Bill Overview
Title: Combatting Financial Conflicts of Interest in Government Act
Description: This bill generally prohibits senior government officials from owning or trading in synthetic assets (i.e., tokenized derivatives). It also establishes financial disclosure requirements with respect to cryptocurrency. Specifically, the bill prohibits senior officials, Members of Congress, the President, the Vice President, certain presidential appointees, judicial officers, members of the Federal Reserve Board, and presidents or vice presidents of a Federal Reserve bank from owning or trading investments in a security, a commodity, a future, cryptocurrency, or any comparable economic interest acquired through synthetic means, such as through a derivative. Such investments must be divested through gift or donation, cashing out, or a qualified blind trust. The appropriate ethics office may grant temporary exemptions in certain situations, such as for preexisting complex financial arrangements from which investments cannot be withdrawn, and may assess fees for violations. The Department of Justice may also bring civil actions for violations. The bill also (1) incorporates cryptocurrency and other digital assets into current financial disclosure requirements; (2) modifies the categories and timelines for financial disclosures; and (3) requires agencies, ethics offices, and the Department of Justice to regularly report on violations of this bill and other related requirements.
Sponsors: Rep. Lofgren, Zoe [D-CA-19]
Target Audience
Population: Senior Government Officials and Related Individuals
Estimated Size: 20000
- The bill affects senior government officials, including Members of Congress, the President, and the Vice President, who are required to divest from certain financial assets.
- It affects financial advisors or fiduciaries who manage the assets of these senior officials, as their management practices may need to change.
- The bill impacts institutions and companies that trade or manage cryptocurrencies and other digital assets due to increased regulatory scrutiny.
- By promoting transparency, the bill indirectly impacts citizens by potentially increasing trust in governmental operations and decisions.
Reasoning
- This policy directly targets a very specific group in the population, mainly senior government officials and their financial advisors. Most Americans will not be directly impacted personally, hence their Cantril wellbeing scores largely remain unchanged or marginally affected unless they have a strong belief or concern about government transparency.
- The budget for this policy suggests it will have substantial administrative and enforcement components impacting a small number of officials but not the broader population.
- Most effects are managerial or technical regarding financial disclosures and divestments. Therefore, immediate high impacts are limited to those dealing directly with these assets.
- The indirect impact on the general citizenry primarily involves trust in government, which is a less immediate and more diffuse benefit.
Simulated Interviews
Member of Congress (Washington D.C.)
Age: 48 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 1/20
Statement of Opinion:
- I believe this policy is crucial for maintaining public trust in government.
- Divesting assets is inconvenient but necessary for transparency.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Cryptocurrency Advisor (San Francisco, CA)
Age: 32 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- The new rules complicate my job as I need to advise clients on new compliance measures.
- I worry about losing clients who see these regulations as restrictive.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 6 |
Financial Regulator (New York, NY)
Age: 54 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This policy strengthens our framework for monitoring financial conflicts of interest.
- It adds a workload but promotes long-term benefits in governance.
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 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Software Developer (Austin, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I'm not directly affected but hope this leads to more clarity in regulations.
- Greater transparency in government can foster trust in wider applications of blockchain tech.
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 Government Official (Chicago, IL)
Age: 65 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- Policies like these are necessary to curb unethical practices.
- I've seen conflicts of interest in the past, and these measures should help reduce them.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Banking Executive (Miami, FL)
Age: 46 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- The policy adds an extra layer of compliance for our services handling government accounts.
- It's manageable but requires adjustment.
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 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Public Policy Analyst (Seattle, WA)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- This is a step towards reducing potential corruption within government.
- Extended monitoring of impact could determine its real effectiveness.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Journalist (Philadelphia, PA)
Age: 51 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- This policy could increase trust in governmental operations, a good story to follow.
- I'm interested in how officials adapt to these rules.
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 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Ethics Officer (Dallas, TX)
Age: 44 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- The policy will formalize some of our practices already in place.
- It ensures that ethically howlers are documented and reported.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Legal Counsel (Los Angeles, CA)
Age: 60 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- The complexity added by this policy is considerable but necessary.
- There will be a lot of legal work surrounding exemptions and compliance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Cost Estimates
Year 1: $150000000 (Low: $100000000, High: $200000000)
Year 2: $100000000 (Low: $75000000, High: $125000000)
Year 3: $85000000 (Low: $60000000, High: $110000000)
Year 5: $75000000 (Low: $50000000, High: $100000000)
Year 10: $50000000 (Low: $35000000, High: $65000000)
Year 100: $25000000 (Low: $15000000, High: $35000000)
Key Considerations
- Implementation costs are initially high due to setting up new systems and processes for disclosure and monitoring.
- The timeline for realization of qualitative benefits like increased public trust and reduced conflicts of interest is longer-term.
- Direct financial savings from preventing conflicts of interest are difficult to quantify but agree with improved governmental operations.