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S. 3181 (117th): Foreign and Domestic Emoluments Enforcement Act


The text of the bill below is as of Nov 4, 2021 (Introduced). The bill was not enacted into law.


II

117th CONGRESS

1st Session

S. 3181

IN THE SENATE OF THE UNITED STATES

November 4, 2021

(for himself, Mr. Whitehouse, Mr. Markey, Ms. Warren, Ms. Hirono, Mr. Booker, Mr. Sanders, Mr. Wyden, Mrs. Gillibrand, and Ms. Klobuchar) introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs

A BILL

To prohibit certain foreign and domestic emoluments, and for other purposes.

1.

Short title

This Act may be cited as the Foreign and Domestic Emoluments Enforcement Act.

2.

Findings

The Congress finds the following:

(1)

The Founders of the United States believed that political corruption and the interference of foreign governments were among the gravest threats the Nation faced. As a result, they viewed anti-corruption measures as essential to preserving an enduring democracy.

(2)

The Founders wanted to ensure that the Nation’s leaders would be dependent on the people alone, not on those offering private financial rewards—and would be motivated solely by the national interest, not their own personal interests.

(3)

The Founders were especially worried that foreign powers would interfere with the internal affairs of the United States, undermining the Nation’s republican institutions and making its leaders subservient to foreign interests. In The Federalist No. 22, Alexander Hamilton wrote that one of the vulnerabilities of republics is that they afford too easy an inlet to foreign corruption. He was aware that eighteenth-century monarchs used lavish presents to ingratiate themselves with ambassadors and ministers from other nations and wanted to avoid the potential for such corruption in the new Government of the United States.

(4)

Of particular concern to the Founders was the risk that benefits and rewards given by foreign states would subvert the President’s undivided loyalty to the Nation’s best interests. As Hamilton noted during the Constitutional Convention, the personal interest of a hereditary monarch was so interwoven with that of the Nation . . . that he was placed above the danger of being corrupted from abroad.. By contrast, as James Madison observed, an elected President would lack that permanent stake in the public interest which would place him out of the reach of foreign corruption..

(5)

The Founders were also concerned that domestic government officials might corrupt the President’s independence and gain the loyalty of the President by giving the President financial benefits and advantages. Hamilton observed in The Federalist No. 73 that a power over a man’s support is a power over his will, and that if legislatures could alter the President’s financial circumstances, they could tempt him by largesses and thereby cause the President to surrender at discretion his judgment to their inclinations..

(6)

To increase the likelihood that the Nation’s leaders would be dependent upon We the People alone, the Founders included in the Constitution a number of safeguards against corruption, including article I, section 9, clause 8 (in this section referred to as the Foreign Emoluments Clause) and article II, section 1, clause 7 (in this section referred to as the Domestic Emoluments Clause).

(7)

In the Foreign Emoluments Clause, the Founders mandated congressional approval of presents, emoluments, offices, and titles offered by foreign states to Federal officeholders. They recognized that the dangers of foreign-government influence and divided loyalty would be reduced if officeholders were required to obtain the affirmative consent of Congress before accepting any foreign benefit. As Representative James Bayard explained in the 1790s, the Foreign Emoluments Clause requires officeholders to make known to the world whatever presents they might receive from foreign Courts and to place themselves in such a situation as to make it impossible for them to be unduly influenced by any such presents..

(8)

In the Domestic Emoluments Clause, the Founders provided that Presidents must receive a fixed compensation, which may not be increased or decreased during their time in office, and that Presidents are prohibited from accepting anything beyond that compensation from Federal, State, or local governments. These requirements were meant to prevent Federal, State, and local officials from exerting undue influence over Presidents by manipulating the financial rewards of their office.

(9)

At the time of the Founding, the word emolument was a broad and commonly used term that meant profit, advantage, gain, or benefit, including payments and other financial rewards derived from private commerce. The use of this broad term in the Foreign Emoluments Clause and the Domestic Emoluments Clause was consistent with the Framers’ goal of preventing the corruption of leaders of the United States through private rewards.

3.

Definitions

In this Act:

(1)

Business entity

The term business entity

(A)

means a for-profit corporation, association, partnership, limited liability company, limited liability partnership, other legal entity, or sole proprietorship; and

(B)

does not include an entity—

(i)

in which 100 or more individuals hold a share or ownership interest;

(ii)

in which the official covered by this section owns or has a beneficial interest in no more than 5 percent of the ownership interests; and

(iii)

that—

(I)

issues securities registered with the Securities and Exchange Commission pursuant to section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l);

(II)

is an investment company registered pursuant to section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a–8) that does not have a stated policy of concentrating the investments of the investment company in any industry, business, single country other than the United States, or bonds of a single State within the United States; or

(III)

is a unit investment trust, as defined in section 4 of the Investment Company Act of 1940 (15 U.S.C. 80a–4) that—

(aa)

is a regulated investment company, as defined in section 851 of the Internal Revenue Code of 1986; and

(bb)

does not have a stated policy of concentrating the investments of the investment company in any industry, business, single country other than the United States, or bonds of a single State within the United States.

(2)

Emolument

The term emolument means any profit, gain, advantage, or payment (including a payment arising from a commercial transaction, without regard to whether the payment is at fair market value) that is received directly or indirectly from—

(A)

any government of a foreign country;

(B)

the Federal Government;

(C)

any State; or

(D)

any instrumentality of a government described in subparagraphs (A) through (C).

(3)

Government of a foreign country

The term government of a foreign country has the meaning given the term in section 1 of the Foreign Agents Registration Act of 1938, as amended (22 U.S.C. 611).

(4)

Person holding any office of profit or trust under the United States

The term person holding any office of profit or trust under the United States

(A)

means any individual holding a position listed in paragraph (A) through (F) of section 7342(a)(1) of title 5, United States Code, including any individual appointed pursuant to section 105(a), 106(a), or 107 of title 3, United States Code; and

(B)

includes the President and the Vice President.

4.

Prohibition on acceptance of foreign and domestic emoluments

(a)

Foreign

Except as provided in section 7342 of title 5, United States Code, it shall be unlawful for any person holding any office of profit or trust under the United States to accept from a government of a foreign country, without first obtaining the consent of Congress, any present, emolument, office, or title.

(b)

Domestic

It shall be unlawful for the President to accept from the United States, or a State, any emolument other than the compensation for his or her services as President provided for by Federal law.

(c)

Applicability

The prohibitions under this section apply if the present, emolument, office, or title is—

(1)

provided directly or indirectly—

(A)

by the government of a foreign country or an instrumentality thereof; or

(B)

in the case of the President, provided directly or indirectly by the United States, a State, or an instrumentality of the United States or a State; and

(2)

provided to—

(A)

the person holding any office of profit or trust under the United States; or

(B)

any business entity or trust in which the person holding any office of profit or trust under the United States has a beneficial or ownership interest.

(d)

Consent

Congress consents to—

(1)

the acceptance, by any person who holds an office of profit or trust under the United States, of any emolument that has a monetary value below the minimum value set under section 7342(a)(5)(A) of title 5, United States Code;

(2)

the acceptance, by any person who holds an office of profit or trust under the United States, other than the President or the Vice President, of any emolument that solely constitutes a benefit or compensation—

(A)

accepted by the spouse or minor child of a person other than the President or Vice President as an employee, consultant, or contractor; and

(B)

that has not been given or enhanced—

(i)

because of the relationship of the spouse or minor child to the office holder;

(ii)

in return for the office holder being influenced in the performance of an official act; or

(iii)

for the purpose of avoiding the requirements of this section;

(3)

the acceptance of any emolument by any person in the Federal executive branch, other than the President and Vice President, who holds an office of profit or trust under the United States and is not appointee of the President or the Vice President, if the emolument—

(A)

is attributable to such individual solely as a result of the individual or the individual’s spouse or minor child having a beneficial or ownership interest in a business entity that accepted the emolument; and

(B)

has been exempted as part of a class of emoluments, by regulation issued by the Director of the Office of Government Ethics and published in the Federal Register, from the requirements of subsection (a) as being too remote or too inconsequential to affect the integrity of the services of the class or classes of Federal Government officers or employees to which such regulation applies; and

(4)

the acceptance of any emolument by a Member of Congress or by an officer or employee of the Congress, if the emolument—

(A)

is attributable to such individual solely as a result of the individual or the individual’s spouse or minor child having a beneficial or ownership interest in a business entity that accepted the emolument; and

(B)

has been exempted as part of a class of emoluments, by the supervising ethics office, as defined in section 109 of the Ethics in Government Act of 1978 (5 U.S.C. App.), from the requirements of subsection (a) as being too remote or too inconsequential to affect the integrity of the services to the Government of individual’s to which such exemption applies.

(e)

Acceptance

An emolument is accepted by a person who holds an office of profit or trust under the United States if—

(1)

the emolument is received directly by the officer holder, the spouse of the office holder (unless such individual and his or her spouse are separated) or a dependent, as defined in section 152 of the Internal Revenue Code of 1986, of the office holder; or

(2)

the emolument is received by—

(A)

any other person on the basis of designation, recommendation, or other specification by an individual described in subparagraph (1); or

(B)

a business entity or trust in which an individual described in (1) has a beneficial or ownership interest; and

(3)

the emolument is retained.

5.

Civil actions by Congress concerning foreign emoluments

(a)

Cause of action

The House of Representatives or the Senate may bring a civil action against any person for a violation of section 4(a).

(b)

Special rules

In any civil action described in subsection (a), the following rules shall apply:

(1)

The action shall be filed in the United States District Court for the District of Columbia.

(2)

The action shall be heard by a 3-judge court convened pursuant to section 2284 of title 28, United States Code. It shall be the duty of such court to advance on the docket and to expedite to the greatest possible extent the disposition of any such action. Such action shall be reviewable only by appeal directly to the Supreme Court of the United States. Such appeal shall be taken by the filing of a notice of appeal within 10 days, and the filing of a jurisdictional statement within 30 days, of the entry of the final decision.

(3)

It shall be the duty of the Supreme Court of the United States to advance on the docket and to expedite to the greatest possible extent the disposition of any such action and appeal.

(c)

Remedy

If the court determines that a violation of section 4(a) has occurred, the court—

(1)

shall issue an order enjoining the course of conduct found to constitute the violation; and

(2)

may order, as are appropriate—

(A)

the disgorgement of the value of any foreign present or emolument;

(B)

the surrender of the physical present or emolument to the Department of State, which shall, if practicable, dispose of the present or emolument and deposit the proceeds into the general fund of the Treasury;

(C)

the renunciation of any office or title accepted in violation of section 4(a);

(D)

a prohibition on the use or holding of such an office or title; and

(E)

such other relief as the court determines appropriate.

(d)

Use of Government funds prohibited

No appropriated funds, funds provided from any accounts in the Treasury, funds derived from the collection of fees, or any other Government funds shall be used to pay any disgorgement imposed by the court pursuant to this section.

6.

Disclosures concerning foreign and domestic emoluments

(a)

Disclosures

Section 102(a) of the Ethics in Government Act of 1978 (5 U.S.C. App.) is amended by adding at the end the following:

(9)

Any present, emolument, office, or title received from a government of a foreign country, including the source, date, type, and amount or value of each present or emolument accepted on or before the date of filing during the preceding calendar year.

(10)

Each financial interest or arrangement that is reasonably expected to result in the receipt of any present or emolument from a government of a foreign country during the current calendar year.

(11)

With respect to a report filed by the President—

(A)

any emolument received from the United States, or any of them, other than the compensation for his or her services as President provided for by Federal law; and

(B)

any financial interest or arrangement that is reasonably expected to result in the receipt of any emolument from the United States, or any of them.

.

(b)

Rule of construction

Nothing in the amendments made by this section shall be construed to affect the prohibition against the acceptance of presents and emoluments under section 4.

7.

Enforcement authority of the Director of the Office of Government Ethics

(a)

General authority

Section 402(a) of the Ethics in Government Act of 1978 (5 U.S.C. App.) is amended—

(1)

by striking (a) The Director and inserting (a)(1) The Director; and

(2)

by adding at the end the following:

(2)

The Director shall provide overall direction of executive branch policies related to compliance with the Foreign and Domestic Emoluments Enforcement Act and the amendments made by that Act, including having the authority to—

(A)

issue administrative fines to individuals for violations;

(B)

order individuals to take corrective action, including disgorgement, divestiture, and recusal, as the Director deems necessary; and

(C)

bring civil actions to enforce such fines and orders.

.

(b)

Specific authorities

Section 402(b) of the Ethics in Government Act of 1978 (5 U.S.C. App.) is amended—

(1)

in paragraph (14), by striking and at the end;

(2)

by striking the period at the end of paragraph (15) and inserting ; and; and

(3)

by adding at the end the following:

(16)

developing and promulgating rules and regulations to ensure compliance with the Foreign and Domestic Emoluments Enforcement Act and the amendments made by that Act, including establishing—

(A)

requirements for reporting and disclosure;

(B)

a schedule of administrative fines that may be imposed by the Director for violations; and

(C)

a process for referring matters to the Office of Special Counsel for investigation in accordance with section 1216(d) of title 5, United States Code.

.

8.

Jurisdiction of the Office of Special Counsel

Section 1216 of title 5, United States Code, is amended—

(1)

in subsection (a)—

(A)

in paragraph (4), by striking and at the end;

(B)

in paragraph (5) by striking the period and inserting ; and; and

(C)

by adding at the end the following:

(6)

any violation of section 4 of the Foreign and Domestic Emoluments Enforcement Act and paragraphs (9), (10), and (11) of section 102(a) of the Ethics in Government Act of 1978 (5 U.S.C. App.).

; and

(2)

by adding at the end the following:

(d)
(1)

If the Director of the Office of Government Ethics refers a matter for investigation pursuant to section 402 of the Ethics in Government Act of 1978 (5 U.S.C. App.), or if the Special Counsel receives a credible complaint of a violation referred to in subsection (a)(6), the Special Counsel shall complete an investigation not later than 120 days thereafter.

(2)

If the Special Counsel investigates any violation pursuant to subsection (a)(6), the Special Counsel shall report not later than 7 days after the completion of the investigation to the Director of the Office of Government Ethics and to Congress on the results of the investigation.

.

9.

Severability

If any provision of this Act or amendment made by this Act, or the application of a provision or amendment to any person or circumstance, is held to be unconstitutional, the remainder of this Act and amendments made by this Act, and the application of the provisions and amendment to any person or circumstance, shall not be affected by the holding.