By Lisa Rein,
President-elect Donald Trump’s refusal to divest from his global business empire has provoked a showdown in Washington over government ethics, pitting a small federal agency tasked with preventing conflicts of interest against the incoming administration and its Republican allies on Capitol Hill.
The dispute erupted Friday after a top House Republican demanded to question the director of the independent Office of Government Ethics, who took the unusual step this week of denouncing Trump for retaining ownership of his businesses while transferring management to his sons.
With Republicans and Democrats weighing in, the episode has brought unprecedented attention to a usually obscure office and its director, Walter Shaub Jr., who became an instant sensation on Twitter and in news headlines this week after he blasted Trump’s plan as “meaningless” and said the president-elect is not meeting the standards set by “the best of his nominees.”
House Republicans reacted swiftly, summoning Shaub to appear before the Oversight and Government Reform Committee to answer questions about his office and his public criticism of Trump. Shaub made the remarks at the Brookings Institution on Wednesday, hours after the president-elect and his attorneys had laid out the business plan at a press conference.
By late Thursday, Committee Chairman Jason Chaffetz (R-Utah) had sent Shaub a letter summoning him to appear before lawmakers in a closed-door, transcribed interview much like a deposition.
But ethics experts and Democrats on Capitol Hill said the letter, by noting that the ethics office is up for reauthorization by Congress, was a veiled threat to slash its budget unless Shaub changes his rhetoric.
“I want to talk about the whole department,” Chaffetz said in an interview. “Mr. Shaub has taken a very aggressive stance on issues he’s never looked at. He’s raised a bunch of eyebrows.”
He called Shaub, appointed by President Obama to a five-year term that ends in a year, “a bit of a hothead.”
The lawmaker said he has not yet decided whether to ask Shaub to testify at a public committee hearing; he wants to hear what he says during the closed-door hearing, which was first reported by The Wall Street Journal, he said.
Senate Minority Leader Charles E. Schumer (D-N.Y.) came to Shaub’s defense, accusing Chaffetz of an “attempt to intimidate” the Shaub and his agency.
“Mr. Chaffetz’s attempt to intimidate the office is deplorable and would be a distraction that would make it harder for OGE to do its already difficult job,” Schumer said in a prepared statement. “It is totally out of line when Americans want clean and accountable government. Mr. Chaffetz should instead focus on his job and let Mr. Shaub and OGE focus on theirs.”
Shaub’s supporters are calling him a hero, pushed by Trump’s tangle of potential conflicts to uphold his duty as a public official and call out a plan he believes is unethical, if legal.
“He’s put ethics front and center on the policy agenda,” said Norm Eisen, who served as ethics counselor to Obama. “No one has taken a more courageous action, especially given that he’s going to be working for Trump in eight days.”
The nonpartisan ethics office, with just 75 employees and a $16 million budget, has always been seen and not heard as its lawyers advise incoming presidents, their Cabinet nominees and other officials on how to avoid conflicts of interest.
In the swirl of controversy over potential conflicts related to Trump’s real estate and branding business, Shaub is presenting himself as an unlikely counterweight to the power of the incoming president. His first foray into resistance came on Twitter a few weeks after the election.
Shaub, 57, is a career ethics lawyer whose outspokenness during the presidential transition has caught colleagues by surprise. He is neither flashy nor attention-seeking, they say, but cautious by nature and concerned with protecting the confidentiality of the public officials he works with.
Shaub is known to crack corny jokes. His expertise in federal ethics conflicts is unchallenged, say those who have worked with him. He’s a workaholic who started his legal career in government at the Department of Veterans Affairs and Health and Human Services and worked briefly in the private sector before climbing the ranks in the ethics office.
“Walt is brainy,” said Don W. Fox, Shaub’s predecessor under President George W. Bush. “He’s very circumspect. No one has ever seen him as a partisan.”
Weeks earlier, Shaub had sent the discreet, behind-the-scenes world of federal ethics experts into a frenzy with a stream of unorthodox declarations on Twitter. His Nov. 30 tweet storm, in superlatives designed to parrot Trump’s use of social media, gushed — prematurely and wrongly — over his decision to divest himself of his holdings.
Reporters thought the ethics office’s Twitter account had been hacked. The public wondered whether someone over at the little-known agency at 1201 New York Ave. had lost their mind.
Before nomination hearings for Trump’s cabinet began this week, Shaub accused Republicans of rushing through some nominees before his staff had finished vetting their financial disclosure documents. He sent a letter to Senate Democrats and did not include Republicans, further raising GOP suspicions about his motives.
Shaub, through a spokesman, declined a request for an interview.
Shaub’s was not on the schedule to speak at a long-planned ethics forum at Brookings on Wednesday. He accepted a long-offered invitation at the last minute, writing his extraordinary public admonishment in a few hours.
It lasted 13 minutes. “I wish circumstances were different and I didn’t feel the need to make public remarks” were his first words at the lectern.
He then make a detailed case for why the steps Trump outlined to allow his sons to run his businesses were “wholly inadequate” protections against potential conflicts. Shaub urged Trump to sell his assets and put them in blind trust instead, no matter how complicated the transaction.
“This is not a blind trust,” Shaub said. “It’s not even close.” He also praised former ExxonMobil chief executive Rex Tillerson, the nominee for secretary of state, for putting his vast retirement package into a trust that will be independently managed and prohibited from investing in the company he headed.
“It’s a sterling model for what we’d like to see with other nominees.”
Shaub’s candor has transformed him into a political target for Republicans.
Richard Painter, who was ethics adviser to George W. Bush, said Chaffetz’s letter amounts to a “clear threat to pull the funding of the Office of Government Ethics” unless the agency follows the wishes of Trump and the Republican leadership.
“They are saying lay off Trump and push through these nominees or we’ll kill the funding of OGE,” Painter said. He and other ethics lawyers from both parties said the agency plays an important role, and killing it or reducing its authority would be a blow to avoiding conflicts of interest in a new administration and enforcing basic standards of ethics and transparency.
But Republicans say that Shaub’s $500 campaign contribution to Obama’s reelection committee, public criticism of Trump and lighter hand for Hillary Clinton when her paid speeches have raised legitimate concerns that he is acting as a partisan.
Among his critics is America Rising, a GOP super PAC that does rapid response and opposition research. The group filed a Freedom of Information Act request with the ethics office in search of communications it believes may show that Shaub coordinated with Democrats during the transition to hurt the incoming Trump administration.
America’s Rising also accused Shaub of silence on potential conflicts of interest for Hillary Clinton as she accepted speaking fees for speeches, money that went to the Clinton Foundation. Shaub told the oversight committee at the time that the law did not require disclosure.
“He was not assuming the prominent role [then] that he is now,” America Rising executive director Colin Reed said of Shaub. “The timing is certainly perplexing.”
The federal ethics office traditionally has kept such a low profile that some lawyers in the field had never heard of Walter Shaub until he showed up on Twitter.
“The director of OGE has never gone out and made these types of public statements about any government official,” said Jan Baran, an ethics expert at Wiley Rein who served on President George H. W. Bush’s ethics commission. “He certainly has damaged his own reputation.”
Shaub is a political appointee, but because the post is filled for a five-year term, Trump would have to show cause to fire him. And Shaub is still a civil servant, having kept his status as a senior executive even as he assumed a political post.
In his letter, a copy of which was obtained by the Post, Chaffetz wrote, “Your agency’s mission is to provide clear ethics guidance, not engage in public relations.”
“The Committee is thus continuing its examination of OGE’s operations,” Chaffetz wrote. “[The office’s] statutory authorization lapsed at the end of fiscal year 2007 and the Committee has jurisdiction in the House of Representatives for reauthorizing the office.”
Mike DeBonis and Tom Hamburger contributed to this report.