Speaker 1: Mr Shap, thanks for joining us. UH. First of all,
Speaker 1: just remind us what the Office of Government Ethics is
Speaker 1: and what authority it has. So, the Office of Government
Speaker 1: Ethics is the supervising ethics office for the executive branch
Speaker 1: of the federal government, and that term supervising Ethics Office
Speaker 1: comes straight out of the Ethics and Government Act. O
Speaker 1: g E has authority over a very specific set of
Speaker 1: ethics rules and statutes and executive orders that apply across
Speaker 1: the executive branch. There's only seventy or eighty employees at
Speaker 1: o g E at any one time, but there are
Speaker 1: forty five hundred agency ethics officials across the government, and
Speaker 1: o g E doesn't directly supervise them, but oversees their work,
Speaker 1: audits them, provides them with advice and training, and works
Speaker 1: very closely with them to ensure uniform application of the
Speaker 1: ethics rules across the executive branch. So that office is
Speaker 1: generally pretty behind the scenes. But when Donald Trump was elected,
Speaker 1: your office pretty quickly went public on Twitter, UH and
Speaker 1: saying he should divest his business interests. Why did you
Speaker 1: decide to be so lot spoken that way? So to
Speaker 1: explain that, I have to explain a little bit about
Speaker 1: how o GE functions. O g E has a lot
Speaker 1: of authority, but literally almost no power. And the difference
Speaker 1: between authority and power, in my mind is that a
Speaker 1: federal court judge can issue an order telling you to
Speaker 1: do something, but it's the us the threat that the U. S.
Speaker 1: Marshals will show up in your doorstep if you don't
Speaker 1: do it that makes you comply, And so you've got
Speaker 1: the authority to issue the order and the power to
Speaker 1: enforce the order. O g E has a lot of authority,
Speaker 1: but no power to actually enforce the determinations it makes,
Speaker 1: and so it works closely with the White House in
Speaker 1: any administration. Uh And in fact, for such a tiny,
Speaker 1: minuscule entity in the federal government, it's got an incredibly
Speaker 1: disparate porginate level of access to the White House, usually
Speaker 1: through the White House Counsel's Office, And so if o
Speaker 1: G ran into an individual official or an agency that
Speaker 1: wasn't doing what it said was required, O g E
Speaker 1: could call up the White House Counsel's office and usually
Speaker 1: by the next morning they'd be on the phone saying,
Speaker 1: what can we do to help you? From that agency
Speaker 1: because they would have gotten a call from the White
Speaker 1: House Council's office, and with presidential nominees, they need o
Speaker 1: G E to sign off on their paperwork and their
Speaker 1: ethics agreements before they can go before the Senate for
Speaker 1: a confirmation hearing. So the two sources of authority that
Speaker 1: o G is traditionally relied on or power has been
Speaker 1: leveraging assistance from the White House or withholding clearance on
Speaker 1: a presidential nominee. UH. It became very quickly clear after
Speaker 1: the election that we did not have the support of
Speaker 1: the person who was going to become the White House
Speaker 1: Council and his team, and so the primary means forgetting
Speaker 1: things done working with them was just out the window.
Speaker 1: And in fact I had trouble getting them to respond
Speaker 1: to messages or answer questions, and so it simply became
Speaker 1: a matter of last resort. There's some legislative history where
Speaker 1: congressional committees issued some reports saying that o G the
Speaker 1: threat that O G E might go public with issues
Speaker 1: was a useful tool for o GE to help keep
Speaker 1: people in line in the absence of any authority, and
Speaker 1: I was mindful of those Senate and House reports at
Speaker 1: the time UH and decided I needed to try something
Speaker 1: new in order to be able to communicate with folks
Speaker 1: who are not listening. So the president, of course did
Speaker 1: not divest all of his business assets. What dangers do
Speaker 1: you see from that decision? Well, I think the dangerous
Speaker 1: have gone from being hypothetical to very real. We now
Speaker 1: have reports in the newspaper and on TV about government
Speaker 1: officials hanging out at the Trump Washington Hotel. And you've
Speaker 1: got foreign governments and lobbyists and business people and charities
Speaker 1: and politicians holding events there. Uh, And it raises the
Speaker 1: very real appearance that they are trying to curry favor
Speaker 1: with the president or gain access to government officials. And
Speaker 1: you've got the president spending countless weekends. Actually I shouldn't
Speaker 1: say countless. There are people who are accounting them, and
Speaker 1: there are a lot of them at his properties, and
Speaker 1: every time he goes there, it's a free advertisement for
Speaker 1: his properties. And he doesn't refrain from talking about things
Speaker 1: like the beautiful chocolate cake that he was eating when
Speaker 1: he lobbed missiles at an airfield in Syria. And so
Speaker 1: you've got, uh, somebody appearing to misuse the presidency to
Speaker 1: try to profit from it. You've got him not selling
Speaker 1: his financial interest, and so there are rampant conflicts of
Speaker 1: interest when people going there and trying to gain access
Speaker 1: to him, and you have the less visible conflicts of interest.
Speaker 1: He's got very complex financial holdings, uh, and they're in
Speaker 1: this shell game of shell company after shell company that
Speaker 1: creates this byzantine maze of his holdings. And it's very
Speaker 1: hard to get your mind around what he truly has
Speaker 1: in terms of financial interests because of the way these
Speaker 1: assets are structured, and because the financial disclosure system doesn't
Speaker 1: require him to disclose business liabilities or business partners, so
Speaker 1: we can't know who's got their hooks into him. Wouldn't
Speaker 1: a lot of those issues have been there regardless of
Speaker 1: whether what he did. I mean, if he had divested
Speaker 1: his assets right away, wouldn't there have been an opportunity
Speaker 1: for folks to curry favor with him by paying an
Speaker 1: inflated amount, or if he had transferred them to his children,
Speaker 1: of course they would continue to benefit from owning those assets.
Speaker 1: Was there really any way around this problem? I truly
Speaker 1: think there is. If he had sold it, and he
Speaker 1: had taken care to sell it for market value, he
Speaker 1: certainly could have brought an independent analysts to assess the
Speaker 1: values of the businesses he was selling, and he would
Speaker 1: have been able to put it together a legitimate explanation
Speaker 1: as to why he took the amount of money that
Speaker 1: he did for anything he sold. And let's remember it
Speaker 1: would be a one time deal. He'd sell it, he'd
Speaker 1: have the money, and even if somebody had lingering doubts
Speaker 1: about whether he sold it for a fair price, he's
Speaker 1: taken the money. Now they don't have any more leverage
Speaker 1: over him. They can't say, hey, remember that time I
Speaker 1: paid you too much? Can you do something nice for me? Now?
Speaker 1: The reality is his transaction with them is over. They
Speaker 1: would have paid him whatever they paid him, and they
Speaker 1: could have at best hoped for some kind of favor,
Speaker 1: but they wouldn't have had continuing hooks in him. I
Speaker 1: also think there were some very simple things he could
Speaker 1: have done if he had chosen not to sell his assets.
Speaker 1: He could have simply announced that he nor anyone in
Speaker 1: his administration would go to events Trump properties. Imagine how
Speaker 1: much that would reduce the incentive for a foreign government
Speaker 1: or business association to throw an event at the Trump
Speaker 1: properties if they knew that they were not going to
Speaker 1: be able to get access to government officials there and
Speaker 1: in fact, if they held it there, they would lose
Speaker 1: the attendance of any government officials. So he really could
Speaker 1: have done a lot more with some very simple measures
Speaker 1: to reduce this problem. Asiphon the divestiture issue, what what
Speaker 1: sort of great do you give this administration on ethics issues? Well,
Speaker 1: I'm afraid I'd have to give them a d teetering
Speaker 1: into f because the tone from the top has trickled down,
Speaker 1: and you've got government officials who seem to continue to
Speaker 1: advertise other people's products or their own products from the government. Uh.
Speaker 1: We recently had some Twitter posts and I don't want
Speaker 1: to name the names or the books because I don't
Speaker 1: want to get free advertising the books. But you can
Speaker 1: search Twitter and you'll see images of some White House
Speaker 1: officials posing with the author of a book and holding
Speaker 1: up his book, and the same with the President holding
Speaker 1: up somebody's book. And you've got a White House counsel
Speaker 1: who seems to be sending a message to folks that
Speaker 1: anything goes and as long as we can make an
Speaker 1: argument that it's legal, it's okay. And so after I
Speaker 1: fought a battle with them for a month to get
Speaker 1: some very routine ethics records the White House waivers. I
Speaker 1: got a hand in my hands on those documents and
Speaker 1: saw that they were unsigned, undated and retroactive. And a
Speaker 1: retroactive waiver means you think somebody has already violated a
Speaker 1: rule and you're saying to them after the fact, it's okay.
Speaker 1: But the whole purpose of a waiver provision is to
Speaker 1: take a decision out of your own hands and have
Speaker 1: somebody else make the decision whether you can participate in something.
Speaker 1: But if you just go and do it on your
Speaker 1: own and then come back afterwards and say, hey, can
Speaker 1: I have a retroactive waiver, you've thrown the whole purpose
Speaker 1: of the waiver provision out the door by deciding for
Speaker 1: yourself to not worry about your own conflicts of interest. So,
Speaker 1: with that kind of tone, and we're seeing nominees who
Speaker 1: are pushing back harder than we've seen before, which which
Speaker 1: makes the nominee program more resource intensive for o g. E. Interestingly,
Speaker 1: on that point, though at the time that I left,
Speaker 1: I was able to tout statistics that we were moving
Speaker 1: President Trump's nominees faster than we had moved to President
Speaker 1: Obama's nominees eight years earlier. Despite the White House continuing
Speaker 1: to smear o G E by spreading stories even as
Speaker 1: recently as this past week when the Daily Caller ransom
Speaker 1: story about Secretary Zinky saying that o G is intentionally
Speaker 1: slowing down nominees, the actual stats show that o G
Speaker 1: s moving them faster uh than in the past administration,
Speaker 1: even though the reports are much more complex because the
Speaker 1: people are much wealthier and they're pushing back more than
Speaker 1: than in other administrations. So all of that puts a
Speaker 1: strain on the ethics program, puts a strain on the
Speaker 1: morality employees working on it, and means that every single
Speaker 1: time and ethics official goes and talks to a government
Speaker 1: official about an ethics requirement, the person can throw up
Speaker 1: their hands and say to the ethics official when the
Speaker 1: president doesn't have to do this, so why do I?
Speaker 1: And that is really not the way to run an
Speaker 1: ethics program in the government. So when you were the
Speaker 1: director of o g E, you were in a rare position.
Speaker 1: You could criticize the administration from the inside or at
Speaker 1: least you know, from an important government position, uh, and
Speaker 1: you could uh put some pressure on them to to
Speaker 1: comply with ethics rules. Um, so why did you leave? Well,
Speaker 1: I truly felt I'd reached the end of what I
Speaker 1: could achieve from the inside. And I think it wasn't
Speaker 1: the deciding factor, but a factor was when I finally
Speaker 1: got my hands on those waivers I mentioned, and they
Speaker 1: were unsigned, undated, retroactive, and in fact the Council to
Speaker 1: the President who issued the two of them was actually
Speaker 1: a member of the class of the persons he issued
Speaker 1: them too. So here he's saying, I hear I waive
Speaker 1: it for myself, which is absolutely incredible. Um. And so
Speaker 1: I started feeling like there wasn't more I could do,
Speaker 1: and I started feeling like they were getting more clever
Speaker 1: in their reactions to to O G E by sharing
Speaker 1: less and less information with us, And so I felt
Speaker 1: like leaving the government, I'd be freer to speak out
Speaker 1: about it. And in fact, I wouldn't be sitting here
Speaker 1: talking to you if I were still in the government,
Speaker 1: because ultimately, in that role, I may have been a
Speaker 1: government watchdog, but my boss was the president, and I
Speaker 1: had to limit how much I was able to publicly
Speaker 1: express my concerns, and so I did them through very
Speaker 1: limited channels. And I have a lot more freedom now
Speaker 1: to talk about some of these issues. One last thing
Speaker 1: for you in your mind, are we going to be
Speaker 1: able to recover from this period? Has this administration so
Speaker 1: lower the ethics bar that future administrations will be able
Speaker 1: to skirt some of these rule as well? Well? I
Speaker 1: think that's a big concern because some of the things
Speaker 1: that I've been expressing UH concerns about in the ethics
Speaker 1: area have to do with ethical norms that are being
Speaker 1: departed from, as opposed to strictly speaking violations of law.
Speaker 1: And so we were always able to count on people
Speaker 1: to behave a certain way and follow certain pretty well
Speaker 1: defined ethical traditions in the executive branch. Now you've got
Speaker 1: somebody who's largely getting away with not doing that. And
Speaker 1: the concern is the next president of the next administration
Speaker 1: can point to this one and say, well, they didn't
Speaker 1: do it, so we don't have to either. And I
Speaker 1: think we should be particularly careful, uh with um members
Speaker 1: of the opposite party. You could have a Democratic candidate
Speaker 1: much more easily than a Republican candidates say well, the
Speaker 1: other guy got away with it. That Republican president got
Speaker 1: away with it, so you can't criticize me, and I
Speaker 1: think we really need to be sure to hold both
Speaker 1: sides feet to the fire and not give anyone a
Speaker 1: free pass going forward to make sure that we turn
Speaker 1: this into a one time aberration rather than the new
Speaker 1: norm for ethics and government. I want to thank Walter
Speaker 1: shab the former director of the Office of Government Ethics,
Speaker 1: now the senior director of Ethics at the Campaign Legal
Speaker 1: Center here in Washington. Thanks for joining us on Bloomberg Law.