The term “revolving door” refers to the transfer of individuals from positions in public office to jobs in the private or voluntary sector, and vice versa. This is fundamentally a good thing because of the shared understanding it brings and the positive impact it has on public policy. It is, however, important that there are appropriate checks and balances to ensure fairness, and that commercial advantage is not unfairly given to those who misuse public information or access.
In the UK, the revolving door is principally governed by the Business Appointment Rules for Civil Servants. The rules currently require government ministers, special advisers and certain other civil servants to apply to the Advisory Committee on Business Appointments (“ACOBA”) before moving to the private sector. Where the Business Appointment Rules apply, they do so for up to two years after leaving public office, depending on seniority. As a general principle, there is a two-year ban on lobbying Government on behalf of a new employer after leaving public service. This means that the former public official should not engage in communications of any kind with Government (including ministers, special advisers and civil servants) with a view to influencing a Government decision, policy or contract award in relation to their own interests, or the interests of the organisation by which they are employed, or to whom they are contracted or with whom they hold office. This definition excludes contacts that are not intended to influence Government, for example purely social meetings at a time when no decision or policy is at stake.
Government ministers, special advisers and civil servants at permanent secretary or equivalent level must apply to ACOBA under the rules, but a more junior civil servant will only be required to do so if there is a particular conflict of interest. In this context, the independent Committee on Standards in Public Life (the “Committee”) has concluded that certain government departments have taken a “slapdash” approach to the application of the rules and it is likely that “predatory” companies target more junior civil servants.1 In addition, the rules do not currently contain any sanctions and ACOBA's input is purely advisory. As the Committee has noted, “[i]n lieu of any formal sanctions, transparency has become the primary mechanism by which the rules are upheld by ACOBA”.2
Are there any meaningful legal restrictions on the revolving door? Not really. Under the UK Bribery Act (“UKBA”) it is unlawful to promise a financial advantage in exchange for the improper performance of a relevant function or activity. So the UKBA could apply in theory. But UK prosecutors have shown no interest in investigating the improper use of the revolving door so far. Other routes to criminal liability – such as the common law offence of misconduct in a public office – are anachronistic and confusing and have not been used in this context.
The U.S. has historically taken a harder line towards the revolving door. Federal law places a lifetime prohibition on former civil servants communicating with or appearing before an agency or court regarding a matter that they substantially participated in. Absolute prohibitions apply to other conduct as well, such as communicating with a former agency for up to two years after leaving public service. The US Foreign Corrupt Practices Act (“FCPA”) has also been more actively enforced in this area than the UKBA. The SEC and DoJ have agreed resolutions with several large companies in relation to dubious hiring practices. FCPA violations have included “relationship hires” or “referral hires” at the behest of government officials in exchange for government work.
On 1 November 2021, the Committee published its final report on the “Standards Matter 2 review”, recommending sweeping changes to the rules regulating the revolving door. The Committee’s report noted “widespread discontent” about the effectiveness of the Business Appointment Rules in the UK.3 Among other things, it criticised the current focus on direct regulatory, policy or commercial relationships between an applicant and a hiring company, which overlooks the possibility of an official initiating a policy favourable to a whole sector with an eye to employment in it.4 The Committee also strongly criticised the lack of any meaningful sanctions, which has the consequence that “ACOBA is not a regulator nor a watchdog”.5 The report made a number of robust recommendations:
- The Business Appointment Rules should prohibit appointments for two years where the applicant has had significant and direct responsibility for policy, regulation, or the awarding of contracts relevant to the hiring company.6
- The Business Appointment Rules should be amended to allow ACOBA and government departments to issue a ban on lobbying of up to five years.7 The Committee’s specific concern is not the former civil servant catching up with an old colleague in the bars of Westminster, but former officials using contacts made in government to provide privileged access or information to a private sector company in return for financial reward. In this context, privileged information can remain valuable for more than two years; whether or not a longer ban is warranted will depend on the nature of the position held by an applicant in government. The lobbying ban should include a ban on any work for lobbying firms, meaning work for public relations firms whose primary purpose is influencing public policy and law.8
- The government should make adherence to the Business Appointment Rules an enforceable contractual obligation for ministers, civil servants, and special advisers, and set out what the consequences for a breach of contract may be. Possible options for sanctions may include seeking an injunction prohibiting the uptake of a certain business appointment, or the recouping of a proportion of an office holder’s pension or severance payment.9
- ACOBA should take on a formal regulatory function. The Committee’s decisions should be directly binding on applicants, rather than a recommendation to the relevant minister, Prime Minister, or permanent secretary.10
- ACOBA should have the power to undertake investigations into potential breaches of the Business Appointment Rules, and be granted additional resources as necessary. The Cabinet Office should decide on sanctions or remedial action in the case of a breach.11
The Committee's recommendations would mark a radical change from the current approach. Whilst it is unlikely that there will be the political willpower to implement all of the Committee’s proposals, modest reforms may occur, such as making ACOBA decisions binding on applicants. And regardless of whether changes occur to the UK legal framework, it is still prudent for companies to adopt a best-practice approach to recruitment, requiring applicants to disclose any past employment or connections with the public sector, not least because of the broad extra-territorial scope of the FCPA. In light of recent cases where public servants have fallen foul of the Business Appointment Rules, it is all the more important that companies ensure that prospective employees engage proactively with ACOBA, are properly open and transparent about their future role, and do not accept any appointment until clearance has been received.
The revolving door is unlikely to shut any time soon, but it still makes sense to be ahead of the curve when it comes to both vetting new recruits and ensuring that they follow the rules.
Authored by Crispin Rapinet, Liam Naidoo, and Reuben Vandercruyssen.