• receipt of compensation for representational services before any department, agency, court, etc. of the United States,
• by anyone who at the time the services were performed, whether by that person or by another, was an officer, employee or judge of the executive, legislative or judicial branch or any agency of the United States,
• in relation to any "particular matter" in which the United States is a party, or has a direct and substantial interest.

     In addition, section 203(a)(2) prohibits the knowing offer or payment of any such compensation for representational service rendered or to be rendered. Section 203(b) sets out parallel prohibitions affecting employees of the District of Columbia government.

Section 203 overlaps substantially with section 205 (discussed under 1.11:690, below), and to some degree also with section 209 (1.11:699, below). Both section 203 and section 205 concern representational activities in matters involving the government, but the former applies to receipt or payment of compensation for such activities, and applies broadly to matters in which the government is a party or has a direct and substantial interest; while the latter applies to the representational activities themselves, and applies whether or not compensation is involved, but it applies, more narrowly, only to representational activities involving a claim against the government. The overlap between section 203 and section 209 lies in the fact that both prohibit receipt or payment of compensation to government personnel, the key difference being that under section 203 the prohibited compensation is for representational services to others and under section 209 it is for services provided to the government.

Section 203 has different mental state requirements for recipients and for payers of compensation for representational services. A payer is liable only if it "knowingly" gives, offers or promises compensation for representational services. The recipient, however, violates section 203 whether or not his or her receipt was "knowing." In explaining this discrepancy, the United States District Court for the District of Columbia observed,

[T]he only logical explanation . . . for Congress’ inclusion of the term "knowingly" in one subsection and its exclusion in the other is Congress’ intent to treat government employees receiving payments from those interested in matters in which the United States is a party or has a direct or substantial interest more harshly than the donors of such payments.

United States v. Baird, 778 F. Supp. 534, 536-37 (DDC 1990), reversed on other grounds, 29 F. 3d 647 (DC Cir. 1994).

A violation of section 203 does not require any showing of evil intent. See United States v. Alexandro, 675 F.2d 34, 43 (2nd Cir.), cert. denied, 459 U.S. 835 (1982); United States v. Evans, 572 F.2d 455, 481 (5th Cir.), cert. denied sub nom. Tate v. United States, 439 U.S. 870 (1978); OGE Informal Advisory Opinion 88 x 6 (March 10, 1988). But see United States v. Johnson, 419 F.2d 56, 60 (4th Cir. 1969), cert. denied, 397 U.S. 1010 (1970) (court reads scienter requirement into predecessor statute to section 203). As the Court observed in Evans :

     572 F.2d at 480. Indeed, the court further found that "it is not [even] necessary . . . that the official actually be capable of providing some official act as quid pro quo at the time." Id. at 479; see also United States v. Freeman, 813 F.2d 303, 306 (10th Cir. 1987) ("We do not limit our interpretation of [section 203] to require that the government employee perform an illegal service."). By similar reasoning, in Stern v. General Electric Co., 924 F.2d 472 (2d Cir. 1991), the court held that section 203 would not be violated by a corporation’s PAC making contributions to Members of Congress knowing that the contributions could be converted (legally) to the Members’ personal use. "Criminal intent under section 203 turns not on what the contributor expects the recipient to do with the money, but rather on what the contributor expects to receive for that money." Id. at 478.

However, evil intent may be relevant in determining whether the violation amounts to a felony, on the one hand, or a misdemeanor, on the other, under section 216 of the Act, which prescribes the penalties attached to all provisions of the Act. (Section 216 is discussed under 1.11:600, above.)

The 1989 amendment to section 203 explicitly provides that the section applies only to "representational" services, codifying the consistent prior holdings of both the courts and the Office of Government Ethics. See e.g., United States v. Myers, 692 F.2d 823 (2nd Cir. 1982), cert. denied sub nom. Lederer v. United States, 461 U.S. 961 (1983); OGE Informal Advisory Opinions 89 x 7 (May 31, 1989) and 88 x 3 (March 2, 1888). There is, however, no requirement that these representational services relate to a proceeding that is actually pending at the time compensation is received, Myers, 692 F.2d at 853 n.26.)

The term "representational services" clearly encompasses a wide array of activities commonly involved in the practice of law. As explained by the Office of Government Ethics, "[r]epresentational service is [seeking on behalf of another, a] discretionary action [from the Government]. It includes any of a broad spectrum of activities beyond formal representation in courtroom or in agency proceedings by an attorney." OGE Informal Advisory Opinion 88 x 3 (March 2, 1988) (brackets in original). It appears that rulemaking may be considered an "other particular matter," for section 203 purposes, as it is for purposes of section 207 (see 1:11:610, above), and thus a representational service within the prohibition of section 203, even though section 203, unlike section 207, was not modified with respect to the meaning of the term "particular matter" by the 1989 amendments.

"Such representations must involve communications made with the intent to influence and must concern an issue or controversy." OGE Informal Advisory Opinion 89 x 7 (May 31, 1989). Thus, the "provision of purely factual information or the submission of documents not intended to influence are not representational acts," id.; see also OGE Informal Advisory Opinions 81 x 21 (June 25, 1981) and 85 x 3 (March 8, 1985) (receipt of compensation for preparation and signing by Government employee of another’s income tax return does not violate section 203).

A major change in the scope of section 203 made by the 1989 amendments was the addition of representational services before a court to the list of prohibited services. Prior to this amendment, representational services rendered before a court were barred only under section 205 (which substantially overlaps with section 203 but also covers unpaid services). See 1.11.690, below.

Section 203 does provide two exceptions that were added by the 1989 amendments. Both of these exceptions have particular relevance to lawyers, and the second is relevant to a law firm that has a "special Government employee" (such as an independent counsel) connected with the firm.

First, any government employee can provide paid or unpaid representational services for his immediate family (parents, spouse or children) or representational services as guardian, executor, administrator, trustee or other personal fiduciary, provided that the employee has not participated "personally or substantially" in the matter as a government employee and the matter is not the subject of his or her official responsibility. Section 203(d). This exception is subject to approval by the Government official responsible for the appointment of the government employee. Id.

Second , a "special Government employee" can act as an agent or attorney for another person in the performance of work under a grant by, or a contract with or for the benefit of, the United States provided that the head of the department or government agency concerned with the grant or contract certifies in writing that the national interest so requires and publishes such certification in the Federal Register. Section 203(e).

Section 203 now also expressly allows a government employee to provide testimony under oath or make statements required to be made under penalty of perjury. This exception, which had been part of the predecessor statute to sections 203 and 205, had been inadvertently omitted from section 203 when the two sections were amended in 1962 to stand alone. United States v. Wallach, 935 F.2d 445, 471 (2d Cir. 1991), held that a conspiracy to violate section 203 could be found if a person anticipating appointment as a federal official accepted payment in return for agreement to lobby on an enterprise’s behalf while holding federal office.
     Although section 203 is not limited to lawyers, it is of particular pertinence to them. In addition to the core prohibition, on a lawyer in government receiving compensation for representing another before the government, and on sharing the compensation received by others (such as law-firm partners) for such representations, section 203 has potential application to lawyers in two less obvious circumstances. One has to do with compensation of lawyers who join a firm after leaving government, and the other relating to compensation of "special Government employees" who concurrently work for a law firm.

Lawyers Entering a Law Firm From Government
Because section 203 focuses on the date that representational services were rendered rather than the date compensation was received, paid or offered, lawyers leaving government service and the law firms to which they go must be aware of the restrictions of section 203 as they may affect the lawyer’s compensation after joining the firm. As the Office of Legal Counsel of the Department of Justice has explained:

     Memorandum of the Department of Justice Office of the Legal Counsel, General Restrictions Regarding Future Employment of Government Officers and Employees (Nov. 12, 1976), at 8 (hereinafter the 1976 OLC Memorandum ).

This restriction normally will not affect a firm’s compensation to former government lawyers entering a firm as associates, since their fixed salary cannot be traced directly to any services before the government. See 1976 OLC Memorandum at 9 (section 203 "does not apply to a person who receives a fixed salary as an employee of the firm."). The firm must be careful, however, if it pays a bonus over and above the fixed salary to the associate, for the bonus must not be calculated on the basis of firm earnings that include compensation for representational services provided by the firm before the government. See OGE Informal Advisory Opinion 84 x 13 (June 15, 1984) (advising a law firm in which an "of counsel" lawyer had been appointed as an assistant independent counsel that a bonus paid to that lawyer over and above his fixed salary "may not be calculated on any amount that includes fees generated by the firm’s representations of clients on matters ’pending in’ the Department of Justice while he served as a special Government employee of the Department").

A firm must, however, take appropriate steps to ensure that former government lawyers entering the firm as partners do not receive such compensation. Partners ordinarily share in the profits of a law firm, but a partner joining a firm after government service must not share in any profit derived from representational services performed by the firm before the executive branch or courts during that partner’s government service. See OGE Informal Advisory Opinion 88 x 3 (March 2, 1988) (government employee who is a partner in a law firm is "barred from receiving any partnership share, any bonuses, or any other form of payment derived from compensation for the representational services of others [before a government agency]"); OGE Informal Advisory Opinion 90 x 3 (March 1, 1990) (same, re former government employee joining law firm); OGE Informal Advisory Opinion 90 x 10 (May 9, 1990) (Section 203 would prevent a retired military officer serving as an officer of a corporation that acts as an agent for federal employees in pursuing private personal property loss and damage claims against the government from sharing in fees earned by the corporation in representing such persons during the time he was on active duty or employed by the government). Likewise, OGE has ruled that a government employee could not receive compensation by way of dividends instead of salary from a company that provides representational services on behalf of third parties, since such compensation is tied to the profitability of the firm which in turn is tied to the prohibited services. OGE Informal Advisory Opinion 89 x 7 (May 31, 1989). Because section 203 imposes criminal liability upon the payer as well as the payee in such instances, such payment would expose to criminal sanction both the other partners of the firm who knowingly share the fee with the returned partner and a client who pays for such services knowing that the former government lawyer will share the fee. See 1976 OLC Memorandum at 9 n.11.

There are two practical approaches that a law firm can take to avoid a violation of section 203 in these circumstances. One is to separate the fees received from representations before the government during the pertinent period from other fees that the partner is eligible to share, and have the partner in question share only in the latter fees. See OGE Informal Advisory Opinion 84 x 3 (March 19, 1984): "In practical terms [the affected partner] and the other members of [the] firm must maintain a bookkeeping arrangement which segregates funds they receive for such representations from those in which [the affected partner is] eligible to share. They may not make up any resulting disparity so that [the affected partner does] not suffer any economic loss." The other approach is to pay the incoming partner a fixed salary for such period as may be necessary to assure that no further fees for representational services before the government during the partner’s government service remain to be received. See OGE Informal Advisory Opinion 84 x 6 (May 1, 1984) ("The payment of a salary, instead of the grant of a partnership interest, to a lawyer who has left the service of the Federal Government for practice as a principal in a law firm is a means of avoiding the specific prohibition of 18 U.S.C. § 203."). OGE Informal Advisory Opinion 93 x 31 (October 26, 1993) approved a proposed arrangement under which a law firm would compensate two partners who had recently left the government on the basis of estimated receipts from billings for services provided after their government service, rather than actual receivables, which might include fees for services rendered before they left government. The amounts based on the estimate would be paid regardless of how accurate the estimate proved to be. The Opinion observed that in subsequent years adjustment would have to be made for fees for services affected by section 203 only in the case of a "particularly dilatory client" or a fee in a "long-lived contingency fee case."

Special Government Employees" Simultaneously Employed in a Law Firm
As explained under 1.11:600 above, a "special Government employee," as defined by section 202(a) of the Act, is an officer or employee of the executive or legislative branch of the United States government or any independent agency of the United States or the District of Columbia who is "retained, designated, appointed, or employed" to perform temporary duties on behalf of the government, with the expectation of serving in a government position for 130 days or less during any period of a year; certain part-time United States Commissioners and magistrates; and, regardless of the number of days of appointment, independent counsel, and persons appointed by independent counsel.

Since it is often the case that a "special Government employee" does not work full-time for the Government, a lawyer might work at a law firm concurrently with his or her responsibilities as a special Government employee -- and, indeed, most independent counsel have done so. A firm that has a partner who accepts such a position and continues his or her relationship with the firm must consider how, in light of section 203, the partner can be compensated. (The issue affects only partners because, as explained above, associates in a firm, paid a salary and not sharing in the firm’s profits, should not be impacted by section 203 because their salaries cannot be traced directly to any services before the government, let alone before any particular agency.) The restrictions covering "special Government employees" under section 203 are more lenient than those covering full-time government employees. Under section 203(c) a "special Government employee" is prohibited only from receiving compensation for representational services in particular matters involving a specific party or parties in which the employee has participated "personally and substantially" in his or her government work or which are pending before a Government department or agency in which the employee has served for more than sixty days in the preceding year. See OGE Informal Advisory Opinion 84 x 4 (April 6, 1984) (independent counsel and his lawyer staff can continue to be compensated by their law firms, so long as they don’t share in compensation received by the firm for services before the Department of Justice after serving as independent counsel for more than sixty days). See also United States v. Mitchell, 397 F. Supp. 166, 171 (DDC 1974), aff’d on other grounds sub nom. United States v. Haldeman, 559 F.2d 31 (DC Cir. 1976), cert. denied sub nom. Ehrlichman v. United States, 431 U.S. 933 (1977) (dismissing contention that special assistant to the Special Prosecutor violated section 203 in maintaining his connection with a law firm).

The firm, therefore, must ensure that partners who are "special Government employees" do not share profits derived from cases involving such representational services before the department or agency in which the partner is employed. See OGE Informal Advisory Opinion 84 x 4 (April 6, 1984) (advising an independent counsel that his firm "would have to take measures to ensure that any compensation [he] might continue to receive from the firm was not attributable to services the firm performed in relation to matters pending in the Justice Department"). See also OGE Informal Advisory Opinion 84 x 13, supra . Again, there are two ways of assuring that the lawyer who is serving simultaneously as a government employee and a law firm partner does not receive compensation forbidden by section 203: segregating the firm’s profits from representations before the pertinent government agency into a separate profit account in which that partner does not share; and putting that partner on a fixed salary. Where the amounts involved are small, the first is likely to be the better alternative. Where the partner’s "special Government employee" status is extensive in scope or duration, however, the firm would probably be better served by adopting the fixed salary method.