LEGISLATIVE REFORM

Both the US Senate and the US House of Representatives prohibit their members along with their staffs from serving on the boards of corporations. The reason is obvious to prevent actual or perceived conflicts of interest and special interest corruption. 

 On Jan 3, 2019 the U.S. House of Representatives passed Representative Kathleen Rice’s resolution prohibiting Members of Congress and their staffs from serving on the company boards of directors . The resolution passed as part of the House Rules package for the 116th Congress. 

The measure creates a similar, yet stronger version of Senate Rule 37.6(a), which states no Senator “shall serve as an officer or member of the board of any publicly-held or publicly regulated corporation, financial institution, or business entity.” The Senate rule prohibits Members and staff from serving on corporate boards but includes certain exceptions for those who were serving on a board for at least two years prior to their election. The House measure eliminated this exception and required members and staff who serve on corporate boards to resign from their position by no later than January 1, 2020. 

“The American people made it clear that they want Congress to clean up corruption and restore integrity to Washington,” said Representative Kathleen Rice. “This resolution is long overdue. I applaud Chairman McGovern and the Rules Committee for making it a priority and ensuring that we finally close this gaping ethics loophole. I’m also incredibly pleased to see the passage of several other measures strengthening sexual harassment rules, protecting whistleblowers, and requiring annual ethics training for Members.” 

I have written a California initiative in the same vein and for the same reason: to help remove corruption and any potential appearance of impropriety from California politics that could arise from an elected politician or member of the elected person’s staff being a member of any profit making board of directors. The initiative reads: 

“No elected official or appointed official to any state or local governmental department or  agency in California nor any member of such person’s staff shall serve as an officer or  member of the board of any privately or publicly held for profit making corporation, financial  institution, or business entity. Any elected California politician or member of staff so  affected must resign by the board within 60 days of the passage of this initiative” 

The initiative does not apply for membership of nonprofit boards as being a board member thereon does not usually create an appearance of impropriety or the possibility of befitting financially from the actions of the board member.