Modernization Updates to Standards of Ethical Conduct for Employees of the Executive Branch

OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2635

RIN 3209-AA43

Modernization Updates to Standards of Ethical Conduct for Employees of the Executive Branch

AGENCY:

Office of Government Ethics.

ACTION:

Proposed rule.

SUMMARY:

The U.S. Office of Government Ethics (OGE) requests comments on proposed changes to the Standards of Ethical Conduct for Employees of the Executive Branch (Standards). The proposed amendments seek to update the Standards based on OGE's experience gained from application of the regulation since its inception. The proposed amendments also would incorporate past interpretive guidance, add and update regulatory examples, improve clarity, update citations, and make technical corrections.

DATES:

Written comments are invited and must be received on or before April 24, 2023.

ADDRESSES:

You may submit comments in writing to OGE on this proposed rule, identified by RIN 3209-AA43, by any of the following methods:

Email: 2635modernization@oge.gov.

Include the reference “Proposed Amendments to Standards of Conduct” in the subject line of the message.

Mail:

Office of Government Ethics, Suite 500, 1201 New York Avenue NW, Washington, DC 20005-3917, Attention: “Proposed Amendments to Standards of Conduct.”

Instructions:

All submissions must include OGE's agency name and the Regulation Identifier Number (RIN), 3209-AA43, for this proposed rulemaking. All comments, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Comments may be posted on OGE's website,

www.oge.gov.

Sensitive personal information, such as account numbers or Social Security numbers, should not be included. Comments generally will not be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT:

Kimberly L. Sikora Panza, Associate Counsel, or Christie Chung, Assistant Counsel, U.S. Office of Government Ethics, 1201 New York Avenue NW, Suite 500, Washington, DC 20005-3917; Telephone: 202-482-9300; TTY: 800-877-8339; Fax: 202-482-9237.

SUPPLEMENTARY INFORMATION:

I. Rulemaking History

On August 7, 1992, the U.S. Office of Government Ethics (OGE) published the Standards of Ethical Conduct for Employees of the Executive Branch (Standards), which are codified at 5 CFR part 2635.

See

57 FR 35006 (Aug. 7, 1992), as amended. The Standards serve as the primary regulatory guidance on the standards of ethical conduct for officers and employees of the executive branch of the Federal Government (Government).

Pursuant to a provision of the Ethics in Government Act of 1978, 5 U.S.C. 13122, the Director of OGE is responsible for periodically reviewing, evaluating, and updating the rules and regulations that pertain to ethics in the executive branch. Most recently, in 2016, OGE issued updated regulations in subpart B and subpart F of part 2635 relating to gifts from outside sources and seeking employment.

See

81 FR 48687 (July 26, 2016);

see also

81 FR 81641 (Nov. 18, 2016). In accordance with 5 U.S.C. 13122, OGE has reviewed the regulations found in subparts A, C, D, E, G, H, and I of part 2635, and is proposing changes to these provisions in light of OGE's experience gained from application of the Standards since they became effective in February 1993.

In formulating this proposed rule, OGE has consulted with the Department of Justice and the Office of Personnel Management pursuant to section 201(a) of Executive Order 12674, as modified by Executive Order 12731, and the authorities contained in 5 U.S.C. chapter 131, subchapter II. Additionally, OGE has solicited and considered the views of executive branch agency ethics officials.

II. Analysis of Proposed Amendments

In addition to the specific changes discussed below, OGE is proposing a number of global technical changes to all subparts of the Standards. Among other things, OGE proposes to add appropriate punctuation and modernize language by using consistent capitalization of “Government,” removing gendered language and language that unnecessarily focuses on marital status, and updating the words “shall” and “where.” OGE also is replacing the terms “disqualification” and “disqualify” with “recusal” and “recuse” to modernize language throughout all subparts of the Standards, consistent with language OGE modernized in subpart F in 2016. As highlighted in further detail below, OGE also proposes to update citations and change agency names throughout this part as appropriate.

A. General Provisions (Subpart A)

In § 2635.101(b)(13), OGE proposes to clarify that the enumerated list of equal opportunity laws and regulations is not exhaustive, and also proposes to add the words “(including pregnancy, gender identity, and sexual orientation)” after “sex,” to change “handicap” to “disability,” and to add “genetic information,” to incorporate more contemporary terminology and reflect categories covered by the Equal Employment Opportunity Commission. OGE also proposes to incorporate this more contemporary terminology in § 2635.106.

In § 2635.102(a), OGE proposes to replace the words “Postal Rate Commission” with the words “Postal Regulatory Commission,” and the words “General Accounting Office” with the words “Government Accountability Office” to reflect the change in the names of these agencies. OGE also proposes to update paragraph § 2635.102(b) to use language more consistent with the defined term “head of an agency” in paragraph (i); a similar language change is made in § 2635.503(c). Former § 2635.102(j) has been removed because OGE modified the language of each subpart to make the regulation gender neutral. As a result, subsequent paragraphs in § 2635.102 have been relabeled.

OGE proposes to revise the title of § 2635.103 to more accurately reflect the contents of the provision by adding “enlisted” before “members of the uniformed services.” Section 2635.103 states that the provisions of this part are not applicable to enlisted members of the uniformed services, and OGE proposes to make only minor technical edits to the language of this section for clarity.

In § 2635.105(c)(3), OGE proposes to delete the reference to supplemental regulations issued prior to the Standards and Executive Order 11222 (May 8, 1965), which was revoked by Executive Order 12674 (April 12, 1989).

Finally, OGE proposes to update § 2635.102(c) and (f), as well as § 2635.107 to reference updated citations and language of part 2638 of this chapter, which was most recently revised in 2016.

B. Gifts From Outside Sources (Subpart B)

In subpart B, OGE proposes a minor revision to Example 1 following § 2635.201(b) to better illustrate the operation of the paragraph. Similarly, OGE also proposes to make minor changes to Example 4 following § 2635.204(a) to clarify the interplay

between 31 U.S.C. 1353 and subpart B. No substantive change is intended.

For the remainder of the subpart, OGE proposes to make only global technical changes that are suggested throughout the Standards. Specifically, OGE proposes to modernize the regulatory text by adding appropriate punctuation and capitalization, updating changed agency names, removing gendered language and language that unnecessarily focuses on marital status, and updating the words “where” and “disqualification/disqualify.”

C. Gifts Between Employees (Subpart C)

Throughout subpart C, OGE proposes to replace the terms “donating” and “donation” with “contributing” and “contribution” respectively to modernize language and ensure consistency in language in this section. No substantive change is intended.

Proposed § 2635.301—Overview

In § 2635.301, OGE proposes to update the overview in recognition of the updates being made to the regulatory restrictions on gifts to superiors, as discussed below. OGE also proposes to add language clarifying that subpart B is the appropriate subpart for analyzing gifts from outside sources. In subpart B, there is a similar reminder pointing to subpart C in the note that follows § 2635.203(e). OGE believes that a parallel note in subpart C would be a helpful clarification, and the proposed language is phrased in a way that tracks the reminder in subpart B.

Proposed § 2635.302—General Standards

In this section, OGE proposes tailored revisions aimed at making the restriction and exceptions regarding gifts to superiors and gifts from employees receiving less pay more logical. OGE believes that the proposed changes are consistent with the underlying statute restricting certain gifts between employees, 5 U.S.C. 7351, as well as OGE's authority in that law to issue regulations that exempt voluntary gifts in appropriate circumstances.

First, OGE has received input over the years that the restriction on gifts to superiors is incongruous with other restrictions on employees accepting gifts because it does not restrict an official superior from accepting a gift from a subordinate, and instead is framed in terms of what a subordinate employee may not do with respect to giving gifts to a superior. The current language is based on the statutory text of 5 U.S.C. 7351, which also articulates the restriction in terms of what a subordinate employee may not do, as opposed to what an official superior may not do. OGE believes that the regulation should emphasize a superior's responsibility to not accept improper gifts from a subordinate, consistent with how the Standards otherwise focus on an employee's responsibility to not accept other improper gifts.

See, e.g.,

subpart B (restricting employees' ability to accept certain gifts from outside sources); § 2635.302(b) (restricting employees' ability to accept certain gifts from individuals receiving less pay). Therefore, OGE proposes to update the language in § 2635.302(a)(1) to clarify that not only may an employee not directly or indirectly give a gift to an official superior, but also that “an official superior may not knowingly accept such a gift.”

OGE also seeks to resolve a peculiarity in the current regulatory language in § 2635.302(b)(1) relating to the circumstances in which an employee may accept a gift from another employee “receiving less pay.” The current regulatory text permits an employee to accept a gift from another employee who receives less pay if there is a personal relationship to justify the gift and the two employees are not in a “subordinate-official superior relationship.” The quoted language refers expansively to

any

subordinate-official superior relationship, regardless of whether the intended recipient of the gift is the subordinate or the official superior. OGE believes that the current language is worded more broadly than necessary to address the key concern with gift giving between employees at different pay levels—gift giving

from a subordinate to a superior.

Accordingly, OGE proposes to replace the requirement in the exception that the employees not be in a subordinate-official superior relationship with a more precise requirement that

the employee receiving the gift not be the official superior of the employee giving the gift

(proposed § 2635.302(b)(1)). This addition does not modify the existing condition in the exception that there be a personal relationship between the employees that would justify the gift.

Finally, OGE seeks to modernize the exception in § 2635.302(b) in response to changes in the Federal pay system since the rule was first promulgated in 1992. Although at one time it may have been the case that superiors categorically received more pay than their subordinates, under current Federal pay systems, there are situations in which a subordinate may earn more than their official superior. OGE does not believe that 5 U.S.C. 7351, the statute underlying the restriction articulated in § 2635.302(b), either contemplated or intended that subordinate employees would be restricted from accepting a gift from an official superior who, because of the nature of modern compensation systems, receives less pay. OGE believes that the purpose of 5 U.S.C. 7351, notably titled “Gifts to Superiors,” was to prevent an official superior from accepting a gift from a subordinate, not to prevent a gift flowing the other way. OGE therefore proposes to categorically exclude from the restriction in § 2635.302(b) gift-giving situations

where the lower-paid employee giving the gift is the official superior of the employee receiving the gift

(proposed § 2635.302(b)(2)). The proposed language categorically excludes such gifts from the prohibition without the additional “personal relationship” requirement contained in § 2635.302(b)(1).

In addition to those changes, OGE also recommends a new example to § 2635.302 to clarify that even if individuals had a gift-giving relationship prior to being in a subordinate-superior relationship, while there is a subordinate-supervisor relationship, their gift giving must be restricted. The proposed example seeks to highlight that a change in circumstances does not obviate the subpart C restrictions, and that even gift giving between employees with a preexisting relationship still must fit within the exceptions of this subpart.

Proposed § 2635.303—Definitions

OGE proposes to modernize Example 1 after § 2635.303(f) by removing unnecessarily specific geographical language. No substantive change is intended.

Proposed § 2635.304—Exceptions

In paragraph (a), OGE proposes to change “other” to “an” in the first sentence; the current phrasing in § 2635.304(a) presupposes that a subordinate always receives less pay than an official superior, which is not always the case, as discussed above. The word replacement proposed by OGE removes this assumption. OGE also proposes to make a slight modification to the phrasing of the exception in § 2635.304(a)(5), by making the final phrase the beginning phrase of the exception. No substantive change is intended; OGE simply wishes to clarify that this gift exception can be used unless the transferred leave was obtained in violation of 5 CFR 630.912. In addition, OGE proposes to update the language of Example 4 to paragraph (a)

to generally refer to the holidays, instead of a specific religious holiday.

OGE proposes to revise paragraph (b)(1) to add “bereavement” to the non-exhaustive list of special, infrequent occasions covered by this exception. As highlighted by several agencies, questions as to whether such instances constitute a special, infrequent occasion arise at a difficult time when employees are grieving. OGE views such occasions as being appropriately covered by this exception, and explicit reference to them will provide clarity and eliminate uncertainty. In addition, OGE proposes to add Example 4 to paragraph (b) to illustrate that a milestone birthday, such as a 50th birthday, is not an “infrequently occurring occasion of personal significance.” The new example would respond to recurring questions regarding whether birthdays ending in zero are an “infrequently occurring occasion of personal significance” under § 2635.304(b), and would reflect OGE's consistent advice that they are not.

OGE also proposes to fix the issue of having an undesignated paragraph in § 2635.304(c) by reorganizing this section and designating the undesignated paragraph. No substantive change is intended.

Finally, OGE proposes to make various ministerial changes to this section. Among other changes, OGE proposes to replace the word “secretary” with the word “assistant” in Example 4 following paragraph (a) and Example 5 to paragraph (c) to modernize these examples. OGE also proposes to replace the word “fee” in Example 1 to paragraph (c) with the words “suggested voluntary contribution,” in order to more accurately reflect that the collection for a gift is a voluntary contribution and not a fee. In addition, OGE proposes to replace “The General Counsel” with “An employee” in Example 2 to paragraph (c) to improve the application of the example. Finally, OGE proposes to replace “$3” in Example 3 to paragraph (c) with “a nominal amount,” to prevent $3 from being interpreted as a universal definition of “nominal amount” as used in paragraph (c) and to make the example more consistent with Example 1. These modifications are not intended to make any substantive changes.

D. Conflicting Financial Interests (Subpart D)

In this subpart and subpart E, OGE has added the modifier “particular” before “matter” when the change would provide further clarity regarding the type of matter being discussed. Although in context the word “particular” had previously been implied, OGE made these adjustments to achieve more precise language.

Proposed § 2635.401—Overview

OGE proposes a minor change to the phrasing of § 2635.401 to clarify the relationship of subpart D and 5 CFR part 2640. Part 2640 interprets and is the implementing regulation for 18 U.S.C. 208, and with this change, OGE seeks to guide ethics officials to part 2640 for complete guidance on that law.

Proposed § 2635.402—Disqualifying Financial Interests

In this section, OGE proposes to revise various examples. In Example 2 following paragraph (b)(2), OGE proposes to streamline the characterization of the spouse's interest in their employing company by simply stating that the spouse has no stock or other direct or indirect ownership interest in the company. OGE also proposes to modify the language at the conclusion of the example to reference “covered relationship” and otherwise align the text with § 2635.502. No substantive change is intended with this adjustment, which is made to improve the clarity and readability of this example. Finally, in Example 2 following paragraph (b)(3), OGE proposes to replace the words “Interstate Commerce Commission” with the words “Surface Transportation Board” to reflect the change in the name of this agency.

In addition, OGE proposes to update the notification and recusal language in § 2635.402(c)(1) and (2) to align with updated phrasing in subpart F, and also reflect that written notification and recusal statements are required for certain employees under the Representative Louise McIntosh Slaughter Stop Trading on Congressional Knowledge Act (STOCK Act). Finally, OGE proposes to delete the final phrase from § 2635.402(d)(1), which discusses 18 U.S.C. 208(b)(2) regulatory exemptions, and notes that the regulations in subpart B of part 2640 “supersede any preexisting agency regulatory exemptions”; this language may have been relevant when the Standards were first promulgated, but it is superfluous today.

Proposed § 2635.403—Prohibited Financial Interests

OGE proposes to delete “issued after February 3, 1993,” which currently modifies “agency supplemental regulations” in § 2635.403(a). This language was relevant when the rule was first drafted because there were some pre-existing agency ethics rules, but at this time, there are no agency supplemental regulations that were issued before February 1993.

In Example 1 following paragraph (b)(2), OGE proposes to add a dollar figure to the amount of stock owned, to make clear that the

de minimis

regulatory exemption in 5 CFR 2640.202 does not apply in this scenario. OGE also proposes to correct the language in paragraph (c)(1), which appears to incorrectly refer to the employee's “dependent child,” not “minor child,” which is the relevant term for purposes of the restrictions of 18 U.S.C. 208.

E. Impartiality in Performing Official Duties (Subpart E)

Proposed § 2635.501—Overview

OGE proposes to restructure § 2635.501 to organize the current text and the text of the current Note into new paragraphs. New paragraph (a) explains more fully the scope of subpart E and the distinction between relationships that implicate 18 U.S.C. 208 and those that implicate this subpart. New paragraph (b) explains more fully the distinction between waivers under 18 U.S.C. 208 and authorizations and waivers under subpart E. No substantive change is intended.

OGE also proposes to add a new note following § 2635.501 to remind employees and ethics officials that even though a particular situation may not raise concerns under subpart E, a supervisor or person responsible for assigning work may decide not to assign certain work to an employee for other reasons. The note is not itself a source of authority to either issue or withhold assignments; it merely highlights that agencies have various options relating to work assignments irrespective of subpart E. OGE intends that this note, read together with the other provisions of subpart E, will identify options available to an agency relating to potential concerns regarding impartiality, appearances, and employee work assignments.

Proposed § 2635.502—Personal and Business Relationships

OGE proposes to reorganize § 2635.502(a) by redesignating the two substantive provisions currently found in the main body of paragraph (a) and the substantive provision currently found in paragraph (a)(2) as paragraphs (a)(1), (2), and (3), respectively. In these redesignations, current paragraph (a)(1), which encourages employees to seek assistance from relevant officials when considering whether a reasonable person would question their

impartiality, will no longer be designated, and instead will be included at the beginning of § 2635.502(a). As currently written, the two primary prohibitions of § 2635.502 (working on a particular matter involving specific parties in which a member of one's household has a financial interest and working on a particular matter involving specific parties in which someone with whom one has a covered relationship is or represents a party) appear in a single paragraph in § 2635.502(a). Because these two prohibitions are very different, the current textual organization can be confusing, and OGE seeks to make this section clearer through the reorganization. Additionally, under the current regulation, the substantive “catch-all” provision of current § 2635.502(a)(2), which covers “circumstances other than those specifically described” in § 2635.502(a), is not immediately adjacent to the discussion of the two primary substantive provisions of § 2635.502. To more clearly present the various concepts of § 2635.502(a) and highlight that an appearance of impartiality may be triggered in different ways, the proposed revision lists the three potential impartiality scenarios in separate paragraphs, and begins with the text currently found in § 2635.502(a)(1), which reminds employees that they may seek the assistance of a supervisor, ethics official, or agency designee in considering whether any of those scenarios would raise impartiality concerns. No substantive change is intended.

In § 2635.502(b), the current regulation provides that an employee has a covered relationship with “[a] person for whom the employee's spouse, parent or dependent child is, to the employee's knowledge, serving or seeking to serve as an officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee.” OGE proposes to remove the qualifier “dependent” before “child” in this paragraph, which will mean that an employee will have a covered relationship with a person for whom

any

child is, to the employee's knowledge, serving or seeking to serve as an officer, director, trustee, general partner, agent, attorney, consultant, contractor, or employee. Removing the “dependent” qualifier acknowledges that there may be impartiality concerns relating to certain business relations of an employee's child regardless of whether that child is a dependent, just as the subpart presently acknowledges that there could be impartiality concerns relating to certain business relations of an employee's parent, without any dependency predicate.

OGE proposes to update the definition of “particular matter involving specific parties” found at § 2635.502(b)(3) to cross-reference the definition at 5 CFR 2640.102(

l

); the current cross-reference is obsolete, as it refers to part 2637, which is no longer in effect. Like part 2635, the part 2640 regulation applies to current employees; it simply was not in effect at the time the Standards were first published and thus could not serve as the relevant cross-reference.

In addition, OGE proposes to replace current Example 3 following paragraph (b)(3) with a new example. The purpose of changing the example is to illustrate the covered relationship described in paragraph (b)(1)(iii), and to describe a situation in which an employee could justifiably conclude that a reasonable person would be likely to question their impartiality. OGE also proposes to add two new examples following paragraph (b)(3), Examples 6 and 7. The purpose of Example 6 is to illustrate a situation where a covered relationship described in (b)(1)(iii) exists, but the employee could justifiably conclude that a reasonable person would not be likely to question their impartiality. The purpose of Example 7 is to illustrate a situation in which there is no covered relationship under § 2635.502(b)(1), but the employee applies the catch-all provision of proposed § 2635.502(a)(3) because the employee is concerned about appearances, and could justifiably conclude that a reasonable person would be likely to question their impartiality.

In § 2635.502(c), OGE proposes to more clearly state an agency designee's determination authority. To more clearly highlight the situations in which an agency designee may make an independent determination regarding a potential appearance problem, OGE has reorganized the text currently at § 2635.502(c) into new § 2635.502(c)(1), and separated the different potential determination scenarios into new § 2635.502(c)(1)(i) and (ii). As a result of this reorganization, current § 2635.502(c)(1) and (2) have been renumbered as § 2635.502(c)(2) and (3). This reorganization does not substantively change the two situations set forth in the regulation in which an agency designee may make an independent determination as to whether a reasonable person would question an employee's impartiality—appearance problems arising from the financial interests of a member of the employee's household in a particular matter involving specific parties, or from a particular matter involving specific parties in which a person with whom the employee has a covered relationship is or represents a party.

Finally, OGE proposes minor changes to § 2635.502(d), (e), and (f). In Example 2 to § 2635.502(d), OGE proposes to make a minor revision to resolve potential ambiguity in the final sentence of the example. No substantive change is intended. In § 2635.502(e), OGE proposes to add a sentence explicitly stating that when the covered relationship is with a former employer, the relevant recusal period is for one year after the date of the employee's resignation from the position with the former employer. Currently, the length of the cooling-off period with respect to former employers is embedded in the definition of “covered relationship”; this sentence does not make any substantive change, but is designed to provide greater clarity for employees. Additionally, in § 2635.502(e)(1) and (e)(2), OGE proposes to update the language regarding notification and documentation procedures to align with updated phrasing in § 2635.402(c)(2) and subpart F. Finally, OGE proposes to make the title of § 2635.502(f) more accurate and read “

Irrelevant considerations”

instead of “

Relevant considerations,”

because that paragraph describes what considerations are not relevant for purposes of determinations under § 2635.502. The actual language of § 2635.502(f) remains unchanged.

Proposed § 2635.503—Covered Payments From Former Employers

OGE proposes various updates to § 2635.503. First, OGE proposes to replace the defined term of “extraordinary payment” in § 2635.503(b)(1) (and throughout the regulation) with the term “covered payment.” This adjustment brings the terminology in this section in line with the terminology used elsewhere in this subpart, namely the term “covered relationship” in § 2635.502. OGE does not intend any substantive change in replacing the word “extraordinary” with “covered.”

OGE also proposes to update § 2635.503(a) to remove the limitation in the current regulation that a relevant payment under this section must be received “prior to entering Government service.” In OGE's experience, the potential ethics concerns and issues relating to covered payments from former employers can arise regardless of whether a payment is received before or after an individual begins Government service. A payment received the day after an employee assumes the duties of a Government position is not different

in kind from such a payment received two days prior; in both cases, the payment “raises a legitimate concern, and thus an appearance, that the employee may not act impartially in particular matters to which the former employer is a party or represents a party.”

See

56 FR 33778, 33786 (July 23, 1991). A recusal requirement equally applicable to both scenarios addresses such appearance issues. Of course, any payment received by a current Government employee could raise potential supplementation of salary concerns. Therefore, the new example that OGE proposes to add to § 2635.503(a) to illustrate a covered payment received during Government service makes clear that ethics officials are also required to analyze the payment to determine whether it constituted a supplementation of salary under 18 U.S.C. 209.

To help make the “covered payment” definition easier to understand, OGE also proposes to move the concept of a “qualifying program,” which is currently embedded in § 2635.503(b)(1), into a standalone definition. The “qualifying program” definition proposed at § 2635.503(b)(2) retains salient concepts from the current regulatory language—which contemplates that such a program could be contained in written form, or demonstrated by a history of similar payments to others not entering Government service—and also includes two new clarifications regarding what OGE considers to be such a program. First, to be a qualifying written program, the program cannot treat individuals departing for Government service more favorably than other individuals. When OGE first promulgated § 2635.503, OGE thought it was unlikely that employers would offer employment plans or contracts that provided for targeted payments for employees who later serve in Government positions.

See

57 FR 35006, 35028. However, since 1992, OGE has seen numerous benefit plans where employers have written plans or programs that treat individuals departing for Government service more favorably than other individuals. Because such plans raise the same potential concerns regarding an employee's impartiality to the payor, OGE has determined that it is appropriate to clarify that a written program will not be considered to be a “qualifying program” if individuals entering Government service are treated more favorably than other former employees. This change also brings OGE's treatment of written and non-written plans into alignment. In the current definition, a qualifying program based on actual practice has to be shown by a history of similar payments

made to persons not entering Government service,

which underscores the importance of the payor not treating employees entering Government more favorably.

Second, OGE proposes to clarify when it is appropriate to consider a history of similar payments made to others not entering Government service. Specifically, OGE proposes to update paragraph (b) to enumerate OGE's longstanding view that when there is a written plan, historical payments contrary to a provision of such a plan should not be considered in determining whether there is a “qualifying program.”

Finally, OGE proposes to update the “former employer” definition to make explicit certain details that are implicit in the current definition. First, consistent with the definition of “person” in § 2635.102, OGE proposes to explicitly state that payments from an officer, employee, or agent of a former employer will be considered payments from the former employer. Second, to explicitly indicate that clients are encompassed by the “former employer” definition—

e.g.,

as persons for whom an employee may have served as an agent, attorney, consultant, or contractor—OGE proposes to add a note following § 2635.503(b)(3) to highlight that this defined term encompasses former clients.

F. Seeking Other Employment (Subpart F)

In subpart F, OGE proposes to make only global technical changes that are suggested throughout the Standards. Among other things, OGE proposes to modernize the regulatory text by removing gendered language and replacing the word “where” with the word “when.”

G. Misuse of Position (Subpart G)

Proposed § 2635.702—Use of Public Office for Private Gain

OGE proposes to add a parenthetical to § 2635.702 to clarify the scope of this section and to indicate that some endorsement may be permitted by this subpart or other applicable laws or regulations. Endorsement may be permitted in certain circumstances, and OGE has received questions indicating that there may be confusion about the current phrasing. No substantive change is intended by this addition.

OGE proposes to amend paragraph (b) of § 2635.702 to clarify the limited circumstances in which an employee may use their official title when making a recommendation. In the current regulation, an employee “may sign a letter of recommendation using [their] official title only in response to a request for an employment recommendation or character reference based upon personal knowledge of the ability or character of an individual with whom [the employee] has dealt in the course of Federal employment or whom [the employee] is recommending for Federal employment.” OGE proposes to update § 2635.702(b) to recognize that an official letter is not the only medium through which recommendations are made. The updated language will provide that an employee may use their official title

when making a verbal or written recommendation

described in that paragraph. In addition, OGE proposes to amend this paragraph to clarify that recommendations permitted under § 2635.702(b) are not limited to employment recommendations. Over the years, questions have arisen as to the permissibility of an employee using their title when signing other types of recommendations, such as character references to accompany graduate school applications. Removing the word “employment” from this phrase will make clear that an employee may use their official title when they have been asked to provide other types of recommendations. These proposed changes would not ease the other constraints on an employee using their title when providing a requested recommendation for an individual: that the employee has “personal knowledge of the ability or character of [the] individual,” and the individual must be someone “with whom the employee has dealt in the course of Federal employment or whom the employee is recommending for Federal employment.” The proposed changes also would not expand an employee's ability to endorse a business or other kind of entity.

In addition, to provide greater clarity regarding the phrase “with whom [the employee] has dealt in the course of Federal employment,” OGE proposes to update Example 1 following § 2635.702(b) to add language indicating that an employee who is asked to provide a letter of recommendation for an individual who worked with the employee under a Government contract may provide the recommendation using official stationery and may sign the letter using their official title. Such a relationship falls within the scope of the phrase “with whom the employee has dealt in the course of Federal employment.” The proposed change

should not be read to suggest an expanded ability of the employee to endorse the contracting entity or any other business.

OGE also proposes to add a new example of appearance of governmental sanction that involves the use of social media. The new example is consistent with OGE's Legal Advisory on social media.

See

OGE Legal Advisory LA-15-03 (Apr. 9, 2015).

Finally, although it is non-exhaustive as currently written, OGE proposes to add “Judge” to the list of terms of address and ranks highlighted in paragraph (e) in order to provide additional clarity regarding the use of certain terms of address.

Proposed § 2635.703—Use of Nonpublic Information

In Examples 2 and 3 following § 2635.703(b), OGE proposes to change “41 U.S.C. 423” to “41 U.S.C. 2102” to reflect the change to the citation to this statute.

Proposed § 2635.704—Use of Government Property

OGE proposes to amend § 2635.704(b)(1) by replacing the term “automated data processing capabilities” with the term “computers and other electronic devices” and by adding the words “Government email and social media accounts” to the list of items included in the term “Government property.” In updating the list of “Government property” to include more modern types of Government property, OGE does not intend to suggest that older forms of technology and equipment are not also Government property; to avoid such misapprehension, new language has been added to clarify that the term “Government property” is not limited to only those items enumerated in paragraph (b)(1).

OGE proposes to update § 2635.704(b)(2) to clarify that use of Government property in accordance with an agency's limited

de minimis

personal use policy is an “authorized purpose” for which Government property may be used.

Finally, OGE also proposes to make certain changes to some of the examples in § 2635.704. OGE proposes to rewrite Example 1 following § 2635.704(b) because the General Services Administration regulation to which the example refers, 41 CFR 101-35.201, no longer exists and has not been superseded by a different Governmentwide regulation. OGE proposes substituting an example that references an agency's

de minimis

policy relating to the personal use of a Government email account. Additionally, OGE proposes to amend Example 3 following § 2635.704(b)(2) by replacing the term “word processor” with the word “computer.” The reason for the change is to modernize the example; no substantive change is intended.

Proposed § 2635.705—Use of Official Time

OGE proposes to amend Example 1 following § 2635.705(a) by replacing “employee” with “disability claims examiner” in order to make the example clearer. OGE also proposes to revise Example 2 following § 2635.705(a) to remove the reference to the Federal Personnel Manual, which has been abolished, and update the example to more generally refer to such Governmentwide personnel guidance as may be applicable.

OGE proposes to update Example 1 following § 2635.705(b) to remove outdated language referring to the subordinate as a secretary, and also modernize the description of the activities involved. No substantive change is intended.

H. Outside Activities (Subpart H)

Proposed § 2635.801—Overview

OGE proposes to delete reference to “the limitations on participation in professional organizations” as one of the provisions of this subpart with which the employee must comply. This language refers to the current title of reserved § 2635.806, which OGE proposes to delete (with § 2635.806 remaining reserved), as discussed below.

OGE also proposes to move Example 2 that is currently found in § 2635.802 to § 2635.801(c), because that example is more appropriate as an illustration of the concept that an employee should avoid creating an appearance of violating ethical standards or using their official position for private gain. No changes were made to the existing example other than relocating it to this paragraph.

Finally, OGE proposes to make more precise the description of certain “other laws” that may apply to employee outside activities, as set forth in § 2635.801(d). Specifically, OGE proposes to explicitly note the application and timing of 18 U.S.C. 203 in § 2635.801(d)(3), and to reference the 15% outside earned income limitation when discussing limitations on outside employment in the Ethics in Government Act in § 2635.801(d)(8).

Proposed § 2635.802—Conflicting Outside Employment and Activities

OGE also proposes a new Example 1 to more accurately reflect a situation where an employee's outside activities would conflict with the employee's job duties, as well as to substitute a new Example 2 in § 2635.802 because current Example 2 has been relocated to § 2635.801(c), as discussed above. The purpose of the substitution is to provide a more appropriate example of when a recusal obligation exists under subpart E, but there is no issue under § 2635.802. OGE proposes no other substantive changes to these examples.

Proposed § 2635.803—Prior Approval for Outside Employment and Activities

In the first paragraph of this section, OGE proposes to add language reminding employees of their responsibility to ensure that outside activities do not conflict with their official duties, regardless of the existence of any agency supplemental regulations regarding prior approval.

Consistent with the goal of removing obsolete references, OGE also proposes to delete the words “issued after February 3, 1993” modifying “agency supplemental regulation” in the current phrasing of this provision. This language was relevant when the rule was first drafted because there were some pre-existing agency rules, but at this time there are no agency supplemental regulations that were issued before February 1993.

Proposed § 2635.804—Outside Earned Income Limitations Applicable to Certain Presidential Appointees

For the reasons explained below, OGE proposes to rename this section by removing the reference to “other noncareer employees” from the title; to add an introductory paragraph explaining that this paragraph implements outside earned income limitations applicable to certain Presidential appointees and that the outside earned income limitation applicable to covered noncareer employees remains at 5 CFR 2636.304; and to remove the discussion of covered noncareer employees at § 2635.804(b) and renumber the remaining paragraphs accordingly.

Currently, the 15% outside earned income limitation for covered noncareer employees is stated in both § 2635.804(b) and 5 CFR 2636.304, and the limitation for Presidential appointees is stated only in § 2635.804(a). To eliminate redundancy and allow each section to focus on a specific category of employees, OGE

proposes to remove the discussion of covered noncareer employees from § 2635.804(b) to allow this section to focus only on the outside earned income limitations applicable to certain Presidential appointees. The reference to 5 CFR 2636.304 for the guidance on the outside earned income limitation applicable to covered noncareer employees will ensure that § 2635.804 still refers to all relevant outside earned income limitations, and that the limitation applicable to covered noncareer employees is not overlooked.

As a ministerial matter, OGE also proposes to revise § 2635.804(a) to remove the reference to outside activities “carried out in satisfaction of the employee's obligation under a contract entered into prior to April 12, 1989” as any contracts before that date, more than 30 years ago, are very unlikely to still be in effect.

Proposed § 2635.806—[Reserved]

OGE proposes to delete the title of reserved § 2635.806, “Participation in professional associations.” OGE does not plan to promulgate a Governmentwide rule on participation in professional associations at this time. Accordingly, § 2635.806 will continue to be “Reserved,” but its current title would be deleted.

Proposed § 2635.807—Teaching, Speaking, and Writing

OGE is aware that § 2635.807 is one of the most complicated provisions in the Standards. In the course of reviewing potential changes to the Standards, therefore, OGE considered various potential changes, including restructuring § 2635.807 or moving it into § 2635.802; ultimately, however, OGE decided to leave the existing structure of this paragraph. Agencies can obtain additional guidance on rules relating to teaching, speaking, and writing on OGE's website.

Although OGE decided against a comprehensive revision of § 2635.807 at this time, it proposes some minor amendments to this section. First, OGE proposes to amend § 2635.807(a) to: (1) clearly state what activity is permitted under paragraph (a)(3); and (2) emphasize that the prohibition on receiving compensation for teaching, speaking, or writing that relates to the employee's official duties applies only to teaching, speaking, or writing that occurs while the person is a Government employee. Regarding the first change, OGE proposes to explicitly note that paragraph (a)(3) is an exception for teaching certain courses. Regarding the second change, proposed § 2635.807(a) specifies that compensation is restricted only for teaching, speaking, or writing “that occurs while the person is a Government employee and that relates to the employee's official duties”; this language emphasizes that the prohibition does not apply to teaching, speaking, or writing done either before or after Government service.

Second, OGE proposes to amend the definition of the term “compensation” at § 2635.807(a)(2)(iii) to streamline the definition and clarify that “compensation” includes travel expenses only with respect to a very small group of employees—covered noncareer employees as defined in 5 CFR 2636.303(a). The new structure of this section defines “compensation” in paragraph (A), identifies the applicable exclusions from the definition of “compensation” in a new designated paragraph (B), and in a new designated paragraph (C) describes whether travel expenses are considered “compensation” for different categories of employees. This restructuring is intended to make the compensation definition more logically organized, and makes no substantive changes. Finally, in the existing Note following this discussion, OGE proposes to delete the reference to 18 U.S.C. 209 in the reminder that other authorities in some circumstances may limit or preclude an employee's acceptance of travel expenses; the purpose of this deletion is to avoid unnecessary focus on a single statute to the potential exclusion of other applicable authorities. No substantive change is intended.

Third, OGE proposes to make a slight modification to Example 2 to paragraph (a)(2)(iii) to clarify that the official attended the meeting described in the example in their personal capacity. This modification is meant to make explicit information that OGE believes was implicit in the example as originally written.

Fourth, OGE proposes to amend the definition of the term “receive” at § 2635.807(a)(2)(iv) to clarify that receipt of compensation is attributable to the time that the teaching, speaking, or writing occurs, and to clarify how OGE views the timing of receipt when there is an enforceable agreement to receive compensation for writing. The current definition of “receive” does not directly address the timing of the compensation. The revised language addresses timing and is consistent with OGE's guidance discussing teaching, speaking, and writing as an outside activity.

Fifth, OGE proposes to update the definition of “particular matter involving specific parties” found at § 2635.807(a)(2)(v) to cross-reference the definition at 5 CFR 2640.102(

l

); the current cross-reference is obsolete, as it refers to part 2637, which is no longer in effect. Like part 2635, the part 2640 regulation applies to current employees; it simply was not in effect at the time the Standards were first published and thus could not serve as the relevant cross-reference.

Sixth, OGE's revisions to subpart B of the Standards, which were finalized in 2016, expanded the term “institution of higher education” to include “similar foreign institutions of higher education.” 80 FR 74004, 74007 (Nov. 27, 2015). OGE proposes a parallel change to § 2635.807(a)(3)(i)(A), along with a corresponding note following § 2635.807(a) reminding agency ethics officials to consider the potential applicability of the Emoluments Clause of the U.S. Constitution when an employee teaches a course for compensation at a foreign institution of higher education. OGE also proposes to update the relevant citations found at § 2635.807(a)(3)(i)(B) and (C).

Seventh, OGE proposes to make a slight modification to Example 2 to paragraph (a)(3) in order to make clear that the content being taught at the state college and the continuing education program is the same. No substantive change is intended.

Eighth, although it is non-exhaustive as currently written, OGE proposes to add “Judge” to the list of terms of address and ranks highlighted in paragraph (b)(3) in order to provide additional clarity regarding the use of certain terms of address in connection with teaching, speaking, or writing.

Finally, OGE proposes to update the note to § 2635.807(b) to cross-reference subpart G to provide a reminder that reference to official title and position other than in a teaching, speaking, or writing capacity can be made only as permitted by § 2635.702(b). This note is parallel to and consistent with the language in § 2635.702 reminding employees that reference to official title and position in connection with teaching, speaking, or writing covered by § 2635.807 must be done consistent with the requirements of § 2635.807.

Proposed § 2635.808—Fundraising Activities

OGE proposes to add language at the beginning of this section designed to resolve continuing confusion about what type of “fundraising” is covered by § 2635.808. OGE frequently receives questions that confuse the restrictions on gifts between employees with the fundraising restrictions. This new language seeks to clarify that § 2635.808

only covers certain specifically-defined fundraising activities and includes a reference to subpart C, which covers other situations where monies might be collected by and between employees. OGE also proposes to move the Note currently located in § 2635.808(a) to § 2635.808(c), for better organizational placement; no changes have been made to the substance of this Note.

OGE proposes to update Example 2 to § 2635.808(a)(3) to update certain citations and make certain ministerial adjustments. No substantive change is intended.

OGE also proposes to amend § 2635.808(c)(1)(i) and (ii) and the restriction imposed on employees fundraising in their personal capacities. Specifically, OGE proposes to add a “personal relationship” exception to the restriction that is similar to the exception for accepting gifts under subparts B and C. Section 2635.808(c) presently prohibits an employee from personally soliciting contributions from anyone the employee knows to be a “prohibited source.” For regular Government employees, this encompasses any employee of a company regulated by or who seeks to do business with the employee's agency as defined at § 2635.203(d). For special Government employees, this only covers specific types of prohibited sources, those that would be substantially affected by the performance or nonperformance of the employee's duties, as defined at § 2635.203(d)(4). Because of the definition of “person” in § 2635.102, the result is that an employee can technically run afoul of § 2635.808(c) if the employee asks a relative, neighbor, or someone else with whom they have a personal relationship to make a donation and the employee knows that the person happens to work for a prohibited source. OGE believes that such a result extends beyond the fundamental purpose of this restriction, and therefore proposes to add a personal relationship exception to avoid situations like those described above, and to bring the fundraising rules more in line with other provisions in the Standards. The proposed text tracks other language in the Standards regarding personal relationships, and requires that the circumstances make clear that the solicitation is motivated by a family relationship or personal relationship that would justify the solicitation. A new Example 4 has been added to illustrate this exception.

OGE also proposes to add new Examples 5 and 6, to illustrate fundraising that involves the use of social media; these examples are consistent with OGE's Legal Advisory on social media.

See

OGE Legal Advisory LA-15-03 (Apr. 9, 2015).

I. Subpart I—Related Statutory Authorities

Proposed § 2635.902—Related Statutes

OGE proposes several technical amendments to § 2635.902 by updating citations and streamlining language.

III. Matters of Regulatory Procedure

Regulatory Flexibility Act

As Director of the Office of Government Ethics, I certify under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this proposed rule will not have a significant economic impact on a substantial number of small entities because it primarily affects current Federal executive branch employees.

Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply because this regulation does not contain information collection requirements that require approval of the Office of Management and Budget.

Unfunded Mandates Reform Act

For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. chapter 5, subchapter II), this proposed rule will not significantly or uniquely affect small governments and will not result in increased expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (as adjusted for inflation) in any one year.

Executive Order 13563 and Executive Order 12866

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select the regulatory approaches that maximize net benefits (including economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

Although the number of substantive proposed changes to the regulation is not extensive, the benefits of implementing these changes are significant. The existing regulations are not insufficient, but they have not been significantly updated since their issuance in 1992. OGE's proposed revisions address common questions received from ethics officials, incorporate OGE's experience gained from applying the regulation since its inception, modernize existing examples and add new examples for more useful reference, provide updated citations where regulatory provisions or statutes have changed, and make technical corrections. These revisions will provide greater clarity for executive branch employees and ethics officials. Further, OGE anticipates that this additional clarity will increase compliance and reduce the number of inadvertent violations.

OGE does not anticipate any significant increased costs associated with these changes. However, OGE notes that there may be an increase in the time burden during the first year in which the regulations become effective, particularly for ethics officials, due to necessary updates to training materials and other related ethics briefings, questions regarding the interpretation of revised regulatory provisions, and review of additional OGE guidance.

This proposed rule has been designated as a “significant regulatory action” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, this rule has been reviewed by the Office of Management and Budget.

Executive Order 12988

As Director of the Office of Government Ethics, I have reviewed this proposed rule in light of section 3 of Executive Order 12988, Civil Justice Reform, and certify that it meets the applicable standards provided therein.

Executive Order 13715

The Office of Government Ethics has evaluated this proposed rule under the criteria set forth in Executive Order 13175 and determined that tribal consultation is not required as this proposed rule has no substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

List of Subjects in 5 CFR Part 2635

Conflict of interests, Executive Branch standards of ethical conduct, Government employees.

Approved: February 1, 2023.

Emory Rounds,

Director, U.S. Office of Government Ethics.

For the reasons set forth in the preamble, the U.S. Office of Government Ethics proposes to revise 5 CFR part 2635 to read as follows:

PART 2635—STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EXECUTIVE BRANCH

Subpart A—General Provisions

Sec.

2635.101

Basic obligation of public service.

2635.102

Definitions.

2635.103

Applicability to enlisted members of the uniformed services.

2635.104

Applicability to employees on detail.

2635.105

Supplemental agency regulations.

2635.106

Disciplinary and corrective action.

2635.107

Ethics advice.

Subpart B—Gifts From Outside Sources

2635.201

Overview and considerations for declining otherwise permissible gifts.

2635.202

General prohibition on solicitation or acceptance of gifts.

2635.203

Definitions.

2635.204

Exceptions to the prohibition for acceptance of certain gifts.

2635.205

Limitations on use of exceptions.

2635.206

Proper disposition of prohibited gifts.

Subpart C—Gifts Between Employees

2635.301

Overview.

2635.302

General standards.

2635.303

Definitions.

2635.304

Exceptions.

Subpart D—Conflicting Financial Interests

2635.401

Overview.

2635.402

Disqualifying financial interests.

2635.403

Prohibited financial interests.

Subpart E—Impartiality in Performing Official Duties

2635.501

Overview.

2635.502

Personal and business relationships.

2635.503

Covered payments from former employers.

Subpart F—Seeking Other Employment

2635.601

Overview.

2635.602

Applicability and related considerations.

2635.603

Definitions.

2635.604

Recusal while seeking employment.

2635.605

Waiver or authorization permitting participation while seeking employment.

2635.606

Recusal based on an arrangement concerning prospective employment or otherwise after negotiations.

2635.607

Notification requirements for public financial disclosure report filers regarding negotiations for or agreement of future employment or compensation.

Subpart G—Misuse of Position

2635.701

Overview.

2635.702

Use of public office for private gain.

2635.703

Use of nonpublic information.

2635.704

Use of Government property.

2635.705

Use of official time.

Subpart H—Outside Activities

2635.801

Overview.

2635.802

Conflicting outside employment and activities.

2635.803

Prior approval for outside employment and activities.

2635.804

Outside earned income limitations applicable to certain Presidential appointees.

2635.805

Service as an expert witness.

2635.806

[Reserved]

2635.807

Teaching, speaking and writing.

2635.808

Fundraising activities.

2635.809

Just financial obligations.

Subpart I—Related Statutory Authorities

2635.901

General.

2635.902

Related statutes.

Authority:

5 U.S.C. 7301, 7351, 7353; 5 U.S.C. ch. 131; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

Subpart A—General Provisions

§ 2635.101

Basic obligation of public service.

(a)

Public service is a public trust.

Each employee has a responsibility to the United States Government and its citizens to place loyalty to the Constitution, laws, and ethical principles above private gain. To ensure that every citizen can have complete confidence in the integrity of the Federal Government, each employee must respect and adhere to the principles of ethical conduct set forth in this section, as well as the implementing standards contained in this part and in supplemental agency regulations.

(b)

General principles.

The following general principles apply to every employee and may form the basis for the standards contained in this part. When a situation is not covered by the standards set forth in this part, employees must apply the principles set forth in this section in determining whether their conduct is proper.

(1) Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws, and ethical principles above private gain.

(2) Employees shall not hold financial interests that conflict with the conscientious performance of duty.

(3) Employees shall not engage in financial transactions using nonpublic Government information or allow the improper use of such information to further any private interest.

(4) An employee shall not, except as permitted by subpart B of this part, solicit or accept any gift or other item of monetary value from any person or entity seeking official action from, doing business with, or conducting activities regulated by the employee's agency, or whose interests may be substantially affected by the performance or nonperformance of the employee's duties.

(5) Employees shall put forth honest effort in the performance of their duties.

(6) Employees shall not knowingly make unauthorized commitments or promises of any kind purporting to bind the Government.

(7) Employees shall not use public office for private gain.

(8) Employees shall act impartially and not give preferential treatment to any private organization or individual.

(9) Employees shall protect and conserve Federal property and shall not use it for other than authorized activities.

(10) Employees shall not engage in outside employment or activities, including seeking or negotiating for employment, that conflict with official Government duties and responsibilities.

(11) Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities.

(12) Employees shall satisfy in good faith their obligations as citizens, including all just financial obligations, especially those—such as Federal, State, or local taxes—that are imposed by law.

(13) Employees shall adhere to all laws and regulations that provide equal opportunity for all Americans regardless of, for example, race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age, genetic information, or disability.

(14) Employees shall endeavor to avoid any actions creating the appearance that they are violating the law or the ethical standards set forth in this part. Whether particular circumstances create an appearance that the law or these standards have been violated shall be determined from the perspective of a reasonable person with knowledge of the relevant facts.

(c)

Related statutes.

In addition to the standards of ethical conduct set forth in this part, there are conflict of interest statutes that prohibit certain conduct. Criminal conflict of interest statutes of general applicability to all employees, 18 U.S.C. 201, 203, 205, 208, and 209, are summarized in the appropriate subparts of this part and must be taken into consideration in determining whether conduct is proper. Citations to other generally applicable statutes relating to employee conduct are set forth in subpart I of this part, and employees are further cautioned that there may be additional statutory and regulatory restrictions applicable to them generally or as employees of their specific agencies. Because an employee is considered to be on notice of the requirements of any statute, an employee should not rely upon any

description or synopsis of a statutory restriction, but should refer to the statute itself and obtain the advice of an agency ethics official as needed.

§ 2635.102

Definitions.

The definitions listed below are used throughout this part. Additional definitions appear in the subparts or sections of subparts to which they apply. For purposes of this part:

(a)

Agency

means an executive agency as defined in 5 U.S.C. 105 and the Postal Service and the Postal Regulatory Commission. It does not include the Government Accountability Office or the government of the District of Columbia.

(b)

Agency designee

refers to any employee who, by agency regulation, instruction, or other issuance, has been delegated authority to make any determination, give any approval, or take any other action required or permitted by this part with respect to another employee. An agency may delegate these authorities to any number of agency designees necessary to ensure that determinations are made, approvals are given, and other actions are taken in a timely and responsible manner. Any provision that requires a determination, approval, or other action by the agency designee will, when the conduct in issue is that of the head of the agency, be deemed to require that such determination, approval, or action be made or taken by the head of the agency in consultation with the designated agency ethics official.

(c)

Agency ethics official

refers to the designated agency ethics official, the alternate designated agency ethics official, any deputy ethics official, and any additional ethics official who has been delegated authority to assist in carrying out the responsibilities of an agency's ethics program. The responsibilities of agency ethics officials are described in § 2638.104 of this chapter.

(d)

Agency programs or operations

refers to any program or function carried out or performed by an agency, whether pursuant to statute, Executive order, or regulation.

(e)

Corrective action

includes any action necessary to remedy a past violation or prevent a continuing violation of this part, including but not limited to restitution, change of assignment, recusal, divestiture, termination of an activity, waiver, the creation of a qualified diversified or blind trust, or counseling.

(f)

Designated agency ethics official

refers to the official designated under § 2638.104(a) of this chapter.

(g)

Disciplinary action

includes those disciplinary actions referred to in Office of Personnel Management regulations and instructions implementing provisions of title 5 of the United States Code or provided for in comparable provisions applicable to employees not subject to title 5, including but not limited to reprimand, suspension, demotion, and removal. In the case of a military officer, comparable provisions may include those in the Uniform Code of Military Justice.

(h)

Employee

means any officer or employee of an agency, including a special Government employee. It includes officers but not enlisted members of the uniformed services. It includes employees of a State or local government or other organization who are serving on detail to an agency, pursuant to 5 U.S.C. 3371,

et seq.

For purposes other than subparts B and C of this part, it does not include the President or Vice President. Status as an employee is unaffected by pay or leave status or, in the case of a special Government employee, by the fact that the individual does not perform official duties on a given day.

(i)

Head of an agency

means, in the case of an agency headed by more than one person, the chair or comparable member of such agency.

(j)

Person

means an individual, corporation and subsidiaries it controls, company, association, firm, partnership, society, joint stock company, or any other organization or institution, including any officer, employee, or agent of such person or entity. For purposes of this part, a corporation will be deemed to control a subsidiary if it owns 50 percent or more of the subsidiary's voting securities. The term is all-inclusive and applies to commercial ventures and nonprofit organizations as well as to foreign, State, and local governments, including the government of the District of Columbia. It does not include any agency or other entity of the Federal Government or any officer or employee thereof when acting in an official capacity on behalf of that agency or entity.

(k)

Special Government employee

means those executive branch officers or employees specified in 18 U.S.C. 202(a). A special Government employee is retained, designated, appointed, or employed to perform temporary duties either on a full-time or intermittent basis, with or without compensation, for a period not to exceed 130 days during any consecutive 365-day period.

(l)

Supplemental agency regulation

means a regulation issued pursuant to § 2635.105.

§ 2635.103

Applicability to enlisted members of the uniformed services.

The provisions of this part are not applicable to enlisted members of the uniformed services. However, each agency with jurisdiction over enlisted members of the uniformed services may issue regulations defining the ethical conduct obligations of enlisted members under its jurisdiction. Such regulations or policies, if issued, should be consistent with Executive Order 12674, April 12, 1989, as modified, and may prescribe the full range of statutory and regulatory sanctions, including those available under the Uniform Code of Military Justice, for failure to comply with such regulations.

§ 2635.104

Applicability to employees on detail.

(a)

Details to other agencies.

Except as provided in paragraph (d) of this section, employees on detail, including uniformed officers on assignment, from their employing agencies to another agency for a period in excess of 30 calendar days will be subject to any supplemental agency regulations of the agency to which they are detailed rather than to any supplemental agency regulations of their employing agencies.

(b)

Details to the legislative or judicial branch.

Employees on detail, including uniformed officers on assignment, from their employing agencies to the legislative or judicial branch for a period in excess of 30 calendar days will be subject to the ethical standards of the branch or entity to which detailed. For the duration of any such detail or assignment, employees will not be subject to the provisions of this part, except this section, or, except as provided in paragraph (d) of this section, to any supplemental agency regulations of their employing agencies, but will remain subject to the conflict of interest prohibitions in title 18 of the United States Code.

(c)

Details to non-Federal entities.

Except to the extent exempted in writing pursuant to this paragraph, an employee detailed to a non-Federal entity remains subject to this part and to any supplemental agency regulation of their employing agency. When an employee is detailed pursuant to statutory authority to an international organization or to a State or local government for a period in excess of six months, the designated agency ethics official may grant a written exemption from subpart B of this part based on their determination that the entity has adopted written ethical standards covering solicitation and acceptance of gifts which will apply to the employee during the detail and which will be

appropriate given the purpose of the detail.

(d)

Applicability of special agency statutes.

Notwithstanding paragraphs (a) and (b) of this section, employees who are subject to an agency statute which restricts their activities or financial holdings specifically because of their status as an employee of that agency will continue to be subject to any provisions in the supplemental agency regulations of the employing agency that implement that statute.

§ 2635.105

Supplemental agency regulations.

In addition to the regulations set forth in this part, employees must comply with any supplemental agency regulations issued by their employing agencies under this section.

(a) An agency that wishes to supplement this part must prepare and submit to the Office of Government Ethics, for its concurrence and joint issuance, any agency regulations that supplement the regulations contained in this part. Supplemental agency regulations which the agency determines are necessary and appropriate, in view of its programs and operations, to fulfill the purposes of this part must be:

(1) In the form of a supplement to the regulations in this part; and

(2) In addition to the substantive provisions of this part.

(b) After concurrence and co-signature by the Office of Government Ethics, the agency must submit its supplemental agency regulations to the

Federal Register

for publication and codification at the expense of the agency in title 5 of the Code of Federal Regulations. Supplemental agency regulations issued under this section are effective only after concurrence and co-signature by the Office of Government Ethics and publication in the

Federal Register

.

(c) This section applies to any supplemental agency regulations or amendments thereof issued under this part. It does not apply to:

(1) A handbook or other issuance intended merely as an explanation of the standards contained in this part or in supplemental agency regulations;

(2) An instruction or other issuance the purpose of which is to:

(i) Delegate to an agency designee authority to make any determination, give any approval or take any other action required or permitted by this part or by supplemental agency regulations; or

(ii) Establish internal agency procedures for documenting or processing any determination, approval or other action required or permitted by this part or by supplemental agency regulations, or for retaining any such documentation; or

(3) Regulations or instructions that an agency has authority, independent of this part, to issue, such as regulations implementing an agency's gift acceptance statute, protecting categories of nonpublic information, or establishing standards for use of Government vehicles.

(d) Employees of a State or local government or other organization who are serving on detail to an agency, pursuant to 5 U.S.C. 3371,

et seq.,

are subject to any requirements, in addition to those in this part, established by a supplemental agency regulation issued under this section to the extent that such regulation expressly provides.

§ 2635.106

Disciplinary and corrective action.

(a) Except as provided in § 2635.107, a violation of this part or of supplemental agency regulations may be cause for appropriate corrective or disciplinary action to be taken under applicable Governmentwide regulations or agency procedures. Such action may be in addition to any action or penalty prescribed by law.

(b) It is the responsibility of the employing agency to initiate appropriate disciplinary or corrective action in individual cases. However, corrective action may be ordered or disciplinary action recommended by the Director of the Office of Government Ethics under the procedures at part 2638 of this chapter.

(c) A violation of this part or of supplemental agency regulations, as such, does not create any right or benefit, substantive or procedural, enforceable at law by any person against the United States, its agencies, its officers or employees, or any other person. Thus, for example, an individual who alleges that an employee has failed to adhere to laws and regulations that provide equal opportunity regardless of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age, genetic information, or disability is required to follow applicable statutory and regulatory procedures, including those of the Equal Employment Opportunity Commission.

§ 2635.107

Ethics advice.

(a) As required by §§ 2638.104(a) and 2638.104(d) of this chapter, each agency has a designated agency ethics official and an alternate designated agency ethics official; these are the employees who have the primary responsibility for directing the daily activities of an agency's ethics program. Acting directly or through other officials, the designated agency ethics official is responsible for providing ethics advice and counseling regarding the application of this part.

(b) Employees who have questions about the application of this part or any supplemental agency regulations to particular situations should seek advice from an agency ethics official. Disciplinary action for violating this part or any supplemental agency regulations will not be taken against an employee who has engaged in conduct in good faith reliance upon the advice of an agency ethics official, provided that the employee, in seeking such advice, has made full disclosure of all relevant circumstances. When the employee's conduct violates a criminal statute, reliance on the advice of an agency ethics official cannot ensure that the employee will not be prosecuted under that statute. However, good faith reliance on the advice of an agency ethics official is a factor that may be taken into account by the Department of Justice in the selection of cases for prosecution. Disclosures made by an employee to an agency ethics official are not protected by an attorney-client privilege. Agency ethics officials are required by 28 U.S.C. 535 to report any information they receive relating to a violation of the criminal code, title 18 of the United States Code.

Subpart B—Gifts From Outside Sources

§ 2635.201

Overview and considerations for declining otherwise permissible gifts.

(a)

Overview.

This subpart contains standards that prohibit an employee from soliciting or accepting any gift from a prohibited source or any gift given because of the employee's official position, unless the item is excluded from the definition of a gift or falls within one of the exceptions set forth in this subpart.

(b)

Considerations for declining otherwise permissible gifts.

(1) Every employee has a fundamental responsibility to the United States and its citizens to place loyalty to the Constitution, laws, and ethical principles above private gain. An employee's actions should promote the public's trust that this responsibility is being met. For this reason, employees should consider declining otherwise permissible gifts if they believe that a reasonable person with knowledge of the relevant facts would question the employee's integrity or impartiality as a result of accepting the gift.

(2) Employees who are considering whether acceptance of a gift would lead

a reasonable person with knowledge of the relevant facts to question their integrity or impartiality may consider, among other relevant factors, whether:

(i) The gift has a high market value;

(ii) The timing of the gift creates the appearance that the donor is seeking to influence an official action;

(iii) The gift was provided by a person who has interests that may be substantially affected by the performance or nonperformance of the employee's official duties; and

(iv) Acceptance of the gift would provide the donor with significantly disproportionate access.

(3) Notwithstanding paragraph (b)(1) of this section, an employee who accepts a gift that qualifies for an exception under § 2635.204 does not violate this subpart or the Principles of Ethical Conduct set forth in § 2635.101(b).

(4) Employees who have questions regarding this subpart, including whether the employee should decline a gift that would otherwise be permitted under an exception found in § 2635.204, should seek advice from an agency ethics official.

Example 1 to paragraph (b):

An employee of the Peace Corps is in charge of making routine purchases of office supplies. After a promotional presentation to highlight several new products, a vendor offers to buy the employee lunch, which costs less than $20. The employee is concerned that a reasonable person may question their impartiality by accepting the free lunch, as the timing of the offer indicates that the donor may be seeking to influence an official action and the company has interests that may be substantially affected by the performance or nonperformance of the employee's duties. The employee concludes that appearance considerations weigh against accepting the gift.

§ 2635.202

General prohibition on solicitation or acceptance of gifts.

(a)

Prohibition on soliciting gifts.

Except as provided in this subpart, an employee may not, directly or indirectly:

(1) Solicit a gift from a prohibited source; or

(2) Solicit a gift to be given because of the employee's official position.

(b)

Prohibition on accepting gifts.

Except as provided in this subpart, an employee may not, directly or indirectly:

(1) Accept a gift from a prohibited source; or

(2) Accept a gift given because of the employee's official position.

(c)

Relationship to illegal gratuities statute.

A gift accepted pursuant to an exception found in this subpart will not constitute an illegal gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B), unless it is accepted in return for being influenced in the performance of an official act. As more fully described in § 2635.205(d)(1), an employee may not solicit or accept a gift if to do so would be prohibited by the Federal bribery statute, 18 U.S.C. 201(b).

Example 1 to paragraph (c):

A Government contractor who specializes in information technology software has offered an employee of the Department of Energy's information technology acquisition division a $15 gift card to a local restaurant if the employee will recommend to the agency's contracting officer that the agency select the contractor's products during the next acquisition. Even though the gift card is less than $20, the employee may not accept the gift under § 2635.204(a) because it is conditional upon official action by the employee. Pursuant to §§ 2635.202(c) and 2635.205(a), notwithstanding any exception to the rule, an employee may not accept a gift in return for being influenced in the performance of an official act.

§ 2635.203

Definitions.

For purposes of this subpart, the following definitions apply:

(a)

Agency

has the meaning set forth in § 2635.102(a). However, for purposes of this subpart, an executive department, as defined in 5 U.S.C. 101, may, by supplemental agency regulation, designate as a separate agency any component of that department which the department determines exercises distinct and separate functions.

(b)

Gift

includes any gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value. It includes services as well as gifts of training, transportation, local travel, lodgings, and meals, whether provided in-kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred. The term excludes the following:

(1) Modest items of food and non-alcoholic refreshments, such as soft drinks, coffee, and donuts, offered other than as part of a meal;

(2) Greeting cards and items with little intrinsic value, such as plaques, certificates, and trophies, which are intended primarily for presentation;

Example 1 to paragraph (b)(2):

After giving a speech at the facility of a pharmaceutical company, a Government employee is presented with a glass paperweight in the shape of a pill capsule with the name of the company's latest drug and the date of the speech imprinted on the side. The employee may accept the paperweight because it is an item with little intrinsic value which is intended primarily for presentation.

Example 2 to paragraph (b)(2):

After participating in a panel discussion hosted by an international media company, a Government employee is presented with an inexpensive portable music player emblazoned with the media company's logo. The portable music player has a market value of $25. The employee may not accept the portable music player as it has a significant independent use as a music player rather than being intended primarily for presentation.

Example 3 to paragraph (b)(2):

After giving a speech at a conference held by a national association of miners, a Department of Commerce employee is presented with a block of granite that is engraved with the association's logo, a picture of the Appalachian Mountains, the date of the speech, and the employee's name. The employee may accept this item because it is similar to a plaque, is designed primarily for presentation, and has little intrinsic value.

(3) Loans from banks and other financial institutions on terms generally available to the public;

(4) Opportunities and benefits, including favorable rates and commercial discounts, available to the public or to a class consisting of all Government employees or all uniformed military personnel, whether or not restricted on the basis of geographic considerations;

(5) Rewards and prizes given to competitors in contests or events, including random drawings, open to the public unless the employee's entry into the contest or event is required as part of the employee's official duties;

Example 1 to paragraph (b)(5):

A Government employee is attending a free trade show on official time. The trade show is held in a public shopping area adjacent to the employee's office building. The employee voluntarily enters a drawing at an individual vendor's booth, which is open to the public, by filling in an entry form on the vendor's display table and dropping it into the contest box. The employee may accept the resulting prize because entry into the contest was not required by or related to their official duties.

Example 2 to paragraph (b)(5):

Attendees at a conference, which is not open to the public, are entered in a drawing for a weekend getaway to Bermuda as a result of being registered for the conference. A Government

employee who attends the conference in an official capacity could not accept the prize under paragraph (b)(5) of this section, as the event is not open to the public.

(6) Pension and other benefits resulting from continued participation in an employee welfare and benefits plan maintained by a current or former employer;

(7) Anything which is paid for by the Government or secured by the Government under Government contract;

Example 1 to paragraph (b)(7):

An employee at the Occupational Safety and Health Administration is assigned to travel away from their duty station to conduct an investigation of a collapse at a construction site. The employee's agency is paying for relevant travel expenses, including airfare. The employee may accept and retain travel promotional items, such as frequent flyer miles, received as a result of this official travel, to the extent permitted by 5 U.S.C. 5702, note, and 41 CFR part 301-53.

(8) Free attendance to an event provided by the sponsor of the event to:

(i) An employee who is assigned to present information on behalf of the agency at the event on any day when the employee is presenting;

(ii) An employee whose presence on any day of the event is deemed to be essential by the agency to the presenting employee's participation in the event, provided that the employee is accompanying the presenting employee; and

(iii) One guest of the presenting employee on any day when the employee is presenting, provided that others in attendance will generally be accompanied by a guest, the offer of free attendance for the guest is unsolicited, and the agency designee, orally or in writing, has authorized the presenting employee to accept;

Example 1 to paragraph (b)(8):

An employee of the Department of the Treasury who is assigned to participate in a panel discussion of economic issues as part of a one-day conference may accept the sponsor's waiver of the conference fee. Under the separate authority of § 2635.204(a), the employee may accept a token of appreciation that has a market value of $20 or less.

Example 2 to paragraph (b)(8):

An employee of the Securities and Exchange Commission is assigned to present the agency's views at a roundtable discussion of an ongoing working group. The employee may accept free attendance to the meeting under paragraph (b)(8) of this section because the employee has been assigned to present information at the meeting on behalf of the agency. If it is determined by the agency that it is essential that another employee accompany the presenting employee to the roundtable discussion, the accompanying employee may also accept free attendance to the meeting under paragraph (b)(8)(ii) of this section.

Example 3 to paragraph (b)(8):

An employee of the United States Trade and Development Agency is invited to attend a cocktail party hosted by a prohibited source. The employee believes that there will be an opportunity to discuss official matters with other attendees while at the event. Although the employee may voluntarily discuss official matters with other attendees, the employee has not been assigned to present information on behalf of the agency. The employee may not accept free attendance to the event under paragraph (b)(8) of this section.

(9) Any gift accepted by the Government under specific statutory authority, including:

(i) Travel, subsistence, and related expenses accepted by an agency under the authority of 31 U.S.C. 1353 in connection with an employee's attendance at a meeting or similar function relating to the employee's official duties which take place away from the employee's duty station, provided that the agency's acceptance is in accordance with the implementing regulations at 41 CFR chapter 304; and

(ii) Other gifts provided in-kind which have been accepted by an agency under its agency gift acceptance statute; and

(10) Anything for which market value is paid by the employee.

(c)

Market value

means the cost that a member of the general public would reasonably expect to incur to purchase the gift. An employee who cannot ascertain the market value of a gift may estimate its market value by reference to the retail cost of similar items of like quality. The market value of a gift of a ticket entitling the holder to food, refreshments, entertainment, or any other benefit is deemed to be the face value of the ticket.

Example 1 to paragraph (c):

An employee who has been given a watch inscribed with the corporate logo of a prohibited source may determine its market value based on the observation that a comparable watch, not inscribed with a logo, generally sells for about $50.

Example 2 to paragraph (c):

During an official visit to a factory operated by a well-known athletic footwear manufacturer, an employee of the Department of Labor is offered a commemorative pair of athletic shoes manufactured at the factory. Although the cost incurred by the donor to manufacture the shoes was $17, the market value of the shoes would be the $100 that the employee would have to pay for the shoes on the open market.

Example 3 to paragraph (c):

A prohibited source has offered a Government employee a ticket to a charitable event consisting of a cocktail reception to be followed by an evening of chamber music. Even though the food, refreshments, and entertainment provided at the event may be worth only $20, the market value of the ticket is its $250 face value.

Example 4 to paragraph (c):

A company offers an employee of the Federal Communication Commission (FCC) free attendance for two to a private skybox at a ballpark to watch a major league baseball game. The skybox is leased annually by the company, which has business pending before the FCC. The skybox tickets provided to the employee do not have a face value. To determine the market value of the tickets, the employee must add the face value of two of the most expensive publicly available tickets to the game and the market value of any food, parking, or other tangible benefits provided in connection with the gift of attendance that are not already included in the cost of the most expensive publicly available tickets.

Example 5 to paragraph (c):

An employee of the Department of Agriculture is invited to a reception held by a prohibited source. There is no entrance fee to the reception event or to the venue. To determine the market value of the gift, the employee must add the market value of any entertainment, food, beverages, or other tangible benefit provided to attendees in connection with the reception, but need not consider the cost incurred by the sponsor to rent or maintain the venue where the event is held. The employee may rely on a per-person cost estimate provided by the sponsor of the event, unless the employee or an agency designee has determined that a reasonable person would find that the estimate is clearly implausible.

(d)

Prohibited source

means any person who:

(1) Is seeking official action by the employee's agency;

(2) Does business or seeks to do business with the employee's agency;

(3) Conducts activities regulated by the employee's agency;

(4) Has interests that may be substantially affected by the performance or nonperformance of the employee's official duties; or

(5) Is an organization a majority of whose members are described in paragraphs (d)(1) through (4) of this section.

(e)

Given because of the employee's official position.

A gift is given because of the employee's official position if the gift is from a person other than an employee and would not have been given had the employee not held the status, authority, or duties associated with the employee's Federal position.

Note 1 to paragraph (e):

Gifts between employees are subject to the limitations set forth in subpart C of this part.

Example 1 to paragraph (e):

When free season tickets are offered by an opera guild to all members of the Cabinet, the gift is offered because of their official positions.

Example 2 to paragraph (e):

Employees at a regional office of the Department of Justice (DOJ) work in Government-leased space at a private office building, along with various private business tenants. A major fire in the building during normal office hours causes a traumatic experience for all occupants of the building in making their escape, and it is the subject of widespread news coverage. A corporate hotel chain, which does not meet the definition of a prohibited source for DOJ, seizes the moment and announces that it will give a free night's lodging to all building occupants and their families, as a public goodwill gesture. Employees of DOJ may accept, as this gift is not being given because of their Government positions. The donor's motivation for offering this gift is unrelated to the DOJ employees' status, authority, or duties associated with their Federal positions, but instead is based on their mere presence in the building as occupants at the time of the fire.

(f)

Indirectly solicited or accepted.

A gift which is solicited or accepted indirectly includes a gift:

(1) Given with the employee's knowledge and acquiescence to the employee's parent, sibling, spouse, child, dependent relative, or a member of the employee's household because of that person's relationship to the employee; or

(2) Given to any other person, including any charitable organization, on the basis of designation, recommendation, or other specification by the employee, except the employee has not indirectly solicited or accepted a gift by the raising of funds or other support for a charitable organization if done in accordance with § 2635.808.

Example 1 to paragraph (f)(2):

An employee who must decline a gift of a personal computer pursuant to this subpart may not suggest that the gift be given instead to one of five charitable organizations whose names are provided by the employee.

(g)

Free attendance

includes waiver of all or part of the fee for an event or the provision of food, refreshments, entertainment, instruction, or materials furnished to all attendees as an integral part of the event. It does not include travel expenses, lodgings, or entertainment collateral to the event. It does not include meals taken other than in a group setting with all other attendees, unless the employee is a presenter at the event and is invited to a separate meal for participating presenters that is hosted by the sponsor of the event. When the offer of free attendance has been extended to an accompanying guest, the market value of the gift of free attendance includes the market value of free attendance by both the employee and the guest.

§ 2635.204

Exceptions to the prohibition for acceptance of certain gifts.

Subject to the limitations in § 2635.205, this section establishes exceptions to the prohibitions set forth in § 2635.202(a) and (b). Even though acceptance of a gift may be permitted by one of the exceptions contained in this section, it is never inappropriate and frequently prudent for an employee to decline a gift if acceptance would cause a reasonable person to question the employee's integrity or impartiality. Section 2635.201(b) identifies considerations for declining otherwise permissible gifts.

(a)

Gifts of $20 or less.

An employee may accept unsolicited gifts having an aggregate market value of $20 or less per source per occasion, provided that the aggregate market value of individual gifts received from any one person under the authority of this paragraph (a) does not exceed $50 in a calendar year. This exception does not apply to gifts of cash or of investment interests such as stock, bonds, or certificates of deposit. When the market value of a gift or the aggregate market value of gifts offered on any single occasion exceeds $20, the employee may not pay the excess value over $20 in order to accept that portion of the gift or those gifts worth $20. When the aggregate value of tangible items offered on a single occasion exceeds $20, the employee may decline any distinct and separate item in order to accept those items aggregating $20 or less.

Example 1 to paragraph (a):

An employee of the Securities and Exchange Commission and their spouse have been invited by a representative of a regulated entity to a community theater production, tickets to which have a face value of $30 each. The aggregate market value of the gifts offered on this single occasion is $60, $40 more than the $20 amount that may be accepted for a single event or presentation. The employee may not accept the gift of the evening of entertainment. The couple may attend the play only if the employee pays the full $60 value of the two tickets.

Example 2 to paragraph (a):

An employee of the National Geospatial-Intelligence Agency has been invited by an association of cartographers to speak about the agency's role in the evolution of missile technology. At the conclusion of the speech, the association presents the employee a framed map with a market value of $18 and a ceramic mug that has a market value of $15. The employee may accept the map or the mug, but not both, because the aggregate value of these two tangible items exceeds $20.

Example 3 to paragraph (a):

On four occasions during the calendar year, an employee of the Defense Logistics Agency (DLA) was given gifts worth $10 each by four employees of a corporation that is a DLA contractor. For purposes of applying the yearly $50 limitation on gifts of $20 or less from any one person, the four gifts must be aggregated because a person is defined at § 2635.102(k) to mean not only the corporate entity, but its officers and employees as well. However, for purposes of applying the $50 aggregate limitation, the employee would not have to include the value of a birthday present received from a cousin, who is employed by the same corporation, if the cousin's birthday present can be accepted under the exception at paragraph (b) of this section for gifts based on a personal relationship.

Example 4 to paragraph (a):

Under the authority of 31 U.S.C. 1353 for agencies to accept payments from non-Federal sources in connection with attendance at certain meetings or similar functions, the Environmental Protection Agency (EPA) has accepted an association's gift of travel expenses and conference fees for an employee to attend a conference on the long-term effect of radon exposure. While at the conference, the employee may accept a gift basket of $20 or less from one of the companies underwriting the event even though it was not approved in advance by the EPA. Although 31 U.S.C. 1353 is the authority under which the EPA accepted the gift to the agency of travel expenses and conference fees, the gift basket is a gift to the employee rather than to the EPA.

Example 5 to paragraph (a):

During off-duty time, an employee of the Department of Defense (DoD) attends a trade show involving companies that are DoD contractors. The employee is offered software worth $15 at X Company's booth, a calendar worth $12 at Y Company's booth, and a deli lunch worth $8 from Z Company. The employee may accept all three of these items because they do not exceed $20 per source, even though they total more than $20 at this single occasion.

Example 6 to paragraph (a):

An employee of the Department of Defense (DoD) is being promoted to a higher level position in another DoD office. Six individuals, each employed by a different defense contractor, who have worked with the DoD employee over the years, decide to act in concert to pool their resources to buy the employee a nicer gift than each could buy separately. Each defense contractor employee contributes $20 to buy a desk clock for the DoD employee that has a market value of $120. Although each of the contributions does not exceed the $20 limit, the employee may not accept the $120 gift because it is a single gift that has a market value in excess of $20.

Example 7 to paragraph (a):

During a holiday party, an employee of the Department of State is given a $15 store gift card to a national coffee chain by an agency contractor. The employee may accept the card as the market value is less than $20. The employee could not, however, accept a gift card that is issued by a credit card company or other financial institution, because such a card is equivalent to a gift of cash.

(b)

Gifts based on a personal relationship.

An employee may accept a gift given by an individual under circumstances which make it clear that the gift is motivated by a family relationship or personal friendship rather than the position of the employee. Relevant factors in making such a determination include the history and nature of the relationship and whether the family member or friend personally pays for the gift.

Example 1 to paragraph (b):

An employee of the Federal Deposit Insurance Corporation (FDIC) has been dating an accountant employed by a member bank. As part of its “Work-Life Balance” program, the bank has given each employee in the accountant's division two tickets to a professional basketball game and has urged each to invite a family member or friend to share the evening of entertainment. Under the circumstances, the FDIC employee may accept the invitation to attend the game. Even though the tickets were initially purchased by the member bank, they were given without reservation to the accountant to use as desired, and the invitation to the employee was motivated by their personal friendship.

Example 2 to paragraph (b):

Three partners in a law firm that handles corporate mergers have invited an employee of the Federal Trade Commission (FTC) to join them in a golf tournament at a private club at the firm's expense. The entry fee is $500 per foursome. The employee cannot accept the gift of one-quarter of the entry fee even though the employee has developed an amicable relationship with the three partners as a result of the firm's dealings with the FTC. As evidenced in part by the fact that the fees are to be paid by the firm, it is not a personal friendship but a business relationship that is the motivation behind the partners' gift.

Example 3 to paragraph (b):

A Peace Corps employee enjoys using a social media site on the internet in a personal capacity outside of work. The employee has used the site to keep in touch with friends, neighbors, coworkers, professional contacts, and other individuals they have met over the years through both work and personal activities. One of these individuals works for a contractor that provides language services to the Peace Corps. The employee was acting in an official capacity when they met the individual at a meeting to discuss a matter related to the contract between their respective employers. Thereafter, the two communicated occasionally regarding contract matters, and later also granted one another access to join their social media networks through their respective social media accounts. However, the pair did not communicate further in their personal capacities, carry on extensive personal interactions, or meet socially outside of work. One day, the individual, whose employer continues to serve as a Peace Corps contractor, contacts the employee to offer a pair of concert tickets worth $30 apiece. Although the employee and the individual are connected through social media, the circumstances do not demonstrate that the gift was clearly motivated by a personal relationship, rather than the position of the employee, and therefore the employee may not accept the gift pursuant to paragraph (b) of this section.

(c)

Discounts and similar benefits.

In addition to those opportunities and benefits excluded from the definition of a gift by § 2635.203(b)(4), an employee may accept:

(1) A reduction or waiver of the fees for membership or other fees for participation in organization activities offered to all Government employees or all uniformed military personnel by professional organizations if the only restrictions on membership relate to professional qualifications; and

(2) Opportunities and benefits, including favorable rates, commercial discounts, and free attendance or participation not precluded by paragraph (c)(3) of this section:

(i) Offered to members of a group or class in which membership is unrelated to Government employment;

(ii) Offered to members of an organization, such as an employees' association or agency credit union, in which membership is related to Government employment if the same offer is broadly available to large segments of the public through organizations of similar size; or

(iii) Offered by a person who is not a prohibited source to any group or class that is not defined in a manner that specifically discriminates among Government employees on the basis of type of official responsibility or on a basis that favors those of higher rank or rate of pay.

Example 1 to paragraph (c)(2):

A computer company offers a discount on the purchase of computer equipment to all public and private sector computer procurement officials who work in organizations with over 300 employees. An employee who works as the computer procurement official for a Government agency could not accept the discount to purchase the personal computer under the exception in paragraph (c)(2)(i) of this section. The employee's membership in the group to which the discount is offered is related to Government employment because membership is based on the employee's status as a procurement official with the Government.

Example 2 to paragraph (c)(2):

An employee of the Consumer Product Safety Commission (CPSC) may accept a discount of $50 on a microwave oven offered by the manufacturer to all members of the CPSC employees' association. Even though the CPSC is currently conducting studies on the safety of microwave ovens, the $50 discount is a standard offer that the manufacturer has made broadly available through a number of employee associations and similar organizations to large segments of the public.

Example 3 to paragraph (c)(2):

An Assistant Secretary may not accept a local country club's offer of membership to all members of Department Secretariats which includes a waiver of its $5,000 membership initiation fee. Even though the country club is not a

prohibited source, the offer discriminates in favor of higher ranking officials.

(3) An employee may not accept for personal use any benefit to which the Government is entitled as the result of an expenditure of Government funds, unless authorized by statute or regulation (

e.g.,

5 U.S.C. 5702, note, regarding frequent flyer miles).

Example 1 to paragraph (c)(3):

The administrative officer for a field office of U.S. Immigration and Customs Enforcement (ICE) has signed an order to purchase 50 boxes of photocopy paper from a supplier whose literature advertises that it will give a free briefcase to anyone who purchases 50 or more boxes. Because the paper was purchased with ICE funds, the administrative officer cannot keep the briefcase which, if claimed and received, is Government property.

(d)

Awards and honorary degrees

—(1)

Awards.

An employee may accept a bona fide award for meritorious public service or achievement and any item incident to the award, provided that:

(i) The award and any item incident to the award are not from a person who has interests that may be substantially affected by the performance or nonperformance of the employee's official duties, or from an association or other organization if a majority of its members have such interests; and

(ii) If the award or any item incident to the award is in the form of cash or an investment interest, or if the aggregate value of the award and any item incident to the award, other than free attendance to the event provided to the employee and to members of the employee's family by the sponsor of the event, exceeds $200, the agency ethics official has made a written determination that the award is made as part of an established program of recognition.

Example 1 to paragraph (d)(1):

Based on a written determination by an agency ethics official that the prize meets the criteria set forth in paragraph (d)(2) of this section, an employee of the National Institutes of Health (NIH) may accept the Nobel Prize for Medicine, including the cash award which accompanies the prize, even though the prize was conferred on the basis of laboratory work performed at NIH.

Example 2 to paragraph (d)(1):

A defense contractor, ABC Systems, has an annual award program for the outstanding public employee of the year. The award includes a cash payment of $1,000. The award program is wholly funded to ensure its continuation on a regular basis for the next twenty years and selection of award recipients is made pursuant to written standards. An employee of the Department of the Air Force, who has duties that include overseeing contract performance by ABC Systems, is selected to receive the award. The employee may not accept the cash award because ABC Systems has interests that may be substantially affected by the performance or nonperformance of the employee's official duties.

Example 3 to paragraph (d)(1):

An ambassador selected by a nonprofit organization as a recipient of its annual award for distinguished service in the interest of world peace may, together with their spouse and children, attend the awards ceremony dinner and accept a crystal bowl worth $200 presented during the ceremony. However, if the organization has also offered airline tickets for the ambassador and the family to travel to the city where the awards ceremony is to be held, the aggregate value of the tickets and the crystal bowl exceeds $200, and the ambassador may accept only upon a written determination by the agency ethics official that the award is made as part of an established program of recognition.

(2)

Established program of recognition.

An award and an item incident to the award are made pursuant to an established program of recognition if:

(i) Awards have been made on a regular basis or, if the program is new, there is a reasonable basis for concluding that awards will be made on a regular basis based on funding or funding commitments; and

(ii) Selection of award recipients is made pursuant to written standards.

(3)

Honorary degrees.

An employee may accept an honorary degree from an institution of higher education, as defined at 20 U.S.C. 1001, or from a similar foreign institution of higher education, based on a written determination by an agency ethics official that the timing of the award of the degree would not cause a reasonable person to question the employee's impartiality in a matter affecting the institution.

Note 1 to paragraph (d)(3):

When the honorary degree is offered by a foreign institution of higher education, the agency may need to make a separate determination as to whether the institution of higher education is a foreign government for purposes of the Emoluments Clause of the U.S. Constitution (U.S. Const., art. I, sec. 9, cl. 8), which forbids employees from accepting emoluments, presents, offices, or titles from foreign governments, without the consent of Congress. The Foreign Gifts and Decorations Act, 5 U.S.C. 7342, however, may permit the acceptance of honorary degrees in some circumstances.

Example 1 to paragraph (d)(3):

A well-known university located in the United States wishes to give an honorary degree to the Secretary of Labor. The Secretary may accept the honorary degree only if an agency ethics official determines in writing that the timing of the award of the degree would not cause a reasonable person to question the Secretary's impartiality in a matter affecting the university.

(4)

Presentation events.

An employee who may accept an award or honorary degree pursuant to paragraph (d)(1) or (3) of this section may also accept free attendance to the event provided to the employee and to members of the employee's family by the sponsor of an event. In addition, the employee may also accept unsolicited offers of travel to and from the event provided to the employee and to members of the employee's family by the sponsor of the event. Travel expenses accepted under this paragraph (d)(4) must be added to the value of the award for purposes of determining whether the aggregate value of the award exceeds $200.

(e)

Gifts based on outside business or employment relationships.

An employee may accept meals, lodgings, transportation, and other benefits:

(1) Resulting from the business or employment activities of an employee's spouse when it is clear that such benefits have not been offered or enhanced because of the employee's official position;

Example 1 to paragraph (e)(1):

A Department of Agriculture employee whose spouse is a computer programmer employed by a Department of Agriculture contractor may attend the company's annual retreat for all of its employees and their families held at a resort facility. However, under § 2635.502, the employee may need to recuse from performing official duties affecting the spouse's employer.

Example 2 to paragraph (e)(1):

When the spouses of other clerical personnel have not been invited, an employee of the Defense Contract Audit Agency whose spouse is a clerical worker at a defense contractor may not attend the contractor's annual retreat in Hawaii for corporate officers and members of the board of directors, even though the spouse received a special invitation from the company for them to attend as a couple.

(2) Resulting from the employee's outside business or employment activities when it is clear that such benefits are based on the outside business or employment activities and

have not been offered or enhanced because of the employee's official status;

Example 1 to paragraph (e)(2):

The members of an Army Corps of Engineers environmental advisory committee that meets six times per year are special Government employees. A member who has a consulting business may accept an invitation to a $50 dinner from a corporate client, an Army construction contractor, unless, for example, the invitation was extended in order to discuss the activities of the advisory committee.

(3) Customarily provided by a prospective employer in connection with bona fide employment discussions. If the prospective employer has interests that could be affected by performance or nonperformance of the employee's duties, acceptance is permitted only if the employee first has complied with the recusal requirements of subpart F of this part applicable when seeking employment; or

Example 1 to paragraph (e)(3):

An employee of the Federal Communications Commission with responsibility for drafting regulations affecting all cable television companies wishes to apply for a job opening with a cable television holding company. Once the employee has properly recused from further work on the regulations as required by subpart F of this part, the employee may enter into employment discussions with the company and may accept the company's offer to pay for airfare, hotel, and meals in connection with an interview trip.

(4) Provided by a former employer to attend a reception or similar event when other former employees have been invited to attend, the invitation and benefits are based on the former employment relationship, and it is clear that such benefits have not been offered or enhanced because of the employee's official position.

Example 1 to paragraph (e)(4):

An employee of the Department of the Army is invited by a former employer, an Army contractor, to attend its annual holiday dinner party. The former employer traditionally invites both its current and former employees to the holiday dinner regardless of their current employment activities. Under these circumstances, the employee may attend the dinner because the dinner invitation is a result of the employee's former outside employment activities, other former employees have been asked to attend, and the gift is not offered because of the employee's official position.

(5) For purposes of paragraphs (e)(1) through (4) of this section, “employment” means any form of non-Federal employment or business relationship involving the provision of personal services.

(f)

Gifts in connection with political activities permitted by the Hatch Act Reform Amendments.

An employee who, in accordance with the Hatch Act Reform Amendments of 1993, at 5 U.S.C. 7323, may take an active part in political management or in political campaigns, may accept meals, lodgings, transportation, and other benefits, including free attendance at events, for the employee and an accompanying guest, when provided, in connection with such active participation, by a political organization described in 26 U.S.C. 527(e). Any other employees, such as a security officers, whose official duties require them to accompany an employee to a political event, may accept meals, free attendance, and entertainment provided at the event by such an organization.

Example 1 to paragraph (f):

The Secretary of the Department of Health and Human Services may accept an airline ticket and hotel accommodations furnished by the campaign committee of a candidate for the United States Senate in order to give a speech in support of the candidate.

(g)

Gifts of free attendance at widely attended gatherings

—(1)

Authorization.

When authorized in writing by the agency designee pursuant to paragraph (g)(3) of this section, an employee may accept an unsolicited gift of free attendance at all or appropriate parts of a widely attended gathering. For an employee who is subject to a leave system, attendance at the event will be on the employee's own time or, if authorized by the employee's agency, on excused absence pursuant to applicable guidelines for granting such absence, or otherwise without charge to the employee's leave account.

(2)

Widely attended gatherings.

A gathering is widely attended if it is expected that a large number of persons will attend, that persons with a diversity of views or interests will be present, for example, if it is open to members from throughout the interested industry or profession or if those in attendance represent a range of persons interested in a given matter, and that there will be an opportunity to exchange ideas and views among invited persons.

(3)

Written authorization by the agency designee.

The agency designee may authorize an employee or employees to accept a gift of free attendance at all or appropriate parts of a widely attended gathering only if the agency designee issues a written determination after finding that:

(i) The event is a widely attended gathering, as set forth in paragraph (g)(2) of this section;

(ii) The employee's attendance at the event is in the agency's interest because it will further agency programs or operations;

(iii) The agency's interest in the employee's attendance outweighs the concern that the employee may be, or may appear to be, improperly influenced in the performance of official duties; and

(iv) If a person other than the sponsor of the event invites or designates the employee as the recipient of the gift of free attendance and bears the cost of that gift, the event is expected to be attended by more than 100 persons, and the value of the gift of free attendance does not exceed $415.

(4)

Determination of agency interest.

In determining whether the agency's interest in the employee's attendance outweighs the concern that the employee may be, or may appear to be, improperly influenced in the performance of official duties, the agency designee may consider relevant factors including:

(i) The importance of the event to the agency;

(ii) The nature and sensitivity of any pending matter affecting the interests of the person who extended the invitation and the significance of the employee's role in any such matter;

(iii) The purpose of the event;

(iv) The identity of other expected participants;

(v) Whether acceptance would reasonably create the appearance that the donor is receiving preferential treatment;

(vi) Whether the Government is also providing persons with views or interests that differ from those of the donor with access to the Government; and

(vii) The market value of the gift of free attendance.

(5)

Cost provided by person other than the sponsor of the event.

The cost of the employee's attendance will be considered to be provided by a person other than the sponsor of the event when such person designates the employee to be invited and bears the cost of the employee's attendance through a contribution or other payment intended to facilitate the employee's attendance. Payment of dues or a similar assessment to a sponsoring organization does not constitute a payment intended to facilitate a particular employee's attendance.

(6)

Accompanying guest.

When others in attendance will generally be accompanied by a guest of their choice,

and when the invitation is from the same person who has invited the employee, the agency designee may authorize an employee to accept an unsolicited invitation of free attendance to one accompanying guest to participate in all or a portion of the event at which the employee's free attendance is permitted under paragraph (g)(1) this section. The authorization required by this paragraph (g)(6) must be provided in writing.

Example 1 to paragraph (g):

An aerospace industry association that is a prohibited source sponsors an industry-wide, two-day seminar for which it charges a fee of $800 and anticipates attendance of approximately 400. An Air Force contractor pays $4,000 to the association so that the association can extend free invitations to five Air Force officials designated by the contractor. The Air Force officials may not accept the gifts of free attendance because (a) the contractor, rather than the association, provided the cost of their attendance; (b) the contractor designated the specific employees to receive the gift of free attendance; and (c) the value of the gift exceeds $415 per employee.

Example 2 to paragraph (g):

An aerospace industry association that is a prohibited source sponsors an industry-wide, two-day seminar for which it charges a fee of $25 and anticipates attendance of approximately 50. An Air Force contractor pays $125 to the association so that the association can extend free invitations to five Air Force officials designated by the contractor. The Air Force officials may not accept the gifts of free attendance because (a) the contractor, rather than the association, provided the cost of their attendance; (b) the contractor designated the specific employees to receive the gift of free attendance; and (c) the event was not expected to be attended by more than 100 persons.

Example 3 to paragraph (g):

An aerospace industry association that is a prohibited source sponsors an industry-wide, two-day seminar for which it charges a fee of $800 and anticipates attendance of approximately 400. An Air Force contractor pays $4,000 in order that the association might invite any five Federal employees. An Air Force official to whom the sponsoring association, rather than the contractor, extended one of the five invitations could attend if the employee's participation were determined to be in the interest of the agency and the employee received a written authorization.

Example 4 to paragraph (g):

An employee of the Department of Transportation is invited by a news organization to an annual press dinner sponsored by an association of press organizations. Tickets for the event cost $415 per person and attendance is limited to 400 representatives of press organizations and their guests. If the employee's attendance is determined to be in the interest of the agency and the agency designee provides a written authorization, the employee may accept the invitation from the news organization because more than 100 persons will attend and the cost of the ticket does not exceed $415. However, if the invitation were extended to the employee and an accompanying guest, the employee's guest could not be authorized to attend for free because the market value of the gift of free attendance would exceed $415.

Example 5 to paragraph (g):

An employee of the Department of Energy (DOE) and their spouse have been invited by a major utility executive to a small dinner party. A few other officials of the utility and their spouses or other guests are also invited, as is a representative of a consumer group concerned with utility rates and their spouse. The DOE official believes the dinner party will provide an opportunity to socialize with and get to know those in attendance. The employee may not accept the free invitation under this exception, even if attendance could be determined to be in the interest of the agency. The small dinner party is not a widely attended gathering. Nor could the employee be authorized to accept even if the event were instead a corporate banquet to which forty company officials and their spouses or other guests were invited. In this second case, notwithstanding the larger number of persons expected (as opposed to the small dinner party just noted) and despite the presence of the consumer group representative and spouse who are not officials of the utility, those in attendance would still not represent a diversity of views or interests. Thus, the company banquet would not qualify as a widely attended gathering under those circumstances either.

Example 6 to paragraph (g):

An Assistant U.S. Attorney is invited to attend a luncheon meeting of a local bar association to hear a distinguished judge lecture on cross-examining expert witnesses. Although members of the bar association are assessed a $15 fee for the meeting, the Assistant U.S. Attorney may accept the bar association's offer to attend for free, even without a determination of agency interest. The gift can be accepted under the $20 gift exception at paragraph (a) of this section.

Example 7 to paragraph (g):

An employee of the Department of the Interior authorized to speak on the first day of a four-day conference on endangered species may accept the sponsor's waiver of the conference fee for the first day of the conference under § 2635.203(b)(8). If the conference is widely attended, the employee may be authorized to accept the sponsor's offer to waive the attendance fee for the remainder of the conference if the agency designee has made a written determination that attendance is in the agency's interest.

Example 8 to paragraph (g):

A military officer has been approved to attend a widely attended gathering, pursuant to paragraph (g) of this section, that will be held in the same city as the officer's duty station. The defense contractor sponsoring the event has offered to transport the officer in a limousine to the event. The officer may not accept the offer of transportation because the definition of “free attendance” set forth in § 2635.203(g) excludes travel, and the market value of the transportation would exceed $20.

(h)

Social invitations.

An employee may accept food, refreshments, and entertainment, not including travel or lodgings, for the employee and an accompanying guest, at a social event attended by several persons if:

(1) The invitation is unsolicited and is from a person who is not a prohibited source;

(2) No fee is charged to any person in attendance; and

(3) If either the sponsor of the event or the person extending the invitation to the employee is not an individual, the agency designee has made a written determination after finding that the employee's attendance would not cause a reasonable person with knowledge of the relevant facts to question the employee's integrity or impartiality, consistent with § 2635.201(b).

Example 1 to paragraph (h):

An employee of the White House Press Office has been invited to a social dinner for current and former White House Press Officers at the home of an individual who is not a prohibited source. The employee may attend even if the invitation is because of the employee's official position.

(i)

Meals, refreshments, and entertainment in foreign areas.

An employee assigned to duty in, or on official travel to, a foreign area as defined in 41 CFR 300-3.1 may accept unsolicited food, refreshments, or entertainment in the course of a breakfast, luncheon, dinner, or other meeting or event provided:

(1) The market value in the foreign area of the food, refreshments, or entertainment provided at the meeting or event, as converted to U.S. dollars, does not exceed the per diem rate for the foreign area specified in the U.S. Department of State's Maximum Per Diem Allowances for Foreign Areas, Per Diem Supplement Section 925 to the Standardized Regulations (GC-FA), available on the internet at

www.state.gov;

(2) There is participation in the meeting or event by non-U.S. citizens or by representatives of foreign governments or other foreign entities;

(3) Attendance at the meeting or event is part of the employee's official duties to obtain information, disseminate information, promote the export of U.S. goods and services, represent the United States, or otherwise further programs or operations of the agency or the U.S. mission in the foreign area; and

(4) The gift of meals, refreshments, or entertainment is from a person other than a foreign government as defined in 5 U.S.C. 7342(a)(2).

Example 1 to paragraph (i):

A number of local business owners in a developing country are eager for a U.S. company to locate a manufacturing facility in their province. An official of the U.S. International Development Finance Corporation may accompany the visiting vice president of the U.S. company to a dinner meeting hosted by the business owners at a province restaurant when the market value of the food and refreshments does not exceed the per diem rate for that country.

(j)

Gifts to the President or Vice President.

Because of considerations relating to the conduct of their offices, including those of protocol and etiquette, the President or the Vice President may accept any gift on their own behalf or on behalf of any family member, provided that such acceptance does not violate § 2635.205(a) or (b), 18 U.S.C. 201(b) or 201(c)(3), or the Constitution of the United States.

(k)

Gifts authorized by supplemental agency regulation.

An employee may accept any gift when acceptance of the gift is specifically authorized by a supplemental agency regulation issued with the concurrence of the Office of Government Ethics, pursuant to § 2635.105.

(l)

Gifts accepted under specific statutory authority.

The prohibitions on acceptance of gifts from outside sources contained in this subpart do not apply to any item which a statute specifically authorizes an employee to accept. Gifts which may be accepted by an employee under the authority of specific statutes include, but are not limited to:

(1) Free attendance, course or meeting materials, transportation, lodgings, food and refreshments, or reimbursements therefor incident to training or meetings when accepted by the employee under the authority of 5 U.S.C. 4111. The employee's acceptance must be approved by the agency in accordance with part 410 of this title; or

(2) Gifts from a foreign government or international or multinational organization, or its representative, when accepted by the employee under the authority of the Foreign Gifts and Decorations Act, 5 U.S.C. 7342. As a condition of acceptance, an employee must comply with requirements imposed by the agency's regulations or procedures implementing that Act.

(m)

Gifts of informational materials.

(1) An employee may accept unsolicited gifts of informational materials, provided that:

(i) The aggregate market value of all informational materials received from any one person does not exceed $100 in a calendar year; or

(ii) If the aggregate market value of all informational materials from the same person exceeds $100 in a calendar year, an agency designee has made a written determination after finding that acceptance by the employee would not be inconsistent with the standard set forth in § 2635.201(b).

(2)

Informational materials

are writings, recordings, documents, records, or other items that:

(i) Are educational or instructive in nature;

(ii) Are not primarily created for entertainment, display, or decoration; and

(iii) Contain information that relates in whole or in part to the following categories:

(A) The employee's official duties or position, profession, or field of study;

(B) A general subject matter area, industry, or economic sector affected by or involved in the programs or operations of the agency; or

(C) Another topic of interest to the agency or its mission.

Example 1 to paragraph (m):

An analyst at the Agricultural Research Service receives an edition of an agricultural research journal in the mail from a consortium of private farming operations concerned with soil toxicity. The journal edition has a market value of $75. The analyst may accept the gift.

Example 2 to paragraph (m):

An inspector at the Mine Safety and Health Administration receives a popular novel with a market value of $25 from a mine operator. Because the novel is primarily for entertainment purposes, the inspector may not accept the gift.

Example 3 to paragraph (m):

An employee at the Department of the Army is offered an encyclopedia on cyberwarfare from a prohibited source. The cost of the encyclopedia is far in excess of $100. The agency designee determines that acceptance of the gift would be inconsistent with the standard set out in § 2635.201(b). The employee may not accept the gift under paragraph (m) of this section.

§ 2635.205

Limitations on use of exceptions.

Notwithstanding any exception provided in this subpart, other than § 2635.204(j), an employee may not:

(a) Accept a gift in return for being influenced in the performance of an official act;

(b) Use, or permit the use of, the employee's Government position, or any authority associated with public office, to solicit or coerce the offering of a gift;

(c) Accept gifts from the same or different sources on a basis so frequent that a reasonable person would be led to believe the employee is using the employee's public office for private gain;

Example 1 to paragraph (c):

A purchasing agent for a Department of Veterans Affairs medical center routinely deals with representatives of pharmaceutical manufacturers who provide information about new company products. Because of a crowded calendar, the purchasing agent has offered to meet with manufacturer representatives during lunch hours Tuesdays through Thursdays, and the representatives routinely arrive at the employee's office bringing a sandwich and a soft drink for the employee. Even though the market value of each of the lunches is less than $6 and the aggregate value from any one manufacturer does not exceed the $50 aggregate limitation in § 2635.204(a) on gifts of $20 or less, the practice of accepting even these modest gifts on a recurring basis is improper.

(d) Accept a gift in violation of any statute; relevant statutes applicable to all employees include, but are not limited to:

(1) 18 U.S.C. 201(b), which prohibits public officials from, directly or indirectly, corruptly demanding, seeking, receiving, accepting, or agreeing to receive or accept anything of value personally or for any other person or entity in return for being influenced in the performance of an official act; being influenced to commit or aid in committing, or to collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or for being induced to do or

omit to do any action in violation of their official duties. As used in 18 U.S.C. 201(b), the term “public official” is broadly construed and includes regular and special Government employees as well as all other Government officials; and

(2) 18 U.S.C. 209, which prohibits employees, other than special Government employees, from receiving any salary or any contribution to or supplementation of salary from any source other than the United States as compensation for services as a Government employee. The statute contains several specific exceptions to this general prohibition, including an exception for contributions made from the treasury of a State, county, or municipality;

(e) Accept a gift in violation of any Executive order; or

(f) Accept any gift when acceptance of the gift is specifically prohibited by a supplemental agency regulation issued with the concurrence of the Office of Government Ethics, pursuant to § 2635.105.

§ 2635.206

Proper disposition of prohibited gifts.

(a) Unless a gift is accepted by an agency acting under specific statutory authority, an employee who has received a gift that cannot be accepted under this subpart must dispose of the gift in accordance with the procedures set forth in this section. The employee must promptly complete the authorized disposition of the gift. The obligation to dispose of a gift that cannot be accepted under this subpart is independent of an agency's decision regarding corrective or disciplinary action under § 2635.106.

(1)

Gifts of tangible items.

The employee must promptly return any tangible item to the donor or pay the donor its market value; or, in the case of a tangible item with a market value of $100 or less, the employee may destroy the item. An employee who cannot ascertain the actual market value of an item may estimate its market value by reference to the retail cost of similar items of like quality.

Example 1 to paragraph (a)(1):

A Department of Commerce employee received a $25 T-shirt from a prohibited source after providing training at a conference. Because the gift would not be permissible under an exception to this subpart, the employee must either return or destroy the T-shirt or promptly reimburse the donor $25. Destruction may be carried out by physical destruction or by permanently discarding the T-shirt by placing it in the trash.

Example 2 to paragraph (a)(1):

To avoid public embarrassment to the seminar sponsor, an employee of the National Park Service did not decline a barometer worth $200 given at the conclusion of a speech on Federal lands policy. To comply with this section, the employee must either promptly return the barometer or pay the donor the market value of the gift. Alternatively, the National Park Service may choose to accept the gift if permitted under specific statutory gift acceptance authority. The employee may not destroy this gift, as the market value is in excess of $100.

(2)

Gifts of perishable items.

When it is not practical to return a tangible item in accordance with paragraph (a)(1) of this section because the item is perishable, the employee may, at the discretion of the employee's supervisor or the agency designee, give the item to an appropriate charity, share the item within the recipient's office, or destroy the item.

Example 1 to paragraph (a)(2):

With approval by the recipient's supervisor, a floral arrangement sent by a disability claimant to a helpful employee of the Social Security Administration may be placed in the office's reception area.

(3)

Gifts of intangibles.

The employee must promptly reimburse the donor the market value for any entertainment, favor, service, benefit, or other intangible. Subsequent reciprocation by the employee does not constitute reimbursement.

Example 1 to paragraph (a)(3):

A Department of Defense employee wishes to attend a charitable event for which they were offered a $300 ticket by a prohibited source. Although attendance is not in the interest of the agency under § 2635.204(g), the employee may attend if they reimburse the donor the $300 face value of the ticket.

(4)

Gifts from foreign governments or international organizations.

The employee must dispose of gifts from foreign governments or international organizations in accordance with 41 CFR part 102-42.

(b) An agency may authorize disposition or return of gifts at Government expense. Employees may use penalty mail to forward reimbursements required or permitted by this section.

(c) Employees who, on their own initiative, promptly comply with the requirements of this section will not be deemed to have improperly accepted an unsolicited gift. Employees who promptly consult their agency ethics official to determine whether acceptance of an unsolicited gift is proper and who, upon the advice of the ethics official, return the gift or otherwise dispose of the gift in accordance with this section, will be considered to have complied with the requirements of this section on the employee's own initiative.

(d) Employees are encouraged to record any actions they have taken to properly dispose of gifts that cannot be accepted under this subpart, such as by sending an electronic mail message to the appropriate agency ethics official or the employee's supervisor.

Subpart C—Gifts Between Employees

§ 2635.301

Overview.

This subpart contains standards that prohibit an employee from giving or contributing to a gift to an official superior, and official superiors are prohibited from knowingly accepting such a gift. Employees also are prohibited from soliciting a contribution from another employee for a gift to an official superior. In addition, employees are prohibited from accepting a gift from an employee who receives less pay. These prohibitions apply unless the item is excluded from the definition of a gift or falls within one of the exceptions set forth in this subpart. Gifts from outside sources are subject to the limitations set forth in subpart B of this part.

§ 2635.302

General standards.

(a)

Gifts to superiors.

Except as provided in this subpart, employees may not:

(1) Directly or indirectly, give a gift to or make a contribution toward a gift for an official superior, and an official superior may not knowingly accept such a gift; or

(2) Solicit a contribution from another employee for a gift to either their own or the other employee's official superior.

(b)

Gifts from employees receiving less pay.

Except as provided in this subpart, employees may not, directly or indirectly, accept a gift from an employee who receives less pay unless:

(1) There is a personal relationship between the two employees that would justify the gift and the employee receiving the gift is not the official superior of the employee giving the gift; or

(2) The employee giving the gift is the official superior of the employee receiving the gift.

Example 1 to paragraph (b):

A GS-13 Department of Homeland Security (DHS) employee has been close personal friends with a neighbor, a GS-15 employee in another government agency, for many years. During their friendship, the GS-13 employee has

often allowed the neighbor's family to use their vacation house rent-free. The GS-15 employee recently accepted a position at DHS, and in the new position will be the direct supervisor of the GS-13 employee. Although the personal relationship between the two employees justified the gift of rent-free use of the vacation home before they were both employed at DHS, for the duration of their supervisor-subordinate relationship the GS-13 employee may not allow the GS-15 neighbor to use the vacation house rent-free or give other gifts, except as permitted by the exceptions contained in this subpart.

(c)

Limitation on use of exceptions.

Notwithstanding any exception provided in this subpart, an official superior may not coerce the offering of a gift from a subordinate.

§ 2635.303

Definitions.

For purposes of this subpart, the following definitions apply:

(a)

Gift

has the meaning set forth in § 2635.203(b). For purposes of that definition an employee will be deemed to have paid market value for any benefit received as a result of participating in a carpool or other such mutual arrangement between employees if the employee bears a fair proportion of the expense or effort involved.

(b)

Indirectly,

for purposes of § 2635.302(b), has the meaning set forth in § 2635.203(f). For purposes of § 2635.302(a), it includes a gift:

(1) Given with the employee's knowledge and acquiescence by the employee's parent, sibling, spouse, child, or dependent relative; or

(2) Given by a person other than the employee when circumstances indicate that the employee has promised or agreed to reimburse that person or to give that person something of value in exchange for giving the gift.

(c)

Market value

has the meaning set forth in § 2635.203(c), subject to paragraph (a) of this section.

(d)

Official superior

means any other employee, other than the President and the Vice President, including but not limited to an immediate supervisor, whose official responsibilities include directing or evaluating the performance of the employee's official duties or those of any other official superior of the employee. For purposes of this subpart, employees are considered to be the subordinates of any of their official superiors.

(e)

Solicit

means to request contributions by personal communication or by general announcement.

(f)

Voluntary contribution

means a contribution given freely, without pressure or coercion. A contribution is not voluntary unless it is made in an amount determined by the contributing employee, except that when an amount for a gift is included in the cost for a luncheon, reception, or similar event, an employee who freely chooses to pay a proportionate share of the total cost in order to attend will be deemed to have made a voluntary contribution. Except in the case of contributions for a gift included in the cost of a luncheon, reception, or similar event, a statement that an employee may choose to contribute less or not at all must accompany any recommendation of an amount to be contributed for a gift to an official superior.

Example 1 to paragraph (f):

A supervisory employee of the Agency for International Development has just been reassigned from Washington, DC, to a foreign duty location. As a farewell party, 12 subordinates have decided to take the supervisory employee out to lunch at a restaurant. It is understood that the employees will pay for their own meals and that the cost of the supervisor's lunch will be divided equally among the 12. Even though the amount they will contribute is not determined until the supervisor orders lunch, the contribution made by those who choose to participate in the farewell lunch is voluntary.

§ 2635.304

Exceptions.

The prohibitions set forth in § 2635.302(a) and (b) do not apply to a gift given or accepted under the circumstances described in paragraph (a) or (b) of this section. A contribution or the solicitation of a contribution that would otherwise violate the prohibitions set forth in § 2635.302(a) and (b) may only be made in accordance with paragraph (c) of this section.

(a)

General exceptions.

On an occasional basis, including any occasion on which gifts are traditionally given or exchanged, the following may be given to an official superior or accepted from a subordinate or an employee receiving less pay:

(1) Items, other than cash, with an aggregate market value of $10 or less per occasion;

(2) Items such as food and refreshments to be shared in the office among several employees;

(3) Personal hospitality provided at a residence which is of a type and value customarily provided by the employee to personal friends;

(4) Items given in connection with the receipt of personal hospitality if of a type and value customarily given on such occasions; and

(5) Unless obtained in violation of § 630.912 of this title, leave transferred under subpart I of part 630 of this title to an employee who is not an immediate supervisor.

Example 1 to paragraph (a):

Upon returning to work following a vacation at the beach, a claims examiner with the Department of Veterans Affairs may give their supervisor, and the supervisor may accept, a bag of saltwater taffy purchased on the boardwalk for $8.

Example 2 to paragraph (a):

An employee of the Federal Deposit Insurance Corporation whose bank examination responsibilities require frequent travel may not bring their supervisor, and the supervisor may not accept, souvenir coffee mugs from each of the cities the employee visits in the course of performing examination duties, even though each of the mugs costs less than $5. Gifts given on this basis are not occasional.

Example 3 to paragraph (a):

The Secretary of Labor has invited the agency's General Counsel to a home dinner party. The General Counsel may bring a $15 bottle of wine to the dinner party and the Secretary may accept this customary gift from the subordinate, even though its cost is in excess of $10.

Example 4 to paragraph (a):

For the holidays, an assistant may give their supervisor, and the supervisor may accept, a small succulent plant purchased for $10 or less. The assistant may also invite the supervisor to a New Year's Eve party in their home and the supervisor may attend.

(b)

Special, infrequent occasions.

A gift appropriate to the occasion may be given to an official superior or accepted from a subordinate or other employee receiving less pay:

(1) In recognition of infrequently occurring occasions of personal significance such as marriage, illness, bereavement, or the birth or adoption of a child; or

(2) Upon occasions that terminate a subordinate-official superior relationship, such as retirement, resignation, or transfer.

Example 1 to paragraph (b):

The administrative assistant to the personnel director of the Tennessee Valley Authority may send a $30 floral arrangement to the personnel director who is in the hospital recovering from surgery. The personnel director may accept the gift.

Example 2 to paragraph (b):

A chemist employed by the Food and Drug Administration has been invited to the wedding of the lab director who is an official superior. The chemist may give the lab director and the lab director's spouse, and the couple may accept, a

place setting in the couple's selected china pattern purchased for $70.

Example 3 to paragraph (b):

Upon the occasion of the supervisor's retirement from Federal service, an employee of the Fish and Wildlife Service may give the supervisor a book of wildlife photographs purchased for $19. The retiring supervisor may accept the book.

Example 4 to paragraph (b):

An economist at the Consumer Financial Protection Bureau overhears their supervisor talking about their upcoming 50th birthday. Although a 50th birthday may be conventionally seen as a unique “milestone” worthy of additional celebration, the employee may not give their supervisor a $25 bottle of wine as a present because a birthday is not an infrequently occurring occasion.

(c)

Voluntary contributions.

(1) An employee may solicit voluntary contributions of nominal amounts from fellow employees for an appropriate gift to an official superior and an employee may make a voluntary contribution of a nominal amount to an appropriate gift to an official superior:

(i) On a special, infrequent occasion as described in paragraph (b) of this section; or

(ii) On an occasional basis, for items such as food and refreshments to be shared in the office among several employees.

(2) An employee may accept such gifts to which a subordinate or an employee receiving less pay has voluntarily contributed pursuant to paragraph (c)(1) of this section.

Example 1 to paragraph (c):

To mark the occasion of retirement, members of the immediate staff of the Under Secretary of the Army would like to throw a party and provide the Under Secretary with a gift certificate. They may distribute an announcement of the party and list a nominal amount for a retirement gift as a suggested voluntary contribution for the party.

Example 2 to paragraph (c):

An employee of the National Endowment for the Arts may not collect contributions for a Christmas gift for the Chairman. Christmas occurs annually and is not an occasion of personal significance.

Example 3 to paragraph (c):

Subordinates may not take up a collection for a gift to an official superior on the occasion of the superior's swearing in or promotion to a higher grade position within the supervisory chain of that organization. These are not events that mark the termination of the subordinate-official superior relationship, nor are they events of personal significance within the meaning of § 2635.304(b). However, subordinates may take up a collection and employees may contribute a nominal amount to buy refreshments to be consumed by everyone in the immediate office to mark either such occasion.

Example 4 to paragraph (c):

Subordinates may each contribute a nominal amount to a fund to give a gift to an official superior upon the occasion of that superior's transfer or promotion to a position outside the organization.

Example 5 to paragraph (c):

An Assistant Secretary at the Department of the Interior is getting married. The Assistant Secretary's assistant has decided that a microwave oven would be a nice gift from the staff and has informed each of the Assistant Secretary's subordinates that they should contribute $5 for the gift. The assistant's method of collection is improper. Although it is permissible to recommend a $5 contribution, the recommendation must be coupled with a statement that the employee whose contribution is solicited is free to contribute less or nothing at all.

Subpart D—Conflicting Financial Interests

§ 2635.401

Overview.

Part 2640 of this chapter interprets and is the implementing regulation for 18 U.S.C. 208. This subpart summarizes the relevant statutory restrictions and some of the regulatory guidance found there. Specifically, this subpart contains two provisions relating to financial interests. One is a recusal requirement and the other is a prohibition on acquiring or continuing to hold specific financial interests. An employee may acquire or hold any financial interest not prohibited by § 2635.403. Notwithstanding that the acquisition or holding of a particular interest is proper, an employee is prohibited in accordance with § 2635.402 from participating in an official capacity in any particular matter in which, to the employee's knowledge, the employee or any person whose interests are imputed to the employee has a financial interest, if the particular matter will have a direct and predictable effect on that interest.

§ 2635.402

Disqualifying financial interests.

(a)

Statutory prohibition.

An employee is prohibited by criminal statute, 18 U.S.C. 208(a), from participating personally and substantially in an official capacity in any particular matter in which, to the employee's knowledge, the employee or any person whose interests are imputed to the employee under this statute has a financial interest, if the particular matter will have a direct and predictable effect on that interest.

Note 1 to paragraph (a):

Standards applicable when seeking non-Federal employment are contained in subpart F of this part and, if followed, will ensure that an employee does not violate 18 U.S.C. 208(a) or this section when the employee is negotiating for or has an arrangement concerning future employment. In all other cases when the employee's participation would violate 18 U.S.C. 208(a), an employee must recuse from participating in the particular matter in accordance with paragraph (c) of this section or obtain a waiver or determine that an exemption applies, as described in paragraph (d) of this section.

(b)

Definitions.

For purposes of this section, the following definitions apply:

(1)

Direct and predictable effect.

(i) A particular matter will have a direct effect on a financial interest if there is a close causal link between any decision or action to be taken in the matter and any expected effect of the matter on the financial interest. An effect may be direct even though it does not occur immediately. A particular matter will not have a direct effect on a financial interest, however, if the chain of causation is attenuated or is contingent upon the occurrence of events that are speculative or that are independent of, and unrelated to, the matter. A particular matter that has an effect on a financial interest only as a consequence of its effects on the general economy does not have a direct effect within the meaning of this subpart.

(ii) A particular matter will have a predictable effect if there is a real, as opposed to a speculative possibility that the matter will affect the financial interest. It is not necessary, however, that the magnitude of the gain or loss be known, and the dollar amount of the gain or loss is immaterial.

Note 2 to paragraph (b)(1):

If a particular matter involves a specific party or parties, generally the matter will at most only have a direct and predictable effect, for purposes of this subpart, on a financial interest of the employee in or with a party, such as the employee's interest by vi

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