WEBVTT - Former White House Ethics Director Walter Shaub (Audio) 0:00:00.120 --> 0:00:02.800 Mr Shap, thanks for joining us. UH. First of all, 0:00:02.840 --> 0:00:05.880 just remind us what the Office of Government Ethics is 0:00:05.960 --> 0:00:08.960 and what authority it has. So, the Office of Government 0:00:08.960 --> 0:00:12.800 Ethics is the supervising ethics office for the executive branch 0:00:12.840 --> 0:00:16.759 of the federal government, and that term supervising Ethics Office 0:00:16.880 --> 0:00:20.000 comes straight out of the Ethics and Government Act. O 0:00:20.200 --> 0:00:25.040 g E has authority over a very specific set of 0:00:25.200 --> 0:00:29.560 ethics rules and statutes and executive orders that apply across 0:00:29.640 --> 0:00:33.800 the executive branch. There's only seventy or eighty employees at 0:00:33.800 --> 0:00:36.279 o g E at any one time, but there are 0:00:36.320 --> 0:00:41.040 forty five hundred agency ethics officials across the government, and 0:00:41.120 --> 0:00:45.920 o g E doesn't directly supervise them, but oversees their work, 0:00:46.080 --> 0:00:50.240 audits them, provides them with advice and training, and works 0:00:50.320 --> 0:00:53.880 very closely with them to ensure uniform application of the 0:00:53.920 --> 0:00:58.000 ethics rules across the executive branch. So that office is 0:00:58.160 --> 0:01:01.600 generally pretty behind the scenes. But when Donald Trump was elected, 0:01:02.080 --> 0:01:06.080 your office pretty quickly went public on Twitter, UH and 0:01:06.240 --> 0:01:10.200 saying he should divest his business interests. Why did you 0:01:10.240 --> 0:01:14.560 decide to be so lot spoken that way? So to 0:01:14.640 --> 0:01:16.640 explain that, I have to explain a little bit about 0:01:16.680 --> 0:01:19.959 how o GE functions. O g E has a lot 0:01:20.000 --> 0:01:25.480 of authority, but literally almost no power. And the difference 0:01:25.480 --> 0:01:27.959 between authority and power, in my mind is that a 0:01:28.000 --> 0:01:30.640 federal court judge can issue an order telling you to 0:01:30.680 --> 0:01:33.399 do something, but it's the us the threat that the U. S. 0:01:33.440 --> 0:01:35.520 Marshals will show up in your doorstep if you don't 0:01:35.520 --> 0:01:38.880 do it that makes you comply, And so you've got 0:01:38.920 --> 0:01:41.160 the authority to issue the order and the power to 0:01:41.280 --> 0:01:44.039 enforce the order. O g E has a lot of authority, 0:01:44.120 --> 0:01:49.200 but no power to actually enforce the determinations it makes, 0:01:49.280 --> 0:01:52.320 and so it works closely with the White House in 0:01:52.360 --> 0:01:55.760 any administration. Uh And in fact, for such a tiny, 0:01:56.000 --> 0:01:59.360 minuscule entity in the federal government, it's got an incredibly 0:01:59.440 --> 0:02:03.040 disparate porginate level of access to the White House, usually 0:02:03.040 --> 0:02:06.160 through the White House Counsel's Office, And so if o 0:02:06.320 --> 0:02:10.360 G ran into an individual official or an agency that 0:02:10.480 --> 0:02:13.400 wasn't doing what it said was required, O g E 0:02:13.480 --> 0:02:16.000 could call up the White House Counsel's office and usually 0:02:16.040 --> 0:02:18.160 by the next morning they'd be on the phone saying, 0:02:18.200 --> 0:02:20.359 what can we do to help you? From that agency 0:02:21.000 --> 0:02:23.240 because they would have gotten a call from the White 0:02:23.240 --> 0:02:27.480 House Council's office, and with presidential nominees, they need o 0:02:27.639 --> 0:02:29.960 G E to sign off on their paperwork and their 0:02:30.000 --> 0:02:32.880 ethics agreements before they can go before the Senate for 0:02:32.919 --> 0:02:37.080 a confirmation hearing. So the two sources of authority that 0:02:37.160 --> 0:02:40.840 o G is traditionally relied on or power has been 0:02:41.320 --> 0:02:45.120 leveraging assistance from the White House or withholding clearance on 0:02:45.160 --> 0:02:50.480 a presidential nominee. UH. It became very quickly clear after 0:02:50.520 --> 0:02:54.200 the election that we did not have the support of 0:02:54.480 --> 0:02:57.360 the person who was going to become the White House 0:02:57.400 --> 0:03:03.080 Council and his team, and so the primary means forgetting 0:03:03.120 --> 0:03:06.520 things done working with them was just out the window. 0:03:06.720 --> 0:03:09.519 And in fact I had trouble getting them to respond 0:03:09.600 --> 0:03:14.160 to messages or answer questions, and so it simply became 0:03:14.320 --> 0:03:18.360 a matter of last resort. There's some legislative history where 0:03:18.520 --> 0:03:23.320 congressional committees issued some reports saying that o G the 0:03:23.360 --> 0:03:25.960 threat that O G E might go public with issues 0:03:26.520 --> 0:03:29.079 was a useful tool for o GE to help keep 0:03:29.120 --> 0:03:32.040 people in line in the absence of any authority, and 0:03:32.080 --> 0:03:35.160 I was mindful of those Senate and House reports at 0:03:35.160 --> 0:03:38.480 the time UH and decided I needed to try something 0:03:38.520 --> 0:03:41.040 new in order to be able to communicate with folks 0:03:41.040 --> 0:03:44.520 who are not listening. So the president, of course did 0:03:44.520 --> 0:03:49.920 not divest all of his business assets. What dangers do 0:03:50.000 --> 0:03:53.880 you see from that decision? Well, I think the dangerous 0:03:53.880 --> 0:03:57.240 have gone from being hypothetical to very real. We now 0:03:57.320 --> 0:04:01.320 have reports in the newspaper and on TV about government 0:04:01.360 --> 0:04:06.200 officials hanging out at the Trump Washington Hotel. And you've 0:04:06.280 --> 0:04:11.080 got foreign governments and lobbyists and business people and charities 0:04:11.120 --> 0:04:15.480 and politicians holding events there. Uh, And it raises the 0:04:15.640 --> 0:04:19.680 very real appearance that they are trying to curry favor 0:04:19.720 --> 0:04:23.679 with the president or gain access to government officials. And 0:04:23.960 --> 0:04:27.680 you've got the president spending countless weekends. Actually I shouldn't 0:04:27.720 --> 0:04:29.640 say countless. There are people who are accounting them, and 0:04:29.640 --> 0:04:33.200 there are a lot of them at his properties, and 0:04:33.240 --> 0:04:36.000 every time he goes there, it's a free advertisement for 0:04:36.080 --> 0:04:39.080 his properties. And he doesn't refrain from talking about things 0:04:39.120 --> 0:04:41.640 like the beautiful chocolate cake that he was eating when 0:04:41.640 --> 0:04:47.159 he lobbed missiles at an airfield in Syria. And so 0:04:47.720 --> 0:04:53.080 you've got, uh, somebody appearing to misuse the presidency to 0:04:53.240 --> 0:04:56.200 try to profit from it. You've got him not selling 0:04:56.240 --> 0:04:59.520 his financial interest, and so there are rampant conflicts of 0:04:59.560 --> 0:05:02.960 interest when people going there and trying to gain access 0:05:03.000 --> 0:05:06.320 to him, and you have the less visible conflicts of interest. 0:05:06.400 --> 0:05:11.000 He's got very complex financial holdings, uh, and they're in 0:05:11.040 --> 0:05:15.360 this shell game of shell company after shell company that 0:05:15.400 --> 0:05:18.800 creates this byzantine maze of his holdings. And it's very 0:05:18.839 --> 0:05:22.800 hard to get your mind around what he truly has 0:05:22.839 --> 0:05:25.760 in terms of financial interests because of the way these 0:05:25.800 --> 0:05:30.159 assets are structured, and because the financial disclosure system doesn't 0:05:30.240 --> 0:05:34.880 require him to disclose business liabilities or business partners, so 0:05:34.920 --> 0:05:37.840 we can't know who's got their hooks into him. Wouldn't 0:05:37.839 --> 0:05:40.320 a lot of those issues have been there regardless of 0:05:40.320 --> 0:05:43.000 whether what he did. I mean, if he had divested 0:05:43.000 --> 0:05:47.080 his assets right away, wouldn't there have been an opportunity 0:05:47.160 --> 0:05:49.880 for folks to curry favor with him by paying an 0:05:49.880 --> 0:05:52.799 inflated amount, or if he had transferred them to his children, 0:05:52.839 --> 0:05:55.719 of course they would continue to benefit from owning those assets. 0:05:55.760 --> 0:05:59.000 Was there really any way around this problem? I truly 0:05:59.040 --> 0:06:01.560 think there is. If he had sold it, and he 0:06:01.640 --> 0:06:04.800 had taken care to sell it for market value, he 0:06:04.880 --> 0:06:07.919 certainly could have brought an independent analysts to assess the 0:06:08.040 --> 0:06:11.159 values of the businesses he was selling, and he would 0:06:11.200 --> 0:06:14.080 have been able to put it together a legitimate explanation 0:06:14.160 --> 0:06:17.080 as to why he took the amount of money that 0:06:17.120 --> 0:06:19.480 he did for anything he sold. And let's remember it 0:06:19.480 --> 0:06:21.800 would be a one time deal. He'd sell it, he'd 0:06:21.800 --> 0:06:24.720 have the money, and even if somebody had lingering doubts 0:06:24.760 --> 0:06:27.760 about whether he sold it for a fair price, he's 0:06:27.800 --> 0:06:30.640 taken the money. Now they don't have any more leverage 0:06:30.680 --> 0:06:33.599 over him. They can't say, hey, remember that time I 0:06:33.640 --> 0:06:36.200 paid you too much? Can you do something nice for me? Now? 0:06:36.480 --> 0:06:40.360 The reality is his transaction with them is over. They 0:06:40.360 --> 0:06:43.200 would have paid him whatever they paid him, and they 0:06:43.240 --> 0:06:45.719 could have at best hoped for some kind of favor, 0:06:45.760 --> 0:06:48.520 but they wouldn't have had continuing hooks in him. I 0:06:48.560 --> 0:06:50.600 also think there were some very simple things he could 0:06:50.600 --> 0:06:53.160 have done if he had chosen not to sell his assets. 0:06:53.160 --> 0:06:57.120 He could have simply announced that he nor anyone in 0:06:57.240 --> 0:07:02.200 his administration would go to events Trump properties. Imagine how 0:07:02.279 --> 0:07:06.120 much that would reduce the incentive for a foreign government 0:07:06.279 --> 0:07:10.040 or business association to throw an event at the Trump 0:07:10.080 --> 0:07:13.040 properties if they knew that they were not going to 0:07:13.120 --> 0:07:15.520 be able to get access to government officials there and 0:07:15.520 --> 0:07:17.880 in fact, if they held it there, they would lose 0:07:17.920 --> 0:07:21.160 the attendance of any government officials. So he really could 0:07:21.200 --> 0:07:23.720 have done a lot more with some very simple measures 0:07:23.760 --> 0:07:28.040 to reduce this problem. Asiphon the divestiture issue, what what 0:07:28.160 --> 0:07:31.480 sort of great do you give this administration on ethics issues? Well, 0:07:31.480 --> 0:07:35.160 I'm afraid I'd have to give them a d teetering 0:07:35.200 --> 0:07:39.160 into f because the tone from the top has trickled down, 0:07:39.200 --> 0:07:44.320 and you've got government officials who seem to continue to 0:07:44.360 --> 0:07:49.239 advertise other people's products or their own products from the government. Uh. 0:07:49.400 --> 0:07:51.680 We recently had some Twitter posts and I don't want 0:07:51.680 --> 0:07:53.360 to name the names or the books because I don't 0:07:53.360 --> 0:07:55.240 want to get free advertising the books. But you can 0:07:55.280 --> 0:07:58.559 search Twitter and you'll see images of some White House 0:07:58.560 --> 0:08:01.800 officials posing with the author of a book and holding 0:08:01.880 --> 0:08:04.120 up his book, and the same with the President holding 0:08:04.200 --> 0:08:08.000 up somebody's book. And you've got a White House counsel 0:08:08.400 --> 0:08:12.000 who seems to be sending a message to folks that 0:08:12.200 --> 0:08:14.520 anything goes and as long as we can make an 0:08:14.600 --> 0:08:17.320 argument that it's legal, it's okay. And so after I 0:08:17.400 --> 0:08:19.560 fought a battle with them for a month to get 0:08:19.600 --> 0:08:24.280 some very routine ethics records the White House waivers. I 0:08:24.360 --> 0:08:26.840 got a hand in my hands on those documents and 0:08:26.880 --> 0:08:31.120 saw that they were unsigned, undated and retroactive. And a 0:08:31.200 --> 0:08:35.360 retroactive waiver means you think somebody has already violated a 0:08:35.440 --> 0:08:38.559 rule and you're saying to them after the fact, it's okay. 0:08:38.600 --> 0:08:40.960 But the whole purpose of a waiver provision is to 0:08:41.040 --> 0:08:44.040 take a decision out of your own hands and have 0:08:44.160 --> 0:08:47.559 somebody else make the decision whether you can participate in something. 0:08:47.880 --> 0:08:49.400 But if you just go and do it on your 0:08:49.400 --> 0:08:51.560 own and then come back afterwards and say, hey, can 0:08:51.600 --> 0:08:55.360 I have a retroactive waiver, you've thrown the whole purpose 0:08:55.440 --> 0:08:58.360 of the waiver provision out the door by deciding for 0:08:58.400 --> 0:09:02.360 yourself to not worry about your own conflicts of interest. So, 0:09:03.000 --> 0:09:06.280 with that kind of tone, and we're seeing nominees who 0:09:06.280 --> 0:09:09.640 are pushing back harder than we've seen before, which which 0:09:09.679 --> 0:09:14.720 makes the nominee program more resource intensive for o g. E. Interestingly, 0:09:14.800 --> 0:09:16.920 on that point, though at the time that I left, 0:09:17.360 --> 0:09:20.280 I was able to tout statistics that we were moving 0:09:20.320 --> 0:09:23.640 President Trump's nominees faster than we had moved to President 0:09:23.640 --> 0:09:28.239 Obama's nominees eight years earlier. Despite the White House continuing 0:09:28.320 --> 0:09:31.000 to smear o G E by spreading stories even as 0:09:31.080 --> 0:09:34.880 recently as this past week when the Daily Caller ransom 0:09:34.960 --> 0:09:39.600 story about Secretary Zinky saying that o G is intentionally 0:09:39.640 --> 0:09:42.959 slowing down nominees, the actual stats show that o G 0:09:43.240 --> 0:09:47.439 s moving them faster uh than in the past administration, 0:09:48.000 --> 0:09:50.600 even though the reports are much more complex because the 0:09:50.640 --> 0:09:53.800 people are much wealthier and they're pushing back more than 0:09:53.960 --> 0:09:58.439 than in other administrations. So all of that puts a 0:09:58.520 --> 0:10:00.880 strain on the ethics program, puts a strain on the 0:10:00.920 --> 0:10:04.800 morality employees working on it, and means that every single 0:10:04.840 --> 0:10:07.520 time and ethics official goes and talks to a government 0:10:07.520 --> 0:10:11.720 official about an ethics requirement, the person can throw up 0:10:11.720 --> 0:10:13.640 their hands and say to the ethics official when the 0:10:13.679 --> 0:10:16.280 president doesn't have to do this, so why do I? 0:10:16.840 --> 0:10:18.840 And that is really not the way to run an 0:10:18.840 --> 0:10:21.439 ethics program in the government. So when you were the 0:10:21.600 --> 0:10:24.600 director of o g E, you were in a rare position. 0:10:24.640 --> 0:10:27.600 You could criticize the administration from the inside or at 0:10:27.640 --> 0:10:30.679 least you know, from an important government position, uh, and 0:10:30.760 --> 0:10:33.200 you could uh put some pressure on them to to 0:10:33.320 --> 0:10:37.440 comply with ethics rules. Um, so why did you leave? Well, 0:10:37.480 --> 0:10:39.280 I truly felt I'd reached the end of what I 0:10:39.280 --> 0:10:42.720 could achieve from the inside. And I think it wasn't 0:10:42.840 --> 0:10:46.000 the deciding factor, but a factor was when I finally 0:10:46.000 --> 0:10:48.839 got my hands on those waivers I mentioned, and they 0:10:48.840 --> 0:10:52.880 were unsigned, undated, retroactive, and in fact the Council to 0:10:52.920 --> 0:10:56.080 the President who issued the two of them was actually 0:10:56.120 --> 0:10:58.000 a member of the class of the persons he issued 0:10:58.040 --> 0:11:00.440 them too. So here he's saying, I hear I waive 0:11:00.520 --> 0:11:04.920 it for myself, which is absolutely incredible. Um. And so 0:11:05.120 --> 0:11:07.600 I started feeling like there wasn't more I could do, 0:11:08.040 --> 0:11:10.640 and I started feeling like they were getting more clever 0:11:10.960 --> 0:11:14.440 in their reactions to to O G E by sharing 0:11:14.520 --> 0:11:17.520 less and less information with us, And so I felt 0:11:17.559 --> 0:11:21.079 like leaving the government, I'd be freer to speak out 0:11:21.120 --> 0:11:23.160 about it. And in fact, I wouldn't be sitting here 0:11:23.240 --> 0:11:25.280 talking to you if I were still in the government, 0:11:25.679 --> 0:11:28.880 because ultimately, in that role, I may have been a 0:11:28.920 --> 0:11:32.880 government watchdog, but my boss was the president, and I 0:11:32.880 --> 0:11:35.720 had to limit how much I was able to publicly 0:11:36.559 --> 0:11:39.240 express my concerns, and so I did them through very 0:11:39.320 --> 0:11:43.000 limited channels. And I have a lot more freedom now 0:11:43.040 --> 0:11:45.679 to talk about some of these issues. One last thing 0:11:45.720 --> 0:11:48.400 for you in your mind, are we going to be 0:11:48.440 --> 0:11:52.839 able to recover from this period? Has this administration so 0:11:53.000 --> 0:11:58.680 lower the ethics bar that future administrations will be able 0:11:58.720 --> 0:12:01.120 to skirt some of these rule as well? Well? I 0:12:01.160 --> 0:12:03.440 think that's a big concern because some of the things 0:12:03.440 --> 0:12:06.840 that I've been expressing UH concerns about in the ethics 0:12:06.960 --> 0:12:10.000 area have to do with ethical norms that are being 0:12:10.000 --> 0:12:13.960 departed from, as opposed to strictly speaking violations of law. 0:12:14.480 --> 0:12:17.560 And so we were always able to count on people 0:12:17.720 --> 0:12:20.680 to behave a certain way and follow certain pretty well 0:12:20.760 --> 0:12:24.560 defined ethical traditions in the executive branch. Now you've got 0:12:24.640 --> 0:12:27.920 somebody who's largely getting away with not doing that. And 0:12:27.960 --> 0:12:30.960 the concern is the next president of the next administration 0:12:31.080 --> 0:12:33.200 can point to this one and say, well, they didn't 0:12:33.200 --> 0:12:35.440 do it, so we don't have to either. And I 0:12:35.480 --> 0:12:40.360 think we should be particularly careful, uh with um members 0:12:40.360 --> 0:12:44.160 of the opposite party. You could have a Democratic candidate 0:12:44.240 --> 0:12:47.160 much more easily than a Republican candidates say well, the 0:12:47.200 --> 0:12:49.839 other guy got away with it. That Republican president got 0:12:49.880 --> 0:12:52.280 away with it, so you can't criticize me, and I 0:12:52.320 --> 0:12:54.240 think we really need to be sure to hold both 0:12:54.559 --> 0:12:57.760 sides feet to the fire and not give anyone a 0:12:57.840 --> 0:13:01.240 free pass going forward to make sure that we turn 0:13:01.320 --> 0:13:05.320 this into a one time aberration rather than the new 0:13:05.360 --> 0:13:08.400 norm for ethics and government. I want to thank Walter 0:13:08.480 --> 0:13:11.120 shab the former director of the Office of Government Ethics, 0:13:11.480 --> 0:13:14.360 now the senior director of Ethics at the Campaign Legal 0:13:14.400 --> 0:13:17.560 Center here in Washington. Thanks for joining us on Bloomberg Law.