Federal Ethics and Financial Disclosure — Office of Government Ethics

Every senior federal official — from cabinet secretaries and White House staff down to mid-level agency managers — must file detailed public financial disclosure reports listing their investments, income sources, real estate, and debts. These reports, required under 5 U.S.C. Chapter 131 (the Ethics in Government Act, codified as amended), are the foundation of the executive branch conflict-of-interest system: they let the public see whether an official has financial interests that might affect their official decisions, and they allow ethics officials to require recusals, divestitures, or waivers before an official takes office. The Office of Government Ethics (OGE), created by the same law, coordinates ethics policy across the executive branch, issues the rules that govern financial disclosure, and reviews the ethics programs of all executive departments and agencies. The system is imperfect and widely criticized as incomplete, but it is the primary institutional mechanism for managing conflicts of interest in the executive branch.

Current Law (2026)

Legal Authority

• 5 U.S.C. § 13101 — Definitions: defines "congressional ethics committees" (House Committee on Ethics, Senate Select Committee on Ethics), "designated agency ethics official" (the DAEO responsible for ethics at each agency), and other key terms
• 5 U.S.C. § 13102 — Administration: assigns responsibility to the OGE Director, designated agency ethics officials, congressional ethics committees, and the Judicial Conference; each branch manages its own ethics compliance under the overall framework
• 5 U.S.C. § 13103 — Persons required to file: the universe of officials who must file public financial disclosure reports — primarily Senate-confirmed presidential appointees, White House staff at or above GS-15 equivalent, General Schedule employees at GS-15 and above in specified positions, career Senior Executive Service members, and others designated by OGE
• 5 U.S.C. § 13104 — Contents of reports: filers must disclose all non-government income above $200 from any source; assets worth more than $1,000 or producing more than $200 in income; liabilities over $10,000 (with exceptions for mortgages and student loans); outside positions held; agreements for future employment after government service; and transactions in securities or real estate above $1,000
• 5 U.S.C. § 13105 — Filing of reports: reports are filed with the designated ethics official at the filer's agency, who logs the receipt date, reviews the report for completeness, and forwards it to OGE or the applicable ethics body; the DAEO must note any apparent conflicts or problems
• 5 U.S.C. § 13106 — Failure to file or filing false reports: the Attorney General may bring a civil action for knowing and willful failure to file or for knowingly filing false information; civil penalty up to $50,000; false statements on the report may also constitute a criminal offense under 18 U.S.C. § 1001
• 5 U.S.C. § 13107 — Public access: agencies must make filed reports publicly available within 30 days of receipt; reports must remain available for 6 years; requesters need not state a reason; OGE maintains an online database of executive branch disclosures (the FDYS system); certain intelligence community officials have limited redaction rights
• 5 U.S.C. § 13121 — OGE establishment: the Office of Government Ethics is an independent agency in the executive branch; the Director is appointed by the President and confirmed by the Senate for a 5-year term; the Director may be removed only for cause
• 5 U.S.C. § 13122 — OGE authority and functions: the Director leads and coordinates ethics and conflict-of-interest policy for all executive branch agencies; issues regulations; provides guidance and training; reviews agencies' ethics programs; and may order agencies to take corrective action when their ethics programs are inadequate
• 5 U.S.C. § 13143 — Outside earned income limitation: senior noncareer officials and members of Congress may not earn outside income exceeding 15% of their government salary from any source; the ban on honoraria prevents officials from profiting from their government positions by speaking, writing, or appearing for compensation in their official capacity

What Financial Disclosure Actually Shows

The public financial disclosure report (Form SF-278) is a snapshot of an official's financial life as of December 31 of the prior year. It is organized into schedules:

Schedule A — Assets and income. The official must list every investment account, stock holding, real estate property, and other asset worth more than $1,000 or generating more than $200 in income. The disclosure is in bands rather than precise figures ($1,001–$15,000, $15,001–$50,000, $50,001–$100,000, $100,001–$250,000, $250,001–$500,000, $500,001–$1,000,000, and above $1,000,000). This schedule reveals whether an official holds stock in companies their agency regulates.

Schedule B — Transactions. The official must list securities transactions (purchases and sales) of more than $1,000 during the year, along with the approximate value. This schedule, combined with the STOCK Act's transaction reports, lets the public track whether officials are trading in companies connected to their official duties.

Schedule C — Liabilities. Debts over $10,000 must be disclosed (with exceptions for mortgages on a personal residence and student loans).

Schedule D — Outside positions. Any position held outside the government — director of a nonprofit, member of a board, partner in a law firm — must be disclosed.

Schedule E — Agreements. Any agreements for future employment after leaving government must be disclosed, which reveals the "revolving door" arrangements that may create current conflicts.

Ethics Agreements and Recusals

When a senior official files their initial financial disclosure report, the agency DAEO reviews it for conflicts. If the official holds stock in companies their agency regulates, or has prior employment relationships that might create bias, the DAEO typically requires an ethics agreement before the official can begin work. Common requirements include:

• Divestiture — the official must sell conflicting assets within a specific time period (typically 90 to 180 days)
• Recusal — the official must recuse from participating in matters involving a former employer, client, or financial holding for a specified period
• Waiver — in narrow circumstances where divestiture would be impractical or the conflict de minimis, the DAEO may grant a waiver after finding that the government's need for the official's services outweighs the conflict risk

For Senate-confirmed appointees paid under the Executive Schedule, ethics agreements are typically negotiated during the confirmation process and disclosed publicly.

The Outside Income Limit

Senior noncareer officials and members of Congress face a strict outside earned income cap: total outside income may not exceed 15% of their government salary in any year. In 2026, for an official earning the standard Executive Level IV salary of about $183,000, this means no more than roughly $27,450 in outside income. The honorarium ban is absolute — covered officials cannot receive any payment for a speech, article, or appearance connected to their government position, regardless of the amount.

These restrictions do not apply to investment income, rental income from passive real estate, or income earned before entering government service.

How It Affects You

State Variations

Federal ethics and disclosure laws apply only to federal officials. Every state has its own ethics and financial disclosure requirements for state officials and employees, with wide variation in who must file, what's disclosed, and whether reports are public. Some states have robust ethics commissions with enforcement power; others have minimal oversight.

Implementing Regulations

• 5 CFR Part 2634 — Executive Branch Financial Disclosure, Qualified Trusts, and Certificates of Divestiture (72 sections across 10 subparts):

  • Subpart B — Persons Required to File Public Reports (5 sections): public filers (who file the SF-278, the public financial disclosure report) are (§ 2634.202): the President, Vice President, all officers and employees in positions at or paid above the GS-15/ES rate equivalent, all Senate-confirmed nominees, and all Schedule C (political) appointees; filers who serve fewer than 60 days are generally excused (§ 2634.204); OGE may grant special waivers of public reporting in unusual circumstances (§ 2634.205)
  • Subpart C — Contents of Public Reports (13 sections): the SF-278 discloses: assets and income (investments, business interests, property generating >$200 income or valued >$1,000); sources of compensation >$5,000 from outside employment; liabilities >$10,000; agreements and arrangements with former or future employers; outside positions (officer, director, trustee, partner, employee) held in the prior 2 years; gifts and travel reimbursements above threshold
  • Subpart D — Qualified Trusts (14 sections): OGE may certify blind trusts (Qualified Blind Trusts and Qualified Diversified Trusts) for officials whose financial holdings otherwise create disqualifying conflicts; the OGE-certified trustee manages assets without informing the beneficiary of portfolio holdings; certification requires USDA-specific trustee qualifications; conflicts are avoided because the official genuinely cannot know what they own
  • Subpart H — Ethics Agreements (5 sections): nominees to Senate-confirmed positions must resolve identified potential conflicts through ethics agreements — written or oral commitments to recuse from specified matters, divest specified holdings, resign from outside boards, or waive post-employment restrictions (§ 2634.802); for Senate-confirmed nominees, OGE includes the ethics agreement in the nominee's report to the Senate (§ 2634.803); evidence of compliance must be filed within 30, 60, or 90 days of confirmation (§ 2634.804)
  • Subpart I — Confidential Financial Disclosure (8 sections): employees below the public filer threshold who exercise substantial discretionary authority over government contracts, grants, or regulatory decisions file confidential (non-public) OGE Form 450; agency ethics officials use confidential reports to identify conflicts before they become public ethics violations; agencies may expand the confidential filer list to cover any position with potential conflicts
  • Subpart J — Certificates of Divestiture (8 sections): when an employee must sell assets to comply with conflict-of-interest requirements, they may obtain a Certificate of Divestiture (CD) from the OGE Director (§ 2634.1004); a CD under 26 U.S.C. § 1043 allows the employee to defer capital gains tax on the sale if proceeds are reinvested in approved diversified funds (government securities, mutual funds, ETFs) within 60 days (§ 2634.1006); CDs are available to employees at all levels who face mandatory divestiture; they will not be issued for assets held in tax-advantaged retirement accounts that already provide tax deferral (§ 2634.1007)

• 5 CFR Part 2635 — Standards of ethical conduct for executive branch employees (gifts, conflicts of interest, impartiality, misuse of position, outside activities)

• 5 CFR Part 2636 — Limitations on Outside Earned Income, Employment, and Affiliations for Certain Noncareer Employees: the OGE regulations implementing the 15% outside earned income cap and specific employment restrictions for covered noncareer employees under the Ethics Reform Act of 1989. Key provisions:

  • § 2636.303 — Who is a "covered noncareer employee": a covered noncareer employee is any employee (excluding Special Government Employees) who: (a) occupies a position above GS-15, or (b) is in a position whose basic pay rate is at least 120% of the minimum GS-15 rate; in practice, this covers most Schedule C political appointees, noncareer SES members, political deputy secretaries, undersecretaries, and assistant secretaries, and equivalent positions at independent agencies; career federal employees below this threshold are not covered — the rule specifically targets political appointments
  • § 2636.304 — The 15% outside earned income limitation: covered noncareer employees may not receive outside earned income that exceeds 15% of the annual rate of basic pay for Level II of the Executive Schedule (5 U.S.C. § 5313) as in effect on January 1 of the calendar year; as of 2026, Level II Executive Schedule pay is approximately $210,000, so the 15% cap is approximately $31,500 per calendar year in outside earned income; "outside earned income" includes salary, wages, honoraria, fees, and compensation received from any non-governmental source; investment income, dividends, capital gains, and pension payments are excluded; the cap applies to income attributable to the calendar year regardless of when it was received
  • § 2636.305 — Fiduciary profession restrictions: covered noncareer employees may NOT receive compensation for: (a) practicing a profession that involves a fiduciary relationship — this includes law (including providing legal services or advice, representing clients, receiving attorney fees), financial counseling, accounting, clinical psychology, or any profession where the professional owes a duty of loyalty to clients; (b) working for or affiliating with a firm, partnership, or other entity that provides fiduciary professional services; these restrictions apply even if the outside employment is unrelated to the employee's government duties — the concern is the overall appearance of the official profiting from private professional work while in government
  • § 2636.306 — No compensation for board service: covered noncareer employees may NOT receive compensation for serving as an officer or member of the board of any association, corporation, or other entity; uncompensated board service is permissible and does not violate this provision; many political appointees serve on nonprofit boards in uncompensated roles, which is allowed
  • § 2636.307 — Teaching requires advance authorization: covered noncareer employees may receive compensation for teaching only when specifically authorized in advance by the designated agency ethics official; "teaching" includes any oral presentation or personal interaction where the primary function is instruction, whether at a college, trade school, or training program; agencies must establish procedures for processing these requests; teaching compensation is the most common outside earned income permitted for senior officials, particularly for officials with academic backgrounds

  Part 2636's restrictions are among the most restrictive constraints on senior executive branch employees' outside economic activities. A political appointee who was a practicing attorney before government service may not receive any legal fees during their tenure, even for work unconnected to their government role. A senior official who served on a corporate board for compensation must resign or forgo the compensation. The rule directly implements Congress's intent that political appointees not simultaneously serve private clients and the public — creating a clean break during government service. The rules apply for the entire duration of the appointment, not just to activities that relate to the appointee's government work. Violations of Part 2636 are civil offenses subject to a civil penalty of up to $50,000 per violation (§ 2636.104).

• 5 CFR Parts 2637–2641 — OGE supplemental regulations (post-employment restrictions, agency ethics program administration, waivers)

• 5 CFR Part 2638 — Executive Branch Ethics Program (39 sections — OGE regulations establishing the structure, roles, and responsibilities of the executive branch ethics program; defines what every participant in the ethics program is required to do, from individual employees to agency heads to OGE itself):

  • Employee baseline (§ 2638.102): every executive branch employee bears responsibility for the ethics program — the foundational principle is that public service is a public trust; each employee must meet personal ethics standards, avoid conflicts of interest, and complete required ethics training
  • Supervisor responsibilities (§ 2638.103): supervisors have heightened personal responsibility for advancing ethics; they must model ethical conduct, promptly address potential conflicts when identified, and ensure employees under their supervision complete required training; OGE expects supervisory failures to be addressed in performance evaluations
  • Designated Agency Ethics Official (DAEO) (§ 2638.104): each agency head must appoint a DAEO with primary responsibility for directing daily ethics program activities; the DAEO must be an attorney; the DAEO position must be at a senior level (GS-15 or SES equivalent) with direct access to the agency head; DAEOs are the primary interface between the agency and OGE
  • Inspector General role (§ 2638.106): agency IGs have authority to investigate suspected violations of conflict-of-interest laws and other government ethics rules; OGE and the IG must coordinate — referrals for potential criminal violations go to DOJ under 28 U.S.C. § 535
  • OGE as supervising ethics office (§ 2638.108): OGE provides overall leadership and oversight of the executive branch ethics program; OGE issues binding regulations, provides guidance, reviews agency ethics programs, and may order corrective action; OGE administers the public financial disclosure system and certifies or rejects reports filed by senior officials
  • Financial disclosure coordination (§§ 2638.203–2638.205): each agency collects public (SF-278) and confidential (OGE Form 450) financial disclosure reports according to OGE standards; agencies must forward reports of senior officials to OGE; agencies determine how to collect confidential reports from lower-level filers; referrals to DOJ of potential conflict-of-interest violations must be coordinated with OGE (§ 2638.206)
  • Annual program report (§ 2638.207): agencies must file an annual ethics program report with OGE by February 1 each year; the report covers training completed, disciplinary actions taken, financial disclosure statistics, and program deficiencies; OGE uses these reports to evaluate program effectiveness government-wide

• 5 CFR Part 2640 — Interpretation, Exemptions and Waiver Guidance for 18 U.S.C. § 208 (Acts Affecting a Personal Financial Interest): OGE's rules interpreting the criminal conflict-of-interest statute and establishing exemptions and waiver procedures that allow federal employees to participate in official matters despite minor financial interests (implements 18 U.S.C. § 208):

  • § 2640.103 — The § 208 prohibition: an executive branch employee may not participate personally and substantially in any government matter in which they (or an immediate family member or organization with which they are affiliated) have a financial interest — a violation is a criminal offense under 18 U.S.C. § 208(a); the prohibition covers any "particular matter" where the employee's financial interest would be "directly and predictably affected" by the outcome
  • § 2640.201 — Mutual fund exemption: an employee whose only financial interest in a matter comes from holding shares in a diversified mutual fund or unit investment trust may generally participate, because the indirect interest through a diversified portfolio is too attenuated to be considered disqualifying; this is the most widely used exemption — most federal employees with retirement savings in diversified funds are not disqualified from participating in matters that might affect companies within those funds
  • § 2640.202 — De minimis securities exemption: an employee may participate in a matter when the disqualifying interest arises from individually held securities and the value of those securities is below specified dollar thresholds set by OGE (currently $15,000 for non-senior employees and $25,000 for senior employees and procurement officials); above those thresholds, recusal or divestiture is required
  • § 2640.203 — Miscellaneous exemptions: additional categorical exemptions apply in specific circumstances — including interests arising from employee benefit plans (pension funds, 401(k)s), interests in publicly traded mutual funds that happen to hold securities of a matter party, interests arising from the spouse's employment when the interest is not directed by the employee, and others; each exemption has its own conditions
  • § 2640.204 — Prohibited financial interests: none of the exemptions in §§ 2640.201–2640.203 apply when the employee acquired the financial interest knowing of the pending or contemplated matter — purchasing stock in a company while reviewing that company's regulatory application, for example, defeats all categorical exemptions
  • § 2640.205 — Employee self-screening responsibility: before taking official action in any matter, employees must assess their own financial interests and determine whether they have a disqualifying interest; if uncertain, they must consult their agency's ethics official
  • § 2640.301 — Agency individual waivers (§ 208(b)(1)): an agency ethics official may grant a written waiver allowing an employee to participate in a specific matter despite a disqualifying financial interest when the agency determines that the interest is not so substantial as to be likely to affect the integrity of the employee's services; waivers must be based on specific facts, not general assurances; they are matter-specific, not standing authorizations
  • § 2640.302 — Special Government employee waivers (§ 208(b)(3)): a waiver may be granted for a Special Government Employee (SGE) — an expert or consultant serving part-time or intermittently — when disqualification would prevent the agency from getting services the SGE was hired to provide; SGE waivers are common for advisory committee members with relevant industry expertise
  • § 2640.303–2640.304 — OGE consultation and public availability: agency ethics officials should consult with OGE before granting waivers when practicable; all agency waivers granted under § 208(b)(1) or (b)(3) must be made available to the public upon request; waivers are not private documents

  The Part 2640 framework is where the abstract § 208 prohibition meets practical administration. A federal scientist reviewing a pharmaceutical company's regulatory application can own mutual funds without fear, but cannot own that company's stock above the de minimis threshold. A part-time advisor on a federal advisory committee can receive a waiver allowing them to participate in advisory work despite industry affiliations — exactly the compromise Congress built into § 208(b)(3) to allow government to recruit expert talent without requiring them to liquidate all professional interests. The waiver and exemption architecture allows agencies to keep qualified people working on matters where their expertise is needed, while preserving the conflict-of-interest prohibition as the baseline rule.

Pending Legislation

• HR 7508 / S 3827 — Financial Disclosure Modernization Act: tiered reporting thresholds for large financial holdings up to $1B+; companion bills in both chambers. Status: Introduced.
• Stop Insider Trading Act — outright ban on congressional stock trading with mandatory blind trust requirement; marked up in the House in January 2026. Status: Committee.

Recent Developments

• Musk/DOGE conflicts of interest (2025): Elon Musk's role as head of DOGE while simultaneously operating SpaceX, Tesla, Starlink, and X with significant federal contracts and regulatory exposure raised unprecedented ethics questions. OGE issued guidance that Musk would need to recuse from matters affecting his companies — but his "special government employee" status and the advisory nature of DOGE's formal structure made traditional recusal rules difficult to apply. Federal employees' unions and watchdog groups filed complaints.
• DOGE access to sensitive data (2025): DOGE personnel accessed sensitive federal financial and personnel systems, raising questions about privacy, data security, and the adequacy of ethics waivers covering their access. OPM and Treasury data systems were accessed by individuals without standard security clearances and ethics review. Federal courts issued orders limiting some DOGE data access.
• Congressional stock trading reform: Bipartisan momentum for congressional stock trading restrictions continued building in 2025–2026. High-profile trades timed around classified briefings on tariff policy and COVID vaccines intensified public pressure. The STOCK Act (2012) requires disclosure but does not ban trading; reform advocates want an outright ban or mandatory blind trust. The House marked up the Stop Insider Trading Act in January 2026. See STOCK Act & Congressional Trading.
• Inspector General firings and ethics oversight: Trump fired 17 IGs in January 2025 without providing the required 30-day congressional notice. Courts ordered reinstatement in some cases. Without permanent IGs, agencies are led by acting IGs who may have less independence — reducing the government's capacity to investigate ethics violations and conflicts of interest. See Inspector General Act.
• SF-278 filing delays: The Trump administration's 2025 transition saw delays in filing and reviewing SF-278 reports for senior appointees, and the scope of waivers granted to officials with potential conflicts drew scrutiny from ethics watchdog organizations and the Senate. OGE's enforcement depends significantly on White House cooperation.