Unregulated, Secretive Legal Slush Funds Are Swamping the Executive Branch

Public Citizen Urges OGE to Develop Rules Requiring Accountability of Legal Expense Funds

WASHINGTON, D.C. – The Office of Government Ethics (OGE) must promulgate rules governing the recent proliferation of legal expense funds within the executive branch, Public Citizen said today in a comment to the agency.

The funds are set up by government officials in legal trouble to raise money from private sources to help pay for legal expenses. They are largely unregulated for executive branch officials.

New rules, at a minimum, should require a $5,000 limit on contributions, a prohibition on donations from those with business pending before the government official and a requirement for full transparency of the sources of funds and expenditures. Public Citizen also recommends that OGE mandate that each official may create only one legal expense fund to ensure accountability.

“Previously these funds were set up so rarely, and voluntarily disclosed their finances, that the OGE felt tougher regulations were unnecessary,” said Craig Holman, government affairs lobbyist for Public Citizen’s Congress Watch division. “But in the Trump administration these slush funds are popping up everywhere, and each one plays by its own rules of how much money they take from which sources and whether to disclose any of this to the public.”

In September 2017 Public Citizen filed a petition for rulemaking on legal expense funds for the executive branch with the OGE. The agency is currently undertaking such rulemaking.

“Government officials facing costly legal expenses are particularly desperate for donations from others to cover those expenses,” said Lisa Gilbert, vice president of legislative affairs for Public Citizen. “This desperation provides a perfect window for special interests with business pending before that official to buy favors through large donations to pay for legal expenses.”

Congress has a long history with congressional legal expense funds, and so both the House and Senate have developed strict rules establishing contribution limits, banning donations from certain potentially corrupting sources such as lobbyists and foreign principals, and requiring quarterly disclosure of contributions and expenditures. Public Citizen urges the OGE to do the same for the executive branch.

Public Citizen’s comments to the agency are available here.