U.S. Department of Housing and Urban Development Washington, D.C. 20410-3000 March 12, 1992 OFFICE OF THE ASSISTANT SECRETARY FOR ADMINISTRATION Ethics Letter 92-1 Special Attention of: All HUD Employees Subject: Standards of Conduct and Principles of Ethical Service for Federal Employees The purpose of this letter is to provide all HUD employees with a copy of the Standards of Conduct, 24 CFR Part 0 and Executive Orders 12674 of April 12, 1989 and 12731 of October 17, 1990. As Federal employees we are responsible for maintaining the highest standards of ethical conduct within the Department. BACKGROUND. The HUD Standards of Conduct, 24 CFR Part 0 became effective on September 18, 1987. These Standards of Conduct specifically define permissible financial interests and outside activities for Department employees, as well as interests which are prohibited by the Ethics in Government Act of 1978. Executive Order 12674 was signed by the President on April 12, 1989. It outlines fundamental principles of ethical service for Federal employees and places limitations on outside earned income. Executive Order 12731 was signed by the President on October 17, 1990, modifying Executive Order 12674. It includes an exception to the limitations on outside earned income. Both Executive Orders discuss authority of the Office of Government Ethics and agency responsibility. OFFICE OF ETHICS. Because specific situations differ, you should not rely exclusively on the material included here. You are encouraged to call the Office of Ethics for guidance and assistance with any questions you may have about how these standards apply to you. Feel free to contact this office at 708-3815 (Voice/TDD) or FTS 458-3815. OTHER GUIDANCE AND ASSISTANCE. Guidance is also available from the Regional Counsel's Office and the Regional Office of the Inspector General. _________________________________________________________________ AE: Distribution: WA, FA, W-3-1 _____________________________________________________________________ ATTACHMENT I 27110 Federal Register/ Vol. 52, No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Office of the Secretary 24 CFR Part 0 Docket No. R-87-1303; FR 2146 Standards of Conduct AGENCY: Office of the Secretary, HUD. ACTION: Final rule. ____________________________________________________________ SUMMARY: This rule comprehensively amends the Department's Standards of Conduct regulations. It clarifies certain provisions of the former regulations and eliminates redundant and outdated material. It also conforms the former regulations to subsequently enacted statutes. The rule operates prospectively. Therefore, in the absence of an actual conflict of interest, any financial interest properly held or acquired under the prior regulation will not have to be divested even if its holding or acquisition is prohibited under this regulation. On September 25, 1986 the President signed Executive Order 12565 (51 FR 34437) which amended Executive Order 11222 to establish a comprehensive system of financial reporting for federal employees. The Office of Government Ethics (OGE) has published a proposed rule (51 FR 43359) implementing Executive Order 12565. This rule would significantly revamp the confidential reporting system and would require every agency to issue regulations in accordance with OGE's rule. Therefore, once OGE publishes a final rule concerning the confidential financial ___________________________________________________________________________ 2 ( 1 of 5) _____________________________________________________________________ ATTACHMENT I 27110 Federal Register/ Vol. 52, No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ disclosure system, the Department will amend Subpart C of these regulations to bring it into conformity with OGE regulations. EFFECTIVE DATE: September 18, 1987. FOR FURTHER INFORMATION CONTACT: Mr David D. White. Assistant General Counsel for Administrative Law. Office of General Counsel, Room 10254, 451 7th Street. SW., Washington, DC 20410. (202) 755-7137 (This is not a toll-free number). SUPPLEMENTARY INFORMATION: Background HUD published a proposed rule on August 22, 1986 (51 FR 30178) entitled "Standards of Conduct." The rule was intended to amend the Standards of Conduct regulations by specifically defining permissible financial interests and outside activities for Department employees, as well as interests which are prohibited by the Ethics in Government Act of 1978 and Office of Personnel Management regulation& The Department received three comments in response to the proposed rule. Two of these comments were from HUD employees who suggested various technical amendments. One of these commenters also suggested that the Department retain the rule in the former regulation that permitted an employee to obtain FHA insurance on his immediate past residence, vacation or retirement home. The Department decided not to adopt this suggestion because the thrust of the new regulation is to restrict employee involvement in HUD-related real estate investments, and to relax restrictions on real estate investments unrelated to the programs of the ___________________________________________________________________________ 2 ( 2 of 5) _____________________________________________________________________ ATTACHMENT I 27110 Federal Register/ Vol. 52, No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ Department. However, the rule was modified somewhat in this regard after negotiations with the American Federation of Government Employees (AFGE), as discussed below. The third commenter was an official of the AFGE. He made a number of preliminary observations in anticipation of negotiations concerning the Standards of Conduct. Some of these comments were suggested technical changes. He also suggested eliminating rules based upon the Government-wide Standards of Conduct regulations promulgated by the Office of Personnel Management. The Department does not have the discretion to modify or eliminate those rules. However, the rule was also submitted in a draft final version to the AFGE for review pursuant to Article 5 of the Department's Agreement with the AFGE. The AFGE requested negotiations concerning certain provisions of the rule. As a result of those negotiations this rule deletes the provision which required an employee to obtain the prior approval of a Deputy Counselor before maintaining a publicly listed place of business ( 0.735-203(d)). That rule has been superceded by a new 0.735-203(d)(1) which requires an employee to obtain prior approval before using his title or reference to Government experience in connection with a commercial enterprise. After discussion with the AFGE we also added a new 0.733-204(a)(3) which explicitly permits an employee to obtain FHA insurance on one single family dwelling in addition to the employee's current principal residence. This change permits an employee for example, to retain FHA insured financing on any one past residence or ___________________________________________________________________________ 2 ( 3 of 5) _____________________________________________________________________ ATTACHMENT I 27110 Federal Register/ Vol. 52, No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ other investment property. Under the prior regulation, an employee could properly obtain FHA insurance on his immediate past residence, vacation or retirement home. We agreed to reinstate a somewhat modified version of this rule because of concerns raised during the clearance process and the AFGE negotiations concerning the possible hardship on employees who may have to refinance in connection with a job relocation. The rule was also submitted for review to the Office of Government Ethics (OGE) pursuant to 5 CFR 735-104. In accordance with OGE suggestions, we made a number of changes in 0.735-202 of the rules concerning the acceptance of gifts. First, we reinstated at 0.735-202(b)(2) the rule that an employee may accept food and refreshments of nominal value on infrequent occasions at a business meeting. We deleted proposed 0.735-202(b)(2)(i) which would have permitted acceptance of food and refreshments at conferences and similar meetings where payment by the employee would not be practicable. Second, as OGE suggested we deleted 0.733-202(b)(2)(ii) which would have permitted acceptance of food and refreshments at "meetings which do not include the inspection, monitoring, or selection of grantees, contractors, or others who do business, or are seeking to do business, with the Department." Third, we revised 0.735-202(b)(5) which generally addressed the subject of attendance at conferences and social functions. As OGE recommended, we revised the regulation to provide for case-by-case handling of attendance at these functions. The rule now permits an employee to participate in a "widely attended luncheon, dinner, conference or similar gathering sponsored by a trade, technical, professional or other ___________________________________________________________________________ 2 ( 4 of 5) _____________________________________________________________________ ATTACHMENT I 27110 Federal Register/ Vol. 52, No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ association or similar group for a discussion of matters related to the work of the Department." Participation must be in the Department's interest and approved in advance by the employee's supervisor. However, acceptance of food and refreshments from a private company in connection with an association's activities will be impermissible. Fourth, we revised 0.735-202(b)(6) to include a reference to HUD's gift acceptance authority at 42 U.S.C. 3535(k). We also added a new 0.735-202(e) to state that employees may accept certain gifts of travel from charitable organizations defined in 26 U.S.C. 501(c)((3). Finally, in 0.735-202(c) we restored language which would permit an employee to accept gifts of only nominal value (not "modest" value) on special occasions from persons receiving less pay than himself. ___________________________________________________________________________ 2 ( 5 of 5) _____________________________________________________________________ Federal Register / Vol. 52, No. 137 / Friday, July 17, 1987 / 27111 Rules and Regulations ___________________________________________________________________________ OGE also suggested a number of changes to provisions concerning the misuse of Government position and official title. In response to these suggestions, we revised 0.735-202(d)(2) to require an employee to obtain the prior approval of a Deputy Counselor before using his official title or reference to government employment "in connection with" a commercial enterprise, rather than to "promote" a commercial enterprise as the rule stated. OGE objected to the implication that an employee's title or employment could ever be used to promote a commercial enterprise. We declined to adopt OGE's recommendation that a Deputy Counselor approve every proposed use of an employee's title in connection with a writing. An employee's use of title in connection with a commercial writing must be approved by a Deputy Counselor under 0.735-203(d)(2). For other writings, an employee must add a disclaimer or obtain the prior approval of the appropriate Assistant Secretary or equivalent or his or her designee pursuant to 0.735-203(e)(3). OGE also recommended several other technical and editorial changes in the proposed rule to clarify meaning and correct errors. We have made those changes where appropriate. In preparing this rule for publication in final form, the Department reconsidered all changes set forth in the proposed rule. One of the proposed revisions would have barred employees from acquiring notes or bonds issued by a State or local agency if the proceeds were to be used for HUD-related housing. After reevaluating the effects of this restriction, the Department decided the proposed revision was unnecessary to prevent a real or apparent conflict of interest in most cases, and this final rule eliminates the restriction. However, acquisition of such bonds or notes based upon any inside information acquired ___________________________________________________________________________ 3 ( 1 of 5) _____________________________________________________________________ Federal Register / Vol. 52, No. 137 / Friday, July 17, 1987 / 27111 Rules and Regulations ___________________________________________________________________________ during the course of HUD employment would be prohibited by 0.735-201(a) and 0.735-206. Other than this change and those discussed above, the rule is essentially unchanged from that which was published in proposed form. Major changes from the former regulations are as follows: Subpart A 1. The statement of purpose in 0.735-101 has been shortened and simplified. In addition, a similar statement now set forth in 0.735-201 has been deleted entirely. 2. The provisions of 0.735-104 have been modified to clarify the role and responsibilities of the Department Counselor and to identify the Department's Deputy Counselors. In addition, the Inspector General has been designated a Deputy Standard of Conduct Counselor for employees in the Office of Inspector General. 3. A new provision has been added in 0.735-106 authorizing waiver of one or more of the regulations restrictions by the Department Counselor when their application is not necessary to prevent an actual or apparent conflict of interest in a particular case. 4. Section 0.735-201 of the former regulations has been eliminated because it was superfluous and unnecessary. Section 0.735-202 of the former regulations has been renumbered 0.735-201 and all following sections are renumbered accordingly. (Unless otherwise indicated, all subsequent section references in Subpart B of this preamble are to the renumbered sections.) 5. The prohibition in 0.735-202(a)(3) on accepting gifts from a person or organization whose interests way be substantially affected by the performance of an employee's official duties has been changed to prohibit acceptance when these interests may be substantially affected by "the action of the Department". ___________________________________________________________________________ 3 ( 2 of 5) _____________________________________________________________________ Federal Register / Vol. 52, No. 137 / Friday, July 17, 1987 / 27111 Rules and Regulations ___________________________________________________________________________ 6. A new subparagraph (b)(5) has been added to 0.735-202 permitting participation by a Department employee at a widely-attended luncheon, dinner, seminar or other similar gathering sponsored by a trade, technical or other association. Participation must be approved in advance by the employee's supervisor as being in the Department's interest. The rule does not permit an employee to accept payment of food and refreshments from a private company in connection with this type of activity. 7. A new subparagraph (b)(6) has been added to 0.735-202 permitting acceptance by Department employees of in-kind contributions toward official travel (for example, donated transportation tickets and meals) made by a non-Federal entity, if consistent with the Department's official travel policies. The policies are intended to permit such acceptance only in circumstance where no actual or apparent conflict of interest would result. The policies are available for public inspection. 8. A new paragraph (e) has been added to 0.735-202 permitting acceptance of travel expense from a charitable organization defined in 28 U.S.C. 501(c)(3). 9. In 735-203(b)(4), the prohibition against engaging in outside employment or activities related to the substantive programs of the Department has been clarified so that the prohibition is against "active participation in, or conduct of, a business dealing with, or related to, real estate or manufactured housing including, but not limited to, real estate brokerage, management and sales, architecture, engineering, mortgage lending, property insurance, appraisal services, construction, construction financing, land planning and real estate development." The new standard permits employees to engage in isolated transactions in areas that are generally similar to programs of HUD when there is no actual conflict of ___________________________________________________________________________ 3 ( 3 of 5) _____________________________________________________________________ Federal Register / Vol. 52, No. 137 / Friday, July 17, 1987 / 27111 Rules and Regulations ___________________________________________________________________________ interest but it does not permit employees to engage in any outside employment involving a HUD program, such as the sale of real estate financed with FHA insurance. 10. In 0.735-203(b)(5) a provision has been added prohibiting an employee from "serving as an officer or director of any organization which engages in lobbying activities concerning HUD's Programs." This provision codifies existing Department policy on this issue. 11. A provision has been added at 0.735-203(d)(1) requiring an employee to obtain the approval of a Deputy Counselor before using his or her title or government experience in connection with a commercial enterprise. The former provision requiring prior approval before maintaining a publicly listed place of business has been deleted. 12. Current provisions concerning honoraria in 0.735-203 (e)(4) have been revised to reflect the statutory limitation (2 U.S.C 441i) on receipt of honoraria. The limit with certain exceptions, is $2000 per appearance, speech or article. 13. A new provision has been added in 0.733-203(f) to reflect the statutory limitation on outside earned income that may be received by Presidential appointees at or above GS-16. That limitation is 15% of annual salary. 14. In 0.735-203 (g) and (h), new provisions have been added incorporating the restrictions on outside activities set forth in 18 U.S.C. 203 and 205. In general, these restrictions pertain to off-duty employee involvement in outside claims, requests for rulings, contracts and applications or other similar particular matters in which the United States is a party or has a direct and substantial interest and which are pending before a Federal or District of Columbia department or agency or, in some instances, court. ___________________________________________________________________________ 3 ( 4 of 5) _____________________________________________________________________ Federal Register / Vol. 52, No. 137 / Friday, July 17, 1987 / 27111 Rules and Regulations ___________________________________________________________________________ 15. A new 0.735-203(k) has been added permitting an employee to serve as a member of the Board of a federal credit union or a cooperative or condominium association for a housing project which is not subject to ___________________________________________________________________________ 3 ( 5 of 5) _____________________________________________________________________ 27112 Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ Department regulation or, if so regulated, in which the employee resides. This provision codifies existing Department policy. 16. Section 0.725-204, which deals with permissible holdings, has been revised substantially. Most restrictions on employee investment in non-HUD related properties have been eliminated, but restrictions against employee investment in HUD-related interests or properties have been expanded. Thus, the restriction on the number of permissible investment units (the so-called "six unit rule") has been eliminated, but restrictions on FHA-financing of properties other than the employee's principal residence and one other single family unit have been expanded. Most of the new or revised provisions in this section reflect this change in emphasis, and also codify existing Department policy concerning HUD-related financial interests. 17. The primary purpose of 0.735-204(a) of the new regulation is to regulate certain financial interests acquired after beginning employment with the Department. Prohibited interests acquired prior to HUD employment are governed by 0.735-204(c). 18. The prohibition against the acquisition of GNMA securities has been eliminated. Accordingly, employees may now purchase GNMA securities and funds comprised of GNMA securities. The holding of GNMA-guaranteed securities does not create a potential conflict-of-interest on the part of a HUD employee, because actions that may be taken by GNMA vis-a-vis the issuer after default will not affect the security holder. GNMA's guarantee of timely payment of principal and interest on mortgage-backed securities is backed by the full faith and credit of the United States. From the perspective of the investor, therefore, GNMAs are essentially similar to Treasury securities, which are not prohibited investments. However, an ___________________________________________________________________________ 4 ( 1 of 4) _____________________________________________________________________ 27112 Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ employee who has access to information unavailable to the general public relevant to GNMA securities (such as prepayment trends) is still prohibited from acquiring, selling, or otherwise dealing in GNMA securities on the basis of this "inside information." GNMA transactions based on inside information violate 0.735-201(a) of this regulation which prohibits using public office for private gain and 0.735-206 which prohibits the use of inside information. 19. This regulation continues to prohibit the holding and acquisition of FNMA securities and also bars the holding of securities collateralized by FNMA securities. See 0.735-204(a)(1). The obligations of FNMA are not backed by the full faith and credit of the United States, and the interests of holders of FNMA debt obligations (including guaranteed passthrough securities) or equity securities can be affected by actions taken by HUD under its oversight and regulatory responsibility. 20. A new provision has been added at 0.735-204(a)(3) barring an employee from having any interest in a Department-owned, insured, or subsidized project or unit other than an employee's principal residence, subject to certain exceptions set forth in 0.735-204(b). This is a departure from the former rule at 0.735-204(a)(6) which permitted an employee, for example, to obtain a HUD-insured loan for an immediate past residence, vacation or retirement home. 21. In 0.735-204(a)(4), a new provision has been added barring the receipt of HUD subsidies under section 8 of the United States Housing Act of 1937, as amended, except in certain limited situations. The provision codifies existing Department policy. 22. The prohibition against "speculation" in real estate, in the former rule at 0.735-205(a)(8), has been deleted since it was ambiguous and unenforceable. ___________________________________________________________________________ 4 ( 2 of 4) _____________________________________________________________________ 27112 Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ 23. A new 0.735-204(a)(5) has been added barring acquisition of a direct creditor interest in mortgages insured by HUD. This restriction is in addition to that set forth in 0.735-204(a)(4) which prohibits an employee from acquiring an interest in a HUD-insured investment property. This provision does not bar the acquisition of an indirect interest in HUD-insured mortgages, such as through GNMA securities. 24. A new provision has been added in 0.735-204(b)(1) permitting employee investments in widely held mutual or money market funds which have broadly diversified portfolios although these funds may have HUD-related assets. The provision codifies existing Department policy. 25. A new 0.735-204(b)(2) has been added permitting investment as a limited partner in a large public partnership if less than 25% of the partnership assets are involved in HUD-related housing. This also codifies existing Department policy. 26. A new provision has been added at 0.735-204(b)(3) which permits an employee to obtain FHA insurance on one single family residential unit, other than the employee's principal residence. Under the provision, for example, an employee is not required to refinance a single family investment property formerly occupied as a principal residence. 27. Section 0.735-204(c) adds a new provision setting forth a procedure to resolve conflicts which may arise because of prohibited interests acquired involuntarily or acquired before employment with the Department. Prohibited interests acquired involuntarily or prior to HUD employment must be reported to, and considered by, a Deputy Counselor. Generally, an employee may retain such interests in the absence of an actual conflict of interest. For example, an employee who owned a property with ___________________________________________________________________________ 4 ( 3 of 4) _____________________________________________________________________ 27112 Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ section 8 voucher or certificate holder tenants in place prior to HUD employment may normally retain the property and the tenants after beginning employment with the Department. However, the employee may not take on new section 8 tenants during HUD employment. 28. A portion of the former regulations implementing 18 U.S C. 208 has been deleted. Formerly, 0.735-205(b)(2) permitted an employee to act in a matter involving a corporation if the employee owned stock in the corporation worth less than $7500 (and which was less than 1% of the total stock in that corporation), and if the employee, his or her spouse, or minor child was not involved in managing the corporation. This provision has been deleted because the $7500 ceiling is arbitrary and is not "inconsequential" within the meaning of 18 U.S.C. 208. Further, retaining this provision would have been inconsistent with other portions of the new rule which prohibit the mere acquisition of certain HUD-related interests. 29. The provision of the former regulations at 0.735-205(c) which attributed the financial interests of an employee's spouse and minor child to the employee has been deleted. The Department has determined that provision was unfair and unenforceable, particularly when an employee's spouse had independent means and the employee had no actual control over the spouse's investments. Of course, sham transactions will still be barred by 0.735-204. For example, the acquisition of a prohibited interest in the name of a minor child will be barred as a sham transaction if the employee's funds are used to purchase the interest or if the employee directs purchase of the interest with other funds. 30. Section 0.735-205 has been expanded to include a prohibition against the use of Government ___________________________________________________________________________ 4 ( 4 of 4) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27113 Rules and Regulations ___________________________________________________________________________ personnel for other than official purposes. In addition, the prohibition against the misuse of Government property set forth in this section is intended to include intangible property such as the Government's rights in data, patents, and copyrights, as well as products and services it has under grants, loans, subsidies, and insurance. 31. A new 0.735-207 has been added prohibiting an employee from misusing his or her supervisory relationship or management position to obtain favors from, encourage a contribution from, or sell to, another HUD employee or someone who has business with the Department. 32. A number of miscellaneous employee conduct provisions contained in 0.735-207 through 0.735-212 of the former regulations have been revised and streamlined. Subpart C 33. Section 0.735-301 adds a provision describing the categories of employees required to submit public financial disclosure statements. 34. A new 0.735-302(a)(4) has been added requiring employees at GS-13 or above who are involved in conducting Departmental investigations to file confidential financial disclosure statements. 35. A new provision has been added at 0.735-302(d) requiring all employees who serve on Evaluation Boards and Technical Evaluation Panels to file confidential disclosure statements. 36. Much of the technical information in the former regulations concerning time and place of filing confidential statements has been deleted. This information will be set forth in a Handbook detailing filing procedures. ___________________________________________________________________________ 5 ( 1 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27113 Rules and Regulations ___________________________________________________________________________ Subpart D 37. All provisions relating to special Government employees have been consolidated in Subpart D, 0.735-401 through 405. 38. Section 0.735-402 adds a new provision prohibiting special Government employees from having financial interests or engaging in outside employment or activities that constitute an actual conflict of interest. This section codifies existing Department policy. Subpart E 39. Subpart E is new and implements the post employment restrictions set forth in the Ethics in Government Act of 1978. 40. Section 0.735-213 of the former regulations has been transferred to Subpart E 0.735-501, to consolidate provisions dealing with conduct and responsibilities of former employees. Section 0.735-501(f) incorporates the provisions of 25 U.S.C. 450(f), permitting representation before any Federal Department, agency, court or commission by a former federal employee employed by an Indian tribe. 41. Sections 0.735-502 through 509 set forth provisions concerning disciplinary actions that may be initiated against former employees who violate post employment restrictions. Determination HUD regulations published at 24 CFR Part 50, implementing section 102(2)(C) of the National Environmental Policy Act of 1969, contain categorical exclusions for certain actions, activities and programs specified in 50.20. Since the amendments made by this rule fail within the categorical exclusions for internal administrative procedures set forth in paragraph (k) of 50.20, the preparation of an Environmental Impact Statement or a Finding of No Significant Impact is not required for this rule. ___________________________________________________________________________ 5 ( 2 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27113 Rules and Regulations ___________________________________________________________________________ Pursuant to the provisions of 5 U.S.C. 605(b) (the Regulatory Flexibility Act), the Undersigned hereby certifies that this rule does not have a significant economic impact on a substantial number of small entities. The rule affects only present and former Government employees. This rule does not constitute a "major rule" as the term is defined in section 1(b) of the Executive Order on Federal Regulation issued by the President on February 17, 1981. Analysis of the rule indicates that it does not: (1) have an annual effect on the economy of $100 million or more; (2) cause a major increase in costs or prices for consumers, individual industries, Federal, State or local government agencies, or geographic regions; or (3) have a significant adverse effect on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets. This rule was listed at item 885 in the Department's Semiannual Agenda of Regulations published on April 27, 1987 (52 FR 14362 73) pursuant to Executive Order 12291 and the Regulatory Flexibility Act. List of Subjects in 24 CFR Part 0 Conflict of interest. Accordingly, 24 CFR Part 0 is revised to read as follows: Part 0-STANDARDS OF CONDUCT Subpart A - General Provisions 0.735-101 Purpose. 0.735-102 Definitions. 0.735-103 Notification to employees. 0.735-104 Interpretation and advisory service. 0.735-105 Disciplinary and other remedial actions. 0.735-106 Waivers. ___________________________________________________________________________ 5 ( 3 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27113 Rules and Regulations ___________________________________________________________________________ Subpart B - Conduction and Responsibilities of Employees 0.735-201 Prescribed actions. 0.735-202 Gifts, entertainment and favors. 0.735-203 Outside employment and other activities. 0.735-204 Financial interests. 0.735-205 Misuse of Government personnel and property. 0.735-206 Misuse of official information. 0.735-207 Misuse of official position. 0.735-208 General conduct and conduct prejudicial to the Government. 0.735-209 Intermediaries and product recommendations. 0.735-210 Membership in organizations in an official capacity. 0.735-211 Political activities. 0.735-212 Miscellaneous statutory provisions. Subpart C - Statements of Employment and Financial Interests 0.735-301 Employees required to file under the Ethics in Government Act of 1978. 0.735-302 Employees required to file confidential financial disclosure statements. 0.735-303 Employee's grievance regarding filing requirements. 0.735-304 Reporting and review requirements. 0.735-305 Confidentiality of employees' statements. Subpart D - Conduct and Responsibilities of Special Government Employees 0.735-401 Applicable provisions. 0.735-402 Outside employment activities and financial interests. 0.735-403 Political activities. 0.735-404 Financial reporting. 0.735-405 Post employment restrictions. ___________________________________________________________________________ 5 ( 4 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27113 Rules and Regulations ___________________________________________________________________________ Subpart E - Conduct and Responsibilities of Former Employees 0.735-501 Prohibited activities by former employees. 0.735-502 Disciplinary action. 0.735-503 Initiating disciplinary proceedings. 0.735-504 Notices. 0.735-505 Hearings. 0.735-506 Decision without a hearing. 0.735-507 Appeals. 0.735-508 Sanctions. 0.735-509 Judicial review. Authority: 5 U.S.C. 301: 18 U.S.C. 201-212; E.O. 11222.3 CFR. 1964-1965 Comp. p.306; 5 CFR 735.101-412. ___________________________________________________________________________ 5 ( 5 of 5) _____________________________________________________________________ 27114 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ Subpart A - General Provisions 0.735-101 Purpose. The maintenance of high standards of honesty, integrity and impartiality by Government employees is essential for the proper performance of the public business and the maintenance of confidence by citizens in their Government. To inform the public and Department staff as to the specific application of this general principle, this Part sets forth the Department's regulations prescribing standards of conduct for, and governing the submission of statements of employment and financial interests by its employees. All questions about, or requests for, interpretations should be directed to the Department Counselor or to a Deputy Counselor. 0.735-102 Definitions. (a) "Department" means the Department of Housing and Urban Development. (b) "Employee" means an employee of the Department other than a Special Government employee. (c) "Special Government employee" means a person who is retired, designated, appointed or employed by the Department to perform temporary duties, with or without compensation, for not more than 130 days during any period of 365 consecutive days, either on a full-time or intermittent basis, as defined in 18 U.S.C. 202. (d) "Person" means an individual human being. (e) "Business entity" means a corporation, company, firm, partnership, society, joint stock company, or any other organization or institution having a business purpose, including, but not limited to: (1) Non-profit organizations or institutions which own or operate housing units, and ___________________________________________________________________________ 6 ( 1 of 5) _____________________________________________________________________ 27114 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (2) Educational and other institutions doing research and development or related work involving grants or other types of financial assistance from, or contracts with, the Government. 0.735-103 Notification to employees. The provisions of this Part shall be brought to the attention of, and made available to, each employee and special Government employee at the time of entrance on duty and at least annually thereafter. Each revision of this Part shall be brought promptly to the attention of all employees and special Government employees. 0.735-104 Interpretation and advisory service. (a) Department Counselor. The General Counsel is the Standards of Conduct Counselor for the Department and shall serve as the Department's designee to the Office of Personnel Management on matters covered by this Part. The Department Counselor shall be responsible for directing and coordinating the Department's activities under this Part and assuring that adequate counseling is provided to prospective, present and former employees of the Department. (b) Deputy Counselors. The Department's Deputy Standards of Conduct Counselors are the Associate General Counsel for Equal Opportunity and Administrative Law, the Assistant General Counsel for Administrative Law, all Regional Counsel, and any other employee designated by the Department Counselor. The Department Counselor and the Deputy Counselors shall provide authoritative, advice to former, current and prospective Department employees who seek guidance on questions of conflicts of interest and on other matters covered by this Part. In addition, the Inspector ___________________________________________________________________________ 6 ( 2 of 5) _____________________________________________________________________ 27114 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ General is the Deputy Counselor for employees of the Office of Inspector General and will provide advice to former, current and prospective, employees of that office. 0.735-105 Disciplinary and other remedial actions. (a) When an actual or apparent conflict of interest or other violation of this Part is not resolved to the satisfaction of a Deputy Counselor, the matter shall be reported by the Deputy counselor to the employee's supervisor; copies of the report shall also be provided to the Office of Personnel and Training and other concerned offices, such as the Office of the Inspector General and the Office of the appropriate Assistant Secretary, Regional Administrator or other field office head. (b) The employee's supervisor must consider the report of the Deputy Counselor, initiate appropriate remedial action, and inform the Deputy Counselor of the action taken. Remedial action may include, but is not limited to: (1) Changes in assigned duties; (2) Divestment by the employee of the conflicting interest within a reasonable time, but normally not more than 60 days after notice that a conflict exists; (3) Disciplinary action: or (4) Disqualification for a particular assignment. 0.735-106 Waivers. (a) The Department Counselor, in an individual case, may waive any requirement of this Part not required by law if the Department Counselor finds that application of the requirement is not necessary to prevent an actual or apparent conflict of interest in a particular case. ___________________________________________________________________________ 6 ( 3 of 5) _____________________________________________________________________ 27114 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (b) Each such waiver shall be in writing and supported by a statement of the facts and conclusions on which it is based. (c) The Department Counselor's authority under this Section may not be delegated. Subpart B - Conduct and Responsibilities of Employees 0.735-201 Proscribed actions. An employee shall avoid any action, whether or not specifically prohibited by this subpart, which might result in, or create the appearance of: (a) Using public office or official title for private gain; (b) Giving preferential treatment; (c) Impeding Government efficiency or economy; (d) Losing independence or impartiality; (e) Making a Government decision outside official channels: (f) Adversely affecting the confidence of the public in the integrity of the Government (g) Discriminating against any other employee, or applicant for employment, on the ground of race, color, religion, national origin, sex, age, or handicap; (h) Excluding any person from participating in, or denying to any person the benefits of, any program or activity administered by the Department on the ground of race, color, religion, sex, national origin, age, or handicap: or (i) knowingly participating in, or attending while on official business, any segregated meeting, or meetings held in segregated facilities, from which persons are excluded because of race, color, religion, national origin, sex, age or handicap. ___________________________________________________________________________ 6 ( 4 of 5) _____________________________________________________________________ 27114 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ 0.735-202 Gifts, entertainment, and favors. (a) Except as provided in paragraph (b) of this section, an employee shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan, or any other thing of value, from a person, State government, local government or business entity, or a group of persons, State governments, local governments or business entities, who or which: ___________________________________________________________________________ 6 ( 5 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27115 Rules and Regulations ___________________________________________________________________________ (1) Has, or is seeking, and contractual or other business or financial relationship with the Department; (2) Conducts operations or activities that are regulated by the Department; or (3) Has interests, or whose members or clients have interests, that may be substantially affected by the actions of the Department. (b) The prohibitions of paragraph (a) of this section do not apply: (1) When the circumstances make it clear that family or personal relationships are the motivating factors for a gift, entertainment or favor; (2) To acceptance of food and refreshments of nominal value on infrequent occasions in the course of a business meeting in which the employee is properly in attendance; (3) To acceptance by an employee of loans from banks or other financial institutions on customary terms; (4) To Acceptance by an employee of unsolicited advertising or promotional material, such as pens, pencils, plaques, note pads, calendars, and other items of nominal intrinsic value; (5) To participation by an employee at a widely attended luncheon, dinner, conference, or similar gathering sponsored by a trade, technical, professional or other association or similar group for a discussion of matters related to the work of the Department. Participation must be approved in advance by the employee's supervisor as being in the interest of the Department. Acceptance of food and refreshments from a private company in connection with an association's activities is impermissible. (6) To acceptance by the Department pursuant to 42 U.S.C. 3535(k) and under its policies governing official travel, of a donation of transportation, lodging or meals from a non-federal entity to permit an employee to attend a meeting or other event in an official duty status. ___________________________________________________________________________ 7 ( 1 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27115 Rules and Regulations ___________________________________________________________________________ (c) An employee shall not solicit contributions for a gift to an official superior, make a donation as a gift to an official superior, or accept a gift from an employee receiving less pay than himself or herself (5 U.S.C 7351). However, this paragraph does not prohibit voluntary gifts or donations of modest value made because of special circumstances such as marriage, illness or retirement. (d) An employee shall not accept any gift, present, decoration or other item from a foreign government, except as authorized by the Foreign Gifts and Decorations Act (5 U.S.C. 7342). (e) An employee may accept payment of travel, subsistence, and other expenses, incident to attendance at a meeting, from a charitable organization as defined in 26 U.S.C. 501(c)(3), if the donor is not a prohibited source described in subsection (1) of this section (5 U.S.C. 4111). 0.735-203 Outside employment and other activities. (a) Reference in this section to outside employment and outside activities is not intended to cover employee investments. That subject is covered in 0.735-204. (b) An employee shall not engage in outside employment or other outside activity not compatible with the full and proper discharge of the employee's official duties and responsibilities. Incompatible activities include, but are not limited to: (1) Outside activities which tend to impair the employee's ability or capacity to perform official duties and responsibilities. (2) Outside activities that may be construed by the public to be the official acts of the Department; (3) Outside activities that establish relationships or property interests that may result in a conflict between private interests and official duties; ___________________________________________________________________________ 7 ( 2 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27115 Rules and Regulations ___________________________________________________________________________ (4) Active participation in, or conduct of, a business dealing with, or related to, real estate or manufactured housing including, but not limited to, real estate brokerage, management and sales, architecture, engineering, mortgage lending, property insurance, appraisal services, construction, construction financing, land planning and real estate development; (5) Serving as an officer or director of any organization which engages in lobbying activities concerning Department programs; (6) Serving as an officer or director of a Department-approved mortgagee, lending institution or organization which services mortgagees or other securities for the Department; (7) Accepting employment, with or without compensation, with any person or business entity doing business with the Department; (c) An employee shall not receive any salary or any thing of monetary value from a private source as compensation for his or her services to the Government (18 U.S.C. 209). (d) An employee, must obtain the prior approval of the a appropriate Deputy Counselor: (1) Before using his or her title of reference to his or her government employment or experience in connection with a commercial enterprise, or (2) Before accepting employment, with or without compensation (i) With a State or local government, or (ii) In the same professional field as that of the employee's official position. (e) Employees are encouraged to engage in teaching, lecturing, and writing that is not prohibited by law, Executive order, Office of Personnel Management regulation, or this Part, except that ___________________________________________________________________________ 7 ( 3 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27115 Rules and Regulations ___________________________________________________________________________ (1) An employee may not receive compensation for any lecture, writing, or consultation, the subject matter of which is substantially related to the responsibilities, programs, or operations of the Department; (2) An employee may not, either with or without compensation, engage in teaching, lecturing or writing that is dependent on information obtained as a result of his or her Government employment, except when that information has been made available to the general public, or will be made available on request, or when the appropriate Assistant Secretary or his or her designee gives written authorization for the use of nonpublic information on the basis that the use is in the public interest. (3) An employee may use his or her title in connection with writing for publication only if: (i) The writing contains a statement indicating that the views contained therein are those of the employee as an individual and do not necessarily represent the views of the Department of Housing and Urban Development; or (ii) Such use of the employee's title is approved in advance by the appropriate Assistant Secretary or equivalent, or his or her designee. (4) An employee may not accept any honorarium of more than $2,000 for any appearance, speech or article (2 U.S.C. 441i), except if the honorarium is paid directly to a charitable organization at the request of the employee and selected by the payor from a list of 5 or more charitable organizations provided by the employee. In computing the $2,000 amount, the following may be excluded: (i) Actual travel and subsistence expenses for the employee and the employee's spouse or aide; and (iii) Amounts paid or incurred for any agent's fees or commissions. ___________________________________________________________________________ 7 ( 4 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27115 Rules and Regulations ___________________________________________________________________________ (f) Any employee who is compensated at an amount equal to or above GS-16 in the General Schedule and who occupies a full-time position, appointment to which must be made by the President by and with the advice and consent of the Senate, may not have in any calendar year outside earned income attributable to such calendar year which is in excess of 15 percent of the employee's salary (Pub. L. 95-521, section 210, 5 U.S.C. App.). ___________________________________________________________________________ 7 ( 5 of 5) _____________________________________________________________________ 27116 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (g) An employee may not directly or indirectly seek or receive compensation for services, rendered by himself or others, in connection with any proceeding, application, request for ruling, contract, claim, or other particular matter in which the United States is a party or has a direct and substantial interest and which is before any Federal or District of Columbia department or agency (18 U.S.C. 203). (h) An employee may not act with or without compensation, as agent or attorney for another; (1) In prosecuting a claim against the United States; or (2) In connection with any proceeding, application, request for ruling, contract or other particular matter in which the United States is a party or has a direct and substantial interest and which is before any Federal or District of Columbia department, agency, or court (18 U.S.C, 205). (i) Permissible exceptions to the prohibitions set forth in paragraphs (g) and (h) of this section include: (1) Representation without compensation in connection with a disciplinary, loyalty, or personnel proceeding: (2) Representation with or without compensation of parents, spouse, child, or those to whom the employee owes a fiduciary duty, except in those matters in which the employee has participated personally and substantially as a Government employee or which are the subject of his official responsibility; and (3) Statements required to be made under penalty for perjury or contempt. An employee seeking to engage in one of these excepted activities is encouraged to consult in advance with a Deputy Counselor. (j) The prohibitions set forth in paragraphs (g) and (h) of this section are in addition to, and not in lieu of any other restrictions contained in this subpart. ___________________________________________________________________________ 8 ( 1 of 5) _____________________________________________________________________ 27116 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (k) This section does not prohibit an employee from serving in an individual capacity as an officer of a member of the Board of Directors of: (1) A Federal Credit Union, or (2) A cooperative or condominium association for a housing project which is not subject to regulation by the Department or, if so regulated, in which the employee personally resides. (j) When participating in any activity permitted by this section, an employee shall make certain that his or her official title or Department connection is not shown or used in a manner which implies that the employee is acting in an official capacity. 0.735-204 Financial interests. (a) An employee shall not have a direct or indirect financial interest that conflicts, or appears to conflict, with his or her official duties and responsibilities. Such interests include, but are not limited to, the voluntary acceptance, acquisition, or holding of: (1) Securities issued by the Federal National Mortgage Association and securities collateralized by FNMA securities. (2) FHA debentures or certificates of claim. (3) Stock or other interest in a Department-owned, insured or subsidized multifamily project or single family dwelling, cooperative unit, or condominium unit, except to the extent that the stock or other interest represents the employee's principal residence. Employees who wish to purchase a Department-held property as a principal residence must adhere to the procedures established by the Assistant Secretary for Housing for the administration of the property disposition program set forth in Handbook 4310.5. ___________________________________________________________________________ 8 ( 2 of 5) _____________________________________________________________________ 27116 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (4) Any Department subsidy provided pursuant to Section 8 of the United States Housing Act of 1937, as amended, to or on behalf of a tenant of property owned by the employee. However, an employee may accept the benefit of such a subsidy when: (i) The employee involuntarily acquires a property which at the time of acquisition has a tenant receiving such a subsidy but only as long as that tenant continues to reside in the property, or (ii) An incumbent tenant who has not previously received such a subsidy becomes the beneficiary thereof but only if there is no increase in that tenant's rent upon the commencement of subsidy payments other than normal annual adjustments. (5) Any direct creditor interest in a mortgage insured by the Department. (b) Notwithstanding paragraph (a) of this section, an employee may accept, acquire or hold (1) An interest in a mutual or money market fund which has holdings listed in paragraph (a) of this section, and which: (i) Has a broadly diversified portfolio not specializing in any particular industry; (ii) Is widely held; and (iii) Is not under the employee's control. (2) A limited partnership interest in a large public partnership (i.e. one which has at least 5,000 partnership interests) less than 25% of the assets of which are Department insured or subsidized projects; (3) Mortgage insurance provided pursuant to section 203 of the National Housing Act on any one single family residence in addition to the employee's current principal residence. (c) If an employee acquires an interest prior to the commencement of employment with the Department which is prohibited under paragraph (a) of this section, or involuntarily acquires such a prohibited interest after the ___________________________________________________________________________ 8 ( 3 of 5) _____________________________________________________________________ 27116 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ commencement of employment with the Department, the matter must be reported promptly to a Deputy Counselor. The Deputy Counselor will then determine whether retention of the interest is permissible or whether divestment or other appropriate remedial action is required. (d)(1) An employee must not participate in his or her capacity as a Government employee in any matter in which, to his or her knowledge, the employee, his or her spouse, minor child, any organization in which the employee is serving as an officer, director, trustee, partner, or staff member, or a partner of the employee has financial interest. In addition, an employee must not participate in his or her capacity as a Government employee in any matter in which, to the employee's knowledge, a person, business, or nonprofit organization with whom the employee is negotiating, or has an arrangement for, employment has a financial interest. For purposes of this paragraph a "matter" includes an application, contract, claim, request for a ruling, controversy, charge, accusation, arrest, judicial or other proceeding, or other particular matter. (18 U.S.C. 208(a)). (2) Paragraph (d)(1) of this section does not apply: (i) If a Deputy Counselor first determines that the financial interest is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from the employee; or (ii) If the financial interest is within one of the following categories which are hereby exempted from the requirements of section 208(a) of Title 18, United States Code, as being too remote or too inconsequential to affect the integrity of an employee's service: ___________________________________________________________________________ 8 ( 4 of 5) _____________________________________________________________________ 27116 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (A) Any holding in a widely held mutual or money market fund, or regulated investment company, which is not under the employee's control and which has a broadly diversified portfolio not specializing in any particular industry; (B) Participation in a bona fide employee benefit plan, other than a profit-sharing or stock-bonus plan, that is maintained by a former employer to ___________________________________________________________________________ 8 ( 5 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27117 Rules and Regulations ___________________________________________________________________________ the extent that the employee's rights in the plan are vested and require no additional services by him or her or further payment to the plan by the former employer with respect to the services of the employee. 0.735-205 Misuse of Government personnel and property. An employee shall not directly or indirectly use, or allow the use of, Government property of any kind, including property leased to the Government, or the services of any HUD employee, for other than officially approved activities. An employee has a positive duty to protect and conserve Government property, including equipment and supplies, entrusted to him or her. 0.735-206 Misuse of official information. For the purpose of furthering a private interest, an employee shall not, except as permitted by 0.735-203(e)(2), directly or indirectly use, or allow the use of, official information which has not been made available to the general public. 0.735-207 Misuse of official position. Except as may be permitted in the course of official business, an employee shall not use his or her supervisory relationship or management position, directly or indirectly, to seek a favor from, encourage a contribution from, or attempt to sell to, another HUD employee or person who has business with HUD. 0.735-208 General conduct and conduct prejudicial to the Government. ___________________________________________________________________________ 9 ( 1 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27117 Rules and Regulations ___________________________________________________________________________ (a) Each employee shall be courteous, considerate, and prompt in dealing with the public and with persons or organizations having business with the Department; (b) An employee shall not engage in criminal, infamous, dishonest, immoral, or notoriously disgraceful conduct, or other conduct prejudicial to the Government. 0.735-209 Intermediaries and product recommendations. In communicating with any person or organization doing, or seeking to do, business with the Department, an employee shall not recommend or suggest the use of any particular or identified nongovernmental intermediary to deal with the Department, except as required by the employee's official duties. 0.735-210 Membership in organizations in an official capacity. (a) An employee may not, in his or her official capacity, serve as a member of a non-Federal or private organization except where express statutory authority exists, or statutory language necessarily implies such authority, or where the Secretary has determined in writing that such service would be beneficial to the Department and consistent with the employee's service to the Department. (b) An employee may be designated to serve as a liaison representative of the Department to a non-Federal or private organization when the Secretary, the Under Secretary, an Assistant Secretary, the General Counsel, or a Regional Administrator, as appropriate, has determined in writing that such service would be beneficial to the Department and provided that: (1) The activity relates to the work of the Department. ___________________________________________________________________________ 9 ( 2 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27117 Rules and Regulations ___________________________________________________________________________ (2) The employee does not participate by vote in the policy determinations of the organization. (3) The Department is not bound by any vote or action taken by the organization. 0.735-211 Political activities. Employees are required to observe the prohibitions against partisan political activities in 5 U.S.C. 7321-7327 and 18 U.S.C. 602, 603 and 607. Regulations implementing these restrictions are set forth in 5 CFR Part 733. 0.735-212 Miscellaneous statutory provisions. The attention of each employee is directed to the following statutory provisions which relate to his at her conduct: (a) Pub. L. 96-303, 5 U.S.C 7301 note, the "Cods of Ethics for Government Service." (b) Chapter 11 of Title 18, United States Code, relating to bribery, graft, and Conflicts of interest. (c) The prohibition against lobbying with appropriated funds (18 U.S.C. 1913). (d) The prohibitions against disloyalty and striking (5 U.S.C. 7311, 18 U.S.C. 1918). (e) The prohibition against the employment of a member of a Communist organization (50 U.S.C. 784). (f) The prohibitions against : (1) The disclosure of classified information (18 U.S.C. 798, 50 U.S.C. 783(b)); and (2) The disclosure of confidential information (18 U.S.C. 1905). (g) The provision relating to the habitual use of intoxicants to excess (5 U.S.C. 7352). ___________________________________________________________________________ 9 ( 3 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27117 Rules and Regulations ___________________________________________________________________________ (h) The prohibition against the misuse or unauthorized use of Government vehicle (31 U.S.C. 1944, 18 U.S.C. 641). (i) The prohibition against the misuse of the franking privilege (18 U.S.C. 1719). (j) The prohibition against the use of deceit in an examination or personnel action in connection with Government employment (18 U.S.C. 1917). (k) The prohibition against fraud or false statements in a Government matter (18 U.S.C. 1001). (l) The prohibitions against concealing, removing, mutilating or destroying a public record (18 U.S.C. 2071). (m) The prohibition against counterfeiting and forging transportation requests (18 U.S.C. 508). (n) The prohibitions against : (1) Embezzlement and theft of Government money, property, or records (18 U.S.C. 641); (2) Failing to account for public money (18 U.S.C. 643); and (3) Embezzlement or wrongful conversion of the money or property of another which comes under the control, or into the possession, of an employee by reason of his employment (18 U.S.C. 654). (o) The prohibition against unauthorized taking or use of documents relating to claims from or by the Government (18 U.S.C. 285). (p) The prohibitions against an employee acting as the agent of a foreign principal registered under the Foreign Agents Registration Act of 1938, as amended (18 U.S.C. 219). (q) The prohibition against the employment of an individual convicted of felonious rioting or related offenses (5 U.S.C. 7313). (r) The prohibition against a public official appointing or promoting a relative, or advocating such an appointment or promotion (5 U.S.C. 3110). ___________________________________________________________________________ 9 ( 4 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27117 Rules and Regulations ___________________________________________________________________________ Subpart C - Statements of Employment and Financial Interests 0.735-301 Employees required to file under the Ethics in Government Act of 1978. (a) The following employees shall submit public financial disclosure reports in accordance with the provisions of Title II of the Ethics in Government Act of 1978, as amended: (1) Officers and employees whose positions are classified at GS-16 or above of the General Schedule, or whose basic rate of pay (excluding "step" increases) under other pay schedules is equal to, or greater than, the rate for GS-16 (step 1); (2) Officers and employees in any other positions determined by the Director of the Office of Government ___________________________________________________________________________ 9 ( 5 of 5) _____________________________________________________________________ 27118 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ Ethics to be of equal classification to GS-16; (3) Administrative Law Judges; (4) Employees in the excepted service in positions which are of a confidential or policy-making character, unless their positions have been excluded by the Director of the Office of Government Ethics; (5) Designated agency ethics officials. (b) Those employees required to file under paragraph (a) of this section are subject to the provisions of 5 CFR Part 734 regarding procedures for filing, contents of reports, and penalties for failure to file or for falsifying a report. 0.735-302 Employees required to file confidential financial disclosure statements. The following categories of employees, other than those required to file under 0.735-301, shall submit confidential statements of employment and financial interests: (a) Employees classified at GS-13 at above who are in positions which include responsibility for making a Government decision or taking a Government action in regard to: (1) Contracting or procurement; (2) Administering or monitoring grants or subsidies; (3) Regulating or auditing private or other non-Federal enterprises; (4) Conducting Departmental investigations; or (5) Other activities where the decision or action has an economic impact on the interests of any non-Federal enterprise. (b) Employees classified at GS-13 or above who are in positions which the Department has determined have duties and responsibilities which require the incumbent to report employees and financial interests in order to avoid involvement in possible conflicts of interest. ___________________________________________________________________________ 10 ( 1 of 5) _____________________________________________________________________ 27118 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (c) Employees classified below CS-13 who are in positions which otherwise meet the criteria in paragraphs (a) or (b) of this Section. These positions have been justified in writing to OPM as exceptions that are essential to protect the integrity of the Government and to avoid employee involvement in possible conflicts of interest. (d) Employees, regardless of grade level, who have been selected to serve on a Technical Evaluation Panel or Source Evaluation Board. 0.735-303 employee's grievance regarding filing requirements. If an employee believes that his or her position has been improperly designated as one requiring its incumbent to submit a confidential statement of employment and financial interest, the employee may obtain review of the designation through the Department's grievance procedures. 0.735-304 Reporting and review requirements. (a) Confidential statements of employment and financial interest and supplementary statements: (1) Shall be submitted on forms prescribed by the Department Counselor; (2) Shall contain information required by the Department Counselor regarding the employment background and financial interests of the employee, the employee's spouse and family members, and (3) Shall be submitted at the times and places designated by the Department Counselor. (b) Notwithstanding paragraph (a) this section, the Department Counselor shall not require reporting of information relating to the interests of an employee, or his or her spouse and ___________________________________________________________________________ 10 ( 2 of 5) _____________________________________________________________________ 27118 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ family members, in professional associations or charitable, religious, social, fraternal, recreational, public service, civic or political organizations or similar organizations not conducted as business enterprises. (c) The appropriate Deputy Counselor shall review and retain employees' statements and shall advise employees as to corrective action if necessary. 0.735.305 Confidentiality of employees' statements. To insure the confidentiality of statements filed under 0.735-302, the appropriate Deputy Counselors shall not allow access to, or allow information to be disclosed from, statements except as the Office of Personnel Management or the Department Counselor may determine for good cause shown. SUBPART D - CONDUCT AND RESPONSIBILITIES OF SPECIAL GOVERNMENT EMPLOYEES 0.735-401 Applicable provisions. (a) Every special Government employee is subject to the provisions of 0.735-101 through 0.735-106, 0.735-201, 0.735-202, 0.735-204(d), 0.735-205 through 0.735-210. (b) Every special Government employee should become familiar with the statutes listed at 0.735-212. 0.735-402 Outside employment, activities and financial interests. (a) Special Government employees may not engage in outside employment and activities or have financial interests that conflict with the responsibilities and duties of Federal employment. However, because special Government employees usually are employed outside ___________________________________________________________________________ 10 ( 3 of 5) _____________________________________________________________________ 27118 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ the Department, they may engage in employment or activities prohibited other Federal employees under 0.735-203 when there is no actual conflict of interest. Special Government employees may also have financial interests prohibited other Federal employees under 0.735-204(a)(1) through (a)(5) when there is no actual conflict of interest. (b) Notwithstanding the provisions of paragraph (a) of this section, a special Government employee may not directly or indirectly seek or receive compensation for services rendered by himself, herself or others in connection with any proceeding, application, request for ruling, contract, claim or other particular matter in which the United States is a party or has a direct and substantial interest and: (1) Which is before any Federal or District of Columbia department or agency and in which he or she participated personally and substantially for the Government, or (2) Which is pending before the Department, provided that a special Government employee who has served in the Department no more than 60 days in the previous 365 days shall be bound only to to a matter in which he or she participated personally and substantially. 18 U.S.C. 203. (c) Notwithstanding the provisions of paragraph (a) of this section, a special Government employee may not act, with or without compensation, as an agent or attorney for another in prosecuting a claim against the United States, or in connection with any proceeding, application, request for ruling, contract or other particular matter in which the United States is a party or has a direct and substantial interest, and (1) Which is before any Federal or District of Columbia department, agency or court and in which he or she participated personally and substantially for the Government, or ___________________________________________________________________________ 10 ( 4 of 5) _____________________________________________________________________ 27118 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (2) Which is pending before the Department, provided that this clause shall not apply in the case of a special Government employee who has served in the Department no more than 60 days in the previous 365 days. 18 U.S.C. 205. (d) Permissible exceptions to the prohibitions set forth in paragraphs (b) and (c) of this section include: (1) Representation without compensation in connection with a disciplinary, loyalty, or personnel proceeding; (2) Representation with or without compensation of parents, spouse, child, and those to whom the employee owes a fiduciary duty except in those matters in which the employee has participated ___________________________________________________________________________ 10 ( 5 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27119 Rules and Regulations ___________________________________________________________________________ personally and substantially as a Government employ or which are the subject of his official responsibility; and (3) Statements required to be made under penalty for perjury or contempt. (e) A special Government employee seeking to engage in one of the excepted activities should consult in advance with a Deputy Counselor. (f) The Secretary may allow a special Government employee to represent his or her regular employer or another person or organization before the Department in the performance of work under a grant or a contract. The Secretary must first certify in the Federal Register that such representation is in the national interest. (18 U.S.C. 205). (g) The prohibitions set forth in paragraphs (b) and (c) of this section are in addition to any other restrictions contained in this subpart and do not permit any activities which are otherwise prohibited. 0.735-403 Political activities. Special Government employees are bound by the political activity restrictions cited in 0.735-211. Such restrictions also apply to a special Government employee engaged on an irregular or occasional basis, but only on days in which service is rendered and then for the entire 24 hours of such service day. 0.735-404 Financial reporting. (a) Special Government employees who will work more than 60 days in a calendar year must submit public financial disclosure reports in accordance with the provision of Title II of the Ethics in Government Act of 1978 when their rate of pay is equal to or greater than the basic rate for GS-16, Step 1. Such employees are covered by the reporting requirements at 5 CFR Part 734. ___________________________________________________________________________ 11 ( 1 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27119 Rules and Regulations ___________________________________________________________________________ (b) All special Government employees not required to file under paragraph (a) of this section shall submit Confidential Statements of Employment and Financial Interests and supplementary statements to the appropriate Deputy Counselor for review and custody. (e) The provisions of 0.735-304 and O.735-305 are applicable to a special Government employee who is required to file a statement under paragraph (b) of this section. 0.735-405 Post employment restrictions. All special Government employees are bound by the restrictions concerning post employment set forth in 0.735-501 (a) and (b) and are subject to the provisions regarding disciplinary proceedings set forth in Subpart E. However, the restrictions set forth in 0.735-501 (c) and (d) apply only to special Government employees who serve as Senior Employees, as defined in 5 CFR 737.3(a)(6), over sixty days in any calendar year. The exception to the post employment restrictions set forth in 0.735-501(f) for former employees employed by an Indian tribe also apply to former special Government employees. Subpart E - Conduct and Responsibilities of Former Employees 0.735-501 Prohibited activities by former employees. (a) No former employee, after terminating Government employment, shall knowingly act as agent or attorney for, or otherwise represent another in any formal or informal appearance before, or with the intent to influence, make any oral or written communication on behalf of another to, any agency, employee or court of the United States or the District of Columbia, in connection with any particular Government matter involving a specific party, in which matter such employee ___________________________________________________________________________ 11 ( 2 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27119 Rules and Regulations ___________________________________________________________________________ participated personally and substantially as a Department employee. (b) No former employee, within two years after terminating employment by the United States shall knowingly act as agent or attorney for, or otherwise represent another in any formal or informal appearance before, or with the intent to influence, make any oral or written communication on behalf of another to, any agency, employee or court of the United States or the District of Columbia, in connection with any particular Government matter involving a specific partt, if such matter was actually pending under the employee's official responsibility as an officer or employee within a period of one year prior to the termination of such responsibility. (c) No former Senior Employee, as defined in 5 CFR 737.3(a)(6), within two years after terminating employment by the United Stated, shall knowingly represent or aid, counsel, advise, consult, or assist in representing another by personal presence at any formal or informal appearance before any agency, employee or court of the United States or the District of Columbia, in connection with any particular Government matter involving a specific party, in which matter he or she participated personally and substantially. (d) For a period of one year after terminating employment by the United States, no former Senior Employee shall knowingly act as an agent or attorney for, or otherwise represent, anyone in a formal or informal appearance before, or with the intent to influence, make any written, or oral communication on behalf of anyone, to the Department or any of its officers or employees, in connection with any particular Government matter, whether or not involving a specific party, which is pending before the Department, or in which it has a direct and substantial interest. ___________________________________________________________________________ 11 ( 3 of 5) _____________________________________________________________________ Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / 27119 Rules and Regulations ___________________________________________________________________________ (e) The prohibitions set forth in paragraphs (a) through (d) of this section will be applied in accordance with regulations of the Office of Government Ethics as set forth in 5 CFR Part 737. (f) The prohibitions in paragraphs (a) through (d) of this section do not bar a former employee employed by an Indian tribe from representing the tribe in connection with any matter pending before any Federal department, agency, court or commission. However, a former employee who intends to engage in representational activities must advise the head of the department, agency, court, or commission, in writing, of any personal and substantial involvement he or she may have had as a federal employee in the matter. 25 U.S.C. 450(f). 0.735-502 Disciplinary action. (a) Disciplinary action may be taken against any former Department employee or special Government employee (hereafter referred to as "former employee") found under this subpart to have violated the post employment restrictions set forth in 0.735-405 and 0.735-501 of this Part. (b) The Department Counselor or a Deputy Counselor may initiate disciplinary proceedings. For purposes of this subpart, such an official is referred to as an Initiating Official. (c) Disciplinary action may consist of: (1) Prohibiting the former employee from making, on behalf of another, except the United States, any informal or formal appearance before, or with the intent to influence, any oral or written communication to the Department, on any matter of business for a period not to exceed five years. This prohibition may be accomplished by directing Department personnel to refuse to participate in any such appearance or to accept any such communication; or (2) Other appropriate disciplinary actions, including but not limited to: ___________________________________________________________________________ 11 ( 4 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27119 Rules and Regulations ___________________________________________________________________________ (i) Prohibiting, for a definite period of not more than five years, the former employee from any representation activity in connection with a specific office in the Department, or with a specific matter, in which the employee had an interest; ___________________________________________________________________________ 11 ( 5 of 5) _____________________________________________________________________ 27120 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (ii) Issuing a letter of warning to the former employee. 0.735-503 Initiating disciplinary proceedings. (a) The Initiating Official, upon receiving information indicating grounds for disciplinary action, shall request that the Office of the Inspector General conduct an investigation and report all relevant investigative findings back to the Initiating Official. (b) The Inspector General shall coordinate all investigations under this subpart with the Department of Justice as appropriate. (c) All investigations under this subpart shall be conducted in a manner which protects the privacy of former employees. To the extent possible, information received as a result of the Inspector General's investigation shall remain confidential except as necessary to carry out the purposes of this subpart. (d) After the Inspector General reports the facts of the investigation to the Initiating Official, the Initiating Official shall determine either: (1) That there is reasonable cause to believe that a violation has occurred, in which event the Initiating Official shall expeditiously provide all relevant information, along with any comments or agency regulation, to the Director of the Office of Government Ethics (OGE); in addition, the Initiating Official shall commence disciplinary action against the former employee by serving notice in accordance with 0.735-504; or (2) That there is no reasonable basis for believing that a violation has occurred, in which event the Initiating Official shall advise the former employee and the Inspector General's office of that determination. ___________________________________________________________________________ 12 ( 1 of 5) _____________________________________________________________________ 27120 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (e) In the event disciplinary action is initiated, the Department Counselor shall promptly appoint an impartial hearing officer who shall be a member of the HUD Board of Contract Appeals or an Administrative Law Judge. The hearing officer shall not have participated in any manner in the decision to initiate disciplinary action. 0.735-504 Notice. (a) The Initiating Official shall notify the former employee of the proposed disciplinary action in writing, by registered or certified mail, return receipt requested, or by any other means which gives actual notice or is reasonably calculated to give actual notice. (b) The Notice shall include: (1) A statement of allegations and the basis thereof sufficiently detailed to enable the former employee to prepare an adequate defense; (2) A statement that the former employee is entitled to a hearing with a right to counsel if he or she requests a hearing within 15 days after receiving the notice; (3) A statement explaining the method by which a hearing may be requested including the name, business address, and telephone number of the person to be contacted if there are further questions; (4) A statement explaining the right to submit documentary evidence and a report to the hearing officer if a hearing is not requested and the method by which evidence may be submitted; and (5) The disciplinary action proposed. ___________________________________________________________________________ 12 ( 2 of 5) _____________________________________________________________________ 27120 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ 0.735-505 Hearings. (a) Formal rules of evidence and procedure applicable to a proceeding in a court of law will not be applied. Parties may object to clearly irrelevant material, but technical objections to testimony as used in a court of law will not be sustained. (b) A former employee, against whom disciplinary action is proposed, is entitled to a hearing upon a written request submitted to the hearing officer within 15 days after the former employee receives notice as set forth in 0.735-504. If no timely request is made, the hearing officer may proceed under 0.735-506 to make a decision without a hearing. (c) An attorney from the Department's legal staff shall represent the Department in the matter. (d) The hearing shall be conducted at a reasonable time, date, and place as set by the hearing officer. (1) In setting a hearing date, the hearing officer shall give due regard to the former employee's need for adequate time to prepare a defense and to an expeditious resolution of allegations that may be damaging to the former employee's reputation. (2) Notice of the time, date, and place of such hearing shall be transmitted in writing to all interested parties by the hearing officer and shall include a statement indicating the nature of the proceedings and their purpose. (e) At a hearing, the former employee shall have the right to: (1) Represent himself or herself or be represented by counsel; (2) Introduce and examine witnesses and submit relevant evidence; (3) confront and cross-examine adverse witnesses; (4) Present oral argument; and (5) Receive a transcript or recording of the proceedings, upon request. ___________________________________________________________________________ 12 ( 3 of 5) _____________________________________________________________________ 27120 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (f) In a hearing, the Department has the burden of proof and must establish substantial evidence of a violation. (g) The hearing officer shall make a determination based exclusively on matters of record in the proceeding and shall set forth in the decision all findings of fact and conclusions of law relevant to the matters at issue. 0.735-506 Decision without a hearing. (a) If no hearing is requested under 0.735-505(b), the hearing officer shall make a decision on the basis of evidence submitted under paragraph (b) of this section. The proposed disciplinary action shall be sustained upon a showing, by substantial evidence, of cause as specified in 0.735-502. Notice shall be provided to all interested parties stating the findings of fact and conclusions of law, the sanctions to be imposed if a violation has been found, and the procedure for filing an appeal to the Secretary. (b) If no hearing is requested, the former employee and the Initiating Official may submit relevant information and reports on their behalf to the hearing officer. In making a decision the hearing officer shall consider all evidence and reports received prior to the decision. 0.735-507 Appeals. (a) The former employee may appeal the hearing officer's decision finding a violation of the post-employment restrictions, as set forth in 0.735-405 and 0.735-501 of this Part, to the Secretary by making a written request within 20 days of the decision. (b) Upon receiving an appeal, the Secretary or his or her designee shall review the decision of the hearing officer. The decision of the Secretary or designee shall be based solely on: (1) The record of the proceedings if there has been a hearing; ___________________________________________________________________________ 12 ( 4 of 5) _____________________________________________________________________ 27120 Federal Register / Vol. 52: No.137 / Friday, July 17, 1987 / Rules and Regulations ___________________________________________________________________________ (2) The record upon which the hearing officer made his or her decision if there has not been a hearing; or (3) Those portions of the record cited by the parties to limit the issues. (c) If the decision of the hearing officer is modified or reversed, the decision by the Secretary or designee shall state any findings of fact or conclusions of law which differ from the findings or conclusions of the hearing officer. 0.735-508 Sanctions. Disciplinary action may be imposed by the hearing officer if there was no appeal, or by the Secretary or his or her designee if there was an appeal, against a former government employee found to have violated the post-employment restrictions set forth in 0.735-405 and 0.735-501 of this Part. The sanctions ___________________________________________________________________________ 12 ( 5 of 5) _____________________________________________________________________ Federal Register / Vol. 52. No. 137 / Friday, July 17, 1987 / 27121 Rules and Regulations ___________________________________________________________________________ shall not exceed those proposed by the Initiating Official in the notice which initiated the disciplinary action against the former employee. 0.735-509 Judicial review. Any person found to have violated the post-employment restrictions set forth in 0.735-405 and 0.735-501 of this part, may seek judicial review of the Department's final administrative determination. Dated: July 7, 1987 Samuel R. Pierce, Ur., Secretary, Department of Housing and Urban Development. FR Doc. 87-16248 Filed 7-16-87; 8:45 am BILLING CODE 421-32-M ___________________________________________________________________________ 13 _____________________________________________________________________ ATTACHMENT II Federal Register / Vol. 54. No. 71 / Friday, April 14, 1989 / 15159 Presidential Documents ___________________________________________________________________________ Presidential Documents Executive Order 12674 of April 12, 1989 Principles of Ethical Conduct for Government Officers and Employees By virtue of the authority vested in me as President by the Constitution and 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. (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. (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. _____________________________________________________________________ ATTACHMENT II Federal Register / Vol. 54. No. 71 / Friday, April 14, 1989 / 15159 Presidential Documents ___________________________________________________________________________ (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. _____________________________________________________________________ ATTACHMENT II 15160 Federal Register / Vol. 54, No. 71 / Friday, April 14, 1989 / Presidential Documents ___________________________________________________________________________ (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. No employee who is appointed by the President to a full-time noncareer position in the executive branch, including all full-time employees in the White House Office and the Office of Policy Development, shall receive any earned income for any outside employment or activity performed during that Presidential appointment. PART II - OFFICE OF GOVERNMENT ETHICS AUTHORITY Sec. 201. The Office of Government Ethics. The Office of Government Ethics shall be responsible for administering this order by: (a) Promulgating, in consultation with the Attorney General and the Office of Personnel Management, regulations that establish a single, comprehensive, and clear set of executive-branch standards of conduct that shall be objective, reasonable, and enforceable. (b) Developing, disseminating, and periodically updating an ethics reference manual for employees of the executive branch describing the applicable statutes, rules, decisions, and policies. (c) Promulgating, with the concurrence of the Attorney General, regulations interpreting the provisions of the general conflict-of-interest statute, section 208 of title 18, United States Code, and the statute prohibiting supplementation of salaries, section 209 of title 18, United States Code. (d) Promulgating, in consultation with the Attorney General and the Office of Personnel Management, regulations establishing a system of nonpublic (confidential) financial disclosure by executive branch employees to complement the system of public disclosure under the Ethics in Government Act of 1978. Such regulations shall include criteria to guide agencies in determining which employees shall submit these reports. (e) Ensuring that any implementing regulations issued by agencies under this order are consistent with and promulgated in accordance with this order. Sec. 202. Executive Office of the President. In that the agencies within the Executive Office of the President (EOP) currently exercise functions that are not distinct and separate from each other within the meaning and for the purposes of section 207(e) of title 18, United States Code, those agencies shall be treated as one agency under section 207(c) of title 18, United States Code. _____________________________________________________________________ ATTACHMENT II 15160 Federal Register / Vol. 54, No. 71 / Friday, April 14, 1989 / Presidential Documents ___________________________________________________________________________ PART III - AGENCY RESPONSIBILITIES Sec. 301. Agency Responsibilities. Each agency head is directed to: (a) Supplement, as necessary and appropriate, the comprehensive executive-branch-wide regulations of the Office of Government Ethics, with regulations of special applicability to the particular functions and activities of that agency. Any supplementary regulations shall be prepared as addenda to the branch-wide regulations and promulgated with the concurrence of the Office of Government Ethics. (b) Ensure the review by all employees of this order and regulations promulgated pursuant to the order. (c) Coordinate with the Office of Government Ethics in developing annual agency ethics training plans. Such training shall include mandatory annual briefings on ethics and standards of conduct for all employees appointed by the President, all employees in the Executive Office of the President, all officials required to file public or nonpublic financial disclosure reports, all employees who are contracting officers and procurement officials, and any other employees designated by the agency head. (d) Where practicable, consult formally or informally with the Office of Government Ethics prior to granting any exemption under section 208 of title _____________________________________________________________________ ATTACHMENT II Federal Register / Vol. 54, No. 72 / Friday, April 14, 1989 / 15161 Presidential Documents ___________________________________________________________________________ 18, United States Code, and provide the Director of the Office of Government Ethics a copy of any exemption granted. (e) Ensure that the rank, responsibilities, authority, staffing, and resources of the Designated Agency Ethics Official are sufficient to ensure the effectiveness of the agency ethics program. Support should include the provision of a separate budget line item for ethics activities, where practicable. PART IV-DELEGATIONS OF AUTHORITY Sec. 401. Delegations to Agency Heads. Except as provided in section 402 and except in the case of the head of an agency, the authority of the President under section 208(b) of title 18, United States Code, to grant exemptions to individuals, is delegated to the head of the agency in which an individual requiring an exemption is employed or to which the individual is attached for purposes of administration. Sec. 402. Delegations to the Counsel to the President. The authority of the President under section 208(b) of title 18, United States Code, to grant exemptions for Presidential appointees to committees, commissions, boards, or similar groups established by the President is delegated to the Counsel to the President. Sec. 403. Delegation Regarding Civil Service. The Office of Personnel Management and the Office of Government Ethics, as appropriate, are delegated the authority vested in the President by 5 U.S.C. 7301 to establish general regulations for the implementation of this Executive order. PART V - GENERAL PROVISIONS Sec. 501. Revocations. The following are hereby revoked: (a) Executive Order No. 11222 of May 8, 1965. (b) Executive Order No. 12565 of September 25, 1986. Sec. 502. Savings Provision. (a) All actions already taken by the President or by his delegates concerning matters affected by this order and in force when this order is issued, including any regulations issued under Executive Order 11222, Executive Order 12565 or statutory authority, shall, except as they are irreconcilable with the provisions of this order or terminate by operation of law or by Presidential action, remain in effect until properly amended, modified, or revoked pursuant to the authority conferred by this order or any regulations promulgated under this order. Notwithstanding anything in section 102 of this order, employees may carry out preexisting contractual obligations entered into before the date of this order. _____________________________________________________________________ ATTACHMENT II Federal Register / Vol. 54, No. 72 / Friday, April 14, 1989 / 15161 Presidential Documents ___________________________________________________________________________ (b) Financial reports filed in confidence (pursuant to the authority of Executive Order No. 11222, 5 C.F.R. Part 735, and individual agency regulations) shall continue to be held in confidence. Sec. 503. Definitions. For purposes of this order, the term: (a) "Contracting officers and procurement officials" means all such officers and officials as defined in the Office of Federal Procurement Policy Act Amendments of 1988. (b) "Employee" means any officer or employee of an agency, including a special Government employee. (c) "Agency" means any executive agency as defined in 5 U.S.C. 105, including any executive department as defined in 5 U.S.C. 101, Government corporation as defined in 5 U.S.C. 103, or an independent establishment in the executive branch as defined in 5 U.S.C. 104 (other than the General Accounting Office), and the United States Postal Service and Postal Rate Commission. (d) "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. _____________________________________________________________________ ATTACHMENT II 15162 Federal Register / Vol. 54. No. 71 / Friday, April 14, 1989 / Presidential Documents ___________________________________________________________________________ (e) "Special Government employee" means a special Government employee as defined in 18 U.S.C. 202(a). Sec. 504. Judicial Review. This order is intended only to improve the internal management of the executive branch and is not intended to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers, or any person. THE WHITE HOUSE April 12, 1989 Editorial note: For the President's message to the Congress and a fact sheet, both dated April 12, see the Weekly Compilation of Presidential Documents (vol. 24, no. 15). FR Doc. 89-9221 File 4-13-89; 11:56 am Billing Code 3195-01-M _____________________________________________________________________ ATTACHMENT III Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 / 42547 Presidential Documents ___________________________________________________________________________ Presidential Documents Executive Order 12731 of October 17, 1990 Principles of Ethical Conduct for Government Officers and Employees 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 that Executive Order 12674 of April 12, 1989, is henceforth modified to read as follows: "EXECUTIVE ORDER "_________________ "PRINCIPLES OF ETHICAL CONDUCT FOR GOVERNMENT OFFICERS AND EMPLOYEES "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. ___________________________________________________________________________ 5 ( 1 of 2) _____________________________________________________________________ ATTACHMENT III Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 / 42547 Presidential Documents ___________________________________________________________________________ "(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. "(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. ___________________________________________________________________________ 5 ( 2 of 2) _____________________________________________________________________ ATTACHMENT III 42548 Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 / Presidential Documents ___________________________________________________________________________ "(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 pursuant to 3 U.S.C 105 and 3 U.S.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. "PART II - Office of Government Ethics Authority "Sec. 201. The Office of Government Ethics. The Office of Government Ethics shall be responsible for administering this order by: "(a) Promulgating, in consultation with the Attorney General and the Office of Personnel Management, regulations that establish a single, comprehensive, and clear set of executive-branch standards of conduct that shall be objective, reasonable, and enforceable. ___________________________________________________________________________ 6 ( 1 of 2) _____________________________________________________________________ ATTACHMENT III 42548 Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 / Presidential Documents ___________________________________________________________________________ "(b) Developing, disseminating, and periodically updating an ethics manual for employees of the executive branch describing the applicable statutes, rules, decisions, and policies. "(c) Promulgating, with the concurrence of the Attorney General, regulations interpreting the provisions of the post-employment statute, section 207 of title 18, United States Code; the general conflict-of-interest statute, section 208 of title 18, United States Code, and the statute prohibiting supplementation of salaries, section 209 of title 18, United States Code. "(d) Promulgating, in consultation with the Attorney General and the Office of Personnel Management, regulations establishing a system of nonpublic (confidential) financial disclosure by executive branch employees to complement the system of public disclosure under the Ethics in Government Act of 1978. Such regulations shall include criteria to guide agencies in determining which employees shall submit these reports. "(e) Ensuring that any implementing regulations issued by agencies under this order are consistent with and promulgated in accordance with this order. "Sec. 202. Executive Office of the President. In that the agencies within the Executive Office of the President (EOP) currently exercise functions that are ___________________________________________________________________________ 6 ( 2 of 2) _____________________________________________________________________ ATTACHMENT III Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 / 42549 Presidential Documents ___________________________________________________________________________ not distinct and separate from each other within the meaning and for the purposes of section 207(e) of title 18, United States Code, those agencies shall be treated as one agency under section 207(c) of title 18, United States Code. "PART III - Agency Responsibility "Sec. 301. Agency Responsibilities. Each agency head is directed to: "(a) Supplement, as necessary and appropriate, the comprehensive executive-branch-wide regulations of the Office of Government Ethics, with regulations of special applicability to the particular functions and activities of that agency. Any supplementary agency regulations shall be prepared as addenda to the branch-wide regulations and promulgated jointly with the Office of Government Ethics, at the agency's expense, for inclusion in Title 5 of the Code of Federal Regulations. "(b) Ensure the review by all employees of this order and regulations promulgated pursuant to the order. "(c) Coordinate with the Office of Government Ethics in developing annual agency ethics training plans. Such training shall include mandatory annual briefings on ethics and standards of conduct for all employees appointed by the President, all employees in the Executive Office of the President, all officials required to file public or nonpublic financial disclosure reports, all employees who are contracting officers and procurement officials, and any other employees designated by the agency head. "(d) Where practicable, consult formally or informally with the Office of Government Ethics prior to granting any exemption under section 208 of title 18, United States Code, and provide the Director of the Office of Government Ethics a copy of any exemption granted. "(e) Ensure that the rank, responsibilities, authority, staffing, and resources of the Designated Agency Ethics Official are sufficient to ensure the effectiveness of the agency ethics program. Support should include the provision of a separate budget line item for ethics activities, where practicable. "PART IV - Delegations of Authority "Sec. 401. Delegations to Agency Heads. Except in the case of the head of an agency, the authority of the President under section 203(d), 205(e), and 208(b) of title 18, United States Code, to grant exemptions or approvals to individuals, is delegated to the head of the agency in which an individual requiring an exemption or approval is employed or to which the individual (or the committee, commission, board, or similar group employing the individual) is attached for purposes of administration. ___________________________________________________________________________ 7 ( 1 of 2) _____________________________________________________________________ ATTACHMENT III Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 / 42549 Presidential Documents ___________________________________________________________________________ "Sec. 402. Delegations to the Counsel to the President. "(a) Except as provided in section 401, the authority of the President under section 203(d), 205(e), and 208(b) of title 18, United States Code, to grant exemptions or approvals for Presidential appointees to committees, commissions, boards, or similar groups established by the President is delegated to the Counsel to the President. "(b) The authority of the President under sections 203(d), 205(e), and 208(b) of title 18, United States Code, to grant exemptions or approvals for individuals appointed pursuant to 3 U.S.C. 105 and 3 U.S.C. 107(a), is delegated to the Counsel to the President. ___________________________________________________________________________ 7 ( 2 of 2) _____________________________________________________________________ ATTACHMENT III 42550 Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 / Presidential Documents ___________________________________________________________________________ "Sec. 403. Delegation Regarding Civil Service. The Office of Personnel Management and the Office of Government Ethics, as appropriate, are delegated the authority vested in the President by 5 U.S.C. 7301 to establish general regulations for the implementation of this Executive order. "PART V - General Provisions "Sec. 501. Revocations. The following Executive orders are hereby revoked: "(a) Executive Order No. 11222 of May 8, 1965. "(b) Executive Order No. 12565 of September 25, 1986. "Sec. 502. Savings Provision. "(a) All actions already taken by the President or by his delegates concerning matters affected by this order and in force when this order is issued, including any regulations issued under Executive Order 11222, Executive Order 12565, or statutory authority, shall, except as they are irreconcilable with the provisions of this order or terminate by operation of law or by Presidential action, remain in effect until properly amended, modified, or revoked pursuant to the authority conferred by this order or any regulations promulgated under this order. Notwithstanding anything in section 102 of this order, employees may carry out preexisting contractual obligations entered into before the date of this order. "(b) Financial reports filed in confidence (pursuant to the authority of Executive Order No. 11222, 5 C.F.R. Part 735, and individual agency regulations) shall continue to be held in confidence. "Sec. 503. Definitions. For purposes of this order, the term: "(a) 'Contracting officers and procurement officials' means all such officers and officials as defined in the Office of Federal Procurement Policy Act Amendments of 1988. "(b) 'Employee' means any officer or employee of an agency, including a special Government employee. "(c) 'Agency' means any executive agency as defined in 5 U.S.C. 105, including any executive department as defined in 5 U.S.C. 101, Government corporation as defined in 5 U.S.C. 103, or an independent establishment in the executive branch as defined in 5 U.S.C. 104 (other than the General Accounting Office), and the United States Postal Service and Postal Rate Commission. ___________________________________________________________________________ 8 ( 1 of 2) _____________________________________________________________________ ATTACHMENT III 42550 Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 / Presidential Documents ___________________________________________________________________________ "(d) '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. "(e) 'Special Government employee' means a special Government employee as defined in 18 U.S.C. 202(a). "Sec. 504. Judicial Review. This order is intended only to improve the internal management of the executive branch and is not intended to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers, or any person.". THE WHITE HOUSE. October 17, 1990 ___________________________________________________________________________ 8 ( 2 of 2)