Rule2024-10339
Modernization Updates to Standards of Ethical Conduct for Employees of the Executive Branch
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 17, 2024
Effective
August 15, 2024
Issuing agencies
Government Ethics Office
Abstract
The U.S. Office of Government Ethics (OGE) is issuing this final rule updating the Standards of Ethical Conduct for Employees of the Executive Branch (Standards). The final rule updates the Standards based on OGE's experience gained from application of the regulation since its inception. The final rule also incorporates past interpretive guidance, adds and updates regulatory examples, improves clarity, updates citations, and makes technical corrections.
Full Text
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[Federal Register Volume 89, Number 97 (Friday, May 17, 2024)]
[Rules and Regulations]
[Pages 43686-43731]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-10339]
[[Page 43685]]
Vol. 89
Friday,
No. 97
May 17, 2024
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; Final Rule
Federal Register / Vol. 89 , No. 97 / Friday, May 17, 2024 / Rules
and Regulations
[[Page 43686]]
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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: Final rule.
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SUMMARY: The U.S. Office of Government Ethics (OGE) is issuing this
final rule updating the Standards of Ethical Conduct for Employees of
the Executive Branch (Standards). The final rule updates the Standards
based on OGE's experience gained from application of the regulation
since its inception. The final rule also incorporates past interpretive
guidance, adds and updates regulatory examples, improves clarity,
updates citations, and makes technical corrections.
DATES: This final rule is effective August 15, 2024.
FOR FURTHER INFORMATION CONTACT: Kimberly L. Sikora Panza, Senior
Associate Counsel, or Christie Chung, Assistant Counsel, U.S. Office of
Government Ethics, 250 E Street SW, Suite 750, Washington, DC 20024-
3249; Telephone: 202-482-9300; TTY: 800-877-8339; FAX: 202-482-9237.
SUPPLEMENTARY INFORMATION:
I. Rulemaking History
Pursuant to a provision of the Ethics in Government Act of 1978, 5
U.S.C. 13122, the Director of the U.S. Office of Government Ethics
(OGE) is responsible for periodically reviewing, evaluating, and
updating the rules and regulations that pertain to ethics in the
executive branch. On February 21, 2023 (88 FR 10774), OGE published for
public comment a proposed rule setting forth various modernization
updates to the Standards of Ethical Conduct for Employees of the
Executive Branch (Standards), which 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). Prior
to publishing the proposed rule, OGE 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 solicited and considered the views of executive
branch agency ethics officials. OGE's proposed updates pertained only
to subparts A through I of the Standards; separate from the present
rulemaking, OGE engaged in a comprehensive rulemaking that added to the
Standards new subpart J, which relates to the creation and operation of
legal expense funds, and the acceptance of pro bono legal services for
certain legal matters. See 88 FR 33799 (May 25, 2023).
The proposed rule provided for a 60-day comment period, which ended
on April 24, 2023. During this period, OGE received nineteen responsive
comment submissions regarding the proposed rule: fourteen from the
public and five from Federal agencies. OGE also received two comment
submissions from the public that do not relate to the proposed rule and
address unrelated matters. After carefully considering all comments and
making appropriate modifications, and for the reasons set forth below
and in the preamble to the proposed rule at <a href="https://www.govinfo.gov/content/pkg/FR-2023-02-21/pdf/2023-02440.pdf">https://www.govinfo.gov/content/pkg/FR-2023-02-21/pdf/2023-02440.pdf</a>, OGE is publishing this
final rule.
II. Discussion of Comments and Changes to Proposed Rule
The twenty-one comments that OGE received during the comment period
are publicly accessible on OGE's website at this address: <a href="https://www.oge.gov/web/OGE.nsf/All+docs+By+Cat/08C3B547690B7675852589AA00556758">https://www.oge.gov/web/OGE.nsf/All+docs+By+Cat/08C3B547690B7675852589AA00556758</a>. OGE has reviewed and considered all
comments submitted by each commenter. OGE is not addressing the two
comments that pertain to matters unrelated to the rulemaking. The
following discussion addresses all other comments in the context of the
specific subparts or sections to which they relate.
A. General Provisions (Subpart A)
OGE received nine comments from individuals who expressed concerns
about the proposed revisions to Sec. Sec. 2635.101(b)(13) and
2635.106. In Sec. Sec. 2635.101(b)(13) and 2635.106, OGE proposed to
add the words ``(including pregnancy, gender identity, and sexual
orientation)'' after ``sex'' to reflect protected characteristics
identified by the Equal Employment Opportunity Commission (EEOC) as
covered by Federal employment discrimination laws. Towards this same
end, OGE also proposed adding ``genetic information'' in these two
sections and updating the word ``handicap'' to ``disability.'' These
commenters specifically criticized the inclusion of ``gender identity''
and ``sexual orientation'' in Sec. Sec. 2635.101(b)(13) and 2635.106;
no commenter referenced or objected to the other updates to these
provisions relating to pregnancy, genetic information, or disability.
Commenters perceived that the inclusion of ``gender identity'' and
``sexual orientation'' would result in an expansion of civil rights,
and objected to the revisions either categorically or without
observance of appropriate protections for religious organizations and
religious conscience.
The revisions to Sec. Sec. 2635.101(b)(13) and 2635.106 do not
effectuate any expansion of, or other change to, civil rights laws.
Significantly, OGE does not have the authority to promulgate
regulations expounding on the scope of categories protected by equal
employment laws and regulations, or other civil rights laws and
regulations. The updated language merely modernizes the regulatory text
to include characteristics that the EEOC already recognizes as
protected under the laws enforced by the Commission. See, e.g.,
Employees & Applicants, U.S. Equal Emp. Opportunity Comm'n, <a href="https://www.eeoc.gov/employees">https://www.eeoc.gov/employees</a> (last visited May 17, 2023). It is both
necessary and appropriate that provisions in the Standards that refer
to ``laws and regulations that provide equal opportunity'' list the
characteristics protected by Federal laws prohibiting employment
discrimination and enforced by the EEOC.
Additionally, OGE received one comment from an individual who
expressed concern that the addition of ``gender identity'' and ``sexual
orientation'' infringes on executive branch employees' First Amendment
and other constitutional rights. As noted above, these revisions are
merely technical updates referencing types of discrimination already
recognized by the EEOC. Acknowledgement of the fact that sex-based
discrimination includes gender identity and sexual orientation in
Sec. Sec. 2635.101(b)(13) and 2635.106 neither results in any change
to existent equal opportunity laws or regulations, nor impacts the
interaction between such laws and the constitutional rights of
employees.
For the above reasons and for the reasons stated in the preamble to
the proposed rule, OGE therefore is adopting the proposed updates to
subpart A without further revisions.
B. Gifts From Outside Sources (Subpart B)
Subpart B Examples
OGE received four suggestions regarding additional examples or
clarifications that could be made in subpart B. Specifically, one
agency
[[Page 43687]]
commenter suggested that OGE add an example of a ``non-traditional''
prohibited source, such as an entity that enters into a cooperative
research and development agreement with a Federal agency, as well as an
example involving a lottery ticket as a gift; the same agency suggested
that OGE add an example to Sec. 2635.204(d) involving a Department of
Defense or other Federal school; and a member of the public suggested
that OGE clarify gift acceptance limits and issues relating to entities
like the Kennedy Center where events might be hosted by a corporate
donor.
The examples requested by these commenters involve illustration of
fairly specific situations. It would not be feasible for OGE to provide
examples addressing application of the regulation in all of the
scenarios that may give rise to subpart B considerations. In light of
the extensive revisions made to subpart B in 2016, which included
modernization changes and examples, and OGE's determination that the
current rule provides appropriate guidance, OGE declines these
suggestions.
Gift Exclusion and Exception for ``Opportunities and Benefits''
One individual commenter requested that OGE reconcile the
difference between the opportunities and benefits excluded from the
definition of ``gift'' in Sec. 2635.203(b)(4) and the opportunities
and benefits excepted from the gift prohibitions by Sec.
2635.204(c)(2). Specifically, the commenter noted that the
opportunities and benefits excluded from the ``gift'' definition by
Sec. 2635.203(b)(4) include ``favorable rates and commercial
discounts,'' while the opportunities and benefits excepted from the
subpart B gift prohibitions by Sec. 2635.204(c)(2) include ``favorable
rates, commercial discounts, and free attendance or participation.''
The ``free attendance or participation'' language that distinguishes
these two provisions was added to Sec. 2635.204(c)(2) when OGE
substantially revised subpart B in 2016. See 81 FR 81641 (Nov. 18,
2016).
OGE notes that the ``opportunities and benefits'' listed in the
Sec. 2635.203(b)(4) gift exclusion are preceded by the word
``including,'' indicating that the list is not intended to be
exhaustive. As such, one could consider free attendance or
participation under the gift exclusion, if the appropriate facts
presented themselves. However, to clear up any confusion, OGE will add
the words ``free attendance or participation'' to Sec. 2635.203(b)(4)
to harmonize the language in Sec. Sec. 2635.203(b)(4) and
2635.204(c)(2).
Free Attendance Gift Exclusion
Section 2635.203(b)(8) excludes from the definition of ``gift''
free attendance to an event provided by the sponsor of the event to
certain individuals, including an employee who is assigned to present
information on behalf of the agency at the event (on any day when the
employee is presenting), and ``[a]n 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,'' if the employee is
accompanying the presenting employee. One agency opined that it is
unclear whether multiple personnel supporting a presenting employee may
accept free attendance pursuant to this exclusion. Specifically, the
commenter requested that ``an employee'' in the above-quoted language
in Sec. 2635.203(b)(8)(ii) be changed to ``any employee'' to clarify
that multiple supporting personnel may accept free attendance under
this exclusion.
OGE notes that it has previously issued guidance making clear that
Sec. 2635.203(b)(8)(ii) can be applied to multiple agency personnel.
See OGE DAEOgram DO-10-003, at 2 (Feb. 18, 2010) (``The number and
types of personnel necessary, if any, to the speaker's participation
will vary depending upon who the speaker is and the nature of the
event.''). Nonetheless, to further address the commenter's concern, OGE
is updating example 2 to paragraph (b)(8) to reflect that guidance and
eliminate any doubt that multiple supporting personnel may accept free
attendance under this exclusion. Specifically, OGE is changing
``another employee'' to ``other employees'' and ``accompanying
employee'' to ``accompanying employees'' in the example.
De Minimis Gift Exception
Three commenters--two individuals and one agency--recommended that
OGE increase the monetary thresholds for the de minimis gift exception
at Sec. 2635.204(a), noting the effects of inflation in the
intervening years since the exception was first adopted. Two other
commenters made a similar suggestion in 2016 as part of OGE's
comprehensive rulemaking revising portions of subpart B.
After carefully considering this recommendation in 2016, OGE noted
its concern that ``raising the de minimis would encourage employees to
accept, and private citizens to give, more expensive and more frequent
gifts than employees are currently able to accept.'' 81 FR 81641, 81645
(Nov. 18, 2016). Although OGE acknowledged at that time--and continues
to acknowledge--the effect of inflation on the relative value of the de
minimis threshold, OGE continues to believe that $20 is a workable
amount that serves the narrow purpose of the exception, which is to
permit only the infrequent acceptance of inexpensive and innocuous
gifts. Id.; see also 57 FR 35006, 35016 (Aug. 7, 1992). It also
continues to be the fact that ``no compelling argument has been made to
support a conclusion that raising the cap on the blanket de minimis
exception, in order to allow employees to accept more expensive and
more frequent gifts, would strengthen the integrity of the executive
branch's operations.'' 81 FR 81645.
Independent of these substantive reasons, OGE also declines to
adopt the suggestion to increase the de minimis threshold in this
particular rulemaking, the primary focus of which is on technical, non-
substantive updates. OGE does not think it would be appropriate to
adjust the Sec. 2635.204(a) dollar value in this final rule without
having announced in the proposed rule that it was contemplating such an
increase, thereby providing the public an opportunity to reflect on
such a proposal and share their input regarding the same.
Widely Attended Gatherings Exception
To improve readability, OGE is making a technical amendment to the
structure of Sec. 2635.204(g)(2), which defines when a gathering is
widely attended for purposes of the widely attended gathering (WAG)
exception. Specifically, OGE is organizing the components of the WAG
definition at Sec. 2635.204(g)(2) into new separate paragraphs
(g)(2)(i) through (iii). This update involves no substantive changes to
the WAG exception.
In response to the proposed rule, one agency recommended removing
the requirement in the WAG exception in Sec. 2635.204(g) that an
employee attend the event on their own time in their personal capacity
rather than in their official capacity. Section 2635.204(g) provides
that an employee could attend a qualifying event either on their own
time or, if authorized by their agency, on excused absence pursuant to
applicable guidelines for granting such absence, or otherwise without
charge to the employee's leave account. The commenter questioned the
rationale for this requirement that the employee attend on their own
time, noting that an agency determination that attendance is in the
agency's interest would suggest the event is related to the employee's
official duties.
[[Page 43688]]
OGE notes that the requirement that the employee attend in their
personal capacity is based on appropriations considerations that OGE
documented in the preamble to the final rule for 5 CFR part 2635. See
57 FR 35006, 35019-20 (Aug. 7, 1992). The 1992 preamble explains that
the WAG exception was designed to allow agencies that do not have
agency gift acceptance authority to permit their employees to accept a
gift of free attendance at events in which the agency has an interest
in the employee attending. However, due to appropriations requirements,
in order for the gift to be accepted by an employee rather than by the
agency, the employee must attend the event in their personal capacity
``off the clock.'' Specifically, this requirement ``is imposed of
necessity to ensure that the gift is made to the employee rather than
to the agency and, thus, that it does not improperly augment agency
appropriations available for payment of expenses of attendance at
training, meetings or similar events.'' Id. at 35019. For these
reasons, OGE declines to follow the agency's recommendation.
C. Gifts Between Employees (Subpart C)
Gifts to Superiors
One individual commented that the proposed new language in Sec.
2635.302(a)(1), which clarifies that ``an official superior may not
knowingly accept'' an improper gift from a subordinate, is inconsistent
with the controlling statutory authority at 5 U.S.C. 7351. The
commenter also suggested that the knowledge element in this provision
is unclear.
As discussed in the preamble to the proposed rule, the premise that
official superiors have a responsibility to not knowingly accept
improper gifts from a subordinate is logically consistent with and
complements the restrictions articulated in 5 U.S.C. 7351 governing
gift giving from a subordinate to a superior. The proposed changes to
Sec. 2635.302(a)(1) appropriately emphasize that superiors should not
knowingly accept gifts that are improper for employees to give.
Regarding the knowledge element relating to a superior's acceptance
of a gift, it is included in recognition of the fact that the
regulation covers gifts given ``indirectly'' by an employee--e.g., ones
given by an employee's parent, sibling, spouse, child, or dependent
relative with the employee's knowledge and acquiescence. See Sec.
2635.303(b)(1). Section 2635.302(a) is structured in such a way that
knowledge is required on the part of both the giver and receiver for
indirect gifts. For example, an employee will not be in violation of
the rule if their sibling gives a gift to the employee's superior
without the employee's knowledge and acquiescence. Similarly, a
superior will not be in violation of the rule if they accept a gift
that unbeknownst to them was given by the sibling of an employee with
the employee's knowledge and acquiescence.
For the reasons explained in the preamble to the proposed rule, OGE
declines the commenter's suggestions, and will adopt the revisions to
Sec. 2635.302(a)(1) as set forth in the proposed rule.
Gifts From Employees Receiving Less Pay
One individual commenter requested clarification regarding the
meaning of ``less pay'' in Sec. 2635.302(b) and suggested that the
rule be amended to specify ``base pay.'' OGE is unable to adopt this
change. The language in Sec. 2635.302(b), referring to ``employees
receiving less pay'' incorporates the language of the underlying
statute. See 5 U.S.C. 7351 (referring to ``an employee receiving less
pay''). Given this statutory basis, OGE is constrained in its ability
to revise the regulation to specify ``base pay'' or ``rate of basic
pay.''
Another individual commenter opposed the new language OGE proposed
to add to Sec. 2635.302(b)(2), which clarifies that the restriction on
accepting a gift from an employee receiving less pay does not apply
when the employee giving the gift is the official superior of the
employee receiving the gift. The commenter expressed concern that this
rule could provide for unequal treatment among the higher paid
employees who are now allowed to receive gifts from their superiors,
although the commenter also recognized that gifts from superiors to
subordinates are not generally restricted by subpart C.
OGE disagrees with the commenter that the updated language is ripe
for ``favoritism and impropriety.'' As a threshold matter, OGE notes
that in the status quo, subpart C does not restrict most gifts from
superiors to their employees because superiors do not typically receive
less pay than their employees. This structure does not seem to have
elicited much concern among ethics officials. Furthermore, as OGE noted
in the proposed rule, ``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.'' 88
FR 10774, 10775 (Feb. 21, 2023). Accordingly, this updated language
that permits all employees to receive gifts from their superiors in the
same manner is necessary to modernize and equalize the rule given the
situations in the current Federal pay system in which a subordinate may
earn more than their official superior. However, it does not encourage
the provision of such gifts in an unfair or inequitable manner.
De Minimis Gift Exception
Similar to the related suggestions regarding the subpart B de
minimis exception, two agency commenters recommended that OGE increase
the monetary threshold in the gift exception at Sec. 2635.304(a). As
is the case with the de minimis exception in Sec. 2635.204(a), OGE
believes that the current value of the de minimis exception in subpart
C should remain unchanged. As OGE noted when issuing the Standards,
while it is ``appropriate to permit modest exchanges of gifts between
coworkers,'' it is important to remain mindful of ``subtle pressures to
give gifts to superiors'' in an environment ``where superiors and
subordinates interact daily and where subordinates compete for
advancement.'' 57 FR 35006, 35022 (Aug. 7, 1992). Notwithstanding
inflation, OGE believes that the $10 amount remains adequate to permit
an exchange of a modest token between employees and is ``low enough
generally to discourage employees from purchasing gifts for their
superiors.'' Id. OGE further echoes its concern noted above about
adjusting a de minimis value in this final rule when the public was not
apprised of such a potential change or given the opportunity to comment
on it.
Special Infrequent Occasions Exception
One agency commenter suggested that OGE add a new example to the
exception for special, infrequently occurring occasions to illustrate
that a superior's promotion is not an occasion of personal
significance. OGE declines to adopt this suggestion. Example 3 to the
exception for voluntary contributions in Sec. 2635.304(c) sufficiently
illustrates that a superior's promotion within the supervisory chain is
not an appropriate time for subordinates to take up a collection for a
gift to that official superior because the occasion does not ``mark the
termination of the subordinate-official superior relationship, nor [is
it an] event[ ] of personal significance within the meaning of [Sec.
2635.304(b)].''
[[Page 43689]]
An individual commenter suggested that OGE consider adding
``divorce'' to the non-exhaustive list of special, infrequent occasions
covered by the exception at Sec. 2635.304(b)(1), and also suggested
that OGE could add further detail in the regulation regarding the
application of this exception in other contexts, such as traditional
religious or cultural rites of passage.
OGE notes that the statute authorizing OGE to issue regulations
exempting certain gifts contemplates that OGE may exempt gifts in
circumstances ``in which gifts are traditionally given or exchanged.''
5 U.S.C. 7351(c). The list of special, infrequent occasions provided in
the regulation is not exhaustive, as it is preceded by the phrase
``such as.'' OGE does not endeavor to attempt to list all occasions
that may be covered in the regulation, nor does it believe it would be
prudent or practicable to articulate every such occasion. The language
of the exception makes clear that the exception allows for gifts that
are ``infrequently occurring occasions of personal significance,'' and
this language should be applied when considering occasions not included
in the non-exhaustive list.
Regarding this same exception, a different individual commenter
agreed that adding ``bereavement'' to Sec. 2635.304(b) is a beneficial
change; the individual suggested, however, that there are issues in
practice with OGE's inclusion of this term without limitation.
Specifically, the commenter recommended that OGE establish
``limitations as to which family members the exception applies.'' OGE
declines to adopt language qualifying which bereavements constitute an
infrequently occurring occasion of personal significance, believing
that it is neither appropriate nor wise to make a categorical
determination about which losses justify expressions of sympathy. OGE
notes that a gift in recognition of bereavement must still be
``appropriate to the occasion,'' which is a sufficient limiting factor
that appropriately curtails gift giving and acceptance in the
bereavement context and addresses any potential for misuse of the
narrow exception at Sec. 2635.304(b).
This same commenter recommended that OGE add birthdays ending in
zero to the non-exhaustive list of special, infrequent occasions
covered by Sec. 2635.304(b)(1). Drawing parallels between birthdays
ending in zero and occasions enumerated in the regulation, the
individual commented that exclusion of milestone birthdays is
arbitrary. OGE believes that it would be inappropriate to except gifts
in connection with birthdays, which includes milestone birthdays, from
the general rules governing gifts between employees, and thus did not
revise the regulation to indicate otherwise. As noted in the preamble
accompanying the proposed rule, OGE does not consider milestone
birthdays to be infrequently occurring occasions of the sort warranting
exception under Sec. 2635.304(b). Of course, it may be possible to
give a gift in recognition of any birthday under another exception,
such as the exception for gifts with a value of $10 or less and the
exception for food and refreshments shared in the office among several
employees. See Sec. 2635.304(a)(1) and (2).
Exception for Voluntary Contributions of Nominal Amounts
One individual commenter suggested that OGE define the term
``nominal'' as it is used in the exception at Sec. 2635.304(c) for
``voluntary contributions of nominal amounts from fellow employees for
an appropriate gift to an official superior.'' OGE appreciates this
suggestion, but has not made a change to the regulation. What
constitutes a ``nominal'' amount is necessarily context-specific, for
example, depending on whether the contribution is for items like food
and refreshments, or for a gift in recognition of a special, infrequent
occasion. In response to a similar comment when first issuing the
Standards, OGE explained that it chose to not impose a specific dollar
limit, even though collections for gifts generally involve individual
contributions less than five dollars. In doing so, OGE noted that
``[w]here contributions meet the regulatory requirement that they be
entirely voluntary, higher amounts may appropriately be contributed in
some cases, as when several senior members of an office provide an
additional contribution to subsidize a collection that has come up
short of sufficient funds to purchase a desired gift.'' 57 FR 35006,
35023 (Aug. 7, 1992). The regulation makes clear that the contributions
must be for ``an appropriate gift,'' which OGE believes provides a
suitable, non-monetary limit on the use of this exception.
Disposition of Prohibited Gifts
One agency commenter suggested that OGE add a section in this
subpart that addresses what an employee should do if they inadvertently
accept a gift that is not permissible under this subpart. In response
to agency inquiries regarding the disposition of gifts prohibited by
subpart C, OGE has advised that agencies are free to look to the
subpart B disposition provisions for guidance regarding how to handle
such gifts. To provide greater clarity to employees and ethics
officials, OGE will add a new Sec. 2635.305 to subpart C that is
consistent with that guidance.
D. Conflicting Financial Interests (Subpart D)
Analyzing Imputed Interests and Multi-Entity Organizations
One agency commenter requested that OGE add an example in Sec.
2635.402 illustrating the application of 18 U.S.C. 208 where an
employee has an imputed financial interest by virtue of their outside
employment or position with an organization, and there is a particular
matter that could affect one of the entity's campuses, or a parent,
affiliate, or subsidiary organization. OGE declines to add such an
example. As a threshold matter, OGE notes that the Standards already
provide clear guidance regarding how imputed relationships are
analyzed. Specifically, Sec. 2635.402(b)(2) explains that ``[f]or
purposes of 18 U.S.C. 208(a) and this subpart, the financial interests
of [certain imputed persons, including an organization or entity with
which an employee serves as officer, director, trustee, general partner
or employee] will require the recusal of an employee to the same extent
as if they were the employee's own interests.'' (Emphasis added.)
Regarding related entities such as parents, subsidiaries, affiliates,
etc., the Standards generally acknowledge the potential conflicts that
may arise with respect to the same. See note 2 to Sec. 2635.402(b)(1)
(recognizing that a party matter may have a direct and predictable
effect on an employee's financial interest in an affiliate, parent, or
subsidiary of that party). Ultimately, however, OGE is wary of
potential misinterpretation and misapplication were it to include an
example of the sort requested by this commenter, and believes that a
Legal Advisory is a more suitable means through which to provide
guidance on the appropriate analysis.
Example 1 to Sec. 2635.403(b)
One individual commenter questioned OGE's proposed inclusion of a
dollar amount in example 1 to Sec. 2635.403(b) and suggested that the
value should be removed because it ``is not . . . important for the
rule's applicability.'' OGE intends to retain the dollar amount in this
example. As explained in the preamble to the proposed rule, OGE
proposed adding a specific dollar figure to the amount of stock owned
by the employee in the example ``to make clear that the de
[[Page 43690]]
minimis regulatory exemption in 5 CFR 2640.202 does not apply in this
scenario.'' Accordingly, as noted in the example, the agency could
determine that ``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.''
Definition of Financial Interest
The same individual commenter questioned OGE's proposed update to
the definition of ``financial interest'' in 5 CFR 2635.403(c)(1), which
replaces the word ``dependent child'' with ``minor child,'' and
expressed a preference for retaining ``dependent child.'' As stated in
the language of Sec. 2635.401 that this rulemaking will adopt, subpart
D ``summarizes the relevant statutory restrictions [of 18 U.S.C. 208]
and some of the regulatory guidance found'' in 5 CFR part 2640, the
part interpreting and implementing 18 U.S.C. 208. The updated language
referencing ``minor child'' brings Sec. 2635.403(c)(1) into alignment
with the language used throughout subpart D, and reflects the
terminology of the statute proper and its implementing regulation.
Therefore, OGE declines to retain the ``dependent child'' language in
Sec. 2635.403(c)(1) or otherwise integrate the concept of ``dependent
child'' in this subpart.
E. Impartiality in Performing Official Duties (Subpart E)
Subpart E Examples
OGE received one comment from an individual concerning the
application of Sec. 2635.502 to particular matters of general
applicability and requesting the addition of an example illustrating
that application. As proposed, reorganized Sec. 2635.502 articulates
the operation of the regulation with respect to particular matters
involving specific parties in which a household member has a financial
interest, and particular matters involving specific parties in which
someone with whom one has a covered relationship is or represents a
party. Section 2635.502(a)(3) makes clear that employees who are
concerned about impartiality questions arising from circumstances other
than the party matters described in the preceding sentence--which could
include particular matters of general applicability--should utilize the
process detailed in the regulation, including in paragraph (d), to
determine whether their participation is appropriate. In 1991, OGE
addressed this ``catch-all'' provision in the preamble to the proposed
rulemaking for the Standards, explaining that although the section
focused on specified relationships and party matters, questions about
an employee's impartiality could arise from any number of interests or
relationships they might have, and in connection with their
participation in matters that do not necessarily involve specific
parties. 56 FR 33778, 33786 (July 23, 1991). For this reason, Sec.
2635.502 ``therefore provides that an employee should use the process
set forth in that section when circumstances other than those
specifically described raise questions about [their] impartiality in
the performance of official duties.'' Id. Given this guidance, OGE
declines to add an example illustrating the specific application of
Sec. 2635.502 to particular matters of general applicability.
For similar reasons, OGE declines to add a very fact-specific
example suggested by a different individual regarding how previous
litigation history between an employee and party to a matter might give
rise to impartiality concerns.
Employee Work Assignments
OGE received two comments from the public expressing concern that
the new note at Sec. 2635.501 could be viewed as being in conflict
with, or causing confusion regarding, regulatory language in Sec. Sec.
2635.105(a) and 2638.602 regarding how supplemental agency ethics
regulations require OGE's concurrence, with co-signature and
publication by the agency and OGE. One commenter questioned whether the
intent of the note was to indicate that agencies have unfettered
authority to assign work as they see fit, and whether a manager's
delegation of work based on ethics considerations would be contrary to
Sec. 2635.105 if not subject to OGE review. The second commenter asked
OGE to make clear what triggers the requirement to memorialize an
ethics requirement in a supplemental regulation versus merely issuing
an agency policy.
As discussed in the preamble to the proposed rule, the note is not
an independent source of authority; it simply reminds agency ethics
officials that supervisors generally have broad discretion when
assigning work to employees and that there may be a multitude of
factors considered by a supervisor in doing so, including appearance or
impartiality concerns that do not fit squarely within the Standards.
OGE has no intention to alter the requirements relating to supplemental
ethics regulations, nor could it do so in this rulemaking, as those
general requirements are established by Executive order. See E.O.
12731, sec. 301(a) (Oct. 17, 1990). Agencies wishing to supplement the
Standards with additional ethics obligations still must follow the
requirements of Sec. 2635.105, as referenced in Sec. 2638.602, and
may rely on prior OGE guidance regarding what agency ethics policies
belong in a supplemental regulation. See, e.g., OGE Legal Advisory LA-
11-07 (Oct. 31, 2011).
Covered Relationship Stemming From Certain Familial Relations
One individual commenter stated their support for the removal of
the ``dependent'' qualifier when discussing covered relationships
relating to certain business activities of children, noting that ``[a]
non-dependent child is more likely to have relationships that implicate
impartiality concerns than dependent children, who, being dependents as
defined at 26 U.S.C. 152 (e.g., minors or students), are relatively
unlikely to have the sorts of business relationships raising those
concerns.'' An agency commenter disagreed with OGE's proposal to remove
the ``dependent'' qualifier, suggesting that the financial co-
dependence of parents and dependent children is more likely to raise
concerns regarding impartiality.
OGE will adopt as final the change removing the ``dependent''
qualifier before ``child'' in Sec. 2635.502(b)(1)(iii). This change
appropriately reflects that there are potential impartiality concerns
relating to certain business relations of a child regardless of that
child's dependency, just as long-established language in Sec.
2635.502(b)(1)(iii) acknowledges impartiality concerns relating to
certain business relations of a parent, without any dependency
predicate. The updated language harmonizes the treatment of parents and
children for purposes of the scope of certain covered relationships
because both familial relations may raise similar ethics concerns,
irrespective of any financial connection or perceived financial impact.
In that regard, OGE notes that nothing in subpart E contemplates that
there need be a perceived impact on an employee's financial interests
for there to be concerns about their impartiality, and that many of the
long-established covered relationships articulated in Sec. 2635.502(b)
would not seem to involve such a perceived impact. Of course, we note
that Sec. 2635.502 does not demand a specific outcome regarding
participation when an appearance concern arises; it merely requires
that employees engage in the appropriate analysis under this subpart
before participating. As we stated in the 1992 preamble to the final
rule for the Standards, ``the importance of relevant facts must be
emphasized.''
[[Page 43691]]
57 FR 35006, 35027 (Aug. 7, 1992). To highlight this point as applied
to the revised covered relationship provision, OGE is updating new
example 6 to Sec. 2635.502(b) so that the scenario described involves
the employment relationship of an adult child. This example now
illustrates a situation where a covered relationship described in
paragraph (b)(1)(iii) exists--a covered relationship with the employer
of an employee's adult child--but the employee could justifiably
conclude that a reasonable person would not be likely to question their
impartiality in participating in a party matter involving the child's
employer.
Covered Payments and Qualifying Programs
OGE received one comment from an agency regarding the proposed
update to the definition of a ``qualifying program'' at Sec.
2635.503(b)(2), which requires that the written program ``not treat
individuals entering Government service more favorably than other
individuals.'' The commenter noted that this language covers the types
of commonly written policies that permit for the acceleration of
benefits or lump sum payouts for individuals entering Government
service, which can expedite the transition to Government service, and
expressed concern that this change would cause unnecessary delays and
conflicts in that transition.
OGE notes that the updated language in Sec. 2635.503(b)(2) does
not affect OGE's position that ``when the ownership of the interest has
already vested[,] an employee may receive an earlier payment to
remediate a conflict of interest without running afoul of either 18
U.S.C. 209 or 5 CFR 2635.503. This is because the employee is entitled
to receive the payment and only the timing is being altered, not the
entitlement to the payment itself.'' U.S. Off. of Gov't Ethics,
Conflicts of Interest Considerations: Corporate Employment 5 (2021),
https://www.oge.gov/web/OGE.nsf/0/EC83872D932E6DCE852585B6005A1F8C/
$FILE/Corporate%20Employment.pdf. Accordingly, if an employee receives
accelerated payment of an already vested equity interest, that payment
still would not implicate Sec. 2635.503.
Regarding the revisions to the definition of ``qualifying
program,'' which OGE will adopt as proposed, OGE has noted an increase
in written policies and programs favoring Government employees, which
OGE did not anticipate when it first promulgated Sec. 2635.503. OGE
therefore intentionally updated the definition of ``qualifying
program'' to exclude written plans and programs that provide favorable
treatment to employees entering Government service, such as accelerated
vesting of employment-related interests. This approach is consistent
with how OGE has viewed unwritten practices of treating employees
entering Government more favorably. Whether made pursuant to a program
or a practice, a covered payment received from a former employer 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.'' 56 FR 33778, 33786 (July 23, 1991).
OGE does not have any indication that this modernized regulation, which
is focused on an employee's recusal obligation once serving the
Government, would cause unnecessary delays and conflicts during the
transition into Federal service.
Inclusion of Former Clients in the Former Employer Definition
The same agency requested that OGE revise note 1 to paragraph
(b)(3) in Sec. 2635.503 to ``clarify that former clients are those for
whom the individual personally provided services, and not all clients
of a larger firm.'' Note 1 states that the ``former employer''
definition ``includes former clients for whom an employee may have
served as an agent, attorney, consultant, or contractor.'' (Emphasis
added.) OGE believes that the Note is clear on its face that the term
``former clients'' refers to those for whom the employee personally
provided services, and thus will adopt the proposed language without
amendment.
F. Seeking Other Employment (Subpart F)
Subpart F Examples
OGE received one comment from an individual requesting an
additional example in subpart F to clarify whether an employee may rely
on third-party information to conclude that a prospective employer has
rejected the possibility of hiring the employee. Specifically, the
commenter suggested an example where an employee learns from a third
party that they are no longer under consideration--for example, because
the position has been filled by someone else. OGE declines to make this
change for several reasons. First, OGE in 2016 published substantive
updates to subpart F, which included several new examples to illustrate
the application of subpart F to modern job searches. This rulemaking is
only proposing global technical changes throughout subpart F, which is
consistent with the purpose of the modernization project. Second, OGE
notes that the legitimacy of the information received from third
parties is likely to vary significantly on a case-by-case basis. As
such, an example involving information from a third party would be
unlikely to provide helpful insight--and worse, could be misconstrued
to imply that all third-party information can be relied upon in the
same way. Finally, OGE believes the current structure of subpart F
provides sufficient guidance to assess scenarios where the employee
receives credible information that the prospective employer has
rejected the possibility of employment.
Seeking Employment Definition
This same individual asserted that the definitions in subpart F do
not take into consideration the possibility that an employee might seek
employment by posting their interest on social media or meeting with a
recruiter who will communicate with multiple, potentially unknown,
companies. OGE disagrees with this commenter. As part of the 2016
updates to subpart F, OGE modernized the rule and added three new
examples of seeking employment involving social media. OGE added these
examples to ``clarify that the rules in this subpart apply regardless
of the method the employee uses when seeking employment.'' 81 FR 8008,
8009 (Feb. 17, 2016). As further discussed in the 2016 preamble, the
examples illustrate that the posting of a profile, resume, or other
employment information that is not targeted to a specific person is not
considered an unsolicited communication with an entity regarding
possible employment; instead such a posting is akin to posting a resume
on a bulletin board. Moreover, if the employee is using an agent or
other intermediary when seeking employment, the definition of
``prospective employer'' is met only ``if the agent identifies the
prospective employer to the employee.'' 5 CFR 2635.603(c)(1) and (2)
and example 2 to paragraph (c) (discussing a scenario involving an
online resume distribution service that sends resumes to recruiters).
Accordingly, OGE is declining to make further updates.
This individual also suggested that OGE shorten the two-month
timeframe in Sec. 2635.603(b)(2)(ii), which provides that, in the
absence of a response from a prospective employer indicating interest,
an employee is no longer seeking employment--and thus no longer has a
recusal requirement under subpart F--after two months have elapsed from
their dispatch of an
[[Page 43692]]
unsolicited resume or job proposal. The commenter recommended
truncating this timeframe given changes in the mechanisms through which
individuals search for jobs, and potentially quicker responses from
prospective employers than was the case in years past.
The provision about which this commenter is providing input was
substantively unchanged by the proposed rule, which noted that OGE
endeavors to make only global technical changes to subpart F that are
proposed throughout the Standards. OGE does not believe that the two-
month period prescribed in Sec. 2635.603(b)(2)(ii) is an unreasonably
excessive period of time in the modern job market. Even with the
technologies of current day, OGE continues to view two months as a
realistic period of time within which an individual may expect a
response to an unsolicited resume or job proposal. Subpart F addresses
lack of impartiality concerns warranting recusal from particular
matters affecting the financial interests of a prospective employer
with whom the employee is seeking employment. In weighing this comment
against the concerns underpinning subpart F, OGE is not inclined to
relax the recusal requirement in the manner suggested. Moreover, we
note, as we did in 1992 when issuing the final rule establishing the
Standards, ``that the two-month period establishes an outside limit. An
earlier response from the recipient indicating no interest in pursuing
the matter further will terminate the employee's disqualification at
that time.'' 57 FR 35006, 35029 (Aug. 7, 1992). Thus, to the extent
that the timeframe in ``which an applicant will hear back from a
prospective employer'' is shorter, as suggested by the commenter, an
employee who receives a negative response will be relieved of their
subpart F recusal obligation at that point.
G. Misuse of Position (Subpart G)
Letters of Recommendation
OGE received multiple comments relating to Sec. 2635.702(b), a
section in which OGE did not propose any substantive changes. One
agency commenter recommended that OGE add an additional example to
Sec. 2635.702(b) to illustrate that an employee may use their official
title in connection with providing a recommendation for an individual
with whom they have dealt in the course of Federal employment outside
of the executive branch--for example, an individual with whom the
employee worked while assigned to a Congressional office. OGE declines
to adopt this suggestion, as it considers the language in Sec.
2635.702(b) to be sufficiently clear in its broad phrasing that an
employee's official title may be used in connection with a reference
for an individual with whom the employee has dealt not just in
connection with executive branch employment, but ``in the course of
Federal employment.''
A different agency requested that the last sentence of Sec.
2635.702(b) be updated such that employees may recommend individuals
using their official title not just for Federal employment, but also
for other opportunities such as Federal internships or educational
programs. OGE believes that Sec. 2635.702(b) appropriately permits
recommendations for Federal employment, and declines to expand the
regulatory language as suggested by the commenter to cover other
Federally associated opportunities. As a point of clarification,
however, OGE notes that some internships and positions associated with
a Federal entity may qualify as ``Federal employment,'' see, e.g., OGE
Legal Advisory LA-17-09 (Aug. 14, 2017) (discussing different hiring
authorities for and employment status of student interns), such that it
would be permissible under Sec. 2635.702(b) for an employee to use
their official title to recommend an individual for the same.
The same agency expressed concern that example 1 to Sec.
2635.702(b) suggests that ``it is entirely acceptable for an employee
to recommend a person for Federal employment (including use of the
employee's title and official letterhead) solely because the person is
a personal friend.'' As a threshold matter, OGE notes it did not
propose to substantively update this example in this rulemaking.
Furthermore, the example is consistent with Sec. 2635.702(b), which
specifically permits an employee to use their official title to
recommend individuals for Federal employment, including personal
friends. As explained in the preamble to the final rule establishing
the Standards, OGE believes that recommending an individual for Federal
employment serves an ``official purpose'' that justifies the use of
official title. See 57 FR 35006, 35031 (Aug. 7, 1992).
Personal Social Media and Use of Official Photographs
As discussed in the proposed rulemaking, OGE is adding a new
example of an appearance of governmental sanction following Sec.
2635.702(b), which involves the use of personal social media by an
Environmental Protection Agency (EPA) employee. The example is
consistent with OGE's Legal Advisory on personal social media use and
illustrates the factual determination that agency ethics officials must
make in evaluating whether a reference to an employee's official title
or position on social media violates the Standards. See OGE Legal
Advisory LA-15-03 (Apr. 9, 2015). In particular, the example notes that
while certain facts alone--such as listing the employee's Government
title under the ``occupation'' section of their personal social media
account--would not reasonably be construed as implying governmental
sanction or endorsement, it would be problematic if the EPA employee
prominently featured the agency's seal on their social media account
and made statements asserting or implying that their opinions on
environmental topics are sanctioned or endorsed by the Government.
One agency commenter recommended updating this example to address
the use of an official Government photograph on personal social media.
Official photographs, displays including official uniform or insignia,
and use of agency seals must be consistent with all applicable
statutes, regulations, and agency policies, including the Standards.
Employees who choose to display official pictures or include
photographs of themselves wearing agency uniform or insignia should be
mindful that doing so can increase the possibility of confusion as to
whether their social media account and content on that account are
official or personal; a prominent disclaimer clarifying that all
content is personal can help obviate such confusion. However, OGE
declines to update the example to discuss the use of an official
photograph on a personal social media account. Although the new example
provides an illustration of how personal social media use might
implicate ethics rules regarding misuse of position, it is not intended
to be exhaustive of the myriad ways that employees might engage or post
on their personal social media accounts. Given the nuance of these
issues, OGE believes that this topic is best addressed through
interpretive guidance, and notes that it recently issued a Legal
Advisory discussing the application of ethics rules to employees'
activities on personal social media accounts, including the use of
official photographs. See OGE Legal Advisory LA-23-13, at 2-3 (Sept.
28, 2023) (discussing the question ``Can I use my official picture or a
picture of me at a work event as my profile picture [on social
media]?'').
[[Page 43693]]
Acceptable Personal Use of Government Resources
As explained in the preamble to the proposed rule, OGE proposed
replacing example 1 following Sec. 2635.704(b)--which discussed a
General Services Administration (GSA) regulation that no longer
exists--with an example that references an agency's de minimis policy
relating to the personal use of a Government email account. In response
to this change, one individual commenter requested that OGE provide
more guidance on acceptable personal use of Government resources, given
the absence of a GSA regulation and significant technological changes
in recent years. OGE believes the Standards and examples set forth and
revised in Sec. 2635.704 are sufficiently clear and can be applied to
Government property as it continues to evolve with technological
advances. Furthermore, more specific guidelines about current
technology than what is already in Sec. 2635.704 and its examples
would run the risk of quickly becoming outdated. Finally, OGE notes
that agencies have established more specific policies regarding
acceptable limited personal use of Government resources by their
employees, and employees' adherence to these policies would constitute
an authorized use of Government resources. See OGE Inf. Adv. Op. 97x3
(Mar. 21, 1997). OGE defers to agencies to interpret such policies and
to determine whether specific instances of personal use would amount to
a misuse of Government resources.
H. Outside Activities (Subpart H)
Teaching, Speaking, and Writing
One individual provided comments regarding OGE's proposed
ministerial change to Sec. 2635.807(a), which emphasizes the timing
aspect that an employee ``may not receive compensation from any source
other than the Government for teaching, speaking, or writing that
occurs while the person is a Government employee and that relates to
the employee's official duties.'' (Emphasis added.) The commenter
incorrectly suggests that the updated language provides for a ``looser
standard'' than set forth in the original rule; specifically, the
commenter stated that before this change, Sec. 2635.807 had a
``broader application . . . [that] prevents former employees from
gaining, after the fact from'' their official duties and that the new
language would ``lessen the broad application and lift the restrictions
as they would apply to former employees.''
As a threshold matter, OGE reiterates that the Standards, including
subpart H, apply only to current executive branch employees. More
specifically regarding teaching, speaking, and writing covered by Sec.
2635.807, OGE has been unequivocal in its guidance that ``ethics rules
do not restrict receipt of compensation unless the writing occurs
during Government service.'' OGE DAEOgram DO-08-006, pt. I, at 8 (Mar.
6, 2008); see also id. (``Section 2635.807 applies to an individual
while [they] serve[ ] as a Government employee. Therefore, each
provision contained in section 2635.807 restricts compensation only for
writing that occurs while an individual is in Government service. If
the writing is done either before or after Government service, none of
these provisions will apply.''). Accordingly, OGE declines the
commenter's suggestion that Sec. 2635.807(a) be phrased disjunctively,
such that compensation for teaching, speaking, or writing would be
restricted if the writing occurs while the person is a Government
employee or if the writing relates to an employee's official duties.
One agency commenter characterized Sec. 2635.807 as addressing
teaching, speaking, or writing ``on `official time' and on personal
time,'' and suggested that the section be divided into off-duty and
official duty paragraphs ``rather than housing it all under Outside
Activities.'' OGE disagrees with the commenter's characterization. As
noted in Sec. 2635.801(a), subpart H ``contains provisions relating to
outside employment, [and] outside activities''; Sec. 2635.807
addresses teaching, speaking, and writing that an employee does as
outside employment or an outside activity, and is not intended to
address official duty teaching, speaking, or writing. To the extent
that this section refers to official capacity teaching, speaking, and
writing, it does so for limited purposes. First, it refers to official
capacity activities in certain examples to distinguish between the
scenarios where the requirements of Sec. 2635.807 do and do not apply.
See, e.g., Sec. 2635.807(a)(2)(iii), example 4 (describing a scenario
where payments are not prohibited under the rule restricting
compensation for speaking relating to official duties because the
employee is speaking officially); see also Sec. 2635.807(b), example 1
(noting that the restrictions on reference to official position would
not apply to an employee who is authorized to speak in their official
capacity). Second, it notes that ``[t]eaching, speaking, or writing
relates to the employee's official duties''--and thus is covered by
Sec. 2635.807(a)--if ``[t]he activity is undertaken as part of the
employee's official duties.'' This language simply ``incorporates the .
. . prohibition on supplementation of salary contained in 18 U.S.C.
209,'' DO-08-006, pt. I, at 19 n.18, and is not intended to provide any
specific guidance regarding official duty speaking. For these reasons,
OGE declines the commenter's suggested reorganization.
The same commenter asked OGE to address various scenarios relating
to the extent to which an employee could choose or refuse who they
present agency information to as part of an outside activity if the
presentation otherwise meets the requirements of Sec. 2635.807(a). The
scenarios posed by the commenter are very fact-specific, and
unfortunately it is not feasible for OGE to include exhaustive examples
in the regulation discussing the application of Sec. 2635.807 and
other ethics rules. OGE notes, however, that even if Sec. 2635.807
would not restrict an employee's teaching, speaking, or writing, the
employee may not conduct the activity in a way that violates other
ethics requirements. See, e.g., OGE Inf. Adv. Op. 94x1 (Jan. 10, 1994)
(``If an employee does not receive any compensation for [their]
participation in the conference, the speech will not be prohibited by
section 2635.807. In such an instance, the primary consideration the
employee should keep in mind is [their] responsibility not to misuse
[their] position, title, Government property, or nonpublic
information.'').
Finally, OGE declines this commenter's suggestion to impose a
disclaimer requirement for official teaching, speaking, or writing. To
the extent that agencies authorize or require the use of disclaimers in
official speeches to make clear that the speaker is sharing their
personal views rather than the views of the agency, OGE defers to
agencies on whether the use of such a disclaimer is appropriate.
A different agency expressed concern regarding a minor update OGE
proposed to make to the existing note to 5 CFR 2635.807(a)(2)(iii).
Specifically, OGE proposed 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. OGE's intention
in deleting the reference was not to make a substantive change but
rather ``to avoid unnecessary focus on a single statute to the
potential exclusion of other applicable authorities.'' 88 FR 10774,
10780 (Feb. 21, 2023). The commenter requested that OGE keep the
reference to 18 U.S.C. 209 because ``[i]t is helpful to employees and
legal practitioners to be reminded in this
[[Page 43694]]
context that a criminal statute in particular may be triggered.''
Based on this feedback, OGE will add back in the reference to 18
U.S.C. 209 in the referenced note. However, OGE reiterates that other
authorities may limit or preclude an employee's acceptance of travel
expenses, so to emphasize that section 209 is one of several
potentially applicable authorities, OGE has updated the phrase to read
``other authorities, including but not limited to 18 U.S.C. 209.''
One agency commenter asked that OGE add new language to Sec.
2635.807(b) permitting ethics officials to apply a fact-based,
``totality of circumstances'' test to determine whether an employee
serving as faculty at Federal universities and schools may include
their title or position in connection with outside academic or
scientific editorial board service, and for listings of professional
society committee membership. The commenter's request for a ``totality
of circumstances'' test appears to be based on the commenter's
assertion that, in the context of Federal employees serving as faculty
at Federal universities and schools, disclaimers and biographical
sketches required for teaching, speaking, and writing activities under
Sec. 2635.807(b) ``are not commonly used by publishers'' and
professional societies.
As OGE has previously explained, ``[t]he foundation in the
Standards underlying the limitations on use of official title is 5 CFR
2635.702(b), which provides `an employee shall not use or permit the
use of [their] Government position or title or any authority associated
with [their] public office in a manner that could reasonably be
construed to imply that [their] agency or the [G]overnment sanctions or
endorses [their] personal activities or those of another.''' OGE Inf.
Adv. Op. 10x1, at 1 (Mar. 19, 2010). Employees engaged in outside
teaching, speaking, and writing must also meet the use of title
requirements of Sec. 2635.807(b). OGE has advised that ``[t]he purpose
of section 807(b)(1) and (b)(2), in conjunction with section 702(b), is
to ensure that public is not misled as to whether the views expressed
by an Executive Branch employee in uncompensated teaching, writing, or
speaking are those of the employee or those of the Government.'' Id. at
2.
OGE believes that the guidance it has previously issued regarding
use of title in outside activities sufficiently addresses the
commenter's practical concerns. See, e.g., id. (emphasizing the
importance of an employee providing relevant biographical details other
than official title and position in connection with teaching, speaking,
and writing, as required by Sec. 2635.807(b)(1), and discussing how to
evaluate whether an employee has complied in good faith with this
provision); see also OGE Legal Advisory LA-14-08, at 2 (Nov. 19, 2014)
(stressing the importance of considering the totality of circumstances
in connection with use of title in other outside activities, such as
involvement with a professional society, to determine whether a
reasonable person could construe the reference to imply sanction or
endorsement of the organization or the employee's personal activities).
Because OGE believes that subparts G and H and the further guidance on
those provisions provide appropriate flexibility regarding use of title
and sufficiently address the commenter's concerns, OGE declines to make
the commenter's recommended change.
Fundraising
The same agency recommended that OGE amend the definition of
``participation in the conduct of an event'' at Sec. 2635.808(a)(2) to
clarify that the term includes presenting awards and being present on
stage during the presentation of awards. OGE declines to adopt these
changes given that the list of examples to which the commenter suggests
adding is not intended to be exhaustive. Additionally, it is OGE's
belief that the current language provides sufficient guidance for
practical application of the regulation by ethics officials and
employees, without being unnecessarily proscriptive regarding the
necessarily fact-specific application of this provision.
The same agency also requested certain clarifications in the new
social media examples added to Sec. 2635.808(c) relating to
fundraising in a personal capacity. In particular, the commenter
suggested updating example 5 to note that the employee's ``personal
solicitation'' could be sent by either official or personal email, and
suggested updating example 6 to note that ``any person'' includes
subordinates. OGE believes that the cited examples are appropriately
specific, and therefore declines to incorporate these changes.
Specifically, the general reference to an email transmission in example
5 does not suggest that such a transmission need be sent by either a
personal or an official email to be problematic. Similarly, the
reference to ``any person'' in example 6 is appropriately broad such
that it could include a subordinate.
I. Other
Incorporation of Obligations From Ethics Pledges
One individual commenter recommended that OGE implement certain
core provisions of recent Presidential ethics pledges that impose
additional obligations on certain noncareer employees. See, e.g., E.O.
13490 (Jan. 21, 2009); E.O. 13770 (Jan. 28, 2017); E.O. 13989 (Jan. 20,
2021). OGE declines to make such a change, which is outside the scope
of the modernization updates contemplated by this rulemaking, and about
which public input was requested. OGE further notes that it is the
prerogative of each Presidential administration to determine what, if
any, additional ethics obligations it wishes to impose on its
appointees, and that it would not be appropriate for OGE to implement
such obligations in a regulation that by design is intended to extend
across multiple administrations.
Subpart J
As discussed above, OGE recently engaged in a separate rulemaking
process that culminated in the addition of subpart J to the Standards.
This rulemaking makes no changes to subpart J, and revises and
republishes only subparts A through I of the Standards.
III. Matters of Regulatory Procedure
Regulatory Flexibility Act
As Acting Director of the Office of Government Ethics, I certify
under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this
final 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 25, subchapter II), this final 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.
[[Page 43695]]
Executive Orders 12866, 13563, and 14094
In promulgating this rule, the Office of Government Ethics has
adhered to the regulatory philosophy and the applicable principles of
regulation set forth in Executive Order 12866, Regulatory Planning and
Review (58 FR 51735, Oct. 4, 1993); Executive Order 13563, Improving
Regulation and Regulatory Review (76 FR 3821, Jan. 21, 2011); and
Executive Order 14094, Modernizing Regulatory Review (88 FR 21879, Apr.
11, 2023). 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 changes to the regulation is not
extensive, the benefits of implementing these changes are significant.
The existing regulation is not insufficient, but it has not been
significantly updated since its issuance in 1992. OGE's 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 regulatory updates
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 rule has been designated as a ``significant regulatory
action'' under Executive Order 12866, although not significant under
section 3(f)(1) of Executive Order 12866. Accordingly, this rule has
been reviewed by the Office of Management and Budget.
Executive Order 12988
As Acting Director of the Office of Government Ethics, I have
reviewed this 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 13175
The Office of Government Ethics has evaluated this final rule under
the criteria set forth in Executive Order 13175 and determined that
Tribal consultation is not required as this final 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: May 8, 2024
Shelley K. Finlayson,
Acting Director, U.S. Office of Government Ethics.
For the reasons set forth in the preamble, the U.S. Office of
Government Ethics amends 5 CFR part 2635 as follows:
PART 2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE
EXECUTIVE BRANCH
0
1. The authority citation for part 2635 is revised to read as follows:
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.
0
2. Revise and republish subparts A through I to read as follows:
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.
2635.305 Disposition of prohibited gifts.
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.
[[Page 43696]]
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 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 in this section 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 at 5 CFR
chapter I 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
[[Page 43697]]
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 (c), 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 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 this title. 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.
[[Page 43698]]
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. 2638.104(a) and (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 (see Sec.
2635.203(b)) 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 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
[[Page 43699]]
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 this
paragraph (c) and Sec. 2635.205(a), notwithstanding any exception to
the rules in this part, 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,
commercial discounts, and free attendance or participation 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 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 other employees accompany the
presenting employee to the roundtable discussion, the accompanying
employees 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
[[Page 43700]]
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
(5) Is an organization a majority of whose members are described in
paragraphs (d)(1) through (4) of this section.
(e) 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) 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
[[Page 43701]]
the market value of free attendance by both the employee and the guest.
(h) Legal expense fund has the meaning set forth in Sec.
2635.1003.
(i) Pro bono legal services has the meaning set forth in Sec.
2635.1003.
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. The exception in this paragraph
(a) 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.
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
[[Page 43702]]
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;
(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; or
(iv) Offered to employees by an established employee organization,
such as an association composed of Federal employees or a nonprofit
employee welfare organization, because of the employees' Government
employment, so long as the employee is part of the class of individuals
eligible for assistance from the employee organization as set forth in
the organization's governing documents.
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
prohibited source, the offer discriminates in favor of higher-ranking
officials.
Example 4 to paragraph (c)(2): A nonprofit military relief society
provides access to financial counseling services, loans, and grants to
all sailors and Marines. A service member may accept financial benefits
from the relief society, including to cover legal expenses, because the
benefits are offered by an employee organization that was established
before the legal matter arose, and because the benefits are being
offered because of the employees' Government employment, as set forth
in the relief society's governing documents.
(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.
[[Page 43703]]
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 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
[[Page 43704]]
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:
(i) A large number of persons will attend;
(ii) 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
(iii) 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 $480.
(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, 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) of 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 the
contractor, rather than the association, provided the cost of their
attendance; the contractor designated the specific employees to receive
the gift of free attendance; and the value of the gift exceeds $480 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 the contractor, rather than
the association, provided the cost of their attendance; the contractor
designated the specific employees to receive the gift of free
attendance; and 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
[[Page 43705]]
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 $480 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
$480. 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 $480.
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:
(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 Rates of Per Diem
Allowances for Travel in Foreign Areas, Per Diem Supplement, section
925 to the Standardized Regulations (GC-FA), available 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
[[Page 43706]]
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.
(n) Legal expense funds and pro bono legal services. An employee
who seeks legal representation for a matter arising in connection with
the employee's past or current official position, the employee's prior
position on a campaign of a candidate for President or Vice President,
or the employee's prior position on a Presidential Transition Team may
accept:
(1) Payments for legal expenses paid out of a legal expense fund
that is established and operated in accordance with subpart J of this
part; and
(2) Pro bono legal services provided in accordance with subpart J
of this part.
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 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
[[Page 43707]]
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. The prohibitions in this subpart apply unless the
item is excluded from the definition of a gift (see Sec. 2635.303(a))
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 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 Sec. 2635.203(b) and this paragraph (a) 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
[[Page 43708]]
(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 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
[[Page 43709]]
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
paragraph (b) of this section. 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.
Sec. 2635.305 Disposition of prohibited gifts.
Section 2635.206(a)(1) through (3) may be referenced when
determining an appropriate disposition of a gift that may not be
accepted under this subpart.
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 standards of this
paragraph (b)(1), 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.
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 example 1 to this paragraph (b)(1)
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
[[Page 43710]]
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, this section 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 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
[[Page 43711]]
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
(d), 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.
(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. 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.
Note 1 to paragraph (a): 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.
(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
[[Page 43712]]
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 paragraph (c) of this section
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 imp
[…truncated; see source link]Indexed from Federal Register on May 17, 2024.
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