Watchdog Group Wants Probe Into FCC Officials Owning Shares in Regulatees
The nonprofit watchdog Campaign Legal Center asked the FCC Office of Inspector General and the Office of Government Ethics for investigations into why multiple high-ranking FCC officials were allowed to own stock in companies regulated by the agency. Financial disclosures from 2018-2020 show bureau and division chiefs and other 8th-floor officials with interest in stocks of FCC regulatees such as AT&T, Charter and Verizon, plus computer companies such as IBM and Sony that depend on FCC device authorizations. “The ethics officials responsible for enforcement must explain to OIG and the public why they allowed employees to hold stocks in FCC licensed telecommunications and computer companies in apparent violation of the law,” said a CLC complaint sent to the FCC last week. CLC made a similar submission to the OGE Monday.
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Under the Communications Act, FCC employees can’t have a financial interest in significantly regulated companies and waivers of those rules are required to be disclosed in the Federal Register, said CLC Legal Ethics Counsel Danielle Caputo in an interview. No such waivers were publicly disclosed, she said. The FCC and OGE didn't comment, nor did those named by CLC.
Those spotlighted by CLC include current Media Bureau Video Division Chief Barbara Kreisman and FCC Media Bureau Deputy Chief Rosemary Harold, a former Enforcement Bureau chief. Others named include Eric Burger, who was chief technology officer, and William Davenport, who was chief of staff to Commissioner Geoffrey Starks. The disclosures show Davenport owning between $2,000 and $30,000 worth of GPS company Garmin, Kreisman owning between $15,000 and $50,000 worth of IBM, Burger purchasing and selling between $1,000 and $15,000 worth of Verizon, and Harold with interests in Comcast, Verizon and Sony, listed as part of her spouse’s IRA. Other employees owned shares in Charter, AT&T, Dell and HP. Under federal conflicts of interest laws, “a spouse’s financial interests are imputed to the government employee,” CLC said. OGE approved all the disclosures. The most recent disclosures are from 2018, 2019 and 2020, with the highlighted activity taking place during the previous administration.
Federal conflict of interest laws have de minimis exceptions for amounts under $15,000, but the Communications Act’s wording doesn’t include that exception, and it also applies regardless of whether the FCC employees handle matters involving the company they own shares in, said Caputo.
“This absolutely begs for an explanation,” said Washington University law professor Kathleen Clark, who studies legal ethics. If there’s a reason the FCC rules for financial interests in regulates were waived, the agency should disclose it, and if no such waivers were issued, the agency's mechanism for enforcing the rules should be interrogated, she said. FCC employees owning stock in companies they regulate is cause for concern even if the amounts of money involved aren’t huge and there are no signs of favoritism, she said. “You want the public to be reasonably confident” that employees aren’t making decisions based on their own self-interest, Clark said. “We largely have an honor system for enforcing ethics in the executive branch.”
The FCC IG acknowledged receipt of the complaint, but otherwise neither it nor the OGE said whether there will be further investigation of the complaint, Caputo said: “The OGE and inspector general maintain these ethical guardrails, and so it is imperative for them to investigate this enforcement failure to rebuild public trust.”