DOJ clears the way for government to hire technologists still connected to their private sector employers
The administration will be onboarding managers from twenty-plus companies — including Anduril, Microsoft, Nvidia, OpenAI, Palantir and xAI — as part of its U.S. Tech Force program, launched last year to recruit early-career engineers after the administration pushed over 20,000 technologists out of their government posts last year.
The setup is an unusual one. Federal employees are subject to ethics rules meant to ensure that they work for the public interest.
The Office of Personnel Management now has DOJ’s blessing to allow individuals joining the Tech Force to keep their restricted stock units that haven’t yet vested — company stocks issued with a vesting plan that dictates when employees get full ownership of them — while they work for the government on a leave of absence from their private sector employer.
Ethics experts and public sector lawyers told Nextgov/FCW that they are skeptical about the arrangement.
“Why are we replacing a workforce we already had with individuals who may still be beholden to an outside employer?” asked Cynthia Brown, the senior ethics counsel at the nonprofit watchdog organization Citizens for Responsibility and Ethics in Washington. It “raises a lot of very serious concerns.”
It’s unclear exactly how many people will join the government on a leave of absence as part of the Tech Force. It's likely that the DOJ decision will be primarily used for the 100-plus managers being recruited from tech companies partnering with the government, rather than for the class of early-career employees, an OPM spokesperson told Nextgov/FCW.
“This opinion from the Department of Justice provides much-needed clarity on the treatment of deferred compensation and strengthens the federal government’s ability to recruit top talent from the private sector to complete stints of government service,” the spokesperson said in a statement.
The statute addressed by DOJ in its opinion generally bans federal employees from receiving outside compensation for their government service.
OPM had to decide how to address this, given the ubiquity of deferred compensation packages like vested stock in the private sector. Essentially, the question was if those wanting to work for the government have to give them up, or restructure them so as to not run afoul of the law, Kevin Hennecken, a senior advisor at OPM, wrote in a recent blog about the DOJ decision.
Typically, employees forfeit their unvested, restricted stock units when they leave their employer.
OPM’s director, Scott Kupor, has described the Tech Force program as a way to show that people don’t need to spend their entire careers in either the private or public sector and to allow flexibility for people to move between them.
This outside compensation ethics law was OPM’s “most recent strike” to clear the way for that movement between the two, wrote Hennecken, previewing that OPM will be leveraging the flexibility to create other programs to bring in additional private-sector talent for terms of service.
But the Tech Force raises other conflict of interest concerns beyond the compensation statute addressed in the recent memo.
“I think it’s a dangerous path for the government to take,” Michael Fallings, managing partner at Tully Rickney law firm, told Nextgov/FCW, noting that it's hard to opine on the setup without the employees in place, at which point “ethical issues could arise that aren’t even foreseen.”
“Who is that employee more loyal to” if they’re technically still employed by a tech company and the government at the same time, he asked.
In the recent opinion, DOJ only briefly touches on the federal financial conflicts of interest statute, which prohibits government employees from participating in official matters where they have a financial interest — such as matters that have an effect on their stocks or employer.
“That’s where the danger is,” Richard Painter, a former White House ethics lawyer under President George W. Bush, told Nextgov/FCW.
OPM asked the DOJ to “assume” that Tech Force employees will be recused from “any matter affecting their origin company,” DOJ wrote in the memo. The hypothetical from OPM assumed that the companies sending employees had diversified customer bases including but not dominated by government contracts.
It’s hard to know how easy recusal will be for employees without more specifics on what they will be doing at the Tech Force exactly, said Painter, adding that he’s still skeptical.
OPM has said that one target the new hires will work on is deploying artificial intelligence in the government.
“You're giving advice on technology and artificial intelligence, and you have artificial intelligence stock — in the Bush administration, this would have been a no-go,” said Painter on what he’d do if approached about such a program during his time in the White House. “I am not going to have an ethics lawyer have to babysit you.”
Brown noted that this comes after the federal government pushed out thousands of in-house government tech employees.
“If you were to replace your workforce because you think that you have better-suited people, then let them leave their job and come in and do the work of the American government,” she said. “But to be bringing in outside forces for temporary work that could influence the value of what they're doing outside, just raises a lot of very serious concerns.”
“Are these tech force employees deciding what's best for the American people in their capacity as government workers — or are they working to shift government decision making to benefit their private employer?” she asked.
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