Executive Summary: Building an Anti-Corruption Agenda To Restore Faith in American Government

Eighty-nine percent of Americans believe that government corruption is widespread, and 73 percent view it as a critical threat to the nation. This view extends beyond elected officials to include Cabinet members, agency leaders, and other high-ranking officials. Recent polling further suggests that Americans are more likely to trust elected officials who are advancing a plan to curb government corruption over those who simply pledge to not act corruptly by a 13-point margin.

The Center for American Progress has proposed an affirmative agenda to tackle government corruption that differs from past efforts in five distinct ways:

1. It shifts away from simple financial disclosures to prohibitions that have real consequences.
2. It accounts for new forms of corruption that current law does not presently address.
3. It creates enforcement mechanisms that cannot be wholly controlled by a corrupt executive branch.
4. It closes presidential exemptions that weaken all other ethics laws.
5. It matches the scale of the problem to the scale of the solution as incremental tweaks are insufficient.

Presidential self-enrichment

Though past presidents have divested their financial holdings into blind trusts, there are no laws requiring them to do so, or that hinder their participation in other business activities that allow significant profiting. Though the Constitution’s emoluments clauses prohibit presidential enrichment from foreign and domestic sources, there are no codified mechanisms for enforcement. CAP proffers the following reforms:

• Codify constitutional emoluments clauses and establish enforcement mechanisms:
  • Define emoluments as any profit, gain, advantage, compensation, or thing of value, including cryptocurrency, digital assets, intellectual property royalties, licensing fees, and real estate profits that flow to the president, to any entities or subsidiaries in which he holds greater than a 0.5 percent ownership interest, and to any entities that a family member or spouse thereof whose profits are imputed to an entity in which the president owns a substantial interest.
  • Create an independent Emoluments Review Board with the power to investigate potential violations, issue subpoenas, and refer cases of violations for enforcement through penalties, disgorgement, or prosecution as appropriate. Standing to sue should be given to those who can demonstrate concrete economic injury, including Congress and state attorneys general.
• Enact presidential “no self-enrichment” disgorgement laws:
  • Congress’ taxing powers provide it the authority to levy taxes to prevent unjust or corrupt enrichment, including by taxing any presidential profiting outside of three exemptions: 1) government compensation; 2) returns on equities and bonds owned before inauguration maintained in a true, certified blind trust; and 3) rents, sale proceeds, and ordinary appreciation on real estate owned before inauguration.
  • Gains would be taxed upon sale, upon borrowing against covered assets, or upon transferring covered assets to family or controlled entities.
• Enact digital assets anti-corruption legislation:
  • Statutes should be enacted requiring all cryptocurrency holdings to be disclosed and prohibiting covered officials from creating, issuing, sponsoring, endorsing, marketing, or holding cryptocurrencies. Anyone with more than $1,000 in crypto holdings should be recused from making decisions related to the industry.
• Close the president and vice president ethics law loopholes:
  • Going further, those ethics laws should be applied to the president’s and vice president’s family members and their spouses, and steps should be taken to prevent them from launching, owning, or profiting from new business ventures during the term of office.

Official self-dealing and insider enrichment

The president, members of Congress, and other high-level officials are often prolific stock traders and may use their insider knowledge to game the system to their own benefit. The Stop Trading on Congressional Knowledge (STOCK) Act is not sufficient to address potential corruption, and a congressional stock trading ban is limited in scope. CAP proffers the following reforms:

• Mandate universal divestiture—with teeth:
  • All senior federal officials, not just Congress, should be required to divest from all individual financial holdings into a certified blind trust or approved index fund within 30 days of taking office, requiring the Government Accountability Office (GAO) to provide such certification and conduct compliance audits.
• Require real-time digital disclosure:
  • One alternative option is to mandate close-to-real-time, publicly available trade tracking for individual stock purchases and sales made by covered officials, akin to the U.S. Securities and Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
• Eliminate insider tax advantages:
  • Another alternative would require officials whose equity holding outperforms a benchmark index by more than 5 percentage points to pay an automatic 90 percent “excess gains” tax on that outperformance.
• Ban participation in prediction markets:
  • Federal employees, federal contractors, and military personnel should be prohibited from participating in any facet of prediction markets—outside sports betting. In addition, prediction markets should be mandated to follow “know your customer” requirements to prevent workarounds and their use by other potentially criminal elements using anonymous crypto wallets.
• Codify the strongest elements of past administrations’ ethics pledges

Lack of anti-corruption enforcement

The U.S. Department of Justice has been captured by the executive branch, the president has fired 17 inspectors general, and the Office of Government Ethics (OGE) is largely toothless. Congress should take steps to move enforcement out of the hands of the executive and toward the legislative branch, Congress’ taxing power, and private litigants. CAP proffers the following reforms:

• Create and enhance anti-corruption causes of action:
  • Congress should require all political appointees to execute an ethics pledge. More substantively, it should: 1) enhance or create causes of action for affected parties (regulated entities, competitors, affected states, and Congress) to challenge potentially corrupt decisions; 2) work within the Administrative Procedure Act to enhance conflict and material influence standards as applied to federal officials; and 3) enhance the standards by which adjudicating bodies, such as the GAO, Court of Federal Claims, and Article III courts, consider challenges to corrupt federal action.
• Require sealed-screen disgorgement of presidential enrichment via private action:
  • Creating a cause of action could empower a coalition of 10 or more states acting in their parens patriae capacity to bring suit against presidential self-enrichment with a secondary track based on the qui tam Significant safeguards will be necessary to prevent abuse and weaponization.
• Utilize appropriations integrity riders:
  • Congress can attach a standing condition to appropriations bills that prohibits the obligation, award, or direction of funds by officials with a disqualifying financial interest, allowing those funds to be clawed back.

Special government employee abuses

Special government employees (SGEs) were intended to serve as temporary advisers, consultants, or experts to provide aid outside the expertise of an agency’s regular employees. The Department of Government Efficiency expanded that role exponentially and led to massive harm to government functionality and the American taxpayer. CAP proffers the following reforms:

• Create a government contractor firewall:
  • Any individual holding an ownership stake exceeding 1 percent in any entity that received more than $10 million in federal contracts, grants, loans, or subsidies in the prior five years should be categorically prohibited from serving in any government role that involves oversight, funding, regulation, or contracting decisions.
• Enact financial transparency and SGE regime reforms:
  • Any SGE with access to sensitive, nonpublic information or authority over government resources must undergo a full financial disclosure review identical to that of Senate-confirmed appointees, as well as mandatory, preapproved recusal agreements. Any individual whose net worth exceeds $100 million should be barred from SGE designation due to the breadth of potential conflicts of interest.
• Require a megadonor cooling-off period:
  • Any individual who has donated more than $1 million to any super PAC or party committee, or $5 million in aggregate over an election cycle, should be prohibited from becoming an SGE for five years following their last qualifying donation to prevent the appearance of corruption unless going through Senate confirmation.

Foreign government entanglement in presidential business

The Trump family’s business entanglements with foreign nations—along with those of other senior government officials—are expansive. Current law, from emoluments enforcement to the Foreign Agents Registration Act, is not sufficient to deal with the potential for conflicts of interest and corruption. CAP proffers the following reforms:

• Build a foreign influence firewall:
  • Senior government officials and all first-degree family members should be prohibited from receiving any financial benefit from a foreign government, sovereign wealth fund, state-owned enterprise, or any entity where a foreign government holds more than a 5 percent interest.
• Mandate sovereign wealth fund transparency requirements:
  • Any current or former senior government official should be required to obtain OGE preapproval before entering into any financial relationship with a sovereign wealth fund or foreign government-owned entity.

Corrupt pardons

A virtual pardon brokerage industry has sprung up, providing high-wealth individuals access to a pardon process that eludes most people convicted of serious crimes. Though clemency is an explicit presidential prerogative, Congress may take steps to reduce corrupt practices. CAP proffers the following reforms:

• Create transparency and bribery statutes around pardons:
  • Congress can require the president to submit written certification for pardons disclosing the identity of all pardon advocates; the financial relationship between the recipient and the president, his family, business, or any campaign donor who contributed more than $10,000 in a past cycle; whether any payment or gift was given to any person connected to the president; and the public-interest justification for the pardon.
  • Congress can enact bribery-related laws regarding payments or gifts made in relation to receiving a pardon. Though the pardon could not be contested, the criminal acts around potential quid pro quo arrangements could result in further criminal punishment.