Ethics in Federally-funded Public Transportation:
Obligations for FTA Recipients, Contractors and Employees
Every year the American taxpayers entrust the Federal Transit Administration (FTA) with billions of dollars in grant and acquisition funds. The taxpayers expect FTA to be a careful steward of their funds and to ensure that the funds are expended for safe, efficient, and accessible public transportation. As part its stewardship, FTA imposes certain ethics obligations on its own employees and contractors, and the recipients of FTA financial assistance and the recipients’ contractors, as follows:
FTA Recipients and Their Contractors
Every FTA grant or cooperative agreement incorporates a Master Agreement (PDF). Section 3 of FTA’s current Master Agreement sets forth the ethics obligations for recipients of FTA funding. Among the subjects covered are:
- Recipient Code of Conduct – An FTA recipient must maintain a written code of conduct or standards of conduct that will govern the actions of its officers, employees, board members, or agents engaged in the award or administration of sub-agreements, leases, third party contracts, or other arrangements supported with Federal assistance. This code must prohibit both real and apparent personal conflicts of interest as well as include procedures for identifying and preventing real and apparent organizational conflicts of interest.
- Responsible Contractor Requirement – By law, recipients using FTA funds to award contracts must award those contracts to “responsible” contractors only. A contractor’s responsibility must be determined by considering, among other factors, the integrity of the contractor. One of the ways a recipient can check the integrity of a prospective contractor is to determine if the contractor has been excluded by the Federal Government from receiving contracts. Each FTA recipient agrees to review the Excluded Parties Listing System before entering into any third party subagreement, lease, third party contract, or other arrangement; additionally, each recipient must assure FTA that its subrecipients, lessees, third party contractors, and other participants at any tier will do the same.
- Prohibitions Against Recipient Employee Political Activity – Certain employees of FTA recipients are restricted in their participation in political activities. Specifically, the Hatch Act limits the political activities of State and local agencies and their officers and employees, whose principal employment activities are financed in whole or part with Federal funds, including a Federal grant, cooperative agreement, or loan. Detailed guidance (PDF)on the Hatch Act is available on the website of the U.S. Office of the Special Counsel. Please be aware, however, that the Hatch Act prohibitions on political activity do not apply to nonsupervisory employees of a public transportation system that receives FTA funding.
- Prohibition Against Recipient Lobbying Activity – FTA recipients are prohibited by 31 U.S.C. § 1352(a) from using Federal assistance to pay the costs of influencing any officer or employee of a Federal agency, Member of Congress, officer of Congress or employee of a member of Congress, in connection with making or extending a grant or cooperative agreement. Recipients are required to assure the compliance of each of their subrecipients, lessees, third party contractors, or other participants at any tier with the DOT regulations, “New Restrictions on Lobbying,” 49 C.F.R. Part 20. Recipients must also comply with other applicable Federal laws and regulations prohibiting the use of Federal assistance for activities designed to influence Congress or a State legislature with respect to legislation or appropriations, except through proper, official channels; and recipients agree not to pay any bonus or commission to obtain approval of their applications for Federal assistance.
Ethics Obligations of FTA’s Direct Contractors
FTA contractors are subject to many statutory and regulatory provisions that guide their ethical conduct in the Federal procurement process. See, for example, the Federal Acquisition Regulation Part 3. A few of these requirements deserve special mention. First, a recent amendment to the Federal Acquisition Regulation requires government contractors to have a written code of business ethics and an ethics compliance training program for contractor employees, and to post “fraud hotline” posters at contractor worksites, which encourage contractor employees to report fraudulent activity in connection with performance and award of government contracts. Second, a recent amendment to the Federal Acquisition Regulation requires contractors to disclose violations of criminal law and the False Claims Act in connection with the award and performance of government contracts and subcontracts. Contractors are subject to debarment and suspension from government contracting for knowingly failing to disclose such violations and overpayments on government contracts in a timely manner. Third, government contractors are required to establish internal control systems to facilitate timely disclosure of improper conduct and fully cooperate with government agencies responsible for audit, investigation, and corrective actions.
Ethics Obligations of FTA Employees
Each FTA employee has certain ethical responsibilities imposed by Federal statutes (PDF) and regulations. In addition, the following general principles apply to every FTA employee:
- Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws and ethical principles above private gain.
- Employees shall not hold financial interests that conflict with the conscientious performance of duty.
- Employees shall not engage in financial transactions using nonpublic Government information or allow the improper use of such information to further any private interest.
- Employees shall not solicit or accept any gift or other item of monetary value from any person or entity seeking official action from, doing business with, or conducting activities regulated by the employee's agency, or whose interests may be substantially affected by the performance or nonperformance of the employee's duties, subject to very limited exceptions.
- Employees shall put forth honest effort in the performance of their duties.
- Employees shall not knowingly make unauthorized commitments or promises of any kind purporting to bind the Government.
- Employees shall not use public office for private gain.
- Employees shall act impartially and not give preferential treatment to any private organization or individual.
- Employees shall protect and conserve Federal property and shall not use it for other than authorized activities.
- Employees shall not engage in outside employment or activities, including seeking or negotiating for employment, that conflict with official Government duties and responsibilities.
- Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities.
- Employees shall satisfy in good faith their obligations as citizens, including all just financial obligations, especially those—such as Federal, State, or local taxes—that are imposed by law.
- Employees shall adhere to all laws and regulations that provide equal opportunity for all Americans regardless of race, color, religion, sex, national origin, age, or handicap.
- Employees shall endeavor to avoid any actions creating the appearance that they are violating the law or the ethical standards set forth in this part. Whether particular circumstances create an appearance that the law or these standards have been violated shall be determined from the perspective of a reasonable person with knowledge of the relevant facts.
Reporting Suspected Violations
The USDOT Office of Inspector General (OIG) maintains a Hotline to facilitate the reporting of allegations of fraud, waste, abuse, or mismanagement in U.S. Department of Transportation’s programs and operations.
The U.S. Office of Special Counsel’s Disclosure Unit serves as a safe conduit for the receipt and evaluation of whistleblower disclosures from federal employees, former employees, and applicants for federal employment.
FTA welcomes your questions on the FTA Ethics Program. The telephone numbers and email contacts of the persons designated to answer inquiries concerning the FTA Ethics Program are listed below.
Elizabeth A.S. Martineau, Senior Attorney
Dana Nifosi, Deputy Chief Counsel