WASHINGTON _ While the president and vice president are largely exempt from government ethics rules, President-elect Donald Trump's proposed Cabinet isn't.
Stephen D. Potts helped create the U.S. government procedures to root out conflicts of interest. He admits he never contemplated Donald J. Trump.
"I never had a situation where we had someone who was covered that had expansive wealth and holdings in as many varied forms as Donald Trump has," said Potts, who led the Office of Government Ethics in two separate five-year terms under Presidents George H.W. Bush and Bill Clinton.
Now retired, Potts said that at least for Trump's nominees _ some who are wealthier than the president-elect _ the Office of Government Ethics applies and they will have to "rid themselves of the conflicts."
The ethics office, which tries to apply a uniform ethics code across the federal government, would have virtually no reach into the Oval Office once Trump is in it, nor would it have influence over Vice President Mike Pence.
These disclosure and divestiture rules will apply to Exxon Mobil chief Rex Tillerson, chosen for secretary of state, and Wilbur Ross, a corporate raider named to become commerce secretary. They will also apply to Amway heiress Betsy DeVos at the Education Department, former World Wrestling Entertainment CEO Linda McMahon at the Small Business Administration and fast-food executive Andre Puzder at the Labor Department.
History suggests they could be forced to sell large quantities of stock, or stakes in private companies. They may choose to hand the proceeds over to independent stewards who wound reinvest them. The nominees would have no influence over investment decisions. That's called a blind trust.
Trump's Cabinet picks first face a thorough vetting process by congressional committees, which can demand tax returns and other financial disclosures about their business holdings. If they are confirmed by the Senate, they would then fall under the watch of the Office of Government Ethics.
The agency has trained ethics officials across the federal government, and has had separate technical meetings with the Trump campaign transition team, according to a Dec. 12 letter from Office of Government Ethics Director Walter Shaub to Sen. Tom Carper, D-Del., the top Democrat on the Senate Homeland Security and Governmental Affairs Committee.
In the letter, Shaub intimated that Trump's suggestion that he'll avoid conflicts by giving operational control of his companies to his children is insufficient.
"Transferring operational control of a company to one's children would not constitute the establishment of a qualified blind trust, nor would it eliminate conflicts of interest," Shaub wrote.
Shaub hasn't made public statements since the Nov. 8 election. But in September he told Federal News Radio that presidential appointees are often shocked to learn how much the rules limit their financial interests while serving in government.
"This can be a bitter pill to swallow, and in fact, coming into the federal government to engage in public service at a high level really is a significant sacrifice," Shaub said.
Failing to heed the agency's advice has risks.
When Marvin Runyon became postmaster general in 1992, the former Ford Motor Co. executive was brought in to make the postal system work more like a business. The Office of Government Ethics determined he had violated conflict-of-interest rules by participating in negotiations to put Coke machines in postal lobbies while holding a significant amount of Coca Cola stock.
"We were not there to catch people. I was really distressed to be in the situation we were in," Potts said. The ethics agency tries to educate government employees to avoid conflicts, he said.
Runyon stepped down in 1998, after the Justice Department ended a long investigation without filing charges.
Although the Office of Government Ethics has no investigative powers, certain government appointees and employees, including the president and vice president, must annually file financial disclosure forms to the agency. The forms are scrutinized for potential conflicts. The agency can also act on tips, as it did with Runyon.
The ethics office would determine, if the nominees are confirmed, whether they can be granted waivers from ethics rules. During the eight years of the Obama presidency, the agency did so 49 times.
Such waivers have dealt more with lawyers and consultants and their former clients. Securities and Exchange Commission Chair Mary Jo White, a lawyer, received two waivers, one that let her make decisions involving a law firm and another involving Swiss bank Credit Suisse, also a former client. Energy Secretary Ernest Moniz, who consulted before taking his Cabinet post, got one to deal with issues involving General Electric.
