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Dismantling Investments in Violation of Ethical Standards through Trusts Act
3/17/2025, 12:53 PM
Summary of Bill HR 1599
Under this legislation, senior Federal employees would be prohibited from participating in transactions involving financial instruments that could pose a conflict of interest or compromise their impartiality in carrying out their official duties. This includes stocks, bonds, commodities, and other financial products.
The bill also includes provisions for reporting and disclosure requirements, as well as penalties for violations of the prohibition on transactions involving certain financial instruments. These measures are intended to promote transparency and accountability among senior Federal employees and their families. Overall, the Senior Federal Employee Financial Integrity Act aims to uphold ethical standards and prevent potential conflicts of interest within the federal government. By prohibiting certain financial transactions and implementing reporting requirements, the bill seeks to ensure the integrity and impartiality of senior Federal employees in their official capacities.
Congressional Summary of HR 1599
Dismantling Investments in Violation of Ethical Standards through Trusts Act
This bill prohibits a senior federal employee or an employee's spouse or dependent children from holding, purchasing, or selling certain financial instruments during the employee's term of service. (A senior federal employee is defined as any individual occupying a Senior Executive Service position.)
Financial instruments covered by this prohibition include any investments in securities, security futures, commodities, or comparable economic interests acquired through synthetic means such as the use of derivatives. The prohibition does not apply to such instruments if they are held in a qualified blind trust or fall below certain value thresholds. Additionally, the prohibition does not apply to diversified mutual funds, diversified exchange-traded funds, specified Treasury debt securities, or compensation from the primary occupation of a spouse or child. The bill provides a 180-day window for individuals affected by the bill to sell any prohibited financial instruments.
Any profit made in violation of the prohibition must be disgorged (given) to the Treasury and may subject the individual to a civil fine assessed by the supervising ethics office. A loss from a transaction or holding conducted in violation of this bill may not be deducted from the amount of income tax owed by the applicable senior federal employee, spouse, or dependent child.
The bill requires each senior federal employee to annually certify compliance, including the compliance of the employee's spouse and dependent children. The Government Accountability Office must conduct a compliance audit.
