Ethics, Employees and Contractors: Financial Conflicts In and Out of Government

40 Pages Posted: 17 Mar 2011 Last revised: 16 Feb 2012

See all articles by Kathleen Clark

Kathleen Clark

Washington University in St. Louis - School of Law

Date Written: February 19, 2011


In recent decades, the federal government has greatly expanded its use of contractors to perform services, and now purchases more than $260 billion in services every year. The government has increasingly turned to contractors to accomplish its programmatic goals, and contractor personnel are now performing tasks that in the past had been performed by government employees.

While government employees are subject to strict ethics standards, most of these standards do not apply to contractor personnel. If a federal employee makes a recommendation on a matter that could affect her financial interest, she could be subject not only to administrative discipline but also to criminal prosecution. In most cases, a contractor employee who has that same financial interest and makes the same recommendation is not subject to any consequences. In fact, the government does not have any systematic way of even finding out when contractor personnel have such conflicts of interest. The personal conflicts of interest of contractor personnel are largely unregulated.

This article the disparity between the strict regulation of employees and the lax regulation of contractor personnel; explores possible explanations for the wide disparity in standards for these two groups; and suggests several research questions that should be answered prior to deciding whether to impose strict financial conflict standards on contractor personnel.

Keywords: corruption, ethics, fiduciary duty, public law, conflict of interest, bailouts, public procurement, government contract, outsourcing, acquisition workforce

Suggested Citation

Clark, Kathleen, Ethics, Employees and Contractors: Financial Conflicts In and Out of Government (February 19, 2011). Washington University in St. Louis Legal Studies Research Paper No. 11-02-03, Alabama Law Review, Vol. 62, No. 5, 2011, Available at SSRN:

Kathleen Clark (Contact Author)

Washington University in St. Louis - School of Law ( email )

Campus Box 1120
St. Louis, MO 63130
United States
314-935-4081 (Phone)
314-935-6493 (Fax)

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