Conflict-of-interest prohibitions are central to federal standards of conduct. Ranging from affirmative ideals to unequivocal restrictions and on to the criminal code, these standards include the more positive, prescriptive Code of Ethics for Government Service enacted in 1980; detailed proscriptions administratively adopted by executive orders; OGE and agency regulations; and criminal conflict-of-interest statutes in 18 U.S.C. 201–209.
Federal conflict-of-interest statutes date from the Civil War, but the principle can be traced formally to 1789 when an Act to Establish the Treasury Department created the very first domestic federal agency and prohibited conflict of interest (and promised a financial reward for whistle-blowers). Section 8 of the act states that “no person appointed to any office instituted by this act shall directly or indirectly be concerned or interested in carrying on the business of trade or commerce.” The many federal statutes were first codified in 1962 and, except for post-employment provisions, have not been amended substantially since then. The general prohibition on conflict of interest is found in 18 U.S.C. Section 208. The Ethics Reform Act of November 30, 1989, revised this section by adding civil prosecution and injunctions to criminal prosecution.
Broader and more stringent standards have been adopted administratively. There are the executive orders, including Lyndon Johnson’s 11222 (1965) and George H. W. Bush’s 12674 (1989) and 12731 (1990), with the latter adding limits on outside earned income. Issuing supplementary rules and procedures, the OGE promulgates imple- menting regulations jointly with agencies. These reckon with agency particulars, in- cluding organic act limitations, statutory gift acceptance authority, procurement, human subject research, or other functional specialties. Executive Order 12731, Section 301(a), directs agency heads to augment the OGE regulations with “regula- tions of special applicability to the particular functions and activities of that agency.”