Sen. Tammy Baldwin (D-Wis.) and House Committee on Oversight and Rep. Elijah Cummings (D-Md.) have co-sponsored legislation intended to curb the so-called “revolving door” that results when regulators draw talent from the private sector and those officials and staffers ultimately return to regulated entities after leaving an agency. Critics say the migratory loop between the private and government sector creates conflicts of interest.
The proposed Financial Services Conflict of Interest Act requires senior financial service regulators to recuse themselves from any official actions that directly or substantially benefit the former employers or clients for whom they worked in the previous two years before joining federal service. It also increases the current prohibition on federal examiners from accepting employment with any financial institutions they oversaw from one year to two years. Government procurement officers would not be allowed to work for companies that received contracts overseen by the procurement officers during their last two years in government service.
The bill would also prohibit government employees from accepting bonuses from their former private sector employers for entering government service.
Senators Elizabeth Warren (D-Mass.) and Brian Schatz (D- Hawaii) have signed onto the Senate bill as co-sponsors.