Companies must beware of new 'revolving door' policies.

• Author: Epstein, Stephen
• Position: ETHICS CORNER

* Relationships between government and private contractor representatives must be carefully approached as recent front page stories highlighting allegations of collusion and impropriety have shown.

One of President Obama's first official acts was to issue Executive Order 13490, "Ethics Commitments by Executive Branch Personnel," which upped the ante in the already highly regulated "revolving door" arena.

Federal laws and regulations governing the transition of federal civilian and military personnel from government service to private enterprise now include 18 U.S.C. [section] 208 and 5 C.F.R. 2635.604(a), which requires federal personnel to recuse themselves from taking official actions in particular matters that affect the financial interests of a potential employer.

The Procurement Integrity Act (41 U.S.C. [section] 423) and Federal Acquisition Regulation Part 3 require federal personnel participating in procurements over $100,000 to report employment contacts by entities in that procurement, and to either recuse themselves or reject the employment opportunity.

The Integrity Act also bars contractors from paying compensation for one year to former federal personnel who performed specific procurement and program management functions for contracts that exceeded $10 million awarded to the contractor.

In addition, 18 U.S.C. [section] 207 imposes representational restrictions on former federal personnel. Ethics Pledge (EO 13490) extends the one-year cooling-off restrictions of 18 U.S.C. [section] 207(c) to two years, and bars lobbying of covered executive branch officials as long as President Obama is in office.

Some agencies have additional restrictions. For example, Department of Defense Section 847 of the 2008 National Defense Authorization Act requires senior and procurement personnel to obtain ethics opinions from their ethics officials.

The question for industry leaders is how to limit the compliance risks related to this laundry list of regulations that carries the threat of criminal and civil prosecution, suspension and debarment and reputational disaster. What measures can companies put in place to prevent violations?

Key elements of an effective compliance program can be tailored to address the risks associated with the revolving door depending on the industry and circumstances.

First, companies should draft a clear policy on hiring former federal personnel that describes the compliance requirements, assigns responsibility and...