Whatever else one might say about corruption and the Trump Administration, it has been a godsend for those who teach ethics and integrity courses. Recent, real-world examples can spice up otherwise dry, abstract presentations while helping drive home key points, and Trump officials’ habit of skating at the edge of permissible conduct never fails to provide headline grabbing fodder for classroom discussion. The most recent debt of gratitude ethics instructors owe the Trump Administration arises from the Environmental Protection Agency chief’s choice of a D.C. landlord. In one fell swoop agency head Scott Pruitt’s actions illustrate the finer points of not one but two key ethical norms, the receipt of gifts and the duty to appear impartial.
The story begins with Pruitt’s decision after appointment as chief regulator of American environmental protection laws to not move to Washington, D.C. but instead to rent a place just for the nights spent in the nation’s capital. He found the spare bedroom in a two-bedroom apartment located in a tony part of town whose owners agreed to rent the extra bedroom for $50 for each night Pruitt spent in Washington.
Real estate agents told the New York Times that Pruitt got quite a bargain: $50 a night was less than one would expect to pay on the open market. Pruitt’s ethical travails begin here.
Unethical gift? Federal ethics rules define a gift to include products or services received at less than fair market value, and the first question is whether what Pruitt paid for the bedroom was less than the market price. One report pegged the lowest advertised price for a bedroom in the same neighborhood at $57 per night with prices ranging as high $100 a night. Other reports say Pruitt got more than just use of the bedroom for his $50. His daughter occasionally stayed in the second bedroom when in Washington and both apparently had access to the apartment’s kitchen.
If in fact the rental price was below the market price, it was a gift from his landlord. The critical issue then become who was the landlord. The several thousand-word section of the ethics code governing gifts Pruitt can accept provides he cannot receive one worth more than $20 from a “prohibited source,” someone or some entity that either 1) does business with his agency, or 2) is requesting official action by the agency, or 3) “that has interests that may be substantially affected by [the] performance or nonperformance of the employee’s official duties.”
One of the apartment’s co-owners lobbies on health care, something Pruitt’s agency has nothing to do with, so she passes muster under the prohibited source rule. But her husband is a lobbyist too, one with clients whose interests are directly affected by decisions Pruitt takes as head of the Environmental Protection Agency. So under the gift rulea do the interests of the husband’s lobbying clients flow through to his spouse?
The rules provide no answer, making Pruitt’s case ideal for classroom discussion or for an essay topic. Spicing up the case is that, while renting the apartment, Pruitt reportedly signed off on a plan that favored one of the husband’s clients (though the husband says neither he nor his firm worked on that issue for the client).
Even if the husband’s lobbying interests makes one of Pruitt’s landlords a “prohibited source,” federal ethics laws would still permit Pruitt to accept the landlord’s gift of below-market rent if it were given “based on a personal relationship.” To qualify for this exemption, however, the circumstance surrounding the gift must be such as to “make it clear that the gift is motivated by … a personal friendship rather than the position of the employee.” Application of this rule again provides a springboard for classroom discussion. Who must have the personal relationship for the exception to apply? The gift-giver? Or the spouse?
While the landlord-wife’s relationship with Pruitt is unknown, the husband-lobbyist has said Pruitt is “a casual friend” with whom he has had no contact for months excepting a brief exchange at the National Prayer Breakfast in February. Assume the personal relationship test applies to husband-lobbyist. Does a “casual friend” meet that test?
The rules here suggest not. The Office of Government Ethics examples provided to help interpret the personal exemption imply a casual friendship is not enough, and the recent contribution to gift rule jurisprudence by another Trump official, the now departed Secretary of Veterans Affairs David Shulkin, also points to a no answer. According to Shulkin, the gift he and his wife received, Wimbledon tickets and an accompanying lunch, was based on the wife’s friendship with the giver. But in a report issued after the incident became public, the department’s inspector general concluded the two’s relationship wasn’t close enough for the exception to apply. The wife only knew the giver through a handful of business meetings and couldn’t recall the giver’s first name in an interview.
While the facts in the Pruitt and Shulkin cases suggest neither the husband-lobbyist nor the wife’s business acquaintance qualify for the “personal relationship” exception, both cases do provide a useful introduction to the often-vexed question of how close a personal relationship a gift giver must have with the recipient to avoid ethical opprobrium.
Appearance of impartiality. The Pruitt case also offers ethics teachers a fine basis for discussing a rule particular to the United States: the provision “intended to ensure an employee takes appropriate steps to avoid an appearance of loss of impartiality in the performance of his [sic] official duties” (5 C.F.R. §2635.501). That provision states that anytime an employee finds him or herself in circumstances that would raise a question about their ability to act impartially, the employee should halt any further action until the appropriate official in his or her agency has been notified and concluded that the circumstance do not give rise to an “appearance problem.”
Questions arose when the rule was first issued: in whose eyes must “an appearance problem” arise for there to be a violaton? A long-time foe? A political opponent? A newspaper hostile to the individual’s policies? The rule now provides that in deciding whether a particular set of circumstances creates an appearance problem, the standard is what a reasonable person with knowledge of the relevant facts would conclude.
What a reasonable person would think is always a good spring board for a classroom discussion. With Pruitt, participants could spend hours arguing whether a reasonable person would conclude Truitt could act impartially when deciding matters affecting the husband-lobbyist’s clients if the person knew that i) Truitt was renting a bedroom for $50 per night when the going rate was at least $57 per night, ii) he had access to the apartment’s kitchen, iii) his daughter occasionally stayed in the other bedroom, and iv) crucially the landlord’s husband had clients affected by Truitt’s decisions.
As American law professors are want to do, the facts could be varied to prod deeper analysis. Would it matter if the going rate were $100 rather than $57? Does kitchen access tip the rental into prohibited territory? What if the daughter only used the extra bedroom once? What if the lobbyist-husband didn’t lobby EPA on behalf of clients but other agencies only?
The complicated if subtle ethics issues Pruitt’s case raises provide enough grist for a whole session on ethics rules. For that, ethics instructors owe Pruitt much thanks.
For me, Pruitt’s case raises a larger question. Is there any better approach to ensuring public employees act with integrity rules than piling on complex regulations of the kinds the American federal government has adopted? Regulations that give rise to arguments about “spousal pass throughs,” when a friendship is personal enough, and what a reasonable person would think of a discount on a bedroom rental? I despair of finding anything close to neutral answers to such questions in the current climate in Washington. On the other hand . . . .