List of Attachments For Briefing Book Volume 1 Tab 8 Attachment 1: Standards of Ethical Conduct For Employees of the Executive Branch. TAB 8 Standards of Ethical Conduct for Employees of the Executive Branch STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EXECUTIVE BRANCH Including; Part I of Executive Order 12674 and 5 C.F.R. Part 2635 Regulation Prepared by: United States Office of Government Ethics Suite 500, 1201 New York Avenue, NW. Washington, DC 20005-3917 August 1992 PRINCIPLES OF ETHICAL CONDUCT FOR GOVERNMENT OFFICERS AND EMPLOYEES Executive Order 12674 of April 12, 1989 (as modified by E.O. 12731) By virtue of the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to establish fair and exacting standards of ethical conduct for all executive branch employees, it is hereby ordered as follows: Part I-Principles of Ethical Conduct Section 101. Principles of Ethical Conduct. To ensure that every citizen can have complete confidence in the integrity of the Federal Government, each Federal employee shall respect and adhere to the fundamental principles of ethical service as implemented in regulations promulgated under sections 201 and 301 of this order: (a) Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws, and ethical principles above private gain. (b)Employees shall not hold financial interests that conflict with the conscientious performance of duty. (c) Employees shall not engage in financial transactions using nonpublic Government information or allow the improper use of such information to further any private interest. An employee shall not, except pursuant to such reasonable exceptions as are provided by solicitor accept any gift or other item of monetary value official action from, doing business with, or conducting activities regulated by the employee's agency, or whose interests maybe substantially affected by the performance or nonperformance of the employee's duties. (e) Employees shall put forth honest effort in the performance of their duties. -1- (f) Employees shall make no unauthorized commitments or promises of any kind purporting to bind the Government. (g) Employees shall not use public office for private gain. (h) Employees shall act impartially and not give preferential treatment to any private organization or individual. (i) Employees shall protect and conserve Federal property and shall not use it for other than authorized activities. (j) Employees shall not engage in outside employment or activities, including seeking or negotiating for employment, that conflict with official Government duties and responsibilities. (k) Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities. (l) 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. (m) Employees shall adhere to all laws and regulations that provide equal opportunity for all Americans regardless of race, color, religion, seq, national origin, age, or handicapped (n) Employees shall endeavor to avoid any actions creating the appearance that they are violating the law or the ethical standards promulgated pursuant to this order. Sec. 102 Limitations on Outside Earned Income. (a) No employee who is appointed by the President to a full-time non-career position in the executive branch (including full-time non-career employees in the White House office, the office of Policy Development, and the office of Cabinet Affairs), shall receive any earned incline for any outside employment or activity performed during that Presidential appointment. (b) The prohibition set forth in subsection (a) shall not apply to any full-time non-career employees employed pursuant to 3 U.S.C. 105 and 3 US.C. 107(a) at salaries below the minimum rate of basic pay then paid for GS-9 of the General Schedule. Any outside employment must comply with relevant agency standards of conduct, including any requirements for approval of outside employment. -2- Pub. Law 92-463 -2- October 6, 1972 86 STAT 771 (3) The term "agency" has the same meaning as in section 551(1) of title 5, United States Code. (4) The term "Presidential advisory committee" means an advisory committee which advises the President. Applicability Sec. 4.(a) The provisions of this Act or of any rule, order, or regulation promulgated under this Act shall apply to each advisory committee except to the extent that any Act of Congress establishing any such advisory committee specifically provides otherwise. Restrictions. (b) Nothing in this Act shall be construed to apply to any advisory committee established or utilized by-- (1) the Central Intelligence Agency; or (2) the Federal Reserve System. (c) Nothing in this Act shall be construed to apply to any local civic group whose primary function is that of rendering a public service with respect to a Federal program, or any State or local committee, council, board, commission, or similar group established to advise or make recommendations to State or local officials or agencies. RESPONSIBILITIES OF CONGRESSIONAL COMMITTEES Review. Sec. 5. (a) In the exercise of its legislative review function, each standing committee of the Senate and the House of Representatives shall make a continuing review of the activities of each advisory committee under its jurisdiction to determine whether such advisory committee should be abolished or merged with any other advisory committee, whether the responsibilities of such advisory committee should be revised, and whether such advisory committee performs a necessary function not already being performed. Each such standing committee shall take appropriate action to obtain the enactment of legislation necessary to carry out the purpose of this subsection. Guidelines. (b) In considering legislation establishing, or authorizing the establishment of any advisory committee, each standing committee of the Senate and of the House of Representatives shall determine, and report such determination to the Senate or to the House of Representatives, as the case may be, whether the functions of the proposed advisory committee are being or could be performed by one or more agencies or by an advisory committee already in existence, or by enlarging the mandate of an existing advisory committee. Any such legislation shall-- (1) contain a clearly defined purpose for the advisory committee; (2) require the membership of the advisory committee to be fairly balanced in terms of the points of view represented and the functions to be performed by the advisory committee; (3) contain appropriate provisions to assure that the advice and recommendations of the advisory committee will not be inappropriately influenced by the appointing authority or by any special interest, but will instead by the result of the advisory committee's independent judgment; (4) contain provisions dealing with authorization of appropriations, the data for submission of report (if any), the duration of the advisory committee, and the publication of reports and other materials, to the extent that the standing committee determine the provisions of section 10 of this Act to be inadequate; and October 6, 1972 -3-Pub. Law 92-463 86 STAT. 772 (5) contain provisions which will assure that the advisory committee will have adequate staff (either supplied by an agency or employed by it), will be provided adequate quarters, and will have funds available to meet its other necessary expenses. (c) To the extent they are applicable, the guidelines set out in subsection (b) of this section shall be followed by the President, agency beads, or other Federal officials in creating an advisory committee. RESPONSIBILITIES OF THE PRESIDENT Sec. 6 (a) The President may delegate responsibility for evaluating and taking action, where appropriate, with respect to al public recommendations made to him by Presidential advisory committees. Report to Congress. (b) Within one year after a Presidential advisory committee has submitted a public report to the President, the President or his delegate shall make a report to the Congress staging either his proposals for action or his reasons for inaction, with respect to the recommendations contained in the public report. Annual report to Congress. (c) The President shall, not later than March 31 of each calendar year (after the year in which this Act is enacted), make an annual report to the Congress on the activities, status, and changes in the composition of advisory committees in existence during the preceding calendar year. The report shall contain the name of every advisory committee, the date of an authority for its creation, its termination date or the date it is to make a report, its functions, a reference to the reports it has submitted, a statement of whether it is an ad hoc or continuing body, the dates of its meetings, the names and occupations of its current members, and the total estimated annual cost to the United States for fund, service, supply, and maintain such committee. Such report shall include a list of those advisory committees abolished by the President, and in the case of advisory committees established by statue, a list of those advisory committees which the President recommends by abolished together with his reasons therefor. Exclusion The President shall exclude from this report any information which, in his judgment, should be withheld for reasons of national security, and he shall include in such report a statement that such information is excluded. RESPONSIBILITIES OF THE DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET Sec. 7. (a) The Director shall establish and maintain within the Office of Management and Budget a Committee Management Secretariat, which shall be responsible for all matters relating to advisory committees. (b) The Director shall, immediately after the enactment of this Act, institute a comprehensive review of the activities and responsibilities of each advisory committee to determine-- (1) whether such committee is carrying out its purpose; (2) whether, consistent with the provisions of applicable statues, the responsibilities assigned to it should be revised; (3) whether it should be merged with other advisory committees; or (4) whether it should be abolished. Recommendations to President and Congress The Director may from time to time request such information as he deems necessary to carry out his functions under this subsection. Upon the completion of the Director's review he shall make recommendations to the President and to either the agency head or the Congress with respect to action he believes should be taken. Thereafter, the Director shall carry out a similar review annually. Agency Cooperation Agency heads shall cooperate with the Director in making the reviews required by this subsection. Pub. Law 92-463 -4- October 6, 1972 86 STAT. 773 Performance guidelines. (c) The Director shall prescribe administrative guidelines and management controls applicable to advisory committees, and, to the maximum extent feasible, provide advice, assistance, and guidance to advisory committees to improve their performance. In carrying out his functions under this subsection, the Director shall consider the recommendations of each agency head with respect to means of improving the performance of advisory committees whose duties are related to such agency. Uniform pay guidelines (d)(1) The Director, after study and consultation with the Civil Service Commission, shall establish guidelines with respect to uniform fair rates of pay for comparable services of members, staffs, and consultants of advisory committees in a manner which gives appropriate recognition to the responsibilities and qualifications required and other relevant factors. Such regulations shall provide that-- (A) no member of any advisory committee or of the staff of any advisory committee shall receive compensation at a rate in excess of the rate specified for GS-18 of the General Schedule under section 5332 of title 5, United States Code; and Travel expenses (B) such members, while engaged in the performance of their duties away from their homes or regular places of business, may be allowed travel expenses, including per diem in lieu substance, as authorized by section 5703 of title 5, United States Code, for persons employed intermittently in the Government service. 80 Stat. 4991 83 Stat. 19C. (2) Nothing in this subsection shall prevent-- (A) an individual who (without regard to his service with an advisory committee) is a full-time employee of the United States, or (B) an individual who immediately before his service with an advisory committee was such an employee, from receiving compensation at the rate at which he otherwise would be compensated (or was compensated) as a full-time employee of the United States. Expense recommendations. (e) The Director shall include in budget recommendations a summary of the amounts he deems necessary for the expenses of advisory committees, including the expenses for publication of reports where appropriate. RESPONSIBILITY OF AGENCY HEADS Sec. 8. (a) Each agency head shall establish uniform administrative guidelines and management controls for advisory committees established by that agency, which shall be consistent with directives of the Director under section 7 and section 10. Each agency shall maintain systematic information on the nature, functions, and operations of each advisory committee within its jurisdiction. Advisory Committee Management Control Officer, designation: (b) The head of each agency which has an advisory committee shall designate an Advisory Committee Management Officer who shall- (1) exercise control and supervision over the establishment, procedures, and accomplishments of advisory committees established by that agency; (2) assemble and maintain the reports, records, and other papers of any such committee during its existence; and 61 Stat. 54. (3) carry out, on behalf of that agency, the provisions of section 552 of title 5. United States Code, with respect to such reports, records, and other papers. ESTABLISHMENT AND PURPOSE OF ADVISORY COMMITTEES Sec. 9. (a) No advisory committee shall be established unless such establishment is-- (1) specifically authorized by statute or by the President; or October 6, 1972 - 5- Pub. Law 92-463 94 STAT. 774 Publication in Federal Register. (2) determined as a matter of formal record, by the head of the agency involved after consultation with the Director, with timely notice published in the Federal Register, to be in the public interest in connection with the performance of duties imposed on that agency by law. (b) Unless otherwise specifically provided by statue or Presidential directive, advisory committees shall be utilized solely for advisory functions. Determinations of action to be taken and policy to be expressed with respect to matters upon which an advisory committee reports or makes recommendations shall be made solely by the President or an officer of the Federal Government. Charter, filing. (c) No advisory committee shall meet or take any action until an advisory committee charter has been filed with (1) the Director, in the case of Presidential advisory committees, or (2) with the head of the agency to whom any advisory committee reports and with the standing committee of the Senate and of the House of Representatives having legislative jurisdiction of such agency. Such charter shall contain the following information: (A) the committee's official designation; (B) the committee's objectives and the scope of its activity; (C) the period of time necessary for the committee to carry out its purpose; (D) the agency or official to whom the committee reports; (E) the agency responsible for providing the necessary support for the committee; (F) a description of the duties for which the committee is responsible, and, if such duties are not solely advisory, a specification of the authority for such functions; (G) the estimated annual operating costs in dollars and man-years for such committee; (H) the estimated number and frequency of committee meetings; (I) the committee's termination date, if less than two years from the date of the committee's establishment; and (J) the date the charter is filed. Copy. A copy of any such charter shall also be furnished to the Library of Congress. ADVISORY COMMITTEE PROCEDURES Meetings. Sec. 10. (a)(1) Each advisory committee meeting shall be open to the public. (2) Except when the President determines otherwise for reasons o national security, timely notice of each such meeting shall be published in the Federal Register, and the Director shall prescribe regulations to provide for other types of public notion to insure that all interested persons are notified of such meeting prior thereto. (3) Interested persons shall be permitted to attend, appear before, or file statements with any advisory committee, subject to such reasonable rules of regulations as the Director may prescribe. 81 Stat. 54. (b) Subject to section 552 of title 5, United States Code, the records, reports, transcripts, minutes, appendixes, working papers, drafts, studies, agenda, or other documents which were made available to or prepared for or by each advisory committee shall be available for public inspection and copying at a single location in the offices of the advisory committee or the agency to which the advisory committee reports until the advisory committee ceases to exist. (c) Detailed minutes of each meeting of each advisory committee shall be kept and shall contain a record of the persons present, a complete and accurate description of matters discussed and conclusions reached, and copies of all reports received, issued, or approved by the Pub. Law 92-463 - 6 - October 6, 1972 84 Stat. 775 Certification. advisory committee. The accuracy of all minutes shall be certified to by the chairman of the advisory committee. 81 STAT. 54. Annual report (d) Subsections (a)(1) and (a)(3) of this section shall not apply to any advisory committee meeting which the President, or the head of the agency to which the advisory committee reports, determines is concerned with matters listed in section 552() of title 8, United States Code. Any such determination shall be in writing and shall contain the reasons for such determination. If such a determination is made, the advisory committee shall issue a report at least annually setting forth a summary of its activities and such related matters as would be informative to the public consistent with the policy of section 552 (b) of title 5, United States Code. Federal officer or employee, attendees. (e) There shall be designated an officer or employee of the Federal Government to chair or attend each meeting of each advisory committee. The officer or employee so designated is authorized, whenever he determines it to be in the public interest, to adjourn any such meeting. No advisory committee shall conduct any meeting in the absence of that officer or employee. (f) Advisory committees shall not hold any meetings except at the call of, or with the advance approval of, a designated officer or employee of the Federal Government, and in the case of advisory committees (other than Presidential advisory committees), with an agency approved by such officer or employee. AVAILABILITY OF TRANSCRIPTS Sec. 11. (a) Except where prohibited by contractual agreements entered into prior to the effective date of this Act, agencies and advisory committees shall make available to any person, at actual cost of duplication, copies of transcripts of agency proceedings or advisory committee meetings. "Agency proceeding." 80 Stat. 382. (b) As used in this section "agency proceeding" means any proceedings as defined in section 551(12) of title 5, United States Code. FISCAL AND ADMINISTRATIVE PROVISIONS Recordkeeping. Sec. 12. (a) Each agency shall keep records as will fully disclose the disposition of any funds which may be at the disposal of its advisory committees and the nature and extent of their activities. The General Services Administration, or such other agency as the President may designate, shall maintain financial records with respect to President advisory committees. Audit. The Comptroller General of the United States, or any of his authorized representatives, shall have access, for the purpose of audit and examination, to any such records. Agency support services. (b) Each agency shall be responsible for providing support services for each advisory committee established by or reporting to it unless the establishing authority provides otherwise. Where any such advisory committee reports to more than one agency, only one agency shall be responsible for support services at any one time. In the case of Presidential advisory committees, such services may be provided by the General Services Administration. RESPONSIBILITIES OF LIBRARY OF CONGRESS Reports and background papers. Depository Sec. 13. Subject to section 552 of title 5, United States Code, the Director shall provide for the filing with the Library of Congress of at least eight copies of each report made by every advisory committee and, where appropriate, background papers prepared by consultants. The Librarian of Congress shall establish a depository for such reports and papers where they shall be available to public inspection and use. October 6, 1972 - 7- Pub. Law 92-463 86 STAT. 776 TERMINATION OF ADVISORY COMMITTEES Sec. 14 (a)(1) Each advisory committee which is in existence on the effective date of this Act shall terminate not later than the expiration of the two-year period following such effective date unless-- (A) in the case of an advisory committee established by the President or an officer of the Federal Government, such advisory committee is renewed by the President or that officer by appropriate action prior to the expiration of such two-year period; or (B) in the case of an advisory committee established by an Act of Congress, its duration is otherwise provide for by law. (2) Each advisory committee established after such effective date shall terminate not later than the expiration of the two-year period beginning on the date of its establishment unless-- (A) in the case of an advisory committee established by the President or an officer of the Federal Government such advisory committee is renewed by the President or such officer by appropriate action prior to the end of such period; or (B) in the case of an advisory committee established by an Act of Congress, its duration is otherwise provided for by law. Renewal. (b)(1) Upon the renewal of any advisory committee, such advisory committee shall file a charter in accordance with section 9(c). (2) Any advisory committee established by an Act of Congress shall file a charter in accordance with such section upon the expiration of each successive two-year period following the date of enactment of the Act establishing such advisory committee. (3) No advisory committee required under this subsection to file a charter shall take any action (other than preparation and filing of such charter) prior to the date on which such charter is filed. Certification. (c) Any advisory committee which is renewed by the President or any officer of the Federal Government may be continued only for successive two-year periods by appropriate action taken by the President or such officer prior to the date on which such advisory committee would otherwise terminate. EFFECTIVE DATE Sec. 15. Except as provided in section 7(b), this Act shall become effective upon the expiration of ninety days following the date of enactment. Approved October 6, 1972. ____________________________ LEGISLATIVE HISTORY: HOUSE REPORTS. No. 92-1017 (Comm. on Government Operations) and No. 92-1403 (Comm. of Conference). SENATE REPORT No. 92-1098 accompanying S. 3529 (Comm. on Government Operations). CONGRESSIONAL RECORD, Vol. 118 (1972): May 9, considered and passed House. Sept. 12, considered and passed Senate, amended, in lieu of S. 3529. Sept. 19, Senate agreed to conference report. Sept. 20, House agreed to conference report. Public Law 94-409 Government in the Sunshine Act Section 5(c) amends Section 10(d) of FACA September 13, 1976 -7-Pub. Law 94-409 "(iii) all written responses, and memoranda stating the substance of all oral responses, to the materials described in clauses (i) and (ii) of this subparagraph; "(1) upon receipt of a communication knowingly made or knowingly caused to be made by a party in violation of this subsection, the agency, administrative law judge, or other employee presiding at the hearing may, to the extent consistent with the interest of justice and the policy of the underlying statutes, require the party to show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of such violation; and Applicability. "(E) the prohibitions of this subsection shall apply beginning at such time as the agency may designate, but in no case shall they begin to apply later than the time at which a proceeding is noticed for hearing unless the person responsible for the communication has knowledge that it will be noticed, in which case the prohibitions shall apply beginning at the time of his acquisition of such knowledge. "(2) This subsection does not constitute authority to withhold information from Congress." (b) Section 551 of title 5, United States Code, is amended-- (1) by striking out "and" at the end of paragraph (12); (2) by striking out the "act,: at the end of paragraph (13) and inserting in lieu thereof "act; and"; and (3) by adding at the end thereof the following new paragraph: "Ex parte communication." "(14) 'ex parte communication" means an oral or written communication not on the public record with respect to which responsible prior notice to all parties is not given, but it shall not include requests for status reports on any matter or proceeding covered by this subchapter.". Section USC 557. (c) Section 536(d) of title 5, United States Code, is amended by inserting between the third and fourth sentences thereof the following new sentence: "The agency may, to the extent consistent with the interests of justice and the policy of the underlying statutes administered by the agency, consider a violation of section 557(d) of this title sufficient grounds for a decision adverse to a party who has knowingly committed such violation or knowingly caused such violation to occur.". CONFORMING AMENDMENTS Sec. 5. (a) Section 401(b)(1) of title 39, United States Code, is amended by inserting after "Section 552 (public information)." the words "section 552a (records about individuals), section 552b (open meetings).". (b) Section 552(b)(3) of title 5, United States Code, is amended to read as follows: "(3) specifically exempted from disclosure by statute (other than section 552b of this title), provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld;". Section USC App. I. (c) Subsection (d) of section 10 of the Federal Advisory Committee Act is amended by striking out the first sentence and inserting in lieu thereof the following: "Subsections (a)(1) and (a)2) of this section shall not apply to any portion of an advisory committee meeting where 90 STAT. 1247 Pub. Law 94-409 - 8 - September 13, 1976 the President, or the head of the agency to which the advisory committee reports, determines that such portion of such meeting may be closed to the public in accordance with subsection (c) of section 552b of title 5, United States Code.". EFFECTIVE DATE Section USC 552b note. Sec. 6 (a) Except as provided in subsection (b) of this section, the provisions of this Act shall take effect 180 days after the date of its enactment. (b) Subsection (g) of section 552b of title 5. United States Code, as added by section 3(a) of this Act, shall take effect upon enactment. Approved September 13, 1976. ________________________________ Legislative History: House reports: No 94-880, Pt. I and No. 94-880, Pt. 2, accompanying H.R. 11656 (Comm. on Government Operations) and No. 94-1441 (Comm. of Conference). SENATE REPORTS: No. 94-354 (Comm. on Government Operations), No. 94-381 (Comm. on Rules and Administration) and No. 94-1178 (Comm. of Conferences). CONGRESSIONAL RECORD: Vol. 121 (1975) Nov. 5, 6 considered and passed Senate. Vol. 122 (1976) July 28, considered and passed House, amended, in lieu of H.R. 11656. Aug. 31, House and Senate agreed to conference report. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS: Vol. 12, No. 38 (19760 Sept. 13, Presidential statement. 90 STAT. 1348 Public Law 96-523 "Handicapped Federal Employees, Personal Assistants, Employment Section 2 amends Section 7(d)(1) of FACA Executive Order 12024 94 STAT. 3040 PUBLIC LAW 96-523--DEC. 12, 1980 Travel expenses "(d)(1) In the case of any handicapped employee (including a blind or deaf employee) traveling on official business, the head of the agency may authorize the payment to an individual to accompany or assist (or both) the handicapped employee for all or a portio of the travel period involved. Any payment under this subsection to such an individual may be made either directly to that individual or by advancement or reimbursement to the handicapped employee. Payment limitation. "(2) With respect to any individual paid to accompany or assist a handicapped employee under paragraph (1) of this subsection-- "(A) the amount paid to that individual shall not exceed the limit or limits which the Office of Personnel Management shall prescribe by regulation to ensure that the payment does not exceed amounts (including pay and, if appropriate, travel expenses and per diem allowances) which could be paid to an employee assigned to accompany or assist the handicapped employee; and Section USC 8101 et seq. "(B) that individual shall be considered an employee, but only for purposes of chapter 81 of this title (relating to tort claims). "(e) This section may not be held or considered to prevent or limit in any way the assignment to a handicapped employee (including a blind or deaf employee) by an agency of clerical or secretarial assistance, at the expense of the agency under statutes and regulations currently applicable at the time, if that assistance normally is provided, or authorized to be provided, in that manner under currently applicable statutes and regulations.". (b) The item relating to section 3102 in the analysis of chapter 31 of title 5, United States Code, is amended to read as follows: "3102 Employment of personal assistants for handicapped employees, including blind and deaf employees". (c)(1) Section 604(a)(16)(A) of title 28, United States Code, is amended by striking out "3102" and inserting in lieu thereof "3102(b)". A[?] p. 3039 (2) Section 401(b)(1) of title 39, United States Code, is amended by striking out "3102 (employment of reading assistants for blind employees and interpreting assistants for deaf employees)," and inserting in lieu thereof "section 3102 (employment of personal assistants for blind, deaf, or otherwise handicapped employees),". Sec. 2. Section 7(d)(1) of the Federal Advisory Committee Act (5 U.S.C. App.) is amended by striking out "and" at the end of subparagraph (A), by striking out the period at the end of subparagraph (B) and inserting "; and" in lieu thereof, and by adding at the end thereof the following new subparagraph: "(C) such members-- 29 USC 791, A[?] p. 3039 "(i) who are blind or deaf or who otherwise qualify as handicapped individuals (within the meaning of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 794)), and "(ii) who do not otherwise qualify for assistance under section 3102 of title 5, United States Code, by reason of being an employee of an agency (within the meaning of section 3102(a)(1) of such title 5), may be provided services pursuant to section 3102 of such title 5 while in performance of their advisory committee duties.". Effective date. Section USC 3102 note. Sec. 3. The amendments made by this Act shall take effect sixty days after the date of the enactment of this act. Sec. 4. (a) Section 8832 of title 5, United States Code, is amended by adding at the end thereof the following new subsection" Ch. 84 Department of Energy42 Section 7234 General Schedule wider section 5332 of Title 5 for persons in Government service employed intermittently. (Pub.L. 95-91, Title VI. Section 623. Aug. 4, 1977. 91 Stat. 598.) Historical Note Legislative History. For legislative history and purpose of Pub.L. 95-91, see 1977 U.S. Code Cong. and Adm.News, p. 854. Section 7234.Advisory committees (a) The Secretary is authorized to establish in accordance with the Federal Advisory Committee Act such advisory committees as he may deem appropriate to assist in the performance of his functions. Members of such advisory committees, other than full-time employees of the Federal Government, while attending meetings of such committees or while otherwise serving at the request of the Secretary while serving away from their homes or regular places of business, may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of Title 5 for individuals in the Government serving without pay. (b) Section 776 of Title 15 shall be applicable to advisory committees chartered by the Secretary, or transferred to the Secretary or the Department under this chapter except that where an advisory committee advises the Secretary on matters pertaining to research and development, the Secretary may determine that such meeting shall be closed because it involves research and development matters and comes within the exemption of Section 552b(c)(4) of Title 5. (Pub.L. 95-91, Title VI. Section 624. Aug 4, 1977. 91 Stat. 598.) Historical Note Reference in Text. The Federal Advisory Committee Act, referred to in subsec. (a), is Pub.L. 92-163, Oct. 6, 1972, 86 Stat. 770, which is set out in Appendix I of Title 5. Government Organization and Employees. "This chapter", referred to in subsec. (b). was in the original "this Act", meaning Pub. L. 95-91, Aug. 4, 1977, 91 Stat. 565, known as the Department of Energy Act, which is classified principally to this chapter. For complete classifications of this Act to the Code, see Short Title note under section 7101 of this title and Table 5. Termination of Advisory Committees. Advisory Committees established after Jan. 5, 1973, to terminate not later than the expiration of the two year period beginning on the date of their establishment by the President or an officer of the Federal Government, such committee is renewed by appropriate action prior to the expiration of such two-year period, or in the case of a committee established by the Congress, its duration is otherwise provided for by law, see section 14. of Pub. L. 92-463, Oct. 6, 1972, 86 Stat. 770, set out in the Appendix to title 5, Government Organization and Employees. Legislative History. For legislative history and purpose of Pub.L. 95-91, see 1977 U.S. Code Congrs. and Adm. News, p. 854. Cross References Applicable of this section, except as inconsistent, to Solar Photovoltaic Energy Advisory Committee, see section 5588 of this title. 335 THE PRESIDENT Relating to the Transfer of Certain Advisory Committee Functions Executive Order 12024 December 1, 1977 By virtue of the authority vested in me by the Constitution and statutes of the United States of America, including the Federal Advisory Committee Act, as amended (5 U.S.C. App. I), Section 301 of Title 3 of the United States Code, Section 202 of the Budget and Accounting Procedures Act of 1950 (31 U.S.C. 581c), and Section 7 of Reorganization Plan No. 1 of 1977 (42 FR. 56101 (October 21, 1977)), and as President of the United States of America, in accord with the transfer of advisory committee functions from the Office of Management and Budget to the General Services Administration provided by Reorganization Plan No. 1 of 1977, it is hereby ordered as follows: SECTION 1. The transfer, provided by Section 5F if Reorganization Plan No. 1 of 1977 (42 FR 56101), of certain functions under the Federal Advisory Committee Act, as amended (5 U.S.C. App. I), from the Office of Management and Budget and its Director to the Administrator of General Services is hereby effective. Sec. 2. There is hereby delegated to the Administrator of General Services all the functions vested in the President by the Federal Advisory Committee Act, as amended, except that, the annual report of the Congress required by Section 6(c) of that Act shall be prepared by the Administrator for the President's consideration and transmittal to the Congress. Sec. 3. The Director of the Office of Management and Budget shall take all actions necessary or appropriate to effectuate the transfer of functions provided in this Order, including the transfer of funds, personnel and positions, assets, liabilities, contracts, property, records, and other times related to the functions transferred. Sec. 4. Executive Order No. 11769 of February 21, 1974 is hereby revoked. Sec. 5. Any rules, regulations, orders, directives, circulars, or other actions taken pursuant to the functions transferred or reassigned as provided in this Order form the Office of Management and Budget to the Administrator of General Services, shall remain in effect as if issued by the Administrator until amended, modified, or revoked. Sec. 6. This Order shall be effective November 20, 1977. [Jimmy Carter] The White House December 1, 1977 [Letterhead: Department of Energy, Washington. DC 20585] April 30, 1993 MEMORANDUM FOR:Howard H. Raiken Advisory Committee Management Officer FROM: Assistant General Counsel for General Law SUBJECT: Representation of Foreign Interests by Advisory Committee Members BACKGROUND The Office of Legal Counsel (OLC), Department of Justice, in an April 29, 1991 letter to the Deputy Counsel to the President, rendered an opinion covering members of advisory committees who "also represent foreign governments, businesses, or individuals. The OLC opinion concluded that no member of a Federal advisory committee may also be a registered agent of a foreign principal under the Foreign Agents Registration Act (FARA) unless the (member is a special Government employee exempted by the appointing agency, and that no member of a committee may hold a position in a foreign government or represent a foreign government for pay. This opinion will impact Department of Energy (DOE) administration of advisory committees. This memorandum is only a brief summary of the.OLC opinion, and each specific situation should be reviewed by this office. OLC LEGAL OPINION A. The Foreign Agents Registration Act "The Foreign Agents Registration Act of 1938 (FARA, 22 U.S.C. SS 611-621) requires individuals or firms who serve as agents for foreign governments, political organizations, business organizations, or individuals, to register with the U.S. Attorney General. 22 U.S.C. Section 612. There are criminal penalties for a public official, who is defined as an "officer or employee or person acting for or on behalf of. . . any . . . agency. . . in any official function," who acts as an agent of a foreign principal. 18 U.S.C. 219(a), and Section 219(c). OLC has opined that members of advisory committees are subject to the criminal penalties in 18 U.S.C. Section 219(a) because advisory committee members are included within the definition of "public official." 3. The Emoluments Clause The OLC opinion also states that absent congressional consent, the Emoluments Clause of the Constitution independently bars any agent of a foreign government from being a member of a federal 2 advisory committee. The Emoluments Clause provides that, absent congressional consent, a person holding an "Office of Profit or Trust" under the United States may not hold any position in, or receive any payment from, a foreign government. U.S. CONST. art. I, Section 9, cl. 8. The OLC opinion states that federal committee members hold offices of profit or trust within the meaning of the Clause. Accordingly, an individual who is an agent of a foreign government is prohibited from serving on an advisory committee unless Congress has consented to such service. C. Exemptions Section 219(b) allows a federal agency to exempt a "special Government employee" from section 219(a) when the head of the employing agency certifies that such employment is required in tee national interest. The term "special Government employee" is not defined in 18 U.S.C. Section 219(b), but is defined in 18 U.S.C. Section 202(a) to include "an officer or employee of the executive . .. branch of the United States Government, . . . who is retained, designated, appointed or employed to perform, with or without compensation, for not to exceed one hundred and thirty days during any period of three hundred and sixty five consecutive days, temporary duties either on a full-time or intermittent basis. . ." The OLC opinion states the definition of "special Government employee" as used in section 219(b) must be understood to have the same meaning. However, the exemption in section 219(b) is not available for agents of foreign governments ACTIONS TO BE TAKEN BY DOE Advisory committee contacts should notify their respective members that, if they are currently registered as a foreign agent under FARA, they should promptly resign from the committee or terminate foreign agent registration. If a current or proposed committee member is a special Government employee, he or she should contact the DOE committee contact for guidance on the availability of a waiver. Furthermore, precautionary measures " should be taken to ensure that no prospective appointee is an agent of a foreign government. [SIGNATURE] Ralph D. Goldenberg GSA's Advisory Committee Management Rulemaking o Final Rule published in Federal Register and became effective on October 5, 1989, which amends several sections of the December 2, 1987, final Rule, to provide additional administrative and interpretive guidelines and management controls for federal agencies concerning the implementation of FACA o Final Rule published in federal Register on December 2, 1987, and became effective on January 4, 1988 which - Implemented FACA - Provides administrative and interpretive guidelines and management controls for federal agencies on implementing FACA o Defines the policies, establishes minimum requirements, and provides guidance and procedures on the establishment, renewal, operation, administration, reporting, and duration of advisory committees o Describes the roles and responsibilities of the: - Committee Management Secretariat - Agency Heads - Advisory Committee Management Officer - Designated Federal Official o Provides guidelines for compensation and expense reimbursement of advisory committee members, staffs, and consultants Federal Register Cover Sheet, Thursday, October 5, 1989 Part II General Services Administration 41 CFR Part 101-6 Federal Advisory Committee Management; Final Rule 41214 Federal Register I Vol. 54./Thursday, October 5, 1989 Rules and Regulations GENERAL SERVICES ADMINISTRATION CFR Part 101-6 Federal Advisory Committee Management Agency: Office of Administration ACTION: Final rule. SUMMARY: This Final rule provides additional administrative and Interpretive guidelines and managing controls for Federal agencies concerning the implementation of the Federal advisory Committee Act as amended (5 U.S.C. App.) (hereinafter "the Act"q. In a previous issue of the Federal Register, GSA published an initial final rule on the management of Federal advisory committees (52 FR 45925, December 2, 1987). This new final rule revises the current rule to improve further the management and use of Federal advisory committees in the Executive Branch of the Federal Government. These revisions: (1) Clarify the guidelines applicable to achieving committee memberships which are balanced in a way that is fair and consistent with Section 5(b) of the Act: (2) add new language which cross references regulations relating to federal conflict-of-interest statutes and standards of conduct within the final rule: (3) clarify the procedures for transmitting follow-up reports to the Congress as required by section 6(b) of the Act on Presidential advisory committee recommendations: and (4) provide that annual year end fiscal year reports to GSA sh all also include information requested to carry out the annual comprehensive review required by Section 7(b) of the Act corrections of minor nonsubstantive errors in the text of the original final rule have also been made. EFFECTIVE DATE: October 5, 1989. ADDRESSES. General Services Administration, Committee Management Secretariat (CTM), Washington DC 20405. Copies of the two comments received are available for public inspection in Room 6206 of the General Services Building, 18th and F Streets, NW, Washington, DC FOR FURTHER INFORMATION CONTACT. Charles F. Howton, Senior Committee Management Specialist Committee Management Specialist Office of Management Services, Office of Administration General Services Administration Washington DC 20405 (202) 523-4884. SUPPLEMENTARY INFORMATION Background GSA's authority for administering the Act is contained in section 7 of the Act and Executive Order 14 (42 FR 81445, 3 CFR 1977 Comp p. 158). Under Executive Order 12024 the President delegated to the Administrator of General Services all of the functions vested in the President by the Act a: amended except that the Annual Report to the Congress required by section 6(c) shall be prepared by the Administrator for the Presidents consideration and transmittal to the Congress Discussion of Comments GSA published a notice of proposed rulemaking in the Federal Register on the management of Federal advisory committees. With a 60-day comment period ending on February 28 1989 (53 FR 53022, December 30, 1988). No Federal agency submitted substantive recommendations. Two non-Federal commenters responded in writing and were highly supportive of the proposed rule, stating, for example, that "The proposed rule provides greater guidance to agencies ***" and that "The changes proposed by GSA represent a major improvement over existing rules.' both commenters offered suggestions for improving two sections of the proposed rule, both of which pertained to provisions relating to balanced membership of advisory committees. These comments discussed three recommendations made in relation to 101-6.1007(b)(2)(iii) and to Section 101-6.1015(a)(t) of the proposed rule. The disposition of these recommendations is addressed as follows: Require that Agencies Include in Their Balanced Membership Plans a Description of Plans To Attain and maintain Fairly Balanced Membership One commenter stated that the flail rule should require agencies to describe plans to maintain fairly balance membership since * * * "advisory committees undergo changes from the initial composition through routine membership rotations or the resignation and replacement of member GSA agrees that advisory committees often have changing membership composition. However, section 14(a)(2)(A) of the Act provides that advisory committees established by agencies shall terminate after two years unless renewed by appropriate action. In Section 101- 6.1029(c) of the original Final rule, GSA requires qt an agency head who intends to renew a committee comply with the provisions of Section 101-6.1007 of the final rule duplicating procedures for establishment. The renewing agency must provide a description of its plan to attain fairly balanced membership an a biennial basis and therefor must address at the time of renewal, any changes to the position of the committee which may have occurred since its establishment or last renewal. GSA recognizes the merit of this suggestion but believes that the Act and existing rule already provide for agencies to accommodate the requirement for fairly balanced membership. GSA, therefore, has not adopted this recommendation. Require that Agencies Consider and Select a Cross-Section of Certain membership Categories The other commenter was of the opinion that the language in the proposed rule requiring that an agency cider (only) certain categories of potential members seemed to suggest that "so long as an agency has considered a cross-section of views ind interests In the course of putting a committee together, it can ultimately select any composition it wants, including one which is one-sided and balanced" GSA does not believe that the guidance provided in the rule necessarily will cause agencies to adopt his perceived course with regard to membership selection leading to the results suggested by this commenter. In any case, Section 101-6.1015(a)(1) of the final rule will now require the agency to publish in advance in the federal Register its description of its plan to attain fairly balanced membership allowing for public comments which could include those offered by any interested party who might disagree that the committee will be fairly balanced. Furthermore, since the eventual selection of members for the composition of an advisory committee established under this provision rests with the agency head, GSA does not believe that the final rule can compel an agency to make any particular membership selection GSA has, therefore, not adopted this recommendation. Require that an Agency's Federal Register Notice of Establishment Solicit the Proposal of specific Nominees for Inclusion on a Committee With regard to the Federal Register notice of establishment required by Section 101-6.1015(a)(1) of the final rule, the previous commenter also suggested that * * * "by requiring agencies to give the public an opportunity to comment on the plan for attaining membership, including by proposing specific nominees for Federal Register / Vol. 54, No. 192 / Thursday, October 5, 1989/ Rules and Regulations 41215 inclusion on the committee * * * (that) This would be invaluable to the public and would be of great benefit to agencies, because it would ensure that they would have the most information possible about potential committee members. For the following reasons, GSA has not adopted this suggestion. First, a notice of establishment normally contains the name and telephone number of the agency officially responsible for responding to questions from, or for receiving comments provided by, any interested persons. Such comments can include proposals for specific nominees for membership on a committee. Second notices of establishment frequently are published by an agency prior to the election of members, and the agency would have the opportunity to consider the commenters suggestions of potential members. Even if an agency has chosen the members of committee prior to the publication of the notice, it can make changes to the membership at any time during the life of the committee. Third, GSA is of the opinion that the overall purpose of the Federal Register notice of establishment, which in accordance with Section 101-6.1015(a)(2) of the final rule shall appear at least 15 days before the filing of the committee's charter, is to provide the public an opportunity to comment on the necessity or any other aspect of the proposed committee. Additional Information The guidelines contained in this final rule with respect to Section 101-6.1008(d). Wherein GSA may solicit the assistance _of the Office of Management and Budget in assuring the completion of follow up reports required by section 6(b) of the Act, were developed by GSA after consultation with that agency. Similarly, the guidelines contained in this final rule with respect to Section 101-6.1009(j), wherein an agency head shall ensure that the interests and affiliations of advisory committee members are reviewed consistent with regulations published by the Office of Government Ethics, were developed by GSA after consultation with that agency. Executive Order 11 GSA has determined that this final rule is not a major rule for the purposes " of Executive Order 12291 of February 17, 1981 because it will not result in an annual effect on the economy of $100 million or more, will not cause a ma or increase in costs to consumers or others, and will not have significant adverse effects. GSA has based all administrative decisions on this final rule on adequate information concerning the need for and consequences of this final rule. GSA has also determined that the potential benefits to society from this final rule far outweighs the potential costs, has maximized the net benefits, and has chosen the alternative involving the least cost to society. Regulatory Flexibility Act These regulations art not subject to the regulatory flexibility analysis or other requirements of 5 U.S.C. 603 and 604. List of Subjects in 41 CFR Part 101-4 Civil Rights, Government property management, Grant programs intergovernmental relations, Surplus Government property, Relocation assistance, Real property acquisition, Federal advisory committees. Accordingly, 41 CFR part 101-6 is amended as follows: PART 101-6--MISCELLANEOUS Regulations 1. The authority citation for 41 CFR part 101-6 continues to read as follows: Authority: Sec. 205(c), 63 Stat. 390L 40 U.S.C. 486(c): sec. 7, 5 U.S.C., App.; and E.O. 12024, 3 CRF 1977 Comp. p. 158. 2. Section 101-6.1001 is amended by revising paragraph (a) to read as follows: Section 101-6.1001. Scope (a) This subpart defines the policies, establishes minimum requirements, and provides guidance to agency management for the establishment, operation, administration, and duration of advisory committees subject to the Federal Advisory Committee Act, as amended. Reporting requirements which keep the Congress and the public informed of the number, purpose, membership activities, and cost of these advisory committees are also included. 3. Section 101-6.1002 is amended by revising paragraph (c) to read as follows: Section 101-6.1002 Policy. (c) An advisory committee shall be fairly balanced in its membership in terms of the points of view represented and the functions to be performed; and 4. Section 101-6.1007 is amended by revising the introductory text of paragraph (b)(2) and paragraph (b)(2)(iii) to read as follows: Section 101-6.1007. Agency procedures for establishing advisory committees. (b) * * * (2) Submit a letter and the proposed charter to the Secretariat proposing to establish or use, reestablish, or renew an advisory committee. The letter shall include the following information: (iii) A description of the agency's plan to attain fairly balanced membership. The plan will ensure that, in the selection of members for the committee, the agency will consider a cross-section of those directly affected, interested, and qualified as appropriate to the nature and functions of the committee. Committees requiring technical expertise should include persons demonstrated professional or personal qualifications and experience relevant to the functions and tasks to be performed. 5. Section 101-6.1006 is amended by adding paragraph (d) to read as follows: Section 101-6-1008 The role of GSA. (d) The Secretariat shall assure that follow-up reports required by section 6(b) of the Act are prepared and transmitted to the Congress as directed by the President either by his delegate, by the agency responsible for providing support to a Presidential advisory committee, or by the responsible agency or organization designated pursuant to paragraph (c) of Section 101- 6.1011. In performing this function, GSA may solicit the assistance of the Office of Management and Budget and of the appropriate organizations, as deemed appropriate. 6. Section 101-6.1009 is amended by revising paragraphs (e), (h) and (i), and by adding paragraphs (j) and (k) to read as follows: Section 101-6.1009 Responsibilities of an agency head. (e) A review, at least annually of the need to continue each existing advisor committee, consistent with the public interest and the purpose and functions of each committee. (h) The opportunity for reasonable public participation in advisory committee activities: (i) That the number of committee members is limited to the fewest necessary to accomplish committee objectives: (j) That the interests and affiliations of advisory committee members are reviewed consistent with regulations published by the Office of Government 41216 Federal Register / Vol. 54. No. 192 / Thursday, October 5, 1989/ Rules and Regulations Ethics in CFR parts 734, 735, and 737, and additional requirements, if any, established and by the sponsoring agency pursuant to Executive Order 12874, the conflict-of-interest statutes, and the Ethics in Government Act of 1978, as amended; and (k) Unless otherwise specified by the President the preparation and transmittal of a follow-up report to the Congress detailing the disposition of the public recommendations of a Presidential advisory committee supported by the agency, in accordance with sections 6(b) of the Act 7. Section 101-6.1011 is amended by revising paragraphs (a) and (b); and by adding paragraph (c) to read as follows: Section 101-6.1011 Responsibilities of the chairperson of an independent Presidential advisory committee. (a) Consult with the Administrator concerning the role of the Designated Federal Officer and Committee Management Officer: (b) Fulfill the responsibilities of an agency head as specified in paragraphs (d), (h) and (j) of Section 101-6.1009; and (c) Unless otherwise specified by the President consult with the -- Administrator regarding the designation of an agency or organization responsible for implementing section 6(b) of the Act. 8. Section 101-6.1015 is amended by revising paragraph (a) (1) to read as fallow:: Section 101-6.1015 Advisory committee information which must be published in the Federal Register. (a)* * * (1) A notice in the Federal Register is required when an advisory committee, except a committee specifically directed by law or established by the President by Executive Order, is established, used, reestablished, or renewed upon receiving notification of the completed review from the Secretariat in accordance with paragraph (c) of Section 101-6.1007, the agency shall publish a notice in the Federal Register that the committee is being established, used, reestablished, or renewed. For a new committee such notice shall also describe the nature and purpose of the committee and the agency's plan to attain fairly balanced membership, and shall include a statement that the committee is necessary and in the public interest. 9. Section 101-6.1035 is amended by revising paragraphs (a) and (b) to read as follows: Section 101-6.1035 Reports required for advisory committees. (a) Within one year after a Presidential advisory committee has submitted a public report to the President a follow-up report will be prepared and transmitted to the Congress as determined under paragraph (d) of Section 101-6.1008, detailing the disposition of the committees recommendations in accordance with section 6(b) of the Act. Reports shall be consistent with specific instructions issued periodically by the Secretariat. (b) The President's annual report to the Congress shall be prepared by GSA based on reports filed on a fiscal year basis by each agency consistent with the information specified in section 6(c) of the Act Reports from agencies shall be consistent with instructions provided annually by the Secretariat Agency reports shall also include information requested to enable the Secretariat to carry out the annual comprehensive review of each advisory committee as required by section 7(b) of the Act. These reports have been cleared in accordance with FIRMR Subpart 201- 45.6 in 41 CFR chapter 201 and assigned interagency report control number 0304-GSA-XX. Dated: August 23, 1989. Richard C. Austin. Acting Administrator of General Services. [FR Doc. 89-23455 Filed 10-4-89; 8:45 am] Billing Code 6620-34-M GENERAL SERVICES ADMINISTRATION 41 CFR Part 101-6 [FPMR Amendment A-40] Federal Advisory Committee Management AGENCY: Office of Administration, GSA. ACTION: Final rule. SUMMARY: This final rule provides administrative and interpretive guidelines and management controls for Federal agencies concerning the implementation of the Federal Advisory Committee Act, as amended (5 U.S.C. App.) (hereinafter the Act). In a previous issue of the Federal Register, GSA published an interim final rule on the management of Federal advisory committees and requested comments (48 FR 19324, April 28, 1983). Additional comments were requested through an advance notice of proposed rulemaking published in the Federal Register on February 13, 1987 (52 FR 4831). A new proposed rule, removing suggested limitations on the size of Federal advisory committees, eliminating requirements for the provision of updated committee membership data on a quarterly bases and "justifications on the compensation of committee members, and reflecting other actions to streamline compliance with the Act was published in the Federal Register on May 19, 1987 (5 FR 18774), with a 90-day comment period ending on August 17, All comments received were considered in formulating this final rule which is intended to improve the management and use of Federal advisory committees in the Executive Branch of the Federal Government. EFFECTIVE DATE: January 4, 1988. ADDRESS: General Services Administration. Committee Management Secretariat (CTM), Washington, DC 20405. Copies of all comments received are available for public inspection in Room 7030 of the General Services Building, 18th and F Streets NW, Washington, DC FOR FURTHER INFORMATION CONTACT: James L. Dean, Director, Committee Management Secretariat, Office of management Services, Office of Administration, General Services Administration, Washington, DC 20405, (202) 523-1343 SUPPLEMENTARY INFORMATION: Background GSA's authority administering the Act is contained in section 7 of the Act and Executive Order 12024 (42 FR 61445, 3 CFR 1977 Comp. p. 158). Under Executive Order 12024, the President delegated to the Administrator of General Services all of the functions vested in the President by the Act as amended except that the Annual Report to the Congress required by Section 6(c) shall be prepared by the Administrator for the President's consideration and transmittal to the Congress. Discussion of Comments As stated above, GSA issued a proposed rule on the management of Federal advisory committees in the Federal Register and invited comments. Nineteen commenters responded. Several commenters had no substantive recommendations and were fully supportive of the proposed rule. Twelve others offered suggestions for improving numerous sections and the disposition of these recommendations is addressed as follows: Clarify the Distinction Between Operational as Opposed to Advisory Committees "Two commenters suggested that further guidance in the final rule was necessary to assist agencies in interpreting what constitutes primarily an operational committee as opposed tub one which performs only advisory functions, in order to determine coverage under the Act. Accordingly, GSA has added language to Section 101-6.1004(g) in the final rule which more fully describes what, in general, constitutes operational functions. While the legislative history of the Act contains the concept for the exclusion of operational committees, there is no precise legal definition of operational committee in either the Act or its legislative history. GSA believes that operational functions to be performed by an advisory committee must be so authorized by law, since the making or implementation of Government decisions is normally reserved to Federal officials as opposed to advisory committees. Additionally, sections 2(b)(6) and 9(b) of the Act provide that, unless specifically provided by statute or Presidential directive, advisory committees may not make determinations or express policy in matters under their consideration. Given the additional language in this final rule, GSA believes that it will be easier for agencies to identify committees which perform primarily operational functions. Provide for Coverage Under the Act When Certain Groups Provide Consensus or Recurrent Advice One commenter stated that the language in Section 101- 6.1004 (i) and (ii) of the proposed rule was too tentative to "specifically provide that acceptance of consensus advice or advice on a recurring basis from certain groups were determinants for coverage under the Act GSA has accepted these questions and has strengthened the wording of these sections in the final rule. Agencies are, in effect cautioned than the Act would apply when an agency accepts the deliberations of a group as a source of consensus advice, when heretofore the agency had been obtaining the advice of attendees on an individual basis only. Also, when an agency recurrently uses a group at the groups request, as a source of advice on a preferential basis, exclusion of average under the Act may become questionable even if the group continues only to express its own views without further solicitations from Federal officials. Strengthen the Provision for Excluding Coverage of So-Called Fact-Finding Subgroups Several commenters were of the opinion that so-called fact- finding subgroups should continue to be excluded from coverage under the Act. However, it was their general consensus that Section 101-6.1004(k) of the proposed rule was less than clear in including both the members of an advisory committee and any of its subcommittee members in this exclusion. One commenter felt strongly that this exclusion should apply to all members of an advisory committee and Its subcommittees, whether or not the subcommittee members are members of the parent committee, GSA agrees with this recommendation since it parallels the language and intent expressed in Section 101-6.1007(b)(3) and (4) which clarify certain requirements applicable to subcommittees. GSA has reworded the definition of "Advisory Committee in Section 101.6.1003 of the final rule to follow more precisely the language in section 3(2) of the Act and has been more consistent in the use of the term subcommittee in Section 101-6.1004(k) and Section 101-6.1007(b)(3) of the final rule. Another commenter felt that the language in Section 101- 6.1004(k) was not strong enough to preclude fact finding subgroups from preparing what ultimately becomes the advice and recommendations of the chartered advisory committee, as opposed Federal register/ VOL. 52. No. 231/ Wednesday. December 2, 1987/ Rules and Regulations 45927 to simply gathering information and analyzing facts for the committee. GSA has modified the language in this provision to clarify that the results of such fact-finding activities are to be subject to the deliberation of a chartered advisory committee, or a subcommittee whensubsequently conducting a meeting under the Act. Provide Additional Guidance on the Requirements Applicable to Subcommittee. One commenter requested that the final rule provide additional guidance on the applicability of various requirements of the Act to subcommittees. Since the definition of "advisory committee" in section 3(2) of the Act specifically includes***any subcommittee or other subgroup thereof***, GSA believes all requirements of advisory committees in the act also apply to subcommittees. Furthermore, the Act itself contains no provisions for subcommittees which differ from those applicable to a full or parent committee. Absent more specific language in the Act, additional guidance by GSA which might serve to differentiate any requirements of subcommittees from those of advisory committees would be inconsistent with the Act. Exclude From Coverage Under The Act Groups Convened by Agencies on an Ad Hoc Basis One commenter recommended that the final rule contain an exclusion from coverage under the Act for so-called ad hoc groups lacking formal organization, structure or continuing existence: convened by an agency to obtain views on particular matters of immediate concern. GSA is of the opinion that such an exclusion is not appropriate since the Act itself neither defines nor specifically excludes such groups. In fact, section 6(c) of the Act, providing for the President's annual report to the congress, requires a statement for each advisory committee.*** of whether it is an ad hoc or continuing body. Accordingly, GSA has not accepted the recommendation to exclude ad hoc groups since GSAA believes that the language of section 6(c) of the Act evidences the intent of the Congress that a group is not to be excluded from coverage merely because it is convened on an ad hoc, or temporary basis. Provide That Agencies May Exercise Policy Decisions in Issuing Exclusions for One-Time Meetings In a comment directed toward GSA's position stated in the discussion of prior comments in the proposed rule(see 52 Information:), a commenter suggested that the final rule should not preclude agencies from issuing an exclusion for one-time meetings. This commenter felt that GSA's opinion, that such an exclusion in the rule was not appropriate in view of the limited litigation history, should not bar agencies from issuing such exclusions. In fact, it was the opinion of this commenter that the absence of litigation history was not sufficient reason to limit management discretion. GSA continues to believe that a one-time meeting exclusion in the final rule would be inconsistent with the Act, and does not intend to provide either a direct exclusion in &101-6.1004 or provide that such an decision may be left to an agency, thereby implying GSA's support for such exclusions. Accordingly, GSA reiterates its opinion that in the absence of any judicial precedent to the contrary, meetings or groups that take place or meet only once should not be excluded from the Act's coverage solely on this basis. Eliminate the Agency Requirement To Assess Duplication of Advisory Committees on a Governmentwide Basis Two commenters pointed out the impractibility of requiring an agency to assess duplication of effort of already existing committees on a Governmentwide basis as opposed to an individual agency basis. Both commenters further asserted that this Governmentwide role could be performed by GSA during its own review process subsequent to the receipt of the agency's proposal in accordance with &101-6.1007(b) of the rule. Since GSA is responsible for reviewing and maintaining data on all advisory committees in every agency pursuant to several provisions of the Act, GSA agrees that it can effectively perform this function. GSA can also provide agencies, on request,., information on other agency committees relative to potential duplication of effort issues. GSA has rewritten the language in & 101-6.1007 (a) and (b)(2)(ii) of the final rule to reflect this concept by providing that an agency only consider the functions of a proposed committee for duplication of existing committees in the same agency. Include the Agency's Plan for Balanced Membership in Federal Register Notices and Charters One commenter suggested that an agency's plan to obtain balanced membership for a proposed advisory committee, to be submitted in conjunction with the review required by &101.6.1007(b) of the proposed rule, should be included in both the Federal register notice of establishment and in the final charter. GSA has not adopted this suggestion for two reasons. first, the agency letter proposing the establishment of an advisory committee under general agency authority already contains this information , as specified by & 101-6.1007(b)(2)(iii) of the rule, and this letter would be a public record following the establishment of the advisory committee. Second, inclusion of this information in the federal Register notice of establishment and the filed charter is not specifically required under sections 9(a)(2) and(c) of the Act. For purposes of this comment, GSA has not altered &101-6.1007(b)(1) or &101- 6.1015(a)(1) of the final rule. Provide Additional Guidance on Balanced Representation and Selection of Members One commenter was concerned that the proposed rule did not contain sufficient guidance on balanced representation and the selection of members, and suggested that the final rule provide additional instructions for agencies to follow in these areas, GSA recognizes that the guidelines in the proposed rule are limited to the language of the Act. However, GSA believes that the provisions of section (5)(c) of the Act are broad enough to allow agency discretion in determining advisory committee representation and membership relative to the applicable statutes. Executive Orders, and the needs of the agency responsible for the committee. Accordingly, GSA will retain the proposed guidelines in the final rule based on the language of the Act. Provide Revised Recordkeeping Requirements Two commenters, directly or indirectly, expressed concern over the recordkeeping requirements contained in the proposed rule. One commenter observed that it was not possible for the Committee Management officer (CMO) to ensure compliance with sections 10(b),12(a) and 13 of the Act, as required by &101- 6.1017. Section 10(b) of the Act requires that the records of an advisory committee shall be available at a single location at the advisory committee or the agency to which it reports during the committee's existence. This commenter suggested that GSA relax the requirement of &101-6.1017. Another commenter, taking a different view, complained of the haphazard approach by agencies to the public 45928 Federal Register/ Vol. 52 No. 231/ Wednesday, December 2, 1987/ Rules and Regulation availability and retention of advisory committee records. This commenter recommended that the regulations be strengthened in these aspects. For the following reasons. GSA has determined not to adapt the specific suggestions of either commenter.First, section 8(b)(2) of the Act provides that the CMO shall "assemble and maintain the reports, records, and other papers of any such committee during its existence." When sections 8(b)(2) and 10(b) are read together, it is clear that the records of an advisory committee are to be available at a single location and it is the CMO who is responsible for ensuring that this is accomplished. GSA has therefore decided against relaxing the requirements of &1O1-6.1O17 in the final rule. The commenter who expressed concern over the haphazard approach to recordkeeping suggested that the final rule should: (1) Require agencies to keep committee records available for a certain period of time after a committee has terminated. and (2) address the perceived unavailability of the deliberative process privilege under the fifth exemption of the Freedom of Information Act (FOIA) to advisory committee records. For the following reasons, GSA has not adopted these comments. First, pursuant to the National Archives and Records Administration Act of 1984, as amended. Pub. L 98-497, the Archivist of the United States is responsible for records management in the Federal Government, including the issuance of regulations and guidance for records retention and disposition, as well as the process for identifying records appropriate for transfer to the permanent Archives of the United States. Since the Federal Advisory Committee Act is silent on records disposition for advisory committees, we see no reason or basis for GSA to alter normal Governmentwide procedures in this area which are the responsibility of the Archivist of the United States. Second, the commenter suggested that the Government's settlement of the law suit involving records of the Attorney General's Commission on Pornography was a concession that the deliberative process privilege under the fifth exemption of FOIA does not apply to advisory committees. Since cases may he settled for a variety of reasons which do not involve a decision on the merits. GSA does not believe that the mere settlement of a matter in litigation is dispositive of the legal issues raised in the litigation. Accordingly, GSA has determined not to adopt this suggestion, Provide Guidance to Agencies Concerning the Applicability of the Anti-Lobbying Statute and Hatch Act to Advisory Committee Members With respect to &101-6.1033 of the proposed rule, one commenter stated that unless provided by statute, agencies should not compensate advisory committee members if they provide policy advice on proposals for legislation because this compensation would violate the anti-lobbying statute.(See 18 U.S.C. 1913). The same commenter also stated that GSA should direct agencies to ensure that any members of an advisory committee who are subject to the Hatch Act (5 U.S.C.7321-7328) are aware of their obligations under that Law. For the following reasons. GSA has adopted neither suggestion. First, GSA does not believe that the traditional activities of an advisory committee fall within the scope of the activities which 18 U.S.C. 1913 was designed to protect against Second, the Federal Advisory Committee Act itself does not reference the Hatch Act and there is already a body of regulations on political activities by Federal employees which has been issued by the Office of Personnel Management. 5 CFR Part 733. Also, the Special Counsel of the Merit Systems Protection Board, who has responsibilities for investigation and administrative prosecution of alleged Hatch Act violations, issues advisory opinions on Hatch Act questions. GSA sees no need to issue regulations in this area when there are already regulations in place and an administrative mechanism available through agencies with greater responsibilities in this area than GSA. Clarify the Procedures for Transmitting Follow-up Reports on Presidential Advisory Committee Recommendations One commenter requested clarification in &101-6.1O35(a) of the proposed rule on the procedures required for transmittal of follow-up reports to the Congress on the disposition of Presidential advisory committee recommendations, as required by section 6(b) of the Act. GSA has decided to retain the proposed language in the final rule without further modification at this time. GSA agrees that there has been some confusion as to whether the agency responsible for supporting the Presidential advisory committee, or GSA, should transmit the report. GSA intends to propose further guidance in a future revision to this final rule following more consultation with the affected agencies Procedural Administrative Comments The final rule incorporates numerous technical and procedural recommendations made by several commenters, particularly in the following sections. Illegible Table Federal Register/ Vol. 52 No. 231/ Wednesday, December 2, 1987/ Rules and Regulations 45929 with respect to uniform fair rates of pay for comparable services for members, staffs and consultants of advisory committees have been established after consultation by the Administrator with the Director, Office of Personnel Management. Executive Order 12291 GSA has determined that this final rule is not a major rule for purposes of Executive Order 12291 of February 17, 1981. because it will not result in an annual effect on the economy of $100 million or more, will not cause a major increase in costs to consumers or others, and will not have significant adverse effects. GSA has based all administrative decisions on this final rule on adequate information concerning the need for and consequences of this final rule. GSA has also determined that the potential benefits to society from this final rule far outweigh the potential costs, has maximized the net benefits, and has chosen the alternative involving the least net cost to society. Regulatory flexibility Act These regulations are not subject to the regulatory flexibility analysis or other requirements of 5 U.S.C 603 and 604. List of Subjects in 41 CFR Part 101-6 Civil Rights. Government property management. Grant Programs. Intergovernmental relations. Surplus Government property. Relocation assistance. Real property acquisition. Federal advisory committees. Accordingly, 41 CFR Part 101-6 is amended as follows: PART 101 - 6 MlSCELLANEOUS REGULATIONS 1.The authority citation for 41 CFR Part 101-6 continues to read as follows: Authority: Sec 2O5(c). 63 Stat. 390. 40 U.S.C. 486(c): sec.7.5 U.S.C App: and E.O. 12024.3 CFR 1977 Comp., p. 158 2.Subpart 1O1-6.10- is revised to read as follows: Subpart 101-6.10- Federal Advisory Committee Management Sec. 101-6.1001 Scope. 101-6.1002 Policy 101-6.1003 Definitions 101-6.1OO4 Examples of advisory meetings or groups not covered by the Act or this subpart. 101-6.1005 Authorities for establishment of advisory committees 101-6.1OO6 [Reserved] 101-6.1OO7 Agency procedures for establishing advisory committees 101-6.1008 The role of GSA 101-6.1009 Responsibilities of an agency head. 1O1-6.1010 Reserved 101-6.1011 Responsibilities of the chairperson of an independent Presidential advisory committee. 101-6.1O12 Reserved 101-6.1013 Charter filing requirements 101-6.1O14 Reserved 101-6.1015 Advisory committee information which must be published in the Federal Register. 101-6.1016 Reserved 101-6.1017 Responsibilities of the agency Committee Management Officer. 101-6.1018 Reserved 101-6.1019 Duties of the Designated Federal Officer. 101-6.1020 Reserved 101-6.1021 Public participation in advisory committee meetings.101-6.1022 (Reserved) 101-6.1023 procedures for closing an advisory committee meeting. 101-6.1024 (Reserved) 101-6.1025 Requirement for maintaining minutes of advisory committee meetings. 101-6.1026 (Reserved) 101-6.1O27 Termination of advisory committees. 101-6.1028 (Reserved) 101-6.1029 Renewal and rechartering of advisory committees. 101-6.1030 Reserved 101-6.1031 Amendments to advisory committee charters. 101-6.1032 Reserved 101-6.1033 Compensation and expense reimbursement of advisory committee members, staffs and consultants. 101-6.1034 (Reserved) 101-6.1035 Reports required for advisory committees. &101-6.1001 Scope. (a) This subpart defines the policies, establish minimum requirements, and provide guidance to agency management for the establishment, operation, administration and duration of advisory committees subject to the Federal Advisory Committee Act as amended. Reporting requirements which keep the Congress and the public informed of the number, purpose, membership, activities, and cost of these advisory committees are also induded. (b) The Act and this subpart do not apply to advisory meetings or groups listed in & 101-6.1004. & 101-6.1002 Policy The policy to be followed by Federal departments, agencies, and commissions; consistent with the Federal Advisory Committee Act, as amended, is as follows: (a) An advisory committee shall be established only when it is essential to the conduct of agency business. Decision criteria include whether committee deliberations wi11 result in the creation or elimination of, or change in regulations, guidelines, or rules affecting agency business: whether the information to be obtained is already available through another advisory committee or source within the Federal Government: whether the committee will make recommendations resulting in significant improvements in service or reductions in cost or whether the committee's recommendations will provide an important additional perspective or viewpoint impacting agency operations: (b) An advisory committee shall be terminated whenever the stated objectives of the committee have been accomplished: the subject matter or work of the committee has become obsolete by the passing of time or the assumption of the committees main functions by another entity within the Federal Government: or the agency determines that the cost of operation is excessive in relation to the benefits accruing to the Federal Government: (c) An advisory committee shall be balanced in its membership in terms of the points of view represented and the functions to be performed: and (d) An advisory committee shall be open to the public in its meetings except in those circumstances where a closed meeting shall be determined proper and consistent with the provisions in the Government in the Sunshine Act. 5 U.S.C. 552(b). &101-6.1003 Definitions "Act" means the Federal Advisory Committee Act, as amended, 5 U.S.C., App. "Administrator" means the Administrator of General Services. "Advisory committee" subject to the Act means any committee, board, commission, council, conference, panel, task force, or other similar group, or any subcommittee or other subgroup thereof, which is established by statute, or established or utilized by the President or any agency official for the purpose of obtaining advice or recommendations on issues or policies which are within the scope of his or her responsibilities"Agency has the same meaning as in section 551(1) of Title 5 of the United States Code. "Committee Management Secretariat" ("secretariat"),established pursuant to the Act is responsible for all matters relating to advisory committees, and carries out the Administrators responsibilities under the Act and Executive Order 12024. Committee member means an individual who serves by appointment on an advisory committee and has the 45930 Federal Register / Vol. 5/No.231/ Wednesday, December 2, 1987/ Rules and Regulations all right and obligation to participate in the activities of the committee, including voting on committee recommendations. "Presidential advisory committee" means any advisory committee which advises the President. It may be established by the President or by the Congress, or used by the President in the interest of obtaining advice or recommendations for the President. "Independent Presidential advisory committee" means any Presidential advisory committee not assigned by the President, or the Presidents delegate, or by the Congress in law, to an agency for administrative and other support and for which the Administrator of General Services may provide administrative and other support on a reimbursable basis. "Staff member" means any individual who serves in a support capacity to an advisory committee. "Utilized" (or used), as referenced in the definition of "Advisory committee" in this section, means a committee or other group composed in whole or in part of other than full time officers or employees of the Federal Government with an established existence outside the agency seeking its advice which the President or agency officials adopts, such as through institutional arrangements, as preferred source from which to obtain advice or recommendations on a specific issue or policy within the scope of his or her responsibilities in the same manner as that individual would obtain advice or recommendations from an established advisory committee. &101-6.1004 Examples of advisory meetings or groups not covered by the Act or this subpart. The following are examples of advisory meetings or groups not covered by the Act or this subpart: (a) Any committee composed wholly of full-time officers or employees of the Federal Government: (b) Any advisory committee specifically exempted by an Act of Congress (c) Any advisory committee established or utilized by the Central Intelligence Agency: (d) Any advisory committee established or utilized by the Federal Reserve System: (e) The Advisory Committee on Intergovernmental Relations: (f) Any local civic group whose primary function is that of rendering a public service with respect to a Federal program, or any State or local committee, council, board, commission, or similar group established to advise or make recommendations to State or local t officials or agencies: (g) Any committee which is established to perform primarily operational as opposed to advisory functions. Operational functions are those specifically provided by law, such as making or implementing Government decisions or policy. An operational committee may be covered by the Act if it becomes primarily advisory in nature. It is the responsibility of the administering agency to determine whether such a committee is primarily operational. If so. it would not fall under the requirements of the Act and this Subpart, but would continue to be regulated under relevant laws, subject to the direction of the President and the review of the appropriate legislative committees: (h) Any meeting initiated by the President or one or more Federal official(s) for the purpose of obtaining advice or recommendations from one individual: (i) Any meeting initiated by a Federal official(s) with more than one individual for the purpose of obtaining the advice of individual attendees and not for the purpose of utilizing the group to obtain consensus advice or recommendations. However, agencies should be aware that such a group would be covered by the Act when an agency accepts the groups deliberations as a source of consensus advice or recommendations: (j) Any meeting initiated by a group with the President or one or more Federal official(s) for the purpose of expressing the groups view, provided that the President or Federal official(s) does not use the group recurrently as a preferred source of advice or recommendations: (k) Meetings of two or more advisory committee or subcommittee members convened solely to gather information or conduct research for a chartered advisory committee, to analyze relevant issues and facts, or to draft proposed position papers for deliberation by the advisory committee or a subcommittee of the advisory committee: or (l) Any meeting with a group initiated by the President or one or more Federal official(s) for the purpose of exchanging facts or information. &1O1-6.I005 Authorities for establishment of advisory committees An advisory committee may be established in one of four ways (a) By law where the Congress specifically directs the President or an agency to establish it: (b) By law where the Congress authorizes but does not direct the President or an agency to establish it. In this instance, the responsible agency head shall follow the procedures provided in &101-6.1007: (c) By the President by Executive order: or (d) By an agency under general agency authority in Title 5 of the United States Code or under other general agency- authorizing law. In this instance, an agency head shall follow the procedures provided in &101-6.1007. 101-6.1006 (Reserved) &101-6.1007 Agency procedures for establishing advisory committees. (a) When an agency head decides that it is necessary to establish a committee, the agency must consider the functions of similar committees in the same agency before submitting a consultation to GSA to ensure that no duplication of effort will occur. (b) In establishing or utilizing an advisory committee, the head of an agency or designee shall comply with the Act and this subpart: and shall: (1) Prepare a proposed charter for the committee which includes the information listed in section 9(c) of the Act: and (2) Submit a letter and the proposed charter to the Secretariat proposing to establish or use, reestablish, or renew an advisory committee. The letter shall include the following information: (i) An explanation of why the committee is essential to the conduct of agency business and in the public interest: (ii) An explanation of why the committees functions cannot be performed by the agency, another existing advisory committee of the agency. or other means such as a public hearing: and (iii) A description of the agency's plan to attain balanced membership. For purposes of attaining balance, agencies shall consider for membership interested persons and groups with professional or personal qualifications or experience to contribute to the functions and tasks to be performed. This should be construed neither to limit the participation: nor compel the selection of any particular individual or group to obtain divergent points of view that are relevant to the business of the advisory committee. (3) Subcommittees that do not function independently of the full or parent advisory committee need not follow the requirements of paragraphs (b)(1) and (b)(2) of this section. However, they are subject to all other requirements of the Act. 45931 Federal register/ Vol. 52 No.231/ wednesday, december 2, 1987/ Rules and Regulations (4) The requirements of paragraphs (b)(1) and (b)(2) of this section shall apply for any subcommittee of a chartered advisory committee, whether its members are drawn in whole or in part from the full or parent advisory committee, which functions independently of the parent advisory committee such as by making recommendations directly to the agency rather than for consideration by the chartered advisory committee. (c) The secretariat will review the proposal and notify the agency of GSA's views within 15 calendar days of receipt, if possible,. The agency head retains final authority for establishing a particular advisory committee. (d) The agency shall notify the secretariat in writing that either: (1) The advisory committee is being established. The filing of the advisory committee charter as specified in &101-6.1013 shall be considered appropriate written notification in this instance. the date of filing constitutes the date of establishment or renewal. The agency head shall then comply with the provisions of &101-6.1009 for an established advisory committee. &101-6.1008 The role of GSA. (a) The functions under section 7 of the Act will be performed for the Administrator by the secretariat. The Secretariat assists the administrator in prescribing administrative guidelines and management controls for advisory committees, and assists other agencies in implementing and interpreting these guidelines. In exercising internal controls over the management and supervision of the operations and procedures vested in each agency by section 8(b) of the Act and by &101-6.1009 and &101-6.1017 of this rule, agencies shall conform to the guidelines prescribed by GSA. (b) The secretariat may request comments from agencies on management guidelines and policy issues of broad interagency interest or application to the Federal Advisory committee program. (c) In advance of issuing informal guidelines, nonstatutory reporting requirements, and administrative procedures such as report formats or automation, the secretariat shall request formal or informal comments from agency Committee Management Officers. &101-6.1009 Responsibilities of any agency head. The head of each agency that uses one or more advisory committees shall ensure: (a) Compliance with the Act and this subpart; (b) issuance of administrative guidelines and management controls which apply to all advisory committees established or used by the agency; (c) Designation of a Committee Management Officer who shall carry out the functions specified in section 8(b) of the Act. (d) Provision of a written determination stating the reasons for closing any advisory committee meeting to the public; (e) A review, at least annually, of the need to continue each existing advisory committees, consistent with the public interest and the purpose of the functions of each committee; (f) Rates of pay are justified and levels of agency support are adequate; (g) The appointment of a Designated Federal Officer for each advisory committee and its subcommittees: (h) The opportunity for reasonable public participation in advisory committee activities; and (i) That the number of committee members is limited to the fewest necessary to accomplish committee objectives. &101-6.1010 Reserved &101-6.1011 Responsibilities of the chairperson of an independent Presidential advisory committee The chairperson od an independent Presidential advisory committee shall comply with the Act and this subpart and shall: (a) Consult with the administrator concerning the role of the Designated Federal Officer and Committee Management Officer; (b) Fulfill the responsibilities of an agency head as specified in paragraphs (d) and (h) of 101-6.1009 &101-6.1012 (Reserved) &101-6.1013 Charter filing Requirements. No advisory committee may operate, meet, or take any action until its charter has been filed as follows: (a) Advisory committee established, used, reestablished, or renewed by an agency. The agency head shall file-- (1) The charter with the standing committees of the Senate and the House of Representatives having legislative jurisdiction of the agency; (2) A copy of the filed charter with the Library of Congress, Exchange and Gift Division, Federal Documents Section. Federal Advisory Committee Desk, Washington, D.C. 20540; and (3) A copy of the charter indicating it Congressional filing date, with the secretariat. (b) Advisory committee specifically directed by law or authorized by law. Procedures are the same as in paragraph (a) of this section. (c) Presidential advisory committee. When either the President or the Congress establishes an advisory committee that advises the President, the responsible agency head or, in the case of an independent Presidential advisory committee, the President's designee shall file-- (1) The charter with the secretariat; (2) A copy of the filed charter with the Library of Congress; and (3) If specifically directed by law, a copy of the charter indicating its date of filing with the secretariat, with the standing committees on the Senate and the House of Representatives having legislative jurisdiction of the agency or the independent Presidential advisory committee. &101-6.101 Reserved &101-6.1015 Advisory committee information which must be published in the Federal register. (a) Committee establishment, reestablishment, or renewal. (1) A notice in the Federal register is required when an advisory committee, except a committee specifically directed by law or established by the President by Executive Order, is established, used, reestablished or renewed. Upon receiving notification of the completed review from the secretariat in accordance with paragraph (c) of &101-6.1007, the agency shall publish a notice in the federal register that the committee is being established,used, reestablished, or renewed. for a new committee, such notice shall also include statements describing the nature and purpose of the committee and that the committee is necessary and in the public interest. (2) Establishment and reestablishment notices shall appear at least 15 calendar days before the committee charter is filed, except that the secretariat may approve less than 15 days when requested by the agency for good cause. The 15 day advance notice requirement does not apply to committee renewals , notices of which may be published concurrently with the filing of the charter. (b) Committee meetings. (1) The agency or an independent Presidential advisory committee shall publish at least 15 calendar days prior to an 45932 Federal Register/ Vi. 52 No. 231 Wednesday, December 2, 1987/ Rules and Regulations advisory committee meeting a notice in the Federal Register, which includes: (i) The exact name of the advisory committee as chartered: (ii) The time, date, place, and purpose of the meeting: (iii) A summary of the agenda: and (iv) A statement whether all or part of the meeting is open to the public or closed, and if closed, the reasons why, citing the specific exemptions of the Government in the Sunshine Act (5 U.S.C. 552(b)) as the basis for closure. (2) In exceptional circumstances, the agency or an independent Presidential advisory committee may give less than 15 days notice, provided that the reasons for doing so are included in the committee meeting notice published in the Federal Register. &101-6.1016 Reserved. &101-6.1017 Responsibilities of the agency Committee Management Officer In addition to implementing the provisions of section 8(b) of the Act, the Committee Management Officer will carry out all responsibilities delegated by the agency head. The Committee Management Officer should also ensure that section 10(b),12(a) and 13 of the Act are implemented by the agency to provide for appropriate recordkeeping.Records include, but are not limited to: (a) A set of approved charters and membership lists for each advisory committee: (b) Copies of the agency's portion of the Annual Report of Federal Advisory Committees required by paragraph (b) of &101- 6.1035: (c) Agency guidelines on committee management operations and procedures as maintained and updated: and (d) Agency determinations to close advisory committee meetings as required by paragraph (c) of &101-6.1023 &101-6.1018 Reserved &101-6.1019 Duties of the Federal Officer. The agency head or, in the case of an independent Presidential advisory committed, the Administrator shall designate a Federal officer or employee, who may be either full- time or permanent part-time, to be the Designated Federal Officer for each advisory committee and its subcommittees, who: (a) Must approve or call the meeting of the advisory committee: (b) Must approve the agenda. (c) Must attend the meetings. (d) Shall adjourn the meetings when such adjournment is in the public interest: and (e) Chairs the meeting when so directed by the agency head (f) The requirement in paragraph (b) of this section does not apply to a Presidential advisory committee. &101-6.1020 Reserved &101-6.1021 Public Participation in advisory committee meetings. The agency head, or the chairperson of an independent Presidential advisory committee. shall ensure that (a) Each advisory committee meeting is held at a reasonable time and in a place reasonably accessible to the public: (b) The meeting room size is sufficient to accommodate advisory committee members, committee or agency staff, and interested members of the public: (c) Any member of the public is permitted to file a written statement with the advisory committee: and (d) Any member of the public may speak at the advisory committee meeting if the agency's guidelines so permit. &101-6.1022 Reserved &101-6.1023 Procedures foreclosing an advisory committee meeting. (a) To close all or part of a meeting, an advisory committee shall submit a request to the agency head or, in the case of an independent Presidential advisory committee, the Administrator, citing the specific provisions of the Government in the Sunshine Act (5 U.S.C.552 (b) which justify the closure. The request shall provide the agency head or the Administrator sufficient time to review the matter in order to make a determination prior to publication of the meeting notice required by &101-6.1015(b). (b) The general counsel of the agency or, in the case of an independent Presidential advisory committee, the general counsel of the General Services Administration should review all requests to close meetings. (c) If the agency head or, in the case of an independent Presidential advisory committee, the Administrator agrees that the request is consistent with the provisions in the Government in the Sunshine Act and the Federal Advisory Committee Act, he or she shall issue a determination that all or part of the meeting be closed. (d) The agency head or the chairperson of an independent Presidential advisory committee, shall: (1) Make a copy of the determination available to the public upon request and (2) State the reasons why all or a part of the meeting is closed: citing the specific exemptions used from the Government in the Sunshine Act in the meeting notice published in the Federal Register. &1016.1024 &101-6.1025 Requirement for maintaining minutes of advisory committee meetings. (a) The agency head or, in the case of an independent Presidential advisory committee, the chairperson shall ensure that detailed minutes of each advisory committee meeting are kept. The minutes must include: (i) Time, date, and place: (2) A list of the following persons who were present: (i) Advisory committee members and staff: (ii) Agency employees: and (iii) Members of the public who presented oral or written statements: (3) An estimated number of other members of the public present: (4) An accurate description of each matter discussed and the resolution, if any, made by the committee of such matter: and (5) Copies of each report or other document received, issued, or approved by the committee. (b) The chairperson of each advisory committee shall certify to the accuracy, of all minutes of advisory committee meetings. &101-6.1026 Reserved &101-6.1027 Termination Of advisory committee (a) Any advisory committee shall automatically terminate not later than 2 years after it is established, reestablished or renewed, unless: (1) Its duration is otherwise provided for by law: (2) The President or agency head renews it prior to the end of such period: or (3) The President or agency head terminates it before that time by revoking or abolishing its establishment authority. (b)If an agency head terminates an advisory committee, the agency shall notify the Secretariat of the effective date of termination &101-6.1028 Reserved &101-6.1029 Renewal and rechartering of advisory committees. (a) Advisory committees specifIcally directed by law: (1) Whose duration extends beyond 2 years shall require rechartering by the filing of a new charter every 2 years after the date of enactment of the law establishing the committee. If a new charter is not filed, the committee is not Federal Register / Vi. 52. No. 231/ Wednesday, December 2, 1987 terminated, but may not meet or take any action (2) Which would terminate under the provisions of section 14 of the Act and for which renewal would require reauthorization by law, may be reestablished by an agency provided that the agency complies under general agency authority with the provisions of &1O1-6.1OO7. (b) Advisory committees established by the President may be renewed by appropriate action of the President and the filing of a new charter. (c) Advisory committees authorized by law or established or used by an agency may be renewed provided that at least 30 but not more than 60 days before the committee terminates. an agency head who intends to renew a committee complies with the provisions of &101-6.10O7. &101-6.1030 Reserved &101-6.1031 Amendments to advisory committee charters (a) Committees specifically directed by law or authorized by law: or established by the President. The agency head shall be responsible for ensuring that any minor technical changes made to current charters are consistent with the relevant statute or Executive Order, When the Congress by law, or the President by Executive Order, changes the authorizing language which has been the basis for establishing an advisory committee, the agency head, or the chairperson of an independent Presidential advisory committee, shall: (1) Amend those sections of the current charter affected by the new law or Executive Order: and (2) File the amended charter as specified in &101-6.1013 (b) Committees established or used by an agency. The charter of an advisory committee established under general agency authority may be amended when an agency head determines that the existing charter no longer accurately reflects the objectives or functions of the committee. Changes may be minor, such as revising the name of the advisory committee, or modifying the estimated number or frequency of meetings. Changes may also be major such as those dealing with the objectives or composition of the committee. The agency head retains final authority for amending the charter of an advisory committee. Amending any existing advisory committee charter does not constitute renewal of the committee under &101-6.1029. (1) To make a minor amendment to a committee charter, an agency shall: (i) Amend the charter language as necessary. and (ii) File the amended charter as specified in &101-6.1013. (2) To make a major amendment to a committee charter, an agency shall: (i) Amend the charter language as necessary: (ii) Submit the proposed amended charter with a letter to the Secretariat requesting GSA's views on the amended language, along with an explanation of the purpose of the changes and why they are necessary. The Secretariat will review the proposed changes and notify the agency of GSA's views within 15 calendar days if the request is possible: and (iii) File the amended charter as specified in &1O1-6.1013 &1O1-6.1032 Reserved &101-6.1033 Compensation and expense reimbursement of advisory committee members, staffs and consultants. (a) Uniform pay guidelines for members of an advisory committee. Nothing in this subpart shall require an agency head to provide compensation, unless otherwise provided by law, to a member of an advisory committee. However, when compensation is deemed appropriate by an agency, it shall fix the pay of the members of an advisory committee to the daily equivalent of a rate of the General Schedule in 5 U.S.C. 5332 unless the members are appointed as consultants and compensated under 5 U.S.C. 3109. In determining an appropriate rate of pay for the members, an agency shall give consideration to the significance, scope, and technical complexity of the matters with which the advisory committee is concerned and the qualifications required of the members of the advisory committee. An agency may not fix the pay of the members of an advisory committee at a rate higher than the daily equivalent of the maximum rate for a GS-15 under the General Schedule, unless a higher rate is mandated by statute, or the head of the agency has personally determined that a higher rate of pay under the General Schedule is justified and necessary. Such a determination must be reviewed by the head of the agency annually. Under this subpart, an agency may not fix the pay of the members of an advisory committee at a rate of pay higher than the daily equivalent of a rate for a GS-18, as provided in 5 U.S.C. 5332 (b) Pay for staff members of an advisory committee. An agency may fix the pay of each advisory committee staff member at a rate of the General Schedule in which the Staff member's position would appropriately be placed (5 U.S.C. Chapter 51). An agency may not fix the pay of a staff member at a rate higher than the daily equivalent of the maximum rate for GS-15, unless the agency head has determined that under the General Schedule the staff members position would appropriately be placed at a grade higher than GS-15. This determination must be reviewed annually by the agency head. (1) In establishing rates of compensation, the agency head shall comply with any applicable statutes, regulations, Executive Order, and administrative guidelines. (2) A staff member who is a Federal employee shall serve with the knowledge of the Designated Federal Officer and the approval of the employees direct supervisor. If a non Federal employee, the staff member shall be appointed in accordance with applicable agency procedures, following consultation with the advisory committee. (c) Pay for consultants to an advisory committee. An agency shall fix the pay of a consultant to an advisory committee after giving consideration to the qualifications required of the consultant and the significance, scope, and technical complexity of the work.The compensation may not exceed the maximum rate of pay authorized by 5 U.S.C 3109, and shall be in accordance with any applicable statutes, regulations, Executive Orders and administrative guidelines. (d) Gratuitous services. In the absence of any special limitations applicable to a specific agency, nothing in this subpart shall prevent an agency from accepting the gratuitous services of an advisory committee member, staff member, or consultant who agrees in advance to serve without compensation. (e) Travel expenses. Advisory committee members and staff members, while engaged in the performance of their duties away from their homes or regular places of business, may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of Title 5. United States Code, for persons employed intermittently in the Government service. (f) Services for handicapped members. While performing advisory committee duties, an advisory committee member who is blind or deaf or who qualifies as a handicapped individual may be provided services by a personal assistant for handicapped employees if the member: (1) Qualifies as a handicapped individual as defined by section 501 of 45932 Federal Register / Vol. 52 No.231/ Wednesday , December 2, 1987/ Rules and Regulations advisory committee meeting a notice in the Federal register, which includes: (i) The exact name of the advisory committed as chartered; (ii) The time, date, place, and place and purpose of the meeting: (iii) A summary of the agenda: and (iv) A statement whether all or part of the meeting is open to the public or closed, the reasons why, citing the specific exemptions of the Government in the Sunshine Act(5 U.S.C. 552(b) as the basis for closure. (2) In exceptional circumstances, the agency or an independent Presidential advisory committee may give less than 15 days notice, provided that the reasons for doing so are included in the committee meeting notice published in the Federal Register. &101-6.1016 Reserved &101-6.1017 responsibilities of the agency Committee Management Officer. In addition to implementing the provisions of section 8(b) of the Act, the Committee Management Officer will carry out all responsibilities delegated by the agency head. The committee Management Officer should also ensure that section 10(b),12(a) and 13 of the Act are implemented by the agency to provide for accurate recordkeeping. Records include, but are not limited to: (a) A set of approved charters and membership lists for each advisory committee: (b) Copies of the agency's portion of the Annual Report of Federal Advisory Committees required by paragraph (b) of &101- 6.1035: (c) Agency guidelines on committee management operations and procedures as maintained and updated: and (d) Agency determinations to close advisory committee meetings as required by paragraph (c) of &101-6.1023. &101-6.1018 Reserved &101-6.1019 Duties of the Designated Federal Officer. The agency head or, in the case of an independent Presidential advisory committee, the Administrator shall designate a Federal officer or employee, who may be either full time or permanent part-time, to be the Designated Federal officer for each advisory committee and its subcommittees, who: (a) Must approve or call the meeting of the advisory committee: (b) Must approve the agenda: (c) Must attend the meetings: (d) Shall adjourn the meetings when such adjournment is in the public interest: and (e) Chairs the meeting when so directed by the agency head. (f) The requirements in paragraph(b) of this section does not apply to a Presidential advisory committee. &101-6.1020 Reserved &101-6.1021 Public participation in advisory committee meetings. The agency head, or the chairperson of an independent Presidential advisory committee, shall ensure that-- (a) Each advisory committee meeting is held at a reasonable time and in a place reasonably accessible to the public: (b) The meeting room size is sufficient to accommodate advisory committee members, committee or agency staff, and any interested members of the public: (c) Any member of the public is permitted to file a written statement with the advisory committee; and (d) Any member of the public may speak at the advisory committee meeting if the agency's guidelines so permit. &101-6.1022 Reserved &101-6.1023 Procedures for closing an advisory committee meeting. (a) To close all or part of a meeting, an advisory committee shall submit a request to the agency head or, in the case of an independent Presidential advisory committee, the Administrator, citing the specific provisions of the Government in the Sunshine Act (5 U.S.C. 552(b) which justify the closure. The request shall provide the agency head or the Administrator sufficient time to review the matter in order to make a determination prior to publication of the meeting notice required by &101-6.1015(b) (b) The general counsel of the agency or in the case of an independent Presidential advisory committee, the general counsel of the General services Administration should review all requests to close meetings. (c) if the agency head, or, in the case of an independent Presidential advisory committee, the administrator agrees that the request is consistent with the provisions in the Government in the Sunshine Act and the Federal Advisory Committee Act, he or she shall issue a determination that all or part of the meeting be closed. (d) the agency head, or the chairperson of an independent Presidential advisory committee,shall: (1) Make a copy of the determination available to the public upon request and (2) State the reasons why all or part of the meeting is closed, citing the specific exemptions used from the Government in the Sunshine Act in the meeting notice published in the Federal Register. &101-6.1024 Reserved &101-6.1025 Requirement for maintaining minutes of advisory committee meetings. (a) The agency head or , in the case of an independent Presidential advisory committee, the chairperson shall ensure that the detail minutes of each advisory committee meeting are kept. the minutes must include: (1) Time, Date and Place, (2) A list of the following persons who were present, (i) Advisory committee members and staff, (ii) Agency employees: and (iii) Members of the public who presented oral or written statements: (3) An estimated number of other members of the public present: (4) An accurate description of each matter discussed and the resolution, if any, made by the committee of such matter, and: (5) Copies of each report or other document received, issued, or approved by the committee. (b) The chairperson of each advisory committee shall certify to the accuracy of all minutes of advisory committee meetings. &101-6.1026 Reserved &101-6.1027 Termination of advisory committees. (a) Any advisory committee shall automatically terminate not later than 2 years after it is established, reestablished, or renewed, unless: (1) Its duration is otherwise provided for by law: (2) The President or agency head renews it prior to the end of such period: or (3) The President or agency head terminates it before that time by revoking or abolishing its establishment authority. (b) If an agency head terminates an advisory committee, the agency shall notify the Secretariat of the effective date of termination. &101-6.1028 Reserved &101-6.1029 Renewal and rechartering of advisory committees. (a) Advisory committees specifically directed by the law; (1) Whose duration extends beyond 2 years shall require rechartering by the filing of a new charter every two years after the date of enactment of the law establishing the committee. If a new charter is not filed, the committee is not Federal Register/ Vol.52 No. 231/ Wednesday,December 2, 1987/ Rules and Regulations Page 45933 terminated, but may not meet or take any action. (2) Which would terminate under the provisions of section 14 of the Act, and for which renewal would require reauthorization by law, may be reestablished by an agency provided that the agency complies under general agency authority with the provisions of &101-6.1007. (b) Advisory committees established by the President may be renewed by appropriate action of the President and the filing of a new charter. (c) Advisory committees authorized by law or established or used by an agency may be renewed, provided that at least 30 but not more than 60 days before the committee terminates, an agency head who intends to renew a committee complies with the provisions of &101-6.1007 &101-6.1030 Reserved &101-6.1031 Amendments to advisory committee charters. (a) Committees specifically directed by law; or established by the President. The agency head shall be responsible for ensuring that any minor technical changes made to current charters are consistent with the relevant statute or Executive Order. When the Congress by law, or the President by Executive Order, changes the authorizing language which has been the basis for establishing an advisory committee, the agency head, or the chairperson of an independent Presidential advisory committee, shall: (1) Amend those sections of the current charter affected by the new law of Executive Order: and (2) File the amended charter as specified in &101-6.1013 (b) Committees established or used by an agency. The charter of an advisory committee established under general agency authority may be amended when an agency head determines that the existing charter no longer accurately reflects the objectives or functions of the committee. Changes may be minor, such as revising the name of the advisory committee, or modifying the estimated number of frequency of meetings. Changes may also be major such as those dealing with the objectives or composition of the committee. The agency head retains final authority for amending the charter of an advisory committee. Amending any existing advisory committee charter does not constitute renewal of the committee under &101-6.1029. (1) To make a minor amendment to a committee charter, an agency shall: (i) Amend the charter language as necessary, and (ii) File the amended charter as specified in &101-6.1013. (2) To make a major amendment to a committee charter, an agency shall: (i) Amend the charter language as necessary; (ii) Submit the proposed amended charter with a letter to the secretariat requesting GSA's views on the amended language, along with an explanation of the purpose of the changes and why they are necessary. The secretariat will review the proposed changes and notify the agency of GSA's views within 15 calendar days of the request, if possible: and (iii) File the amended charter as specified in &101-6.1013. &101-6.1032 Reserved &101-6.1033 Compensation and expense reimbursement of advisory committee members, staffs and consultants. (a) Uniform pay guidelines for members of an advisory committee. Nothing in this subpart shall require an agency head to provide compensation, unless otherwise provided by the law, to a member of an advisory committee. However, when compensation is deemed appropriate by an agency, it shall fix the pay of the members of an advisory committee to the daily equivalent of a rate of the General Schedule in 5 U.S.C. 5332 unless the members are appointed as consultants and compensated under 5 U.S.C. 3109. In determining the appropriate rate of pay for the members, an agency shall give consideration to the scope, and technical complexity of the matters with which the advisory committee is concerned and the qualifications required of the members of the advisory committee. An agency may not fix the pay of the members of an advisory committee at a rate higher than the daily equivalent of the maximum rate for a GS-15 under the General Schedule, unless a higher rate is mandated by statute, or the head of the agency has personally determined that a higher rate of pay under the General schedule is justified and necessary. Such a determination must be reviewed by the head of the agency annually. Under this subpart, an agency may not fix the pay of its members of an advisory committee at rate of pay higher than the daily equivalent of a rate for an GS-18, as provided in 5 U.S.C. 5332. (b) Pay for staff members of an advisory committee. An agency may fix the pay of each advisory committee staff member at a rate of the General Schedule in which the staff member's position would appropriately be placed (5 U.S.C. Chapter 51). An agency may not fix the pay of a staff member at a rate higher than the daily equivalent of the maximum rate for GS-15, unless the agency head has determined that under the General Schedule the staff member's position would appropriately be placed at a grade higher than GS-15. This determination must be reviewed annually by the agency head. (1) In establishing rates of compensation, the agency head shall comply with any applicable statutes, regulations, Executive Orders, and administrative guidelines. (2) A staff member who is a Federal employee shall serve with the knowledge of the Designated Federal Officer and the approval of the employee's direct supervisor. If a non-Federal employee, the staff member shall be appointed in accordance with applicable agency procedures, following consultation with the advisory committee. (c) Pay for consultants to an advisory committee. An agency shall fix the pay of a consultant to an advisory committee after giving consideration to the qualifications required of the consultant and the significance, scope, technical complexity of the work. The compensation may not exceed the maximum rate of pay authorized by 5 U.S.C. 3109, and shall be in accordance with any applicable statutes, regulations, Executive Orders, and administrative guidelines. (d) Gratuitous Services. In the absence of any special limitations applicable to a specific agency, nothing in this subpart shall prevent an agency from accepting the gratuitous services of an advisory committee member, staff member, or consultant who agrees in advance to serve without compensation. (e) Travel Expenses. Advisory committee members and staff members, while engaged in the performance of their duties away from their homes or regular places of business, may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of Title 5, United States Code, for persons employed intermittently in the Government service. (f) Services for handicapped members. While performing advisory committee duties, an advisory committee member who is blind or deaf or who qualifies as a handicapped individual may be provided services by a personal assistant for handicapped employees if the member: (1) Qualifies as a handicapped individual as defined by section 501 of the rehabilitation Act of 1973(29 U.S.C.) and (2) Does not otherwise qualify for assistance under 5 U.S.C. 3102 by reason of being an employee of an agency. (g) Exclusions.Nothing in this section shall prevent any person who (without regard to his or her service with an advisory committee) is a fulltime Federal employee from receiving compensation at a rate which he or she otherwise would be compensated as a fulltime Federal employee. (2) Nothing in this section shall prevent any person who immediately before his or her service with an advisory committee was a full-time Federal employee from receiving compensation at the rate at which he or she was compensated as a full time Federal employee. (3) Nothing in this section shall affect a rate of pay or a limitation on a rate of pay that is specifically established by law or a rate of pay established under the General Schedule classification and pay system in chapter 51 end chapter 53 of Title 5. United States Code. &101-6.1034 Reserved 101-6.1035 Reports required for advisory committees. (a) Within one year after a presidential advisory committee has submitted a public report to the President, the President or his delegate will prepare a follow.up report to the Congress detailing the disposition of the committees recommendations in accordance with section 6(b) of the Act: (b) The President's annual report to the Congress shall be prepared by GSA based on reports filed on a fiscal year basis by each agency consistent with the information specified in section 6(c) of the Act. Reports from agencies shall be consistent with instructions provided annually by the Secretariat. This report has been cleared in accordance with FIRMR 201-45.6 in 41 CFR Chapter 201 and assigned interagency report control number 0304- GSA-XX (c) In accordance with section 10(d) of the Act, advisory committees holding closed meetings shall issue reports at least annually, setting forth a summary of activities consistent with the policy of Section 552(b) of Title 5. United States Code. (d) Subject to section 552 of Title 5. United States Code, eight copies of each report made by an advisory committee. Including any report on closed meetings as specified in paragraph (c) of this section, and, where appropriate, background papers prepared by consultants, shall be filed with the Library of Congress as required by section 13 of the Act, for public inspection and use at the location specified in paragraph (a)(2) of &101-6.1013. Dated: November 24. 1987 T.C. Golden Administrator of General Services TAB 8 Standards of Ethical Conduct for Employees of the Executive Branch STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EXECUTIVE BRANCH Including: Part I of Executive Order 12674 and 5 C.F.R. Part 2635 Regulation Prepared by: United States Office of Government Ethics Suite 500, 1201 New York Avenue, N.W. Washington, DC 20005-3917 August 1992 STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EXECUTIVE BRANCH Final Regulation Issued by the U.S. Office of Government Ethics To be Codified at 5 C.F.R. Part 2635 The following document is an informal computer-generated version of the regulatory text of the final ethical conduct standards rule, the official version of which was published at 57 Federal Register 35006-35067 (August 7, 1992), within effective date of February 3, 1993. The authority citation for this regulation is: 5 United States Code Sections 7351 & 7353; 5 United States Code Appendix (Ethics in Government Act of 1978); and Executive Order 12674, 54 Federal Register 15159-15162, 3 Code of Federal Regulations, 1989 Compilation, pp. 215-218, as modified by Executive Order 731, 55 Federal Register 42547-42550, 3 Code of Federal Regulations, 1990 compilation, pp. 306-311. PRINCIPLES OF ETHICAL CONDUCT FOR GOVERNMENT OFFICERS AND EMPLOYEES Executive Order 12674 of April 12, 1989 (as modified by E.O. 12731) By virtue of the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to establish fair and enacting standards of ethical conduct for all executive branch employees, it is hereby ordered as follows: Part I--Principles of Ethical Conduct Section 101. Principles of Ethical Conduct. To ensure that every citizen can have complete confidence in the integrity of the Federal Government, each Federal employee shall respect and adhere to the fundamental principles of ethical service as implemented in regulations promulgated under sections 201 and 301 of this order: (a) Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws, and ethical principles above private gain. (b) Employees shall not hold financial interests that conflict with the conscientious performance of duty. (c) Employees shall not engage in financial transactions using nonpublic Government information or allow the improper use of such information to further any private interest. (d) An employee shall not, except pursuant to such reasonable exceptions as are provided by regulation, 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. (e) Employees shall put forth honest effort in the performance of their duties. -1- (f) Employees shall make no unauthorized commitments or promises of any kind purporting to bind the Government. (g) Employees shall not use public once for private gain. (h) Employees shall act impartially and not give preferential treatment to any private organization or individual. (i) Employees shall protect and conserve Federal property and shall not use it for other than authorized activities. (j) Employees shall not engage in outside employment or activities, including seeking or negotiating for employment, that conflict with official Government duties and responsibilities. (k) Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities. (l) 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. (m) Employees shall adhere to all laws and regulations that provide equal opportunity for all Americans regardless of race, color, religion, sex, national origin, age, or handicap. (n) Employees shall endeavor to avoid any actions creating the appearance that they are violating the law or the ethical standards promulgated pursuant to this order. Sec. 102. Limitations on Outside Earned Income (a) No employee who is appointed by the President to a full-time noncareer position in the executive branch (including full-time noncareer employees in the White House office, the office of Policy Development, and the office of Cabinet Affairs, shall receive any earned income for any outside employment or activity performed during that Presidential appointment. (b) The prohibition set forth in subsection (a) shall not apply to any full-time noncareer employees employed pursue to 3 U.S.C. 105 and 3 U.S.C. 107(a) at salaries below the minimum rate basic pay then paid for GS-9 of the General Schedule. Any outside employment must comply with relevant agency standards of conduct, including any requirements for approval of outside employment. -2- Table of Contents Subpart A - General Provisions Page Section 2635.101 Basic obligation of public service 3 Section 2635.102 Definitions 4 Section 2635.103 Applicability to members of the uniformed services 6 Section 2635.104 Applicability to employees on detail 6 Section 2635.105 Supplemental agency regulations 7 Section 2635.106 Disciplinary and corrective action 8 Section 2635.107 Ethics advice 9 Subpart B -- Gifts From Outside Sources Section 2635.201 Overview 10 Section 2635.202 General standards 10 Section 2635.203 Definitions 11 Section 2635.204 Exceptions 14 Section 2635.205 Proper disposition of prohibited gifts 24 Subpart C -- Gifts Between Employees Section 2635.301 Overview 25 Section 2635.302 General standards 26 Section 2635.303 Definitions 26 Section 2635.304 Exceptions 27 Subpart D - Conflicting Financial Interests Section 2635.401 Overview 30 Section 2635.402 Disqualifying financial interests 30 Section 2635.403 Prohibited financial interests 36 Subpart E - Impartiality in Performing Official Duties Section 2635.501 Overview 39 Section 2635.502 Personal and business relationships 40 Section 2635.503 Extraordinary payments from former employees 45 (continued on next page) -1- Table of Contents (Continued) Subpart F -- Seeking Other Employment Page Section 2635.601 Overview 47 Section 2635.602 Applicability and related considerations 47 Section 2635.603 Definitions 48 Section 2635.604 Disqualification while seeking employment 51 Section 2635.605 Waiver or authorization permitting participation while seeking employment 53 Section 2635.606 Disqualification based on an arrangement concerning prospective employment or otherwise after negotiations 54 Subpart G -- Misuse of Position Section 2635.701 Overview 55 Section 2635.702 Use of public office for private gain 55 Section 2635.703 Use of nonpublic information 58 Section 2635.704 Use of Government property 59 Section 2635.705 Use of official time 60 Subpart H -- Outside Activities Section 2635.801 Overview 61 Section 2635.802 Conflicting outside employment and activities 63 Section 2635.803 Prior approval for outside employment and activities 64 Section 2635.804 Outside earned income limitations applicable to certain Presidential appointees and other noncareer employees 64 Section 2635.805 Service as an expert witness 66 Section 2635.806 Participation in professional associations [Reserved] 67 Section 2635.807 Teaching, speaking, and writing 67 Section 2635.808 Fundraising activities 74 Section 2635.809 Just financial obligations 77 Subpart I -- Related Statutory Authorities Section 2635.901 General 78 Section 2635.902 Related statutes 78 -2- Subpart A - General Provisions Section 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 shall 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. Where a situation is not covered by the standards set forth in this part, employees shall 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 institution, the laws and ethical principles above private gain. (2) Employees shall it hold financial interests that conflict with the conscientious performance of duty. (3) Employees shall not engage 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 a(cities 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. -3- (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 dispose 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 race, color, religion, sex, national origin, age, or handicap. (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 ill 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 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. Section 2635.102 Definitions. The definitions listed below are used throughout this part Additional definitions appear in the subparts or sections of subparts to which they apply. For purposes of this part: -4- (a) Agency means an executive agency as defined in 5 U.S.C. 105 and the Postal Service and the Postal Rate Commission it does not include the General Accounting 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 shall, where the conduct in issue is that of the agency head, be deemed to require that such determination, approval or action be made or taken by the agency head in consultation with the designated agency ethics official. (c) Agency ethics official refers to the designated agency ethics official or to the alternate designated agency ethics official, referred to in Section 2638.202(b) of this chapter, and to any deputy ethics official, described in Section 2638.204 of this chapter, who has been delegated authority to assist in carrying out the responsibilities of the designated agency ethics official. (d) Agency programs or operations refers to any program or faction 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, disqualification, 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 Section 2638.201 of this chapter. (g) Disciplinary action includes those disciplinary actions referred to in Office of Personnel Management regulations and instructions implementing provisions of title 5 of the United States Code or provided for in comparable provisions applicable to employees not subject to title 5, including but not limited to reprimand, suspension, demotion, and removal. In the case of a military officer, comparable provisions may include those in the Uniform Code of Military Justice. (h) Employee means any officer or employee of an agency, including a special Government employee. It includes officers but not enlisted members of the uniformed services. For purposes other than subparts 3 and C of this part, it does not include President or Vice President. Status as an employee is unaffected by pay or leave -5- 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) He, his, and him include she, hers and her. (k) 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 his official capacity on behalf of that agency or entity. (l) 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 our without compensation, for a period not to exceed 130 days during any consecutive 365-day period. (m) Supplemental agency regulation means a regulation issued pursuant to Section 2635.105 Section 2635.103 Applicability to members of the uniformed services. The provisions on this part, except this section, are not applicable to enlisted members of the uniformed services. Each agency with jurisdiction over enlisted members of the uniformed services shall issue regulations defining the ethical conduct obligations of enlisted members under its jurisdiction. Those regulations shall 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. Section 2635.104 Applicability to employees on detail -6- (a) Details to other agencies. Except as provided in paragraph (d) of this section, an employee on detail, including a uniformed officer on assignment, from his employing agency to another agency for a period in excess of 30 calendar days shall be subject to any supplemental agency regulations of the agency to which he is detailed rather than to any supplemental agency regulations of his employing agency. (b) Details to the legislative or judicial branch. An employee on detail, including a uniformed officer on assignment, from his employing agency to the legislative or judicial branch for a period in excess of 30 calendar days shall be subject to the ethical standards of the branch or entity to which detailed. For the duration of any such detail or assignment, the employee shall 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 his employing agency, but shall retain subject to the conflict of interest prohibitions in title 18 of the United States Code. (c) Details to non-Federal entities. Except to the extent exempted in writing pursuant to this paragraph, an employee detailed to a non-Federal entity remains subject to this part and to any supplemental agency regulation of his 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, she designated agency ethics official may grant a written exemption from subpart 3 of this part based on his 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, an employee who is subject to an agency statute which restricts his activities or financial holdings specifically because of his status as an employee of that agency shall continue to be subject to any provisions in the supplemental agency regulations of his employing agency that implement that Statute. Section 2635.105 Supplemental agent regulations. In addition to the regulations set forth in this part, an employee shall comply with any supplemental agency regulations issued by his employing agency under this section (a) An agency that wishes to supplement this part shall 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 -7- agency regulations which the agency determines are necessary and appropriate, in view of its programs and operations, to fulfill the purposes of this part shall 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 signature by the Office of Government Ethics, the agency shall submit its supplemental agency regulations to the Federal Register for publication and codification at the expense of the agency in title 5 of the Code of Federal Regulations. Supplemental agency regulations issued under this section ARC effective only after concurrence and 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:. c (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. Where the content of any such regulations or instructions was included in the agency's standards of conduct regulations issued pursuant to Executive Order 11222 and the Office of Government Ethics concurs that they need not be issued as part of an agency's supplemental agency regulations, those regulations or instructions may be promulgated separately from the agency's supplemental agency regulations. Section 2635.106 Disciplinary and corrective action. -8- (a) Except as provided in 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, national origin, age, or handicap is required to follow applicable statutory and regulatory procedures, including those of the Equal Employment Opportunity Commission. 2635.107 Ethics advice. (a) As required by 2638.201 and 2638.202(b) of this chapter, each agency has a designated agency ethics official who, on the agency's behalf, is responsible for coordinating and managing the agency's ethics program, as well as an alternate. The designated agency ethics official has authority under 2638.204 of this chapter to delegate certain responsibilities, including that of providing ethics counseling regarding the application of this part, to one or more deputy ethics officials. (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. Where 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 is 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. An agency ethics official is required by 28 U.S.C. 535 to report any information he receives relating to a violation of the criminal code, title 18 of the United States Code. -9- Subpart B -- Gifts From Outside Sources 2635.201 Overview. This subpart contains standards that prohibit an employee from soliciting or accepting any gift from a prohibited source or given because of the employee's official position unless the item is excluded from the definition of a gift or falls within one of the exceptions set forth in this subpart. 2635.202 General standards. (a) General prohibitions. Except as provided in this subpart, an employee shall not, directly or indirectly, solicit or accept a gift: (1) From a prohibited source; or (2) Given because of the employee's official position. (b) Relationship to illegal gratuities statute. Unless accepted in violation of paragraph (c)(1) of this section, a gift accepted under the standards set forth in this subpart shall not constitute an illegal gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(3). (c) Limitations on use of exceptions. Notwithstanding any exception provided in this subpart, other than 2635.204(j), an employee shall not: (1) Accept a gift in return for being influenced in the performance of an official act; (2) Solicit or coerce the offering of a gift; (3) 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 his public office for private gain; Example 1: A purchasing agent for a Veterans Administration hospital routinely deals with representatives of pharmaceutical manufacturers who provide information about new company products. Because of his crowded calendar, the purchasing agent has offered to meet with manufacturer representatives during his 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 -10- 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 2635.204(a) on de minimis gifts of $20 or less, the practice of accepting even these modest gifts on a recurring basis is improper. (4) Accept a gift in violation of any statute. Relevant statutes applicable to all employees include: (i) 18 U.S.C. 201(b), which prohibits a public official from seeking, accepting, or agreeing to receive or accept anything of value in return for being influenced in the performance of an official act or for being induced to take or omit to take any action in violation of his official duty. 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; (ii) 18 U.S.C. 209, which prohibits an employee, other than a special Government employee, 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; and (iii) 41 U.S.C. 423(b)(2), which prohibits a procurement official from seeking, accepting, or agreeing to receive any money, gratuity, or other thing of value from any officer, employee, representative, agent, or consultant of a competing contractor during the conduct of a Federal agency procurement. Implementing regulations, including exceptions to the gift prohibition, are contained in the Federal Acquisition Regulation, 48 CFR 3.104; or (5) Accept vendor promotional training contrary to applicable regulations, policies or guidance relating to the procurement of supplies and services for the Government; except pursuant to 2635.204(1). 2635.203 Definitions. For purposes of this subpart, the following definitions shall apply: (a) Agency has the meaning set forth in 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. -11- (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. It does not include: (1) Modest items of food and 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 solely for presentation; (3) Loans from banks and other financial institutions on terms generally available to the public; (4) Opportunities and benefits, including favorable rates and commercial discounts, available to the public or to a class consisting of all Government employees or all uniformed military personnel, whether or not restricted on the basis of geographic considerations; (5) Rewards and prizes given to competitors in contests or events, including random drawings, open to the public unless the employee's entry into the contest or event is required as part of his official duties; (6) Pension and other benefits resulting from continued participation in an employee welfare and benefits plan maintained by a former employer; (7) Anything which is paid for by the Government or secured by the Government under Government contract; Note: Some airlines encourage those purchasing tickets to join programs that award free flights and other benefits to frequent fliers. Any such benefit earned on the basis of Government- financed travel belongs to the agency rather than to the employee and may be accepted only insofar as provided under 41 CFR 301- 1.6(b). (8) 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 his official duties which takes place away from his duty stations. The agency's acceptance must be in accordance with the implementing regulations at 41 CFR part 304-1; and -12- (ii) Other gifts provided in-kind which have been accepted by an agency under its agency gift acceptance statute; or (9) Anything for which market value is paid by the employee. (c) Market value means the retail cost the employee would 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 shall be the face value of the ticket. Example 1: An employee who has been given an acrylic paperweight embedded with the corporate logo of a prohibited source may determine its market value based on her observation that a comparable acrylic paperweight, not embedded with a logo, generally sells for about $20. Example 2: A prohibited source has offered an 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. (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 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 solicited or accepted because of the employee's official position if it is from a person other than an employee and would not have been solicited, offered, or given had the employee not held his position as a Federal employee. Note: Gifts between employee are subject to the limitations set forth in subpart C of this part. Example 1: Where free season tickets are offered by an opera guild to all members of the Cabinet, the gift is offered because of their official positions. -13- (f) A gift which is solicited or accepted indirectly includes a gift: (1) Given with the employee's knowledge and acquiescence to his parent, sibling, spouse, child, or dependent relative 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 as permitted for the disposition of perishable items by 2635.205(a)(2) or for payments made to charitable organizations in lieu of honoraria under 2636.204 of this chapter. Example 1: 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) Vendor promotional training means training provided by any person for the purpose of promoting its products or services. It does not include training provided under a Government contract or by a contractor to facilitate use of products or services it furnishes under a Government contract 2635.204 Exceptions. The prohibitions set forth in 2635.202(a) do not apply to a gift accepted under the circumstances described in paragraphs (a) though (l) of this section and a gift accepted in accordance with one of those paragraphs will not be deemed to violate the principles set forth in 2635.101(b). Even though acceptance of a gift may be permitted by one of the exceptions contained in paragraphs (a) through (l) of this section, it is never inappropriate and frequently prudent for an employee to decline a gift offered by a prohibited source or because of his official position. (a) Gifts of $20 or less. An employee may accept unsolicited gifts having an aggregate market value of $20 or less per occasion, provided that the aggregate market value of individual gifts received from any one person under the authority of this paragraph shall not exceed $50 in a calendar year. This exception does not apply to gifts of cash or of investment interests such as stock, bonds, or certificates of deposit. Where 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. Where 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. -14- Example 1: An employee of the Securities and Exchange Commission and his spouse have been invited by a representative of a regulated entity to a Broadway play, 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. He and his spouse may attend the play only ff he pays the full $60 value of the two tickets. Example 2: An employee of the Defense Mapping Agency has been invited by an association of cartographers to speak about his agency's role in the evolution of missile technology. At the conclusion of his speech, the association presents the employee a framed map with a market value of $18 and a book about the history of cartography with a market value of $15. The employee may accept the map or the book, but not both, since the aggregate value of these two tangible items exceeds $20. Example 3: On four occasions during the calendar year, an employee of the Defense Logistics Agency 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 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 his cousin, who is employed by the same corporation, if he can accept the birthday present under the exception at 2635.204(b) for gifts based on a personal relationship. Example 4: 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 has accepted an association's gift of travel expenses and conference fees for an employee of its Office of Radiation Programs to attend an international conference on "The Chernobyl Experience." While at the conference, the employee may accept a gift of $20 or less from the association or from another person attending the conference even though it was not approved in advance by the EPA. Although 31 U.S.C. 1353 is the only authority under which an agency may accept gifts from certain non-Federal sources in connection with its employees' attendance at such functions, a gift of $20 or less accepted under 2635.204(a) is a gift to the employee rather than to his employing agency. Example 5: A Navy contracting officer is participating in a procurement for environmental cleanup services at a Navy installation that has recently been closed. She is presently involved in negotiations with three competing contractors, one of whom has offered her a fancy ballpoint pen embossed with its corporate logo. Even though the pen has a market value of $18 and could be accepted under the $20 de -15- minimis exception at 2635.204(a), the contracting officer cannot accept the competing contractor's gift. Under the procurement integrity provisions at 41 U.S.C. 423, she is a "procurement official" for that contract and, except as specifically permitted by the regulations implementing that statute, she is prohibited prior to award from accepting a gift from a competing contractor for that contract. The Federal Acquisition Regulation at 48 CFR 3.104 contains an exception for gifts with a market value of $10 or less. (b) Gifts based on a personal relationship. An employee may accept a gift given 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 of the relationship and whether the family member or friend personally pays for the gift. Example 1: An employee of the Federal Deposit Insurance Corporation has been dating a secretary employed by a member banks. For Secretary's Week, the bank has given each secretary 2 tickets to an off-Broadway musical review 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 his girlfriend's invitation to the theater. Even though the tickets were initially purchased by the member bank, they were given without reservation to the secretary to use as she wished, and her invitation to the employee was motivated by their personal friendship. Example 2: Three partners in a law firm that handles corporate mergers have invited an employee of the Federal Trade Commission 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 he and the three partners have developed an amicable relationship as a result of the firm's dealings with the FTC. As evidenced in part by the fact that the fees are to be paid by the firm, it is not a personal friendship but a business relationship that is the motivation behind the partners' gift. (c) Discounts and similar benefits. In addition to those opportunities and benefits excluded from the definition of a gift by 2635.203(b)(4), an employee may accept (1) Reduced 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 rated and commercial discounts not precluded by paragraph (c)(3) of this section: -16- (i) Offered to members of a group or class in which membership is unrelated to Government employment; (ii) Offered to members of an organization, such as an employees' association or agency credit union, in which membership is related to Government employment if the same offer is broadly available to large segments of the public through organizations of similar size; or (iii) Offered by a person who is not a prohibited source to any group or class that is not defined in a manner that specifically discriminates among Government employees on the basis of type of official responsibility or on a basis that favors those of higher rank or rate of pay, provided, however, that (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. Example 1: An employee of the Consumer Product Safety Commission 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 similar organizations to large segments of the public. Example 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 3: The administrative officer for a district office of the Immigration and Naturalization Service has signed an INS 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 INS funds, the administrative officer cannot keep the briefcase which, if claimed and received, is Government property. (d) Awards and honorary degrees. (1) An employee may accept gifts, other than cash or an investment interest, with an aggregate market value of $200 or less if such gifts are a bona fide award or incident to a bona fide award that is given for meritorious public service or achievement by a person who does not have interests that may be substantially affected by the performance or nonperformance of the employee's official duties or by an association or other organization the majority of whose members do not have such interests. Gifts with an aggregate market value in excess of $200 and awards of cash or investment interests offered by such persons as awards or incidents to awards that are given for these purposes may be accepted upon a written -17- determination by an agency ethics official that the award is made as part of an established program of recognition: (i) Under which awards have been made on a regular basis or which is funded, wholly or in part, to ensure its continuation on a regular basis; and (ii) Under which selection of award recipients is made pursuant to written standards. (2) An employee may accept an honorary degree from an institution of higher education as defined at 20 U.S.C. 1141(a) 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. (3) An employee who may accept an award or honorary degree pursuant to paragraph (d)(1) or (2) of this section may also accept meals and entertainment given to him and to members of his family at the event at which the presentation takes place. Example 1: Based on a determination by an agency ethics official that the prize meets the criteria set forth in 2635.204(d)(1), an employee of the National Institutes of Health may accept the Nobel Prize for Medicine, including the cash award which accompanies the prize, even though the prize was conferred on the basis of laboratory work performed at NIH. Example 2: Prestigious University 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. Example 3: An ambassador selected by a nonprofit organization as recipient of its annual award for distinguished service in the interest of world peace may, together with his wife, and children, attend the awards ceremony dinner and accept a crystal bowl worth $200 presented during the ceremony. However, where the organization has also offered airline tickets for the ambassador and his family to travel to the city where the awards ceremonies to be held, the aggregate value of the tickets and the crystal bowl exceeds $200 and he 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 (e) Gifts based on outside business or employment relationships. An employee may accept meals, lodgings, transportation and other benefits: -18- (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: A Department of Agriculture employee whose husband is a computer programmer employed by an Agriculture Department contractor may attend the company's annual retreat for all of its employees and their families held at a resort facility. However, under 2635.502, the employee maybe disqualified from performing official duties affecting her husband's employer. Example 2: Where the spouses of other clerical personnel have not been invited, an employee of the Defense Contract Audit Agency whose wife 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 his wife received a special invitation for herself and her spouse. (2) Resulting from his outside business or employment activities when it is clear that such benefits have not been offered or enhanced because of his official status; or Example 1: The members of an Army Corps of Engineers environmental advisory committee that meets 6 times per year are special Government employees. A member who has a consulting business may accept an invitation to a $50 dinner from her corporate client, an Army construction contractor, unless, for example, the invitation was extended in order to discuss the activities of the 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 disqualification requirements of subpart F of this part applicable when seeking employment. Example 1: 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 she has properly disqualified herself from further work on the regulations as required by subpart F of this part, she may enter into employment discussions with the company and may accept the company's offer to pay for her airfare, hotel and meals in connection with an interview trip. (4) For purposes of paragraphs (e)(1) through (3) of this section, employment shall have the meaning set forth in 2635.603(a). (f) Gifts from a political organization. An employee who is exempt under 5 U.S.C. 7324(d) from the Hatch Act prohibitions against active participation in political -19- management or political campaigns may accept meals, lodgings, transportation and other benefits, including free attendance at events, when provided, in connection with such active participation, by a political organization described in 26 U.S.C. 527(e). Any other employee, such as a security officer, whose official duties require him to accompany an exempt employee to a political event may accept meals, free attendance and entertainment provided at the event by such a political organization. Example 1: The Secretary of the Department of Health and Human Services is exempt from the noted Hatch Act restrictions. He 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) Widely attended gatherings and other events-(I) Speaking and similar engagements. When an employee is assigned to participate as a speaker or panel participant or otherwise to present information on behalf of the agency at a conference or other event, his acceptance of an offer of free attendance at the event on the day of his presentation is permissible when provided by the sponsor of the event. The employee's participation in the event on that day is viewed as a customary and necessary part of his performance of the assignment and does not involve a gift to him or to the agency. (2) Widely attended gatherings. When there has been a determination that his attendance is in the interest of the agency because it will further agency programs or operations, an employee may accept a sponsor's unsolicited gift of free attendance at all or appropriate parts of a widely attended gathering of mutual interest to a number of parties. A gathering is widely attended if, for example, it is open to members from throughout a given industry or profession or if those in attendance represent a range of persons interested in a given matter. For employees subject to a leave system, attendance at the event shall 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 (3) Determination of agency interest. The determination of agency interest required by paragraph (g)(2) of this section shall be made orally or in writing by the agency designee. (i) If the sponsor is a person who has interests that may be substantially affected by the performance or nonperformance of an employee's official duties or an association or organization the majority of whose members have such interests, the employee's participation may be determined to be in the interest of the agency only where there is a written finding by the agency designee that the agency's interest in the employee's participation in the event outweighs concern that acceptance of the gift of free attendance may or may appear to improperly influence the employee in the -20- performance of his official duties. Relevant factors that should be considered by the agency designee include the importance of the event to the agency, the nature and sensitivity of any pending matter affecting the interests of the sponsor of the event, the significance of the employee's role in any such matter, the purpose of the event, the identity of other expected participants and the monetary value of the gift of free attendance. (ii) A blanket determination of agency interest may be issued to cover all or any category of invitees other than those as to whom a finding is required by paragraph (g)(3)(i) of this section. Where a finding under paragraph (g)(3)(i) of this section is required, a written determination of agency interest, including the necessary finding, may be issued to cover two or more employees whose duties similarly affect the interests of the sponsor or its members. (4) Free attendance. For purposes of paragraphs (g)(1) and (2) of this section, free attendance may include waiver of all or part of a conference or other fee or the provision of food, refreshments, entertainment, instruction and materials furnished to all attendees as an integral part of the event. It does not include travel expenses, lodgings, entertainment collateral to the event, or meals taken other than in a group setting with all other attendees. Note: There are statutory authorities implemented other than by part 2635 under which an agency or an employee may be able to accept free attendance or other items not included in the definition of free attendance, such as travel expenses. (5) Cost provided by sponsor of event. The cost of the employee's attendance will not be considered to be provided by the sponsor where a person other than the sponsor designates the employee to be invited and bears the cost of the employee's attendance through a contribution or other payment intended to facilitate that 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 attendant. (6) Accompanying spouse. When others in attendance will generally be accompanied by spouses, the agency designee may authorize an employee to accept a sponsor's invitation to an accompanying spouse to participate in all or a portion of the event at which the employee's free attendance is permitted under paragraph (g)(1) or (2) of this section. The authorization required by this paragraph may be provided orally or in writing. Example 1: An aerospace industry association that is a prohibited source sponsors a seminar for which it charges a fee of $100. An Air Force contractor pays $500 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 -21- of free attendance. Because the contractor specified the invitees and bore the cost of their attendance, the gift of free attendance is considered to be provided by the company and not by the sponsoring association. Had the contractor paid $500 to the association in order that it might invite any five Federal employees, an Air Force official to whom the sponsoring association extended one of the &e invitations could attend if his participation were determined to be in the interest of the agency. Example 2: An employee of the Department of the Treasury authorized 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 2635.204(a), he may accept a token of appreciation for his speech having a market value of $20 or less. Example 3: 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 de minimis exception at 2635.204(a). Example 4: 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. If the conference is widely attended, he may be authorized, based on a determination that his attendance is in the agency's interest, to accept the sponsor's offer to waive the attendance fee for the remainder of the conference. (h) Social invitations from persons other than prohibited sources. An employee may accept food, refreshments and entertainment, not including travel or lodgings, at a social event attended by several persons where: (1) The invitation is from a person who is not a prohibited source; and (2) No fee is charged to any person in attendance. Example 1: Along with several other Government officials and a number of individuals from the private sector, the Administrator of the Environmental Protection Agency has been invited to the premier showing of a new adventure movie about industrial espionage. The producer is paying all costs of the showing. The Administrator may accept the invitation since the producer is not a prohibited source and no attendance fee is being charged to anyone who has been invited. Example 2: An employee of the White House Press Office has been invited to a cocktail party given by a noted Washington hostess who is not a prohibited source. -22- The employee may attend even though he has only recently been introduced to the hostess and suspects that he may have been invited because of his 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 301-7.3(c) may accept 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 Per Diem Allowances for Foreign Areas, Per Diem Supplement Section 925 to the Standardized Regulations (GC,FA) available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402; (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. A number of local businessmen in a developing country are anxious for a U.S. company to locate a manufacturing facility in their province. An official of the Overseas Private Investment Corporation may accompany the visiting vice president of the U.S. company to a dinner meeting hosted by the businessmen at a province restaurant where the market value of the food and refreshments does not exceed the per diem rate for that country. (i) 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 his own behalf or on behalf of any family member, provided that such acceptance does not violate 2635.202(c) (1) or (2), 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 the acceptance of which is specifically authorized by a supplemental agency regulation. -23- (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, receipt of which is specifically authorized by statute. Gifts which may be received 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 from an organization with tax-exempt status under 26 U.S.C. 501(c)(3) or from a person to whom the prohibitions in 18 U.S.C. 209 do not. apply. The employee's acceptance must be approved by the agency in accordance with 410.701 through 410.706 of this title; or Note: 26 U.S.C. 501(c)(3) is authority for tax-exempt treatment of a limited class of nonprofit organizations, including those organized and operated for charitable, religious or educational purposes. Many nonprofit organizations are not exempt from taxation under this section. (2) Gifts from a foreign government or international or multinational organization, or its representative, when accepted by the employee under the authority of 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 regulation procedures implementing that Act. 2635.205 Proper disposition of prohibited gifts. (a) An employee who has received a gift that cannot be accepted under this section shall, unless the gift is accepted by an agency acting under specific statutory authority: (1) Return any tangible item to the donor or pay the donor its market value. 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. See 2635.203(c). Example 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 his speech on Federal lands policy. The employee must either return the barometer or promptly reimburse the sponsor $200. -24- (2) When it is not practical to return a tangible item because it is perishable, the item may, at the discretion of the employee's supervisor or an agency ethics official, be given to an appropriate charity, shared within the recipient's office, or destroyed. Example 1: 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 areas. (3) For any entertainment, favor, service, benefit or other intangible, reimburse the donor the market value. Subsequent reciprocation by the employee does not constitute reimbursement. Example 1: A Department of Defense employee wishes to attend a charitable event to which he has been offered a $300 ticket by a prohibited source. Although hid attendance is not in the interest of the agency under 2635.204(g), he may attend if he reimburses the donor the $300 face value of the ticket. (4) Dispose of gifts from foreign governments or international organizations in accordance with 41 CFR part 101-49, and dispose of materials received in conjunction with official travel in accordance with 41 CFR 101-25.103. (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) An employee who, on his own initiative, promptly complies with the requirements of this section will not be deemed to have improperly accepted an unsolicited gift. An employee who promptly consults his agency ethics official to determine whether acceptance of an unsolicited gift is proper and who, upon the advice of the ethics official, returns the gift or otherwise disposes of the gift in accordance with this section, will be considered to have complied with the requirements of this section on his own initiative. Subpart C - Gifts Between Employees 2635.301 Overview. This subpart contains standards that prohibit an employee from giving, donating to, or soliciting contributions for, a gift to an official superior and from accepting a gift from an employee receiving less pay than himself, unless the item is excluded from one definition of a gift or falls within one of the exceptions set forth in this subpart. -25- 2635.302 General standards. (a) Gifts to superiors. Except as provided in this subpart, an employee may not: (1) Directly or indirectly, give a gift to or make a donation toward a gift for an official superior; or (2) Solicit a contribution from another employee for a gift to either his own for the other employee's official superior. (b) Gifts from employees receiving less pay. Except as provided in this subpart, an employee may not, directly or indirectly, accept a gift from an employee receiving less pay than himself unless: (1) The two employees are not in a subordinate-official superior relationship; and (2) There is a personal relationship between the two employees that would justify the gift. (c) Limitation on use of exceptions. Notwithstanding any exception provided in this subpart, an official superior shall not coerce the offering of a gift from a subordinate. 2635.303 Definitions. For purposes of this subpart, the following definitions shall apply: (a) Gift has the meaning set forth in 2635.203(b). For purposes of that definition an employee will be deemed to have paid market value for any benefit received as a result of his participation in any carpool or other such mutual arrangement involving another employee or other employees if he bears his fair proportion of the expense or effort involved. (b) Indirectly, for purposes of 2635.302(b), has the meaning set forth in 2635.203(f). For purposes of 2635.302(a), it includes a gift: (1) Given with the employee's knowledge and acquiescence by his parent, sibling, spouse, child, or dependent relative; or -26- (2) Given by a person other than the employee under circumstances where 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) Subject to paragraph (a) of this section, market value has the meaning set forth in 2635.203(c). (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, an employee is considered to be the subordinate of any of his 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 where 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 shall accompany any recommendation of an amount to be contributed for a gift to an official superior. Example 1: A supervisory employee of the Agency for International Development has just been reassigned from Washington, DC to Kabul, Afghanistan. As a farewell party, 12 of her subordinates have decided to take her out to lunch at the Khyber Repast. It is understood that each will pay for his own meal and that the cost of the supervisor's lunch will be divided equally among the twelve. 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. 2635.304 Exceptions. The prohibitions set forth in 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 -27- prohibitions set forth in 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 other 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) Leave transferred under subpart I of part 630 of this title to an employee who is not an immediate supervisor, unless obtained in violation of 630.912 of this title. Example 1: Upon returning to work following a vacation at the beach, a claims examiner with the Department of Veterans Affairs may give his supervisor, and his supervisor may accept, a bag of saltwater taffy purchased on the boardwalk for $8. Example 2: An employee of the Federal Deposit Insurance Corporation whose bank examination responsibilities require frequent travel may not bring her supervisor, and her supervisor may not accept, souvenir coffee mugs from each of the cities she visits in the course of performing her duties, even though each of the mugs costs less than $5. Gifts given on this basis are not occasional. Example 3: The Secretary of Labor has invited the agency's General Counsel to a dinner party at his home. The General Counsel may bring a $15 bottle of wine to the dinner party and the Secretary may accept this customary hostess gift from his subordinate, even though its cost is in excess of $10. Example 4: For Christmas, a secretary may give his supervisor, and the supervisor may accept, a poinsettia plant purchased for $10 or less. The secretary may also invite his supervisor to a Christmas party in his home and the supervisor may attend. -28- (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, 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: 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: A chemist employed by the Food and Drug Administration has been invited to the wedding of the lab director who is his official superior. He may give the lab director and his bride, and they may accept, a place setting in the couple's selected china pattern purchased for $70. Example 3: Upon the occasion of the supervisor's retirement from Federal service, an employee of the Fish and Wildlife Service may give her supervisor a book of wildlife photographs which she purchased for $19. The retiring supervisor may accept the book. (c) Voluntary contributions. 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: (1) On a special, infrequent occasion as described in paragraph (b) of this section; or (2) On an occasional basis, for items such as food and refreshments to be shared in the office among several employees. An employee may accept such gifts to which a subordinate or other employee receiving less pay than himself has contributed. Example 1: To mark the occasion of his retirement, members of the immediate staff of the Under Secretary of the Army would like to give him a party and provide him with a gift certificate. They may distribute an announcement of the party and include a nominal amount for a retirement gift in the fee for the party. -29- Example 2: The General Counsel 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: 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 of2635.304(b). However, subordinates may take up a collection and employees may contribute $3 each to buy refreshments to be consumed by everyone in the immediate office to mark either such occasion. Example 4: 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: An Assistant Secretary at the Department of the Interior is getting married and his secretary has decided that a microwave oven would be a nice gift from his staff and has informed each of the Assistant Secretary's subordinates that they should contribute $5 for the gift. Her method of collection is improper. Although she may recommend a $5 contribution, the recommendation must be coupled with a statement that the employee whose contribution is solicited is free to contribute less or nothing at all. Subpart D - Conflicting Financial Interests 2635.401 Overview. This subpart contains two provisions relating to financial interests. One is a disqualification 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 2635.603. Notwithstanding that his acquisition or holding of a particular interest is proper, an employee is prohibited in accordance with 2635.402 of this subpart from participating in an official capacity in any particular matter in which, to his knowledge, he or any person whose interests are imputed to him has a financial interest, if the particular matter will have a direct and predictable effect on that interest. 2635.402 Disqualifying financial interests. -30- (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 his knowledge, he or any person whose interests are imputed to him under this statute has a financial interest, if the particular matter will have a direct and predictable effect on that interest. Note: 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 he is negotiating for or has an arrangement concerning future employment In all other cases where the employee's participation would violate 18 U.S.C. 208(a), an employee shall disqualify himself from participation in the matter in accordance with paragraph (c) of this section or obtain a waiver, as described in paragraph (d) of this section. (b) Definitions. For purposes of this section, the following definitions shall 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: If a particular matter involves a specific party or parties, generally the matter will at most only have a direct and predictable effect, for purposes of this subpart, on a financial interest of the employee in or with a party, such as the employee's interest by virtue of owning stock. There may, however, be some situations in which, under the above standards, a particular matter will have a direct and predictable effect on an employee's financial interests in or with a nonparty. For example, if a party is a corporation, a particular matter may also have a direct and predictable effect on an employee's financial interests through ownership of stock in an affiliate, parent, or subsidiary of that party. Similarly, the disposition of a protest against the award of a contract to a particular company may also have a direct and predictable effect on an employee's financial interest in another company listed as a subcontractor in the proposal of one of the competing offerors. -31- Example 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 he and his wife 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 both has and his wife's financial interests, the employee cannot participate on the technical evaluation team unless his disqualification has been waived. Example 2: Upon assignment to the technical evaluation panel, the employee in the preceding example finds that DEF Computer Corporation has not submitted a proposal. Rather, LMN Corporation, with which DEF competes for private sector business, is one of the six offerors. The employee is not disqualified from serving on the technical evaluation panel. Any effect on the employee's financial interests as a result of the agency's decision to award or not award the systems contract to LMN would be at most indirect and speculative. (2) Imputed interests. For purposes of 18 U.S.C. 208(a) and this subpart, the financial interests of the following persons will serve to disqualify 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: 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 her personal financial interests will not be affected, the employee must disqualify herself from participating in the review of a grant application submitted by Kinder World. Award or denial of the gift will affect the financial interests of Kinder World and its financial interests are imputed to her as a member of its board of directors. Example 2: The spouse of an employee of the Food and Drug Administration has obtained a position with a well established biomedical research company. The -32- 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 direct ownership interest in the company. Nor does she have an indirect ownership interest, as would be the case, for example, if she were participating in a pension plan that held stock in the company. Her position with the company is such that the granting or withholding of FDA approval will not have a direct and predictable effect on her salary or on her continued employment with the company. Since the FDA approval process will not affect his spouse's financial interests, the employee is not disqualified under 2635.402 from participating in that process. Nevertheless, the financial interests of the spouse's employer may be disqualifying under the impartiality principle, as implemented at 2635.502. (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: 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 disqualifying claimants. Example 2: Consideration by the Interstate Commerce Commission of regulations establishing safety standards for trucks on interstate highways involves a particular matter. (4) Personal and substantial. To participate personally mens 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 -33- 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) Disqualification. Unless the employee is authorized to participate in the particular matter by vi:tue of a waiver described in paragraph (d) of this section or because the interest has been divested in accordance with paragraph (e) of this section, an employee shall disqualify himself from participating in a particular matter in which, to his knowledge, he or a person whose interests are imputed to him has a financial interest, if the particular matter will have a direct and predictable effect on that interest. Disqualification is accomplished by not participating in the particular matter. (1) Notification. An employee who becomes aware of the need to disqualify himself from participation in a particular matter to which he has been assigned should notify the person responsible for his assignment An employee who is responsible for his own assignment should take whatever steps are necessary to ensure that he does not participate in the matter from which he is disqualified. Appropriate oral or written notification of the employee's disqualification may be made to coworkers by the employee or a supervisor to ensure that the employee is not involved in a matter from which he is disqualified. (2) Documentation. An employee need not file a written disqualification statement unless he is required by part 2634 of this chapter to file written evidence of compliance with an ethics agreement with the Office of Government Ethics or is asked by an agency ethics official or the person responsible for his assignment to file a written disqualification statement. However, an employee may elect to create a record of his actions by providing written notice to a supervisor or other appropriate official. Example 1: 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 pare Annexation would directly and predictably increase the value of her vacation property and, thus, she is disqualified from participating in any way in the Department's deliberations or decisions regarding the annexation. Because she is responsible for determining which matters she will work on, she may accomplish her disqualification merely by ensuring that she does not participate in the matter. Because of the level of her position, however, the Assistant Secretary might be wise to establish a record that she has acted properly by providing a written disqualification statement to an official superior and by providing written notification of the disqualification to subordinates to ensure that they do not raise or discuss with her any issues related to the annexation. -34- (d) Waiver of disqualification. An employee who would otherwise be disqualified by 18 U.S.C. 208(a) may be permitted to participate in a particular matter where the otherwise disqualifying financial interest is the subject of a regulatory or individual waiver described in this paragraph, or results from certain Indian birthrights as described in 18 U.S.C. 208(b)(4). (1) Regulatory waivers. Under 18 U.S.C. 208(b)(2), regulatory waivers of general applicability may be issued by the Office of Government Ethics based on its deter:;nation that particular interests are too remote or too inconsequential to affect the integrity of the services of the employees to whom the waivers apply. Pending issuance of superseding regulatory waivers under this authority, agency regulatory waivers issued under 18 U.S.C. 208(b)(2) as in effect prior to November 30, 1989 continue to apply. (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) ifs 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 disqualifying 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. (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 the Ethics in Government Act of 1978; and -35- (ii) Certifies in writing that the need for the individual's services outweighs the potential for a conflict of interest created by the otherwise disqualifying financial interest. (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 causes his disqualification from participation 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 disqualified from participation in a particular matter may voluntarily sell or otherwise divest himself of the interest that causes the disqualification. (2) Directed divestiture. An employee may be required to sell or otherwise divest himself of the disqualifying financial interest if his continued holding of that interest is prohibited by statute or by agency supplemental regulation issued in accordance with 2635.403(a), or if the agency determines in accordance with 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 subpart J of part 2634 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. Where an employee's official duties create a substantial likelihood that the employee may be assigned to a particular matter from which he is disqualified, the employee should advise his supervisor or other person responsible for his assignments of that potential so that conflicting assignments can be avoided, consistent with the agency's needs. 2635.403 Prohibited financial interests. An employee shall not acquire or hold any financial interest that he is prohibited from acquiring or holding by statute, by agency regulation issued in accordance with -36- paragraph (a) of this section or by reason of an agency determination of substantial conflict under paragraph (b) of this section. Note: There is no statute of Governmentwide applicability prohibiting employees from holding or acquiring any financial interest. Statutory restrictions, if any, are contained in agency statutes which, in some cases, may be implemented by agency regulations issued independent of this part. (a) Agency regulation prohibiting certain financial interests. An agency may, by supplemental agency regulation, prohibit or restrict the acquisition or holding of a financial interest or a class of financial interests by agency employees, or any category of agency employees, and the spouses and minor children of those employees, based on the agency's determination that the acquisition or holding of such financial interests would cause a reasonable person to question the impartiality and objectivity with which agency programs are administered. Where the agency restricts or prohibits the holding of certain financial interests by its employees' spouses or minor children, any such prohibition or restriction shall 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: Any prohibition on acquiring or holding a specific financial interest contained in an agency regulation, institution or other issuance in effect prior to the effective date of this part shall, for employees of that agency, constitute a prohibited financial interest for purposes of this paragraph for one year after the effective date of this part or until issuance of an agency supplemental regulation, whichever occurs first. (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's disqualification from matters so central or critical to the performance of his official duties that the employee's ability to perform the duties of his 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 disqualified by reason of the financial interest. Example 1: An Air Force employee who owns stock in a major aircraft engine manufacturer is being considered for promotion to a position that involves responsibility for development of a new fighter airplane. If the agency determined that engineering and other decisions about the Air Force's requirements for the fighter would directly and predictably affect his financial interests, the employee -37- could not, by virtue of 18 U.S.C. 208(a), perform these significant duties of the position while retaining his stock in the company. The agency can require the employee to sell his stock as a condition of being selected for the position rather than allowing him to disqualify himself in 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 be disqualifying under 18 U.S.C. 208(a) and 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, his spouse, or dependent child or any right as a beneficiary of an estate that has not been settled. Example 1: A regulatory agency has concluded that ownership by its employees o: 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: 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 disqualification under 2635.402. Nevertheless, a loan from a member bank is a discrete financial interest within the meaning of 2635.403(c) that may, when appropriate, be prohibited by supplemental agency regulation (2) The term financial interest includes service, with or without compensation, as an officer, director, trustee, general partner or employee of any person, including a nonprofit entity, whose financial interests are imputed to the employee under 2635.402(b)(2)(iii) or (iv). Example 1. 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 -38- all proposed rules governing use of Federal grasslands issued by the Bureau of band Management. BLM may require an employee to resign his uncompensated position as Vice President of the Foundation as a condition of his promotion to a policy-level position within the Bureau rather than allowing him to rely on disqualification 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 shall be given a reasonable period of time, considering the nature of his particular duties and the nature and marketability of the interest, within which to comply with the agency's direction: Except in cases of usual hardship, as determined by the agency, a reasonable period shall not exceed 90 days from the date divestiture is fist directed. However, as long as the employee continues to hold the financial interest, he remains subject to any restrictions imposed by this subpart. (e) Eligibility for special tax treatment. An employee required to sell or otherwise divest a financial interest may be eligible to defer the tax consequences of divestiture under subpart J of part 2634 of this chapter. Subpart E - Impartiality in Performing Official Duties 2635.501 Overview. (a) This subpart contains two provisions intended to ensure that an employee takes appropriate steps to avoid an appearance of loss of impartiality in the performance of his official duties. Under 2635.502, unless he receives prior authorization, an employee should not participate in a particular matter involving specific parties which he knows is likely to affect the financial interests of a member of his household, or in which he knows a person with whom he has a covered relationship is or represents a party, if he determines that a reasonable person with knowledge of the relevant facts would question his impartiality in the matter. An employee who is concerned that other circumstances would raise a question regarding his impartiality should use the process described in 2635.502 to determine whether he should or should not participate in a particular matter. (b)Under 2635.503, an employee who has received an extraordinary severance or other payment from a former employer prior to entering Government service is subject, in the absence of a waiver, to a two-year period of disqualification from participation in particular matters in which that former employer is or represents a party. -39- Note: Questions regarding impartiality necessary arise when an employee's official duties impact upon the employee's own financial interests or those of certain other persons, such as the employee's spouse or minor child. 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 his knowledge, he, his spouse, general partner or minor child has a financial interest, if the particular matter will have a direct and predictable effect on that interest. The statutory prohibition also extends to an employee's participation in a particular matter in which, to his knowledge, an organization in which the employee is serving as officer, director, trustee, general partner or employee, or with whom he is negotiating or has an arrangement concerning prospective employment has a financial interest. Where the employee's participation in a particular matter would affect any one of these financial interests, the standards set forth in subparts D or F of his part apply and only a statutory waiver, as described respectively in 2635.402(d) and 2635.605(a), will enable the employee to participate in that matter. The authorization procedures in 2635.502(d) may not be used to authorize an employee's participation in any such matter. Where the employee complies with all terms of the waiver, the granting of a statutory waiver will be deemed to constitute a determination that the interest of the Government in the employee's participation outweighs the concern that a reasonable person may question the integrity of agency programs and operations. 2635.502 Personal and business relationships. (a) Consideration of appearances by the employee. Where an employee knows that a particular matter involving specific parties is likely to have a direct and predictable effect on the financial interest of a member of his household, or knows that a person with whom he has a covered relationship is or represents a party to such matter, and where the employee determines that the circumstances would cause a reasonable person with knowledge of the relevant Acts to question his impartiality in the matter, the employee should not participate in the matter unless he has informed the agency designee of the appearance problem and received authorization from the agency designee in accordance with paragraph (d) of this section. (1) In considering whether a relationship would cause a reasonable person to question his impartiality, an employee may seek the assistance of his supervisor, an agency ethics official or the agency designee. (2) An employee who is concerned that circumstances other than those specifically described in this section would raise a question regarding his impartiality should use the process described in this section to determine whether he should or should not participate in a particular matter. -40- (b) Definitions. For purposes of this section: (1) An employee has a covered relationship with: (i) A person, other than a prospective employer described in 2635.603(c), with whom the employee has or seeks a business, contractual or other financial relationship that involves other than a routine consumer transaction: Note: An employee who is seeking employment within the meaning of 2635.603 shall comply with subpart F of this part rather than with this section. (ii) A person who is a member of the employee's household, or who is a relative with whom the employee has a close personal relationship; (iii) A person for whom the employee's spouse, parent or dependent child is, to the employee's knowledge, serving or seeking to serve as an officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee; (iv) Any person for whom the employee has, within the last year, served as officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee; (v) An organization, other than a political party described in 26 U.S.C. 527(e), in which the employee is an active participant. Participation is active if, for example, it involves service as an official of the organization or in a capacity similar to that of a committee or subcommittee chairperson or spokesperson, or participation in directing the activities of the organization. In other cases, significant time devoted to promoting specific programs of the organization, including coordination of fundraising efforts, is an indication of active participation. Payment of dues or the donation or solicitation of financial support does not, in itself, constitute active participation. Note: Nothing in this section shall be construed to suggest that an employee should not participate in a matter because of his political, religious or moral views. (2) Indirect and predictable effect has the meaning set forth in 2635.402(b)(1). (3) Particular matter involving specific parties has the meaning set forth in 2637.102(a)(7) of this chapter. Example 1: An employee of the General Services Administration has made an offer to purchase a restaurant owned by a local developer. The developer has submitted an offer in response to a GSA solicitation for lease of office space. Under the circumstances, she would be correct in concluding that a reasonable person would be -41- likely to question her impartiality if she were to participate in evaluating that developer's or its competitor's lease proposal. Example 2: An employee of the Department of Labor is providing technical assistance in drafting occupational safety and health legislation that will affect all employers of five or more persons. His wife is employed as an administrative assistant by a large corporation that will incur additional costs if the proposed legislation is enacted. Because the legislation is not a particular matter involving specific parties, the employee may continue to work on the legislation and need not be concerned that his wife's employment with an affected corporation would raise a question concerning his impartiality. Example 3: An employee of the Defense Logistics Agency who has- responsibilities for testing avionics being produced by an Air Force contractor has just learned that his sister-in-law has accepted employment as an engineer with the contractor's parent corporations where the parent corporation is a conglomerate, the employee could reasonably conclude that, under the circumstances, a reasonable person would not be likely to question his impartiality if he were to continue to perform his test and evaluation responsibilities. Example 4: An engineer has just resigned from her position as vice president of an electronics company in order to accept employment with the Federal Aviation Administration in a position involving procurement responsibilities. Although the employee did not receive an extraordinary payment in connection with her resignation and has severed all financial ties with the firm, under the circumstances she would be correct in concluding that her former service as an officer of the company would be likely to cause a reasonable person to question her impartiality if she were to participate in the administration of a DOT contract for which the firm is a first-tier subcontractor. Example 5: An employee of the Internal Revenue Service is a member of a private organization whose purpose is to restore a Victorian- era railroad station and she chars its annual fundraising drive. Under the circumstances, the employee would be correct in concluding that her active membership in the organization would be likely to cause a reasonable person to question her impartiality if she were to participate in an IRS determination regarding the tax- exempt status of the organization. (c) Determination by agency designee. Where he has information concerning a potential appearance problem arising from the financial interest of a member of the employee's household in a particular matter involving specific parties, or from the role in such matter of a person with whom the employee has a covered relationship, the agency designee may make an independent determination as to whether a reasonable person with knowledge of the relevant facts would be likely to question the employee's impartiality in the matter. Ordinarily, the agency designee's -42- determination will be initiated by information provided by the employee pursuant to paragraph (a) of this section. However, at any time, including after the employee has disqualified himself from participation in a matter pursuant to paragraph (e) of this section, the agency designee may make this determination on his own initiative or when requested by the employee's supervisor or any other person responsible for the employee's assignment. (1) If the agency designee determines that the employee's impartiality is likely to be questioned, he shall then determine, in accordance with paragraph (d) of this section, whether the employee should be authorized to participate in the matter. where the agency designee determines that the employee's participation should not be authorized, the employee will be disqualified from participation in the matter in accordance with paragraph (e) of this section. (2) If the agency designee determines that the employee's impartiality is not likely to be questioned, he may advise the employee, including an employee who has reached a contrary conclusion under paragraph (a) of this section, that the employee's participation in the matter would be proper. (d) Authorization by agency designee. Where an employee's participation in a particular matter involving specific parties would not violate 18 U.S.C. 208(a), but would raise a question in the mind of a reasonable person about his impartiality, the agency designee may authorize the employee to participate in the matter based on a determination, made in light of all relevant circumstances, that the interest of the Government in.the employee's participation outweighs the concern that a reasonable person may question the integrity of the agency's programs and operations. Factors which may be taken into consideration include: (1) The nature of the relationship involved; (2) The effect that resolution of the matter would have upon the financial interests of the person involved in the relationship; (3) The nature and importance of the employee's role in the matter, including the extent to which the employee is called upon to exercise discretion in the matter; (4) The sensitivity of the matter; (5) The difficulty of reassigning the matter to another employee; and (6) Adjustments that may be made in the employee's duties that would reduce or eliminate the likelihood that a reasonable person would question the employee's impartiality. -43- Authorization by the agency designee shall be documented in writing at the agency designee's discretion or when requested by the employee. An employee who has been authorized to participate in a particular matter involving specific parties may not thereafter disqualify himself from participation in the matter on the basis of an appearance problem involving the same circumstances that have been considered by the agency designee. Example 1: The Deputy Director of Personnel for the Department of the Treasury and an attorney with the Department's Office of General Counsel are general partners in a real estate partnership. The Deputy Director advises his supervisor, the Director of Personnel, of the relationship upon being assigned to a selection panel for a position for which his partner has applied. If selected, the partner would receive a substantial increase in salary. The agency designee cannot authorize the Deputy Director to participate on the panel under the authority of this section since the Deputy Director is prohibited by criminal statute, 18 U.S.C. 208(a), from participating in a particular matter affecting the financial interest of a person who is his general partner. See 2635.402. Example 2: A new employee of the Securities and Exchange Commission is assigned to an investigation of insider trading by the brokerage house where she had recently been employed& Because of the sensitivity of the investigation, the agency designee may be unable to conclude that the Government's interest in the employee's participation in the investigation outweighs the concern that a reasonable person may question the integrity of the investigation, even though the employee has severed all financial ties with the company. Based on consideration of all relevant circumstances, the agency designee might determine, however, that it is in the interest of the Government for the employee to pass on a routine filing by the particular brokerage house. Example 3: An Internal Revenue Service employee involved in a long and complex tax audit is advised by her son that he has just accepted an entry-level management position with a corporation whose taxes are the subject of the audit. Because the audit is essentially complete and because the employee is the only one with an intimate knowledge of the case, the agency designee might determine, after considering all relevant circumstances, that it is in the Government's interest for the employee to complete the audit, which is subject to additional levels of review. (e) Disqualification. Unless the employee is authorized to participate in the matter under paragraph (d) of this section, an employee shall not participate in a particular matter involving specific parties when he or the agency designee has concluded, in accordance with paragraph (a) or (c) of this section, that the financial interest of a member of the employee's household, or the role of a person with whom he has a covered relationship, is likely to raise a question in the mind of a reasonable person -44- about his impartiality. Disqualification is accomplished by not participating in the matter. (1) Notification. An employee who becomes aware of the need to disqualify himself from participation in a particular matter involving specific parties to which he has been assigned should notify the person responsible for his assignment. An employee who is responsible for his own assignment should take whatever steps are necessary to ensure that he does not participate in the matter from which he is disqualified. Appropriate oral or written notification of the employee's disqualification may be made to coworkers by the employee or a supervisor to ensure that the employee is not involved in a particular matter involving specific parties from which he is disqualified. (2) Documentation. An employee need not file a written disqualification statement unless he is required by part 2634 of this chapter to file written evidence of compliance with an ethics agreement with the Office of Government Ethics or is specifically asked by an agency ethics official or the person responsible for his assignment to file a written disqualification statement. However, an employee may elect to create a record of his actions by providing written notice to a supervisor or other appropriate official. (f) Relevant considerations. An employee's reputation for honesty and integrity is not a relevant consideration for purposes of any determination required by this section. 2635.503 Extraordinary payments from former employers. (a) Disqualification requirement. Except as provided in paragraph (c) of this section, an employee shall be disqualified for two years from participating in any particular matter in which a former employer is a party or represents a party if he received an extraordinary payment from that person prior to entering Government service. The two-year period of disqualification begins to run on the date that the extraordinary payment is received. Example 1: Following his confirmation hearings and one month before his scheduled swearing in, a nominee to the position of Assistant Secretary of a department received an extraordinary payment from his employer. For one year and 11 months after his swearing in, the Assistant Secretary may not participate in any particular matter to which his former employer is a party. Example 2: An employee received an extraordinary payment from her former employer, a coal mine operator, prior to entering on duty with the Department of the Interior. For two years thereafter, she may not participate in a determination -45- regarding her former employer's obligation to reclaim a particular mining site, because her former employer is a party to the matter. However, she may help to draft reclamation legislation affecting all coal mining operations because this legislation does not involve any parties. (b) Definitions. For purposes of this section, the following definitions shall apply: (1) Extraordinary payment means any item, including cash or an investment interest, with a value in excess of $10,000, which is paid: (i) On the basis of a determination made after it became known to the former employer that the individual was being considered for or had accepted a Government position; and (ii) Other than pursuant to the former employer's established compensation, partnership, or benefits program. A compensation, partnership, or benefits program will be deemed an established program if it is contained in bylaws, a contract or other written form, or if there is a history of similar payments made to others not entering into Federal service. Example 1: The vice president of a small corporation is nominated to be an ambassador. In recognition of his service to the corporation, the board of directors votes to pay him $50,000 upon his confirmation in addition to the regular severance payment provided for by the corporate bylaws. The regular severance payment is not an extraordinary payment. The gratuitous payment of $50,000 is an extraordinary payment, since the corporation had not made similar payments to other departing officers. (2) Former employer includes any person which the employee served as an officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee. (c) Waiver of disqualification. The disqualification requirement of this section may be waived based on a finding that the amount of the payment was not so substantial as to cause a reasonable person to question the employee's ability to act impartially in a matter in which the former employer is or represents a party. The waiver shall be in writing and may be given only by the head of the agency or, where the recipient of the payment is the head of the agency, by the President or his designee. Waiver authority may be delegated by agency heads to any person who has been delegated authority to issue individual waivers under 18 U.S.C. 208(b) for the employee who is the recipient of the extraordinary payment. -46- Subpart F - Seeking Other Employment 2635.601 Overview. This subpart contains a disqualification requirement that applies to employees when seeking employment with persons who otherwise would be affected by the performance or nonperformance of the employees' official duties. Specifically, it addresses the requirement of 18 U.S.C. 208(a) that an employee disqualify himself from participation in any particular matter that will have a direct and predictable effect on the financial interests of a person "with whom he is negotiating or has any arrangement concerning prospective employment." Beyond this statutory requirement, it also addresses the issues of lack of impartiality that require disqualification from particular matters affecting the financial interests of a prospective employer when an employee's actions in seeking employment fall short of actual employment negotiations. 2635.602 Applicability and related considerations. To ensure that he does not violate 18 U.S.C. 208(a) or the principles of ethical conduct contained in 2635.101(b), an employee who is seeking employment or who has an arrangement concerning prospective employment shall comply with the applicable disqualification requirements of 2635.604 and 2635.606 if the employee's official duties would affect the financial interests of a prospective employer or of a person with whom he has an arrangement concerning prospective employment Compliance with this subpart also will ensure that the employee does not violate subpart D or E of this part. Note: An employee who is seeking employment with a person whose financial interests are not affected by the performance or nonperformance of his official duties has no obligation under this subpart. An employee may, however, be subject to other statutes which impose restrictions on employment contacts or discussions, such as 41 U.S.C. 423(b)(1), applicable to procurement officials, and 10 U.S.C. 2397a, applicable to certain employees of the Department of Defense. (a) Related employment restrictions. (1) Outside employment while a Federal employee. An employee who is contemplating employment to be undertaken concurrently with his Federal employment must abide by any limitations applicable to his outside activities under subparts G and R of this part. He must also comply with any disqualification requirement that may be applicable under subpart D or E of this part as a result of his outside employment activities. -47- (2) Post-employment restrictions. An employee who is contemplating employment to be undertaken following the termination of his Federal employment should consult an agency ethics official to obtain advice regarding any post-employment restrictions that may be applicable. Regulations implementing the Governmentwide post-employment statute, 18 U.S.C. 207, are contained in parts 2637 and 2641 of this chapter. Employees are cautioned that they may be subject to additional statutory restrictions on their post-employment activities, such as 41 U.S.C. 423(f) applicable to procurement officials, 10 U.S.C. 2397b applicable to certain Department of Defense personnel and special statutes applicable to certain retired officers. (b) Interview trips and entertainment. Where a prospective employer who is a prohibited source as defined in 2635.203(d) offers to reimburse an employee's travel expenses, or provide other reasonable amenities incident to employment discussions, the employee may accept such amenities in accordance with 2635.204(e)(3). 2635.603 Definitions. For purposes of this subpart: (a) Employment means any form of non-Federal employment or business relationship involving the provision of personal services by the employee, whether to be undertaken at the same time as or subsequent to Federal employment. It includes but is not limited to personal services as an officer, director, employee, agent, attorney, consultant, contractor, general partner or trustee. Example 1: An employee of the Bureau of Indian Affairs who has announced her intention to retire is approached by tribal representatives concerning a possible consulting contract with the tribe. The independent contractual relationship the tribe wishes to negotiate is employment for purposes of this subpart. Example 2: An employee of the Department of Health and Human Services is invited to a meeting with officials of a nonprofit corporation to discuss the possibility of his serving as a member of the corporation's board of directors. Service, with or without compensation, as a member of the board of directors constitutes employment for purposes of this subpart. (b) An employee is seeking employment once he has begun seeking employment within the meaning of paragraph (b)(1) of this section and until he is no longer seeking employment within the meaning of paragraph (b)(2) of this section. (1) An employee has begun seeking employment if he has directly or indirectly: -48- (i) Engaged in negotiations for employment with any person. For these purposes, as for 18 U.S.C. 208(a), the term negotiations means discussion or communication with another person, or such person's agent or intermediary, mutually conducted with a view toward reaching an agreement regarding possible employment with that person. The term is not limited to discussions of specific terms and conditions of employment in a specific position: (ii) Made an unsolicited communication to any person, or such person's agent or intermediary, regarding possible employment with that person However, the employee has not begun seeking employment ff that communication was: (A) For the sole purpose of requesting a job application; or (B) For the purpose of submitting a resume or other employment proposal to a person affected by the performance or nonperformance of the employee's duties only as part of an industry or other discrete class. The employee will be considered to have begun seeking employment upon receipt of any response indicating an interest in employment discussions; or (iii) Made a response other than rejection to an unsolicited communication from any person, or such person's agent or intermediary, regarding possible employment with that person. (2) An employee is no longer seeking employment when: (i) The employee or the prospective employer rejects the possibility of employment and all discussions of possible employment have terminated; or (iii) Two months have transpired after the employee's dispatch of an unsolicited resume or employment proposal' provided the employee has received no indication of interest in employment discussions from the prospective employer. (3) For purposes of this definition, a response that defers discussions until the foreseeable future does not constitute rejection of an unsolicited employment overture, proposal, or resume nor rejection of a prospective employment possibility. Example 1: An employee of the Health Care Financing Ministration is complimented on her work by an official of a State Health Department who asks her to call if she is ever interested in leaving Federal service. The employee explains to the State official that she is very happy with her job at HCFA and is not interested in another job. She thanks him for his compliment regarding her work and adds that she'll remember his interest if she ever decides to leave the Government. The employee has rejected the unsolicited employment overture and has not begun seeking employment. -49- Example 2: The employee in the preceding example responds by stating that she cannot discuss future employment while she is working on a project affecting the State's health care funding but would like to discuss employment with the State when the project is completed. Because the employee has merely deferred employment discussions until the foreseeable future, she has begun seeking employment with the State Health Department. Example 3: An employee of the Defense Contract Audit Agency is auditing the overhead accounts of an Army contractor. while at the contractor's headquarters, the head of the contractor's accounting division tells the employee that his division is thinking about hiring another accountant and asks whether the employee might be interested in leaving DCAA. The DCAA employee says he is interested in knowing what kind of work would be involved. They discuss the duties of the position the accounting division would like to fill and the DCAA employee's qualifications for the position. They do not discuss salary. The head of the division explains that he has not yet received authorization to fill the particular position and will get back to the employee when he obtains the necessary approval for additional staffing. The employee and the contractor's official have engaged in negotiations regarding possible employment. The employee has begun seeking employment with the Army contractor. Example 4: An employee of the Occupational Safety and Health Administration helping to draft safety standards applicable to the textile industry has mailed his resume to 25 textile manufacturers. He has not begun seeking employment with any of the twenty-five. If he receives a response from one of the resume recipients indicating an interest in employment discussions, the employee will have begun seeking employment with the respondent at that time. Example 5: A special Government employee of the Federal Deposit Insurance Corporation is serving on an advisory committee formed for the purpose of reviewing rules applicable to all member banks. She mails an unsolicited letter to a member bank offering her services as a contract consultant She has not begun seeking employment with the bank until she receives some response indicating an interest in discussing her employment proposal. A letter merely acknowledging receipt of the proposal is not an indication of interest in employment discussions. Example 6: A geologist employed by the U.S. Geological Survey has been working as a member of a team preparing the Government's case in an action brought by the Government against six oil companies. The geologist sends her resume to an oil company that is a named defendant in the action. The geologist has begun seeking employment with that oil company and will be seeking employment for two months from the date the resume was mailed. However, if she withdraws her application or is notified within the two-month period that her resume has been rejected, she will no longer be seeking employment with the oil company as of the date she makes such withdrawal or receives such notification. -50- (c) Prospective employer means any person with whom the employee is seeking employment. Where contacts that constitute seeking employment are made by or with an agent or other intermediary, the term prospective employer includes: (1) A person who uses that agent or other intermediary for the purpose of seeking to establish an employment relationship with the employee ff the agent identifies the prospective employer to the employee; and (2) A person contacted by the employee's agent or other intermediary for the purpose of seeking to establish an employment relationship ff the agent identifies the prospective employer to the employee. Example 1: An employee of the Federal Aviation Administration has overall responsibility for airport safety inspections in a three- state area: She has retained an employment search firm to help her find another job. The search film has just reported to the FAA employee that it has given her resume to and had promising discussions with two airport authorities within her jurisdiction. Even though the employee has not personally had employment discussions with either, each airport authority is her prospective employer. She began seeking employment with each upon learning its identity and that it has been given her resume. (d) Direct and predictable effect and particular matter have the respective meanings set forth in 2635.402(b) (1) and (3). 2635.604 Disqualification while seeking employment. (a) Obligation to disqualify. Unless the employee's participation is authorized in accordance with 2635.605, the employee shall not participate in a particular matter that, to his knowledge, has a direct and predictable effect on the financial interests of a prospective employer with whom he is seeking employment within the meaning of 2635.603(b). Disqualification is accomplished by not participating in the particular matter. (b) Notification. An employee who becomes aware of the need to disqualify himself from participation in a particular matter to which he has been assigned should notify the person responsible for his assignment. An employee who is responsible for his own assignment should take whatever steps are necessary to ensure that he does not participate in the matter from which he is disqualified. Appropriate oral or written notification of the employee's disqualification may be made to coworkers by the employee or a supervisor to ensure that the employee is not involved in a matter from which he is disqualified. -51- (c) Documentation. An employee need not file a written disqualification statement unless he is required by part 2634 of this chapter to file written evidence of compliance with an ethics agreement with the Office of Government Ethics or is specifically asked by an agency ethics official or the person responsible for his assignment to file a written disqualification statement. However, an employee may elect to create a record of his actions by providing written notice to a supervisor or other appropriate official. Example 1: An employee of the Department of Veterans Affairs is participating in the audit of a contract for laboratory support services. Before sending his resume to a lab which is a subcontractor under the VA contract, the employee should disqualify himself from participation in the audit. Since he cannot withdraw from participation in the contract audit without the approval of his supervisor, he should disclose his intentions to his supervisor in order that appropriate adjustments in his work assignments can be made. Example 2: An employee of the Food and Drug Administration is contacted in writing by a pharmaceutical company concerning possible employment with the company. The employee is involved in testing a thing for which the company is seeking FDA approval. Before making a response that is not a rejection, the employee should disqualify himself from further participation in the testing. Where he has authority to ask his colleague to assume his testing responsibilities, he may accomplish his disqualification by transferring the work to that coworker. However, to ensure that his colleague and others with whom he had been working on the recommendations do not seek his advice regarding testing or otherwise involve him in the matter, it may be necessary for him to advise those individuals of his disqualification. Example 3: The General Counsel of a regulatory agency wishes to engage in discussions regarding possible employment as corporate counsel of a regulated entity. Matters directly affecting the financial interests of the regulated entity are pending within the Office of General Counsel, but the General Counsel will not be called upon to act in any such matter because signature authority for that particular class of matters has been delegated to an Assistant General Counsel. Because the General Counsel is responsible for assigning work within the Office of General Counsel, he can in fact accomplish his disqualification by simply avoiding any involvement in matters affecting the regulated entity. However, because it is likely to be assumed by others that the General Counsel is involved in all matters within the cognizance of the Office of General Counsel, he would be wise to file a written disqualification statement with the Commissioners of the regulatory agency and provide his subordinates with written notification of his disqualification, or he maybe specifically asked by an agency ethics official or the Commissioners to file a written disqualification statement. -52- Example 4: A scientist is employed by the National Science Foundation as a special Government employee to serve on a panel that reviews grant applications to fluid research relating to deterioration of the ozone layer. The is discussing possible employment as a member of the faculty of a university that several years earlier received an NSF grant to study the effect of fluorocarbons, but has no grant application pending. As long as the university does not submit a new application for the panel's review, the employee would not have to take any action to effect disqualification. (d) Agency determination of substantial-conflict. Where the agency determines that the employee's action in seeking employment with a particular person will require his disqualification from matters so central or critical to the performance of his official duties that the employee's ability to perform the duties of his position would be materially impaired, the agency may allow the employee to take annual leave or leave without pay while seeking employment, or may take other appropriate administrative action. 2635.605 Waiver or authorization permitting participation while seeking employment. (a) Waiver. Where, as defined in 2635.603(b)(1)(i), an employee is engaged in discussions that constitute employment negotiations for purposes of 18 U.S.C. 208(a), the employee may participate in a particular matter that has a direct and predictable effect on the financial interests of a prospective employer only after receiving a written waiver issued under the authority of 18 U.S.C. 208(b)(1) or (b)(3). These waivers are described in 2635.402(d). Example 1: An employee of the Department of Agriculture has had two telephone conversations with an orange grower regarding possible employment. They have discussed the employee's qualifications for a particular position with the grower, but have not yet discussed salary or other specific terms of employment. The employee is negotiating for employment within the meaning of 18 U.S.C. 208(a) and 2635.603(b)(1)(i). In the absence of a written waiver issued under 18 U.S.C. 208(b)(1), she may not take official action on a complaint filed by a competitor alleging that the grower has shipped oranges in violation of applicable quotas. (b) Authorization by agency designee. Where an employee is seeking employment within the meaning of 2635.603(b)(1) (ii) or (iii), a reasonable person would be likely to question his impartiality if he were to participate in a particular matter that has a direct and predictable effect on the financial interests of any such prospective employer. The employee may participate in such matters only where the agency designee has authorized his participation in accordance with the standards set forth in 2635.502(d). -53- Example 1: Within the past month, an employee of the Education Department mailed her resume to a university. She is thus seeking employment with the university within the meaning of 2635.603(b)(1)(ii) even though she has received no reply. In the absence of specific authorization by the agency designee in accordance with 2635.502(d), she may not participate in an assignment to review a grant application submitted by the university. 2635.606 Disqualification based on an arrangement concerning prospective employment or otherwise after negotiations. (a) Employment or arrangement concerning employment. An employee shall be disqualified from taking official action in a particular matter that has a direct and predictable effect on the financial interests of the person by whom he is employed or with whom he has an arrangement concerning future employment, unless authorized to participate in the matter by a written waiver issued under the authority of 18 U.S.C. 208 (b)(1) or (b)(3). These waivers are described in 2635.402(d). Example 1: A military officer has accepted a job with a defense contractor to begin in six months, after his retirement from military service. During the period that he remains with the Government, the officer may not participate in the administration of a contract with that particular defense contractor unless he has received a written waiver under the authority of 18 U.S.C. 208(b)(1). Example 2: An accountant has just been offered a job with the Comptroller of the Currency which involves a two-year limited appointment. Her private employer, a large corporation, believes the job will enhance her skills and has agreed to give her a two- year unpaid leave of absence at the end of which she has agreed to return to work for the corporation. During the two-year period she is to be a COC employee, the accountant will have an arrangement concerning future employment with the corporation that will require her disqualification from participation in any particular matter that will have a direct and predictable effect on the corporation's financial interests. (b) Offer rejected or not made. The agency designee for the purpose of 2635.502(c) may, in an appropriate case, determine that an employee not covered by the preceding paragraph who has sought but is no longer seeking employment nevertheless shall be subject to a period of disqualification upon the conclusion of employment negotiations. Any such determination shall be based on a consideration of all the relevant factors, including those listed in 2635.502(d), and a determination that the concern that a reasonable person may question the integrity of the agency's decision making process outweighs the Government's interest in the employee's participation in the particular matter. -54- Example 1: An employee of the Securities and Exchange Commission was relieved of responsibility for an investigation of a broker- dealer while seeking employment with the law firm representing the broker-dealer in that matter. The firm did not offer her the partnership position she sought. Even though she is no longer seeking employment with the firm, she may continue to be disqualified from participating in the investigation based on a determination by the agency designee that the concern that a reasonable person might question whether, in view of the history of the employment negotiations, she could act impartially in the matter outweighs the Government's interest in her participation. Subpart G - Misuse of Position 2635.701 Overview. This subpart contains provisions relating to the proper use of official time and authority, and of information and resources to which an employee has access because of his Federal employment. This subpart sets forth stands relating to: (a) Use of public office for private gain; (b) Use of nonpublic information; (c) Use of Government property; and (d) Use of official time. 2635.702 Use of public office for private gain. An employee shall not use his public office for his own private gain, for the endorsement of any product, service or enterprise, or for the private gain of friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity, including nonprofit organizations of which the employee is an officer or member, and persons with whom the employee has or seeks employment or business relations. The specific prohibitions set forth in paragraphs (a) through (d) of this section apply this general standard, but are not intended to be exclusive or to limit the application of this section. (a) Inducement or coercion of benefits. An employee shall not use or permit the use of his Government position or title or any authority associated with his public office -55- in a manner that is intended to coerce or induce another person, including a subordinate, to provide any benefit, financial or otherwise, to himself or to friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity. Example 1: Offering to pursue a relative's consumer complaint over a household appliance, an employee of the Securities and Exchange Commission called the general counsel of the manufacturer and, in the course of discussing the problem, stated that he worked at the SEC and was responsible for reviewing the company's filings. The employee violated the prohibition against use of public office for private gain by invoking his official authority in an attempt to influence action to benefit his relative. Example 2: An employee of the Department of Commerce was asked by a friend to determine why his firm's export license had not yet been granted by another office within the Department of Commerce. At a department-level staff meeting, the employee raised as a matter for official inquiry the delay in approval of the particular license and asked that the particular license be expedited. The official used her public office in an attempt to benefit her friend and, in acting as her friend's agent for the purpose of pursuing the export license with the Department of Commerce, may also have violated 18 U.S.C. 205. (b) Appearance of governmental sanction. Except as otherwise provided in this part, an employee shall not use or permit the use of his Government position or title or any authority associated with his public office in a manner that could reasonably be construed to imply that his agency or the Government sanctions or endorses his personal activities or those of another. when teaching, speaking, or writing in a personal capacity, he may refer to his official title or position only as permitted by 2635.807(b). He may sign a letter of recommendation using his official title only in response to a request for an employment recommendation or character reference based upon personal knowledge of the ability or character of an individual with whom he has dealt in the course of Federal employment.or whom he is recommending for Federal employment. Example 1: An employee of the Department of the Treasury who is asked to provide a letter of recommendation for a former subordinate on his staff may provide the recommendation using official stationery and may sign the letter using his official title. If, however, the request is for the recommendation of a personal friend with whom he has not dealt in the Government, the employee should not use official stationery or sign the letter of recommendation using his official title, unless the recommendation is for Federal employment. In writing the letter of recommendation for his personal friend, it may be appropriate for the employee to refer to his official position in the body of the letter. -56- (c) Endorsements. An employee shall not use or permit the use of his Government position or title or any authority associated with his public office to endorse any product, service or enterprise except: (1) In furtherance of statutory authority to promote products, services or enterprises; or (2) As a result of documentation of compliance with agency requirements or standards or as the result of recognition for achievement given under an agency program of recognition for accomplishment in support of the agency's missions. Example 1: A Commissioner of the Consumer Product Safety Commission may not appear in a television commercial in which she endorses an electrical appliance produced by her former employer, stating that it has been found by the CPSC to be safe for residential use. Example 2: A Foreign Commercial Service officer from the Department of Commerce is asked by a United States telecommunications company to meet with representatives of the Government of Spain, which is in the process of procuring telecommunications services and equipment. The company is bidding against five 4 European companies and the statutory mission of the Department of Commerce includes assisting the export activities of U.S. companies. As part of his official duties, the Foreign Commercial Service officer may meet with Spanish officials and explain the advantages of procurement from the United States company. Example 3: The Administrator of the Environmental Protection Agency may sign a letter to an oil company indicating that its refining operations are in compliance with Federal air quality standards even though he knows that the company has routinely displayed letters of this type in television commercials portraying it as a "trustee of the environment for future generations." Example 4: An Assistant Attorney General may not use his official title or refer to his Government position in a book jacket endorsement of a novel about organized crime written by an author whose work he admires. Nor may he do so in a book review published in a newspaper. (d) Performance of official duties affecting a private interest. To ensure that the performance of his official duties does not give rise to an appearance of use of public office for private gain or of giving preferential treatment, an employee whose duties would affect the financial interests of a friend, relative or person with whom he is associated in a nongovernmental capacity shall comply with any applicable requirements of 2635.502. -57- (e) Use of terms of address and ranks. Nothing in this section prohibits an employee who is ordinarily addressed using a general term of address, such as "The Honorable", or a rank, such as a military or ambassadorial rank, from using that term of address or rank in connection with a personal activity. 2635.703 Use of nonpublic information. (a) Prohibition. An employee shall not engage in a financial transaction using nonpublic information, nor allow the improper use of nonpublic information to further his own private interest or that of another, whether through advice or recommendation, or by knowing unauthorized disclosure. (b) Definition of nonpublic information. For purposes of this section, nonpublic information is information that the employee gains by reason of Federal employment and that he knows or reasonably should know has not been made available to the general public it includes information that he knows or reasonably should know: (1) Is routinely exempt from disclosure under 5 U.S.C. 552 or otherwise protected from disclosure by statute, Executive order or regulation; (2) Is designated as confidential by an agency; or (3) Has not actually been disseminated to the general public and is not authorized to be made available to the public on request. Example 1: A Navy employee learns in the course of her duties that a small corporation will be awarded a Navy contract for electrical test equipment She may not take any action to purchase stock in the corporation or its suppliers and she may not advise friends or relatives to do so until after public announcement of the award. Such actions could violate Federal securities statutes as well as this section. Example 2: A General Services Administration employee involved in evaluating proposals for a construction contract cannot disclose the terms of a competing proposal to a friend employed by a company bidding on the work. Prior to award of the contract, bid or proposal information is nonpublic information specifically protected by 41 U.S.C. 423. Example 3: An employee is a member of a source selection team to review the proposals submitted by several companies in response to an Army solicitation for spare parts. As a member of the evaluation team, the employee has access to proprietary information regarding the production methods of Alpha Corporation, one of the competitors. He may not use that information to assist Beta Company in -58- drafting a proposal to compete for a Navy spare parts contract. The Federal Acquisition Regulation in 48 CFR parts 3, 14 and 15 restricts the release of information related to procurements and other contractor information that must be protected under 18 U.S.C. 1905 and 41 U.S.C. 423. Example 4: An employee of the Nuclear Regulatory Commission inadvertently includes a document that is exempt from disclosure with a group of documents released in response to a Freedom of Information Act request. Regardless of whether the document is used improperly, the employee's disclosure does not violate this section because it was not a knowing unauthorized disclosure made for the purpose of furthering a private interest. Example 5: An employee of the Army Corps of Engineers is actively involved in the activities of an organization whose goals relate to protection of the environment. The employee may not, other than as permitted by agency procedures, give the organization or a newspaper reporter nonpublic information about long-range plans to build a particular dam. 2635.704 Use of Government property. (a) Standard. An employee has a duty to protect and conserve Government property and shall not use such property, or allow its use, for other than authorized purposes. (b) Definitions. For purposes of this section: (1) Government property includes any form of real or personal property in which the Government has an ownership, leasehold, or other property interest as well as any right or other intangible interest that is purchased with Government funds, including the services of contractor personnel. The term includes office supplies, telephone and other telecommunications equipment and services, the Government mails, automated data processing capabilities, printing and reproduction facilities, Government records, and Government vehicles. (2) Authorized purposes are those purposes for which Government property is made available to members of the public or those purposes authorized in accordance with law or regulation Example 1: Under regulations of the General Services Administration at 41 CFR 201-21.601, an employee may make a personal long distance call charged to her personal calling card. -59- Example 2: An employee of the Commodity Futures Trading Commission whose office computer gives him access to a commercial service providing information for investors may not use that service for personal investment research. Example 3: In accordance with chapter 252 of the Federal Personnel Manual, an attorney employed by the Department of Justice may be permitted to use her office word processor and agency photocopy equipment to prepare a paper to be presented at a conference sponsored by a professional association of which she is a member. 2635.705 Use of official time. (a) Use of an employee's own time. Unless authorized in accordance with law or regulations to use such time for other purposes, an employee shall use official time in an honest effort to perform official duties. An employee not under a leave system, including a Presidential appointee exempted under 5 U.S.C. 6301(2), has an obligation to expend an honest effort and a reasonable proportion of his time in the performance of official duties. Example 1: An employee of the Social Security Administration may use official time to engage in certain representational activities on behalf of the employee union of which she is a member. Under 5 U.S.C. 7131, this is a proper use of her official time even though it does not include performance of her assigned duties as a disability claims examiner. Example 2: A pharmacist employed by the Department of Veterans Affairs has been granted excused absence to participate as a speaker in a conference on drug abuse sponsored by the professional association to which he belongs. Although excused absence granted by an agency in accordance with guidance in chapter 630 of the Federal Personnel Manual allows an employee to be absent from his official duties without charge to his annual leave account, such absence is not on official time. (b) Use of a subordinate's time. An employee shall not encourage, direct, coerce, or request a subordinate to use official time to perform activities other than those required in the performance of official duties or authorized in accordance with law or regulation. Example 1: An employee of the Department of Housing and Urban Development may not ask his secretary to type his personal correspondence during duty hours. Further, directing or coercing a subordinate to perform such activities during nonduty hours constitutes an improper use of public office for private gain in violation of 2635.702(a). Where the arrangement is entirely voluntary and appropriate compensation is paid, the secretary may type the correspondence at home on her own -60- time. Where the compensation is not adequate, however, the arrangement would involve a gift to the superior in violation of the standards in subpart C of this part. Subpart H -- Outside Activities 2635.801 Overview. (a) This subpart contains provisions relating to outside employment, outside activities and personal financial obligations of employees that are in addition to the principles and standards set forth in other subparts of this part Several of these provisions apply to uncompensated as well as to compensated outside activities. (b) An employee who wishes to engage in outside employment or other outside activities must comply with all relevant provisions of this subpart, including, when applicable: (1) The prohibition on outside employment or any other outside activity that conflicts with the employee's official duties; (2) Any agency-specific requirement for prior approval of outside employment or activities; (3) The limitations on receipt of outside earned income by certain Presidential appointees and other noncareer employees; (4) The limitations on paid and unpaid service as an expert witness; (5) The limitations on participation in professional organizations; (6) The limitations on paid and unpaid teaching, speaking, and writing; and (7) The limitations on fundraising activities. (c) Outside employment and other outside activities of an employee must also comply with applicable provisions set forth in other subparts of this part and in supplemental agency regulations. These include the principle that an employee shall endeavor to avoid actions creating an appearance of violating any of the ethical standards in this part and the prohibition against use of official position far an employee's private gain or for the private gain of any person with whom he has employment or business relations or is otherwise affiliated in a nongovernmental capacity. -61- (d) In addition to the provisions of this and other subparts of this part, an employee who wishes to engage in outside employment or other outside activities must comply with applicable statutes and regulations. Relevant provisions of law, many of which are listed in subpart I of this part, may include: (1) 18 U.S.C. 201(b), which prohibits a public official from seeking, accepting or agreeing to receive ar accept anything of value in return for being influenced in the performance of an official act or for being induced to take or omit to take any action in violation of his official duty; (2) 18 U.S.C. 201(c), which prohibits a public official, otherwise than as provided by law for the proper discharge of official duty, from seeking, accepting, or agreeing to receive or accept anything of value for or because of any official act; (3) 18 U.S.C. 203(a), which prohibits an employee from seeking, accepting, or agreeing to receive or accept compensation for any representational services, rendered personally or by another, in relation to any particular matter in which the United States is a party or has a direct and substantial interest, before airy department, agency, or other specified entity. This statute contains several exceptions, as well as standards for special Government employees that limit the scope of the restriction: (4) 18 U.S.C. 205, which prohibits an employee, whether or not for compensation, from acting as agent or attorney for anyone in a claim against the United States or from acting as agent or attorney for anyone, before any department, agency, or other specified entity, in any particular matter in which the United States is a party or has a direct and substantial interest. It also prohibits receipt of any gratuity, or any share of or interest in a claim against the United States, in consideration for assisting in the prosecution of such claim. This statute contains several exceptions, as well as standards for special Government employees that limit the scope of the restrictions; (5) 18 U.S.C. 209, which prohibits an employee, other than a special Government employee, 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 exceptions that limit its applicability; (6) The Emoluments Clause of the United States Constitution, article I, section 9, clause 8, which prohibits anyone holding an office of profit or trust under the United States from accepting any gift, office title or emolument, including salary or compensation, from any foreign government except as authorized by Congress. In addition, 18 U.S.C. 219 generally prohibits any public official from being or acting as an agent of a foreign principal, including a foreign government, corporation or person, -62- if the employee would be required to register as a foreign agent under 22 U.S.C. 611 et seq.; (7) The Hatch Act, 5 U.S.C. 7321 through 7328, which prohibits most employees from engaging in certain partisan political activities and prohibits all employees from interfering with elections and conducting political activities in the Federal workplace; (8) The honorarium prohibition, 5 U.S.C. App. (Ethics in Government Act of 1978), which prohibits an employee, other than a special Government employee, from receiving any compensation for an appearance, speech or article. Implementing regulations are contained in 2636.201 through 2636.205 of this chapter; and (9) The limitations on outside employment, 5 U.S.C. App. (Ethics in Government Act of 1978), which prohibit a covered noncareer employee's receipt of compensation for specified activities and provide that he shall not allow his name to be used by any firm or other entity which provides professional services involving a fiduciary relationship. Implementing regulations are contained in 2636.305 through 2636.307 of this chapter. 2635.802 Conflicting outside employment and activities. An employee shall not engage in outside employment or any other outside activity that conflicts with his official duties. An activity conflicts with an employee's official duties: (a) If it is prohibited by statute or by an agency supplemental regulation; or (b) If, under the standards set forth in 2635.402 and 2635.502, it would require the employee's disqualification from matters so central or critical to the performance of his official duties that the employee's ability to perform the duties of his position would be materially impaired. Employees are cautioned that even though an outside activity may not be prohibited under this section, it may violate other principles or standards set forth in this part or require the employee to disqualify himself from participation in certain particular matters under either subpart D or subpart E of this part. Example 1: An employee of the Environmental Protection Agency has just been promoted. His principal duty in his new position is to write regulations relating to the disposal of hazardous waste. The employee may not continue to serve as president of nonprofit environmental organization that routinely submits comments on such regulations. His service as an officer would require his disqualification from duties -63- critical to the performance of his official duties on a basis so frequent as to materially impair his ability to perform the duties of his position. Example 2: An employee of the Occupational Safety and Health Administration who was and is expected again to be instrumental in formulating new OSHA safety standards applicable to manufacturers that use chemical solvents has been offered a consulting contract to provide advice to an affected company in restructuring its manufacturing operations to comply with the OSHA standards. The employee should not enter into the consulting arrangement even though he is not currently working on OSHA standards affecting this industry and his consulting contract can be expected to be completed before he again works on such standards. Even though the consulting arrangement would not be a conflicting activity within the meaning of 2635.802, it would create an appearance that the employee had used his official position to obtain the compensated outside business opportunity and it would create the further appearance of using his public office for the private gain of the manufacturer. 2635.803 Prior approval for outside employment and activities. When required by agency supplemental regulation, an employee shall obtain prior approval before engaging in outside employment or activities. Where it is determined to be necessary or desirable for the purpose of administering its ethics program, an agency shall, by supplemental regulation, require employees or any category of employees to obtain prior approval before engaging in specific types of outside activities, including outside employment. Note: Any requirement for prior approval of employment or activities contained in any agency regulation, instruction, or other issuance in effect prior to the effective date of this part shall constitute a requirement for prior approval for purposes of this section for one year after the effective date of this part or until issuance of an agency supplemental regulation, whichever occurs first. 2635.804 Outside earned income limitations applicable to certain Presidential appointees and other noncareer employees. (a) Presidential appointees to full-time noncareer positions. A Presidential appointee to a full-time noncareer position shall not receive any outside earned income for outside employment, or for any other outside activity, performed during that Presidential appointment. This limitation does not apply to any outside earned income received for outside employment, or for any other outside activity, carried out -64- in satisfaction of the employee's obligation under a contract entered into prior to April 12, 1989. (b) Covered noncareer employees. Covered noncareer employees, as defined in 2636.303(a) of this chapter, may not, in any calendar year, receive outside earned income attributable to that calendar year which exceeds 15 percent of the annual rate of basic pay for level II of the Executive Schedule under 5 U.S.C. 5313, as in effect on January 1 of such calendar year. Employees should consult the regulations implementing this limitation, which are contained in 2636.301 through 2636.304 of this chapter. Note: In addition to the 15 percent limitation on outside earned income, covered noncareer employees are prohibited from receiving any compensation for: practicing a profession which involves a fiduciary relationship; affiliating with or being employed by a firm or other entity which provides professional services involving a fiduciary relationship; serving as an officer or member of the board of any association, corporation or other entity; or teaching without prior approval. Implementing regulations are contained in 2636.305 through 2636.307 of this chapter. (c) Definitions. For purposes of this section: (1) Outside earned income has the meaning set forth in 2636.303(b) of this chapter, except that 2636.303(b)(8) shall not apply. (2) Presidential appointee to a full-time noncareer position means any employee who is appointed by the President to a full- time position described in 5 U.S.C. 5312 through 5317 or to a position that, by statute or as a matter of practice, is filled by Presidential appointment, other than: (i) A position filled under the authority of 3 US.C. 105 or 3 U.S.C. 107(a) for which the rate of basic pay is less than that for G&9, step 1 of the General Schedule; (ii) A position, within a white House operating unit, that is designated as not normally subject to change as a result of a Presidential transition; (iii) A position within the uniformed services; or (iv) A position in which a member of the foreign service is serving that does not Squire advice and consent of the Senate. Example 1: A career Department of Justice employee who is detailed to a policy-making position in the White House Office that is ordinarily filled by a career employee is not a Presidential appointee to a full-time noncareer position. -65- Example 2: A Department of Energy employee appointed under 213.3301 of this title to a Schedule C position is appointed by the agency and, thus, is not a Presidential appointee to a full- time noncareer position. 2635.805 Service as an expert witness. (a) Restriction. An employee shall not serve, other than on behalf of the United States, as an expert witness, with or without compensation, in any proceeding before a court or agency of the United States in which the United States is a party or has a direct and substantial interest, unless the employee's participation is authorized by the agency under paragraph (c) of this section. Except as provided in paragraph (b) of this section, this restriction shall apply to a special Government employee only if he has participated as an employee or special Government employee in the particular proceeding or in the particular matter that is the subject of the proceeding. (b)Additional restriction applicable to certain special Government employees. (1) in addition to the restriction described in paragraph (a) of this section, a special Government employee described in paragraph (b)(2) of this section shall not serve. other than on behalf of the United States, as an expert witness, with or without compensation, in any proceeding before a court or agency of the United States in which his employing agency is a party or has a direct and substantial interest, unless the employee's participation is authorized by the agency under paragraph (c) of this section. (2) The restriction in paragraph (b)(1) of this section shall apply to a special Government employee who: (i) Is appointed by the President; (ii) Serves on a commission established by statute; or (iii) Has served or is expected to serve for more than 60 days in a period of 365 consecutive days. (c) Authorization to serve as an expert witness. Provided that the employee's testimony will not result in compensation for an appearance in violation of 2636.201 of this chapter or violate any of the principles or standards set forth in this part, authorization to provide expert witness service otherwise prohibited by paragraphs (a) and (b) of this section may be given by the designated agency ethics official of the agency in which the employee serves when: -66- (1) After consultation with the agency representing the Government in the proceeding or, if the Government is not a party, with the Department of Justice and the agency with the most direct and substantial interest in the matter, the designated agency ethics official determines that the employee's service as an expert witness is in the interest of the Government; or (2) The designated agency ethics official determines that the subject matter of the testimony does not relate to the employee's official duties within the meaning of 2635.807(a)(2)(i). (d) Nothing in this section prohibits an employee from serving as a fact witness when subpoenaed by an appropriate authority. 2635.806 Participation in professional associations. [Reserved] 2635.807 Teaching, speaking and writing. (a) Compensation for teaching, speaking or writing. Except as permitted by paragraph (a)(3) of this section, an employee, including a special Government employee, shall not receive compensation from any source other than the Government for teaching, speaking or writing that relates to the employee's official duties. (1) Relationship to other limitations on receipt of compensation. The compensation prohibition contained in this section is in addition to any other limitation on receipt of compensation set forth in this chapter, including: (i) The honorarium prohibition on receipt of compensation for an appearance, speech or article, which is implemented in 2636~01 through 2636.205 of this chapter; (ii) The requirement contained iii 2636.307 of this chapter that covered noncareer employees obtain advance authorization before engaging in teaching for compensation; and (iii) The prohibitions and limitations in 2635.804 and in 2636.304 of this chapter on receipt of outside earned income applicable to certain Presidential appointees and to other covered noncareer employees. Example 1. A personnel specialist employed by the Department of Labor has been ed by the publisher of a magazine to write an article on his hobby of collecting arrowheads. Even though the subject matter is unrelated to his official duties, he may -67- not accept the publisher's offer of $200 for the article. Because the compensation offered is for an article, its receipt would violate the honorarium prohibition contained in 2636.201 through 2636.205 of this chapter. (2) Definitions. For purposes of this paragraph: (i) Teaching, speaking or writing relates to the employee's official duties if: (A) The activity is undertaken as part of the employee's official duties; (B) The circumstances indicate that the invitation to engage in the activity was extended to the employee primarily because of his official position rather than his expertise on the particular subject matter; (C) The invitation to engage in the activity or the offer of compensation for the activity was extended to the employee, directly or indirectly, by a person who has interests that may be affected substantially by performance or nonperformance of the employee's official duties; (D) The information conveyed through the activity draws substantially on ideas or official data that are nonpublic information as defined in 2635.703(b); or (E)Except as provided in paragraph (a)(2)(i)(E)(4) of this section, the subject of the activity deals in significant part with: (1) Any matter to which the employee presently is assigned or to which the employee had been assigned during the previous one-year period; (2) Any ongoing or announced policy, program or operation of the agency; or (3) In the case of a noncareer employee as defined in 2636.303(a) of this chapter, the general subject matter area, industry, or economic sector primarily affected by the programs and operations of his agency. (4) The restrictions in paragraphs (a)(2)(i)(E) (2) and (3) of this section do not apply to a special Government employee. The restriction in paragraph (a)(2)(i)(E)(1) of this section applies only during the current appointment of a special Government employee; except that if the special Government employee has not served or is not expected to serve for more than 60 days during the first year or any subsequent one year period of that appointment, the restriction applies only to particular matters involving specific parties in which the special Government employee has participated or is participating personally and substantially. -68- Note: Section 2635.807(a)(2)(i)(E) does not preclude an employee, other than a covered noncareer employee, from receiving compensation for teaching, speaking or writing on a subject within the employee's discipline or inherent area of expertise based on his educational background or experience even though the teaching, speaking or writing deals generally with a subject within the agency's areas of responsibility. Example 1: The Director of the Division of Enforcement at the Commodity Futures Trading Commission has a keen interest in stamp collecting and has spent years developing his own collection as well as studying the field generally. He is asked by an international society of philatelists to give a series of four lectures on how to assess the value of American stamps. Because the subject does not relate to his official duties, the Director may accept compensation for the lecture series. He could not, however, accept a similar invitation from a commodities broker. Example 2: A scientist at the National Institutes of Health, whose principal area of Government research is the molecular basis of the development of cancer, could not be compensated for writing a book which focuses specifically on the research she conducts in her position at NIH, and thus, relates to her official duties. However, the scientist could receive compensation for writing or editing a textbook on the treatment of all cancers, provided that the book does not focus on recent research at MR, but rather conveys scientific knowledge gleaned from the scientific community as a whole. The book might include a chapter, among many other chapters, which discusses the molecular basis of cancer development. Additionally, the book could contain brief discussions of recent developments in cancer treatment, even though some of those developments are derived from NIH research, as long as it is available to the public. Example 3: On his own time, a National Highway Traffic Safety Administration employee prepared a consumer's guide to purchasing a safe automobile that focuses on automobile crash worthiness statistics gathered and made public by NHTSA. He may not receive royalties or any other form of compensation for the guide. The guide deals in significant part with the programs or operations of NHTSA and, therefore, relates to the employee's official duties. On the other hand, the employee could receive royalties from the sale of a consumer's guide to values in used automobiles even though it contains a brief, incidental discussion of automobile safety standards developed by NHTSA. Example 4: An employee of the Securities and Exchange Commission may not receive compensation for a book which focuses specifically on the regulation of the securities industry in the United States, since that subject concerns the regulatory programs or operations of the SEC. The employee may, however, write a book about the advantages of investing in various types of securities as long as the book contains an incidental discussion of any program or operation of the SEC. -69- Example 5: An employee of the Department of Commerce who works in the Department's employee relations office is an acknowledged expert in the field of Federal employee labor relations, and participates in Department negotiations with employee unions. The employee may receive compensation from a private training institute for a series of lectures which describe the decisions of the Federal Labor Relations Authority concerning unfair labor practices, provided that her lectures do not contain any significant discussion of labor relations cases handled at the Department of Commerce, or the Department's labor relations policies. Federal Labor Relations Authority decisions concerning Federal employee unfair labor practices are not a specific program or operation of the Department of Commerce and thus do not relate to the employee's official duties. However, an employee of the FLRA could not give the same presentations for compensation. Example 6: A program analyst employed at the Environmental Protection Agency may receive royalties and other compensation for a book about the history of the environmental movement in the United States even though it contains brief references to the creation and responsibilities of the EPA. A covered noncareer employee of the EPA, however, could not receive compensation for writing the same book because it deals with the general subject matter area affected by EPA programs and operations. Neither employee could receive compensation for writing a book that focuses on specific EPA regulations or otherwise on its programs and operations. Example 7: An attorney in private practice has bean given a one year appointment as a special Government employee to serve on an advisory committee convened for the purpose of surveying and recommending modification of procurement regulations that deter small businesses from competing for Government contracts. Because his service under that appointment is not expected to exceed 60 days, the attorney may accept compensation for an article about the anticompetitive effects of certain regulatory certification requirements even though those regulations are being reviewed by the advisory committee. The regulations which are the focus of the advisory committee deliberations are not a particular matter involving specific parties. Because the information is nonpublic, he could not, however, accept compensation for an article which recounts advisory committee deliberations that took place in a meeting dosed to the public in order to discuss proprietary information provided by a small business. Example 8: A biologist who is an exert in marine life is employed for more than 60 days in a year as a special Government employee by the National Science Foundation to assist in developing a program of grants by the Foundation for the study of coral reefs. The biologist may continue to receive compensation for speaking, teaching and writing about marine life generally and coral reefs specifically. However, during the term of her appointment as a special Government employee, she may not receive compensation for an article about the NSF program she is participating in developing. -70- Only the latter would concern a matter to which the special Government employee is assigned. Example 9: An expert on international banking transactions has been given a one-year appointment as a special Government employee to assist in analyzing evidence in the Government's fraud prosecution of owners of a failed savings and loan association. It is anticipated that she will serve fewer than 60 days under that appointment. Nevertheless, during her appointment, the expert may not accept compensation for an article about the fraud prosecution, even though the article does not reveal nonpublic information. The prosecution is a particular matter that involves specific parties. (ii) Agency has the meaning set forth in 2635.102(a), except that any component of a department designated as a separate agency under 2635.203(a) shall be considered a separate agency. (iii) Compensation includes any form of consideration, remuneration or income, including royalties, given for or in connection with the employee's teaching, speaking or writing activities. Unless accepted under specific statutory authority, such as 31 U.S.C. 1353, 5 U.S.C. 4111 or 7342, or an agency gift acceptance statute, it includes transportation, lodgings and meals, whether provided in kind, by purchase of a ticket, by payment in advance or by reimbursement after the expense has been incurred. It does not include: (A) Items offered by any source that could be accepted from a prohibited source under subpart B of this part; (B) Meals or other incidents of attendance such as waiver of attendance fees or course materials furnished as part of the event at which the teaching or speaking takes place; or (C) Copies of books or of publications containing articles, reprints of articles, tapes of speeches, and similar items that provide a record of the teaching, speaking or writing activity. (iv) Receive means that there is actual or constructive receipt of the compensation by the employee so that the employee has the right to exercise dominion and control over the compensation and to direct its subsequent use. Compensation received by an employee includes compensation which is: (A) Paid to another person, including a charitable organization, on the basis of designation, recommendation or other specification by the employee; or -71- (B) Paid with the employee's knowledge and acquiescence to his parent, sibling, spouse, child, or dependent relative. (v) Particular matter involving specific parties has the meaning set forth in 2637.102(a)(7) of this chapter. (vi) Personal and substantial participation has the meaning set forth in 2635.402(b)(4). (3) Exception for teaching certain courses. Notwithstanding that the activity would relate to his official duties under paragraphs (a)(2)(i) (B)or (E) of this section, an employee may accept compensation for teaching a course requiring multiple presentations by the employee ff the course is offered as part of: (i) The regularly established curriculum of: (A) An institution of higher education as defined at 20 U.S.C. 1141(a); (B) An elementary school as defined at 20 U.S.C. 2891(8); or (C) A secondary school as defined at 20 U.S.C. 2891(21); or (ii) A program of education or training sponsored and funded by the Federal Government or by a State or local government which is not offered by an entity described in paragraph (a)(3)(i) of this section. Example 1: An employee of the Cost Accounting Standards Board who teaches an advanced accounting course as part of the regular business school curriculum of an accredited university may receive compensation for teaching the course even though a substantial portion of the course deals with cost accounting principles applicable to contracts with the Government Moreover, his receipt of a salary or other compensation for teaching this course does not violate the honorarium prohibition on receipt of compensation for any speech, which is implemented in 2636.201 through 2636.205 of this chapter. Example 2: An attorney employed by the Equal Employment opportunity Commission may accept compensation for teaching a course at a state college on the subject of Federal employment discrimination law. The attorney could not accept compensation for teaching the same seminar as part of a continuing education program sponsored by her bar association because the subject of the course is focused on the operations or programs of the EEOC and the sponsor of the course is not an accredited educational institution. -72- Example 3: An employee of the National Endowment for the Humanities is invited by a private university to teach a course that is a survey of Government policies in support of artists, poets and writers. As part of his official duties, the employee administers a grant that the university has received from the NEH. The employee may not accept compensation for teaching the course because the university has interests that may be substantially affected by the performance or nonperformance of the employee's duties. Likewise, an employee may not receive compensation for any teaching that is undertaken as part of his official duties or that involves the use of nonpublic information. (b) Reference to official position An employee who is engaged in teaching, speaking or writing as outside employment or as an outside activity shall not use or permit the use of his official title or position to identify him in connection with his teaching, speaking or writing activity or to promote any book, seminar, course, program or similar undertaking, except that: (1) An employee may include or permit the inclusion of his title or position as one of several biographical details when such information is given to identify him in connection with his teaching, speaking or writing, provided that his title or position is given no more prominence than other significant biographical details; (2) An employee may use, or permit the use of; his title or position in connection with an article published in a scientific or professional journal, provided that the title or position is accompanied by a reasonably prominent disclaimer satisfactory to the agency stating that the views expressed in the article do not necessarily represent the views of the agency or the United States; and (3) An employee who is ordinarily addressed using a general term of address, such as 'The Honorable," or a rank, such as a military or ambassadorial rank, may use or permit the use of that term of address or rank in connection with his teaching, speaking or writing. Note: Some agencies may have policies requiring advance agency review, clearance, or approval of certain speeches, books, articles or similar products to determine whether the product contains an appropriate disclaimer, discloses nonpublic information, or otherwise complies with this section. Example 1: A meteorologist employed with the National Oceanic and Atmospheric Administration is asked by a local university to teach a graduate course on hurricanes. The university may include the meteorologist's Government title and position together with other information about his education and previous employment in course materials setting forth biographical data on all teachers involved in the graduate program. However, his title or position may not be used to promote the course, for example, by featuring the meteorologist's Government title, -73- Senior Meteorologist, NOAA, in bold type under his name. In contrast, his title may be used in this manner when the meteorologist is authorized by NOAA to speak in his official capacity. Example 2: A doctor just employed by the Centers for Disease Control has written a paper based on his earlier independent research into cell structures. Incident to the paper's publication in the Journal of the American Medical Association, the doctor may be given credit for the paper, as Dr. M. Wellbeing, Associate Director, Centers for Disease Control, provided that the article also contains a disclaimer, concurred in by the CDC, indicating that the paper is the result of the doctor's independent research and does not represent the findings of the CDC. Example 3: An employee of the Federal Deposit Insurance Corporation has been asked to give a speech in his private capacity, without compensation, to the annual meeting of a committee of the American Bankers Association on the need for banking reform: The employee may be described in his introduction at the meeting as an employee of the Federal Deposit Insurance Corporation provided that other pertinent biographical details are mentioned as welL 2635.808 Fundraising activities. An employee may engage in fundraising only in accordance with the restrictions in part 950 of this title on the conduct of charitable fundraising in the Federal workplace and in accordance with paragraphs (b)and (c) of this section. (a) Definitions. For purposes of this section: (1) Fundraising means the raising of funds for a nonprofit organization, other than a political organization as defined in 26 U.S.C. 527(e), through: (i) Solicitation of funds or sale of items; or (ii) Participation in the conduct of an event by an employee where any portion of the cost of attendance or participation may be taken as a charitable tax deduction by a person incurring that cost. (2) Participation in the conduct of an event means active and visible participation in the promotion, production, or presentation of the event and includes serving as honorary chairperson, sitting at a head table during the event, and standing in a reception line. The term does not include mere attendance at an event provided that, to the employee's knowledge, his attendance is not used by the nonprofit organization to promote the event. While the term generally includes any public speaking during the event, it does not include the delivery of an official speech as defined in -74- paragraph (a)(3) of this section or any seating or other participation appropriate to the delivery of such a speech. Waiver of a fee for attendance at an event by a participant in the conduct of that event does not constitute a gift for purposes of subpart B of this part. Note: This section does not prohibit fundraising for political parties. However, there are statutory restrictions that apply to political fundraising. Employees, other than those exempt under 5 U.S.C. 7324(d), are prohibited by the Hatch Act, 5 U.S.C. 7321 through 7328, from soliciting or collecting contributions or other funds for a partisan political purpose or in connection with a partisan election. In addition, all employees are prohibited by 18 U.S.C. 602 from knowingly soliciting contributions for any political purpose from other employees and by IS U.S.C. 607 from soliciting such contributions in the Federal workplace. Example 1: The Secretary of Transportation has been asked to serve as master of ceremonies for an All Star Gala. Tickets to the event cost $150 and are tax deductible as a charitable donation, with proceeds to be donated to a local hospital. By serving as master of ceremonies, the Secretary would be participating in fundraising. (3) Official speech means a speech given by an employee in his official capacity on a subject matter that relates to his official duties, provided that the employee's agency has determined that the event at which the speech is to be given provides an appropriate forum for the dissemination of the information to be presented and provided that the employee does not request donations or other support for the nonprofit organization. Subject matter relates to an employee's official duties if it focuses specifically on the employee's official duties, on the responsibilities, programs, or operations of the employee's agency as described in 2635.807(a)(2)(i)(E), or on matters of Administration policy on which the employee has been authorized to speak Example 1: The Secretary of Labor is invited to speak at a banquet honoring a distinguished labor leader, the proceeds of which will benefit a nonprofit organization that assists homeless families. She devotes a major portion of her speech to the Administration's Points of Light initiative, an effort to encourage citizens to volunteer their time to help solve serious social problems. Because she is authorized to speak on Administration policy, her remarks at the banquet are an official speech. However, the Secretary would be engaged in fundraising if she were to conclude her official speech with a request for donations to the nonprofit organization. Example 2: A charitable organization is sponsoring a two-day tennis tournament at a country club in the Washington, DC area to raise funds for recreational programs for learning disabled children. The organization has invited the Secretary of Education to give a speech on federally funded special education programs at the awards dinner to be held at the conclusion of the tournament and a determination -75- has been made that the dinner is an appropriate forum for the particular speech. The Secretary may speak at the dinner and, under 2635.204(g)(1), he may partake of the meal provided to him at the dinner. (4) Personally solicit means to request or otherwise encourage donations or other support either through person-to-person contact or through the use of one's name or identity in correspondence or by permitting its use by others. It does not include the solicitation of funds through the media or through either oral remarks, or the contemporaneous dispatch of like items of mass- produced correspondence, if such remarks or correspondence are addressed to a group consisting of many persons, unless it is known to the employee that the solicitation is targeted at subordinates or at persons who are prohibited sources within the meaning of 2635.203(d). It does not include behind-the-scenes assistance in the solicitation of funds, such as drafting correspondence, stuffing envelopes, or accounting for contributions. Example 1: An employee of the Department of the Energy who signs a letter soliciting funds for a local private school does not "personally solicit" funds when 500 copies of the letter, which makes no mention of his DOE position and title, are i:ailed to members of the local community, even though some individuals who are employed by Department of Energy contractors may receive the letter. (b) Fundraising in an official capacity. An employee may participate in fundraising in an official capacity if; in accordance with a statute, Executive order, regulation or otherwise as determined by the agency, he is authorized to engage in the fundraising activity as part of his official duties. When authorized to participate in an official capacity, an employee may use his official title, position and authority. Example 1: Because participation in his official capacity is authorized under part 950 of this title, the Secretary of the Army may sign a memorandum to all Army personnel encouraging them to donate to the Combined Federal Campaign. (c) Fundraising in a personal capacity. An employee may engage in fundraising in his personal capacity provided that he does not: (1) Personally solicit funds or other support from a subordinate or from any person: (i) Known to the employee, if the employee is other than a special Government employee, to be a prohibited source within the meaning of 2635.203(d); or (ii) Known to the employee, if the employee is a special Government employee, to be a prohibited source within the meaning of 2635.203(d)(4) that is a person whose interests may be substantially affected by performance or nonperformance of his official duties; -76- (2) Use or permit the use of his official title, position or any authority associated with his public office to further the fundraising effort, except that an employee who is ordinarily addressed using a general term of address, such as "The Honorable," or a rank, such as a military or ambassadorial rank, may use or permit the use of that term of address or rank for such purposes; or (3) Engage in any action that would otherwise violate this part. Example 1: A nonprofit organization is sponsoring a golf tournament to raise finds for underprivileged children. The Secretary of the Navy may not enter the tournament with the understanding that the organization intends to attract participants by offering other entrants the opportunity, in exchange for a donation in the form of an entry fee, to spend the day playing 18 holes of golf in a foursome with the Secretary of the Navy. Example 2: An employee of the Merit Systems Protection Board may not use the agency's photocopier to reproduce fundraising literature for her son's private schooL Such use of the photocopier would violate the standards at 2635.704 regarding use of Government property. Example 3: An Assistant Attorney General may not sign a letter soliciting funds for homeless shelter as "John Doe, Assistant Attorney General." He also may not sign a letter with just his signature, "John Doe," soliciting funds from a prohibited source, unless the letter is one of many identical, mass-produced letters addressed to a large group where the solicitation is not known to him to be targeted at persons who are either prohibited sources or subordinates. 2635.809 Just financial obligations. 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. For purposes of this section, a just financial obligation includes any financial obligation acknowledged by the employee or reduced to judgment by a court. In good faith means an honest intention to fulfill any just financial obligation in a timely manner. In the event of a dispute between an employee and an alleged creditor, this section does not require an agency to determine the validity or amount of the disputed debt or to collect debt on the alleged creditor's behalf. -77- Subpart I -- Related Statutory Authorities 2635.901 General. In addition to the standards of ethical conduct set forth in subparts A through H of this part, there are a number of statutes that establish standards to which an employee's conduct must conform. The list set forth in 2635.902 references some of the more significant of those statutes. It is not comprehensive and includes only references to statutes of general applicability. While it includes references to several of the basic conflict of interest statutes whose standards are explained in more detail throughout this part, it does not include references to statutes of more limited applicability, such as statutes that apply only to officers and employees of the Department of Defense. 2635.902 Related statutes. (a) The prohibition against solicitation or receipt of bribes (18 U.S.C. 201(b)). (b)The prohibition against solicitation or receipt of illegal gratuities (18 U.S.C. 201(c)). (c) The prohibition against seeking or receiving compensation for representational services before the Government (18 U.S.C. 203). (d) The prohibition against assisting in the prosecution of claims against the Government or acting as agent or attorney before the Government (18 U.S.C. 205). (e) The post-employment restrictions applicable to former employees (18 U.S.C. 207, with implementing regulations at parts 2637 and 2641 of this chapter). (f) The post-employment restrictions applicable to former procurement officials (41 U.S.C. 423(f)). (g) The prohibition against participating in matters affecting an employee's own financial interests or the financial interests of other specified persons or organizations (18 U.S.C. 208). (h) The prohibition on a procurement official's negotiating for employment with competing contractors (41 U.S.C. 423(b)(1). -78- (i) The prohibition against receiving salary or any contribution to or supplementation of salary as compensation for Government service from a source other than the United States (18 U.S.C. 209). (j) The prohibition against gifts to superiors (5 U.S.C. 7351). (k) The prohibition against solicitation or receipt of gifts from specified prohibited sources (5 U.S.C. 7353). (l) The prohibition against solicitation or receipt of gifts from competing contractors (41 U.S.C. 423(b)(2)). (m) The provisions governing receipt and disposition of foreign gifts and decorations (5 U.S.C. 7342). (n) The Code of Ethics for Government Service (Pub. L. 96-303, 94 Stat. 855). (o) The prohibitions against certain political activities (5 U.S.C. 7321 et seq. and 18 U.S.C. 602, 603, 606 and 607). (p) The prohibitions against disloyalty and striking (5 U.S.C. 7311 and 18 U.S.C. 8). (q) The general prohibition against acting as the agent of a foreign principal required to register under the Foreign Agents Registration Act (18 U.S.C. 219). (r) The prohibition against employment of a person convicted of participating in or promoting a riot or civil disorder (5 U.S.C. 7313). (s) The prohibition against employment of an individual who habitually uses intoxicating beverages to excess (5 US.C. 7352). (t) The prohibition against misuse of a Government vehicle (31 U.S.C. 1344). (u) The prohibition against misuse of the franking privilege (18 U.S.C. 1719). (v) The prohibition against fraud or false statements in a Government matter (18 U.S.C. 1001). (w) The prohibition against concealing, mutilating or destroying a public record (18 U.S.C. 2071). (r) The prohibition against counterfeiting or forging transportation requests (18 U.S.C. 508). -79- (y) The restrictions on disclosure of certain sensitive Government information under the Freedom of Information Act and the Privacy Act (5 U.S.C. 552 and 552a). (z) The prohibitions against disclosure of classified information (18 U.S.C. 798 and 50 U.S.C. 783(b)). (aa) The prohibition against disclosure of proprietary information and certain other information of a confidential nature (18 U.S.C. 1905). (bb) The prohibition against unauthorized disclosure of certain procurement sensitive information, including proprietary or source selection information (41 U.S.C. 423(b) (3) and (d)). (cc) The prohibition against unauthorized use of documents relating to claims from or by the Government (18 U.S.C. 285). (dd) The prohibition against certain personnel practices (5 U.S.C. 2302). (ee) The prohibition against interference with civil service organizations (18 U.S.C. 1917). (ff) The restrictions on use of public funds for lobbying (18 U.S.C. 1913). (gg) The prohibition against participation in the appointment or promotion of relatives (5 U.S.C. 3110). (hh) The prohibition against solicitation or acceptance of anything of value to obtain public office for another (18 U.S.C. 211). (ii) The prohibition against conspiracy to commit an offense against or to defraud the United States (18 U.S.C. 371). (ii) The prohibition against embezzlement or conversion of Government money or property (18 U.S.C. 641). (kk) The prohibition against failing to account for public money (18 U.S.C. 643). (ll)The prohibition against embezzlement of the money or property of another person that is in the possession of an employee by reason of his employment (18 U.S.C. 654). -80- Your Executive Branch Agency has ethics counselors. For further information contact: Name and Title of Ethics Officials: Beth Nolan Associate Counsel to the President Telephone #: 202-456-6229 Office Address: Room 136, Old Executive Office Building Washington, DC 20500