UNITED STATES OFFICE OF GOVERNMENT ETHICS * March 22, 2018 ‘The Honorable Raja Krishnamoorthi United States House of Representatives 515 Cannon House Office Bui ‘Washington, DC 20515 Dear Congressman Krishnamoorthi: ‘This responds to your letter dated March 1, 2018, regarding the application of ethics laws tnd rules to Senior Advisor to the President Jared Kushner. In particular, your leter raises {questions about the ethical implications ofa senior White House official holding a broad Portfolio of government responsibilities while also maintaining a financial interest inactive business entities, personally guaranteeing loans to business entities, and meeting with potential investors and ereditor in those business entities. Executive branch employees are subject to a variety of ethies laws and rules designed to ‘ensure the impartiality of the government's decision making.' The complexity of these laws and rules combined with an employee's complex Financial holdings ean create significant risk forthe ‘employee, the government, and public confidence in government decisionmaking. To mitigate ‘these risks, OGE often counsels the divestiture of potential conicting asses. Where an ‘employee and the employee's agency decide to permit the employee to maintain potentially conflicting private interests, the employee and the agency must take actions to avoid running afoul ofthe ethies laws and rues in the conduct of his or her duties as discussed more fully below. Relevant to your inquiry, the primary financial conflict of interest statute prohibits «executive branch employees from participating personally and substantially in particular matters directly and predictably affecting ther financial interests.* This prohibition extends tothe financial interests of companies in which they have ownership interests, but generally not to companies to which they are indebted unless theofficial action would have some effect on the loan itself. I is important to note that the criminal conflict of interest statute is nota prohibited holdings statute. Instead, it requires an employee to refrain from participating in the particular ‘matter affeting the employee's financial interests or the financial interests of persons whose interests are imputed to the employee.’ For employees who retain their outside financial terest, a common mechanism for resolving conflicts of interest is to recuse from particular * ee, eg, 18 USC. $5 201-209 Confiesof neres 5 C.P.R.p.2635 (Standards of Ethical Cont for Employes ofthe Exertive Branch); Exevutve Orde No 13,770 (lan. 28,2017) (Ehies Commitments by Exeuive Branch Appoints). 250 1B USC. § 2080). > Soi (impating to an employs the interests of hs spouse, minor cid, general partner, organization in which hers varving a acer, diet, tte, ganeral pair ar employee, oan person or organization with whom he ‘egodating rhs any arangement concerning prospective employees) kk ok 1201 NEW YORK AVE NW-SUITE St0-WASHINGTON DC: 20005‘The Honorable Raja Krishnamoorthi Page 2 ‘matters that would affect the employee's personal and imputed financial interests.* Other remedies for resolving conflicts of interest include selling or otherwise divesting an asset, reassignment, waiver or the establishment ofa qualified blind or diversified trust In some cases, an employee can rely on an exemption tothe criminal conflict of interest statute.” OGE is prohibited by statute from making finding that criminal law, including aeriminal conflict of interest law, has been or is being violated, Your letter also inquires about the ethical implications ofa senior White House official ‘having personally guaranteed loans toa private business entity with lage outstanding debt obligations. Subpart E of the Standards of Conduet prohibits an employee from participating in any particular matter involving specific parties in which a person with whom he or she has @ covered relationship isa party or represents a party, ifthe employee determines that a reasonable Person with knowledge of the relevant facts would question the employee's impartiality in the matter.’ The employee’s agency, inthis instance the White House, may authorize an employee to participate in such a matter when the agency designee makes a determination, after considering certain relevant factors, that the interest of the government in the employee's participation ‘outweighs the concern that a reasonable person may question the integrity of the agency's programs and operations.” Alternatively, the agency may require recusal after making an independent determination tha a reasonable person with knowledge of the relevant facts would be likely fo question the employee's impartiality in the matter."° The definition of “covered relationship” includes a person with whom the employee has or seeks a business, contractual or other financial relationship that involves ther than a routine consumer transacton.'' We note in response to your inquiry that personally guaranteeing a large loan to a business or receiving @ large loan on non-commercially available terms typically does not constitute a “routine consumer transaction.” ‘Your letter also inquires about the ethical implications ofa senior White House official :meeting with potential investors and creditors in those business entities while the official isin a position to direetly benefit the investors and offer its principals favorable poliey outcomes. IF private business connected to those entities were discussed at such a meeting, the prohibitions on misuse of postion could be implicated.” More importantly, i there was a connection between, the potential loan and an official ct, it could rise an issue under 18 U.S.C. § 201 (bribery and illegal gratuites). Additionally, your letter asks whether Mr. Kushner's actions as detailed in a February 28, 2018 New York Times article constitute a breach of his ethical obligations tothe ‘American people. {See SCR. §§ 2635 a02((2), 26354030) se alo 5 US.C app $§ 1056N3), 4212 NA)GHXD. * See, eg, Memo ftom Amy L, Comstock, Dieter, US. Offie of Gov't thes, 0 Designated Agency Ethics ‘Officials, Nominge Ethics Agreements, DO-0-013 (2001) (casing emesis for confit finest inthe talogous ease of Presidential mines), 5 CR. pt 2634, subpD. MTSU. § 208030), 2 See S USC app § 40106). SSCER § 2638502. "SER § 26355026), W'SCER § 2635502) "Soe SCHR § 2635502 1 See $ CER. §§ 2635702 (Use of public office for private gain), 2635704 (Use of Goverment proper), 2635.05 (Us of afi ine).‘The Honorable Raja Krishnamoorthi Page 3 With respect to both ofthese final two questions raised in your letter, the White House is ina postion o ascertain the relevant facts related to possible violations and is responsible for ‘monitoring compliance with ehies requirements, including those exablished under Executive ‘Order 13770, te criminal conflict of interest statutes, and the Standards of Conduct.” The White House is also responsible fr initiating any appropriate disipinay or corrective action in individual cases." I have discussed this matter with the White House Counsel's Office in order tw ensure that they have begun the process of ascertaining the facts necessary to determine ‘whether any law or regulation has been violated and whether any additional procedures are necessary to avoid violations in the future. During that discussion, the White House informed me that they had already begun this process. Ihave asked the White House to inform me ofthe results of that process. Iam also forwarding this letter, as well as your leter to me, to the ‘Counse! to the President for his review and a determination as to what action is warranted. hope this letter addresses the issues your letter raises, If members of your staff have questions, OGE"s Chief of Staff, Shelley K. Finlayson, is available to assist them. She can be reached at 202-482-9314 Sincerely, a a7 eel teed ce, The Honorable Donald F. MeGahn IL ‘Counsel to the President Stefan C. Passantino ‘White House Designated Agency Ethics Official " When questions ars so an employees compliane th aw authorizes OGE only to make a recommendation that the employing ageney look int the mater and conier taking appropriate ston Ifan agency were to decline te recommendation, OOF only recourse woul be to nly the Presiden Soe $ USC ap. § 40200), See CR. § 2635.06