Supplemental Standards of Ethical Conduct and Financial Disclosure Regulations for Employees of the Federal Communications Commission and Revision of the Commission's Employee Responsibilities and Conduct Regulations

SUMMARY: The Federal Communications Commission, with the concurrence of

the Office of Government Ethics (OGE), is issuing regulations for

employees of the Commission that supplement the Standards of Ethical

Conduct for Employees of the Executive Branch issued by OGE. The

supplemental rules require professional employees of the Commission to

obtain approval prior to engaging in certain outside activities and

provide cross-references to restrictions based on authority other than

the executive branch-wide Standards. The Commission also is revising

its residual standards of conduct regulations found in 47 CFR part 19

by repealing those sections that were superseded by the executive

branch-wide Standards and the Commission's supplemental regulation, and

by adding general cross references to the Executive Branch-wide

standards and related regulations. In addition, the Commission is

transferring to a new supplemental part certain provisions in its

existing financial disclosure regulations.

EFFECTIVE DATE: These regulations are effective October 31, 1996.

FOR FURTHER INFORMATION CONTACT: Sharon B. Kelley, Senior Attorney-

Advisor, Office of General Counsel, Federal Communications Commission,

telephone: (202) 418-1720.

SUPPLEMENTARY INFORMATION:

I. Background

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

final rule entitled Standards of Ethical Conduct for Employees of the

Executive Branch (Standards). See 57 FR 35006-35067, as corrected at 57

FR 48557, 57 FR 52583 and 60 FR 51667, with additional grace period

extensions at 59 FR 4779-4780, 60 FR 6390-6391 and 60 FR 66857-66858.

The Standards, codified at 5 CFR part 2635 and effective February 3,

1993, establish uniform Standards of Ethical Conduct that apply to all

executive branch personnel.

With the concurrence of OGE, 5 CFR 2635.105 authorizes executive

branch agencies to publish agency-specific supplemental ethical conduct

standards regulations necessary to implement their respective ethics

programs. The Commission, with OGE's concurrence, has determined that

its supplemental regulations, being codified in new chapter XXIX of 5

CFR, consisting of parts 3901 and 3902 (see the discussion below at

section II.B of this Supplementary Information block with regard to

this latter financial disclosure supplemental regulation) are necessary

to implement the Commission's ethics program successfully, in light of

the Commission's programs, operations and statutory requirements.

II. Analysis of the Regulations

A. Supplemental Standards of Ethical Conduct

Section 3901.101 General

Section 3901.101 explains that the regulation applies to all

employees of the Commission, and is supplemental to the executive

branch-wide Standards. The section also cross-references the

Commission's employee responsibilities and conduct regulations at 47

CFR part 19, as well as the executive branch-wide financial disclosure

regulations at 5 CFR part 2634 and the FCC supplemental financial

disclosure regulations at 5 CFR part 3902.

Section 3901.102 Prior Approval for Practice of a Profession

The OGE standards, at 5 CFR 2635.803, recognize that an agency may

find it necessary or desirable to issue supplemental regulations

requiring its employees to obtain approval before engaging in outside

employment or activities. The Commission's old standards of conduct

regulations, at 47 CFR 19.735-203(b), have long required prior approval

for the outside practice of an employee's profession. The Commission

has found this requirement useful in ensuring that the outside

employment activities of employees conform with all applicable laws and

regulations. In accordance with 5 CFR 2635.803, the Commission has

determined that it is necessary to the administration of its ethics

program to continue to require such approval with minor modifications.

Section 3901.102(a) requires any professional employee of the

Commission to obtain approval before engaging in the practice of the

same profession as that of the employee's official position. This

provision reflects the way the Commission has applied the prior

approval requirement which has been found at 47 CFR 19.735-203(b),

which is now being removed. For clarity, new Sec. 3901.102(a) also

includes definitions of the terms ``profession'' and ``professional

employee'' that are based upon the definition of ``profession'' in

OGE's executive branch-wide outside employment regulation at 5 CFR

2636.305(b)(1). The procedure for requesting prior approval under the

requirement which has been found at 47 CFR 19.735-203(b) also is being

changed, in Sec. 3901.102(b), to require employees to obtain approval

from both the Designated Agency Ethics Official or his or her designee,

and the employee's immediate supervisor; and to require employees to

submit a revised request for approval upon a significant change in the

nature or scope of the employee's FCC position or the services to be

provided in practicing his or her profession.

The criteria in Sec. 3901.102(c), to be used in approving or

denying requests for prior approval, indicate that Sec. 3901.102 does

not itself provide a basis to deny permission to engage in an outside

activity. The basis for disapproval, if any, must be found in

[[Page 56110]]

applicable statutes or the executive branch-wide Standards.

B. Supplemental Financial Disclosure Regulations

The Commission's old employee responsibilities and conduct

regulations, at 47 CFR 19.735-403(b), have long required all employees

who file either Standard Form (SF) 278, ``Public Financial Disclosure

Report,'' or SF/OGE Form 450, ``Confidential Financial Disclosure

Report,'' to also file a supplemental financial disclosure form (FCC

Form A54A) that collects information about income and interests in

property or assets valued below the minimum reporting limits of the SF

278 and the SF/OGE Form 450, respectively. Section 4(b) of the

Communications Act of 1934, at 47 U.S.C. 154(b)(2)(A), contains

prohibitions on certain financial interests of any value. The

Commission has determined that it is necessary to fulfill its statutory

responsibilities under the Communications Act to continue to require

employees to submit this supplemental financial disclosure form.

Accordingly, pursuant to 5 CFR 2634.103, 2634.601(b) and 2634.901(b),

the Commission is issuing, with OGE's concurrence, a supplemental

financial disclosure regulation in new part 3902 of 5 CFR retaining

procedures which have been found in 47 CFR 19.735-403(b), now being

revoked, for Commission employees to follow in filing FCC Form A54A.

Section 3902.101 General

Section 3902.101 of the final rule explains that the regulations in

part 3902 apply to employees of the Federal Communications Commission

and supplement the Executive Branch Financial Disclosure Regulations

contained in 5 CFR part 2634.

Section 3902.102 Employees Required to Submit FCC Form A54A,

``Confidential Supplemental Statement of Employment and Financial

Interests''

Section 3902.102 of the final rule provides that all employees of

the Commission, including special Government employees, who are

required to file a Standard Form (SF) 278, ``Public Financial

Disclosure Report,'' or SF/OGE Form 450, ``Confidential Financial

Disclosure Report,'' are also required to file FCC Form A54A,

``Confidential Supplemental Statement of Employment and Financial

Interests.'' In addition, Sec. 3902.102 explains that the purpose of

FCC Form A54A is to require disclosure of income and interests in

property and assets valued below the minimum reporting limits of the SF

278 and the SF/OGE Form 450, due to the restrictions on financial

interests in the Communications Act.

Section 3902.103 Submission and Review of Employees' Statements

Section 3902.103 of the final rule provides the time frames for

filing these statements by employees, to whom the statements should be

submitted for review, and the process if an employee is found to have a

conflict or appearance of a conflict of interest arising from a

financial interest. The Commission's old employee responsibilities and

conduct regulations, at 47 CFR 19.735-405 which is now being revoked,

have long contained identical procedures and the Commission has found

them necessary to fulfill its statutory responsibilities under section

4(b) of the Communications Act, at 47 U.S.C. 154(b).

Section 3902.104 Confidentiality of Employees' Statements

Section 3902.104 provides that employee supplemental statements are

treated confidentially (see 5 CFR 2634.103(a)(2) and 2634.601(b)) and

sets forth the basis for their disclosure. The Commission's

responsibilities and conduct regulations, at 47 CFR 19.735-410 which is

now being revoked, have long required confidential treatment of such

employee statements and the Commission has found this rule useful in

obtaining the necessary financial information in fulfillment of its

statutory responsibilities under section 4(b) of the Communications

Act, at 47 U.S.C. 154(b).

III. Repeal and Revision of Federal Communications Commission

Standards of Conduct Regulations

The final rules repeal many of the FCC regulations in 47 CFR part

19. Most of the repealed provisions were superseded by the executive

branch-wide Standards at 5 CFR part 2635, or were superseded or

rendered unnecessary by the interim rules regarding public and

confidential financial disclosure reports at 5 CFR part 2634. Section

19.735-203(b) of 47 CFR is superseded by the requirement for prior

approval of the private practice of a profession at 5 CFR part

3901.102. Other repealed provisions are unnecessary for inclusion in 47

CFR part 19 because they duplicate the executive branch-wide employee

responsibilities and conduct regulations at 5 CFR part 735. The

Commission is replacing the repealed provisions with a cross-reference

to the executive branch-wide Standards of Ethical Conduct and financial

disclosure regulations at 5 CFR parts 2634 and 2635, the Commission's

supplemental standards of ethical conduct and supplemental financial

disclosure regulations at 5 CFR parts 3901 and 3902, and the executive

branch-wide regulations regarding Employee Responsibilities and Conduct

at 5 CFR part 735. In addition, the remaining, unsuperseded provisions

in 47 CFR part 19 have been reorganized and edited for clarity and

consistency with other authorities.

The executive branch-wide Standards do not supersede regulations

that an agency has authority, independent of 5 CFR part 2635, to issue.

Nor would an agency have to include in its supplemental standards of

ethical conduct an instruction or other issuance the purpose of which

is to delegate to an agency designee authority to make any

determination, give any approval or take any other action required or

permitted by part 2635 or by supplemental agency regulations; or

establish internal agency procedures for documenting or processing any

determination, approval or other action required or permitted by part

2635 or by supplemental agency regulations, or for retaining any such

documentation. Such regulations, instructions and other issuances may

be promulgated separately from the agency's supplemental regulations.

The Communications Act, at 47 U.S.C. 303(r), authorizes the

Commission to make such rules and regulations and prescribe such

restrictions and conditions, not inconsistent with law, as may be

necessary to carry out the provisions of that Act. Further, the Act, at

47 U.S.C. 154(b), prohibits the Commissioners and employees of the

Commission from having certain financial interests and from engaging in

certain outside employment and activities. Accordingly, the Commission

is retaining in 47 CFR part 19 regulations implementing the

Communications Act's prohibitions on financial interests and on outside

employment and activities, and identifying certain information that is

nonpublic (see newly designated subpart B of part 19).

IV. Matters of Regulatory Procedure

Administrative Procedure Act

These revisions apply to internal rules of agency management,

personnel organization, practice and procedure for which notice and

comment is not required. The Commission is, for the most part, simply

removing those portions of part 19 that have been superseded by the OGE

regulations. The

[[Page 56111]]

new supplemental regulations are essentially similar to rules

previously contained in part 19 of the Commission's rules. 5 U.S.C.

553(a)(2), (b)(3)(A)), and (d).

List of Subjects

5 CFR Part 3901

Conflict of interests, Government employees, Outside activities.

5 CFR Part 3902

Conflict of interests, Government employees, Financial interests.

47 CFR Part 19

Conflicts of Interests, Government employees.

Adopted: October 16, 1996.

Released: October 29, 1996.

By the Commission.

William F. Caton,

Acting Secretary, Federal Communications Commission.

Approved: October 23, 1996.

Stephen D. Potts,

Director, Office of Government Ethics.

For the reasons set forth in the preamble, the Federal

Communications Commission, with the concurrence of the Office of

Government Ethics, is amending title 5 and title 47 of the Code of

Federal Regulations as follows:

TITLE 5--[AMENDED]

1. A new chapter XXIX, consisting of parts 3901 and 3902, is added

to title 5 of the Code of Federal Regulations to read as follows:

CHAPTER XXIX--FEDERAL COMMUNICATIONS COMMISSION

PART 3901--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES

OF THE FEDERAL COMMUNICATIONS COMMISSION

Sec.

3901.101 General.

3901.102 Prior approval for practice of a profession.

Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government

Act of 1978); 47 U.S.C. 303(r); 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 2635.105, 2635.803.

Sec. 3901.101 General.

In accordance with 5 CFR 2635.105, the regulations in this part

apply to employees of the Federal Communications Commission (FCC) and

supplement the Standards of Ethical Conduct for Employees of the

Executive Branch contained in 5 CFR part 2635. In addition to the

standards in 5 CFR part 2635 and this part, employees are subject to

the Executive Branch Financial Disclosure Regulations contained in 5

CFR part 2634, the FCC's regulations at 5 CFR part 3902 supplementing 5

CFR part 2634, and to FCC regulations regarding their responsibilities

and conduct in 47 CFR part 19.

Sec. 3901.102 Prior approval for practice of a profession.

(a) Prior approval requirement. A professional employee of the FCC

shall obtain approval before engaging in the outside practice of the

same profession as that of the employee's official position, whether or

not for compensation. As used in this section, ``profession'' has the

meaning set forth in Sec. 2636.305(b)(1) of this title, and

``professional employee'' means an employee whose official FCC position

is in a profession as defined in Sec. 2636.305(b)(1) of this title.

(b) Procedures for requesting approval. (1) A request for approval

shall be in writing and shall be submitted, through the following

Commission officials, to the Designated Agency Ethics Official or his

designee:

(i) For Heads of Bureaus and Offices, through the Chairman;

(ii) For employees in the immediate Office of a Commissioner,

through the Commissioner; or

(iii) For all other employees, through the Head of the Bureau or

Office to which the employee is assigned.

(2) A request for approval shall include, at a minimum:

(i) A full description of the services to be performed in

practicing the profession;

(ii) The name and address of the person or organization for which

services are to be provided; and

(iii) The estimated total time that will be devoted to practicing

the profession.

(3) Upon a significant change in the nature or scope of the

employee's FCC position or the services to be provided in practicing

the profession, the employee shall submit a revised request for

approval.

(c) Standard for approval. Approval shall be granted only upon a

determination that the proposed outside practice of the employee's

profession is not expected to involve conduct prohibited by statute or

Federal regulation, including 5 CFR 2635.

PART 3902--SUPPLEMENTAL FINANCIAL DISCLOSURE REQUIREMENTS FOR

EMPLOYEES OF THE FEDERAL COMMUNICATIONS COMMISSION

Sec.

3902.101 General.

3902.102 Employees required to submit FCC Form A54A, ``Confidential

Supplemental Statement of Employment and Financial Interests.''

3902.103 Submission and review of employees' statements.

3902.104 Confidentiality of employees' statements.

Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government

Act of 1978); 47 U.S.C. 154(b), (j), (i) and 303(r); 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 2634.103, 2634.601(b),

2634.901(b).

Sec. 3902.101 General.

The regulations in this part apply to employees of the Federal

Communications Commission (FCC) and supplement the Executive Branch

Financial Disclosure Regulations contained in 5 CFR part 2634.

Sec. 3902.102 Employees required to submit FCC Form A54A,

``Confidential Supplemental Statement of Employment and Financial

Interests.''

All employees, including special Government employees, who are

required to file a Standard Form (SF) 278, ``Public Financial

Disclosure Report,'' or a SF/OGE Form 450, ``Confidential Financial

Disclosure Report,'' are also required to file FCC Form A54A,

``Confidential Supplemental Statement of Employment and Financial

Interests.'' The purpose of FCC Form A54A is to require disclosure of

income and interest in property and assets valued below the minimum

reporting limits for the SF 278 and SF/OGE Form 450 in order to meet

the separate requirements of section 4(b) of the Communications Act of

1934, at 47 U.S.C. 154(b).

Sec. 3902.103 Submission and review of employees' statements.

(a) An employee required to submit a statement of employment and

financial interests will be notified individually of his or her

obligation to file.

(b) An employee required to submit an FCC Form A54A, ``Confidential

Supplemental Statement of Employment and Financial Interests'' pursuant

to Sec. 3902.102 shall submit such statement to the Designated Agency

Ethics Official, on the prescribed form, not later than 30 days after

his or her entrance on duty, and annually thereafter at the time the

employee

[[Page 56112]]

submits his or her SF 278 or SF/OGE Form 450.

(c) Financial statements submitted under this subpart shall be

reviewed by the Designated Agency Ethics Official.

(d) When a statement submitted under this subpart or information

from other sources indicates a potential violation of applicable laws

and regulations, such as a conflict between the interests of an

employee or special Government employee and the performance of his or

her services for the Government, the employee concerned shall be

provided an opportunity to explain and resolve the potential violation.

(e) When, after explanation by the employee involved, the potential

violation of law or regulation is not resolved, the information

concerning the potential violation shall be reported to the Chairman by

the Designated Agency Ethics Official for appropriate action.

Sec. 3902.104 Confidentiality of employees' statements.

Each supplemental statement of employment and financial interests

shall be held in confidence and shall be retained in the Office of the

Designated Agency Ethics Official. Each employee charged with reviewing

a statement is responsible for maintaining the statements in confidence

and shall not allow access to or allow information to be disclosed from

a statement except to carry out the purpose of this part or as

otherwise required by law. Information from these statements shall not

be disclosed except as the Chairman may determine in accordance with

law or regulation.

TITLE 47--[AMENDED]

CHAPTER I--FEDERAL COMMUNICATIONS COMMISSION

2. Part 19 of 47 CFR chapter I is revised to read as follows:

PART 19--EMPLOYEE RESPONSIBILITIES AND CONDUCT

Subpart A--General Provisions

Sec.

19.735-101 Purpose.

19.735-102 Cross-reference to ethics and other conduct related

regulations.

19.735-103 Definitions.

19.735-104 Delegations.

19.735-105 Availability of ethics and other conduct related

regulations and statutes.

19.735-106 Interpretation and advisory service.

19.735-107 Disciplinary and other remedial action.

Subpart B--Employee Responsibilities and Conduct

19.735-201 Outside employment and other activity prohibited by the

Communications Act.

19.735-202 Financial interests prohibited by the Communications

Act.

19.735-203 Nonpublic information.

Authority: 5 U.S.C. 7301; 47 U.S.C. 154 (b), (i), (j), and

303(r).

Subpart A--General Provisions

Sec. 19.735-101 Purpose.

The regulations in this part prescribe procedures and standards of

conduct that are appropriate to the particular functions and activities

of the Commission, and are issued by the Commission under authority

independent of the uniform Standards of Ethical Conduct for Employees

of the Executive Branch at 5 CFR part 2635 or otherwise in accordance

with 5 CFR 2635.105(c).

Sec. 19.735-102 Cross-reference to ethics and other conduct related

regulations.

In addition to the rules in this part, employees of the Federal

Communications Commission (Commission) are subject to the Standards of

Ethical Conduct for Employees of the Executive Branch at 5 CFR part

2635 and the Commission's regulations at 5 CFR part 3901 which

supplement the executive branch-wide standards, the executive branch

financial disclosure regulations at 5 CFR part 2634 and the

Commission's regulations at 5 CFR part 3902 which supplement the

executive branch-wide financial disclosure regulations, and the

employee responsibilities and conduct regulations at 5 CFR part 735.

Sec. 19.735-103 Definitions.

Commission means the Federal Communications Commission.

Communications Act means the Communications Act of 1934, as

amended, 47 U.S.C. 151 et seq.

Employee means an officer or employee of the Commission including

special Government employees within the meaning of 18 U.S.C. 202(a) and

the Commissioners.

Person means an individual, a corporation, a company, an

association, a firm, a partnership, a society, a joint stock company,

or any other organization or institution.

Sec. 19.735-104 Delegations.

(a) The Commission has delegated to the Chairman responsibility for

the detection and prevention of acts, short of criminal violations,

which could bring discredit upon the Commission and the Federal

service.

(b) Approvals under 18 U.S.C. 205(e). (1) Commissioners may approve

the representational activities permitted by 18 U.S.C. 205(e) by other

employees in their immediate offices. The Designated Agency Ethics

Official has delegated authority to grant such approvals for all other

employees except Commissioners.

(2) (i) Requests for approval of the activities permitted by 18

U.S.C. 205(e) shall be in writing and submitted as follows:

(A) In the case of employees in the immediate offices of a

Commissioner, to the Commissioner;

(B) In the case of Heads of Offices and Bureaus, to the Chairman;

and

(C) In the case of all other employees except Commissioners, to the

Head of the Office or Bureau to which the employee is assigned.

(ii) An official (other than the Chairman or another Commissioner)

to whom a request for approval under 18 U.S.C. 205(e) is submitted

shall forward it to the Designated Agency Ethics Official with the

official's recommendation as to whether the request should be granted.

(3) Copies of all requests for approval under 18 U.S.C. 205(e) and

the action taken thereon shall be maintained by the Designated Agency

Ethics Official.

(c) Waivers under 18 U.S.C. 208. (1) Commissioners may waive the

applicability of 18 U.S.C. 208(a), in accordance with 18 U.S.C.

208(b)(1) or 208(b)(3) and section 301(d) of Executive Order 12731, for

other employees in their immediate offices. The Designated Agency

Ethics Official has delegated authority to make such waiver

determinations for all other employees except Commissioners.

(2) (i) Requests for waiver of the applicability of 18 U.S.C.

208(a) shall be in writing and submitted as follows:

(A) In the case of employees in the immediate offices of a

Commissioner, to the Commissioner;

(B) In the case of Heads of Offices and Bureaus, to the Chairman;

and

(C) In the case of all other employees except Commissioners, to the

Head of the Office or Bureau to which the employee is assigned.

(ii) An official (other than the Chairman or another Commissioner)

to whom a waiver request is submitted shall forward it to the

Designated Agency Ethics Official with the official's recommendation as

to whether the waiver should be granted.

(3) Copies of all requests for waivers and the action taken thereon

shall be maintained by the Designated Agency Ethics Official.

[[Page 56113]]

Sec. 19.735-105 Availability of ethics and other conduct related

regulations and statutes.

(a) (1) The Commission shall furnish each new employee, at the time

of his or her entrance on duty, with a copy of:

(i) The Standards of Ethical Conduct for Employees of the Executive

Branch (5 CFR part 2635);

(ii) The Supplemental Standards of Ethical Conduct for Employees of

the Federal Communications Commission (5 CFR part 3901); and

(iii) The Commission's Employee Responsibilities and Conduct

regulations in this part.

(2) The Head of each Office and Bureau has the responsibility to

secure from every person subject to his or her administrative

supervision a statement indicating that the individual has read and is

familiar with the contents of the regulations in this part, and the

regulations at 5 CFR parts 2635 and 3901, and to advise the Designated

Agency Ethics Official that all such persons have provided such

statements. Each new employee shall execute a similar statement at the

time of entrance on duty. Periodically, and at least once a year, the

Designated Agency Ethics Official shall take appropriate action to

ensure that the Head of each Office and Bureau shall remind employees

subject to his or her administrative supervision of the content of the

regulations in 5 CFR parts 2635 and 3901 and this part.

(b) Copies of pertinent provisions of the Communications Act of

1934; title 18 of the United States Code; the Standards of Ethical

Conduct for Employees of the Executive Branch (5 CFR part 2635); the

Commission's Supplemental Standards of Ethical Conduct (5 CFR part

3901); and the Commission's employee responsibilities and conduct

regulations in this part shall be available in the office of the

Designated Agency Ethics Official for review by employees.

Sec. 19.735-106 Interpretation and advisory service.

(a) Requests for interpretative rulings concerning the

applicability of 5 CFR parts 2635 and 3901, and this part, may be

submitted through the employee's supervisor to the General Counsel, who

is the Commission's Designated Agency Ethics Official pursuant to the

delegation of authority at 47 CFR 0.251(a).

(b) At the time of an employee's entrance on duty and at least once

each calendar year thereafter, the Commission's employees shall be

notified of the availability of counseling services on questions of

conflict of interest and other matters covered by this part, and of how

and where these services are available.

Sec. 19.735-107 Disciplinary and other remedial action.

(a) A violation of the regulations in this part by an employee may

be cause for appropriate disciplinary action which may be in addition

to any penalty prescribed by law.

(b) The Chairman will designate an officer or employee of the

Commission who will promptly investigate all incidents or situations in

which it appears that employees may have engaged in improper conduct.

Such investigation will be initiated in all cases where complaints are

brought to the attention of the Chairman, including: Adverse comment

appearing in publications; complaints from members of Congress, private

citizens, organizations, other Government employees or agencies; and

formal complaints referred to the Chairman by the Designated Agency

Ethics Official.

(c) The Inspector General will be promptly notified of all

complaints or allegations of employee misconduct. The Inspector General

will also be notified of the planned initiation of an investigation

under this part. Such notification shall occur prior to the initiation

of the investigation required by paragraph (a) of this section. The

Inspector General may choose to conduct the investigation in accordance

with the rules in this part. Should the Inspector General choose to

conduct the investigation, he will promptly notify the Chairman. In

such case, the Inspector General will serve as the designated officer

and be solely responsible for the investigation. In carrying out this

function, the Inspector General may obtain investigative services from

other Commission offices, other governmental agencies or non

governmental sources and use any other means available to him in

accordance with Public Law 100-504 or the Inspector General Act of

1978, as amended, 5 U.S.C. Appendix. The Inspector General will be

provided with the results of all investigations in which he chooses not

to participate.

(d) The employee concerned shall be provided an opportunity to

explain the alleged misconduct. When, after consideration of the

employee's explanation, the Chairman decides that remedial action is

required, he shall take remedial action. Remedial action may include,

but is not limited to:

(1) Changes in assigned duties;

(2) Divestiture by the employee of his conflicting interest;

(3) Action under the Commission's Ethics Program resulting in one

of the following actions:

(i) When investigation reveals that the charges are groundless, the

person designated by the Chairman to assist in administration of the

program may give a letter of clearance to the employee concerned, and

the case will not be recorded in his Official Personnel Folder;

(ii) If, after investigation, the case investigator deems the act

to be merely a minor indiscretion, he may resolve the situation by

discussing it with the employee. The case will not be recorded in the

employee's Official Personnel Folder;

(iii) If the case administrator considers the problem to be of

sufficient importance, he may call it to the attention of the Chairman,

who in turn may notify the employee of the seriousness of his act and

warn him of the consequences of a repetition. The case will not be

recorded in the employee's Official Personnel Folder, unless the

employee requests it;

(iv) The Chairman may, when in his opinion circumstances warrant,

establish a special review board to investigate the facts in a case and

to make a full report thereon, including recommended action; or

(v) (A) If the Chairman decides that formal disciplinary action

should be taken, he may prepare for Commission consideration a

statement of facts and recommend one of the following:

(1) Written reprimand. A formal letter containing a complete

statement of the offense and official censure;

(2) Suspension. A temporary non pay status and suspension from

duty; or

(3) Removal for cause. Separation for cause in case of a serious

offense.

(B) Only after a majority of the Commission approves formal

disciplinary action will any record resulting from the administration

of this program be placed in the employee's Official Personnel Folder;

or

(4) Disqualification for a particular assignment.

(e) Remedial action, whether disciplinary or otherwise, shall be

effected in accordance with any applicable laws, Executive orders, and

regulations.

Subpart B--Employee Responsibilities and Conduct

Sec. 19.735-201 Outside employment and other activity prohibited by

the Communications Act.

Under section 4(b) of the Communications Act, at 47 U.S.C.

154(b)(2)(A)(iv), no employee of the

[[Page 56114]]

Commission may be in the employ of or hold any official relation to any

person significantly regulated by the Commission under that Act. In

addition, the Commissioners are prohibited by section 4(b) of the

Communications Act, at 47 U.S.C. 154(b)(4), from engaging in any other

business, vocation, profession, or employment.

Note: Under the Supplemental Standards of Ethical Conduct for

Employees of the Federal Communications Commission, at 5 CFR

3901.102, professional employees of the Commission must obtain

approval before engaging in the private practice of the same

profession as that of the employee's official position, whether or

not for compensation.

Sec. 19.735-202 Financial interests prohibited by the Communications

Act.

(a) No Commissioner shall have a pecuniary interest in any hearing

or proceeding in which he participates. (47 U.S.C. 154(j).)

(b) (1) Section 4(b) of the Communications Act, at 47 U.S.C.

154(b)(2)(A), provides:

No member of the Commission or person employed by the Commission

shall:

(i) Be financially interested in any company or other entity

engaged in the manufacture or sale of telecommunications equipment

which is subject to regulation by the Commission;

(ii) Be financially interested in any company or other entity

engaged in the business of communication by wire or radio or in the

use of the electromagnetic spectrum;

(iii) Be financially interested in any company or other entity

which controls any company or other entity specified in clause (i)

or clause (ii), or which derives a significant portion of its total

income from ownership of stocks, bonds, or other securities of any

such company or other entity; or

(iv) Be employed by, hold any official relation to, or own any

stocks, bonds, or other securities of, any person significantly

regulated by the Commission under this act; except that the

prohibitions established in this subparagraph shall apply only to

financial interests in any company or other entity which has a

significant interest in communications, manufacturing, or sales

activities which are subject to regulation by the Commission.

(2) To determine whether an entity has a significant interest in

communications related activities that are subject to Commission

regulations, the Commission shall consider, without excluding other

relevant factors, the criteria in section 4(b) of the Communications

Act, at 47 U.S.C. 154(b)(3). These criteria include:

(i) The revenues and efforts directed toward the telecommunications

aspect of the business;

(ii) The extent of Commission regulation over the entity involved;

(iii) The potential economic impact of any Commission action on

that particular entity; and

(iv) The public perception regarding the business activities of the

company.

(3)(i) Section 4(b) of the Communications Act, at 47 U.S.C.

154(b)(2)(B)(i), permits the Commission to waive the prohibitions at 47

U.S.C. 154(b)(2)(A). The Act's waiver provision at 47 U.S.C.

154(b)(2)(B)(i) provides:

The Commission shall have authority to waive, from time to time,

the application of the prohibitions established in subparagraph (A)

of section 4(b) to persons employed by the Commission if the

Commission determines that the financial interests of a person which

are involved in a particular case are minimal, except that such

waiver authority shall be subject to the provisions of section 208

of title 18, United States Code. The waiver authority established in

this subparagraph shall not apply with respect to members of the

Commission.

(ii)(A) Requests for waiver of the provisions of 47 U.S.C.

154(b)(2)(A) may be submitted by an employee to the Head of the

employee's Office or Bureau, who will endorse the request with an

appropriate recommendation and forward the request to the Designated

Agency Ethics Official. The Designated Agency Ethics Official has

delegated authority to waive the applicability of 47 U.S.C.

154(b)(2)(A).

(B) All requests for waiver shall be in writing and in the required

detail. The dollar value for the financial interest sought to be waived

shall be expressed explicitly or in categories of value provided at 5

CFR 2634.301(d).

(C) Copies of all waiver requests and the action taken thereon

shall be maintained by the Designated Agency Ethics Official. In any

case in which the Commission exercises the waiver authority established

in section 4(b) of the Communications Act, the Commission shall publish

notice of such action in the Federal Register and shall furnish notice

of such action to the appropriate committees of each House of the

Congress. Each such notice shall include information regarding the

identity of the person receiving the waiver, the position held by such

person, and the nature of the financial interests which are the subject

of the waiver.

Sec. 19.735-203 Nonpublic information.

(a) Except as authorized in writing by the Chairman pursuant to

paragraph (b) of this section, or otherwise as authorized by the

Commission or its rules, nonpublic information shall not be disclosed,

directly or indirectly, to any person outside the Commission. Such

information includes, but is not limited to, the following:

(1) The content of agenda items (except for compliance with the

Government in the Sunshine Act, 5 U.S.C. 552b); or

(2) Actions or decisions made by the Commission at closed meetings

or by circulation prior to the public release of such information by

the Commission.

(b) An employee engaged in outside teaching, lecturing, or writing

shall not use nonpublic information obtained as a result of his

Government employment in connection with such teaching, lecturing, or

writing except when the Chairman gives written authorization for the

use of that nonpublic information on the basis that its use is in the

public interest.

(c) This section does not prohibit the disclosure of an official

Commission meeting agenda listing titles and summaries of items for

discussion at an open Commission meeting. Also, this section does not

prohibit the disclosure of information about the scheduling of

Commission agenda items.

Note: Employees also should refer to the provisions of the

Standards of Ethical Conduct for Employees of the Executive Branch,

at 5 CFR 2635.703, on the use of nonpublic information. As is the

case with section 2635.703, this part is intended only to cover

knowing unauthorized disclosures of nonpublic information.

[FR Doc. 96-27735 Filed 10-30-96; 8:45 am]

BILLING CODE 6712-01-F