PlainBillCongress, translated.Legislation. Context. Public interest.Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Congressional Research Service
Version 00 · Introduced in House · Feb 26, 2025
Dismantling Investments in Violation of Ethical Standards through Trusts Act
This bill prohibits a senior federal employee or an employee's spouse or dependent children from holding, purchasing, or selling certain financial instruments during the employee's term of service. (A senior federal employee is defined as any individual occupying a Senior Executive Service position.)
Financial instruments covered by this prohibition include any investments in securities, security futures, commodities, or comparable economic interests acquired through synthetic means such as the use of derivatives. The prohibition does not apply to such instruments if they are held in a qualified blind trust or fall below certain value thresholds. Additionally, the prohibition does not apply to diversified mutual funds, diversified exchange-traded funds, specified Treasury debt securities, or compensation from the primary occupation of a spouse or child. The bill provides a 180-day window for individuals affected by the bill to sell any prohibited financial instruments.
Showing the opening paragraphs of the official summary.
Any profit made in violation of the prohibition must be disgorged (given) to the Treasury and may subject the individual to a civil fine assessed by the supervising ethics office. A loss from a transaction or holding conducted in violation of this bill may not be deducted from the amount of income tax owed by the applicable senior federal employee, spouse, or dependent child.
The bill requires each senior federal employee to annually certify compliance, including the compliance of the employee's spouse and dependent children. The Government Accountability Office must conduct a compliance audit.
People & committees
Rep. Cloud, Michael [R-TX-27] · R–TX
Legislative record
A procedural vote is different from passage. Passage in one chamber does not establish enactment. Explore the glossary.
Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
No related bills are listed in this snapshot. This does not establish whether the proposal has appeared in earlier Congresses.
Source last updated: Jan 29, 2026. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2025-02-26 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
This proposal would generally bar federal Senior Executive Service employees, their spouses, and dependent children from owning, buying, or selling covered investments while the employee serves. It would exclude diversified mutual funds, diversified exchange-traded funds, and U.S. Treasury bills, notes, and bonds, and provide other exclusions and exceptions. Employees would have to certify compliance, and ethics offices could impose fines. These are proposed requirements; the supplied history records introduction and committee referrals.
The term senior Federal employee means any individual occupying a Senior Executive Service position
Except as provided in subsection (b), a senior Federal employee, their spouse, or their dependent children may not, during the term of service of the employee, hold, purchase, or sell any covered financial instrument.
The term covered financial instrument does not include— (i) a diversified mutual fund; (ii) a diversified exchange-traded fund; (iii) a United States Treasury bill, note, or bond; or (iv) compensation from the primary occupation of a spouse or dependent child of a senior Federal employee.
Not less frequently than annually, each senior Federal employee shall submit to the supervising ethics office a written certification
assessing civil fines against any senior Federal employee who is in violation of this subchapter, subject to subsection (b).
2025-02-26: Introduced in House
2025-02-26: Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Section 1 would name the bill the Dismantling Investments in Violation of Ethical Standards through Trusts Act.
This Act may be cited as the Dismantling Investments in Violation of Ethical Standards through Trusts Act.
The investment restrictions would cover employees occupying Senior Executive Service positions and their spouses and dependent children. The prohibition would apply during the employee's service, subject to the bill's exceptions.
The term senior Federal employee means any individual occupying a Senior Executive Service position (as that term is defined in section 3132).
Except as provided in subsection (b), a senior Federal employee, their spouse, or their dependent children may not, during the term of service of the employee, hold, purchase, or sell any covered financial instrument.
Covered investments would include securities, security futures, and commodities as defined in existing laws. Coverage would also include financial arrangements that create comparable investment interests through synthetic means, such as derivatives, options, and warrants.
any investment in— (I) a security (as defined in section 3(a) of Securities Exchange Act of 1934 (15 U.S.C. 78c(a))); (II) a security future (as defined in that section); or (III) a commodity (as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)); and (ii) any economic interest comparable to an interest described in clause (i) that is acquired through synthetic means, such as the use of a derivative, including an option, warrant, or other similar means.
Diversified mutual funds and diversified exchange-traded funds would be excluded, as would U.S. Treasury bills, notes, and bonds. Compensation from a spouse's or dependent child's primary occupation would also be excluded.
The term covered financial instrument does not include— (i) a diversified mutual fund; (ii) a diversified exchange-traded fund; (iii) a United States Treasury bill, note, or bond; or (iv) compensation from the primary occupation of a spouse or dependent child of a senior Federal employee.
A sale would be excepted if completed by 180 days after enactment for an employee already serving, or by 180 days after the first day of an initial term for an employee starting afterward. This provision expressly excepts sales; it does not expressly provide a general 180-day exception for purchases or holdings.
The prohibition under subsection (a) does not apply to— (1) a sale by a senior Federal employee, their spouse, or their dependent child that is completed by the date that is— (A) for an employee serving on the date of enactment of this title, 180 days after that date of enactment; and (B) for any employee who commences service as an employee after the date of enactment of this title, 180 days after the first date of the initial term of service
Covered investments could be held in a qualified blind trust for the employee, spouse, or dependent child. The bill relies on an existing statutory definition of that trust arrangement, without reproducing its requirements.
The term qualified blind trust has the meaning given the term in section 13104.
a covered financial instrument held in a qualified blind trust operated on behalf of, or for the benefit of, a senior Federal employee, their spouse, or their dependent child
Another exception would cover investments exempted from coverage under 18 U.S.C. 208 pursuant to 5 C.F.R. 2640.202 or its successor regulation. The supplied text does not reproduce those exemptions.
a covered financial instrument exempted from coverage under section 208 of title 18 pursuant to section 2640.202 of title 5, Code of Federal Regulations (or any successor regulation).
For the tax code's certificate-of-divestiture program, the restriction would count as a federal conflict-of-interest statute, and anyone required to dispose of property because of it would count as an eligible person. The bill does not reproduce the program's tax treatment or other conditions.
Application of certificate of divestiture program For purposes of section 1043 of the Internal Revenue Code of 1986— (1) this section shall be treated as a Federal conflict of interest statute; and (2) any person required to dispose of any property by reason of this section shall be treated as an eligible person.
An employee, spouse, or dependent child would have to surrender to the Treasury any profit from a prohibited transaction or holding.
A senior Federal employee, their spouse, or their dependent child shall disgorge to the general fund of the Treasury any profit from a transaction or holding involving a covered financial instrument that is conducted in violation of this section.
The proposal would prohibit deducting a loss from a prohibited transaction or holding from the income tax owed by the affected employee, spouse, or dependent child.
A loss from a transaction or holding involving a covered financial instrument that is conducted in violation of this section may not be deducted from the amount of income tax owed by the applicable senior Federal employee, their spouse, or their dependent child.
The supervising ethics office could assess civil fines against employees who violate the new requirements. A fine would equal the greater of $1,000 or 10% of the investment's greatest dollar value during any period it was held by the employee, spouse, or dependent child. The transaction-penalty clause refers to section 13153, which addresses certifications, while the detailed fine authority appears in section 13154. The supplied text does not resolve this cross-reference discrepancy.
assessing civil fines against any senior Federal employee who is in violation of this subchapter, subject to subsection (b).
A fine imposed under this section against a senior Federal employee shall be equal to the greater of— (A) $1,000, or (B) an amount equal to 10 percent of the greatest dollar value of the applicable covered financial instrument during any period that such instrument was held by the applicable senior Federal employee or their spouse or dependent child (as the case may be).
A senior Federal employee who holds or conducts a transaction involving a covered financial instrument in violation of this section may be subject to a civil fine assessed by the supervising ethics office under section 13153.
13153. Certification of compliance
13154. Authority of supervising ethics office
Each covered employee would have to submit a written compliance certification at least annually. The supervising ethics office would have to publish each certification on a public website.
Not less frequently than annually, each senior Federal employee shall submit to the supervising ethics office a written certification that the employee, their spouse, or their dependent child has achieved compliance with the requirements of this title.
The supervising ethics office shall publish each certification submitted under subsection (a) on a publicly available website.
The supervising ethics office could issue implementation rules and investment guidance. It could also grant one or more reasonable compliance extensions when it determines that an employee is making a good-faith effort to dispose of covered investments.
The supervising ethics office may implement and enforce the requirements of this subchapter, including by— (1) issuing— (A) for applicable senior Federal employees— (i) rules governing that implementation; and (ii) 1 or more reasonable extensions to achieve compliance with this subchapter, if the supervising ethics office determines that an employee is making a good faith effort to divest any covered financial instruments; and (B) guidance relating to covered financial instruments
Before imposing a fine, the ethics office would have to give the employee written notice describing each transaction involved, an opportunity for a hearing, and an opportunity to comply.
Before imposing a fine pursuant to this section, the supervising ethics office shall provide to the applicable senior Federal employee— (A) a written notice describing each covered financial instrument transaction for which a fine will be assessed; and (B) an opportunity, with respect to each such covered financial instrument transaction— (i) for a hearing; and (ii) to achieve compliance with the requirements of this subchapter.
The ethics office would have to publish descriptions of fines, the reasons for them, and the outcomes, including related hearings. An employee could appeal a fine to that office within the 30-day period beginning on the assessment date.
The supervising ethics office shall publish on a publicly available website a description of— (A) each fine assessed pursuant to this section; (B) the reasons why each such fine was assessed; and (C) the result of each assessment, including any hearing under paragraph (2)(B)(i) relating to the assessment.
A senior Federal employee may appeal to the supervising ethics office a fine assessed under this section during the 30-day period beginning on the date the fine is so assessed.
Within two years after enactment of the new subchapter, the Comptroller General would have to audit employee compliance and report the results to each supervising ethics office.
Not later than 2 years after the date of enactment of this subchapter, the Comptroller General of the United States shall— (1) conduct an audit of the compliance by senior Federal employees with the requirements of this subchapter; and (2) submit to each supervising ethics office a report describing the results of the audit conducted under paragraph (1).
The amendments establishing the investment restrictions would apply to covered employees and family members beginning 12 months after enactment. The text also sets separate 180-day sale deadlines, leaving their interaction unclear. For employees serving at enactment, the sale deadline would precede the general application date.
The amendments made by subsection (a) shall apply to individuals described in section 13152(a) of title 5, United States Code, (as added by subsection (a)) beginning on the date that is 12 months following the date of enactment of this Act.
for an employee serving on the date of enactment of this title, 180 days after that date of enactment; and (B) for any employee who commences service as an employee after the date of enactment of this title, 180 days after the first date of the initial term of service
The staffing amendment would insert “up to 100” after “appoint” in an existing statutory provision. Because that provision is not reproduced, the supplied text does not establish the full scope of this change or how it compares with current appointment authority.
Additional employees Section 13121(c)(1) of title 5, United States Code, is amended by inserting up to 100 after appoint.
The Office of Management and Budget Director could transfer an unspecified amount to the Office of Government Ethics to implement the bill. The money would come from available funds not yet committed to obligations in executive branch programs the Director identifies as duplicative. This is discretionary transfer authority, not a requirement to spend a stated amount.
The Director of the Office of Management and Budget may transfer such funds as the Director considers appropriate, to be derived from unobligated amounts available for executive branch programs identified by the Director to be duplicative, to the Office of Government Ethics for the purpose of carrying out this Act
Transferred funds would remain available until five years after enactment. That deadline concerns funding availability; the investment prohibition is tied to the employee's term of service.
to remain available until the date that is 5 years following the date of the enactment of this Act.
may not, during the term of service of the employee, hold, purchase, or sell any covered financial instrument.
The supplied source snapshot updated January 29, 2026, records introduction in the House on February 26, 2025, and referral that day to the Oversight and Government Reform Committee and the Ways and Means Committee for provisions within their respective jurisdictions. It does not establish the bill's subsequent progress or enactment status.
Source snapshot updated 2026-01-29T14:52:09Z.
2025-02-26: Introduced in House
2025-02-26: Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
A closer look
Reviewed version: Introduced in House · 2025-02-26. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy change attached to appropriations was identified in the complete supplied introduced text. This conclusion is limited to that version and does not establish absence in other versions or accompanying materials, or establish an amendment's attachment history.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No earmark under the stated definition was identified in the complete supplied introduced text. This conclusion is limited to that version and does not establish absence in other versions or accompanying materials. The source set lacks the disclosures and accompanying materials needed to establish formal earmark status.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
Findings to examine
A narrow carve-out was identified in the supplied introduced text. This classification describes preferential treatment within the bill's restrictions, not a judgment about its justification.
Spouses and dependent children of covered employees would receive an express exemption for compensation from their primary occupation. That compensation would fall outside the covered-investment definition even though those family members otherwise face the holding and trading restrictions.
The term covered financial instrument does not include— (i) a diversified mutual fund; (ii) a diversified exchange-traded fund; (iii) a United States Treasury bill, note, or bond; or (iv) compensation from the primary occupation of a spouse or dependent child of a senior Federal employee.
Except as provided in subsection (b), a senior Federal employee, their spouse, or their dependent children may not, during the term of service of the employee, hold, purchase, or sell any covered financial instrument.
Full text preserved for this analysis. Legislative record snapshot: Jan 29, 2026. How PlainBill uses AI