Proposed Rule2023-02440
Modernization Updates to Standards of Ethical Conduct for Employees of the Executive Branch
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Published
February 21, 2023
Issuing agencies
Government Ethics Office
Abstract
The U.S. Office of Government Ethics (OGE) requests comments on proposed changes to the Standards of Ethical Conduct for Employees of the Executive Branch (Standards). The proposed amendments seek to update the Standards based on OGE's experience gained from application of the regulation since its inception. The proposed amendments also would incorporate past interpretive guidance, add and update regulatory examples, improve clarity, update citations, and make technical corrections.
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[Federal Register Volume 88, Number 34 (Tuesday, February 21, 2023)]
[Proposed Rules]
[Pages 10774-10817]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-02440]
[[Page 10773]]
Vol. 88
Tuesday,
No. 34
February 21, 2023
Part IV
Office of Government Ethics
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5 CFR Part 2635
Modernization Updates to Standards of Ethical Conduct for Employees of
the Executive Branch; Proposed Rule
Federal Register / Vol. 88, No. 34 / Tuesday, February 21, 2023 /
Proposed Rules
[[Page 10774]]
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OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2635
RIN 3209-AA43
Modernization Updates to Standards of Ethical Conduct for
Employees of the Executive Branch
AGENCY: Office of Government Ethics.
ACTION: Proposed rule.
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SUMMARY: The U.S. Office of Government Ethics (OGE) requests comments
on proposed changes to the Standards of Ethical Conduct for Employees
of the Executive Branch (Standards). The proposed amendments seek to
update the Standards based on OGE's experience gained from application
of the regulation since its inception. The proposed amendments also
would incorporate past interpretive guidance, add and update regulatory
examples, improve clarity, update citations, and make technical
corrections.
DATES: Written comments are invited and must be received on or before
April 24, 2023.
ADDRESSES: You may submit comments in writing to OGE on this proposed
rule, identified by RIN 3209-AA43, by any of the following methods:
Email: <a href="/cdn-cgi/l/email-protection#ecdedadfd9818388899e8285968d98858382ac838b89c28b839a"><span class="__cf_email__" data-cfemail="1f2d292c2a72707b7a6d7176657e6b7670715f70787a31787069">[email protected]</span></a>. Include the reference ``Proposed
Amendments to Standards of Conduct'' in the subject line of the
message.
Mail: Office of Government Ethics, Suite 500, 1201 New York Avenue
NW, Washington, DC 20005-3917, Attention: ``Proposed Amendments to
Standards of Conduct.''
Instructions: All submissions must include OGE's agency name and
the Regulation Identifier Number (RIN), 3209-AA43, for this proposed
rulemaking. All comments, including attachments and other supporting
materials, will become part of the public record and subject to public
disclosure. Comments may be posted on OGE's website, <a href="http://www.oge.gov">www.oge.gov</a>.
Sensitive personal information, such as account numbers or Social
Security numbers, should not be included. Comments generally will not
be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Kimberly L. Sikora Panza, Associate
Counsel, or Christie Chung, Assistant Counsel, U.S. Office of
Government Ethics, 1201 New York Avenue NW, Suite 500, Washington, DC
20005-3917; Telephone: 202-482-9300; TTY: 800-877-8339; Fax: 202-482-
9237.
SUPPLEMENTARY INFORMATION:
I. Rulemaking History
On August 7, 1992, the U.S. Office of Government Ethics (OGE)
published the Standards of Ethical Conduct for Employees of the
Executive Branch (Standards), which are codified at 5 CFR part 2635.
See 57 FR 35006 (Aug. 7, 1992), as amended. The Standards serve as the
primary regulatory guidance on the standards of ethical conduct for
officers and employees of the executive branch of the Federal
Government (Government).
Pursuant to a provision of the Ethics in Government Act of 1978, 5
U.S.C. 13122, the Director of OGE is responsible for periodically
reviewing, evaluating, and updating the rules and regulations that
pertain to ethics in the executive branch. Most recently, in 2016, OGE
issued updated regulations in subpart B and subpart F of part 2635
relating to gifts from outside sources and seeking employment. See 81
FR 48687 (July 26, 2016); see also 81 FR 81641 (Nov. 18, 2016). In
accordance with 5 U.S.C. 13122, OGE has reviewed the regulations found
in subparts A, C, D, E, G, H, and I of part 2635, and is proposing
changes to these provisions in light of OGE's experience gained from
application of the Standards since they became effective in February
1993.
In formulating this proposed rule, OGE has consulted with the
Department of Justice and the Office of Personnel Management pursuant
to section 201(a) of Executive Order 12674, as modified by Executive
Order 12731, and the authorities contained in 5 U.S.C. chapter 131,
subchapter II. Additionally, OGE has solicited and considered the views
of executive branch agency ethics officials.
II. Analysis of Proposed Amendments
In addition to the specific changes discussed below, OGE is
proposing a number of global technical changes to all subparts of the
Standards. Among other things, OGE proposes to add appropriate
punctuation and modernize language by using consistent capitalization
of ``Government,'' removing gendered language and language that
unnecessarily focuses on marital status, and updating the words
``shall'' and ``where.'' OGE also is replacing the terms
``disqualification'' and ``disqualify'' with ``recusal'' and ``recuse''
to modernize language throughout all subparts of the Standards,
consistent with language OGE modernized in subpart F in 2016. As
highlighted in further detail below, OGE also proposes to update
citations and change agency names throughout this part as appropriate.
A. General Provisions (Subpart A)
In Sec. 2635.101(b)(13), OGE proposes to clarify that the
enumerated list of equal opportunity laws and regulations is not
exhaustive, and also proposes to add the words ``(including pregnancy,
gender identity, and sexual orientation)'' after ``sex,'' to change
``handicap'' to ``disability,'' and to add ``genetic information,'' to
incorporate more contemporary terminology and reflect categories
covered by the Equal Employment Opportunity Commission. OGE also
proposes to incorporate this more contemporary terminology in Sec.
2635.106.
In Sec. 2635.102(a), OGE proposes to replace the words ``Postal
Rate Commission'' with the words ``Postal Regulatory Commission,'' and
the words ``General Accounting Office'' with the words ``Government
Accountability Office'' to reflect the change in the names of these
agencies. OGE also proposes to update paragraph Sec. 2635.102(b) to
use language more consistent with the defined term ``head of an
agency'' in paragraph (i); a similar language change is made in Sec.
2635.503(c). Former Sec. 2635.102(j) has been removed because OGE
modified the language of each subpart to make the regulation gender
neutral. As a result, subsequent paragraphs in Sec. 2635.102 have been
relabeled.
OGE proposes to revise the title of Sec. 2635.103 to more
accurately reflect the contents of the provision by adding ``enlisted''
before ``members of the uniformed services.'' Section 2635.103 states
that the provisions of this part are not applicable to enlisted members
of the uniformed services, and OGE proposes to make only minor
technical edits to the language of this section for clarity.
In Sec. 2635.105(c)(3), OGE proposes to delete the reference to
supplemental regulations issued prior to the Standards and Executive
Order 11222 (May 8, 1965), which was revoked by Executive Order 12674
(April 12, 1989).
Finally, OGE proposes to update Sec. 2635.102(c) and (f), as well
as Sec. 2635.107 to reference updated citations and language of part
2638 of this chapter, which was most recently revised in 2016.
B. Gifts From Outside Sources (Subpart B)
In subpart B, OGE proposes a minor revision to Example 1 following
Sec. 2635.201(b) to better illustrate the operation of the paragraph.
Similarly, OGE also proposes to make minor changes to Example 4
following Sec. 2635.204(a) to clarify the interplay
[[Page 10775]]
between 31 U.S.C. 1353 and subpart B. No substantive change is
intended.
For the remainder of the subpart, OGE proposes to make only global
technical changes that are suggested throughout the Standards.
Specifically, OGE proposes to modernize the regulatory text by adding
appropriate punctuation and capitalization, updating changed agency
names, removing gendered language and language that unnecessarily
focuses on marital status, and updating the words ``where'' and
``disqualification/disqualify.''
C. Gifts Between Employees (Subpart C)
Throughout subpart C, OGE proposes to replace the terms
``donating'' and ``donation'' with ``contributing'' and
``contribution'' respectively to modernize language and ensure
consistency in language in this section. No substantive change is
intended.
Proposed Sec. 2635.301--Overview
In Sec. 2635.301, OGE proposes to update the overview in
recognition of the updates being made to the regulatory restrictions on
gifts to superiors, as discussed below. OGE also proposes to add
language clarifying that subpart B is the appropriate subpart for
analyzing gifts from outside sources. In subpart B, there is a similar
reminder pointing to subpart C in the note that follows Sec.
2635.203(e). OGE believes that a parallel note in subpart C would be a
helpful clarification, and the proposed language is phrased in a way
that tracks the reminder in subpart B.
Proposed Sec. 2635.302--General Standards
In this section, OGE proposes tailored revisions aimed at making
the restriction and exceptions regarding gifts to superiors and gifts
from employees receiving less pay more logical. OGE believes that the
proposed changes are consistent with the underlying statute restricting
certain gifts between employees, 5 U.S.C. 7351, as well as OGE's
authority in that law to issue regulations that exempt voluntary gifts
in appropriate circumstances.
First, OGE has received input over the years that the restriction
on gifts to superiors is incongruous with other restrictions on
employees accepting gifts because it does not restrict an official
superior from accepting a gift from a subordinate, and instead is
framed in terms of what a subordinate employee may not do with respect
to giving gifts to a superior. The current language is based on the
statutory text of 5 U.S.C. 7351, which also articulates the restriction
in terms of what a subordinate employee may not do, as opposed to what
an official superior may not do. OGE believes that the regulation
should emphasize a superior's responsibility to not accept improper
gifts from a subordinate, consistent with how the Standards otherwise
focus on an employee's responsibility to not accept other improper
gifts. See, e.g., subpart B (restricting employees' ability to accept
certain gifts from outside sources); Sec. 2635.302(b) (restricting
employees' ability to accept certain gifts from individuals receiving
less pay). Therefore, OGE proposes to update the language in Sec.
2635.302(a)(1) to clarify that not only may an employee not directly or
indirectly give a gift to an official superior, but also that ``an
official superior may not knowingly accept such a gift.''
OGE also seeks to resolve a peculiarity in the current regulatory
language in Sec. 2635.302(b)(1) relating to the circumstances in which
an employee may accept a gift from another employee ``receiving less
pay.'' The current regulatory text permits an employee to accept a gift
from another employee who receives less pay if there is a personal
relationship to justify the gift and the two employees are not in a
``subordinate-official superior relationship.'' The quoted language
refers expansively to any subordinate-official superior relationship,
regardless of whether the intended recipient of the gift is the
subordinate or the official superior. OGE believes that the current
language is worded more broadly than necessary to address the key
concern with gift giving between employees at different pay levels--
gift giving from a subordinate to a superior. Accordingly, OGE proposes
to replace the requirement in the exception that the employees not be
in a subordinate-official superior relationship with a more precise
requirement that the employee receiving the gift not be the official
superior of the employee giving the gift (proposed Sec.
2635.302(b)(1)). This addition does not modify the existing condition
in the exception that there be a personal relationship between the
employees that would justify the gift.
Finally, OGE seeks to modernize the exception in Sec. 2635.302(b)
in response to changes in the Federal pay system since the rule was
first promulgated in 1992. Although at one time it may have been the
case that superiors categorically received more pay than their
subordinates, under current Federal pay systems, there are situations
in which a subordinate may earn more than their official superior. OGE
does not believe that 5 U.S.C. 7351, the statute underlying the
restriction articulated in Sec. 2635.302(b), either contemplated or
intended that subordinate employees would be restricted from accepting
a gift from an official superior who, because of the nature of modern
compensation systems, receives less pay. OGE believes that the purpose
of 5 U.S.C. 7351, notably titled ``Gifts to Superiors,'' was to prevent
an official superior from accepting a gift from a subordinate, not to
prevent a gift flowing the other way. OGE therefore proposes to
categorically exclude from the restriction in Sec. 2635.302(b) gift-
giving situations where the lower-paid employee giving the gift is the
official superior of the employee receiving the gift (proposed Sec.
2635.302(b)(2)). The proposed language categorically excludes such
gifts from the prohibition without the additional ``personal
relationship'' requirement contained in Sec. 2635.302(b)(1).
In addition to those changes, OGE also recommends a new example to
Sec. 2635.302 to clarify that even if individuals had a gift-giving
relationship prior to being in a subordinate-superior relationship,
while there is a subordinate-supervisor relationship, their gift giving
must be restricted. The proposed example seeks to highlight that a
change in circumstances does not obviate the subpart C restrictions,
and that even gift giving between employees with a preexisting
relationship still must fit within the exceptions of this subpart.
Proposed Sec. 2635.303--Definitions
OGE proposes to modernize Example 1 after Sec. 2635.303(f) by
removing unnecessarily specific geographical language. No substantive
change is intended.
Proposed Sec. 2635.304--Exceptions
In paragraph (a), OGE proposes to change ``other'' to ``an'' in the
first sentence; the current phrasing in Sec. 2635.304(a) presupposes
that a subordinate always receives less pay than an official superior,
which is not always the case, as discussed above. The word replacement
proposed by OGE removes this assumption. OGE also proposes to make a
slight modification to the phrasing of the exception in Sec.
2635.304(a)(5), by making the final phrase the beginning phrase of the
exception. No substantive change is intended; OGE simply wishes to
clarify that this gift exception can be used unless the transferred
leave was obtained in violation of 5 CFR 630.912. In addition, OGE
proposes to update the language of Example 4 to paragraph (a)
[[Page 10776]]
to generally refer to the holidays, instead of a specific religious
holiday.
OGE proposes to revise paragraph (b)(1) to add ``bereavement'' to
the non-exhaustive list of special, infrequent occasions covered by
this exception. As highlighted by several agencies, questions as to
whether such instances constitute a special, infrequent occasion arise
at a difficult time when employees are grieving. OGE views such
occasions as being appropriately covered by this exception, and
explicit reference to them will provide clarity and eliminate
uncertainty. In addition, OGE proposes to add Example 4 to paragraph
(b) to illustrate that a milestone birthday, such as a 50th birthday,
is not an ``infrequently occurring occasion of personal significance.''
The new example would respond to recurring questions regarding whether
birthdays ending in zero are an ``infrequently occurring occasion of
personal significance'' under Sec. 2635.304(b), and would reflect
OGE's consistent advice that they are not.
OGE also proposes to fix the issue of having an undesignated
paragraph in Sec. 2635.304(c) by reorganizing this section and
designating the undesignated paragraph. No substantive change is
intended.
Finally, OGE proposes to make various ministerial changes to this
section. Among other changes, OGE proposes to replace the word
``secretary'' with the word ``assistant'' in Example 4 following
paragraph (a) and Example 5 to paragraph (c) to modernize these
examples. OGE also proposes to replace the word ``fee'' in Example 1 to
paragraph (c) with the words ``suggested voluntary contribution,'' in
order to more accurately reflect that the collection for a gift is a
voluntary contribution and not a fee. In addition, OGE proposes to
replace ``The General Counsel'' with ``An employee'' in Example 2 to
paragraph (c) to improve the application of the example. Finally, OGE
proposes to replace ``$3'' in Example 3 to paragraph (c) with ``a
nominal amount,'' to prevent $3 from being interpreted as a universal
definition of ``nominal amount'' as used in paragraph (c) and to make
the example more consistent with Example 1. These modifications are not
intended to make any substantive changes.
D. Conflicting Financial Interests (Subpart D)
In this subpart and subpart E, OGE has added the modifier
``particular'' before ``matter'' when the change would provide further
clarity regarding the type of matter being discussed. Although in
context the word ``particular'' had previously been implied, OGE made
these adjustments to achieve more precise language.
Proposed Sec. 2635.401--Overview
OGE proposes a minor change to the phrasing of Sec. 2635.401 to
clarify the relationship of subpart D and 5 CFR part 2640. Part 2640
interprets and is the implementing regulation for 18 U.S.C. 208, and
with this change, OGE seeks to guide ethics officials to part 2640 for
complete guidance on that law.
Proposed Sec. 2635.402--Disqualifying Financial Interests
In this section, OGE proposes to revise various examples. In
Example 2 following paragraph (b)(2), OGE proposes to streamline the
characterization of the spouse's interest in their employing company by
simply stating that the spouse has no stock or other direct or indirect
ownership interest in the company. OGE also proposes to modify the
language at the conclusion of the example to reference ``covered
relationship'' and otherwise align the text with Sec. 2635.502. No
substantive change is intended with this adjustment, which is made to
improve the clarity and readability of this example. Finally, in
Example 2 following paragraph (b)(3), OGE proposes to replace the words
``Interstate Commerce Commission'' with the words ``Surface
Transportation Board'' to reflect the change in the name of this
agency.
In addition, OGE proposes to update the notification and recusal
language in Sec. 2635.402(c)(1) and (2) to align with updated phrasing
in subpart F, and also reflect that written notification and recusal
statements are required for certain employees under the Representative
Louise McIntosh Slaughter Stop Trading on Congressional Knowledge Act
(STOCK Act). Finally, OGE proposes to delete the final phrase from
Sec. 2635.402(d)(1), which discusses 18 U.S.C. 208(b)(2) regulatory
exemptions, and notes that the regulations in subpart B of part 2640
``supersede any preexisting agency regulatory exemptions''; this
language may have been relevant when the Standards were first
promulgated, but it is superfluous today.
Proposed Sec. 2635.403--Prohibited Financial Interests
OGE proposes to delete ``issued after February 3, 1993,'' which
currently modifies ``agency supplemental regulations'' in Sec.
2635.403(a). This language was relevant when the rule was first drafted
because there were some pre-existing agency ethics rules, but at this
time, there are no agency supplemental regulations that were issued
before February 1993.
In Example 1 following paragraph (b)(2), OGE proposes to add a
dollar figure to the amount of stock owned, to make clear that the de
minimis regulatory exemption in 5 CFR 2640.202 does not apply in this
scenario. OGE also proposes to correct the language in paragraph
(c)(1), which appears to incorrectly refer to the employee's
``dependent child,'' not ``minor child,'' which is the relevant term
for purposes of the restrictions of 18 U.S.C. 208.
E. Impartiality in Performing Official Duties (Subpart E)
Proposed Sec. 2635.501--Overview
OGE proposes to restructure Sec. 2635.501 to organize the current
text and the text of the current Note into new paragraphs. New
paragraph (a) explains more fully the scope of subpart E and the
distinction between relationships that implicate 18 U.S.C. 208 and
those that implicate this subpart. New paragraph (b) explains more
fully the distinction between waivers under 18 U.S.C. 208 and
authorizations and waivers under subpart E. No substantive change is
intended.
OGE also proposes to add a new note following Sec. 2635.501 to
remind employees and ethics officials that even though a particular
situation may not raise concerns under subpart E, a supervisor or
person responsible for assigning work may decide not to assign certain
work to an employee for other reasons. The note is not itself a source
of authority to either issue or withhold assignments; it merely
highlights that agencies have various options relating to work
assignments irrespective of subpart E. OGE intends that this note, read
together with the other provisions of subpart E, will identify options
available to an agency relating to potential concerns regarding
impartiality, appearances, and employee work assignments.
Proposed Sec. 2635.502--Personal and Business Relationships
OGE proposes to reorganize Sec. 2635.502(a) by redesignating the
two substantive provisions currently found in the main body of
paragraph (a) and the substantive provision currently found in
paragraph (a)(2) as paragraphs (a)(1), (2), and (3), respectively. In
these redesignations, current paragraph (a)(1), which encourages
employees to seek assistance from relevant officials when considering
whether a reasonable person would question their
[[Page 10777]]
impartiality, will no longer be designated, and instead will be
included at the beginning of Sec. 2635.502(a). As currently written,
the two primary prohibitions of Sec. 2635.502 (working on a particular
matter involving specific parties in which a member of one's household
has a financial interest and working on a particular matter involving
specific parties in which someone with whom one has a covered
relationship is or represents a party) appear in a single paragraph in
Sec. 2635.502(a). Because these two prohibitions are very different,
the current textual organization can be confusing, and OGE seeks to
make this section clearer through the reorganization. Additionally,
under the current regulation, the substantive ``catch-all'' provision
of current Sec. 2635.502(a)(2), which covers ``circumstances other
than those specifically described'' in Sec. 2635.502(a), is not
immediately adjacent to the discussion of the two primary substantive
provisions of Sec. 2635.502. To more clearly present the various
concepts of Sec. 2635.502(a) and highlight that an appearance of
impartiality may be triggered in different ways, the proposed revision
lists the three potential impartiality scenarios in separate
paragraphs, and begins with the text currently found in Sec.
2635.502(a)(1), which reminds employees that they may seek the
assistance of a supervisor, ethics official, or agency designee in
considering whether any of those scenarios would raise impartiality
concerns. No substantive change is intended.
In Sec. 2635.502(b), the current regulation provides that an
employee has a covered relationship with ``[a] person for whom the
employee's spouse, parent or dependent child is, to the employee's
knowledge, serving or seeking to serve as an officer, director,
trustee, general partner, agent, attorney, consultant, contractor or
employee.'' OGE proposes to remove the qualifier ``dependent'' before
``child'' in this paragraph, which will mean that an employee will have
a covered relationship with a person for whom any child is, to the
employee's knowledge, serving or seeking to serve as an officer,
director, trustee, general partner, agent, attorney, consultant,
contractor, or employee. Removing the ``dependent'' qualifier
acknowledges that there may be impartiality concerns relating to
certain business relations of an employee's child regardless of whether
that child is a dependent, just as the subpart presently acknowledges
that there could be impartiality concerns relating to certain business
relations of an employee's parent, without any dependency predicate.
OGE proposes to update the definition of ``particular matter
involving specific parties'' found at Sec. 2635.502(b)(3) to cross-
reference the definition at 5 CFR 2640.102(l); the current cross-
reference is obsolete, as it refers to part 2637, which is no longer in
effect. Like part 2635, the part 2640 regulation applies to current
employees; it simply was not in effect at the time the Standards were
first published and thus could not serve as the relevant cross-
reference.
In addition, OGE proposes to replace current Example 3 following
paragraph (b)(3) with a new example. The purpose of changing the
example is to illustrate the covered relationship described in
paragraph (b)(1)(iii), and to describe a situation in which an employee
could justifiably conclude that a reasonable person would be likely to
question their impartiality. OGE also proposes to add two new examples
following paragraph (b)(3), Examples 6 and 7. The purpose of Example 6
is to illustrate a situation where a covered relationship described in
(b)(1)(iii) exists, but the employee could justifiably conclude that a
reasonable person would not be likely to question their impartiality.
The purpose of Example 7 is to illustrate a situation in which there is
no covered relationship under Sec. 2635.502(b)(1), but the employee
applies the catch-all provision of proposed Sec. 2635.502(a)(3)
because the employee is concerned about appearances, and could
justifiably conclude that a reasonable person would be likely to
question their impartiality.
In Sec. 2635.502(c), OGE proposes to more clearly state an agency
designee's determination authority. To more clearly highlight the
situations in which an agency designee may make an independent
determination regarding a potential appearance problem, OGE has
reorganized the text currently at Sec. 2635.502(c) into new Sec.
2635.502(c)(1), and separated the different potential determination
scenarios into new Sec. 2635.502(c)(1)(i) and (ii). As a result of
this reorganization, current Sec. 2635.502(c)(1) and (2) have been
renumbered as Sec. 2635.502(c)(2) and (3). This reorganization does
not substantively change the two situations set forth in the regulation
in which an agency designee may make an independent determination as to
whether a reasonable person would question an employee's impartiality--
appearance problems arising from the financial interests of a member of
the employee's household in a particular matter involving specific
parties, or from a particular matter involving specific parties in
which a person with whom the employee has a covered relationship is or
represents a party.
Finally, OGE proposes minor changes to Sec. 2635.502(d), (e), and
(f). In Example 2 to Sec. 2635.502(d), OGE proposes to make a minor
revision to resolve potential ambiguity in the final sentence of the
example. No substantive change is intended. In Sec. 2635.502(e), OGE
proposes to add a sentence explicitly stating that when the covered
relationship is with a former employer, the relevant recusal period is
for one year after the date of the employee's resignation from the
position with the former employer. Currently, the length of the
cooling-off period with respect to former employers is embedded in the
definition of ``covered relationship''; this sentence does not make any
substantive change, but is designed to provide greater clarity for
employees. Additionally, in Sec. 2635.502(e)(1) and (e)(2), OGE
proposes to update the language regarding notification and
documentation procedures to align with updated phrasing in Sec.
2635.402(c)(2) and subpart F. Finally, OGE proposes to make the title
of Sec. 2635.502(f) more accurate and read ``Irrelevant
considerations'' instead of ``Relevant considerations,'' because that
paragraph describes what considerations are not relevant for purposes
of determinations under Sec. 2635.502. The actual language of Sec.
2635.502(f) remains unchanged.
Proposed Sec. 2635.503--Covered Payments From Former Employers
OGE proposes various updates to Sec. 2635.503. First, OGE proposes
to replace the defined term of ``extraordinary payment'' in Sec.
2635.503(b)(1) (and throughout the regulation) with the term ``covered
payment.'' This adjustment brings the terminology in this section in
line with the terminology used elsewhere in this subpart, namely the
term ``covered relationship'' in Sec. 2635.502. OGE does not intend
any substantive change in replacing the word ``extraordinary'' with
``covered.''
OGE also proposes to update Sec. 2635.503(a) to remove the
limitation in the current regulation that a relevant payment under this
section must be received ``prior to entering Government service.'' In
OGE's experience, the potential ethics concerns and issues relating to
covered payments from former employers can arise regardless of whether
a payment is received before or after an individual begins Government
service. A payment received the day after an employee assumes the
duties of a Government position is not different
[[Page 10778]]
in kind from such a payment received two days prior; in both cases, the
payment ``raises a legitimate concern, and thus an appearance, that the
employee may not act impartially in particular matters to which the
former employer is a party or represents a party.'' See 56 FR 33778,
33786 (July 23, 1991). A recusal requirement equally applicable to both
scenarios addresses such appearance issues. Of course, any payment
received by a current Government employee could raise potential
supplementation of salary concerns. Therefore, the new example that OGE
proposes to add to Sec. 2635.503(a) to illustrate a covered payment
received during Government service makes clear that ethics officials
are also required to analyze the payment to determine whether it
constituted a supplementation of salary under 18 U.S.C. 209.
To help make the ``covered payment'' definition easier to
understand, OGE also proposes to move the concept of a ``qualifying
program,'' which is currently embedded in Sec. 2635.503(b)(1), into a
standalone definition. The ``qualifying program'' definition proposed
at Sec. 2635.503(b)(2) retains salient concepts from the current
regulatory language--which contemplates that such a program could be
contained in written form, or demonstrated by a history of similar
payments to others not entering Government service--and also includes
two new clarifications regarding what OGE considers to be such a
program. First, to be a qualifying written program, the program cannot
treat individuals departing for Government service more favorably than
other individuals. When OGE first promulgated Sec. 2635.503, OGE
thought it was unlikely that employers would offer employment plans or
contracts that provided for targeted payments for employees who later
serve in Government positions. See 57 FR 35006, 35028. However, since
1992, OGE has seen numerous benefit plans where employers have written
plans or programs that treat individuals departing for Government
service more favorably than other individuals. Because such plans raise
the same potential concerns regarding an employee's impartiality to the
payor, OGE has determined that it is appropriate to clarify that a
written program will not be considered to be a ``qualifying program''
if individuals entering Government service are treated more favorably
than other former employees. This change also brings OGE's treatment of
written and non-written plans into alignment. In the current
definition, a qualifying program based on actual practice has to be
shown by a history of similar payments made to persons not entering
Government service, which underscores the importance of the payor not
treating employees entering Government more favorably.
Second, OGE proposes to clarify when it is appropriate to consider
a history of similar payments made to others not entering Government
service. Specifically, OGE proposes to update paragraph (b) to
enumerate OGE's longstanding view that when there is a written plan,
historical payments contrary to a provision of such a plan should not
be considered in determining whether there is a ``qualifying program.''
Finally, OGE proposes to update the ``former employer'' definition
to make explicit certain details that are implicit in the current
definition. First, consistent with the definition of ``person'' in
Sec. 2635.102, OGE proposes to explicitly state that payments from an
officer, employee, or agent of a former employer will be considered
payments from the former employer. Second, to explicitly indicate that
clients are encompassed by the ``former employer'' definition--e.g., as
persons for whom an employee may have served as an agent, attorney,
consultant, or contractor--OGE proposes to add a note following Sec.
2635.503(b)(3) to highlight that this defined term encompasses former
clients.
F. Seeking Other Employment (Subpart F)
In subpart F, OGE proposes to make only global technical changes
that are suggested throughout the Standards. Among other things, OGE
proposes to modernize the regulatory text by removing gendered language
and replacing the word ``where'' with the word ``when.''
G. Misuse of Position (Subpart G)
Proposed Sec. 2635.702--Use of Public Office for Private Gain
OGE proposes to add a parenthetical to Sec. 2635.702 to clarify
the scope of this section and to indicate that some endorsement may be
permitted by this subpart or other applicable laws or regulations.
Endorsement may be permitted in certain circumstances, and OGE has
received questions indicating that there may be confusion about the
current phrasing. No substantive change is intended by this addition.
OGE proposes to amend paragraph (b) of Sec. 2635.702 to clarify
the limited circumstances in which an employee may use their official
title when making a recommendation. In the current regulation, an
employee ``may sign a letter of recommendation using [their] official
title only in response to a request for an employment recommendation or
character reference based upon personal knowledge of the ability or
character of an individual with whom [the employee] has dealt in the
course of Federal employment or whom [the employee] is recommending for
Federal employment.'' OGE proposes to update Sec. 2635.702(b) to
recognize that an official letter is not the only medium through which
recommendations are made. The updated language will provide that an
employee may use their official title when making a verbal or written
recommendation described in that paragraph. In addition, OGE proposes
to amend this paragraph to clarify that recommendations permitted under
Sec. 2635.702(b) are not limited to employment recommendations. Over
the years, questions have arisen as to the permissibility of an
employee using their title when signing other types of recommendations,
such as character references to accompany graduate school applications.
Removing the word ``employment'' from this phrase will make clear that
an employee may use their official title when they have been asked to
provide other types of recommendations. These proposed changes would
not ease the other constraints on an employee using their title when
providing a requested recommendation for an individual: that the
employee has ``personal knowledge of the ability or character of [the]
individual,'' and the individual must be someone ``with whom the
employee has dealt in the course of Federal employment or whom the
employee is recommending for Federal employment.'' The proposed changes
also would not expand an employee's ability to endorse a business or
other kind of entity.
In addition, to provide greater clarity regarding the phrase ``with
whom [the employee] has dealt in the course of Federal employment,''
OGE proposes to update Example 1 following Sec. 2635.702(b) to add
language indicating that an employee who is asked to provide a letter
of recommendation for an individual who worked with the employee under
a Government contract may provide the recommendation using official
stationery and may sign the letter using their official title. Such a
relationship falls within the scope of the phrase ``with whom the
employee has dealt in the course of Federal employment.'' The proposed
change
[[Page 10779]]
should not be read to suggest an expanded ability of the employee to
endorse the contracting entity or any other business.
OGE also proposes to add a new example of appearance of
governmental sanction that involves the use of social media. The new
example is consistent with OGE's Legal Advisory on social media. See
OGE Legal Advisory LA-15-03 (Apr. 9, 2015).
Finally, although it is non-exhaustive as currently written, OGE
proposes to add ``Judge'' to the list of terms of address and ranks
highlighted in paragraph (e) in order to provide additional clarity
regarding the use of certain terms of address.
Proposed Sec. 2635.703--Use of Nonpublic Information
In Examples 2 and 3 following Sec. 2635.703(b), OGE proposes to
change ``41 U.S.C. 423'' to ``41 U.S.C. 2102'' to reflect the change to
the citation to this statute.
Proposed Sec. 2635.704--Use of Government Property
OGE proposes to amend Sec. 2635.704(b)(1) by replacing the term
``automated data processing capabilities'' with the term ``computers
and other electronic devices'' and by adding the words ``Government
email and social media accounts'' to the list of items included in the
term ``Government property.'' In updating the list of ``Government
property'' to include more modern types of Government property, OGE
does not intend to suggest that older forms of technology and equipment
are not also Government property; to avoid such misapprehension, new
language has been added to clarify that the term ``Government
property'' is not limited to only those items enumerated in paragraph
(b)(1).
OGE proposes to update Sec. 2635.704(b)(2) to clarify that use of
Government property in accordance with an agency's limited de minimis
personal use policy is an ``authorized purpose'' for which Government
property may be used.
Finally, OGE also proposes to make certain changes to some of the
examples in Sec. 2635.704. OGE proposes to rewrite Example 1 following
Sec. 2635.704(b) because the General Services Administration
regulation to which the example refers, 41 CFR 101-35.201, no longer
exists and has not been superseded by a different Governmentwide
regulation. OGE proposes substituting an example that references an
agency's de minimis policy relating to the personal use of a Government
email account. Additionally, OGE proposes to amend Example 3 following
Sec. 2635.704(b)(2) by replacing the term ``word processor'' with the
word ``computer.'' The reason for the change is to modernize the
example; no substantive change is intended.
Proposed Sec. 2635.705--Use of Official Time
OGE proposes to amend Example 1 following Sec. 2635.705(a) by
replacing ``employee'' with ``disability claims examiner'' in order to
make the example clearer. OGE also proposes to revise Example 2
following Sec. 2635.705(a) to remove the reference to the Federal
Personnel Manual, which has been abolished, and update the example to
more generally refer to such Governmentwide personnel guidance as may
be applicable.
OGE proposes to update Example 1 following Sec. 2635.705(b) to
remove outdated language referring to the subordinate as a secretary,
and also modernize the description of the activities involved. No
substantive change is intended.
H. Outside Activities (Subpart H)
Proposed Sec. 2635.801--Overview
OGE proposes to delete reference to ``the limitations on
participation in professional organizations'' as one of the provisions
of this subpart with which the employee must comply. This language
refers to the current title of reserved Sec. 2635.806, which OGE
proposes to delete (with Sec. 2635.806 remaining reserved), as
discussed below.
OGE also proposes to move Example 2 that is currently found in
Sec. 2635.802 to Sec. 2635.801(c), because that example is more
appropriate as an illustration of the concept that an employee should
avoid creating an appearance of violating ethical standards or using
their official position for private gain. No changes were made to the
existing example other than relocating it to this paragraph.
Finally, OGE proposes to make more precise the description of
certain ``other laws'' that may apply to employee outside activities,
as set forth in Sec. 2635.801(d). Specifically, OGE proposes to
explicitly note the application and timing of 18 U.S.C. 203 in Sec.
2635.801(d)(3), and to reference the 15% outside earned income
limitation when discussing limitations on outside employment in the
Ethics in Government Act in Sec. 2635.801(d)(8).
Proposed Sec. 2635.802--Conflicting Outside Employment and Activities
OGE also proposes a new Example 1 to more accurately reflect a
situation where an employee's outside activities would conflict with
the employee's job duties, as well as to substitute a new Example 2 in
Sec. 2635.802 because current Example 2 has been relocated to Sec.
2635.801(c), as discussed above. The purpose of the substitution is to
provide a more appropriate example of when a recusal obligation exists
under subpart E, but there is no issue under Sec. 2635.802. OGE
proposes no other substantive changes to these examples.
Proposed Sec. 2635.803--Prior Approval for Outside Employment and
Activities
In the first paragraph of this section, OGE proposes to add
language reminding employees of their responsibility to ensure that
outside activities do not conflict with their official duties,
regardless of the existence of any agency supplemental regulations
regarding prior approval.
Consistent with the goal of removing obsolete references, OGE also
proposes to delete the words ``issued after February 3, 1993''
modifying ``agency supplemental regulation'' in the current phrasing of
this provision. This language was relevant when the rule was first
drafted because there were some pre-existing agency rules, but at this
time there are no agency supplemental regulations that were issued
before February 1993.
Proposed Sec. 2635.804--Outside Earned Income Limitations Applicable
to Certain Presidential Appointees
For the reasons explained below, OGE proposes to rename this
section by removing the reference to ``other noncareer employees'' from
the title; to add an introductory paragraph explaining that this
paragraph implements outside earned income limitations applicable to
certain Presidential appointees and that the outside earned income
limitation applicable to covered noncareer employees remains at 5 CFR
2636.304; and to remove the discussion of covered noncareer employees
at Sec. 2635.804(b) and renumber the remaining paragraphs accordingly.
Currently, the 15% outside earned income limitation for covered
noncareer employees is stated in both Sec. 2635.804(b) and 5 CFR
2636.304, and the limitation for Presidential appointees is stated only
in Sec. 2635.804(a). To eliminate redundancy and allow each section to
focus on a specific category of employees, OGE
[[Page 10780]]
proposes to remove the discussion of covered noncareer employees from
Sec. 2635.804(b) to allow this section to focus only on the outside
earned income limitations applicable to certain Presidential
appointees. The reference to 5 CFR 2636.304 for the guidance on the
outside earned income limitation applicable to covered noncareer
employees will ensure that Sec. 2635.804 still refers to all relevant
outside earned income limitations, and that the limitation applicable
to covered noncareer employees is not overlooked.
As a ministerial matter, OGE also proposes to revise Sec.
2635.804(a) to remove the reference to outside activities ``carried out
in satisfaction of the employee's obligation under a contract entered
into prior to April 12, 1989'' as any contracts before that date, more
than 30 years ago, are very unlikely to still be in effect.
Proposed Sec. 2635.806--[Reserved]
OGE proposes to delete the title of reserved Sec. 2635.806,
``Participation in professional associations.'' OGE does not plan to
promulgate a Governmentwide rule on participation in professional
associations at this time. Accordingly, Sec. 2635.806 will continue to
be ``Reserved,'' but its current title would be deleted.
Proposed Sec. 2635.807--Teaching, Speaking, and Writing
OGE is aware that Sec. 2635.807 is one of the most complicated
provisions in the Standards. In the course of reviewing potential
changes to the Standards, therefore, OGE considered various potential
changes, including restructuring Sec. 2635.807 or moving it into Sec.
2635.802; ultimately, however, OGE decided to leave the existing
structure of this paragraph. Agencies can obtain additional guidance on
rules relating to teaching, speaking, and writing on OGE's website.
Although OGE decided against a comprehensive revision of Sec.
2635.807 at this time, it proposes some minor amendments to this
section. First, OGE proposes to amend Sec. 2635.807(a) to: (1) clearly
state what activity is permitted under paragraph (a)(3); and (2)
emphasize that the prohibition on receiving compensation for teaching,
speaking, or writing that relates to the employee's official duties
applies only to teaching, speaking, or writing that occurs while the
person is a Government employee. Regarding the first change, OGE
proposes to explicitly note that paragraph (a)(3) is an exception for
teaching certain courses. Regarding the second change, proposed Sec.
2635.807(a) specifies that compensation is restricted only for
teaching, speaking, or writing ``that occurs while the person is a
Government employee and that relates to the employee's official
duties''; this language emphasizes that the prohibition does not apply
to teaching, speaking, or writing done either before or after
Government service.
Second, OGE proposes to amend the definition of the term
``compensation'' at Sec. 2635.807(a)(2)(iii) to streamline the
definition and clarify that ``compensation'' includes travel expenses
only with respect to a very small group of employees--covered noncareer
employees as defined in 5 CFR 2636.303(a). The new structure of this
section defines ``compensation'' in paragraph (A), identifies the
applicable exclusions from the definition of ``compensation'' in a new
designated paragraph (B), and in a new designated paragraph (C)
describes whether travel expenses are considered ``compensation'' for
different categories of employees. This restructuring is intended to
make the compensation definition more logically organized, and makes no
substantive changes. Finally, in the existing Note following this
discussion, OGE proposes to delete the reference to 18 U.S.C. 209 in
the reminder that other authorities in some circumstances may limit or
preclude an employee's acceptance of travel expenses; the purpose of
this deletion is to avoid unnecessary focus on a single statute to the
potential exclusion of other applicable authorities. No substantive
change is intended.
Third, OGE proposes to make a slight modification to Example 2 to
paragraph (a)(2)(iii) to clarify that the official attended the meeting
described in the example in their personal capacity. This modification
is meant to make explicit information that OGE believes was implicit in
the example as originally written.
Fourth, OGE proposes to amend the definition of the term
``receive'' at Sec. 2635.807(a)(2)(iv) to clarify that receipt of
compensation is attributable to the time that the teaching, speaking,
or writing occurs, and to clarify how OGE views the timing of receipt
when there is an enforceable agreement to receive compensation for
writing. The current definition of ``receive'' does not directly
address the timing of the compensation. The revised language addresses
timing and is consistent with OGE's guidance discussing teaching,
speaking, and writing as an outside activity.
Fifth, OGE proposes to update the definition of ``particular matter
involving specific parties'' found at Sec. 2635.807(a)(2)(v) to cross-
reference the definition at 5 CFR 2640.102(l); the current cross-
reference is obsolete, as it refers to part 2637, which is no longer in
effect. Like part 2635, the part 2640 regulation applies to current
employees; it simply was not in effect at the time the Standards were
first published and thus could not serve as the relevant cross-
reference.
Sixth, OGE's revisions to subpart B of the Standards, which were
finalized in 2016, expanded the term ``institution of higher
education'' to include ``similar foreign institutions of higher
education.'' 80 FR 74004, 74007 (Nov. 27, 2015). OGE proposes a
parallel change to Sec. 2635.807(a)(3)(i)(A), along with a
corresponding note following Sec. 2635.807(a) reminding agency ethics
officials to consider the potential applicability of the Emoluments
Clause of the U.S. Constitution when an employee teaches a course for
compensation at a foreign institution of higher education. OGE also
proposes to update the relevant citations found at Sec.
2635.807(a)(3)(i)(B) and (C).
Seventh, OGE proposes to make a slight modification to Example 2 to
paragraph (a)(3) in order to make clear that the content being taught
at the state college and the continuing education program is the same.
No substantive change is intended.
Eighth, although it is non-exhaustive as currently written, OGE
proposes to add ``Judge'' to the list of terms of address and ranks
highlighted in paragraph (b)(3) in order to provide additional clarity
regarding the use of certain terms of address in connection with
teaching, speaking, or writing.
Finally, OGE proposes to update the note to Sec. 2635.807(b) to
cross-reference subpart G to provide a reminder that reference to
official title and position other than in a teaching, speaking, or
writing capacity can be made only as permitted by Sec. 2635.702(b).
This note is parallel to and consistent with the language in Sec.
2635.702 reminding employees that reference to official title and
position in connection with teaching, speaking, or writing covered by
Sec. 2635.807 must be done consistent with the requirements of Sec.
2635.807.
Proposed Sec. 2635.808--Fundraising Activities
OGE proposes to add language at the beginning of this section
designed to resolve continuing confusion about what type of
``fundraising'' is covered by Sec. 2635.808. OGE frequently receives
questions that confuse the restrictions on gifts between employees with
the fundraising restrictions. This new language seeks to clarify that
Sec. 2635.808
[[Page 10781]]
only covers certain specifically-defined fundraising activities and
includes a reference to subpart C, which covers other situations where
monies might be collected by and between employees. OGE also proposes
to move the Note currently located in Sec. 2635.808(a) to Sec.
2635.808(c), for better organizational placement; no changes have been
made to the substance of this Note.
OGE proposes to update Example 2 to Sec. 2635.808(a)(3) to update
certain citations and make certain ministerial adjustments. No
substantive change is intended.
OGE also proposes to amend Sec. 2635.808(c)(1)(i) and (ii) and the
restriction imposed on employees fundraising in their personal
capacities. Specifically, OGE proposes to add a ``personal
relationship'' exception to the restriction that is similar to the
exception for accepting gifts under subparts B and C. Section
2635.808(c) presently prohibits an employee from personally soliciting
contributions from anyone the employee knows to be a ``prohibited
source.'' For regular Government employees, this encompasses any
employee of a company regulated by or who seeks to do business with the
employee's agency as defined at Sec. 2635.203(d). For special
Government employees, this only covers specific types of prohibited
sources, those that would be substantially affected by the performance
or nonperformance of the employee's duties, as defined at Sec.
2635.203(d)(4). Because of the definition of ``person'' in Sec.
2635.102, the result is that an employee can technically run afoul of
Sec. 2635.808(c) if the employee asks a relative, neighbor, or someone
else with whom they have a personal relationship to make a donation and
the employee knows that the person happens to work for a prohibited
source. OGE believes that such a result extends beyond the fundamental
purpose of this restriction, and therefore proposes to add a personal
relationship exception to avoid situations like those described above,
and to bring the fundraising rules more in line with other provisions
in the Standards. The proposed text tracks other language in the
Standards regarding personal relationships, and requires that the
circumstances make clear that the solicitation is motivated by a family
relationship or personal relationship that would justify the
solicitation. A new Example 4 has been added to illustrate this
exception.
OGE also proposes to add new Examples 5 and 6, to illustrate
fundraising that involves the use of social media; these examples are
consistent with OGE's Legal Advisory on social media. See OGE Legal
Advisory LA-15-03 (Apr. 9, 2015).
I. Subpart I--Related Statutory Authorities
Proposed Sec. 2635.902--Related Statutes
OGE proposes several technical amendments to Sec. 2635.902 by
updating citations and streamlining language.
III. Matters of Regulatory Procedure
Regulatory Flexibility Act
As Director of the Office of Government Ethics, I certify under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) that this proposed rule
will not have a significant economic impact on a substantial number of
small entities because it primarily affects current Federal executive
branch employees.
Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
because this regulation does not contain information collection
requirements that require approval of the Office of Management and
Budget.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
chapter 5, subchapter II), this proposed rule will not significantly or
uniquely affect small governments and will not result in increased
expenditures by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more (as adjusted for
inflation) in any one year.
Executive Order 13563 and Executive Order 12866
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select the regulatory approaches that
maximize net benefits (including economic, environmental, public health
and safety effects, distributive impacts, and equity). Executive Order
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
Although the number of substantive proposed changes to the
regulation is not extensive, the benefits of implementing these changes
are significant. The existing regulations are not insufficient, but
they have not been significantly updated since their issuance in 1992.
OGE's proposed revisions address common questions received from ethics
officials, incorporate OGE's experience gained from applying the
regulation since its inception, modernize existing examples and add new
examples for more useful reference, provide updated citations where
regulatory provisions or statutes have changed, and make technical
corrections. These revisions will provide greater clarity for executive
branch employees and ethics officials. Further, OGE anticipates that
this additional clarity will increase compliance and reduce the number
of inadvertent violations.
OGE does not anticipate any significant increased costs associated
with these changes. However, OGE notes that there may be an increase in
the time burden during the first year in which the regulations become
effective, particularly for ethics officials, due to necessary updates
to training materials and other related ethics briefings, questions
regarding the interpretation of revised regulatory provisions, and
review of additional OGE guidance.
This proposed rule has been designated as a ``significant
regulatory action'' although not economically significant, under
section 3(f) of Executive Order 12866. Accordingly, this rule has been
reviewed by the Office of Management and Budget.
Executive Order 12988
As Director of the Office of Government Ethics, I have reviewed
this proposed rule in light of section 3 of Executive Order 12988,
Civil Justice Reform, and certify that it meets the applicable
standards provided therein.
Executive Order 13715
The Office of Government Ethics has evaluated this proposed rule
under the criteria set forth in Executive Order 13175 and determined
that tribal consultation is not required as this proposed rule has no
substantial direct effect on one or more Indian tribes, on the
relationship between the Federal Government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian tribes.
List of Subjects in 5 CFR Part 2635
Conflict of interests, Executive Branch standards of ethical
conduct, Government employees.
Approved: February 1, 2023.
Emory Rounds,
Director, U.S. Office of Government Ethics.
0
For the reasons set forth in the preamble, the U.S. Office of
Government Ethics proposes to revise 5 CFR part 2635 to read as
follows:
[[Page 10782]]
PART 2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE
EXECUTIVE BRANCH
Subpart A--General Provisions
Sec.
2635.101 Basic obligation of public service.
2635.102 Definitions.
2635.103 Applicability to enlisted members of the uniformed
services.
2635.104 Applicability to employees on detail.
2635.105 Supplemental agency regulations.
2635.106 Disciplinary and corrective action.
2635.107 Ethics advice.
Subpart B--Gifts From Outside Sources
2635.201 Overview and considerations for declining otherwise
permissible gifts.
2635.202 General prohibition on solicitation or acceptance of gifts.
2635.203 Definitions.
2635.204 Exceptions to the prohibition for acceptance of certain
gifts.
2635.205 Limitations on use of exceptions.
2635.206 Proper disposition of prohibited gifts.
Subpart C--Gifts Between Employees
2635.301 Overview.
2635.302 General standards.
2635.303 Definitions.
2635.304 Exceptions.
Subpart D--Conflicting Financial Interests
2635.401 Overview.
2635.402 Disqualifying financial interests.
2635.403 Prohibited financial interests.
Subpart E--Impartiality in Performing Official Duties
2635.501 Overview.
2635.502 Personal and business relationships.
2635.503 Covered payments from former employers.
Subpart F--Seeking Other Employment
2635.601 Overview.
2635.602 Applicability and related considerations.
2635.603 Definitions.
2635.604 Recusal while seeking employment.
2635.605 Waiver or authorization permitting participation while
seeking employment.
2635.606 Recusal based on an arrangement concerning prospective
employment or otherwise after negotiations.
2635.607 Notification requirements for public financial disclosure
report filers regarding negotiations for or agreement of future
employment or compensation.
Subpart G--Misuse of Position
2635.701 Overview.
2635.702 Use of public office for private gain.
2635.703 Use of nonpublic information.
2635.704 Use of Government property.
2635.705 Use of official time.
Subpart H--Outside Activities
2635.801 Overview.
2635.802 Conflicting outside employment and activities.
2635.803 Prior approval for outside employment and activities.
2635.804 Outside earned income limitations applicable to certain
Presidential appointees.
2635.805 Service as an expert witness.
2635.806 [Reserved]
2635.807 Teaching, speaking and writing.
2635.808 Fundraising activities.
2635.809 Just financial obligations.
Subpart I--Related Statutory Authorities
2635.901 General.
2635.902 Related statutes.
Authority: 5 U.S.C. 7301, 7351, 7353; 5 U.S.C. ch. 131; E.O.
12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O.
12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.
Subpart A--General Provisions
Sec. 2635.101 Basic obligation of public service.
(a) Public service is a public trust. Each employee has a
responsibility to the United States Government and its citizens to
place loyalty to the Constitution, laws, and ethical principles above
private gain. To ensure that every citizen can have complete confidence
in the integrity of the Federal Government, each employee must respect
and adhere to the principles of ethical conduct set forth in this
section, as well as the implementing standards contained in this part
and in supplemental agency regulations.
(b) General principles. The following general principles apply to
every employee and may form the basis for the standards contained in
this part. When a situation is not covered by the standards set forth
in this part, employees must apply the principles set forth in this
section in determining whether their conduct is proper.
(1) Public service is a public trust, requiring employees to place
loyalty to the Constitution, the laws, and ethical principles above
private gain.
(2) Employees shall not hold financial interests that conflict with
the conscientious performance of duty.
(3) Employees shall not engage in financial transactions using
nonpublic Government information or allow the improper use of such
information to further any private interest.
(4) An employee shall not, except as permitted by subpart B of this
part, solicit or accept any gift or other item of monetary value from
any person or entity seeking official action from, doing business with,
or conducting activities regulated by the employee's agency, or whose
interests may be substantially affected by the performance or
nonperformance of the employee's duties.
(5) Employees shall put forth honest effort in the performance of
their duties.
(6) Employees shall not knowingly make unauthorized commitments or
promises of any kind purporting to bind the Government.
(7) Employees shall not use public office for private gain.
(8) Employees shall act impartially and not give preferential
treatment to any private organization or individual.
(9) Employees shall protect and conserve Federal property and shall
not use it for other than authorized activities.
(10) Employees shall not engage in outside employment or
activities, including seeking or negotiating for employment, that
conflict with official Government duties and responsibilities.
(11) Employees shall disclose waste, fraud, abuse, and corruption
to appropriate authorities.
(12) Employees shall satisfy in good faith their obligations as
citizens, including all just financial obligations, especially those--
such as Federal, State, or local taxes--that are imposed by law.
(13) Employees shall adhere to all laws and regulations that
provide equal opportunity for all Americans regardless of, for example,
race, color, religion, sex (including pregnancy, gender identity, and
sexual orientation), national origin, age, genetic information, or
disability.
(14) Employees shall endeavor to avoid any actions creating the
appearance that they are violating the law or the ethical standards set
forth in this part. Whether particular circumstances create an
appearance that the law or these standards have been violated shall be
determined from the perspective of a reasonable person with knowledge
of the relevant facts.
(c) Related statutes. In addition to the standards of ethical
conduct set forth in this part, there are conflict of interest statutes
that prohibit certain conduct. Criminal conflict of interest statutes
of general applicability to all employees, 18 U.S.C. 201, 203, 205,
208, and 209, are summarized in the appropriate subparts of this part
and must be taken into consideration in determining whether conduct is
proper. Citations to other generally applicable statutes relating to
employee conduct are set forth in subpart I of this part, and employees
are further cautioned that there may be additional statutory and
regulatory restrictions applicable to them generally or as employees of
their specific agencies. Because an employee is considered to be on
notice of the requirements of any statute, an employee should not rely
upon any
[[Page 10783]]
description or synopsis of a statutory restriction, but should refer to
the statute itself and obtain the advice of an agency ethics official
as needed.
Sec. 2635.102 Definitions.
The definitions listed below are used throughout this part.
Additional definitions appear in the subparts or sections of subparts
to which they apply. For purposes of this part:
(a) Agency means an executive agency as defined in 5 U.S.C. 105 and
the Postal Service and the Postal Regulatory Commission. It does not
include the Government Accountability Office or the government of the
District of Columbia.
(b) Agency designee refers to any employee who, by agency
regulation, instruction, or other issuance, has been delegated
authority to make any determination, give any approval, or take any
other action required or permitted by this part with respect to another
employee. An agency may delegate these authorities to any number of
agency designees necessary to ensure that determinations are made,
approvals are given, and other actions are taken in a timely and
responsible manner. Any provision that requires a determination,
approval, or other action by the agency designee will, when the conduct
in issue is that of the head of the agency, be deemed to require that
such determination, approval, or action be made or taken by the head of
the agency in consultation with the designated agency ethics official.
(c) Agency ethics official refers to the designated agency ethics
official, the alternate designated agency ethics official, any deputy
ethics official, and any additional ethics official who has been
delegated authority to assist in carrying out the responsibilities of
an agency's ethics program. The responsibilities of agency ethics
officials are described in Sec. 2638.104 of this chapter.
(d) Agency programs or operations refers to any program or function
carried out or performed by an agency, whether pursuant to statute,
Executive order, or regulation.
(e) Corrective action includes any action necessary to remedy a
past violation or prevent a continuing violation of this part,
including but not limited to restitution, change of assignment,
recusal, divestiture, termination of an activity, waiver, the creation
of a qualified diversified or blind trust, or counseling.
(f) Designated agency ethics official refers to the official
designated under Sec. 2638.104(a) of this chapter.
(g) Disciplinary action includes those disciplinary actions
referred to in Office of Personnel Management regulations and
instructions implementing provisions of title 5 of the United States
Code or provided for in comparable provisions applicable to employees
not subject to title 5, including but not limited to reprimand,
suspension, demotion, and removal. In the case of a military officer,
comparable provisions may include those in the Uniform Code of Military
Justice.
(h) Employee means any officer or employee of an agency, including
a special Government employee. It includes officers but not enlisted
members of the uniformed services. It includes employees of a State or
local government or other organization who are serving on detail to an
agency, pursuant to 5 U.S.C. 3371, et seq. For purposes other than
subparts B and C of this part, it does not include the President or
Vice President. Status as an employee is unaffected by pay or leave
status or, in the case of a special Government employee, by the fact
that the individual does not perform official duties on a given day.
(i) Head of an agency means, in the case of an agency headed by
more than one person, the chair or comparable member of such agency.
(j) Person means an individual, corporation and subsidiaries it
controls, company, association, firm, partnership, society, joint stock
company, or any other organization or institution, including any
officer, employee, or agent of such person or entity. For purposes of
this part, a corporation will be deemed to control a subsidiary if it
owns 50 percent or more of the subsidiary's voting securities. The term
is all-inclusive and applies to commercial ventures and nonprofit
organizations as well as to foreign, State, and local governments,
including the government of the District of Columbia. It does not
include any agency or other entity of the Federal Government or any
officer or employee thereof when acting in an official capacity on
behalf of that agency or entity.
(k) Special Government employee means those executive branch
officers or employees specified in 18 U.S.C. 202(a). A special
Government employee is retained, designated, appointed, or employed to
perform temporary duties either on a full-time or intermittent basis,
with or without compensation, for a period not to exceed 130 days
during any consecutive 365-day period.
(l) Supplemental agency regulation means a regulation issued
pursuant to Sec. 2635.105.
Sec. 2635.103 Applicability to enlisted members of the uniformed
services.
The provisions of this part are not applicable to enlisted members
of the uniformed services. However, each agency with jurisdiction over
enlisted members of the uniformed services may issue regulations
defining the ethical conduct obligations of enlisted members under its
jurisdiction. Such regulations or policies, if issued, should be
consistent with Executive Order 12674, April 12, 1989, as modified, and
may prescribe the full range of statutory and regulatory sanctions,
including those available under the Uniform Code of Military Justice,
for failure to comply with such regulations.
Sec. 2635.104 Applicability to employees on detail.
(a) Details to other agencies. Except as provided in paragraph (d)
of this section, employees on detail, including uniformed officers on
assignment, from their employing agencies to another agency for a
period in excess of 30 calendar days will be subject to any
supplemental agency regulations of the agency to which they are
detailed rather than to any supplemental agency regulations of their
employing agencies.
(b) Details to the legislative or judicial branch. Employees on
detail, including uniformed officers on assignment, from their
employing agencies to the legislative or judicial branch for a period
in excess of 30 calendar days will be subject to the ethical standards
of the branch or entity to which detailed. For the duration of any such
detail or assignment, employees will not be subject to the provisions
of this part, except this section, or, except as provided in paragraph
(d) of this section, to any supplemental agency regulations of their
employing agencies, but will remain subject to the conflict of interest
prohibitions in title 18 of the United States Code.
(c) Details to non-Federal entities. Except to the extent exempted
in writing pursuant to this paragraph, an employee detailed to a non-
Federal entity remains subject to this part and to any supplemental
agency regulation of their employing agency. When an employee is
detailed pursuant to statutory authority to an international
organization or to a State or local government for a period in excess
of six months, the designated agency ethics official may grant a
written exemption from subpart B of this part based on their
determination that the entity has adopted written ethical standards
covering solicitation and acceptance of gifts which will apply to the
employee during the detail and which will be
[[Page 10784]]
appropriate given the purpose of the detail.
(d) Applicability of special agency statutes. Notwithstanding
paragraphs (a) and (b) of this section, employees who are subject to an
agency statute which restricts their activities or financial holdings
specifically because of their status as an employee of that agency will
continue to be subject to any provisions in the supplemental agency
regulations of the employing agency that implement that statute.
Sec. 2635.105 Supplemental agency regulations.
In addition to the regulations set forth in this part, employees
must comply with any supplemental agency regulations issued by their
employing agencies under this section.
(a) An agency that wishes to supplement this part must prepare and
submit to the Office of Government Ethics, for its concurrence and
joint issuance, any agency regulations that supplement the regulations
contained in this part. Supplemental agency regulations which the
agency determines are necessary and appropriate, in view of its
programs and operations, to fulfill the purposes of this part must be:
(1) In the form of a supplement to the regulations in this part;
and
(2) In addition to the substantive provisions of this part.
(b) After concurrence and co-signature by the Office of Government
Ethics, the agency must submit its supplemental agency regulations to
the Federal Register for publication and codification at the expense of
the agency in title 5 of the Code of Federal Regulations. Supplemental
agency regulations issued under this section are effective only after
concurrence and co-signature by the Office of Government Ethics and
publication in the Federal Register.
(c) This section applies to any supplemental agency regulations or
amendments thereof issued under this part. It does not apply to:
(1) A handbook or other issuance intended merely as an explanation
of the standards contained in this part or in supplemental agency
regulations;
(2) An instruction or other issuance the purpose of which is to:
(i) Delegate to an agency designee authority to make any
determination, give any approval or take any other action required or
permitted by this part or by supplemental agency regulations; or
(ii) Establish internal agency procedures for documenting or
processing any determination, approval or other action required or
permitted by this part or by supplemental agency regulations, or for
retaining any such documentation; or
(3) Regulations or instructions that an agency has authority,
independent of this part, to issue, such as regulations implementing an
agency's gift acceptance statute, protecting categories of nonpublic
information, or establishing standards for use of Government vehicles.
(d) Employees of a State or local government or other organization
who are serving on detail to an agency, pursuant to 5 U.S.C. 3371, et
seq., are subject to any requirements, in addition to those in this
part, established by a supplemental agency regulation issued under this
section to the extent that such regulation expressly provides.
Sec. 2635.106 Disciplinary and corrective action.
(a) Except as provided in Sec. 2635.107, a violation of this part
or of supplemental agency regulations may be cause for appropriate
corrective or disciplinary action to be taken under applicable
Governmentwide regulations or agency procedures. Such action may be in
addition to any action or penalty prescribed by law.
(b) It is the responsibility of the employing agency to initiate
appropriate disciplinary or corrective action in individual cases.
However, corrective action may be ordered or disciplinary action
recommended by the Director of the Office of Government Ethics under
the procedures at part 2638 of this chapter.
(c) A violation of this part or of supplemental agency regulations,
as such, does not create any right or benefit, substantive or
procedural, enforceable at law by any person against the United States,
its agencies, its officers or employees, or any other person. Thus, for
example, an individual who alleges that an employee has failed to
adhere to laws and regulations that provide equal opportunity
regardless of race, color, religion, sex (including pregnancy, gender
identity, and sexual orientation), national origin, age, genetic
information, or disability is required to follow applicable statutory
and regulatory procedures, including those of the Equal Employment
Opportunity Commission.
Sec. 2635.107 Ethics advice.
(a) As required by Sec. Sec. 2638.104(a) and 2638.104(d) of this
chapter, each agency has a designated agency ethics official and an
alternate designated agency ethics official; these are the employees
who have the primary responsibility for directing the daily activities
of an agency's ethics program. Acting directly or through other
officials, the designated agency ethics official is responsible for
providing ethics advice and counseling regarding the application of
this part.
(b) Employees who have questions about the application of this part
or any supplemental agency regulations to particular situations should
seek advice from an agency ethics official. Disciplinary action for
violating this part or any supplemental agency regulations will not be
taken against an employee who has engaged in conduct in good faith
reliance upon the advice of an agency ethics official, provided that
the employee, in seeking such advice, has made full disclosure of all
relevant circumstances. When the employee's conduct violates a criminal
statute, reliance on the advice of an agency ethics official cannot
ensure that the employee will not be prosecuted under that statute.
However, good faith reliance on the advice of an agency ethics official
is a factor that may be taken into account by the Department of Justice
in the selection of cases for prosecution. Disclosures made by an
employee to an agency ethics official are not protected by an attorney-
client privilege. Agency ethics officials are required by 28 U.S.C. 535
to report any information they receive relating to a violation of the
criminal code, title 18 of the United States Code.
Subpart B--Gifts From Outside Sources
Sec. 2635.201 Overview and considerations for declining otherwise
permissible gifts.
(a) Overview. This subpart contains standards that prohibit an
employee from soliciting or accepting any gift from a prohibited source
or any gift given because of the employee's official position, unless
the item is excluded from the definition of a gift or falls within one
of the exceptions set forth in this subpart.
(b) Considerations for declining otherwise permissible gifts. (1)
Every employee has a fundamental responsibility to the United States
and its citizens to place loyalty to the Constitution, laws, and
ethical principles above private gain. An employee's actions should
promote the public's trust that this responsibility is being met. For
this reason, employees should consider declining otherwise permissible
gifts if they believe that a reasonable person with knowledge of the
relevant facts would question the employee's integrity or impartiality
as a result of accepting the gift.
(2) Employees who are considering whether acceptance of a gift
would lead
[[Page 10785]]
a reasonable person with knowledge of the relevant facts to question
their integrity or impartiality may consider, among other relevant
factors, whether:
(i) The gift has a high market value;
(ii) The timing of the gift creates the appearance that the donor
is seeking to influence an official action;
(iii) The gift was provided by a person who has interests that may
be substantially affected by the performance or nonperformance of the
employee's official duties; and
(iv) Acceptance of the gift would provide the donor with
significantly disproportionate access.
(3) Notwithstanding paragraph (b)(1) of this section, an employee
who accepts a gift that qualifies for an exception under Sec. 2635.204
does not violate this subpart or the Principles of Ethical Conduct set
forth in Sec. 2635.101(b).
(4) Employees who have questions regarding this subpart, including
whether the employee should decline a gift that would otherwise be
permitted under an exception found in Sec. 2635.204, should seek
advice from an agency ethics official.
Example 1 to paragraph (b): An employee of the Peace Corps is in
charge of making routine purchases of office supplies. After a
promotional presentation to highlight several new products, a vendor
offers to buy the employee lunch, which costs less than $20. The
employee is concerned that a reasonable person may question their
impartiality by accepting the free lunch, as the timing of the offer
indicates that the donor may be seeking to influence an official action
and the company has interests that may be substantially affected by the
performance or nonperformance of the employee's duties. The employee
concludes that appearance considerations weigh against accepting the
gift.
Sec. 2635.202 General prohibition on solicitation or acceptance of
gifts.
(a) Prohibition on soliciting gifts. Except as provided in this
subpart, an employee may not, directly or indirectly:
(1) Solicit a gift from a prohibited source; or
(2) Solicit a gift to be given because of the employee's official
position.
(b) Prohibition on accepting gifts. Except as provided in this
subpart, an employee may not, directly or indirectly:
(1) Accept a gift from a prohibited source; or
(2) Accept a gift given because of the employee's official
position.
(c) Relationship to illegal gratuities statute. A gift accepted
pursuant to an exception found in this subpart will not constitute an
illegal gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B), unless
it is accepted in return for being influenced in the performance of an
official act. As more fully described in Sec. 2635.205(d)(1), an
employee may not solicit or accept a gift if to do so would be
prohibited by the Federal bribery statute, 18 U.S.C. 201(b).
Example 1 to paragraph (c): A Government contractor who specializes
in information technology software has offered an employee of the
Department of Energy's information technology acquisition division a
$15 gift card to a local restaurant if the employee will recommend to
the agency's contracting officer that the agency select the
contractor's products during the next acquisition. Even though the gift
card is less than $20, the employee may not accept the gift under Sec.
2635.204(a) because it is conditional upon official action by the
employee. Pursuant to Sec. Sec. 2635.202(c) and 2635.205(a),
notwithstanding any exception to the rule, an employee may not accept a
gift in return for being influenced in the performance of an official
act.
Sec. 2635.203 Definitions.
For purposes of this subpart, the following definitions apply:
(a) Agency has the meaning set forth in Sec. 2635.102(a). However,
for purposes of this subpart, an executive department, as defined in 5
U.S.C. 101, may, by supplemental agency regulation, designate as a
separate agency any component of that department which the department
determines exercises distinct and separate functions.
(b) Gift includes any gratuity, favor, discount, entertainment,
hospitality, loan, forbearance, or other item having monetary value. It
includes services as well as gifts of training, transportation, local
travel, lodgings, and meals, whether provided in-kind, by purchase of a
ticket, payment in advance, or reimbursement after the expense has been
incurred. The term excludes the following:
(1) Modest items of food and non-alcoholic refreshments, such as
soft drinks, coffee, and donuts, offered other than as part of a meal;
(2) Greeting cards and items with little intrinsic value, such as
plaques, certificates, and trophies, which are intended primarily for
presentation;
Example 1 to paragraph (b)(2): After giving a speech at the
facility of a pharmaceutical company, a Government employee is
presented with a glass paperweight in the shape of a pill capsule with
the name of the company's latest drug and the date of the speech
imprinted on the side. The employee may accept the paperweight because
it is an item with little intrinsic value which is intended primarily
for presentation.
Example 2 to paragraph (b)(2): After participating in a panel
discussion hosted by an international media company, a Government
employee is presented with an inexpensive portable music player
emblazoned with the media company's logo. The portable music player has
a market value of $25. The employee may not accept the portable music
player as it has a significant independent use as a music player rather
than being intended primarily for presentation.
Example 3 to paragraph (b)(2): After giving a speech at a
conference held by a national association of miners, a Department of
Commerce employee is presented with a block of granite that is engraved
with the association's logo, a picture of the Appalachian Mountains,
the date of the speech, and the employee's name. The employee may
accept this item because it is similar to a plaque, is designed
primarily for presentation, and has little intrinsic value.
(3) Loans from banks and other financial institutions on terms
generally available to the public;
(4) Opportunities and benefits, including favorable rates and
commercial discounts, available to the public or to a class consisting
of all Government employees or all uniformed military personnel,
whether or not restricted on the basis of geographic considerations;
(5) Rewards and prizes given to competitors in contests or events,
including random drawings, open to the public unless the employee's
entry into the contest or event is required as part of the employee's
official duties;
Example 1 to paragraph (b)(5): A Government employee is attending a
free trade show on official time. The trade show is held in a public
shopping area adjacent to the employee's office building. The employee
voluntarily enters a drawing at an individual vendor's booth, which is
open to the public, by filling in an entry form on the vendor's display
table and dropping it into the contest box. The employee may accept the
resulting prize because entry into the contest was not required by or
related to their official duties.
Example 2 to paragraph (b)(5): Attendees at a conference, which is
not open to the public, are entered in a drawing for a weekend getaway
to Bermuda as a result of being registered for the conference. A
Government
[[Page 10786]]
employee who attends the conference in an official capacity could not
accept the prize under paragraph (b)(5) of this section, as the event
is not open to the public.
(6) Pension and other benefits resulting from continued
participation in an employee welfare and benefits plan maintained by a
current or former employer;
(7) Anything which is paid for by the Government or secured by the
Government under Government contract;
Example 1 to paragraph (b)(7): An employee at the Occupational
Safety and Health Administration is assigned to travel away from their
duty station to conduct an investigation of a collapse at a
construction site. The employee's agency is paying for relevant travel
expenses, including airfare. The employee may accept and retain travel
promotional items, such as frequent flyer miles, received as a result
of this official travel, to the extent permitted by 5 U.S.C. 5702,
note, and 41 CFR part 301-53.
(8) Free attendance to an event provided by the sponsor of the
event to:
(i) An employee who is assigned to present information on behalf of
the agency at the event on any day when the employee is presenting;
(ii) An employee whose presence on any day of the event is deemed
to be essential by the agency to the presenting employee's
participation in the event, provided that the employee is accompanying
the presenting employee; and
(iii) One guest of the presenting employee on any day when the
employee is presenting, provided that others in attendance will
generally be accompanied by a guest, the offer of free attendance for
the guest is unsolicited, and the agency designee, orally or in
writing, has authorized the presenting employee to accept;
Example 1 to paragraph (b)(8): An employee of the Department of the
Treasury who is assigned to participate in a panel discussion of
economic issues as part of a one-day conference may accept the
sponsor's waiver of the conference fee. Under the separate authority of
Sec. 2635.204(a), the employee may accept a token of appreciation that
has a market value of $20 or less.
Example 2 to paragraph (b)(8): An employee of the Securities and
Exchange Commission is assigned to present the agency's views at a
roundtable discussion of an ongoing working group. The employee may
accept free attendance to the meeting under paragraph (b)(8) of this
section because the employee has been assigned to present information
at the meeting on behalf of the agency. If it is determined by the
agency that it is essential that another employee accompany the
presenting employee to the roundtable discussion, the accompanying
employee may also accept free attendance to the meeting under paragraph
(b)(8)(ii) of this section.
Example 3 to paragraph (b)(8): An employee of the United States
Trade and Development Agency is invited to attend a cocktail party
hosted by a prohibited source. The employee believes that there will be
an opportunity to discuss official matters with other attendees while
at the event. Although the employee may voluntarily discuss official
matters with other attendees, the employee has not been assigned to
present information on behalf of the agency. The employee may not
accept free attendance to the event under paragraph (b)(8) of this
section.
(9) Any gift accepted by the Government under specific statutory
authority, including:
(i) Travel, subsistence, and related expenses accepted by an agency
under the authority of 31 U.S.C. 1353 in connection with an employee's
attendance at a meeting or similar function relating to the employee's
official duties which take place away from the employee's duty station,
provided that the agency's acceptance is in accordance with the
implementing regulations at 41 CFR chapter 304; and
(ii) Other gifts provided in-kind which have been accepted by an
agency under its agency gift acceptance statute; and
(10) Anything for which market value is paid by the employee.
(c) Market value means the cost that a member of the general public
would reasonably expect to incur to purchase the gift. An employee who
cannot ascertain the market value of a gift may estimate its market
value by reference to the retail cost of similar items of like quality.
The market value of a gift of a ticket entitling the holder to food,
refreshments, entertainment, or any other benefit is deemed to be the
face value of the ticket.
Example 1 to paragraph (c): An employee who has been given a watch
inscribed with the corporate logo of a prohibited source may determine
its market value based on the observation that a comparable watch, not
inscribed with a logo, generally sells for about $50.
Example 2 to paragraph (c): During an official visit to a factory
operated by a well-known athletic footwear manufacturer, an employee of
the Department of Labor is offered a commemorative pair of athletic
shoes manufactured at the factory. Although the cost incurred by the
donor to manufacture the shoes was $17, the market value of the shoes
would be the $100 that the employee would have to pay for the shoes on
the open market.
Example 3 to paragraph (c): A prohibited source has offered a
Government employee a ticket to a charitable event consisting of a
cocktail reception to be followed by an evening of chamber music. Even
though the food, refreshments, and entertainment provided at the event
may be worth only $20, the market value of the ticket is its $250 face
value.
Example 4 to paragraph (c): A company offers an employee of the
Federal Communication Commission (FCC) free attendance for two to a
private skybox at a ballpark to watch a major league baseball game. The
skybox is leased annually by the company, which has business pending
before the FCC. The skybox tickets provided to the employee do not have
a face value. To determine the market value of the tickets, the
employee must add the face value of two of the most expensive publicly
available tickets to the game and the market value of any food,
parking, or other tangible benefits provided in connection with the
gift of attendance that are not already included in the cost of the
most expensive publicly available tickets.
Example 5 to paragraph (c): An employee of the Department of
Agriculture is invited to a reception held by a prohibited source.
There is no entrance fee to the reception event or to the venue. To
determine the market value of the gift, the employee must add the
market value of any entertainment, food, beverages, or other tangible
benefit provided to attendees in connection with the reception, but
need not consider the cost incurred by the sponsor to rent or maintain
the venue where the event is held. The employee may rely on a per-
person cost estimate provided by the sponsor of the event, unless the
employee or an agency designee has determined that a reasonable person
would find that the estimate is clearly implausible.
(d) Prohibited source means any person who:
(1) Is seeking official action by the employee's agency;
(2) Does business or seeks to do business with the employee's
agency;
(3) Conducts activities regulated by the employee's agency;
(4) Has interests that may be substantially affected by the
performance or nonperformance of the employee's official duties; or
[[Page 10787]]
(5) Is an organization a majority of whose members are described in
paragraphs (d)(1) through (4) of this section.
(e) Given because of the employee's official position. A gift is
given because of the employee's official position if the gift is from a
person other than an employee and would not have been given had the
employee not held the status, authority, or duties associated with the
employee's Federal position.
Note 1 to paragraph (e): Gifts between employees are subject to
the limitations set forth in subpart C of this part.
Example 1 to paragraph (e): When free season tickets are offered by
an opera guild to all members of the Cabinet, the gift is offered
because of their official positions.
Example 2 to paragraph (e): Employees at a regional office of the
Department of Justice (DOJ) work in Government-leased space at a
private office building, along with various private business tenants. A
major fire in the building during normal office hours causes a
traumatic experience for all occupants of the building in making their
escape, and it is the subject of widespread news coverage. A corporate
hotel chain, which does not meet the definition of a prohibited source
for DOJ, seizes the moment and announces that it will give a free
night's lodging to all building occupants and their families, as a
public goodwill gesture. Employees of DOJ may accept, as this gift is
not being given because of their Government positions. The donor's
motivation for offering this gift is unrelated to the DOJ employees'
status, authority, or duties associated with their Federal positions,
but instead is based on their mere presence in the building as
occupants at the time of the fire.
(f) Indirectly solicited or accepted. A gift which is solicited or
accepted indirectly includes a gift:
(1) Given with the employee's knowledge and acquiescence to the
employee's parent, sibling, spouse, child, dependent relative, or a
member of the employee's household because of that person's
relationship to the employee; or
(2) Given to any other person, including any charitable
organization, on the basis of designation, recommendation, or other
specification by the employee, except the employee has not indirectly
solicited or accepted a gift by the raising of funds or other support
for a charitable organization if done in accordance with Sec.
2635.808.
Example 1 to paragraph (f)(2): An employee who must decline a gift
of a personal computer pursuant to this subpart may not suggest that
the gift be given instead to one of five charitable organizations whose
names are provided by the employee.
(g) Free attendance includes waiver of all or part of the fee for
an event or the provision of food, refreshments, entertainment,
instruction, or materials furnished to all attendees as an integral
part of the event. It does not include travel expenses, lodgings, or
entertainment collateral to the event. It does not include meals taken
other than in a group setting with all other attendees, unless the
employee is a presenter at the event and is invited to a separate meal
for participating presenters that is hosted by the sponsor of the
event. When the offer of free attendance has been extended to an
accompanying guest, the market value of the gift of free attendance
includes the market value of free attendance by both the employee and
the guest.
Sec. 2635.204 Exceptions to the prohibition for acceptance of
certain gifts.
Subject to the limitations in Sec. 2635.205, this section
establishes exceptions to the prohibitions set forth in Sec.
2635.202(a) and (b). Even though acceptance of a gift may be permitted
by one of the exceptions contained in this section, it is never
inappropriate and frequently prudent for an employee to decline a gift
if acceptance would cause a reasonable person to question the
employee's integrity or impartiality. Section 2635.201(b) identifies
considerations for declining otherwise permissible gifts.
(a) Gifts of $20 or less. An employee may accept unsolicited gifts
having an aggregate market value of $20 or less per source per
occasion, provided that the aggregate market value of individual gifts
received from any one person under the authority of this paragraph (a)
does not exceed $50 in a calendar year. This exception does not apply
to gifts of cash or of investment interests such as stock, bonds, or
certificates of deposit. When the market value of a gift or the
aggregate market value of gifts offered on any single occasion exceeds
$20, the employee may not pay the excess value over $20 in order to
accept that portion of the gift or those gifts worth $20. When the
aggregate value of tangible items offered on a single occasion exceeds
$20, the employee may decline any distinct and separate item in order
to accept those items aggregating $20 or less.
Example 1 to paragraph (a): An employee of the Securities and
Exchange Commission and their spouse have been invited by a
representative of a regulated entity to a community theater production,
tickets to which have a face value of $30 each. The aggregate market
value of the gifts offered on this single occasion is $60, $40 more
than the $20 amount that may be accepted for a single event or
presentation. The employee may not accept the gift of the evening of
entertainment. The couple may attend the play only if the employee pays
the full $60 value of the two tickets.
Example 2 to paragraph (a): An employee of the National Geospatial-
Intelligence Agency has been invited by an association of cartographers
to speak about the agency's role in the evolution of missile
technology. At the conclusion of the speech, the association presents
the employee a framed map with a market value of $18 and a ceramic mug
that has a market value of $15. The employee may accept the map or the
mug, but not both, because the aggregate value of these two tangible
items exceeds $20.
Example 3 to paragraph (a): On four occasions during the calendar
year, an employee of the Defense Logistics Agency (DLA) was given gifts
worth $10 each by four employees of a corporation that is a DLA
contractor. For purposes of applying the yearly $50 limitation on gifts
of $20 or less from any one person, the four gifts must be aggregated
because a person is defined at Sec. 2635.102(k) to mean not only the
corporate entity, but its officers and employees as well. However, for
purposes of applying the $50 aggregate limitation, the employee would
not have to include the value of a birthday present received from a
cousin, who is employed by the same corporation, if the cousin's
birthday present can be accepted under the exception at paragraph (b)
of this section for gifts based on a personal relationship.
Example 4 to paragraph (a): Under the authority of 31 U.S.C. 1353
for agencies to accept payments from non-Federal sources in connection
with attendance at certain meetings or similar functions, the
Environmental Protection Agency (EPA) has accepted an association's
gift of travel expenses and conference fees for an employee to attend a
conference on the long-term effect of radon exposure. While at the
conference, the employee may accept a gift basket of $20 or less from
one of the companies underwriting the event even though it was not
approved in advance by the EPA. Although 31 U.S.C. 1353 is the
authority under which the EPA accepted the gift to the agency of travel
expenses and conference fees, the gift basket is a gift to the employee
rather than to the EPA.
[[Page 10788]]
Example 5 to paragraph (a): During off-duty time, an employee of
the Department of Defense (DoD) attends a trade show involving
companies that are DoD contractors. The employee is offered software
worth $15 at X Company's booth, a calendar worth $12 at Y Company's
booth, and a deli lunch worth $8 from Z Company. The employee may
accept all three of these items because they do not exceed $20 per
source, even though they total more than $20 at this single occasion.
Example 6 to paragraph (a): An employee of the Department of
Defense (DoD) is being promoted to a higher level position in another
DoD office. Six individuals, each employed by a different defense
contractor, who have worked with the DoD employee over the years,
decide to act in concert to pool their resources to buy the employee a
nicer gift than each could buy separately. Each defense contractor
employee contributes $20 to buy a desk clock for the DoD employee that
has a market value of $120. Although each of the contributions does not
exceed the $20 limit, the employee may not accept the $120 gift because
it is a single gift that has a market value in excess of $20.
Example 7 to paragraph (a): During a holiday party, an employee of
the Department of State is given a $15 store gift card to a national
coffee chain by an agency contractor. The employee may accept the card
as the market value is less than $20. The employee could not, however,
accept a gift card that is issued by a credit card company or other
financial institution, because such a card is equivalent to a gift of
cash.
(b) Gifts based on a personal relationship. An employee may accept
a gift given by an individual under circumstances which make it clear
that the gift is motivated by a family relationship or personal
friendship rather than the position of the employee. Relevant factors
in making such a determination include the history and nature of the
relationship and whether the family member or friend personally pays
for the gift.
Example 1 to paragraph (b): An employee of the Federal Deposit
Insurance Corporation (FDIC) has been dating an accountant employed by
a member bank. As part of its ``Work-Life Balance'' program, the bank
has given each employee in the accountant's division two tickets to a
professional basketball game and has urged each to invite a family
member or friend to share the evening of entertainment. Under the
circumstances, the FDIC employee may accept the invitation to attend
the game. Even though the tickets were initially purchased by the
member bank, they were given without reservation to the accountant to
use as desired, and the invitation to the employee was motivated by
their personal friendship.
Example 2 to paragraph (b): Three partners in a law firm that
handles corporate mergers have invited an employee of the Federal Trade
Commission (FTC) to join them in a golf tournament at a private club at
the firm's expense. The entry fee is $500 per foursome. The employee
cannot accept the gift of one-quarter of the entry fee even though the
employee has developed an amicable relationship with the three partners
as a result of the firm's dealings with the FTC. As evidenced in part
by the fact that the fees are to be paid by the firm, it is not a
personal friendship but a business relationship that is the motivation
behind the partners' gift.
Example 3 to paragraph (b): A Peace Corps employee enjoys using a
social media site on the internet in a personal capacity outside of
work. The employee has used the site to keep in touch with friends,
neighbors, coworkers, professional contacts, and other individuals they
have met over the years through both work and personal activities. One
of these individuals works for a contractor that provides language
services to the Peace Corps. The employee was acting in an official
capacity when they met the individual at a meeting to discuss a matter
related to the contract between their respective employers. Thereafter,
the two communicated occasionally regarding contract matters, and later
also granted one another access to join their social media networks
through their respective social media accounts. However, the pair did
not communicate further in their personal capacities, carry on
extensive personal interactions, or meet socially outside of work. One
day, the individual, whose employer continues to serve as a Peace Corps
contractor, contacts the employee to offer a pair of concert tickets
worth $30 apiece. Although the employee and the individual are
connected through social media, the circumstances do not demonstrate
that the gift was clearly motivated by a personal relationship, rather
than the position of the employee, and therefore the employee may not
accept the gift pursuant to paragraph (b) of this section.
(c) Discounts and similar benefits. In addition to those
opportunities and benefits excluded from the definition of a gift by
Sec. 2635.203(b)(4), an employee may accept:
(1) A reduction or waiver of the fees for membership or other fees
for participation in organization activities offered to all Government
employees or all uniformed military personnel by professional
organizations if the only restrictions on membership relate to
professional qualifications; and
(2) Opportunities and benefits, including favorable rates,
commercial discounts, and free attendance or participation not
precluded by paragraph (c)(3) of this section:
(i) Offered to members of a group or class in which membership is
unrelated to Government employment;
(ii) Offered to members of an organization, such as an employees'
association or agency credit union, in which membership is related to
Government employment if the same offer is broadly available to large
segments of the public through organizations of similar size; or
(iii) Offered by a person who is not a prohibited source to any
group or class that is not defined in a manner that specifically
discriminates among Government employees on the basis of type of
official responsibility or on a basis that favors those of higher rank
or rate of pay.
Example 1 to paragraph (c)(2): A computer company offers a discount
on the purchase of computer equipment to all public and private sector
computer procurement officials who work in organizations with over 300
employees. An employee who works as the computer procurement official
for a Government agency could not accept the discount to purchase the
personal computer under the exception in paragraph (c)(2)(i) of this
section. The employee's membership in the group to which the discount
is offered is related to Government employment because membership is
based on the employee's status as a procurement official with the
Government.
Example 2 to paragraph (c)(2): An employee of the Consumer Product
Safety Commission (CPSC) may accept a discount of $50 on a microwave
oven offered by the manufacturer to all members of the CPSC employees'
association. Even though the CPSC is currently conducting studies on
the safety of microwave ovens, the $50 discount is a standard offer
that the manufacturer has made broadly available through a number of
employee associations and similar organizations to large segments of
the public.
Example 3 to paragraph (c)(2): An Assistant Secretary may not
accept a local country club's offer of membership to all members of
Department Secretariats which includes a waiver of its $5,000
membership initiation fee. Even though the country club is not a
[[Page 10789]]
prohibited source, the offer discriminates in favor of higher ranking
officials.
(3) An employee may not accept for personal use any benefit to
which the Government is entitled as the result of an expenditure of
Government funds, unless authorized by statute or regulation (e.g., 5
U.S.C. 5702, note, regarding frequent flyer miles).
Example 1 to paragraph (c)(3): The administrative officer for a
field office of U.S. Immigration and Customs Enforcement (ICE) has
signed an order to purchase 50 boxes of photocopy paper from a supplier
whose literature advertises that it will give a free briefcase to
anyone who purchases 50 or more boxes. Because the paper was purchased
with ICE funds, the administrative officer cannot keep the briefcase
which, if claimed and received, is Government property.
(d) Awards and honorary degrees--(1) Awards. An employee may accept
a bona fide award for meritorious public service or achievement and any
item incident to the award, provided that:
(i) The award and any item incident to the award are not from a
person who has interests that may be substantially affected by the
performance or nonperformance of the employee's official duties, or
from an association or other organization if a majority of its members
have such interests; and
(ii) If the award or any item incident to the award is in the form
of cash or an investment interest, or if the aggregate value of the
award and any item incident to the award, other than free attendance to
the event provided to the employee and to members of the employee's
family by the sponsor of the event, exceeds $200, the agency ethics
official has made a written determination that the award is made as
part of an established program of recognition.
Example 1 to paragraph (d)(1): Based on a written determination by
an agency ethics official that the prize meets the criteria set forth
in paragraph (d)(2) of this section, an employee of the National
Institutes of Health (NIH) may accept the Nobel Prize for Medicine,
including the cash award which accompanies the prize, even though the
prize was conferred on the basis of laboratory work performed at NIH.
Example 2 to paragraph (d)(1): A defense contractor, ABC Systems,
has an annual award program for the outstanding public employee of the
year. The award includes a cash payment of $1,000. The award program is
wholly funded to ensure its continuation on a regular basis for the
next twenty years and selection of award recipients is made pursuant to
written standards. An employee of the Department of the Air Force, who
has duties that include overseeing contract performance by ABC Systems,
is selected to receive the award. The employee may not accept the cash
award because ABC Systems has interests that may be substantially
affected by the performance or nonperformance of the employee's
official duties.
Example 3 to paragraph (d)(1): An ambassador selected by a
nonprofit organization as a recipient of its annual award for
distinguished service in the interest of world peace may, together with
their spouse and children, attend the awards ceremony dinner and accept
a crystal bowl worth $200 presented during the ceremony. However, if
the organization has also offered airline tickets for the ambassador
and the family to travel to the city where the awards ceremony is to be
held, the aggregate value of the tickets and the crystal bowl exceeds
$200, and the ambassador may accept only upon a written determination
by the agency ethics official that the award is made as part of an
established program of recognition.
(2) Established program of recognition. An award and an item
incident to the award are made pursuant to an established program of
recognition if:
(i) Awards have been made on a regular basis or, if the program is
new, there is a reasonable basis for concluding that awards will be
made on a regular basis based on funding or funding commitments; and
(ii) Selection of award recipients is made pursuant to written
standards.
(3) Honorary degrees. An employee may accept an honorary degree
from an institution of higher education, as defined at 20 U.S.C. 1001,
or from a similar foreign institution of higher education, based on a
written determination by an agency ethics official that the timing of
the award of the degree would not cause a reasonable person to question
the employee's impartiality in a matter affecting the institution.
Note 1 to paragraph (d)(3): When the honorary degree is offered
by a foreign institution of higher education, the agency may need to
make a separate determination as to whether the institution of
higher education is a foreign government for purposes of the
Emoluments Clause of the U.S. Constitution (U.S. Const., art. I,
sec. 9, cl. 8), which forbids employees from accepting emoluments,
presents, offices, or titles from foreign governments, without the
consent of Congress. The Foreign Gifts and Decorations Act, 5 U.S.C.
7342, however, may permit the acceptance of honorary degrees in some
circumstances.
Example 1 to paragraph (d)(3): A well-known university located in
the United States wishes to give an honorary degree to the Secretary of
Labor. The Secretary may accept the honorary degree only if an agency
ethics official determines in writing that the timing of the award of
the degree would not cause a reasonable person to question the
Secretary's impartiality in a matter affecting the university.
(4) Presentation events. An employee who may accept an award or
honorary degree pursuant to paragraph (d)(1) or (3) of this section may
also accept free attendance to the event provided to the employee and
to members of the employee's family by the sponsor of an event. In
addition, the employee may also accept unsolicited offers of travel to
and from the event provided to the employee and to members of the
employee's family by the sponsor of the event. Travel expenses accepted
under this paragraph (d)(4) must be added to the value of the award for
purposes of determining whether the aggregate value of the award
exceeds $200.
(e) Gifts based on outside business or employment relationships. An
employee may accept meals, lodgings, transportation, and other
benefits:
(1) Resulting from the business or employment activities of an
employee's spouse when it is clear that such benefits have not been
offered or enhanced because of the employee's official position;
Example 1 to paragraph (e)(1): A Department of Agriculture employee
whose spouse is a computer programmer employed by a Department of
Agriculture contractor may attend the company's annual retreat for all
of its employees and their families held at a resort facility. However,
under Sec. 2635.502, the employee may need to recuse from performing
official duties affecting the spouse's employer.
Example 2 to paragraph (e)(1): When the spouses of other clerical
personnel have not been invited, an employee of the Defense Contract
Audit Agency whose spouse is a clerical worker at a defense contractor
may not attend the contractor's annual retreat in Hawaii for corporate
officers and members of the board of directors, even though the spouse
received a special invitation from the company for them to attend as a
couple.
(2) Resulting from the employee's outside business or employment
activities when it is clear that such benefits are based on the outside
business or employment activities and
[[Page 10790]]
have not been offered or enhanced because of the employee's official
status;
Example 1 to paragraph (e)(2): The members of an Army Corps of
Engineers environmental advisory committee that meets six times per
year are special Government employees. A member who has a consulting
business may accept an invitation to a $50 dinner from a corporate
client, an Army construction contractor, unless, for example, the
invitation was extended in order to discuss the activities of the
advisory committee.
(3) Customarily provided by a prospective employer in connection
with bona fide employment discussions. If the prospective employer has
interests that could be affected by performance or nonperformance of
the employee's duties, acceptance is permitted only if the employee
first has complied with the recusal requirements of subpart F of this
part applicable when seeking employment; or
Example 1 to paragraph (e)(3): An employee of the Federal
Communications Commission with responsibility for drafting regulations
affecting all cable television companies wishes to apply for a job
opening with a cable television holding company. Once the employee has
properly recused from further work on the regulations as required by
subpart F of this part, the employee may enter into employment
discussions with the company and may accept the company's offer to pay
for airfare, hotel, and meals in connection with an interview trip.
(4) Provided by a former employer to attend a reception or similar
event when other former employees have been invited to attend, the
invitation and benefits are based on the former employment
relationship, and it is clear that such benefits have not been offered
or enhanced because of the employee's official position.
Example 1 to paragraph (e)(4): An employee of the Department of the
Army is invited by a former employer, an Army contractor, to attend its
annual holiday dinner party. The former employer traditionally invites
both its current and former employees to the holiday dinner regardless
of their current employment activities. Under these circumstances, the
employee may attend the dinner because the dinner invitation is a
result of the employee's former outside employment activities, other
former employees have been asked to attend, and the gift is not offered
because of the employee's official position.
(5) For purposes of paragraphs (e)(1) through (4) of this section,
``employment'' means any form of non-Federal employment or business
relationship involving the provision of personal services.
(f) Gifts in connection with political activities permitted by the
Hatch Act Reform Amendments. An employee who, in accordance with the
Hatch Act Reform Amendments of 1993, at 5 U.S.C. 7323, may take an
active part in political management or in political campaigns, may
accept meals, lodgings, transportation, and other benefits, including
free attendance at events, for the employee and an accompanying guest,
when provided, in connection with such active participation, by a
political organization described in 26 U.S.C. 527(e). Any other
employees, such as a security officers, whose official duties require
them to accompany an employee to a political event, may accept meals,
free attendance, and entertainment provided at the event by such an
organization.
Example 1 to paragraph (f): The Secretary of the Department of
Health and Human Services may accept an airline ticket and hotel
accommodations furnished by the campaign committee of a candidate for
the United States Senate in order to give a speech in support of the
candidate.
(g) Gifts of free attendance at widely attended gatherings--(1)
Authorization. When authorized in writing by the agency designee
pursuant to paragraph (g)(3) of this section, an employee may accept an
unsolicited gift of free attendance at all or appropriate parts of a
widely attended gathering. For an employee who is subject to a leave
system, attendance at the event will be on the employee's own time or,
if authorized by the employee's agency, on excused absence pursuant to
applicable guidelines for granting such absence, or otherwise without
charge to the employee's leave account.
(2) Widely attended gatherings. A gathering is widely attended if
it is expected that a large number of persons will attend, that persons
with a diversity of views or interests will be present, for example, if
it is open to members from throughout the interested industry or
profession or if those in attendance represent a range of persons
interested in a given matter, and that there will be an opportunity to
exchange ideas and views among invited persons.
(3) Written authorization by the agency designee. The agency
designee may authorize an employee or employees to accept a gift of
free attendance at all or appropriate parts of a widely attended
gathering only if the agency designee issues a written determination
after finding that:
(i) The event is a widely attended gathering, as set forth in
paragraph (g)(2) of this section;
(ii) The employee's attendance at the event is in the agency's
interest because it will further agency programs or operations;
(iii) The agency's interest in the employee's attendance outweighs
the concern that the employee may be, or may appear to be, improperly
influenced in the performance of official duties; and
(iv) If a person other than the sponsor of the event invites or
designates the employee as the recipient of the gift of free attendance
and bears the cost of that gift, the event is expected to be attended
by more than 100 persons, and the value of the gift of free attendance
does not exceed $415.
(4) Determination of agency interest. In determining whether the
agency's interest in the employee's attendance outweighs the concern
that the employee may be, or may appear to be, improperly influenced in
the performance of official duties, the agency designee may consider
relevant factors including:
(i) The importance of the event to the agency;
(ii) The nature and sensitivity of any pending matter affecting the
interests of the person who extended the invitation and the
significance of the employee's role in any such matter;
(iii) The purpose of the event;
(iv) The identity of other expected participants;
(v) Whether acceptance would reasonably create the appearance that
the donor is receiving preferential treatment;
(vi) Whether the Government is also providing persons with views or
interests that differ from those of the donor with access to the
Government; and
(vii) The market value of the gift of free attendance.
(5) Cost provided by person other than the sponsor of the event.
The cost of the employee's attendance will be considered to be provided
by a person other than the sponsor of the event when such person
designates the employee to be invited and bears the cost of the
employee's attendance through a contribution or other payment intended
to facilitate the employee's attendance. Payment of dues or a similar
assessment to a sponsoring organization does not constitute a payment
intended to facilitate a particular employee's attendance.
(6) Accompanying guest. When others in attendance will generally be
accompanied by a guest of their choice,
[[Page 10791]]
and when the invitation is from the same person who has invited the
employee, the agency designee may authorize an employee to accept an
unsolicited invitation of free attendance to one accompanying guest to
participate in all or a portion of the event at which the employee's
free attendance is permitted under paragraph (g)(1) this section. The
authorization required by this paragraph (g)(6) must be provided in
writing.
Example 1 to paragraph (g): An aerospace industry association that
is a prohibited source sponsors an industry-wide, two-day seminar for
which it charges a fee of $800 and anticipates attendance of
approximately 400. An Air Force contractor pays $4,000 to the
association so that the association can extend free invitations to five
Air Force officials designated by the contractor. The Air Force
officials may not accept the gifts of free attendance because (a) the
contractor, rather than the association, provided the cost of their
attendance; (b) the contractor designated the specific employees to
receive the gift of free attendance; and (c) the value of the gift
exceeds $415 per employee.
Example 2 to paragraph (g): An aerospace industry association that
is a prohibited source sponsors an industry-wide, two-day seminar for
which it charges a fee of $25 and anticipates attendance of
approximately 50. An Air Force contractor pays $125 to the association
so that the association can extend free invitations to five Air Force
officials designated by the contractor. The Air Force officials may not
accept the gifts of free attendance because (a) the contractor, rather
than the association, provided the cost of their attendance; (b) the
contractor designated the specific employees to receive the gift of
free attendance; and (c) the event was not expected to be attended by
more than 100 persons.
Example 3 to paragraph (g): An aerospace industry association that
is a prohibited source sponsors an industry-wide, two-day seminar for
which it charges a fee of $800 and anticipates attendance of
approximately 400. An Air Force contractor pays $4,000 in order that
the association might invite any five Federal employees. An Air Force
official to whom the sponsoring association, rather than the
contractor, extended one of the five invitations could attend if the
employee's participation were determined to be in the interest of the
agency and the employee received a written authorization.
Example 4 to paragraph (g): An employee of the Department of
Transportation is invited by a news organization to an annual press
dinner sponsored by an association of press organizations. Tickets for
the event cost $415 per person and attendance is limited to 400
representatives of press organizations and their guests. If the
employee's attendance is determined to be in the interest of the agency
and the agency designee provides a written authorization, the employee
may accept the invitation from the news organization because more than
100 persons will attend and the cost of the ticket does not exceed
$415. However, if the invitation were extended to the employee and an
accompanying guest, the employee's guest could not be authorized to
attend for free because the market value of the gift of free attendance
would exceed $415.
Example 5 to paragraph (g): An employee of the Department of Energy
(DOE) and their spouse have been invited by a major utility executive
to a small dinner party. A few other officials of the utility and their
spouses or other guests are also invited, as is a representative of a
consumer group concerned with utility rates and their spouse. The DOE
official believes the dinner party will provide an opportunity to
socialize with and get to know those in attendance. The employee may
not accept the free invitation under this exception, even if attendance
could be determined to be in the interest of the agency. The small
dinner party is not a widely attended gathering. Nor could the employee
be authorized to accept even if the event were instead a corporate
banquet to which forty company officials and their spouses or other
guests were invited. In this second case, notwithstanding the larger
number of persons expected (as opposed to the small dinner party just
noted) and despite the presence of the consumer group representative
and spouse who are not officials of the utility, those in attendance
would still not represent a diversity of views or interests. Thus, the
company banquet would not qualify as a widely attended gathering under
those circumstances either.
Example 6 to paragraph (g): An Assistant U.S. Attorney is invited
to attend a luncheon meeting of a local bar association to hear a
distinguished judge lecture on cross-examining expert witnesses.
Although members of the bar association are assessed a $15 fee for the
meeting, the Assistant U.S. Attorney may accept the bar association's
offer to attend for free, even without a determination of agency
interest. The gift can be accepted under the $20 gift exception at
paragraph (a) of this section.
Example 7 to paragraph (g): An employee of the Department of the
Interior authorized to speak on the first day of a four-day conference
on endangered species may accept the sponsor's waiver of the conference
fee for the first day of the conference under Sec. 2635.203(b)(8). If
the conference is widely attended, the employee may be authorized to
accept the sponsor's offer to waive the attendance fee for the
remainder of the conference if the agency designee has made a written
determination that attendance is in the agency's interest.
Example 8 to paragraph (g): A military officer has been approved to
attend a widely attended gathering, pursuant to paragraph (g) of this
section, that will be held in the same city as the officer's duty
station. The defense contractor sponsoring the event has offered to
transport the officer in a limousine to the event. The officer may not
accept the offer of transportation because the definition of ``free
attendance'' set forth in Sec. 2635.203(g) excludes travel, and the
market value of the transportation would exceed $20.
(h) Social invitations. An employee may accept food, refreshments,
and entertainment, not including travel or lodgings, for the employee
and an accompanying guest, at a social event attended by several
persons if:
(1) The invitation is unsolicited and is from a person who is not a
prohibited source;
(2) No fee is charged to any person in attendance; and
(3) If either the sponsor of the event or the person extending the
invitation to the employee is not an individual, the agency designee
has made a written determination after finding that the employee's
attendance would not cause a reasonable person with knowledge of the
relevant facts to question the employee's integrity or impartiality,
consistent with Sec. 2635.201(b).
Example 1 to paragraph (h): An employee of the White House Press
Office has been invited to a social dinner for current and former White
House Press Officers at the home of an individual who is not a
prohibited source. The employee may attend even if the invitation is
because of the employee's official position.
(i) Meals, refreshments, and entertainment in foreign areas. An
employee assigned to duty in, or on official travel to, a foreign area
as defined in 41 CFR 300-3.1 may accept unsolicited food, refreshments,
or entertainment in the course of a breakfast, luncheon, dinner, or
other meeting or event provided:
[[Page 10792]]
(1) The market value in the foreign area of the food, refreshments,
or entertainment provided at the meeting or event, as converted to U.S.
dollars, does not exceed the per diem rate for the foreign area
specified in the U.S. Department of State's Maximum Per Diem Allowances
for Foreign Areas, Per Diem Supplement Section 925 to the Standardized
Regulations (GC-FA), available on the internet at <a href="http://www.state.gov">www.state.gov</a>;
(2) There is participation in the meeting or event by non-U.S.
citizens or by representatives of foreign governments or other foreign
entities;
(3) Attendance at the meeting or event is part of the employee's
official duties to obtain information, disseminate information, promote
the export of U.S. goods and services, represent the United States, or
otherwise further programs or operations of the agency or the U.S.
mission in the foreign area; and
(4) The gift of meals, refreshments, or entertainment is from a
person other than a foreign government as defined in 5 U.S.C.
7342(a)(2).
Example 1 to paragraph (i): A number of local business owners in a
developing country are eager for a U.S. company to locate a
manufacturing facility in their province. An official of the U.S.
International Development Finance Corporation may accompany the
visiting vice president of the U.S. company to a dinner meeting hosted
by the business owners at a province restaurant when the market value
of the food and refreshments does not exceed the per diem rate for that
country.
(j) Gifts to the President or Vice President. Because of
considerations relating to the conduct of their offices, including
those of protocol and etiquette, the President or the Vice President
may accept any gift on their own behalf or on behalf of any family
member, provided that such acceptance does not violate Sec.
2635.205(a) or (b), 18 U.S.C. 201(b) or 201(c)(3), or the Constitution
of the United States.
(k) Gifts authorized by supplemental agency regulation. An employee
may accept any gift when acceptance of the gift is specifically
authorized by a supplemental agency regulation issued with the
concurrence of the Office of Government Ethics, pursuant to Sec.
2635.105.
(l) Gifts accepted under specific statutory authority. The
prohibitions on acceptance of gifts from outside sources contained in
this subpart do not apply to any item which a statute specifically
authorizes an employee to accept. Gifts which may be accepted by an
employee under the authority of specific statutes include, but are not
limited to:
(1) Free attendance, course or meeting materials, transportation,
lodgings, food and refreshments, or reimbursements therefor incident to
training or meetings when accepted by the employee under the authority
of 5 U.S.C. 4111. The employee's acceptance must be approved by the
agency in accordance with part 410 of this title; or
(2) Gifts from a foreign government or international or
multinational organization, or its representative, when accepted by the
employee under the authority of the Foreign Gifts and Decorations Act,
5 U.S.C. 7342. As a condition of acceptance, an employee must comply
with requirements imposed by the agency's regulations or procedures
implementing that Act.
(m) Gifts of informational materials. (1) An employee may accept
unsolicited gifts of informational materials, provided that:
(i) The aggregate market value of all informational materials
received from any one person does not exceed $100 in a calendar year;
or
(ii) If the aggregate market value of all informational materials
from the same person exceeds $100 in a calendar year, an agency
designee has made a written determination after finding that acceptance
by the employee would not be inconsistent with the standard set forth
in Sec. 2635.201(b).
(2) Informational materials are writings, recordings, documents,
records, or other items that:
(i) Are educational or instructive in nature;
(ii) Are not primarily created for entertainment, display, or
decoration; and
(iii) Contain information that relates in whole or in part to the
following categories:
(A) The employee's official duties or position, profession, or
field of study;
(B) A general subject matter area, industry, or economic sector
affected by or involved in the programs or operations of the agency; or
(C) Another topic of interest to the agency or its mission.
Example 1 to paragraph (m): An analyst at the Agricultural Research
Service receives an edition of an agricultural research journal in the
mail from a consortium of private farming operations concerned with
soil toxicity. The journal edition has a market value of $75. The
analyst may accept the gift.
Example 2 to paragraph (m): An inspector at the Mine Safety and
Health Administration receives a popular novel with a market value of
$25 from a mine operator. Because the novel is primarily for
entertainment purposes, the inspector may not accept the gift.
Example 3 to paragraph (m): An employee at the Department of the
Army is offered an encyclopedia on cyberwarfare from a prohibited
source. The cost of the encyclopedia is far in excess of $100. The
agency designee determines that acceptance of the gift would be
inconsistent with the standard set out in Sec. 2635.201(b). The
employee may not accept the gift under paragraph (m) of this section.
Sec. 2635.205 Limitations on use of exceptions.
Notwithstanding any exception provided in this subpart, other than
Sec. 2635.204(j), an employee may not:
(a) Accept a gift in return for being influenced in the performance
of an official act;
(b) Use, or permit the use of, the employee's Government position,
or any authority associated with public office, to solicit or coerce
the offering of a gift;
(c) Accept gifts from the same or different sources on a basis so
frequent that a reasonable person would be led to believe the employee
is using the employee's public office for private gain;
Example 1 to paragraph (c): A purchasing agent for a Department of
Veterans Affairs medical center routinely deals with representatives of
pharmaceutical manufacturers who provide information about new company
products. Because of a crowded calendar, the purchasing agent has
offered to meet with manufacturer representatives during lunch hours
Tuesdays through Thursdays, and the representatives routinely arrive at
the employee's office bringing a sandwich and a soft drink for the
employee. Even though the market value of each of the lunches is less
than $6 and the aggregate value from any one manufacturer does not
exceed the $50 aggregate limitation in Sec. 2635.204(a) on gifts of
$20 or less, the practice of accepting even these modest gifts on a
recurring basis is improper.
(d) Accept a gift in violation of any statute; relevant statutes
applicable to all employees include, but are not limited to:
(1) 18 U.S.C. 201(b), which prohibits public officials from,
directly or indirectly, corruptly demanding, seeking, receiving,
accepting, or agreeing to receive or accept anything of value
personally or for any other person or entity in return for being
influenced in the performance of an official act; being influenced to
commit or aid in committing, or to collude in, or allow, any fraud, or
make opportunity for the commission of any fraud, on the United States;
or for being induced to do or
[[Page 10793]]
omit to do any action in violation of their official duties. As used in
18 U.S.C. 201(b), the term ``public official'' is broadly construed and
includes regular and special Government employees as well as all other
Government officials; and
(2) 18 U.S.C. 209, which prohibits employees, other than special
Government employees, from receiving any salary or any contribution to
or supplementation of salary from any source other than the United
States as compensation for services as a Government employee. The
statute contains several specific exceptions to this general
prohibition, including an exception for contributions made from the
treasury of a State, county, or municipality;
(e) Accept a gift in violation of any Executive order; or
(f) Accept any gift when acceptance of the gift is specifically
prohibited by a supplemental agency regulation issued with the
concurrence of the Office of Government Ethics, pursuant to Sec.
2635.105.
Sec. 2635.206 Proper disposition of prohibited gifts.
(a) Unless a gift is accepted by an agency acting under specific
statutory authority, an employee who has received a gift that cannot be
accepted under this subpart must dispose of the gift in accordance with
the procedures set forth in this section. The employee must promptly
complete the authorized disposition of the gift. The obligation to
dispose of a gift that cannot be accepted under this subpart is
independent of an agency's decision regarding corrective or
disciplinary action under Sec. 2635.106.
(1) Gifts of tangible items. The employee must promptly return any
tangible item to the donor or pay the donor its market value; or, in
the case of a tangible item with a market value of $100 or less, the
employee may destroy the item. An employee who cannot ascertain the
actual market value of an item may estimate its market value by
reference to the retail cost of similar items of like quality.
Example 1 to paragraph (a)(1): A Department of Commerce employee
received a $25 T-shirt from a prohibited source after providing
training at a conference. Because the gift would not be permissible
under an exception to this subpart, the employee must either return or
destroy the T-shirt or promptly reimburse the donor $25. Destruction
may be carried out by physical destruction or by permanently discarding
the T-shirt by placing it in the trash.
Example 2 to paragraph (a)(1): To avoid public embarrassment to the
seminar sponsor, an employee of the National Park Service did not
decline a barometer worth $200 given at the conclusion of a speech on
Federal lands policy. To comply with this section, the employee must
either promptly return the barometer or pay the donor the market value
of the gift. Alternatively, the National Park Service may choose to
accept the gift if permitted under specific statutory gift acceptance
authority. The employee may not destroy this gift, as the market value
is in excess of $100.
(2) Gifts of perishable items. When it is not practical to return a
tangible item in accordance with paragraph (a)(1) of this section
because the item is perishable, the employee may, at the discretion of
the employee's supervisor or the agency designee, give the item to an
appropriate charity, share the item within the recipient's office, or
destroy the item.
Example 1 to paragraph (a)(2): With approval by the recipient's
supervisor, a floral arrangement sent by a disability claimant to a
helpful employee of the Social Security Administration may be placed in
the office's reception area.
(3) Gifts of intangibles. The employee must promptly reimburse the
donor the market value for any entertainment, favor, service, benefit,
or other intangible. Subsequent reciprocation by the employee does not
constitute reimbursement.
Example 1 to paragraph (a)(3): A Department of Defense employee
wishes to attend a charitable event for which they were offered a $300
ticket by a prohibited source. Although attendance is not in the
interest of the agency under Sec. 2635.204(g), the employee may attend
if they reimburse the donor the $300 face value of the ticket.
(4) Gifts from foreign governments or international organizations.
The employee must dispose of gifts from foreign governments or
international organizations in accordance with 41 CFR part 102-42.
(b) An agency may authorize disposition or return of gifts at
Government expense. Employees may use penalty mail to forward
reimbursements required or permitted by this section.
(c) Employees who, on their own initiative, promptly comply with
the requirements of this section will not be deemed to have improperly
accepted an unsolicited gift. Employees who promptly consult their
agency ethics official to determine whether acceptance of an
unsolicited gift is proper and who, upon the advice of the ethics
official, return the gift or otherwise dispose of the gift in
accordance with this section, will be considered to have complied with
the requirements of this section on the employee's own initiative.
(d) Employees are encouraged to record any actions they have taken
to properly dispose of gifts that cannot be accepted under this
subpart, such as by sending an electronic mail message to the
appropriate agency ethics official or the employee's supervisor.
Subpart C--Gifts Between Employees
Sec. 2635.301 Overview.
This subpart contains standards that prohibit an employee from
giving or contributing to a gift to an official superior, and official
superiors are prohibited from knowingly accepting such a gift.
Employees also are prohibited from soliciting a contribution from
another employee for a gift to an official superior. In addition,
employees are prohibited from accepting a gift from an employee who
receives less pay. These prohibitions apply unless the item is excluded
from the definition of a gift or falls within one of the exceptions set
forth in this subpart. Gifts from outside sources are subject to the
limitations set forth in subpart B of this part.
Sec. 2635.302 General standards.
(a) Gifts to superiors. Except as provided in this subpart,
employees may not:
(1) Directly or indirectly, give a gift to or make a contribution
toward a gift for an official superior, and an official superior may
not knowingly accept such a gift; or
(2) Solicit a contribution from another employee for a gift to
either their own or the other employee's official superior.
(b) Gifts from employees receiving less pay. Except as provided in
this subpart, employees may not, directly or indirectly, accept a gift
from an employee who receives less pay unless:
(1) There is a personal relationship between the two employees that
would justify the gift and the employee receiving the gift is not the
official superior of the employee giving the gift; or
(2) The employee giving the gift is the official superior of the
employee receiving the gift.
Example 1 to paragraph (b): A GS-13 Department of Homeland Security
(DHS) employee has been close personal friends with a neighbor, a GS-15
employee in another government agency, for many years. During their
friendship, the GS-13 employee has
[[Page 10794]]
often allowed the neighbor's family to use their vacation house rent-
free. The GS-15 employee recently accepted a position at DHS, and in
the new position will be the direct supervisor of the GS-13 employee.
Although the personal relationship between the two employees justified
the gift of rent-free use of the vacation home before they were both
employed at DHS, for the duration of their supervisor-subordinate
relationship the GS-13 employee may not allow the GS-15 neighbor to use
the vacation house rent-free or give other gifts, except as permitted
by the exceptions contained in this subpart.
(c) Limitation on use of exceptions. Notwithstanding any exception
provided in this subpart, an official superior may not coerce the
offering of a gift from a subordinate.
Sec. 2635.303 Definitions.
For purposes of this subpart, the following definitions apply:
(a) Gift has the meaning set forth in Sec. 2635.203(b). For
purposes of that definition an employee will be deemed to have paid
market value for any benefit received as a result of participating in a
carpool or other such mutual arrangement between employees if the
employee bears a fair proportion of the expense or effort involved.
(b) Indirectly, for purposes of Sec. 2635.302(b), has the meaning
set forth in Sec. 2635.203(f). For purposes of Sec. 2635.302(a), it
includes a gift:
(1) Given with the employee's knowledge and acquiescence by the
employee's parent, sibling, spouse, child, or dependent relative; or
(2) Given by a person other than the employee when circumstances
indicate that the employee has promised or agreed to reimburse that
person or to give that person something of value in exchange for giving
the gift.
(c) Market value has the meaning set forth in Sec. 2635.203(c),
subject to paragraph (a) of this section.
(d) Official superior means any other employee, other than the
President and the Vice President, including but not limited to an
immediate supervisor, whose official responsibilities include directing
or evaluating the performance of the employee's official duties or
those of any other official superior of the employee. For purposes of
this subpart, employees are considered to be the subordinates of any of
their official superiors.
(e) Solicit means to request contributions by personal
communication or by general announcement.
(f) Voluntary contribution means a contribution given freely,
without pressure or coercion. A contribution is not voluntary unless it
is made in an amount determined by the contributing employee, except
that when an amount for a gift is included in the cost for a luncheon,
reception, or similar event, an employee who freely chooses to pay a
proportionate share of the total cost in order to attend will be deemed
to have made a voluntary contribution. Except in the case of
contributions for a gift included in the cost of a luncheon, reception,
or similar event, a statement that an employee may choose to contribute
less or not at all must accompany any recommendation of an amount to be
contributed for a gift to an official superior.
Example 1 to paragraph (f): A supervisory employee of the Agency
for International Development has just been reassigned from Washington,
DC, to a foreign duty location. As a farewell party, 12 subordinates
have decided to take the supervisory employee out to lunch at a
restaurant. It is understood that the employees will pay for their own
meals and that the cost of the supervisor's lunch will be divided
equally among the 12. Even though the amount they will contribute is
not determined until the supervisor orders lunch, the contribution made
by those who choose to participate in the farewell lunch is voluntary.
Sec. 2635.304 Exceptions.
The prohibitions set forth in Sec. 2635.302(a) and (b) do not
apply to a gift given or accepted under the circumstances described in
paragraph (a) or (b) of this section. A contribution or the
solicitation of a contribution that would otherwise violate the
prohibitions set forth in Sec. 2635.302(a) and (b) may only be made in
accordance with paragraph (c) of this section.
(a) General exceptions. On an occasional basis, including any
occasion on which gifts are traditionally given or exchanged, the
following may be given to an official superior or accepted from a
subordinate or an employee receiving less pay:
(1) Items, other than cash, with an aggregate market value of $10
or less per occasion;
(2) Items such as food and refreshments to be shared in the office
among several employees;
(3) Personal hospitality provided at a residence which is of a type
and value customarily provided by the employee to personal friends;
(4) Items given in connection with the receipt of personal
hospitality if of a type and value customarily given on such occasions;
and
(5) Unless obtained in violation of Sec. 630.912 of this title,
leave transferred under subpart I of part 630 of this title to an
employee who is not an immediate supervisor.
Example 1 to paragraph (a): Upon returning to work following a
vacation at the beach, a claims examiner with the Department of
Veterans Affairs may give their supervisor, and the supervisor may
accept, a bag of saltwater taffy purchased on the boardwalk for $8.
Example 2 to paragraph (a): An employee of the Federal Deposit
Insurance Corporation whose bank examination responsibilities require
frequent travel may not bring their supervisor, and the supervisor may
not accept, souvenir coffee mugs from each of the cities the employee
visits in the course of performing examination duties, even though each
of the mugs costs less than $5. Gifts given on this basis are not
occasional.
Example 3 to paragraph (a): The Secretary of Labor has invited the
agency's General Counsel to a home dinner party. The General Counsel
may bring a $15 bottle of wine to the dinner party and the Secretary
may accept this customary gift from the subordinate, even though its
cost is in excess of $10.
Example 4 to paragraph (a): For the holidays, an assistant may give
their supervisor, and the supervisor may accept, a small succulent
plant purchased for $10 or less. The assistant may also invite the
supervisor to a New Year's Eve party in their home and the supervisor
may attend.
(b) Special, infrequent occasions. A gift appropriate to the
occasion may be given to an official superior or accepted from a
subordinate or other employee receiving less pay:
(1) In recognition of infrequently occurring occasions of personal
significance such as marriage, illness, bereavement, or the birth or
adoption of a child; or
(2) Upon occasions that terminate a subordinate-official superior
relationship, such as retirement, resignation, or transfer.
Example 1 to paragraph (b): The administrative assistant to the
personnel director of the Tennessee Valley Authority may send a $30
floral arrangement to the personnel director who is in the hospital
recovering from surgery. The personnel director may accept the gift.
Example 2 to paragraph (b): A chemist employed by the Food and Drug
Administration has been invited to the wedding of the lab director who
is an official superior. The chemist may give the lab director and the
lab director's spouse, and the couple may accept, a
[[Page 10795]]
place setting in the couple's selected china pattern purchased for $70.
Example 3 to paragraph (b): Upon the occasion of the supervisor's
retirement from Federal service, an employee of the Fish and Wildlife
Service may give the supervisor a book of wildlife photographs
purchased for $19. The retiring supervisor may accept the book.
Example 4 to paragraph (b): An economist at the Consumer Financial
Protection Bureau overhears their supervisor talking about their
upcoming 50th birthday. Although a 50th birthday may be conventionally
seen as a unique ``milestone'' worthy of additional celebration, the
employee may not give their supervisor a $25 bottle of wine as a
present because a birthday is not an infrequently occurring occasion.
(c) Voluntary contributions. (1) An employee may solicit voluntary
contributions of nominal amounts from fellow employees for an
appropriate gift to an official superior and an employee may make a
voluntary contribution of a nominal amount to an appropriate gift to an
official superior:
(i) On a special, infrequent occasion as described in paragraph (b)
of this section; or
(ii) On an occasional basis, for items such as food and
refreshments to be shared in the office among several employees.
(2) An employee may accept such gifts to which a subordinate or an
employee receiving less pay has voluntarily contributed pursuant to
paragraph (c)(1) of this section.
Example 1 to paragraph (c): To mark the occasion of retirement,
members of the immediate staff of the Under Secretary of the Army would
like to throw a party and provide the Under Secretary with a gift
certificate. They may distribute an announcement of the party and list
a nominal amount for a retirement gift as a suggested voluntary
contribution for the party.
Example 2 to paragraph (c): An employee of the National Endowment
for the Arts may not collect contributions for a Christmas gift for the
Chairman. Christmas occurs annually and is not an occasion of personal
significance.
Example 3 to paragraph (c): Subordinates may not take up a
collection for a gift to an official superior on the occasion of the
superior's swearing in or promotion to a higher grade position within
the supervisory chain of that organization. These are not events that
mark the termination of the subordinate-official superior relationship,
nor are they events of personal significance within the meaning of
Sec. 2635.304(b). However, subordinates may take up a collection and
employees may contribute a nominal amount to buy refreshments to be
consumed by everyone in the immediate office to mark either such
occasion.
Example 4 to paragraph (c): Subordinates may each contribute a
nominal amount to a fund to give a gift to an official superior upon
the occasion of that superior's transfer or promotion to a position
outside the organization.
Example 5 to paragraph (c): An Assistant Secretary at the
Department of the Interior is getting married. The Assistant
Secretary's assistant has decided that a microwave oven would be a nice
gift from the staff and has informed each of the Assistant Secretary's
subordinates that they should contribute $5 for the gift. The
assistant's method of collection is improper. Although it is
permissible to recommend a $5 contribution, the recommendation must be
coupled with a statement that the employee whose contribution is
solicited is free to contribute less or nothing at all.
Subpart D--Conflicting Financial Interests
Sec. 2635.401 Overview.
Part 2640 of this chapter interprets and is the implementing
regulation for 18 U.S.C. 208. This subpart summarizes the relevant
statutory restrictions and some of the regulatory guidance found there.
Specifically, this subpart contains two provisions relating to
financial interests. One is a recusal requirement and the other is a
prohibition on acquiring or continuing to hold specific financial
interests. An employee may acquire or hold any financial interest not
prohibited by Sec. 2635.403. Notwithstanding that the acquisition or
holding of a particular interest is proper, an employee is prohibited
in accordance with Sec. 2635.402 from participating in an official
capacity in any particular matter in which, to the employee's
knowledge, the employee or any person whose interests are imputed to
the employee has a financial interest, if the particular matter will
have a direct and predictable effect on that interest.
Sec. 2635.402 Disqualifying financial interests.
(a) Statutory prohibition. An employee is prohibited by criminal
statute, 18 U.S.C. 208(a), from participating personally and
substantially in an official capacity in any particular matter in
which, to the employee's knowledge, the employee or any person whose
interests are imputed to the employee under this statute has a
financial interest, if the particular matter will have a direct and
predictable effect on that interest.
Note 1 to paragraph (a): Standards applicable when seeking non-
Federal employment are contained in subpart F of this part and, if
followed, will ensure that an employee does not violate 18 U.S.C.
208(a) or this section when the employee is negotiating for or has
an arrangement concerning future employment. In all other cases when
the employee's participation would violate 18 U.S.C. 208(a), an
employee must recuse from participating in the particular matter in
accordance with paragraph (c) of this section or obtain a waiver or
determine that an exemption applies, as described in paragraph (d)
of this section.
(b) Definitions. For purposes of this section, the following
definitions apply:
(1) Direct and predictable effect. (i) A particular matter will
have a direct effect on a financial interest if there is a close causal
link between any decision or action to be taken in the matter and any
expected effect of the matter on the financial interest. An effect may
be direct even though it does not occur immediately. A particular
matter will not have a direct effect on a financial interest, however,
if the chain of causation is attenuated or is contingent upon the
occurrence of events that are speculative or that are independent of,
and unrelated to, the matter. A particular matter that has an effect on
a financial interest only as a consequence of its effects on the
general economy does not have a direct effect within the meaning of
this subpart.
(ii) A particular matter will have a predictable effect if there is
a real, as opposed to a speculative possibility that the matter will
affect the financial interest. It is not necessary, however, that the
magnitude of the gain or loss be known, and the dollar amount of the
gain or loss is immaterial.
Note 2 to paragraph (b)(1): If a particular matter involves a
specific party or parties, generally the matter will at most only
have a direct and predictable effect, for purposes of this subpart,
on a financial interest of the employee in or with a party, such as
the employee's interest by virtue of owning stock. There may,
however, be some situations in which, under the above standards, a
particular matter will have a direct and predictable effect on an
employee's financial interests in or with a nonparty. For example,
if a party is a corporation, a particular matter may also have a
direct and predictable effect on an employee's financial interests
through ownership of stock in an affiliate, parent, or subsidiary of
that party. Similarly, the disposition of a protest against the
award of a contract to a particular company may also have a direct
and predictable effect on an employee's financial interest in
another company listed as a subcontractor in the proposal of one of
the competing offerors.
[[Page 10796]]
Example 1 to paragraph (b)(1): An employee of the National Library
of Medicine at the National Institutes of Health has just been asked to
serve on the technical evaluation panel to review proposals for a new
library computer search system. DEF Computer Corporation, a closely
held company in which the employee and their spouse own a majority of
the stock, has submitted a proposal. Because award of the systems
contract to DEF or to any other offeror will have a direct and
predictable effect on the financial interests of both the employee and
the spouse, the employee cannot participate on the technical evaluation
team unless this disqualification has been waived.
Example 2 to paragraph (b)(1): Upon assignment to the technical
evaluation panel, the employee in the preceding example finds that DEF
Computer Corporation has not submitted a proposal. Rather, LMN Corp.,
with which DEF competes for private sector business, is one of the six
offerors. The employee need not recuse from serving on the technical
evaluation panel. Any effect on the employee's financial interests as a
result of the agency's decision to award or not award the systems
contract to LMN would be at most indirect and speculative.
(2) Imputed interests. For purposes of 18 U.S.C. 208(a) and this
subpart, the financial interests of the following persons will require
the recusal of an employee to the same extent as if they were the
employee's own interests:
(i) The employee's spouse;
(ii) The employee's minor child;
(iii) The employee's general partner;
(iv) An organization or entity which the employee serves as
officer, director, trustee, general partner, or employee; and
(v) A person with whom the employee is negotiating for or has an
arrangement concerning prospective employment. (Employees who are
seeking other employment should refer to and comply with the standards
in subpart F of this part.)
Example 1 to paragraph (b)(2): An employee of the Department of
Education serves without compensation on the board of directors of
Kinder World, Inc., a nonprofit corporation that engages in good works.
Even though the employee's personal financial interests will not be
affected, the employee must recuse from participating in the review of
a grant application submitted by Kinder World. Award or denial of the
grant will affect the financial interests of Kinder World and its
financial interests are imputed to the employee as a member of its
board of directors.
Example 2 to paragraph (b)(2): The spouse of an employee of the
Food and Drug Administration has obtained a position with a well-
established biomedical research company. The company has developed an
artificial limb for which it is seeking FDA approval and the employee
would ordinarily be asked to participate in the FDA's review and
approval process. The spouse is a salaried employee of the company and
has no stock or other direct or indirect ownership interest in the
company. The spouse's position with the company is such that the
granting or withholding of FDA approval will not have a direct and
predictable effect on their salary or continued employment with the
company. Because the FDA approval process will not affect the spouse's
financial interests, Sec. 2635.402 does not require the employee to
recuse from participating in that process. Nevertheless, because the
impartiality principle is implicated as a result of the employee's
covered relationship with the spouse's employer, as identified at Sec.
2635.502(b)(1)(iii), the employee must follow the procedures
established in Sec. 2635.502 before participating in the FDA's review
and approval process.
(3) Particular matter. The term particular matter encompasses only
matters that involve deliberation, decision, or action that is focused
upon the interests of specific persons, or a discrete and identifiable
class of persons. Such a matter is covered by this subpart even if it
does not involve formal parties and may include governmental action
such as legislation or policy-making that is narrowly focused on the
interests of such a discrete and identifiable class of persons. The
term particular matter, however, does not extend to the consideration
or adoption of broad policy options that are directed to the interests
of a large and diverse group of persons. The particular matters covered
by this subpart include a judicial or other proceeding, application,
request for a ruling or other determination, contract, claim,
controversy, charge, accusation, or arrest.
Example 1 to paragraph (b)(3): The Internal Revenue Service's
amendment of its regulations to change the manner in which depreciation
is calculated is not a particular matter, nor is the Social Security
Administration's consideration of changes to its appeal procedures for
disability claimants.
Example 2 to paragraph (b)(3): Consideration by the Surface
Transportation Board of regulations establishing safety standards for
trucks on interstate highways involves a particular matter.
(4) Personal and substantial. To participate personally means to
participate directly. It includes the direct and active supervision of
the participation of a subordinate in the matter. To participate
substantially means that the employee's involvement is of significance
to the matter. Participation may be substantial even though it is not
determinative of the outcome of a particular matter. However, it
requires more than official responsibility, knowledge, perfunctory
involvement, or involvement on an administrative or peripheral issue. A
finding of substantiality should be based not only on the effort
devoted to a matter, but also on the importance of the effort. While a
series of peripheral involvements may be insubstantial, the single act
of approving or participating in a critical step may be substantial.
Personal and substantial participation may occur when, for example, an
employee participates through decision, approval, disapproval,
recommendation, investigation, or the rendering of advice in a
particular matter.
(c) Recusal. Unless the employee is authorized to participate in
the particular matter by virtue of a waiver or exemption described in
paragraph (d) of this section or because the interest has been divested
in accordance with paragraph (e) of this section, an employee must
recuse from participating in a particular matter in which, to the
employee's knowledge, the employee or a person whose interests are
imputed to the employee has a financial interest, if the particular
matter will have a direct and predictable effect on that interest.
Recusal is accomplished by not participating in the particular matter.
(1) Notification. Employees who become aware of the need to recuse
from participating in a particular matter to which they have been
assigned must take whatever steps are necessary to ensure that they do
not participate in the matter. Appropriate oral or written notification
of their recusal may be made to an agency ethics official, coworkers,
or a supervisor to document and help effectuate the recusal. Public
filers as defined in subpart F of this part must comply with additional
notification requirements set forth in Sec. 2635.607 regarding
negotiations for or agreement of future employment or compensation.
(2) Documentation. Employees need not file written recusal
statements unless they are required by part 2634 of this chapter to
file written evidence of compliance with an ethics agreement
[[Page 10797]]
with the Office of Government Ethics or a designated agency ethics
official, or are specifically directed by an agency ethics official or
the person responsible for their assignments to file written recusal
statements. However, it is often prudent for employees to create a
record of their actions by providing written notice to an agency ethics
official, a supervisor, or other appropriate official. In addition,
public filers as defined in subpart F of this part must comply with the
documentation requirements set forth in Sec. 2635.607 regarding
negotiations for or agreement of future employment or compensation.
Example 1 to paragraph (c): An Assistant Secretary of the
Department of the Interior owns recreational property that borders on
land which is being considered for annexation to a national park.
Annexation would directly and predictably increase the value of the
Assistant Secretary's vacation property and, thus, the Assistant
Secretary must recuse from participating in any way in the Department's
deliberations or decisions regarding the annexation. Because the
Assistant Secretary is responsible for determining their own work
assignments, they may accomplish their recusal merely by ensuring that
they do not participate in the particular matter. Because of the level
of their position, however, the Assistant Secretary might be wise to
establish a record that they have acted properly by providing a written
recusal statement to an official superior and by providing written
notification of the recusal to subordinates to ensure that they do not
raise or discuss any issues related to the annexation with the
Assistant Secretary.
(d) Waiver of or exemptions from recusal requirement. An employee
who would otherwise be required to recuse under 18 U.S.C. 208(a) may be
permitted to participate in a particular matter if the financial
interest that would otherwise require recusal is the subject of a
regulatory exemption or individual waiver described in this paragraph,
or results from certain Indian birthrights as described in 18 U.S.C.
208(b)(4).
(1) Regulatory exemptions. Under 18 U.S.C. 208(b)(2), regulatory
exemptions of general applicability have been issued by the Office of
Government Ethics, based on its determination that particular interests
are too remote or too inconsequential to affect the integrity of the
services of employees to whom those exemptions apply. See part 2640,
subpart B of this chapter.
(2) Individual waivers. An individual waiver enabling the employee
to participate in one or more particular matters may be issued under 18
U.S.C. 208(b)(1) if, in advance of the employee's participation:
(i) The employee:
(A) Advises the Government official responsible for the employee's
appointment (or other Government official to whom authority to issue
such a waiver for the employee has been delegated) about the nature and
circumstances of the particular matter or matters; and
(B) Makes full disclosure to such official of the nature and extent
of the relevant financial interest; and
(ii) Such official determines, in writing, that the employee's
financial interest in the particular matter or matters is not so
substantial as to be deemed likely to affect the integrity of the
services which the Government may expect from such employee. See part
2640, subpart C of this chapter (providing additional guidance).
(3) Federal advisory committee member waivers. An individual waiver
may be issued under 18 U.S.C. 208(b)(3) to a special Government
employee serving on, or under consideration for appointment to, an
advisory committee within the meaning of the Federal Advisory Committee
Act if the Government official responsible for the employee's
appointment (or other Government official to whom authority to issue
such a waiver for the employee has been delegated):
(i) Reviews the financial disclosure report filed by the special
Government employee pursuant to 5 U.S.C. chapter 131; and
(ii) Certifies in writing that the need for the individual's
services outweighs the potential for a conflict of interest created by
the relevant financial interest. See part 2640, subpart C of this
chapter (providing additional guidance).
(4) Consultation and notification regarding waivers. When
practicable, an official is required to consult formally or informally
with the Office of Government Ethics prior to granting a waiver
referred to in paragraph (d)(2) or (3) of this section. A copy of each
such waiver is to be forwarded to the Director of the Office of
Government Ethics.
(e) Divestiture of a disqualifying financial interest. Upon sale or
other divestiture of the asset or other interest that would otherwise
require the employee to recuse from participating in a particular
matter, 18 U.S.C. 208(a) and paragraph (c) of this section will no
longer prohibit the employee's participation in the matter.
(1) Voluntary divestiture. An employee who would otherwise be
required to recuse from participating in a particular matter may
voluntarily sell or otherwise divest the interest that create the
recusal requirement.
(2) Directed divestiture. An employee may be required to sell or
otherwise divest the disqualifying financial interest if the continued
holding of that interest is prohibited by statute or by agency
supplemental regulation issued in accordance with Sec. 2635.403(a), or
if the agency determines in accordance with Sec. 2635.403(b) that a
substantial conflict exists between the financial interest and the
employee's duties or accomplishment of the agency's mission.
(3) Eligibility for special tax treatment. An employee who is
directed to divest an interest may be eligible to defer the tax
consequences of divestiture under part 2634, subpart J of this chapter.
An employee who divests before obtaining a certificate of divestiture
will not be eligible for this special tax treatment.
(f) Official duties that give rise to potential conflicts. When
their official duties create a substantial likelihood that they may be
assigned to a particular matter from which they would be required to
recuse, employees should advise their supervisors or other persons
responsible for their assignments of that potential so that conflicting
assignments can be avoided, consistent with the agency's needs.
Sec. 2635.403 Prohibited financial interests.
An employee may not acquire or hold any financial interest that
agency employees are prohibited from acquiring or holding by statute,
by agency regulation issued in accordance with paragraph (a) of this
section, or by reason of an agency determination of substantial
conflict under paragraph (b) of this section.
Note 1 to Sec. 2635.403: There is no statute of Governmentwide
applicability prohibiting employees from holding or acquiring any
financial interest. Statutory restrictions, if any, are contained in
agency statutes which, in some cases, may be implemented by agency
regulations issued independent of this part.
(a) Agency regulation prohibiting certain financial interests. An
agency may, by supplemental agency regulation, prohibit or restrict the
acquisition or holding of a financial interest or a class of financial
interests by agency employees, or any category of agency employees, and
the spouses and minor children of those employees, based on the
agency's determination that the acquisition or holding of such
financial interests would cause a reasonable person to question the
impartiality and objectivity with which agency programs are
administered.
[[Page 10798]]
When the agency restricts or prohibits the holding of certain financial
interests by its employees' spouses or minor children, any such
prohibition or restriction must be based on a determination that there
is a direct and appropriate nexus between the prohibition or
restriction as applied to spouses and minor children and the efficiency
of the service.
(b) Agency determination of substantial conflict. An agency may
prohibit or restrict an individual employee from acquiring or holding a
financial interest or a class of financial interests based upon the
agency designee's determination that the holding of such interest or
interests will:
(1) Require the employee to recuse from particular matters so
central or critical to the performance of the employee's official
duties that their ability to perform the duties of their position would
be materially impaired; or
(2) Adversely affect the efficient accomplishment of the agency's
mission because another employee cannot be readily assigned to perform
work from which the employee would be recused by reason of the
financial interest.
Example 1 to paragraph (b): An Air Force employee who owns $33,778
of stock in a major aircraft engine manufacturer is being considered
for promotion to a position that involves responsibility for
development of a new fighter airplane. If the agency determined that
engineering and other decisions about the Air Force's requirements for
the fighter would directly and predictably affect the employee's
financial interests, the employee could not, by virtue of 18 U.S.C.
208(a), perform these significant duties of the position while
retaining stock in the company. The agency can require the employee to
sell the stock as a condition of being selected for the position rather
than allowing the employee to recuse from particular matters.
(c) Definition of financial interest. For purposes of this section:
(1) Except as provided in paragraph (c)(2) of this section, the
term financial interest is limited to financial interests that are
owned by the employee or by the employee's spouse or minor children.
However, the term is not limited to only those financial interests that
would require the employee to recuse under 18 U.S.C. 208(a) and Sec.
2635.402. The term includes any current or contingent ownership,
equity, or security interest in real or personal property or a
business, and may include an indebtedness or compensated employment
relationship. It thus includes, for example, interests in the nature of
stocks, bonds, partnership interests, fee and leasehold interests,
mineral and other property rights, deeds of trust, and liens, and
extends to any right to purchase or acquire any such interest, such as
a stock option or commodity future. It does not include a future
interest created by someone other than the employee, the employee's
spouse, or minor child, or any right as a beneficiary of an estate that
has not been settled.
Example 1 to paragraph (c)(1): A regulatory agency has concluded
that ownership by its employees of stock in entities regulated by the
agency would significantly diminish public confidence in the agency's
performance of its regulatory functions and thereby interfere with the
accomplishment of its mission. In its supplemental agency regulations,
the agency may prohibit its employees from acquiring or continuing to
hold stock in regulated entities.
Example 2 to paragraph (c)(1): An agency that insures bank deposits
may, by supplemental agency regulation, prohibit its employees who are
bank examiners from obtaining loans from banks they examine.
Examination of a member bank could have no effect on an employee's
fixed obligation to repay a loan from that bank and, thus, would not
affect an employee's financial interests so as to require recusal under
Sec. 2635.402. Nevertheless, a loan from a member bank is a discrete
financial interest within the meaning of Sec. 2635.403(c) that may,
when appropriate, be prohibited by supplemental agency regulation.
(2) The term financial interest includes service, with or without
compensation, as an officer, director, trustee, general partner, or
employee of any person, including a nonprofit entity, whose financial
interests are imputed to the employee under Sec. 2635.402(b)(2) (iii)
or (iv).
Example 1 to paragraph (c)(2): The Foundation for the Preservation
of Wild Horses maintains herds of horses that graze on public and
private lands. Because its costs are affected by Federal policies
regarding grazing permits, the Foundation routinely comments on all
proposed rules governing use of Federal grasslands issued by the Bureau
of Land Management (BLM). BLM may require an employee to resign from
their uncompensated position as Vice President of the Foundation as a
condition of a promotion to a policy-level position within the Bureau
rather than allowing the employee to rely on recusal in particular
cases.
(d) Reasonable period to divest or terminate. Whenever an agency
directs divestiture of a financial interest under paragraph (a) or (b)
of this section, the employee will be given a reasonable period of
time, considering the nature of their particular duties and the nature
and marketability of the interest, within which to comply with the
agency's direction. Except in cases of unusual hardship, as determined
by the agency, a reasonable period must not exceed 90 days from the
date divestiture is first directed. However, as long as the employee
continues to hold the financial interest, all restrictions imposed by
this subpart remain applicable.
(e) Eligibility for special tax treatment. Employees required to
sell or otherwise divest a financial interest may be eligible to defer
the tax consequences of divestiture under part 2634, subpart J of this
chapter.
Subpart E--Impartiality in Performing Official Duties
Sec. 2635.501 Overview.
(a) Scope. This subpart is intended to ensure that employees take
appropriate steps to avoid an appearance of loss of impartiality in the
performance of their official duties in circumstances other than those
covered by the criminal conflict of interest statute, 18 U.S.C. 208(a).
(1) The provisions of Sec. 2635.502 are designed to help employees
identify and take appropriate steps regarding their participation in
particular matters involving specific parties that may cause a
reasonable person with knowledge of the relevant facts to question
their impartiality. Employees and agencies should analyze such
appearance issues, and employees may receive authorization to
participate in such matters, using the procedures in this subpart.
(2) Under Sec. 2635.503, an employee who has received a covered
payment from a former employer is subject, in the absence of a waiver
pursuant to Sec. 2635.503(c), to a two-year period of recusal from
participating in particular matters in which that former employer is or
represents a party.
(3) An employee is prohibited by 18 U.S.C. 208(a) from
participating personally and substantially in an official capacity in
any particular matter in which, to the employee's knowledge, the
employee has a personal or imputed financial interest, if the
particular matter will have a direct and predictable effect on that
interest. Section 208(a), its interpreting and implementing regulations
under part 2640 of this chapter, and the regulations at subparts D and
F of this part, apply when the
[[Page 10799]]
particular matter would affect the financial interests of one of these
persons.
(b) Distinction between authorizations under this subpart and
waivers and exemptions under 18 U.S.C. 208.
(1) When an employee's participation in a particular matter
involving specific parties would raise a question in the mind of a
reasonable person about the employee's impartiality, but would not
violate 18 U.S.C. 208(a), the agency designee may make a determination,
as explained in Sec. 2635.502(d), and authorize the employee to
participate in the matter.
(2) When the employee's participation in a particular matter would
affect any one of the financial interests described in 18 U.S.C.
208(a), only a statutory waiver or exemption, as described in
Sec. Sec. 2635.402(d) and 2635.605(a), will enable the employee to
participate in that matter. The specific requirements for regulatory
exemptions and statutory waivers are contained in subparts B and C of
part 2640 of this chapter.
(3) An applicable waiver or exemption under part 2640 of this
chapter also authorizes an employee's participation in particular
matters that would otherwise be restricted by Sec. 2635.502.
Specifically, if an employee meets all prerequisites for the
application of one of the regulatory exemptions set forth in part 2640,
subpart B of this chapter, that constitutes a determination that the
interest of the Government in the employee's participation in a
particular matter outweighs the concern that a reasonable person may
question the integrity of agency programs and operations. Similarly, if
the employee complies with all terms of a statutory waiver granted
pursuant to part 2640, subpart C of this chapter, that also constitutes
a determination that the interest of the Government in the employee's
participation in a particular matter outweighs the concern that a
reasonable person may question the integrity of agency programs and
operations. In such cases, the employee is not required to recuse under
Sec. 2635.502(e) or request authorization to participate under Sec.
2635.502(d).
Note 1 to Sec. 2635.501: Even if the employee or agency
designee determines that this subpart is not applicable, the
employee's supervisor or other individuals responsible for assigning
work to the employee may decide not to assign certain work to the
employee for other reasons, including to address appearance and
impartiality concerns not covered by this subpart.
Sec. 2635.502 Personal and business relationships.
(a) Consideration of appearances by the employee. In considering
whether any of the following would cause a reasonable person to
question their impartiality, employees may seek the assistance of their
supervisor, an agency ethics official, or the agency designee.
(1) When an employee knows that a particular matter involving
specific parties is likely to have a direct and predictable effect on
the financial interest of a member of the employee's household, and the
employee determines that the circumstances would cause a reasonable
person with knowledge of the relevant facts to question the employee's
impartiality in the matter, the employee should not participate in the
matter unless the employee has received a determination from the agency
designee regarding the appearance problem in accordance with paragraph
(c) of this section or received an authorization from the agency
designee in accordance with paragraph (d) of this section.
(2) When an employee knows that a person with whom the employee has
a covered relationship is or represents a party to a particular matter
involving specific parties, and the employee determines that the
circumstances would cause a reasonable person with knowledge of the
relevant facts to question their impartiality in the matter, the
employee should not participate in the matter unless the employee has
received a determination from the agency designee regarding the
appearance problem in accordance with paragraph (c) of this section or
received an authorization from the agency designee in accordance with
paragraph (d) of this section.
(3) Employees who are concerned that circumstances other than those
specifically described in paragraphs (a)(1) and (2) of this section
would raise a question regarding their impartiality should use the
process described in this section to determine whether they should not
participate in a particular matter.
(b) Definitions. For purposes of this section:
(1) An employee has a covered relationship with:
(i) A person, other than a prospective employer described in Sec.
2635.603(c), with whom the employee has or seeks a business,
contractual, or other financial relationship that involves other than a
routine consumer transaction;
Note 1 to paragraph (b)(1)(i): An employee who is seeking
employment within the meaning of Sec. 2635.603 must comply with
subpart F of this part rather than with this section.
(ii) A person who is a member of the employee's household, or who
is a relative with whom the employee has a close personal relationship;
(iii) A person for whom the employee's spouse, parent, or child is,
to the employee's knowledge, serving or seeking to serve as an officer,
director, trustee, general partner, agent, attorney, consultant,
contractor, or employee;
(iv) Any person for whom the employee has, within the last year,
served as officer, director, trustee, general partner, agent, attorney,
consultant, contractor, or employee; or
(v) An organization, other than a political party described in 26
U.S.C. 527(e), in which the employee is an active participant.
Participation is active if, for example, it involves service as an
official of the organization or in a capacity similar to that of a
committee or subcommittee chairperson or spokesperson, or participation
in directing the activities of the organization. In other cases,
significant time devoted to promoting specific programs of the
organization, including coordination of fundraising efforts, is an
indication of active participation. Payment of dues or the donation or
solicitation of financial support does not, in itself, constitute
active participation.
Note 2 to Sec. 2635.502: Nothing in this section should be
construed to suggest that employees should not participate in a
matter because of their political, religious, or moral views.
(2) Direct and predictable effect has the meaning set forth in
Sec. 2635.402(b)(1).
(3) Particular matter involving specific parties has the meaning
set forth in Sec. 2640.102(l) of this chapter.
Example 1 to paragraph (b): An employee of the General Services
Administration (GSA) has made an offer to purchase a restaurant owned
by a local developer. The developer has submitted an offer in response
to a GSA solicitation for the lease of office space. Under the
circumstances, the GSA employee would be correct in concluding that a
reasonable person would be likely to question their impartiality if
they were to participate in evaluating that developer's or its
competitor's lease proposal.
Example 2 to paragraph (b): An employee of the Department of Labor
is providing technical assistance in drafting occupational safety and
health legislation that will affect all employers of five or more
persons. The employee's
[[Page 10800]]
spouse is employed as an administrative assistant by a large
corporation that will incur additional costs if the proposed
legislation is enacted. Because the legislation is not a particular
matter involving specific parties, the employee may continue to work on
the legislation and need not be concerned that the spouse's employment
with an affected corporation would raise a question concerning the
employee's impartiality.
Example 3 paragraph (b): An employee of the Bureau of Land
Management (BLM) is studying environmental problems created by the use
of hazardous substances on a particular section of public land. BLM has
a contract with an environmental services company to produce a water
quality study of the groundwater under this section of land along with
a recommendation about how to remediate any problems that are found.
The BLM employee will use the study to help determine the extent of the
damage and to recommend a solution to any problems that are revealed.
The employee's parent has accepted a job with this environmental
services company, and will be signing and submitting the report of the
company's findings. Under these circumstances, the employee would be
correct in concluding that a reasonable person would be likely to
question their impartiality if they were to continue participating in
the study related to this parcel of public land.
Example 4 to paragraph (b): An engineer has just resigned from a
position as vice president of an electronics company in order to accept
employment with the Federal Aviation Administration (FAA) in a position
involving procurement responsibilities. Although the employee did not
receive a covered payment in connection with the resignation and has
severed all financial ties with the firm, under the circumstances the
employee would be correct in concluding that this former service as an
officer of the company would be likely to cause a reasonable person to
question their impartiality if they were to participate in the
administration of an FAA contract for which the firm is a first-tier
subcontractor.
Example 5 to paragraph (b): An employee of the Internal Revenue
Service (IRS) is a member of a private organization whose purpose is to
restore a Victorian-era railroad station, and chairs its annual
fundraising drive. Under the circumstances, the employee would be
correct in concluding that this active membership in the organization
would be likely to cause a reasonable person to question their
impartiality if they were to participate in an IRS determination
regarding the tax-exempt status of the organization.
Example 6 to paragraph (b): An employee of the Department of
Defense (DoD) has responsibility for testing avionics produced by a
large Air Force contractor. The employee just learned that their parent
accepted a staff position in the human resources division of that
contractor. Although the DoD employee has a covered relationship with
the contractor that employs their parent, the employee could
justifiably conclude that a reasonable person would not be likely to
question their impartiality because the parent's work is unrelated to
the avionics contract.
Example 7 to paragraph (b): An employee of the Department of
Defense (DoD) leads the office that is testing a new type of jet engine
produced by a multinational conglomerate's aviation division. The
employee's lifelong best friend is the head of the conglomerate's
aviation division, and is responsible for presenting and promoting the
new jet engine. Although the DoD employee does not have a covered
relationship under Sec. 2635.502(b)(1), the employee is concerned
that, under Sec. 2635.502(a)(3), questions regarding their
impartiality could be raised. Here, the employee could justifiably
conclude that a reasonable person would be likely to question their
impartiality if they were to continue performing duties related to this
jet engine.
(c) Determination by agency designee. (1) When the agency designee
has information concerning a potential appearance problem arising from:
(i) the financial interest of a member of the employee's household in a
particular matter involving specific parties or (ii) a particular
matter involving specific parties in which a person with whom the
employee has a covered relationship is a party or represents a party,
the agency designee may make an independent determination as to whether
a reasonable person with knowledge of the relevant facts would be
l
[…truncated; see source link]Indexed from Federal Register on February 21, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.