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

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URL: https://www.frixlaw.com/law-library/documents/fr%3A97-21047

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** August 11, 1997
- **Citation:** 62 FR 42897

## Text

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

[[Page 42898]]

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

[[Page 42899]]

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]
BILLING CODE 6325-01-P

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-21047. Public record. Not legal advice.