Divestment

[Jonathan Buhacoff]

Proposal:

The top elected and appointed officials of each branch must divest themselves of any business interests prior to taking office, and must not acquire any new business interests or be involved in the management or control of any business interests or investments for the duration of their term and for at least one year following the end of their term. The divestment end date is set when the official is elected and does not change if the official resigns or is impeached before the end of the term.

For the federal Executive Branch, the top elected officials are the President, Vice President, anyone serving in the cabinet and anyone who is the top appointed official of any federal agency or department. For a state Executive Branch, the top elected officials are the Governor and Lieutenant Governor, the Secretary of State, the Treasurer, the Attorney General, and other such elected positions and anyone who is the top appointed official of any state agency or department.

For the federal Legislative Branch, the top elected officials are the Senators. For a state Legislative Branch, the top elected officials are the state’s legislators.

For the federal Judicial Branch, the top elected or appointed officials are the justices at all levels of courts. For a state Judicial Branch, the top elected or appointed officials are the justices at all levels of courts.

For the federal Investigative Branch, the top elected or appointed officials are the head of the investigative branch and any appointed special prosecutors. For a state Investigative Branch, the top elected official is the head of the investigative branch and any appointed special prosecutors.

Discussion:

This proposal is part of a set of proposals related to Ethical Government.

The divestment requirement must be enforced. This means an elected or appointed official cannot begin their term while they still have business or investment interests that violate this requirement. The best way for a serious public servant to proceed is to sell their interests prior to the election, so that if they win they are ready for public office and there will not be any delays related to selling their interests. If they lose they still have all their money and could build or invest in something new, or get a job, or retire.

Violating the divestment requirement by acquiring new interests, directly or indirectly, while in office would be a criminal act and an impeachable offense.

Federal and state employees may invest in businesses, buy real estate, stocks, and the like. They have supervisors and the Investigative Branch is there to look into allegations of unethical or criminal behavior. However, the top elected and appointed officials must meet a higher standard because they are so important to the functioning of the government. While the Investigative Branch can and should investigate anyone who is suspected of unethical or criminal behavior, including the President, Senators, Supreme Court justices, and the head of the Investigative Branch itself, such investigations have negative effects for everyone involved if the suspect is found to be innocent, and they also have negative effects for people if the suspect is found to be guilty. This doesn’t mean they should be avoided — but it does mean we should make an effort to both prevent them from being needed and to make them easier to navigate when they are needed.

The business interests or assets must be gone — transferring them to children, or into a trust where they can later be recovered or controlled by the official, would not meet the intent of this proposal. The best way is to sell the business or assets in the market and put the money into a professionally managed and publicly available stock fund until the official’s divestment period ends.

First, if an elected or appointed official doesn’t have any business interests including investments, that prevents an entire category of possible corruption. The elected or appointed official’s words and actions should benefit all the people, not just themselves. It prevents a situation where someone can directly or indirectly benefit the official to gain favor by buying from their business or investing in it.

Second, if an elected or appointed official does want to own stocks, they must do so through a professionally managed fund that is both available to the public (no special interests) and invests in a variety of companies, not just one company or one industry (to avoid special interests). The elected or appointed official’s words and actions related to business or investing should benefit all the people in all industries, not just the ones they are invested in.

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