Bill Overview
Title: Dismantling Investments in Violation of Ethical Standards through Trusts Act
Description: This bill prohibits a senior federal employee, his or her spouse, or dependent children from holding, purchasing, or selling certain financial instruments during the employee's term of service. Any profit made in violation of the prohibition must be disgorged to the Treasury and may subject the individual to a civil fine. The bill also requires the submission of an annual certification of compliance and requires the Government Accountability Office to conduct a compliance audit. A loss from a transaction or holding involving a covered financial instrument that is conducted in violation of this bill may not be deducted from the amount of income tax owed by the applicable senior federal employee, spouse, or dependent child. A senior federal employee who holds or conducts a transaction involving a covered financial instrument in violation of this bill may be subject to a civil fine assessed by the supervising ethics office.
Sponsors: Rep. Cloud, Michael [R-TX-27]
Target Audience
Population: Senior federal employees, their spouses, and dependent children
Estimated Size: 100000
- The bill targets senior federal employees in the United States, focusing on their financial activities.
- The legislation also affects the families of these employees, specifically their spouses and dependent children, as it restricts their financial dealings.
- The bill may lead to financial and ethical audits, which would impact the operational processes of government oversight bodies like the Government Accountability Office.
Reasoning
- The policy directly affects senior federal employees, their spouses, and dependent children by restricting certain financial activities, which may lead to a significant reduction in potential conflicts of interest and increase transparency in government operations.
- The impact on individual well-being varies depending on the extent of their engagement in affected financial activities and their reliance on such income sources.
- While some individuals may experience significant lifestyle changes due to the adjustment in their financial planning, others may remain indifferent if they are not actively engaged in the restricted activities.
- The policy's implementation is costly due to the necessary personnel and processes for compliance monitoring, audits, and enforcement, which would need to be within budgetary limits.
Simulated Interviews
Senior Federal Employee (Washington D.C.)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- I believe this policy is necessary to maintain public trust in federal institutions.
- Adjusting my investment portfolio is inconvenient but manageable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Spouse of Senior Federal Employee (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- The changes in managing investments are stressful but I understand the importance of the policy.
- I worry about the potential penalties affecting our savings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
College Student (Los Angeles, CA)
Age: 20 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I don't think the policy affects me directly, but I'm aware it might change my parents' financial planning.
- I trust my parents will handle the adjustments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Retired Senior Federal Employee (Chicago, IL)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- Being retired, the policy doesn't affect me directly but I'm interested to see its long-term impact on government accountability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Government Accountability Office Auditor (Austin, TX)
Age: 38 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 4/20
Statement of Opinion:
- The new policy increases workload significantly but aligns with ethics improvements.
- The need for thorough audits ensures that federal employees comply, boosting public confidence.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Senior Federal Employee (San Francisco, CA)
Age: 55 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- I see it as a reasonable sacrifice for transparency and ethical governance.
- Financial planning becomes slightly more complicated, but manageable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Independent Investment Consultant (Miami, FL)
Age: 29 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- I need to stay informed on policy impacts to guide clients effectively.
- This policy reduces my client base from federal employees, affecting business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
Senior Federal Employee (Denver, CO)
Age: 42 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- Our family's financial planning will need revisiting due to these restrictions.
- I agree with the principles of this policy, although it's personally inconvenient.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Senior Federal Employee (Boston, MA)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- I've diversified enough that the policy doesn't impact my personal finances significantly.
- I think the policy is a step in the right direction to avoid conflicts of interest.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Dependent Child of Senior Federal Employee (Philadelphia, PA)
Age: 33 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- I see the importance of this policy for government transparency.
- Personally, it's eye-opening but doesn't affect my daily life.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $150000000 (Low: $120000000, High: $180000000)
Year 2: $150000000 (Low: $120000000, High: $180000000)
Year 3: $140000000 (Low: $110000000, High: $170000000)
Year 5: $130000000 (Low: $100000000, High: $160000000)
Year 10: $120000000 (Low: $90000000, High: $150000000)
Year 100: $100000000 (Low: $80000000, High: $120000000)
Key Considerations
- Ensuring efficient compliance and audit procedures to minimize administrative burdens.
- Balancing enforcement costs with expected revenue from fines and disgorgement.
- Assessing the long-term effects of stricter financial ethics regulations on government service attractiveness.