Companies should evaluate their prospective employees, especially former government officials, for potential ethics violations.
The US Department of Homeland Security (DHS) announced April 12 that Kenneth J. Buck, a former senior DHS official, agreed to pay $10,000 to resolve allegations that he violated conflict of interest rules in working with a federal government contractor shortly before and after his departure from the agency in 2016.
Federal ethics rules restrict current and former federal employees from being in contact with government contractors, including a mandatory one-year period during which former federal officials are prohibited from communicating directly with their former agency on behalf of another with intent to influence agency action.
According to the government, prior to resigning from DHS, Buck entered into a subcontracting agreement with Intelligent Fiscal Optimal Solutions LLC (iFOS) and assisted it in preparing a pre-award presentation. Buck informed a DHS official that he intended to leave DHS to work with iFOS as a subcontractor, and less than a week later, that official selected iFOS for a no-bid contract. Buck then participated in numerous conversations over the next year with both DHS and iFOS, which the parties attempted to conceal.
The agreement resolved allegations that Buck violated the False Claims Act (FCA) by conspiring with iFOS and a then DHS official to hide his involvement in the deal when securing the award of a federal government contract to iFOS. The government further alleged that iFOS and Buck violated the FCA and circumvented mandatory background investigation requirements by submitting invoices to DHS attributing work that Buck performed to another iFOS employee in order to conceal Buck’s involvement.
The settlement emphasizes the need for companies to be aware of post-employment restrictions on government officials. Organizations should develop appropriate policies to inform and train employees on the requirements outlined in the Procurement Integrity Act, evaluate their prospective employees’ employment history, and restrict employment activities of former government officials as necessary.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the authors, W. Barron A. Avery, and Casey Weaver, or any of the following:
Chicago
Megan R. Braden
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Kenneth J. Nunnenkamp
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