Rule2023-16811
Supplemental Standards of Ethical Conduct for Employees of the United States Postal Service
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Published
August 8, 2023
Effective
September 7, 2023
Issuing agencies
Postal Service
Abstract
The United States Postal Service (Postal Service), with the concurrence of the United States Office of Government Ethics (OGE), amends the Supplemental Standards of Ethical Conduct for Employees of the United States Postal Service by updating and refining outside employment and activity provisions (including prior approval requirements and prohibitions), by adding new requirements applicable to Postal Service Office of Inspector General (OIG) employees, Postal Service Governors, the Postmaster General, and the Deputy Postmaster General, and by making limited technical and ministerial changes. In response to the proposed rule, the Postal Service received two sets of comments, which it addresses here.
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<title>Federal Register, Volume 88 Issue 151 (Tuesday, August 8, 2023)</title>
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[Federal Register Volume 88, Number 151 (Tuesday, August 8, 2023)]
[Rules and Regulations]
[Pages 53351-53357]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-16811]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 88 , No. 151 / Tuesday, August 8, 2023 /
Rules and Regulations
[[Page 53351]]
POSTAL SERVICE
5 CFR Part 7001
Supplemental Standards of Ethical Conduct for Employees of the
United States Postal Service
AGENCY: Postal Service<SUP>TM</SUP>.
ACTION: Final rule.
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SUMMARY: The United States Postal Service (Postal Service), with the
concurrence of the United States Office of Government Ethics (OGE),
amends the Supplemental Standards of Ethical Conduct for Employees of
the United States Postal Service by updating and refining outside
employment and activity provisions (including prior approval
requirements and prohibitions), by adding new requirements applicable
to Postal Service Office of Inspector General (OIG) employees, Postal
Service Governors, the Postmaster General, and the Deputy Postmaster
General, and by making limited technical and ministerial changes. In
response to the proposed rule, the Postal Service received two sets of
comments, which it addresses here.
DATES: This rule is effective as of September 7, 2023.
FOR FURTHER INFORMATION CONTACT: Jessica Brewster-Johnson, Senior
Ethics Counsel, United States Postal Service, 475 L'Enfant Plaza SW,
Washington, DC 20260-1101, 202-268-6936.
SUPPLEMENTARY INFORMATION:
Background
In March 2022, the Postal Service proposed to amend the
Supplemental Standards of Ethical Conduct for Employees of the United
States Postal Service (Supplemental Standards), which are codified in 5
CFR part 7001. 87 FR 12888 (March 8, 2022). The proposed rule provided
a 60 day comment period, which ended on May 9, 2022. The Postal Service
received two timely and responsive comments in reply, which were
submitted by one trade association and one private organization. The
Postal Service now responds.
Summary of Commenter A's Comments and Postal Service Responses
Commenter A, a private organization, contributed seven (7)
suggested changes to the proposed rule. The Postal Service reviews and
responds to each responsive comment in turn.
I. Expansion of Sec. 7001.104--Competitors and Publicly-Traded Lessors
Commenter A ``strongly supports the Postal Service's efforts to
establish firm prohibitions that bar the Board of Governors, their
spouses, and their minor children from directly or indirectly acquiring
or holding financial interests in postal competitors . . . [or]
investments in publicly-traded companies that lease real estate to the
Postal Service.'' However, Commenter A recommended that the Postal
Service broaden the prohibitions proposed at 5 CFR 7001.104(a)(1)(i)
and (ii) (on acquiring or holding, directly or indirectly, ``any
financial interest in a person engaged in the delivery outside the
mails of any type of mailable matter, except daily newspapers'' or
``any financial interest in a publicly-traded entity engaged primarily
in the business of leasing real property to the Postal Service'') to
apply also to the Postmaster General and the Deputy Postmaster General.
The Postal Service notes that the holdings of the Postmaster
General and Deputy Postmaster General are carefully vetted, with
recusals in place when necessary, for the purpose of ensuring that
neither individual participates in any particular matter in a manner
that violates any ethics statute or regulation or even in a manner that
raises the mere appearance of a violation of these statutes and
regulations. Nevertheless, for the reasons stated below, the Postal
Service has determined that it is appropriate to extend the
prohibitions proposed at 5 CFR 7001.104 to the Postmaster General and
the Deputy Postmaster General, in addition to the Governors.
Accordingly, the Postal Service has updated the language of Sec.
7001.104 to require that the Postmaster General and the Deputy
Postmaster General, in addition to the Governors, abstain from holding
financial interests in Postal Service competitors or publicly-traded
companies that lease real estate to the Postal Service.
The nine Governors, the Postmaster General, and the Deputy
Postmaster General--who together constitute a complete Board of
Governors--should all be subject to the same restrictions on holdings
of postal competitors and publicly-traded lessors because they together
constitute the highest echelons of the Postal Service. See 39 U.S.C.
202(a), (c), (d). Prohibiting all members of the Board from holding
these assets will assuage any appearance concerns that any member of
the Board has any divided loyalties when engaged in Board activities.
The Governors alone vote on pricing decisions, which was why they alone
were included in the proposed rule. The comments are well taken,
however, that the Postmaster General and Deputy Postmaster General,
with the Governors, constitute a full Board and that, therefore, if any
Board member, regardless of their involvement with pricing decisions,
were to hold stock in competitors or publicly-traded lessors, this
still may lead to the appearance that a Board member has divided
loyalties when he or she makes broadly applicable decisions with wide-
ranging consequences, including consequences that may affect
competitors or publicly-traded entities who purchase postal real estate
and sell it back to the Postal Service at a profit. This expansion to
include the Postmaster General and Deputy Postmaster General will
support the public's ability to trust that the full Board will continue
to make choices that are for the sole benefit of the Postal Service and
that those decisions are made without even the appearance of divided
loyalties. Therefore, the full Board--the Governors, Postmaster
General, and Deputy Postmaster General--will henceforth be subject to
the holding prohibitions of Sec. 7001.104.
II. Expansion of Sec. 7001.104--Contractors and Subcontractors
Commenter A recommends that the Postal Service broaden the proposed
restrictions of 5 CFR 7001.104 to ``prohibit the Postmaster General,
the Deputy Postmaster General and the . . . Governors from holding any
financial interest, directly or indirectly, in a Postal Service
contractor or subcontractor.'' The Postal Service has
[[Page 53352]]
considered this suggestion but concluded that such a restriction is
both overly broad and unnecessary to address actual conflicts of
interest or any significant appearance concerns.
First, all Postal Service employees--including the Postmaster
General and the Deputy Postmaster General--must recuse themselves from
``participating personally and substantially in an official capacity in
any particular matter in which, to [their] knowledge, [they] or any
person whose interests are imputed to [them] . . . has a financial
interest, if the particular matter will have a direct and predictable
effect on that interest.'' 18 U.S.C. 208(a)(``section 208''). In other
words, no Postal Service employee--including those in leadership--may
work personally and substantially on any particular matter that could
have a direct and predictable effect on his or her financial interests
(or the financial interests of those whose interests are imputed to him
or her--i.e., the employee's spouse, minor child, and others as defined
by the statute). All Postal Service employees must continue to comply
with this criminal statute prohibiting conflicts of interest and with
the impartiality and misuse provisions of the Standards of Ethics
Conduct for Employees of the Executive Branch, when considering what
actions they may take at work for the Postal Service. It is not
necessary to prohibit financial interests in Postal Service contractors
or subcontractors beyond those entities with whom the employee will
actually work in his or her postal capacity. To do so would be overly
broad and would not serve to prevent actual conflicts of interest.
Financial interests in postal contractors and subcontractors also
do not raise appearance concerns in the same way as financial interests
in competitors and publicly traded lessors, which are covered by Sec.
7001.104. While there are only a handful of postal competitors and only
one publicly traded lessor to the Postal Service, there are thousands
of postal contractors and subcontractors. Therefore, the primary
concern addressed by proposed Sec. 7001.104--that there is an
appearance concern for the Governors, the Postmaster General or the
Deputy Postmaster General to hold a financial interest in one of a
handful of Postal Service competitors or in the one publicly traded
lessor of the Postal Service, because of the highly visible nature of
these entities--is not present with regard to the over 11,000
contractors and the multitude of subcontractors, many of whom are not
publicly traded entities, or with regard to those entities with whom
the Postal Service enters into local buy contracts. For example, if a
Governor were to hold a financial interest in a small private company
that has one contract with the Postal Service, so long as that Governor
does not work on postal matters affecting that company, there is no
conflicts concern and the level of appearance concerns is greatly
reduced as compared to if that Governor owned a financial holding in
one of the Postal Service's competitors or the sole publicly-traded
lessor, whose visibility is pronounced. In other words, holding a
financial interest in one of thousands of postal contractors or
subcontractor presents negligible, if any, appearance issues.
The Governors, Postmaster General, and Deputy Postmaster General
already must track, for conflicts of interest purposes, whether they
hold financial interests in any entity that they may affect as part of
their postal duties, and it would be overly burdensome, impractical,
and unnecessary for them to have to track the entire universe of postal
contractors and subcontractors for the purposes of avoiding minimal
appearance concerns. For these reasons, the Postal Service declines to
broaden 5 CFR 7001.104(a)(1) to include a broad blanket prohibition on
holding financial interests in any of the wide universe of contractors
and subcontractors.
III. Expansion of Sec. 7001.104(a)(1)(ii) to Privately Held Lessors
Third, Commenter A recommends that 5 CFR 7001.104(a)(1)(ii)
``should not only prohibit holdings in publicly-traded entities engaged
primarily in the business of leasing real property to the Postal
Service, but also prohibit holdings in privately-held entities engaged
primarily in the business of leasing real property to the Postal
Service.'' The Postal Service declines this expansion of the entities
covered by Sec. 7001.104(a)(1)(ii), as such a prohibition is not
necessary to prevent either an actual or apparent conflict of interest.
The Postal Service contracts with numerous privately-owned lessors
(including many sole proprietors). These private lessors change
frequently, are often relatively small, and are too numerous for
covered individuals to effectively track (though of course the
individuals must continue to track those outside entities who could be
financially impacted as they perform their postal duties for conflicts
analyses). This is in contrast to publicly-traded lessors, of which
there is only one. Commenter A's suggestion is overbroad because it
would require covered individuals to abstain from holding a financial
interest in a private entity even if there is no overlap with the
financial interests of that entity and his or her official postal
duties. If a covered employee holds a financial interest in a private
entity, he or she would already be prohibited from working on a matter
affecting that entity under applicable conflicts rules. That will
continue to be the case--though the Postal Service notes that an actual
conflict is unlikely because the Board of Governors rarely would be
called to address leasing matters.
What the Postal Service intends to address with 5 CFR
7001.104(a)(1)(ii), by prohibiting the covered individuals from holding
a financial interest in the Postal Service's sole publicly traded
lessor, is even the appearance of a conflict. The appearance of holding
a financial interest in that sole, massive lessor is far greater than
the potential appearance of a conflict when holding a financial
interest in an entity that few know exists, such as for example a
small, private, lessor that may potentially be a sole proprietorship,
or have operations in just one small town. By contrast, the public
lessor's sole business is to buy postal properties and sell those
properties back to the Postal Service at a profit. If a covered
individual were to hold a financial interest in that publicly traded
lessor, there could be the appearance that the covered individual has
divided loyalties--in other words, there could be the appearance of a
conflict, even if there was not an actual conflict because the
conflicts rule served its purpose to prevent one. The appearance of a
conflict is what Sec. 7001.104(a)(1)(ii) is designed to prevent.
Holding a financial interest in a private lessor simply does not raise
the same level of appearance concerns or questions regarding divided
loyalties, and thus the Postal Service declines to include such lessors
in the coverage of Sec. 7001.104.
IV. Waivers
Fourth, Commenter A is concerned that the Designated Agency Ethics
Official (DAEO) will not be required to consult with the Office of
Government Ethics (OGE) before issuing waivers of prohibited financial
interests pursuant to Sec. 7001.104(d), which provides that the Postal
Service's DAEO may, for good cause shown, grant a waiver ``of any
prohibited financial interest described in paragraph (a) or (c)(2) or
(3) of this section.''
Although the Postal Service is required to--and does--consult with
OGE when practicable prior to issuing waivers under section 208 (under
5 CFR 2640.303), the Postal Service need not
[[Page 53353]]
consult externally with OGE when it grants a waiver pursuant to its own
Supplemental Standards, which are agency-specific rules that go above
and beyond those rules already required by OGE. The Postal Service is
best positioned to determine whether a waiver under its own
Supplemental Standards is appropriate (unlike with section 208 waivers,
for which OGE is the subject matter expert). That the Postal Service is
empowered to approve waivers under its own Supplemental Standards is
consistent with others agencies' abilities to make similar decisions
under their own supplemental ethics regulations.
V. Section 7001.104(a)(2) Scope
Fifth, Commenter A makes recommendations regarding how the Postal
Service should apply certain of the prohibited holding provisions in
Sec. 7001.104(a). As discussed above, Sec. 7001.104(a)(1) sets forth
the financial interests that are restricted for the Governors (and, as
expanded in this final rule, to the Postmaster General and Deputy
Postmaster General); Sec. 7001.104(a)(2) builds upon that restriction
by noting that such individuals similarly should not ``actively control
the acquisition of or the holding of any financial interest described
in paragraph (a)(1)(i) or (ii) of this section on behalf of any entity
whose financial interests are imputed . . . under 18 U.S.C. 208.'' The
provision goes on to explain that the Postal Service does not deem an
individual to ``actively control'' the financial interests of an entity
for purposes of this provision if he or she merely directs the
investment strategy, hires the entity's financial manager who selects
the investments, or designates another employee to select the
investments. Commenter A seems to suggest that the Postmaster General
and Deputy Postmaster General--to whom the final rule applies
restrictions of Sec. 7001.104(a)(1), as suggested by Commenter A--
should have a different standard than the Governors for evaluating when
they ``do[ ] not actively control the financial interests of an
entity'' relating to the Sec. 7001.104(a)(2) restriction.
Specifically, Commenter A suggests that the standards for determining
whether the Postmaster General and Deputy Postmaster General ``actively
control'' the financial interests of an entity ``should be consistent
with 5 CFR 2640.202(e).''
The Postal Service disagrees that the concept of ``active[ ]
control'' in this restriction should be different for the Postmaster
General and Deputy Postmaster General than for the Governors. As
updated consistent with the discussions in this preamble, Sec.
7001.104(a) will place requirements on Governors, the Postmaster
General, and the Deputy Postmaster General to address appearance
concerns. These requirements are above and beyond--and in addition to--
the requirements that all Federal employees are subject to, under
section 208 and the Standards of Ethical Conduct for Employees of the
Executive Branch. Section 208 will continue to control when any real
conflicts of interest are present. Therefore, the restrictions, which
mirror the exemption to section 208 found in 5 CFR 2640.202(e), will
apply to the Postmaster General and Deputy Postmaster General should an
actual conflict arise.
Conversely, Sec. 7001.104(a) is meant to address appearance
concerns, as stated above. A reasonable person with the knowledge that
a Governor, the Postmaster General or the Deputy Postmaster General
actively controls the holdings of entity would have reason to question
the loyalty of that individual when the entity invests in a competitor
or the publicly held lessor. The same cannot be said when the entity
invests in a competitor or the publicly held lessor, but the Governor,
Postmaster General or Deputy Postmaster General does not actively
control the acquisition of or holding of those financial interests, as
described in Sec. 7001.014(a)(2). As such, the standard that Commenter
A suggests should be applied to PG and DPG is simply not necessary
because we do not believe that there are any appearance concerns if the
Postmaster General or the Deputy Postmaster is merely directing the
investment strategy of the entity and hiring the entity's financial
manager, who in turn selects the entity's investment, or designating
another employee of the entity to select the entity's investments.
Because the Postal Service is focused on the appearance of a conflict
as opposed to an actual conflict, the Postal Service will apply Sec.
7001.104(a)(2) in the same manner to the Postmaster General and the
Deputy Postmaster General as it does to the Governors.
VI. Postmaster General Vetting Process
Sixth, Commenter A asks that the ethics review process for the
position of Postmaster General be ``strengthened and enhanced''--
specifically through an accelerated process similar to that used for
Presidential appointees subject to Senate confirmation (``PAS''
nominees), which would require a new Postmaster General to enter into a
written ethics agreement with the DAEO within 30 days of taking office
and adhere to a 90-day time limit for divestiture.
The Postal Service notes that the vetting process for potential
future Postmasters General is outside of the scope of this rulemaking.
Regarding the substance of the commenter's suggestion, the Postal
Service has every confidence in its current protocols for reviewing the
financial interests of incoming Postmasters General, but does note that
it is currently considering an enhanced framework under which
prospective Postmasters General would be reviewed.
VII. Office of Government Ethics Website
Last, Commenter A asks that the Postmaster General's ethics
agreements, and any amendments thereto, be subject to review and
approval by the Director of OGE and made publicly available on OGE's
website, along with the Postmaster General's public financial
disclosure reports and any waivers issued pursuant to 18 U.S.C.
208(b)(1) or by supplemental regulation.
First, with regard generally to what materials are publicly
available on OGE's website, the Postal Service notes that it is not
empowered to make that determination. OGE solely determines what
materials it includes or excludes on its own website, pursuant to
applicable law.
Second, as to the Postmaster General's public financial disclosure
reports, they are already publicly available on OGE's website. While
PAS officials' ethics agreements are available on OGE's website, the
Postmaster General is not a PAS government official. As such, the
Postal Service is not required to have OGE involved in developing an
ethics agreement for the Postmaster General, as OGE is involved for PAS
officials. Moreover, even if the Postmaster General were a PAS
official, the Postal Service is not in the position to choose or
determine what is posted on OGE's website and the question of whether
the Postmaster General should be a PAS official, with all the
requirements those positions entail, is far afield and outside of the
scope of the Postal Service's authority and this rulemaking. Finally,
no other PAS government official's waivers issued pursuant to 18 U.S.C.
208(b)(1) are published on OGE website and the Postal Service declines
to treat the Postmaster General differently by requesting that his or
her waivers be posted to OGE website or, in the case of waivers issued
pursuant to Supplemental Standards, posted on the Postal Service's
website. Notwithstanding the foregoing, the Postal Service notes that
any waiver
[[Page 53354]]
issued pursuant to section 208 to the Postmaster General is available
upon request to the public under that statute and 5 CFR 2640.304(a).
Summary of Commenter B's Comments and Postal Service Responses
Commenter B is a trade association. Commenter B's correspondence
overall expressed optimism. In particular, Commenter B articulated the
hope that the Postal Service's proposed changes to 5 CFR 7001.102 would
positively affect the labor shortage currently faced by highway
contract route (``HCR'') suppliers. Commenter B described the HCR
driver shortage as part of a larger problem faced by the greater
surface transportation industry that uniquely challenges HCR suppliers.
Commenter B identified multiple factors causing the available labor
pool to shrink, including matters both outside of the scope of this
rulemaking and factors within the scope of this rulemaking, addressed
here.
As stated above, Commenter B broadly supported the proposed change
to 5 CFR 7001.102, which would permit a Postal Service employee to seek
concurrent supplemental employment with HCR contractors if the employee
obtained permission from the Ethics Office. Commenter B acknowledged
that removing the outright prohibition on concurrent employment with
the Postal Service and HCR suppliers and instituting a ``case-by-case''
analysis would permit HCR suppliers to hire some Postal Service
employees--those whom the Ethics Office clears for part-time
positions--as opposed to the prior situation, in which HCR suppliers
were prohibited outright from hiring Postal Service employees.
Commenter B hopes that this change would result in a larger pool of
applicants for open HCR driver positions. If finalized, this Commenter
opined, ``the proposed rule would create a more flexible, dynamic
workforce benefitting the transportation of mail throughout the
nation.''
Nevertheless, Commenter B was apprehensive about whether the
proposed approval process would result in delays. Specifically, it
expressed concerns about potential delays caused by (1) the requirement
that a Postal Service employee obtain a statement from the employee's
supervisor for the Ethics Office to consider and (2) the requirement
that the Ethics Office review the Postal Service employee's request and
his or her manager's statement. Essentially, Commenter B opined that
these two requirements would cause undue delay between when the
employee decides to apply for an open supplier position and when he or
she is able to obtain clearance from the Ethics Office to apply.
Commenter B is concerned that these requirements, which would take
time, could jeopardize the Postal Service employee's opportunity for
employment with an HCR contractor because the HCR application process
moves swiftly.
The Postal Service respectfully disagrees with Commenter B's
characterization of the review requirements as delays, which connotes
that the time taken to review is unnecessary. Rather, the Postal
Service posits that the time needed to complete these requirements will
be relatively short and that the perceived negatives of the approval
process are outweighed by its benefits. Specifically, both requirements
are essential for the Ethics Office to determine whether a Postal
Service employee would run afoul of the criminal conflict of interest
statute or other Federal ethics rules if he or she were hired by an HCR
supplier. As to a timeframe for review, the Ethics Office will endeavor
to review these requests within its already established practice of
reviewing all ethics advice matters as quickly as possible and in a
timely manner.
The Postal Service is cognizant of, and wishes to be attentive to,
the needs of the supplier community and the time-sensitive nature of
the application process, and understands that the requirement to obtain
a statement from the employee's manager and approval from the Ethics
Office will lengthen the time that it takes an employee to apply for a
position with a supplier. However, the Ethics Office requires the
information contained in the statement from the employee's manager, and
time to review that information, in order to make a determination about
whether the employee's application would be consistent with the ethics
rules and statutes. And, as stated above, the Ethics Office will
continue to respond as quickly as possible to all requests for review
under this new provision.
In changing the rule from an outright prohibition on supplemental
employment with an HCR to a case-by-case analysis via an approval
process, the Postal Service will permit some Postal Service employees,
as appropriate, to apply for concurrent employment with HCR suppliers--
thus helping to alleviate the HCR driver shortage--while assisting
Postal Service employees with remaining in compliance with the ethics
rules and regulations.
As a final point, Commenter B raised a question regarding 5 CFR
7001.102, about which the Postal Service would like to offer
clarification. Commenter B expressed concern that an employee who is a
prospective applicant with an HCR may have to submit unnecessarily
duplicative applications to the Ethics Office if he or she wished to
work for more than one HCR supplier. In other words, it appears that
Commenter B saw the proposed rule as requiring a Postal Service
employee to submit one request per supplier. However, this is not the
intention of the proposed rule. Postal Service employees seeking
clearance to work for more than one HCR supplier may submit a single
request to the Ethics Office and may obtain a single statement from
their managers in support of that request.
Conclusion
The Postal Service did not receive any other comments other than
those discussed above. For the reasons detailed in the preamble of the
previously-issued Notice of Proposed Rulemaking, the Postal Service is,
with the concurrence of the Office of Government Ethics, issuing the
rule in final with only one change, to expand the coverage of 5 CFR
7001.104(a) to apply to the Postmaster General and the Deputy
Postmaster General.
List of Subjects in 5 CFR Part 7001
Conflict of interests, Ethical standards, Executive branch
standards of conduct, Government employees.
For the reasons set forth in the preamble, the United States Postal
Service, with the concurrence of the United States Office of Government
Ethics, amends 5 CFR part 7001 as follows:
PART 7001--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE UNITED STATES POSTAL SERVICE
0
1. The authority citation for part 7001 continues to read as follows:
Authority: 5 U.S.C. 7301; 5 U.S.C. Chapter 131; 39 U.S.C. 401;
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; 5 CFR 2635.105,
2635.802, and 2635.803.
0
2. Revise Sec. 7001.102 to read as follows:
Sec. 7001.102 Restrictions on outside employment and business
activities.
(a) Prohibited outside employment and business activities. No
Postal Service employee shall:
(1) Engage in outside employment or business activities that
involve providing consultation, advice, or any subcontracting service,
with respect to the operations, programs, or procedures of the Postal
Service, to any person who
[[Page 53355]]
has a contract with the Postal Service or who the employee has reason
to believe will compete for such a contract;
(2) Except as permitted by paragraph (b)(2) of this section, engage
in outside employment or business activities with, for, or as a person
engaged in:
(i) The operation of a commercial mail receiving agency registered
with the Postal Service; or
(ii) The delivery outside the mails of any type of mailable matter,
except daily newspapers.
Example 1 to paragraph (a)(2)(ii): United Parcel Service (UPS),
Federal Express (FedEx), Amazon, or DHL offers a part-time job to a
Postal Service employee. Because UPS, FedEx, Amazon and DHL are persons
engaged in the delivery outside the mails of mailable matter (as
defined in paragraph (c)(2) of this section) that is not daily
newspapers, the employee may not engage in employment with UPS, FedEx,
Amazon, or DHL in any location in any capacity while continuing
employment with the Postal Service in any location in any capacity. If
the employee chooses to work for UPS, FedEx, Amazon, or DHL, the
employee must end his or her postal employment before commencing work
for that company.
(3) Engage in any fundraising (as defined in 5 CFR 2635.808(a)(1)),
for-profit business activity, or sales activity, including the
solicitation of business or the receipt of orders, for oneself or any
other person, while on duty or in uniform, at any postal facility, or
using any postal equipment. This paragraph does not prohibit an
employee from engaging in fundraising at a postal facility as permitted
in connection with the Combined Federal Campaign (CFC) under 5 CFR part
950.
Example 2 to paragraph (a)(3): An employee volunteers at a local
animal shelter (a non-profit organization) which is having its annual
fundraising drive. The employee may not solicit funds or sell items to
raise funds for the animal shelter while on duty, in uniform, at any
postal facility, or using any postal equipment.
Example 3 to paragraph (a)(3): Outside of his postal employment, an
employee operates a for-profit dog-walking business. The employee may
not engage in activities relating to the operation of his business
while on duty, in uniform, at any postal facility, or using any postal
equipment.
Example 4 to paragraph (a)(3): Outside of her postal employment, an
employee has a job as a sales associate for a cosmetics company. The
employee may not solicit sales or receive orders for the cosmetic
company from any person while on duty, in uniform, at any postal
facility, or using any postal equipment.
(b) Prior approval for outside employment and business activities--
(1) When prior approval required. A Postal Service employee shall
obtain approval from the Postal Service's Ethics Office in accordance
with paragraph (b)(3) of this section prior to:
(i) Engaging in outside employment or business activities with or
for any person with whom the employee has official dealings on behalf
of the Postal Service;
(ii) Engaging in outside employment or business activities with,
for, or as a person who has interests that are:
(A) Substantially dependent upon, or potentially affected to a
significant degree by, postal rates, fees, or classifications; or
(B) Substantially dependent upon providing goods or services to, or
for use in connection with, the Postal Service; or
(iii) Engaging in outside employment or business activities with or
for any Highway Contract Route (HCR) contractor.
(2) When prior approval may be requested for prohibited outside
employment and activities. If an entity with which an employee wishes
to engage in outside employment or business activities is a subsidiary
of an entity that is engaged in one the activities described in
paragraph (a)(2) of this section, but does not itself engage in any
those activities, the employee may request approval from the Postal
Service's Ethics Office to engage in such activity. The employee's
request should follow the procedures of paragraph (b)(3) of this
section, and will be evaluated under the standard set forth in
paragraph (b)(4) of this section.
Example 5 to paragraph (b)(2): A Postal Service employee who wishes
to engage in outside employment with Whole Foods Market may submit a
request to engage in that activity to the Postal Service's Ethics
Office. Although Whole Foods Market is a subsidiary of Amazon, it is
engaged in the supermarket business, not in the delivery outside the
mails of mailable matter.
(3) Submission and contents of request for approval. An employee
who wishes to engage in outside employment or business activities for
which approval is required by paragraph (b)(1) of this section shall
submit a written request for approval to the Postal Service's Ethics
Office. The request shall be accompanied by a statement from the
employee's supervisor briefly summarizing the employee's duties and
stating any workplace concerns raised by the employee's request for
approval. The request for approval shall include:
(i) A brief description of the employee's official duties;
(ii) The name of the outside employer, or a statement that the
employee will be engaging in employment or business activities on his
or her own behalf;
(iii) The type of employment or business activities in which the
outside employer, if any, is engaged;
(iv) The type of services to be performed by the employee in
connection with the outside employment or business activities;
(v) A description of the employee's official dealings, if any, with
the outside employer on behalf of the Postal Service; and
(vi) Any additional information requested by the Postal Service's
Ethics Office that is needed to determine whether approval should be
granted.
(4) Standard for approval. The approval required by paragraph
(b)(1) of this section shall be granted only upon a determination that
the outside employment or business activities will not involve conduct
prohibited by statute or Federal regulation, including 5 CFR part 2635,
which includes, among other provisions, the principle stated at 5 CFR
2635.101(b)(14) that employees shall endeavor to avoid any actions
creating the appearance that they are violating the law or the ethical
standards set forth in part 2635.
(c) Special rules for outside employment or business activities of
OIG employees--(1) When reporting required. A Postal Service Office of
Inspector General (OIG) employee shall report compensated and
uncompensated outside employment or business activities to the OIG's
Office of General Counsel, including:
(i) Any knowing sale or lease of real estate to the Postal Service
or to a Postal Service employee or contractor, regardless of the
frequency of such sales or leases or whether the sale or lease is at
fair market value;
(ii) Any ownership or control of a publicly-accessible online or
physical storefront; and
(iii) Volunteer activities, if they regularly exceed 20 hours per
week or when the employee holds an officer position in the
organization.
Example 6 to paragraph (c)(1)(iii): An OIG employee occasionally
volunteers with a domestic violence non-profit. The employee's
volunteer duties are generally limited to 5 hours per week. The
employee is not an officer of the organization. One weekend the
employee helps to build a new home for a family, which takes a combined
22
[[Page 53356]]
hours. The employee is not required to report those volunteer
activities because the employee is not an officer and the employee's
volunteer activities do not regularly exceed 20 hours per week.
Example 7 to paragraph (c)(1)(iii): An OIG employee is a
Scoutmaster for his child's local scouting group. The children meet for
an hour each week and go on 4-hour hikes one weekend per month. Though
``Scoutmaster'' may involve leadership, it is not an officer position
within the non-profit entity and need not be reported.
(2) When prior approval required. A Special Agent or Criminal
Investigator shall also request and obtain written approval prior to
engaging in outside employment or business activities which he or she
is required to report under paragraph (c)(1) of this section. A request
for approval shall be submitted to the OIG's Office of General Counsel,
which will be reviewed under the same standard stated in paragraph
(b)(3) of this section.
(3) Implementation guidance. The OIG's Office of General Counsel
may issue internal instructions governing the submission of requests
for approval of outside employment, business activities, and volunteer
activities. The instructions may exempt categories of employment,
business activities, or volunteer activities from the reporting and
prior approval requirements of this section based on a determination
that those activities would generally be approved and are not likely to
involve conduct prohibited by statute or Federal regulation, including
5 CFR part 2635. The OIG's Office of General Counsel may include in
these instructions examples of outside activities that are permissible
or impermissible consistent with this part and 5 CFR part 2635.
(d) Definitions. For purposes of this section:
(1) Outside employment or business activity means any form of
employment or business, whether or not for compensation. It includes,
but is not limited to, the provision of personal services as officer,
employee, agent, attorney, consultant, contractor, trustee, teacher, or
speaker. It also includes, but is not limited to, engagement as
principal, proprietor, general partner, holder of a franchise,
operator, manager, or director. It does not include equitable ownership
through the holding of publicly-traded shares of a corporation.
(2) Commercial mail receiving agency means a private business that
acts as the mail receiving agent for specific clients. The business
must be registered with the post office responsible for delivery to the
commercial mail receiving agency.
(3) A person engaged in the delivery outside the mails of any type
of mailable matter means a person who is engaged in the delivery
outside the mails of any letter, card, flat, or parcel eligible to be
accepted for delivery by the Postal Service.
(4) A person having interests substantially dependent upon, or
potentially affected to a significant degree by, postal rates, fees, or
classifications includes a person:
(i) Primarily engaged in the business of publishing or distributing
a publication mailed at Periodicals rates of postage;
(ii) Primarily engaged in the business of sending advertising,
promotional, or other material on behalf of other persons through the
mails;
(iii) Engaged in a commercial business that:
(A) Primarily utilizes the mails for the solicitation or receipt of
orders for, or the delivery of, goods or services; and
(B) Can be expected to earn gross revenue exceeding $10,000 from
utilizing the mails during the business's current fiscal year; or
(iv) Who is, or within the past 4 years has been, a party to a
proceeding before the Postal Regulatory Commission.
Example 8 to paragraph (d)(4)(iii): An employee operates a business
which sells handmade wooden bowls on its website and other e-commerce
websites and uses the Postal Service as its primary shipper. The
employee's business can be expected to earn gross revenue of more than
$10,000 from utilizing the mails during the business's current fiscal
year. The employee's business is ``a person having interests
substantially dependent upon, or potentially affected to a significant
degree by, postal rates, fees, or classifications'' because it is a
commercial business that primarily utilizes the mails for the delivery
of its goods and the business can be expected to earn gross revenue
exceeding $10,000 from utilizing the mails during its current fiscal
year.
Example 9 to paragraph (d)(4)(iii): An employee knits scarves as a
hobby, most of which she gives to family and friends, but she
occasionally sells extra scarves on an e-commerce website and uses the
Postal Service as her primary shipper. The employee does not expect to
receive more than $10,000 from utilizing the mails during the current
calendar year in which she sells the scarves. The employee is not ``a
person having interests substantially dependent upon, or potentially
affected to a significant degree by, postal rates, fees, or
classifications'' because she is not engaged in a commercial business
that can be expected to earn gross revenue from utilizing the mails
exceeding $10,000 during its current fiscal year.
(5) A person having interests substantially dependent upon
providing goods or services to, or for use in connection with, the
Postal Service includes a person:
(i) Providing goods or services under contract(s) with the Postal
Service that in total can be expected to provide revenue exceeding
$100,000 over the term(s) of the contract(s); or
(ii) Substantially engaged in the business of preparing items for
others for mailing through the Postal Service.
Example 10 to paragraph (d)(5)(ii): A mailing house that sorts and
otherwise prepares for its clients large volumes of advertising,
fundraising, or political mail for mailing to prospective customers,
donors, or voters through the Postal Service is ``a person having
interests substantially dependent upon providing goods or services to,
or for use in connection with, the Postal Service'' because it is
substantially engaged in the business of preparing items for others for
mailing through the Postal Service.
0
3. Add Sec. 7001.104 to read as follows:
Sec. 7001.104 Prohibited financial interests of the members of the
Board of Governors
(a) General prohibitions. (1) No member of the Board of Governors,
which includes the Postmaster General, the Deputy Postmaster General,
and the nine appointed Governors of the United States Postal Service,
or any spouse or minor child of any member of the Board of Governors,
shall acquire or hold, directly or indirectly:
(i) Any financial interest in a person engaged in the delivery
outside the mails of any type of mailable matter, except daily
newspapers; or
(ii) Any financial interest in a publicly-traded entity engaged
primarily in the business of leasing real property to the Postal
Service.
(2) No member of the Board of Governors shall actively control the
acquisition of, or the holding of, any financial interest described in
paragraph (a)(1)(i) or (ii) of this section, on behalf of any entity
whose financial interests are imputed to them under 18 U.S.C. 208. A
member of the Board of Governors actively controls the financial
interests of an entity if he or she selects or dictates the entity's
investments, such as stocks, bonds, commodities, or funds. A member of
the Board of Governors does not actively control the financial
interests of an entity if he or she merely directs the investment
strategy of the entity, hires the entity's financial manager(s) who
selects the
[[Page 53357]]
entity's investments, or designates another employee of the entity to
select the entity's investments. A member of the Board of Governors may
have such investment authority when serving as an officer, director,
trustee, general partner, or employee of an entity.
Example 1 to paragraph (a)(2): A Governor is also the chief
executive officer (CEO) of a life insurance company. The company's
policy is for: the board of directors to determine the overall
investment strategy for the company's excess cash, an internal team to
recommend to the CEO specific financial instruments in which to invest
the company's excess cash to implement the board's overall investment
strategy, and the CEO to approve or disapprove of the internal team's
specific investment recommendations. The Governor actively controls the
financial interests of the life insurance company in her position as
CEO of the company.
Example 2 to paragraph (a)(2): A Deputy Postmaster General is also
on the board of directors of an investment company. The company's
policy is for: the board of directors to determine the overall
investment strategy for the company's excess cash, the board of
directors to choose an external investment manager to select and manage
day-to-day the specific financial instruments in which the company's
excess cash is invested to implement the board's overall investment
strategy, and the CEO and other company management official to oversee
the investment management process, including periodic review of the
company's investment portfolio. This Deputy Postmaster General does not
actively control the financial interests of the investment company in
his position on the board of directors.
(b) Exception. Paragraph (a) of this section does not prohibit any
member of the Board of Governors or spouse or minor child of any member
of the Board of Governors from directly or indirectly acquiring or
holding, or a member of the Board of Governors from actively
controlling on behalf of any entity, any financial interest in any
publicly-traded or publicly-available mutual fund (as defined in 5 CFR
2640.102(k)) or other collective investment fund, including a widely-
held pension or other retirement fund, that includes any financial
interest described in paragraph (a)(1)(i) or (ii) of this section,
provided that:
(1) Neither the member of the Board of Governors nor his or her
spouse exercises active control over the financial interests held by
the fund; and
(2) The fund does not have a stated policy of concentrating its
investments in, as applicable, persons engaged in the delivery outside
the mails of mailable matter, except daily newspapers, or persons
engaged primarily in the business of leasing real property to the
Postal Service.
(c) Reporting of prohibited financial interest and divestiture--(1)
General. Any financial interest prohibited by paragraph (a) of this
section shall be divested, in the case of a Governor, within 90
calendar days of confirmation by the Senate of the Governor's
nomination, and, in the case of a Postmaster General or Deputy
Postmaster General, within 90 calendar days of his or her appointment,
or as soon as possible thereafter if there are restrictions on
divestiture.
(2) Newly-prohibited financial interests following confirmation or
appointment. If a financial interest described in paragraph (a) of this
section becomes prohibited subsequent to the Governor's confirmation or
a Postmaster General or Deputy Postmaster General's appointment:
(i) The member of the Board of Governors shall report the
prohibited financial interest to the Postal Service's Designated Agency
Ethics Official (DAEO) within 30 calendar days of the DAEO informing
the member of the Board of Governors that such financial interests have
become prohibited; and
(ii) The prohibited financial interest shall be divested within 90
calendar days of the DAEO informing the member of the Board of
Governors that such financial interests have become prohibited, or as
soon as possible thereafter if there are restrictions on divestiture.
(3) Prohibited financial interests acquired without specific intent
following confirmation or appointment. (i) If a member of the Board of
Governors, or spouse or minor child of any member of the Board of
Governors acquires a financial interest prohibited by paragraph (a)(1)
of this section without specific intent to acquire it (such as through
marriage, inheritance, or gift) subsequent to the Governor's
confirmation or the appointment of a Postmaster General or Deputy
Postmaster General:
(A) The member of the Board of Governors shall report the
prohibited financial interest to the Postal Service's DAEO within 30
calendar days of its acquisition; and
(B) The prohibited financial interest shall be divested within 90
calendar days of its acquisition, or as soon as possible thereafter if
there are restrictions on divestiture.
(ii) If an entity whose financial interests are actively controlled
by a member of the Board of Governors acquires a financial interest
described in paragraph (a)(1)(i) or (ii) of this section without
specific intent to acquire it (such as through a gift) subsequent to a
Governor's confirmation or the appointment of a Postmaster General or
Deputy Postmaster General:
(A) The member of the Board of Governors shall report the
prohibited financial interest to the Postal Service's DAEO within 30
calendar days of its acquisition; and
(B) The prohibited financial interest shall be divested within 90
calendar days of its acquisition, or as soon as possible thereafter if
there are restrictions on divestiture.
(4) Disqualification from participating in particular matters
pending divestiture. Pending any required divestiture of a prohibited
financial interest provided for in this paragraph (c), a member of the
Board of Governors shall disqualify himself or herself from
participating in particular matters involving or affecting the
prohibited financial interest. Disqualification is accomplished by not
participating in the particular matter.
(d) Waiver of prohibited financial interests. For good cause shown
by a member of the Board of Governors, the Postal Service's DAEO may
grant a written waiver to the member of the Board of Governors of any
prohibited financial interest described in paragraph (a) or (c)(2) or
(3) of this section; provided that the DAEO finds that the waiver is
not inconsistent with 5 CFR part 2635 or otherwise prohibited by law,
and that under the particular circumstances, application of the
prohibition is not necessary to avoid the appearance of the member of
the Board of Governors' misuse of position or loss of impartiality, or
otherwise to ensure confidence in the impartiality or objectivity with
which the Postal Service's programs are administered. The DAEO may
impose appropriate conditions for granting of the waiver, such as
requiring the member of the Board of Governors to execute a written
statement of disqualification.
(e) Definition. For purposes of this section, a person engaged in
the delivery outside the mails of any type of mailable matter is as
defined in Sec. 7001.102(d)(3).
Ruth Stevenson,
Chief Counsel, Ethics and Legal Compliance, United States Postal
Service.
Shelley K. Finlayson,
Acting Director, U.S. Office of Government Ethics.
[FR Doc. 2023-16811 Filed 8-7-23; 8:45 am]
BILLING CODE 7710-12-P
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</html>Indexed from Federal Register on August 8, 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.