Supplemental Standards of Ethical Conduct for Employees of the Office of Personnel Management

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 1001 and 4501

RIN 3206-AG87, 3209-AA15

Supplemental Standards of Ethical Conduct for Employees of the

Office of Personnel Management

AGENCY: U.S. Office of Personnel Management (OPM).

ACTION: Final rule.

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SUMMARY: The U.S. Office of Personnel Management, with the concurrence

of the Office of Government Ethics (OGE), is adopting as final an

interim rule published July 16, 1996, issuing a final rule which

supplements, for OPM employees, the executive branch-wide Standards of

Ethical Conduct (Standards) issued by OGE.

EFFECTIVE DATE: August 11, 1997.

FOR FURTHER INFORMATION CONTACT: Wade Plunkett, Principal Deputy Ethics

Official, U.S. Office of Personnel Management, Office of the General

Counsel, 1900 E. Street, N.W., Washington, D.C. 20415-0001, Telephone:

(202) 606-1700, FAX: (202) 606-2609.

SUPPLEMENTARY INFORMATION:

I. Background

On July 16, 1996, OPM published with OGE concurrence and co-

signature, Supplemental Standards of Ethical Conduct for Employees of

OPM as an interim rule with request for comments (61 FR 36993-36997).

The interim rule was intended to supplement the Standards of Ethical

Conduct for Employees of the Executive Branch (Standards) published by

OGE on August 7, 1992, and effective February 3, 1993 (57 FR 35006-

35067), as corrected at 57 FR 48557, 57 FR 52583, and 60 FR 51667, and

amended at 61 FR 42965-42970 (as corrected at 61 FR 48733 and 61 FR

50689-50691) (interim rule revisions adopted as final at 62 FR 12531),

with additional grace period extensions for certain existing agency

standards of conduct, including requirements for prior approval of

outside activities, at 59 FR 4779-4780, 60 FR 6390-6391, and 60 FR

66857-66858. The executive branch-wide Standards, codified at 5 CFR

part 2635, establish uniform standards of ethical conduct for executive

branch employees. The interim rule was issued pursuant to 5 CFR

2635.105, which authorizes executive branch agencies to publish agency-

specific supplemental regulations necessary to implement their

respective ethics programs. The interim rule, in new 5 CFR part 4501,

contained a notice requirement designed to ensure that OPM employees do

not use their official positions or nonpublic information to obtain an

advantage for themselves or for certain other persons on competitive

and other examinations relating to Federal service; a requirement,

revised from prior 5 CFR 1001.735-203, for OPM employees to obtain

prior approval before engaging in certain types of outside activities;

and a cross-reference to other ethics and conduct-related statutes and

regulations. With regard to 5 CFR part 1001, OPM's internal standards

of conduct regulations, the interim rule also repealed that portion

which had been retained on an interim basis pending issuance of OPM's

supplemental standards of ethical conduct regulations and those

portions which had been superseded by the new Standards or by the

executive branch financial disclosure regulations issued by OGE;

retained a separate Privacy Act conduct code; and added to 5 CFR part

1001 a cross-reference to ethics and other conduct-related statutes and

regulations.

The interim rule requested comments and prescribed a 30-day comment

period. OPM received two comments on the interim rule, one from an OPM

employee and another from the President of the International Personnel

Management Association. Both comments were timely. OPM has carefully

considered the points made in the comments, reviewed other Federal

agency rules, considered changes in Federal law since publication of

the interim rule, and reexamined OPM's previous requirement for prior

approval of outside employment and activity. OPM has decided to make a

minor modification to the rule. With that modification, OPM, with OGE's

concurrence, is now adopting as final the interim rule Supplemental

Standards of Ethical Conduct for Employees of the U.S. Office of

Personnel Management for codification in chapter XXXV of 5 CFR,

consisting of part 4501.

II. Summary of the Comments

The employee who commented on the interim regulations asserted that

OPM should have allowed more time for comment. Both commenters objected

to the requirement for obtaining prior approval before engaging in

certain outside activities. The employee also asserted that the

regulatory definitions are confusing. The personnel management

association official suggested that the prior approval requirements

raise the question of whether approval of an outside activity would

constitute ``sanction'' of the activity by OPM. Finally, the personnel

management association official suggested that the requirement for

prior approval runs counter to the spirit of an amendment to 18 U.S.C.

205.

III. Analysis of the Comments

Comment Period

The employee commenter asserted that OPM should have allowed more

time for comment, stating that the changes are not ``minor'' and that

it was unnecessary for the regulations to go into effect immediately.

OPM was not required to publish its supplemental standards as a

proposed rule or an interim rule with request for comment, but could

have published the new supplemental standards as a final rule pursuant

to authority at 5 U.S.C. 1103(b)(1) and 1105. OPM believes it took

reasonable and appropriate steps to notify employees of the publication

of the interim rule, and that an extension of the comment period is not

warranted. OPM received no additional comments since August 15, 1996.

Section 4501.103 Prior Approval for Certain Outside Activities

Both commenters objected to the requirement for obtaining prior

approval before engaging in certain outside activities, contained in 5

CFR 4501.103(a). The commenters perceived the requirement for prior

approval of the

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employee's participation, for or without compensation, in the types of

outside activities set forth at 5 CFR 4501.103(a) as being unnecessary

and an infringement upon the employee's freedom of speech. They assert

that this is especially true with regard to the provision of

professional services involving the application of the same specialized

skills or the same educational background as performance of the

employee's official duties (Sec. 4501.103(a)(1)) and teaching,

speaking, and writing that relates to the employee's official duties

(Sec. 4501.103(a)(2)), but which are conducted without compensation to

the employee. The employee commenting asserted that the requirement

covers activities that ``never before have been considered to be

problems'' and seems designed primarily ``to ensure that the employee

repeatedly affirms that he or she knows what the rules are.'' Both

commenters were concerned also that the prior approval requirement

involves burdensome ``red tape'' to obtain approval, would prevent the

employee from speaking openly and informally in professional meetings--

according to the employee, ``in some cases educating audiences about

technical issues, and in others clarifying OPM policies''--and the

employee thought that the requirement would effectively prohibit the

professional employee from ``doing all the normal things that a

professional does to maintain the role of professional.'' In OPM's

view, however, prior approval for certain activities serves many

legitimate functions, not the least of which is an opportunity to

counsel in order to ensure that the agency and the employee are aware

of potential violations of ethics laws or regulations and take

appropriate steps to avoid their violation. Violations of ethics laws

or regulations may occur even where the activity is performed without

monetary compensation to the employee. Prior approval also provides a

means of protection for the employee against subsequent adverse action

by ensuring that the employee is aware of the specific applicability of

ethics statutes and regulations to the proposed activity.

It would be incorrect to conclude, because the previous OPM

requirement for prior approval which was in effect prior to the

issuance of the OGE Standards did not expressly mention other types of

activities, that other activities could not present violations of

ethics laws or regulations which would require resolution.

In drafting Sec. 4501.103(a), OPM took care to clarify the

previously existing requirement in prior 5 CFR 1001.735-203 and to

narrow its scope, consistent with the Standards. OPM's former

regulations also prohibited ``[o]utside employment activity which is in

violation of a statute, Executive Order, or regulation, including

applicable State and local statutes and ordinances.'' 5 CFR 1001.735-

203(a)(4).

Although an activity might be lawful, there could be parameters to

an activity, such as restrictions upon the employee's representational

activities, imposed by ethics laws and regulations, some of which have

criminal sanctions. The requirement that an employee obtain prior

approval was designed to ensure that the employee was aware of any such

limitations.

Prior written approval from the employee's regional or staff office

head was required before the employee could serve as a member of a

committee or board which planned or rendered advice on training courses

or programs offered by non-Government organizations, or could engage in

after-hours teaching as a faculty member; receipt of compensation was

not a prerequisite. See prior 5 CFR 1001.735-203 (c) and (d).

Previously, prior written approval was also required before an employee

``engage[d] in any kind of outside paid employment on a substantially

regular basis,'' 5 CFR 1001.735-203(f). As noted, OPM determined in its

new supplemental standards to focus more narrowly the prior approval

requirement. See 5 CFR 4501.103 (a)(1)-(a)(4).

Nonetheless, the former, as well as the current, provisions on

outside employment and activity expressly did not preclude an employee

from participating in the affairs of a ``charitable, religious,

professional, social, fraternal, nonprofit educational and

recreational, public service, or civil organization.'' See prior 5 CFR

1001.735-203(g)(3). The prior approval process does not seek to prevent

the free exercise of an employee's rights to outside employment or

speech as is evident by new 5 CFR 4501.103(c) which provides that:

Approval shall be granted only upon a determination by the

agency designee, in consultation with an agency ethics official when

such consultation is deemed necessary by the agency designee, that

the outside activity is not expected to involve conduct prohibited

by statute or Federal regulation, including 5 CFR part 2635.

This section was included to show that the presumption is that an

activity will be approved unless there is some ethical violation which

must be addressed. We emphasize, further, that OPM's new rules

contained in 5 CFR part 4501 are supplemental to, and intended to be

read in conjunction with, the OGE Standards contained at 5 CFR part

2635. Currently, the OGE Standards at 5 CFR part 2635, subpart H,

provide for some restrictions on outside activities and additionally

allow for prior approval to ensure that no other existing statutes or

regulations will be violated.

Insofar as comments on the interim rule have asserted that the

prior approval requirement itself somehow violates employees' rights

under the First Amendment of the Constitution, we point out that the

requirement does not prohibit any form of expression or association. In

the case of Williams v. Internal Revenue Service, 919 F.2d 745 (D.C.

Cir. 1990), it was held that an agency regulation that required

employees to obtain permission from the agency before engaging in

outside employment and that was tailored to the Government's interest

in efficiency and avoiding the appearance of impropriety, did not

violate employees' First Amendment rights.

Knowledge of these Standards is the personal responsibility of

every OPM employee. OPM has established an ethics point of contact in

every OPM service or staff office at the central office and agency

ethics officials in the Office of the General Counsel to facilitate

access to ethics laws and regulations for OPM employees. However, due

to the frequent complexity of ethics laws and regulations,

understanding of the rules may require consultation with an agency

ethics official. For this reason, OPM has endeavored to isolate and

require prior approval of those types of outside activities where an

ethics statute or regulation may limit the employee's activities to

ensure that both the interests of the Government and the employee are

protected.

The personnel management association official suggests that the

prior approval requirement runs counter to a recent amendment to 18

U.S.C. 205. OPM disagrees. The Federal Employee Representation

Improvement Act of 1996; Pub. L. 104-177, 110 Stat. 1563, August 6,

1996, modified 18 U.S.C. 205 to permit employee representation of

employee organizations under certain circumstances. OPM published

proposed regulations reflecting this amendment's impact on its 5 CFR

part 251 executive branch-wide regulations on agency relationships with

organizations representing Federal employees and other organizations

that are not labor organizations. See 62 FR 19525 (April 22, 1997).

That proposed revision to the part 251 agency relationships regulations

would continue the express provision that

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agency officials and employees are advised to consult with their

designated agency ethics officials for guidance regarding any conflicts

of interests that may arise under 18 U.S.C. 205. Moreover, the

modification to section 205 permitting Federal employees to represent

certain nonprofit organizations before the Government in certain

circumstances is different in focus, from the separate, and consistent

requirement in these supplemental standards regulations that OPM

employees obtain prior approval before engaging in certain outside

activities. OPM feels both regulations are consistent with current

Government-wide policy and each other, and it should not revise the

scope of the approval for teaching, speaking and writing which relates

to official duties in this part 4501 regulation applicable to OPM

employees. This authority will be exercised consistent with the

provisions of 18 U.S.C. 205, as amended, and other applicable conflicts

laws and regulations.

Definitions

The employee asserts that the regulations are confusing in that

they refer to definitions contained elsewhere in the Code of Federal

Regulations, such as definitions of ``official duties'', ``outside

activity'', ``profession'', ``prohibited source'', and

``compensation'', to which, he contends, most OPM readers do not have

access. The prior approval requirement regarding teaching, speaking,

and writing, contained at 5 CFR 4501.103(a)(2), supplements the Office

of Government Ethics Standards contained at 5 CFR 2635.801 and

2635.807. The definition of ``compensation'' is contained at 5 CFR

2635.807(a)(2)(iii). Section 4501.103(d) defines the terms ``active

participant,'' ``nonpublic information,'' ``professional services,''

``prohibited source,'' and ``relates to the employee's official

duties.'' It is OPM's view that the terms necessary for employees to

understand the regulation are adequately provided and cross-references

are clearly stated.

However, should access to the regulations pose a problem or should any

other confusion exist, agency ethics officials are available to answer

specific questions regarding any ethics provision's applicability to

OPM employees.

Appearance of OPM Sanctioning an Outside Activity

The personnel management association official commented that the

prior approval requirement raises the question of whether ``approval''

of an outside activity would constitute ``sanction'' of the activity by

OPM. The agency has a legitimate interest in the teaching, making of a

speech or other presentation by an agency employee on a matter that

relates to the employee's official duties and which, by the manner of

its presentation, could create the appearance of being the official

position of OPM. However, the prior approval requirement, as previously

discussed, is meant to provide an opportunity to counsel in order to

ensure that the agency and employee are aware of any violation of

ethics laws or regulations. It should not in any way indicate that OPM

is sanctioning the activity.

In summary, OPM has determined not to modify any of the substantive

provisions in adopting the interim supplemental OPM standards at 5 CFR

part 4501 as final. A typographical error will be corrected as noted

below.

IV. Correction of Typographical Error

OPM is correcting in this final rule a typographical error that

appeared in the authority citation for part 4501 which incorrectly

cites 5 CFR 2635.802 as ``2635.-802''.

Regulatory Flexibility Act

As Director of OPM, I certify that this regulation will not have

significant economic impact on a substantial number of small

entities within the meaning of the Regulatory Flexibility Act (5

U.S.C. chapter 6).

Paperwork Reduction Act

As Director of OPM, 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.

List of Subjects in 5 CFR Parts 1001 and 4501

Conflict of interests, Government employees.

Dated: July 16, 1997.

James B. King,

Director, U.S. Office of Personnel Management.

Approved: July 29, 1997.

Stephen D. Potts,

Director, Office of Government Ethics.

Accordingly, OPM is adopting the interim rule, adding 5 CFR part

4501 and amending 5 CFR part 1001, which was published at 61 FR 36993

on July 16, 1996, as a final rule with the following change.

Chapter XXXV Office of Personnel Management

PART 4501--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES

OF THE OFFICE OF PERSONNEL MANAGEMENT

1. The authority citation for part 4501 is corrected to read as

follows:

Authority: 5 U.S.C. 7301; 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 2635.105, 2635.702, 2635.703, 2635.802, 2635.803, 2635.805.

[FR Doc. 97-21047 Filed 8-8-97; 8:45 am]

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