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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10470 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 10470
To amend section 207 of title 18, United States Code, to prohibit
certain former Federal officials from investing in or serving in a
managerial role in an investment fund in which a foreign principal owns
shares within a certain time period if such investment or managerial
role is based on conversations between such former officials and such
foreign principal while such former official was employed by the
Federal Government, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 18, 2024
Mr. Beyer (for himself and Ms. Scanlon) introduced the following bill;
which was referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To amend section 207 of title 18, United States Code, to prohibit
certain former Federal officials from investing in or serving in a
managerial role in an investment fund in which a foreign principal owns
shares within a certain time period if such investment or managerial
role is based on conversations between such former officials and such
foreign principal while such former official was employed by the
Federal Government, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Political Appointee Illicit Dealings
Act'' or ``PAID Act''.
SEC. 2. PROHIBITION RELATING TO FOREIGN ENTITIES.
(a) Prohibition.--Section 207(f) of title 18, United States Code,
is amended by striking paragraph (3) and inserting the following:
``(3) Special rule for former federal officials on
investments or management roles.--
``(A) Rule.--Any person who--
``(i) is subject to the restrictions
contained in subsection (c), (d), or (e); or
``(ii) would have been subject to the
restrictions in such subsection if such person
received compensation for service or employment
in the position, office, or employment referred
to in such subsection at a rate which would
have made the person subject to such
restrictions,
and who knowingly, within 4 years of any exchange of
communication between such person and a foreign
principal or agent of a foreign principal makes a
substantial investment, or accepts or assumes a
managerial role, in a business entity knowing that such
foreign principal or agent of a foreign principal has a
direct or indirect substantial investment in such
business entity, shall be subject to the penalties set
forth in section 216 of this title.
``(B) Exception.--The rule under subparagraph (A)
does not apply to a person referred to in such
subparagraph--
``(i) who has no managerial role in a
business entity described in such subparagraph
and in which such person has a financial
interest solely through--
``(I) an employer-sponsored
retirement plan; or
``(II) a trust in which such person
has a beneficial interest; and
``(ii) who does not control or recommend,
either directly or through a relative of such
person, any investment of the plan or trust.
``(C) Compliance.--To comply with the rule under
subparagraph (A), such person shall divest such
investment or terminate such role within 120 days of
discovering that such foreign principal or agent of the
foreign principal has a direct or indirect substantial
investment in such business entity.
``(4) Definitions.--In this subsection:
``(A) Agent of a foreign principal.--The term
`agent of a foreign principal' means any person who--
``(i) acts as an agent, representative,
employee, or servant, or any person who acts in
any other capacity at the order, request, or
under the direction or control, of a foreign
principal; or
``(ii) a person any of whose activities are
directly or indirectly supervised, directed,
controlled, financed, or subsidized in whole or
in major part by a foreign principal.
``(B) Business entity.--The term `business entity'
has the meaning given such term in section 334 of the
Gramm-Leach-Bliley Act (15 U.S.C. 6764), except the
term does not include--
``(i) a management company (as defined
under section 4 of the Investment Company Act
of 1940 (15 U.S.C. 80a-4)) that is registered
with the Securities and Exchange Commission
under that Act;
``(ii) an investment company (as defined
under section 3 of the Investment Company Act
of 1940 (15 U.S.C. 80a-3)) that is a regulated
investment company under section 851 of the
Internal Revenue Code of 1986 (26 U.S.C. 851);
or
``(iii) the issuer of a security that is
registered with the Securities and Exchange
Commission pursuant to section 12 of the
Securities Exchange Act of 1934 (15 U.S.C. 78l)
and listed on a national exchange.
``(C) Foreign entity.--The term `foreign entity'
means the government of a foreign country as defined in
section 1(e) of the Foreign Agents Registration Act of
1938, as amended, or a foreign political party as
defined in section 1(f) of that Act.
``(D) Foreign principal.--The term `foreign
principal' has the meaning given such term in section 1
of the Foreign Agents Registration Act of 1938, as
amended (22 U.S.C. 611).
``(E) Indirect substantial investment.--The term
`indirect substantial investment' includes a
substantial investment made by any foreign principal or
agent of a foreign principal acting on directions from
the foreign principal or agent of a foreign principal
described such subparagraph.
``(F) Managerial role.--The term `managerial role'
means an assignment within an organization which
entails--
``(i) managing the organization, or a
department, subdivision, function, or component
of the organization;
``(ii) supervising and controlling the work
of other supervisory, professional, or
managerial employees, or managing an essential
function within the organization, or a
department or subdivision of the organization;
``(iii) if another employee or other
employees are directly supervised, having the
authority to hire and fire or recommend those
as well as other personnel actions (such as
promotion and leave authorization) or, if no
other employee is directly supervised,
functioning at a senior level within the
organizational hierarchy or with respect to the
function managed; and
``(iv) exercising discretion over the day-
to-day operations of the activity or function
for which the employee has authority.
``(G) Relative.--The term `relative' in relation to
a person described in paragraph (3)(A) has the meaning
given such term in section 13101 of title 5.
``(H) Substantial investment.--The term
`substantial investment' means any investment that
exceeds $25,000 or one percent of the value of the
business entity, whichever amount is greater.''.
(b) Applicability.--The amendments made by this section shall apply
on and after the date that is 120 days after the date of enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
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