The Executive Appointment Process

Patrick Duffey: Welcome. With the 2024 election well underway, we're here today to discuss the executive appointment process. My name is Patrick Duffey. I'm a partner in the firm's Private Wealth Services Group out of the Tampa office. I'm joined today by Bob Rizzi and Charles Borden. Bob is a partner in the firm's tax group and co-teaches a class at Harvard Law, (inaudible) as does Charles Borden, who is the co-lead of the firm's Political Law practice. Now, we ought to begin at the beginning. What precisely do we mean when you talk about the executive appointment process?

Charles Borden: Well, you know, I think what we're talking about is the process of people seeking appointment in senior executive branch positions of all sorts. You know, what Bob and I have found, you know, over the years that we've been doing this is that, you know, regardless of administration, there are always people who are interested in, you know, serving their country and joining an administration as you get to a presidential election. And, you know, what they find is that the process of actually going into government is much, much more complicated than they ever imagined. I think all of them sort of get through the process and then try to just forget what it was like because it can be quite burdensome. And, you know, what we have helped clients do of both parties for several decades now is navigate those issues and help them find ways so that they can, you know, think in advance about what are potential issues from a financial disclosure perspective, from an asset planning perspective, from a divestiture perspective, so that they can get through the process as smoothly as possible.

Patrick Duffey: And Bob, what kind of positions do you see most commonly in this practice? 

Bob Rizzi: Well, it varies depending on the administration. One of the constants is that our clients are often considered for ambassadorial positions. But every time there's a new administration, there are 4,000 new political appointees. So 1,200 of those are Senate confirmed. And all of them have to go through the process that Charles described. So these positions can vary from cabinet positions to assistant secretaries to senior staff in the White House. And each one of those has its own complications and its own challenges. But all of them are filled by political appointees. 

Patrick Duffey: I guess the wrinkle for 2024 is that now, either way, we're guaranteed to get a brand new administration. 

Bob Rizzi: That's right. I think the — certainly there will be a considerable amount of turnover, even if there is a continuing Democratic administration. If there's a Republican administration, obviously going to be a very, very significant amount of turnover. And as I say, there'll be thousands of positions available for political appointees. 

Charles Borden: I mean, even in — you've only had one what we would call a friendly transition in recent memory, which was from Ronald Reagan to George H.W. Bush. And, you know, sort of give you, I think, a bit of a benchmark in that case, three of the cabinet secretaries from the last, you know, Reagan Cabinet stayed on and served in the George H.W. Bush Administration. So it's pretty significant turnover. 

Patrick Duffey: So anyone who's interested should be thinking about this process now. 

Charles Borden: Absolutely. I think the issue is that the process, as I said, if you're dealing with high-net-worth individuals, is really complicated. It's definitely manageable. But the concern is if you start down the path and you haven't thought through these issues, you could find a situation where you've essentially started a conversation with people who were the letters and surfaced issues or made commitments that actually would be very problematic. Either problematic in the sense that it will actually cause you not to get the position in the end, which can be obviously disappointing personally and also professionally can have some reputational impact, but also just commitments in the sense of, you know, financial ones. It can be really damaging both in the short term and long term where you've agreed to, you know, you'll get the job, but you'll get it on condition of divesting assets for pennies on the dollar or things like that, which, you know, people don't want to do, or you'll be upsetting, you know, plans you've made regarding your estate and your long-term sort of holdings that will now be torn up in a way that's not really, you know, thoughtful and only is designed really to deal with some of these short-term issues. 

Bob Rizzi: And this is why we're talking about this now, because we're already being contacted by individuals of both political parties who are interested in finding out more about the process. But once the election is over, there is a very short period of time between the election and Inauguration Day for people who are serious about these positions to get ready. And so the more preparation they do now, the easier it's going to be later. And so it's one of the reasons for trying to alert people to these opportunities at this point. 

Charles Borden: Just to sort of, you know, I think expand a bit on that. I mean, the thing I was sort of, you know, mentioning a moment ago, you know, Bob and I have been doing this for a couple of decades now, and we've worked with nominees across administrations, Republicans and Democrats. And that means, you know, we're repeat players. So we've really, you know, been through this process with all kinds of different nominees for all kinds of different positions. And the institutional players in the process, like the Office of Government Ethics, the ethics officials in the various agencies, we've dealt with them for years. And so I think in terms of spotting issues for potential nominees, telling them these are the things that could be potential problems for their nomination or these are the things you're going to probably have to divest, we should think about how you can do that in the most efficient and least costly way possible — we have a very good sense of what those issues are going to be for people. 

Patrick Duffey: So I think that both points are a good transition to talk through for each prospective nominee from a high level. What we're talking about. What is the process? What are the, you know, the high points. To me, what I've heard so far as it appears begins in some version of the vetting process. Then there's a significant amount of financial disclosures involved and maybe even some agreements to resolve those. And then finally, you're probably going to get hit with some version even getting a security clearance. 

Charles Borden: Go ahead, Bob. 

Bob Rizzi: Yeah, I mean, the first step in this process is what's called,  what we've called the political bend, which is individuals step forward. They want to do government service. They're identified by the new administration as being a good fit. And they go through some kind of a screening by the political side of the new administration. At that point, if there's an indication of interest, then there's a very significant amount of paperwork that needs to be completed. Generally, we ask our clients to start taking a look at those forms at this point, or at least early in the process, so they get comfortable that they are able to complete the paperwork. We usually start with the security clearance document, and that is a very detailed background investigation. Generally going back at least seven years and in some cases 15 years and trying to identify whether somebody is eligible for getting a security clearance. Most of the positions we're talking about require a top secret clearance. And so that's the initial form that we focus on. 

Patrick Duffey: Now, I understand that you yourself have gone through that process personally. 

Bob Rizzi: Yes, I worked at the Central Intelligence Agency. And I've represented people who have had security clearances denied. I've obviously represented many, many individuals through the security clearance process. We have some experience in identifying the issues. And certainly that's a point where we can give a lot of background on what we've seen and what are sensitive issues, what are issues that could be managed, what are issues that may potentially be disqualifying. And so it's, you know, it's helpful to have that background. 

Charles Borden: You know, I think it's important to expand a little bit on that in terms of the kinds of issues that we see. We've seen, you know, clients run into problems with — when it comes to security clearances. And the security clearance form is, as Bob said, it's really about trying to figure out whether or not you should be trusted with extremely sensitive information. And so, you know, the issues that they ask about are things like connections to foreign countries, foreign interests. So, you know, one of the things we've run into with a number of clients is having them map their foreign connections of all sort. In this day and age, that can be pretty extensive, particularly there have been, and one of the things you have to find information on is foreign travel. You know, people can be traveling out of the country every week these days, you know, dual citizenship, family members in other countries, those kinds of connections, those can be very significant of the kinds of things that people ask about.

I'd say another issue we see that comes up is, you know, legal proceedings, litigation. If you've had litigation, you know, in litigation that goes to a character, I would say, you know, things like being accused of some form of fraud. Those are the kinds of things that can come up in a process. Obviously, family-related litigation, marital divorce proceedings, allegations regarding abuse of that, all of that's the kind of stuff that gets questioned in the process. And then I think, you know, we see it for some of the younger clients, drug use, particularly the state age, where you have marijuana, you know, being legalized at the state level, but still being a controlled substance at the federal level. 

Patrick Duffey: Now, the younger clients, that's a function of how far back the review is going. 

Charles Borden: Yeah. So as Bob said, you know, the standard, you know, of the background check will go back seven years, but oftentimes they go back 15. And so, you know, if you are someone who is, you know, late 30s, early 40s, 15 years, takes you into your mid-20s. And we definitely have clients where you go back that far there, they may have had some, as some have called, a youthful indiscretion, that get captured in this process. And it's not necessarily a disqualifier. It doesn't mean that they can't get a clearance. And Bob and I have plenty of experience with helping people get clearances under those circumstances, but it's something that needs to be explained. And one of the most important things that, you know, we tell clients when they're going through this process, which feels very invasive, is they can't lie. The single biggest reason people don't get security clearances is economic insecurity. They are capable of being bribed for their financial distress. The second most common reason they don't get a clearance is they lie during the security clearance process. We've had lots of people over the years who have — they just don't want to admit that they've done something wrong or something arguably wrong and they lie about it. And that's fatal.

Patrick Duffey: So, Charles, I want to touch, move on here to the disclosure process, which we mentioned earlier. Now, in our practice, a version of disclosure, financial disclosures comes up all the time, but actual agreements, post-actual agreements. I'm assuming this is a little bit more organized than that. 

Charles Borden: I think your assumption is probably right in part, not in others. Basically, this is a process. We always call this — it's basically a snapshot process designed to take a snapshot of someone's finances essentially at the time that they're being nominated. And it is a process that dates back to the Ethics and Government Act of 1978. And that's important because when the, you know, when Congress was, you know, drafting this legislation and enacting it, they were thinking about financial, a person's financial holdings, you know, in through the 1970s lens. In other words, they were assuming that people held stocks, bonds, mutual funds. Maybe they had some private real estate holdings, but they weren't thinking about the wide variety of financial instruments we see today. And so one of the things you often run into when you're trying to do this snapshot is dealing with a disclosure, a set of disclosure requirements in a form that was not meant for the, you know, sort of the modern portfolio. And so a lot of what Bob and I have to deal with clients is help them, you know, work through how do they disclose some very, very complicated financial arrangements, you know, using a rubric that was basically not meant for private equity holdings or JVs with various JVs, you know, institutional investors and things of that sort. You know, carried interest, for example. It's been a huge issue over the years. But how do you disclose that, you know, appropriately? And so I think, you know, that's been a big part of the disclosure process. You're taking a snapshot. You're trying to disclose your assets, what you're doing. So, you know, in a form which sort of assumes all your (inaudible) publicly traded securities. 

Patrick Duffey: And now the framework to those assets matters, too, right? So there's a family office involved, trusts or a series of trusts. 

Bob Rizzi: You know, financial disclosure. And it's very good to focus on that because that's one of the parts of this process that's pretty different from anything anybody has gone through in the rest of their careers. If they're coming from the private sector, trusts are a key part of the financial disclosure exercise. Private equity funds are part of it. Every part of somebody's financial situation is subject to disclosure one way or another and formatting that, presenting it in a way that's understandable to government officials who may not be familiar with some of the subtleties of trust and estates planning, for example, is part of what we do. We act as intermediaries. We certainly get a lot of assistance from the accountants for the clients, their financial planners, their other advisers, and work closely with them to try to make sure that we navigate through this process.

The arbiter of all of this is the Office of Government Ethics, which is a unique organization in this government ethics area. And we've worked closely with OGE for many years. We've actually helped them develop some of these formats for disclosure and walk them through how these things should be presented. So it's an area where we can help clients on and ease the burden of what is a fairly onerous process. 

Patrick Duffey: So when our clients are coming in with a complicated application, they know, — the OGE knows — who they're talking to, and you know who you're talking to at OGE. 

Charles Borden: Yes, absolutely. 

Bob Rizzi: Yes. Actually, OGE in the past has been willing to talk to us on a no-name basis, which has been very helpful. So, for example, if we have a client or a particular issue, we're able to go to OGE and say, what would your position be on this if our client had the following potential problems? And that helps to ease this process as well. So it's been a very cooperative process. And as Charles said, we're repeat players. So we have developed these kinds of contacts and I think it helps everybody, including the government ethics process generally. 

Charles Borden: Yeah. And I mean, another piece of that is that, you know, the White House Office of Presidential Personnel special counsel's office, you know, there will be times where nominations will get stuck. And we've definitely had situations where, you know, the White House can't recommend someone specifically, but they'll provide a list to nominees of lawyers (inaudible). And both of us are on that list of lawyers who White House and again, across administrations have said, if your process is stuck, you might want to think about talking to these people and getting their help. 

I did want to just pick up, I think, one other thing on the financial disclosure piece, because I do think if people are thinking about it from the standpoint of GM net worth statements or things like that, there is some real, you know, differences in terms of, you know, what you're disclosing here. One thing that you do need to disclose, depending on the business you're in, is clients. So there's a part of the form which basically requires you — so the form writ large requires you to disclose your assets, your sources of income and essentially your professional relationships. So, you know, you need to disclose boards that you sit on, you know, charities you might be associated with in a senior capacity, things like that. But one of the things that does require you to disclose is sources of compensation above $5,000. And to the extent that you are, that those sources of compensation, they take you through another vehicle, like a law firm in our case. But this is true for accountants, it's true for certain types of financial services advisers, where you have a client who is paying for your professional services, you need to disclose that specific client. So, you know, you'll get a situation for if you look like a lawyer who goes in to the government, they'll list, you know, there's a source of compensation, the law firm they work for, and then they'll list every single client who paid at least $5,000 for their legal services. And you can think about some industries where including, well, where that kind of disclosure can be very problematic because you have confidentiality agreements or things like that with clients. 

Patrick Duffey: So on the asset side, suppose we have a client who's got a very complex set of holdings, maybe a closely held company. Why can't we fix this with a blind trust?

Bob Rizzi: It's one of the most common questions we get, is why can't we use a blind trust? And the answer is that blind trusts generally don't work to avoid conflicts, or disclosure issues, for that matter, because you know what's in the trust. If you contribute an asset to a trust, you know it's there. Blind trusts have very limited utility in this area unfortunately. The only time where a blind trust makes any sense is if you put cash into the blind trust and then the trustee can invest that cash and not tell you what that cash is being invested in.

The other problem with blind trusts under the OGE interpretation of blind trust, which is really all that counts here, is that you have to have a quote, "independent trustee," and that means a trustee that has really no prior relationship to the nominee. And they're really a very limited number of trust companies that are even willing to do this. So there are a handful of blind trusts that are in existence. We've worked with a couple of those, and they're very cumbersome, They're very unappealing for most nominees, and they really are not a factor in most of our planning for nominations. 

Charles Borden: Yeah, I mean, I think just to echo that, you know, people think blind trusts are a way to hold things that are a conflict, and they're not. You're blind to essentially what is done with the proceeds after you've sold the conflicted assets. You're not blind to anything else. So it's basically a structure, as Bob set up, where it's a great way for you to have your money invested after you've sold everything that you were trying to hold on to. But you're going to have anybody managed by somebody who neither you or your family has any prior relationship with. And they're actually very strict rules of how much you can communicate with them. And you can get almost no information on what they're doing. And once you sort of walk a client through those issues, they usually aren't all that keen to do a blind trust.

Patrick Duffey: Makes sense. The clients build the company, they want to keep the company, and then they also want to know how the company is doing. Blind trust fails on all that.

Charles Borden: On all those things, yep.

Bob Rizzi: It's incompatible with a blind trust, yeah.

Patrick Duffey: So with disclosures, I'd imagine that you probably can run into issues both ways. Meaning, the regulations involved. Are they written anywhere? Do we know exactly what to disclose and what not disclose? 

Bob Rizzi: There are regulations in the area. There are guidelines from OGE, but there is also a sort of unwritten set of guidance that you can only really get a handle on by practicing in this area because there's just an enormous amount of custom and practice. You know, it's unsatisfying in a lot of ways. But that's just the, that's the reality. The interpretation of the rules by OGE is something that you can only really understand if you've been working with them. And as I say, we've helped develop some of that custom and practice over the years as we've worked with OGE. So it's — the short answer is there is some written guidance, but that's really not sufficient in the most difficult cases. So if somebody comes in, as Charles says, with a complicated carried interest arrangement with their funds, we know how that is supposed to be described in the disclosure form. But that's only because we've done it a million times. So it's really, it's a matter of practicing in this area and providing that guidance that people need to be able to go forward with their nominations. 

Patrick Duffey: So it strikes me, Charles, you could probably go wrong either way. 

Charles Borden: Exactly. 

Patrick Duffey: Disclosing a little too much or a little too little. 

Charles Borden: And we've seen that, you know, as we say, we oftentimes will find people who come to us midstream. They've already started the process. They've already had their accountant or some other lawyer fill out the disclosure and it's become a mess and it's become a mess for, you know, we have both of those types of reasons. You've had some situations where they're clearly not disclosing enough, you know, they're not providing the level of detail. The process has gotten bogged down. They keep getting questions from the ethics officials about we need more information about this, and they're not providing the right information or a sufficient amount of it. And then you get other situations where people have disclosed far too much information about their holdings. And the thing about it is that can lead to both, you know, providing information or things people don't want to provide information about. But it also highlights for the ethics officials, you know, things that they want to know more about. You can find yourself, you know, running into problems with assets that would have otherwise not been a problem. 

Patrick Duffey: There's a downside to oversharing.

Charles Borden: There's definitely a downside to oversharing. 

Bob Rizzi: Absolutely. 

Patrick Duffey: You mentioned something about working with other law firms. That's, in our own practice, something we find ourselves doing quite frequently. How often does it happen here? 

Charles Borden: I think it happens a decent amount. I mean, we have some very good, you know, relationships with various other firms who know that we do this and they don't. And, you know, they recognize that their role with their client will potentially get problematic if they're the ones who have to come in and be sort of intermediary with the government, you know, helping to understand, you know, what these requests are, explaining what needs to be done if they lack both the experience and they also are differently (inaudible) with the client than we are. And so, you know, a lot of times we will be working with, you know, family offices who have longtime counsel, internal or external, where they're relying on us. And if we work, I think if you think about major law firms who operate in this space, we've worked with all of them at one point or another. 

Bob Rizzi: Yeah. And I think, you know, it should be clear now. I mean, this is a highly specialized practice. And so there are very few other firms that practice in this area. But most of our clients, I would say, have their own counsel or own advisers. And so our role is to help quarterback the process, but to use their advisers in the best possible way to get the information, to help interpret their holdings, to make sure that we've covered everything. Make sure that we have, you know, accurate financial information. So all of those require a coordination with outside advisers, including outside counsel. We're very used to that. 

Patrick Duffey: So one thing I don't think we've talked about yet is how you get to a point where you've made your disclosures, and maybe the OGE has some issues with them, but we're ready to move forward to the next step. What's the way to get there? 

Bob Rizzi: So the financial disclosure is largely intended to help identify potential conflicts of interest, financial conflicts of interest, and the financial conflict of interest statute is a criminal code section. So it's a very serious requirement. And so once those financial conflicts have been identified through the disclosure, then the process of resolving those financial conflicts takes place. And so that can take a number of forms. You can provide for a recusal, for example, that the nominee will recuse from decisions that could affect their holdings. Or you can, in theory, get a waiver if the financial interest is small enough. But generally, the default is that the, that the ethics officials will ask you to divest conflicted assets. And that's sometimes as simple as these are public securities, publicly traded securities. But if it's not publicly traded securities, if there are closely held assets or assets held in trust or other kinds of complicated holdings, structuring the divestiture itself is an area that needs help, and we are very experienced in helping figure out what those remedies look like and how they can be done and what's been acceptable in the past in terms of divestiture. And so that's a, can be a major part. If you're going into the cabinet, for example, the ethics officials will ask you to make major commitments to divestitures. And so that's something that people just have to take into account if they want to take one of those positions. 

Charles Borden: And so what you have happen if you're going to a Senate-confirmed position and you have this in a more informal way and not (inaudible) position. So you have essentially what's called an ethics agreement. It's an actual — it sounds like a contract. It's really more of a one-sided set of pledges. But you have a formal written document. You can find them online. You'll see what some of these ethics agreements look like. Again, as Bob said, for cabinet officials, these can go, you know, maybe 10, 20 pages long. But they're basically a written, you know, sort of set of commitments about how each of the conflicts that have been identified by the government, what's it (inaudible). How are you going to resolve each of those commitments? As Bob said, most cases it's going to be — you're going divest, you're going to divest within 90 days of being confirmed by the Senate if it’s a Senate confirmed position or 90 days of taking office if it's not. 

Patrick Duffey: So I divest within 90 days. That feels like a big tax bill for a lot of these appointees. 

Bob Rizzi: Right. And this is where tax law becomes central. There are a lot of different tax issues related to the government ethics process. But one of the key provisions of the code is Section 1043 that allows you to further gain on required divestitures. And Section 1043 operates a little bit like a 1031 exchange. You have to have a replacement asset to track the basis of the asset that you sold and you're required to sell. And that replacement asset generally will be a diversified mutual fund, and that replacement property will preserve the gain, defer the gain until that replacement asset is sold. And Section 1043 planning is a major part of planning for some of these appointments, and it can be a very welcome opportunity for somebody who is committed to going into the government and divesting and mitigate some of the costs of doing that. 

Bob Rizzi: And the deferral, we talk about deferral, but as you well know, if that diversified mutual fund is held into your estate, it gets a basis step up at death. And so the deferral is permanent. 

Patrick Duffey: And that could be for a pretty large portion of such a work.

Charles Borden: Yeah, absolutely. 

Patrick Duffey: So I wanted to touch on one more thing, which is the hearing process. That to me was what I thought we were going to talk about when I signed up for this. Turns out there's a little more you have to get to — you have to get through to get there. But why don't you talk about how that works and how — 

Bob Rizzi: Well, again, there's a, there's a paperwork element to it. There's always paperwork. And this process is a very form-driven process. Each committee of jurisdiction has a questionnaire, and the nominee will fill out that questionnaire, have it reviewed, have it edited and then submitted to the committee. And then our clients will schedule a hearing. And some of our clients will actually ask us to help in preparation for the hearing through a murder board, which is the term that's used to describe the, sort of the moot court equivalent for somebody who is going to be in front of a Senate committee to try to give them some help in preparing. But each one of those steps we can help. We can provide guidance. We can give them some experience. Ultimately, that hearing will be a very important part of the process and will determine, in some cases, determine whether they'll move forward. 

Charles Borden: Yeah, I mean, just a couple of additional points on that. One is, as Bob said, this is a form-driven process, and the Senate committee questionnaire is an important form and oftentimes it's made public. So your responses, they're going to be scrutinized. The other thing to keep in mind is, in a form-driven process, it's really important to make sure you have consistency across the forums. Because the thing is, if you're going to a Senate confirmation, you know, the opposing party, whichever party that may be, is going to be looking at all of those forms and they're going to be looking for inconsistencies. And you have forms that are asking about the same topics, but with slightly different, you know, questions. And so having a good handle on how you're answering questions about your assets, about your conflicts is critical because if you do have an issue there, absolutely it's going to get caught by the congressional staff on the other side. And we have several colleagues who have been in that role, previously served as Senate staff whose job it was to flyspeck these nominations. And they'll tell you that's exactly what they were looking for.

I think the other thing to sort of keep in mind is that these hearings really can make or break a nomination. I mean, it's you know, we were talking before about ambassadors, but there was a famous, you know, incident during the Obama Administration where three ambassadors walked into a hearing and it turned into an absolute fiasco for them. They were asked a bunch of questions, they didn't have good answers and several of those nominations never went forward because of that.

Patrick Duffey: Three ambassadors walk into a hearing. Sounds like the beginning of a good joke. 

Charles Borden: Yeah. Yeah. 

Patrick Duffey: We mentioned earlier both of you are adjunct professors at Harvard, teach a class on this subject. Why don't we finish up with a case study? 

Charles Borden: Sounds great. 

Patrick Duffey: I'm an ambassadorial candidate. I'm very serious. I picked out a residence or maybe a top five, and I'm ready to go. What do I need to start thinking about? What's my checklist? 

Bob Rizzi: And I should say I've been to a couple of those residences, and it's worthwhile being an ambassador, I would say. It's a wonderful way to serve your country and to be in the middle of some just fantastic experiences. So, as I said, the general way that this starts — and I'll just maybe talk about the first phase of this — is an ambassador — a potential ambassador — is contacted by somebody in the White House. Person in the White House says, congratulations, you're being considered by the president to be the ambassador to Country X. That's the good news. The not-so-good news is here's a list of all of the forms you need to fill out. And so the individual at that point hopefully will contact us and say, I've never seen these forms before. How do I do it? And usually we say, please start with the security clearance form. Let us know as you go through it if you have any questions. And we work with them to try to finalize that form and get that submitted, because the security clearance process takes a while. And so it can be kind of a gating issue for timing. And so that's really what we generally advise in terms of the process. 

Charles Borden: Right. No, absolutely. I think, you know, to sort of recap some of the things we've been talking about, I think you want to think about if you're someone who's interested in being an ambassador. They've come to us. We would say, let's figure out if for each step of the process, what are your potential issues? And so, you know, for the political bet that we were talking about, you know, what are some things that, when the White House or a transition team is interviewing you, what are the kinds of things that they might say are politically problematic? Do you have any, you know, high-profile litigation? Do you have any criminal issues? Do you have any nanny tax issues? Any tax issues generally? Have you ever been accused about not paying your taxes?

Patrick Duffey: Review the Twitter account? 

Charles Borden: Yeah. Review social media posts. 

Bob Rizzi: These days for sure. 

Charles Borden: Any sort of public speaking, any books you've done, any, you know, video presentations you've made. Have you done anything that would be politically problematic? And they're going to ask you for all of that. They're going to ask you for all your social media passwords. So review it now and let's see if you've got an issue that's going to potentially be a showstopper. 

Then to Bob's point, let's talk about the security clearance process. You're going to fill out this form. We talked a little bit about the kinds of issues that get people into trouble. What are your foreign connections? What are your foreign business holdings? Do you have any drug use issues we should be talking about? Have you had any legal proceedings that were contentious or that involved allegations of misconduct or things that go to your character? The kinds of things that we know people do your background check you're going to ask about.

Then with financial disclosure, you know, we've been talking about it, but you know, when you fill out this form, do you have the kinds of assets that this form wasn't meant for? You know, do you have a lot of private equity holdings? Do have a lot of holdings that are held in family trusts? Maybe multigenerational trusts that were not — that are going to be hard to fully explain on this form. Are you in a client service business where you could have a client list that might need to be disclosed? Do you have executive compensation? (inaudible) We don't really talk about that. That might be complicated to explain on this form, but what do you have any of the kinds of sources of income, relationships or assets that are going to be difficult? So we could talk about how best to deal with those.

And then, you know, this issue with remedies, which is if — once you identify these assets, what are the kinds of assets it'll be hard to get out of, you know, what are the situations where assets are held in trust, whether they're held, you know, again, the private equity investments or other types of investments where there's a long lockup of some sort. You know, all of those sorts of issues, you know, let's identify them now and think about, you know, are there some planning opportunities like, you know, where unless we're talking about, you know, 1043 rollover opportunities. But I think that it would be to go through and do that kind of comprehensive upfront analysis so you can make a realistic assessment of, you know, what are you getting yourself into if you want to go forward with this. Are you going to make it through? Based on our experience, do we think you're going to be able to make it through? And if you do make it through, what are you looking at in terms of potential costs, both, you know, reputationally and also financially. 

Patrick Duffey: On this hypo, I've already hired the two of you, so I feel pretty good about it. 

Bob Rizzi: So the conflicts that Charles is talking about, that analysis is somewhat complicated because ultimately the conflicts are going to be determined, potential conflicts are going to be determined by the State Department. And, but we can give some advice as to what we think some of those conflicts might be.

We had one client who is going to be an ambassador to Italy and he owned a winery in California. And we were very concerned about that because we thought, that would be a conflict, potential conflict. The State Department thought that was quite amusing because the idea that Italy would worry about California wines was a stretch and it turned out not to be a problem at all. But we can give some advice about those potential issues to help them think about what might be involved in serving. 

And then, you know, as we just talked about, I mean, getting prepared for the Senate hearing is something that we can provide a lot of help on. And the legislative branch of the State Department provides some background for our nominees. But we find that our staff can provide even better background on some issues and can prepare nominees as well or better than some of the officials. And clients will come to us for that kind of help as well. 

Patrick Duffey: Well, great. I appreciate you both taking the time to join us here today. Look forward to an interesting 2024 election season. And I'm sure that we'll be talking about any political appointments that happen either way. 

Charles Borden: Well, thank you. This has been great.

Bob Rizzi: Thank you very much. Appreciate it.