Supplemental Standards of Ethical Conduct for Employees of the Department of Labor

SUMMARY: The Department of Labor, with the concurrence of the Office of

Government Ethics (OGE), is issuing an interim rule for employees of

the Department that supplements the Standards of Ethical Conduct for

Employees of the Executive Branch issued by OGE. The interim rule

designates certain components of the Department as separate agencies

for the purposes of provisions in the executive branch-wide Standards

regarding gifts from outside sources, the receipt of compensation for

teaching, speaking or writing, and fundraising in a personal capacity;

restricts the outside employment and the holding of certain financial

interests by employees of the Mine Safety and Health Administration and

by their spouses and minor children; and requires employees in the

Department's Office of the Inspector General to obtain prior approval

for outside employment. The interim rule also repeals existing

Departmental regulations governing outside employment and financial

interests of agency employees, except for a regulatory waivers

provision, and inserts in their place a cross-reference to the

executive branch-wide Standards and financial disclosure regulations,

and this interim rule.

DATES: This interim rule is effective November 6, 1996. Comments are

invited and are due by January 6, 1997.

ADDRESSES: Send comments to Robert Shapiro, Department of Labor, Room

N-2428, 200 Constitution Avenue, NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT:

David Apol, Office of the Solicitor, Department of Labor, telephone

202-219-8065, FAX 202-219-6896.

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, 60 FR 66857-66858, and

61 FR 40950-40952. 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.

On June 23, 1994, the Department issued a final rule which removed

all of the provisions of its Ethics and Conduct Regulations at 29 CFR

Part 0 that had been superseded by 5 CFR part 2635 or by OGE's

executive branch financial disclosure regulations at 5 CFR part 2634.

See 59 FR 32611. The Department preserved those provisions of its

Ethics and Conduct Regulations containing regulatory waivers issued

under 18 U.S.C. 208(b)(2), restricting the acquisition or holding of

certain financial interests, and requiring prior approval of outside

employment or activities. These provisions were permitted to continue

in effect until superseded, as provided respectively in 5 CFR

2635.402(d)(1) and the notes following 5 CFR 2635.403(a) and 2635.803,

as extended by 59 FR 4779-4780, 60 FR 6390-6391, and 60 FR 66857-66858.

5 CFR 2635.105 authorizes executive branch agencies, with the

concurrence of OGE, to publish agency-specific supplemental regulations

necessary to implement their ethics programs. The Department, with

OGE's concurrence, has determined that the following supplemental

regulations, to be codified in part 5201 of new chapter XLII of 5 CFR,

are necessary to the successful implementation of the Department's

ethics program. The Department is simultaneously repealing those

provisions of the residual subpart C of its old Ethics and Conduct

Regulations at 29 CFR part 0, which are superseded upon issuance of the

Department's supplemental regulations, and is adding a single section

that provides cross-references to 5 CFR parts 2634 and 2635, as well as

to the Department's new supplemental regulations.

II. Analysis of the Regulations

Section 5201.101 General

Section 5201.101 explains that the regulations contained in the

interim rule apply to employees of the Department of Labor and are

supplemental to the executive branch-wide Standards.

Section 5201.102 Designation of Separate Agency Components

Section 5201.102 designates several of the Department's components

as separate agencies for the purposes of certain ethics provisions. The

Department has determined that those components exercise district and

separate functions. The separate agency designations will affect the

substantive ethics rules within the Department of Labor involving the

acceptance of gifts, the receipt of compensation for teaching, speaking

and writing, and the restrictions on fundraising for nonprofit

organizations in a personal capacity.

Section 2635.202(a) of the Standards prohibits an employee from

soliciting or accepting a gift from a ``prohibited source'' unless

permitted under one of the exceptions in the Standards. The separate

agency designations will affect, first, the definition of ``prohibited

source.'' The Standards of Ethical Conduct define a ``prohibited

source'' by the relationship of the source to both the responsibilities

of the employee and those of his or her employing agency. For the

purpose of identifying an employee's agency, 5 CFR 2635.203(a)

authorizes an executive department, by supplemental regulation, to

designate as a separate agency any component that exercises a distinct

and separate function. The agency designations contained in

Sec. 5201.102 are made pursuant to 5 CFR 2635.203(a).

In addition to its effect on the gift-acceptance rules, the

designation of separate agencies will affect the definition of

``agency'' for the purposes

[[Page 57282]]

of the rules governing compensation for outside teaching, speaking, and

writing. Section 2635.807 of the Standards restricts an employee's

acceptance of compensation for outside teaching, speaking, and writing

that relates to the employee's official duties, including teaching,

speaking, or writing the subject of which deals in significant part

with any ongoing or announced policy, program, or operation of the

employee's agency. See 5 CFR 2635.807(a)(2)(I)(E)(2). Under 5 CFR

2635.807(a)(2)(I)(E)(3), more restrictive rules apply to certain

noncareer employees. The separate agency designations contained in

Sec. 5201.102 mean that the compensation restrictions in 5 CFR 2635.807

apply when the subject of an employee's speech, appearance, or article

deals in significant part with any ongoing or announced policy program,

or operation of his or her own designated agency component rather than

to the Department as a whole.

Finally, Sec. 5201.102 further supplements the Standards to change

the way the restrictions on fundraising in a personal capacity apply

within the Department. Section 2635.808(c) of the Standards restricts

employees' fundraising in a personal capacity with respect to persons

who are ``prohibited sources''. Section 5201.102 provides that the

separate agency designations used to determine when a person is a

``prohibited source'' for purposes of the Standards governing direct

and indirect gifts to employees from outside sources will also be used

to determine when a person is a prohibited source for the purpose of

the Standard at 5 CFR 2635.808(c) governing fundraising in a personal

capacity.

The definition of ``prohibited source'' for employees outside the

designated agency components will not be affected by the designations.

Any source which is prohibited from any Department component will be

treated as a prohibited source for any employee who is not in one of

the designated agency components.

Because of the very distinct and diverse functions of the

Employment Standards Administration (ESA), each designated component

within ESA is treated as a separate agency for the purposes of

determining ``prohibited sources'' and the other specified provisions

of the Standards. For the remaining ESA employees, a source is

prohibited if it is a prohibited source for any component of ESA.

Section 5201.103 Fundraising Activities

Section 5201.103 of the interim rule supplements the executive

branch-wide Standard at 5 CFR 2635.808(c) regarding fundraising in a

personal capacity. That standard bars employees from engaging in such

fundraising from those persons known by the employee to be ``prohibited

sources,'' as defined in 5 CFR 2635.203(d). In Sec. 5201.102 of this

interim rule, the Department has designated certain of its components

as separate agencies for the purposes of identifying prohibited

sources.

The employees of certain of these designated agencies have very

large numbers of prohibited sources because their components exercise

very broad regulatory responsibilities. These agency components are:

the Occupational Safety and Health Administration, which regulates

safety and health in most of the nation's workplaces; the Veterans'

Employment and Training Service, which is responsible, among its other

functions, for regulating the nation's employers to assure that they

comply with their obligations under the veterans reemployment statutes;

the Pension and Welfare Benefits Administration, which regulates

private pension and welfare benefit plans under the Employee Retirement

Income Security Act; the Wage and Hour Division of the ESA, which is

responsible, among its other functions, for assuring that non-exempt

private and public sector employees are paid the Federal minimum wage;

and the Office of Federal Contract Compliance Programs in the ESA,

which assures that the very broad and diverse category of employers

performing work under Federal contracts and those who perform federally

assisted construction work meet Federal affirmative action

requirements. Officials in the ``Remainder of ESA'' participate in

regulatory activities under both the Wage and Hour and Contract

Compliance Programs, as well as certain workers' compensation programs.

Officials in the ``Remainder of the Department of Labor'' also exercise

broad regulatory responsibilities, as they participate in all of the

Department's regulatory efforts.

The Department has determined that, in light of the very broad

regulatory responsibilities of these components, barring personal

fundraising from every category of prohibited source listed in 5 CFR

2635.203(d) is not necessary to avoid the appearance of using public

office for private gain. Accordingly, in order that the personal

fundraising activities of employees in these components not be unduly

restricted, Sec. 5201.103 provides that it shall be permissible for

employees in these designated separate agency components to solicit

funds or other support from a person who is a prohibited source for

them only under 5 CFR 2635.203(d)(3), because the person is regulated

by the component. Employees of these separate agency components will

not be allowed to solicit contributions from a person known to be a

``prohibited source'' for the other reasons listed in 5 CFR

2635.203(d). Thus, they cannot engage in charitable fundraising from

any person (including an organization, a majority of whose members are

such persons) seeking official action by the employee's agency

component; doing business or seeking to do business with the employee's

agency component; or having interests that may be substantially

affected by the performance or nonperformance of the employee's

official duties.

Section 5201.104 Additional Rules for Office of the Inspector General

Employees

The Standards, at 5 CFR 2635.803, specifically recognize that

individual agencies may find it necessary or desirable to supplement

the executive branch-wide regulations with a requirement for their

employees to obtain approval before engaging in outside employment or

activities. The Department's Office of the Inspector General (OIG) has

long imposed requirements for advance approval of its employees'

outside business or professional activities. Because of the wide range

of OIG responsibilities and the sensitivity of its mission, the

Department has determined, in accordance with 5 CFR 2635.803, that it

is necessary to the administration of the ethics program to continue to

require OIG employees to get prior approval for outside employment.

Section 5201.104(a)(1) of this interim rule continues, with minor

substantive modification, the OIG's past requirement for prior approval

of outside employment. Section 5201.104(a)(2) specifies the content of

approval requests. Section 5201.104(a)(3) specifies the standards to be

used in evaluating approval requests. Section 5201.104(a)(4) provides a

definition of ``employment'' to be used in the application of

Sec. 5201.104.

Section 5201.105 Additional Rules for Mine Safety and Health

Administration Employees

5 CFR 2635.403(a) authorizes agencies, by supplemental regulation,

to

[[Page 57283]]

prohibit or restrict the acquisition or holding of a financial interest

or a class of financial interests by agency employees, based on a

determination that the acquisition or holding of such interests would

cause reasonable persons to question the impartiality and objectivity

with which agency programs are administered. Where it is necessary to

the efficiency of the service, such prohibitions or restrictions may be

extended to employees' spouses and minor children.

Section 5201.105(a) of the interim rule generally bars employees of

the Department's Mine Safety and Health Administration (MSHA), and

their spouses and minor children, from having outside employment with

any company or other person engaged in mining activities regulated by

the MSHA under the Federal Mine Safety and Health Act of 1977 (Mine

Safety and Health Act), 30 U.S.C. 801 et seq., and from holding other

financial interests in such companies or other persons. The MSHA has

restricted the holding of mining interests by its employees since the

mine safety and health programs were transferred from the Department of

the Interior to the Department of Labor by the Federal Mine Safety and

Health Amendments Act of 1977, Pub. L. 95-164. Section 301(c)(2) of

that Act, codified at 30 U.S.C. 961(c)(2), provided that existing rules

of the Department of the Interior regarding the transferred mine safety

and health program were to continue in effect until modified,

terminated, superseded, set aside, revoked, or repealed by the

Secretary of Labor, the Federal Mine Safety and Health Review

Commission or other authorized officials, by any court of competent

jurisdiction, or by operation of law. Prior to the transfer, the

Department of the Interior's regulations in 1976 (43 CFR 20.735-13)

broadly prohibited employees of the Mining Enforcement and Safety

Administration (MESA) from holding mining interests and engaging in

certain forms of outside employment. The substantive restrictions have

not been changed since the transfer and are in effect until this

interim rule takes effect, in accordance with 59 FR 32611.

These regulations prohibited MESA (and later MSHA) employees from

having any direct or indirect interests in any mine or the products of

any mine under investigation. They also prohibited certain private

employment in relation to mines or mineral property. The Department has

determined that in light of the sensitive mission of the MSHA involving

the application of safety and health standards to the entities that it

regulates, restrictions on outside employment and on employee ownership

of financial interests in mining entities are necessary in order to

maintain public confidence in the impartiality and objectivity with

which the MSHA executes its various functions and to avoid widespread

disqualification of employees from their duties which could result in

MSHA having difficulty carrying out its mission. With respect to the

spouses and minor children of these MSHA employees, the Department has

made an additional determination that there is a direct and appropriate

nexus between the restrictions on the holding of certain employment and

financial interests as applied to spouses and minor children, and the

ability of MSHA employees to carry out their official duties and the

ability of MSHA to fulfill its mission.

The prohibitions in Sec. 5201.105(a) apply to employment or other

financial interests in a company not primarily engaged in mining

activities, if it conducts some mining activities regulated by the MSHA

under the Mine Safety and Health Act. Consistent with the definition of

``person'' in the Standards at 5 CFR 2635.102(k), Sec. 5201.105(a)

specifies that a non-mining company which owns 50 percent or more of

the voting securities of another company or other person engaged in

covered mining activities is itself treated as a company engaged in

such mining activities. This prevents the employee from avoiding these

restrictions by having an interest in a company that conducts its

mining operations through a separate corporation. On the other hand,

this section supplements the definition of ``person'' in the Standards

at 5 CFR 2635.102(k), by allowing employees to hold interests in a non-

mining corporation that is controlled by a mining corporation. The

Department has determined that the provisions of the conflict of

interest laws and the Standards are sufficient to protect the public

interest in such a case.

Section 5201.105(b) includes two exceptions to the prohibition of

5201.105(a). The exceptions are intended to permit ownership of

interests of a character that are less likely to raise questions

regarding the objective and impartial performance of an employee's

official duties or the possible misuse of their positions.

The interim rule contains an exception at Sec. 5201.105(b)(1)

permitting covered persons to hold interests in publicly traded or

publicly available investment funds, unless the fund holds more than 30

percent of its investments in the prohibited holdings.

The exception at Sec. 5201.105(b)(2) permits the holding of pension

interest. Disqualifications due to conflicts of interest from pension

interest are rare; moreover, when there is a disqualifying conflict of

interest due to a pension interest, nonparticipation in a particular

matter affecting the interest will sufficiently address the conflict

issue. It is expected that such disqualifications will be infrequent

and, therefore, will not disturb the Department's ability to carry out

its mission.

Finally, requiring divestiture of pension interests could adversely

affect MSHA's ability to carry out its statutory responsibilities. The

Federal Mine Safety and Health Act requires that those hired to perform

various MSHA functions must be qualified by practical experience or

education. For this reason, it is likely that both current employees

and applicants will have a prior work history in the mining industry

and may have interests in the pension plans of their former employers.

Many of these interests are difficult to divest. Requiring divestiture,

even in the absence of a conflict of interest, would discourage the

hiring and retention of persons possessing the qualifications that the

Mine Safety and Health Act requires.

Under Sec. 5201.105(c), the Assistant Secretary of Labor for Mine

Safety and Health, or the Assistant Secretary's designee, may grant a

waiver covering an outside employment or other financial interest when

the Assistant Secretary or the designee determines that the waiver is

not inconsistent with 5 CFR part 2635 or otherwise prohibited by law

and that, under the particular circumstances, application of the

prohibition is not necessary to avoid the appearance of misuse of

position or loss of impartiality, or to ensure confidence in the

impartiality and objectivity with which Mine Safety and Health

Administration programs are administered. The Assistant Secretary or

the designee shall grant a waiver from prohibitions in this section

regarding spouses and minor children unless the Assistant Secretary or

the designee determines that having the covered relationship or

interest is likely to be inconsistent with 5 CFR part 2635 or is

otherwise prohibited by law.

Section Sec. 5201.105(d) provides that existing waivers, issued

under the Department's old regulations and procedures implementing the

mining interest prohibition applicable to MSHA employees, remain in

effect but may be withdrawn subject to the standards applicable to the

withdrawal of waivers under paragraph (c).

[[Page 57284]]

III. Repeal of Department of Labor Standards of Conduct

On June 23, 1994, The Department of Labor, at 59 FR 36210-36211,

removed and reserved subparts A, B, D, and E and portions of subpart C

of 29 CFR part 0, Ethics and Conduct Department of Labor Employees. The

Department retained in subpart C Sec. 0.735-12(d) (now being

redesignated as Sec. 0.735-2), which contains a regulatory waiver

issued under the prior version of 18 U.S.C. 208(b)(2) (1988) and which

has remained in effect pending OGE's issuance of superseding executive

branch-wide regulatory waivers. It also amended and retained in subpart

C grandfathered Sec. 0.735-13, regarding prohibited financial interests

and clearance of outside activities. The interim rule repeals

Sec. 0.735.13, which is superseded upon issuance of this interim rule.

The interim rule adds a new provision to ensure that employees are

on notice of the ethical standards and other ethics provisions to which

they are subject. The provision cross-references 5 CFR parts 2634,

2635, and 5201. It is included along with the regulatory waiver

provision in a revised subpart A.

The provisions dealing with post employment conflicts of interest

which are now in subpart F are transferred to the currently reserved

subpart B. These provisions establish administrative procedures to

sanction former Department of Labor employees who have violated 18

U.S.C. 207. While the authority to impose the administrative sanctions

was repealed prospectively by the Ethics Reform Act of 1989, the

procedures continue to apply to persons whose government service

terminated while they were still in effect. For this reason the

administrative sanction provisions are being retained for the present.

To simplify the structure of part 0, the remaining vacant or

currently reserved subparts are being deleted.

IV. Matters of Regulatory Procedure

Administrative Procedure Act

As Secretary of Labor, I have found good cause pursuant to 5 U.S.C.

553 (a)(2), (b), and (d)(3) for waiving, as unnecessary and contrary to

the public interest, the general notice of proposed rulemaking and the

60-day delay in effectiveness as to these interim rules and repeals.

The reason for this determination is that it is important to a smooth

transition from the Department of Labor's prior ethics rules to the new

executive branch-wide Standards that these rulemaking actions become

effective as soon as possible. Furthermore, this rulemaking is related

to the Department's organization, procedure and practice. Nonetheless,

this is an interim rulemaking, with provision for a 60 day public

comment period. The Department will review all comments received during

the comment period and will consider any modifications that appear

appropriate in adopting these rules as final, with the concurrence of

the Office of Government Ethics.

Executive Order 12866, Regulatory Planning and Review

As Secretary of Labor, I have determined that this regulation is

not a ``regulatory action'' under section 3 of Executive Order 12866.

Because the rule is limited to agency organization, management and

personnel, it falls within the exclusion set forth in section 3(d)(3)

of the Executive order. In promulgating this rule, the Department has

adhered to the regulatory philosophy and the applicable principles of

regulation set forth in section 1 of the Executive order.

Small Business Regulatory Fairness Act of 1996

This rule is not classified as a ``rule'' under the Small Business

Regulatory Fairness Act of 1996, because it is a rule pertaining to

agency organization, procedure, or practice that does not substantially

affect the right of non-agency parties. See 5 U.S.C. 804(3)(C).

Moreover, as Secretary of Labor, I have found for the good cause set

forth above, that notice and public procedure thereon are unnecessary

and contrary to the public interest. See 5 U.S.C. 808(2). Accordingly,

this interim regulation will take effect on November 6, 1996.

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

imposes ethics standards only on Federal employees and their immediate

families. The Secretary of Labor has provided this certification to the

Chief Counsel for Advocacy of the Small Business Administration.

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 5 CFR Part 5201 and 29 CFR Part 0

Conflict of interests, Government employees.

Dated: October 31, 1996.

Robert B. Reich,

Secretary of Labor.

Approved: November 4, 1996.

Steven D. Potts,

Director, Office of Government Ethics.

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

Department of Labor, with the concurrence of the Office of Government

Ethics, is amending title 5 and title 29, subtitle A, of the Code of

Federal Regulations as follows:

TITLE 5--[AMENDED]

1. A new chapter XLII, consisting of part 5201, is added to 5 CFR

to read as follows:

CHAPTER XLII--DEPARTMENT OF LABOR

PART 5201--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES

OF THE DEPARTMENT OF LABOR

Sec.

5201.101 General.

5201.102 Designation of separate agency components.

5201.103 Fundraising activities.

5201.104 Additional rules for Office of the Inspector General

employees.

5201.105 Additional rules for Mine Safety and Health Administration

employees.

Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in

Government Act); 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, 2635.203(a), 2635.403(a), 2635.803.

Sec. 5201.101 General.

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

apply to employees of the Department of Labor (Department) and

supplement the Standards of Ethical Conduct for Employees of the

Executive Branch contained in 5 CFR part 2635.

Sec. 5201.102 Designation of separate agency components.

(a) Separate agency components of the Department of Labor. Pursuant

to 5 CFR 2635.203(a), each of the ten components of the Department

listed below is designated as an agency separate from each of the other

nine listed components and, for employees of that component, as an

agency distinct from the remainder of the Department. However, the

components listed below are not deemed to be separate agencies for

purposes of applying any provision of 5 CFR part 2635 or this part to

[[Page 57285]]

employees of the remainder of the Department:

(1) Benefits Review Board;

(2) Employees Compensation Appeals Board;

(3) Mine Safety and Health Administration (MSHA);

(4) Veterans' Employment and Training Service;

(5) Occupational Safety and Health Administration (OSHA);

(6) Pension and Welfare Benefits Administration (PWBA);

(7) Bureau of International Labor Affairs;

(8) Bureau of Labor Statistics;

(9) Employment and Training Administration (ETA); and

(10) Employment Standards Administration (ESA).

(b) Separate agency subcomponents of ESA. Pursuant to 5 CFR

2635.203(a), each of the four subcomponents of the Employment Standards

Administration (ESA) listed in this paragraph is designated as an

agency separate from each of the other three listed components and, for

employees of that subcomponent, as an agency distinct from the

remainder of ESA. However, the components listed in this paragraph are

not deemed to be separate agencies for purposes of applying any

provision of 5 CFR part 2635 or this part to employees of the remainder

of ESA:

(1) Wage and Hour Division;

(2) Office of Federal Contract Compliance Programs;

(3) Office of Workers Compensation Programs; and

(4) Office of Labor-Management Standards.

(c) Definitions. (1) Remainder of the Department means employees in

the Office of the Secretary and any other employee of the Department

not in one of the 10 components designated as separate agencies in

paragraph (a) of this section.

(2) Remainder of ESA means employees in the Office of the Assistant

Secretary for Employment Standards and any other ESA employee not in

one of the four subcomponents designated as separate agencies in

paragraph (b) of this section.

(d) Applicability of separate agency designations. The designations

in paragraphs (a) and (b) of this section identify an employee's

``agency'' for purposes of:

(1) Determining when a person is a prohibited source within the

meaning of 5 CFR 2635.203(d) for purposes of applying the regulations

at subpart B of 5 CFR part 2635 governing gifts from outside sources;

(2) Determining whether teaching, speaking or writing relates to

the employee's official duties within the meaning of 5 CFR

2635.807(a)(2)(i); and

(3) Determining when a person is a prohibited source for purposes

of applying the regulations at 5 CFR 2635.808(c) governing fundraising

in a personal capacity.

Example 1: An employee of the Mine Safety and Health Administration

attends a Saturday football game together with an employee of the

Office of the Solicitor. By coincidence, they are seated next to a

contract consultant to the Employment and Training Administration. They

talk about the game and describe their jobs and personal interests to

their new seat-mate. The consultant states that he and his wife will

not be able to attend next week's game and would like to give their

very expensive tickets to people who will really enjoy them. The MSHA

employee may accept the ticket. MSHA is designated as a separate agency

under Sec. 5201.102, and the ETA contractor is not a prohibited source

of gifts for MSHA employees. The contractor is not regulated by and has

no business dealings with MSHA. The Solicitor's Office employee may not

accept the gift. The ETA contractor is a prohibited source for

Solicitor's Office employees because the Solicitor's Office is a part

of the ``Remainder of the Department of Labor.'' Any source which is

prohibited for any component of the Department of Labor is a prohibited

source for employees in the ``Remainder.''

Sec. 5201.103 Fundraising activities.

Notwithstanding 5 CFR 2635.808(c)(1)(i), an employee of any

separate agency component listed in this section may, in a personal

capacity, personally solicit funds from a person who is a prohibited

source if person is a prohibited source for employees of the component

only under 5 CFR 2635.203(d)(3) because the person conducts activities

regulated by the component:

(a) The Wage and Hour Division;

(b) The Office of Federal Contract Compliance Programs;

(c) The Remainder of the Employment Standards Administration, as

defined in Sec. 5201.102(c);

(d) Occupational Safety and Health Administration;

(e) Pension and Welfare Benefits Administration;

(f) Veterans' Employment and Training Service; and

(g) The Remainder of the Department of Labor, as defined in

Sec. 5201.102(c).

Example 1: A training official in the Mine Safety and Health

Administration is president of the local branch of her college alumni

association. The association is seeking used computers from local

businesses to upgrade the college's language lab. The employee may not

seek a contribution from the vice president of a mining company which

is regulated by MSHA. Even though the mining company is not currently

under investigation, it is a prohibited source for the employment

because it is subject to MSHA regulation and MSHA is not one of the

agency components designated as separate for the purpose of fundraising

in a personal capacity.

Example 2: A typist in the Pension and Welfare Benefits

Administration raises money for a local homeless shelter during his

off-duty hours. He may seek a contribution from a firm that is

regulated by PWBA under the Employee Retirement Income Security Act but

may not seek contributions from one that he knows is currently under

investigation for a violation of the Act. While firms regulated by an

agency would ordinarily be prohibited sources for purposes of an

employee's fundraising in a personal capacity, Sec. 5201.103 provides

that employees of PWBA and the other separate agency components listed

in that section may seek charitable contributions from an entity that

is a prohibited source only because its activities are subject to

regulation by that separate agency component. On the other hand, the

employee may not engage in fundraising from a person who he knows is a

prohibited source for any other reason, such as an ongoing enforcement

action.

Example 3: An employee of the Employment and Training

Administration may seek charitable contributions from a firm currently

under investigation by the Occupational Safety and Health

Administration (OSHA). ETA does not regulate this firm and has had no

dealings or business with it of any kind. Since ETA has been designated

as a separate agency under Sec. 5201.102, ETA employees need only

consider their own official duties and activities and those of ETA in

determining whether a person is a prohibited source for purposes of

their fundraising in a personal capacity. The fact that a person may be

a prohibited source of direct and indirect gifts for OSHA employees is

not relevant in this instance.

Sec. 5201.104 Additional rules for Office of the Inspector General

employees.

The rules in this section apply to employees of the Office of the

Inspector General (OIG) and are in addition to Secs. 5201.101,

5201.102, and 5201.103.

(a) Prior approval for outside employment. (1) Before engaging in

any

[[Page 57286]]

outside employment, an OIG employee must obtain the written approval of

the Inspector General or the Inspector General's designee.

(2) Submission of requests for approval. (i) Requests for approval

shall be submitted in writing to the Inspector General or the Inspector

General's designee. Such requests shall include, at a minimum, the

following:

(A) The employee's name and position title;

(B) The name and address of the person, group, or organization for

whom the employee proposes to engage in outside employment; and

(C) A description of the proposed outside employment, including the

duties and services to be performed while engaged in the outside

employment, and the approximate dates of the outside employment.

(ii) Together with the employee's request for approval, the

employee shall provide a certification that:

(A) The outside employment will not depend in any way on nonpublic

information, as defined at 5 CFR 2635.703(b);

(B) No official duty time or Government property, resources, or

facilities not available to the general public will be used in

connection with the outside employment; and

(C) The employee has read and is familiar with the Standards of

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

2635), including subpart H. (``Outside Activities''), and the

Department's supplemental standards of ethical conduct set forth in

this part.

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

outside employment or in the employee's official position, the employee

shall submit a revised request for approval.

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

determination that the outside employment is not expected to involve

conduct prohibited by statute or Federal regulation, including 5 CFR

part 2635 and this part.

(4) Definitions. For purposes of this section, ``employment'' means

any form of non-Federal employment or any business relationship

involving the provision of personal services by the employee. It

includes but is not limited to personal services as an officer,

director, employee, agent, attorney, consultant, contractor, general

partner, or trustee.

Sec. 5201.105 Additional rules for Mine Safety and Health

Administration employees.

The rules in this section apply to employees of the Mine Safety and

Health Administration (MSHA) and are in addition to Secs. 5201.101,

5201.102, and 5201.103.

(a) Prohibited financial interests. Employees in the MSHA and their

spouses and minor children are prohibited from having any financial

interests (including compensated employment) in any company or other

person engaged in mining activities subject to the Federal Mine Safety

and Health Act of 1977 (Mine Safety and Health Act), 30 U.S.C. 801 et

seq. A company or other person shall be deemed to be engaged in such

mining activities if it owns 50 percent or more of the voting

securities of another company or other person engaged in such mining

activities. A company or other person shall not be deemed to be engaged

in such mining activities solely because it is controlled by a company

or other person which does engage in such activities.

(b) Exceptions. (1) Nothing in this section prohibits an employee

or the spouse or minor child of an employee from acquiring, owning or

controlling an interest in a publicly traded or publicly available

investment fund provided that, upon initial or subsequent investment by

the employee (excluding ordinary dividend reinvestment), the fund does

not have invested, or does not indicate in its prospectus the intent to

invest, more than 30 percent of its assets in the securities of a

company or other person engaged in mining activities subject to the

Mine Safety and Health Act, and the employee, spouse, or minor child

neither exercises control nor has the ability to exercise control over

the financial interests held in the fund.

(2) Nothing in this section prohibits an employee or the spouse or

minor child of an employee from having a financial interest in a

pension administered by, or which invests in, a company or other person

engaged in mining activities subject to the Mine Safety and Health Act.

Example: A mine inspector who was a former employee of mining

company X could continue to participate in mine company X's pension

plan without violating this section. However, he would have to disclose

the interest on his financial disclosure report. Additionally, the

inspector should not inspect or otherwise take official action on a

matter affecting mine company X without checking with his ethics

advisor to ensure that performance of his official duties would not

violate the conflict of interest statute (18 U.S.C. 208) or any other

ethics provisions.

(c) Waiver. (1) The Assistant Secretary of labor for Mine Safety

and Health or the Assistant Secretary's designee may grant an employee

a written waiver from the prohibitions contained in paragraph (a) of

this section, based on a determination that the waiver is not

inconsistent with 5 CFR part 2635 or otherwise prohibited by law and

that, under the particular circumstances, application of the

prohibition is not necessary to avoid the appearance of misuse of

position or loss of impartiality, or to ensure confidence in the

impartiality and objectivity with which Mine Safety and Health

Administration programs are administered.

(2) The Assistant Secretary or the designee shall grant a waiver

from the prohibitions in paragraph (a) of this section regarding

spouses and minor children unless the Assistant Secretary or the

designee determines that the covered relationship or interest is likely

to be inconsistent with 5 CFR part 2635 or is otherwise prohibited by

law.

(3) A waiver under this section may be accompanied by appropriate

conditions, such as requiring execution of a written statement of

disqualification. A waiver may be withdrawn if it is later determined

that such waiver does not meet the requirements for the granting of

waivers under this paragraph. Notwithstanding the grant of any waiver,

a covered employee remains subject to the disqualification requirements

of 5 CFR 2635.402 and 2635.502.

(4) Factors which may be considered in connection with the granting

or denial of waivers include the nature and extent of the financial

interest, and the official position and duties of the employee.

(d) Pre-existing interests. Notwithstanding paragraph (a) of this

section, an employee of the Mine Safety and Health Administration, and

a spouse or minor child of such an employee, may retain financial

interests otherwise prohibited by paragraph (a) of this section which

were approved in writing under procedures in effect before the

effective date of this section, unless the approval is withdrawn,

subject to the standards applicable to the withdrawal of waivers under

paragraph (c) of this section.

TITLE 29--[AMENDED]

Subtitle A--Office of the Secretary of Labor

PART 0--[AMENDED]

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

Authority: 5 U.S.C. 301; 5 U.S.C. App. (Ethics in Government Act

of 1978); sec. 501, Pub. L. 95-521, 92 Stat. 1866-1867; 18 U.S.C.

[[Page 57287]]

208; 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, part 2635.

3. Part 0 is amended by removing subparts A, B, D, and E, by

removing Sec. 0.735-13, and by redesignating subpart F as subpart B and

removing its authority citation.

4. Part 0 is further amended by redesignating subpart C as subpart

A and by revising its heading to read ``Subpart A--Standards of Conduct

for Current Department of Labor Employees.''

5. Part 0 is further amended by redesignating Sec. 0.735-12 as

Sec. 0.735-2 and adding Sec. 0.735-1 to read as follows:

Sec. 0.735-1 Cross-references to employee ethical conduct standards

and financial disclosure regulations.

Employees of the Department of Labor (Department) are subject to

the executive branch-wide standards of ethical conduct at 5 CFR part

2635, the Department's regulations at 5 CFR part 5201 which supplement

the executive branch-wide standards, and the executive branch financial

disclosure regulations at 5 CFR part 2634.

[FR Doc. 96-28666 Filed 11-5-96; 8:45 am]

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