Ethics and Conduct of Department of Labor Employees

SUMMARY: This document repeals, retroactively, most of the regulatory

provisions relating to ``Ethics and Conduct of Department of Labor

Employees''. This action is necessary in order to conform our

regulations to the provisions of superceding final rules issued by the

Office of Government Ethics (OGE). Our rule is intended to meet the OGE

requirements and to remove any obsolete Labor Department requirements.

This final rule also makes other clarifying or technical changes.

EFFECTIVE DATE: The amendments to subparts A, B, C, and D shall be

effective as of February 3, 1993. The amendments to subpart E shall be

effective as of October 5, 1992.

FOR FURTHER INFORMATION CONTACT:

Robert Shapiro, Office of the Solicitor, Room N-2428, 200 Constitution

Avenue, N.W., Washington, D.C. 20210, telephone (202/FTS) 219-8201, FAX

(202/FTS) 219-6896.

SUPPLEMENTARY INFORMATION: On April 7, 1992, the Office of Government

Ethics (OGE) published an interim rule, 5 CFR Part 2634, establishing a

new confidential financial disclosure reporting system for executive

branch departments and agencies, effective October 5, 1992. The new

confidential financial reporting system supersedes 5 CFR 735.106, all

of subpart D of Part 735 of 5 CFR, and all implementing agency

regulations thereunder, including Department of Labor regulations

contained in subpart E of 29 CFR part 0.

On August 7, 1992, the Office of Government Ethics published a

final rule to establish, effective February 3, 1993, uniform standards

of ethical conduct for all employees of the executive branch (57 FR

35006-35067). This OGE rule is intended to carry out, among other

provisions, the mandate of section 201 of Executive Order 12674 of

April 12, 1989, as modified by E.O. 12731, which directs the Office of

Government Ethics to establish a single, comprehensive and clear set of

executive-branch standards of conduct that shall be objective,

reasonable, and enforceable. The final OGE rule is codified at 5 CFR

2635. It supersedes most of the OGE's model ethics and conduct

regulations found at subparts A, B, and C of 5 CFR part 735 and agency

ethics regulations issued thereunder including subparts A-D the

Department of Labor ethics and conduct regulations (29 CFR part 0).

On November 30, 1992, the Office of Personnel Management (OPM)

reissued uniform standards of conduct regulations relating to gambling,

conduct prejudicial to the Government, and the special preparation of

persons for civil service and foreign service examinations. This OPM

action will preserve the executive branch-wide applicability of certain

provisions which are not included in the OGE regulations at part 2635.

The Department of Labor final rule revokes the superseded

provisions of subparts A through D of the Department of Labor ethics

and conduct regulations, effective February 3, 1993, and revokes

subpart E, effective October 5, 1992. The proposed rule, however, had

permitted certain Department of Labor regulations, instructions, and

issuances to remain in effect for a limited period. The limited

continuation of these provisions was consistent with the Office of

Government Ethics rules contained in 5 CFR 2635.

On February 2, 1994, the Office of Government Ethics extended this

maximum grace period with respect to the Department of Labor and other

agencies for another year, until February 3, 1995 (59 FR 4779-4780).

Consistent with this February 2 rule, the Department of Labor final

regulation also extends the maximum grace period until February 3,

1995, one year beyond the grace period set forth in the proposed rule.

The grace period will end before February 3, 1995 if, prior to that

date, a supplemental ethics regulation is issued under 5 CFR part 2635

which applies to the Department of Labor. Section 2635.105 of the OGE

rule provides that in addition to the OGE standards of conduct

contained in part 2635 an agency may issue, jointly with OGE,

supplemental agency regulations with which the OGE has concurred.

Consistent with the OGE rule, this final rule would not, during the

grace period, disturb the continued effectiveness of current

regulations, instructions, and issuances of the Department of Labor

(including its constituent agencies) restricting the acquisition or

holding of certain financial interests. Retention of these requirements

is in accordance with the Note at Sec. 2635.403(a) of the OGE

regulations, as amended by 59 FR 4779-4780.

The final rule also would not disturb the continued effectiveness

of existing Department-wide and agency regulations, instructions, or

other issuances requiring prior approval of outside employment or

activities. The Note to Sec. 2635.803 provides, as in the case of

restrictions on financial interests, that these prior approval

requirements will be regarded as agency supplemental regulations for a

time period described identically to that set forth in Sec. 2635.403.

The OGE rule published at 59 FR 4779-4780 also amends the Note at

Sec. 2635.803 to apply the same extended grace period to existing

issuances requiring prior approval of outside employment or activities.

The final rule would not affect the current regulatory waiver

issued by the Department of Labor under the authority of title 18

U.S.C. Sec. 208(b)(2). This waiver is found in the Department of Labor

ethics regulations at 29 CFR Sec. 0.735-12(c). It permits Department of

Labor employees to engage in official activities affecting certain

financial interests in insurance companies, mutual funds, investment

companies or banks, even though engaging in such activities would

otherwise be prohibited by 18 U.S.C. Sec. 208(a). It is likely that the

Department of Labor waiver provided in 29 CFR Sec. 0.735-12(c) will

eventually be superseded by OGE action. Section 2635.402(d)(1) provides

that pending the issuance of superseding regulatory waivers by OGE,

agency regulatory waivers issued prior to November 30, 1989, continue

to apply.

For clarification purposes, the final rule changes the words

``agency supplemental regulation'' in the proposed new Sec. 0.735-13(d)

to read ``Department of Labor supplemental regulation'' and it adds the

words ``this section and any'' after the words ``shall include'' in the

last sentence thereof. It deletes the comma after the word ``agency''

in the first sentence of that paragraph and inserts a comma after

``financial interest'' in the same sentence. As a technical matter, the

final rule makes a correction in the authority citation to 29 CFR Part

0 which is set forth in the proposed rule. It deletes the reference to

``5 CFR part 737.'' The citation has been amended to read, ``48 FR

11944 (March 22, 1983), amending 29 CFR part 0''.

The proposed rule was published for comment in the Federal Register

on June 28, 1993, at 58 FR 34542-34544. No comments were received.

Administrative Procedure Act

Pursuant to 5 U.S.C. 553 (a)(2) and (b), as Secretary of Labor, I

find that good cause exists for waiving the general notice of proposed

rulemaking, notwithstanding the differences between the final and

proposed rules. I find, pursuant to 553(a)(2) that this final rule

relates to agency management or personnel and under 553(b)(A), that it

relates to rules of agency organization, procedure, or practice. The

general notice of proposed rulemaking is also being waived pursuant to

5 U.S.C. 553(b)(B) because these regulations are the direct result of

regulations issued by the Office of Government Ethics. Moreover, the

proposed rule that was previously published for comment is

substantially identical to this final rule, except for the duration of

the grace period. This extended grace period is in conformity with

regulations of the Office of Government Ethics at 59 FR 4779-4780.

In light of the recent issuance of the extended grace period

provisions at 59 FR 4779-4780, it is in the public interest to clarify

for employees of the Department of Labor the ethics rules applicable to

their conduct. Accordingly, for the reasons set forth in the preamble,

the amendments to 29 CFR part 0, subparts A, B, C, and D, shall be

effective as of February 3, 1993. The amendments to part E shall be

effective as of October 5, 1992.

Executive Order 12866

In promulgating this final rule, the Department of Labor has

adhered to the regulatory philosophy and the applicable principles of

regulation set forth in section 1 of Executive Order 12866, Regulatory

Planning and Review. This final rule has not been reviewed by the

Office of Management and Budget under that Executive Order, as it is

not deemed to be a ``regulatory action'' under Sec. 3 (d) and (e) of

the Executive Order, nor is it deemed to be ``significant'' under

Sec. 3(f) thereof.

Regulatory Flexibility Act

As Secretary of Labor, I certify under the Regulatory Flexibility

Act (5 U.S.C. chapter 6) that this regulation will not have significant

economic impact on a substantial number of small entities because it

affects only Federal employees.

Paperwork Reduction Act

As Secretary of Labor, I have determined that the Paperwork

Reduction Act (44 U.S.C. chapter 35) does not apply because this

regulation does not contain any information collection requirements

that require the approval of the Office of Management and Budget

thereunder.

List of Subjects in 29 CFR Part 0

Conflicts of interest; Government employees and former employees.

Accordingly, for the reasons set out in the preamble, the

Department of Labor is amending 29 CFR part 0 as follows:

PART 0--ETHICS AND CONDUCT OF DEPARTMENT OF LABOR EMPLOYEES

1. The authority citation for part 0 is revised to read as follows:

Authority: E.O. 11222; 1964-1965 Comp., p. 306; 5 CFR part 735;

18 U.S.C. Sec. 201-209; 48 FR 11944 (Mar. 22, 1983), amending 29 CFR

Part 0; 5 U.S.C. 7351, 7353; 5 U.S.C. App. (Ethics in Government Act

of 1978); E.O. 12674, 54 FR 15159, 3 CFR 1989 Comp., p. 215, as

modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5

CFR part 2634; and 5 CFR part 2635.

PART 0--[AMENDED]

2. Part 0 is amended by removing and reserving subparts A, B, D,

and E.

3. Part 0, subpart C is amended by removing and reserving

Sec. 0.735-11 and by removing and reserving the introductory text, and

paragraphs (a), (b), and (d) in Sec. 0.735-12.

4. Section 0.735-13 is amended by revising the section heading to

read as follows and by adding a new paragraph (d) at the end of the

section to read as follows:

Sec. 0.735-13 Financial interests and clearance of outside activities.

* * * * *

(d) In accordance with the Note to 5 CFR Sec. 2635.403(a) and the

Note to 5 CFR 2635.803, as amended by 59 FR 4779-4780 (February 2,

1994), any requirement for prior approval of employment or activities

and any prohibition on acquiring or holding a specific financial

interest, contained in an agency regulation, instruction, or other

issuance which is in effect prior to February 3, 1993 shall remain

effective until February 3, 1995 or until issuance of a Department of

Labor supplemental regulation under part 2635, whichever occurs first.

Issuances which are the subject of this paragraph shall include this

section and any regulations, instructions, or other issuances by the

Department of Labor and any agencies within the Department of Labor.

Signed at Washington, DC this 10th day of June 1994.

Robert B. Reich,

Secretary of Labor.

[FR Doc. 94-14803 Filed 6-22-94; 8:45 am]

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