Ignorance or Insider Trading--What’s an analyst to do?                                December 2001

A young policy analyst is in his second month of work for a federal law enforcement agency.  He received no ethics orientation, and stuck the ethics  booklet he was handed into his desk drawer unread.  His basic job is to analyze agency operations to make them more effective and efficient.  To do this, it is necessary for him to read the case reports of the agency's field agents.  These reports are classified confidential or secret as the case may be. The analyst has been granted an interim Secret clearance, pending completion of a background Investigation which will take a year.

As a related duty, he sits on a grant and contract review board that evaluates proposals from outside contractors for studies with the same general purpose.  Over the few weeks he has sat on the board, he has been quite disappointed by the low quality of the bids.  Few proposers seem to have carefully read the RFPs, and many are at best only nominally qualified to do the work.

One day an acquaintance of his who is affiliated with a very prestigious think tank calls and explains that the think tank is thinking about filing a proposal.  His friend says that he has several questions about the RFP, and what the agency is really looking for.  The analyst eagerly fills him in.  "Finally," he thinks, "we'll get a good proposal, and the government will get some solid research for all the dollars they're granting."

A few days later the analyst comes across the ethics manual in his desk drawer, and, it being a slow day, reads it.  He is both surprised and a little apprehensive to learn that no one but the contact person named in the RFP is to reveal any information about a Request for Proposals.  Upon reflection, the analyst realizes that what he has done could be considered a form of "insider trading"--that is, providing information which could be advantageous to only a few persons.

He discusses the problem with his office-mate, a 30-year veteran government employee who has been in this agency over 10 years. "If you tell Max (the division chief) you divulged confidential material, you'll never see another confidential file," she says.

This is very plausible.  "Max" cut his teeth as a Security Investigator protecting nuclear weapons secrets at the height of the Cold War.

What should our analyst do?

---author's name/organizational affiliation with held per request