Removal of Superseded References to the Former Honorarium Ban, Revisions to Conform With Procurement Integrity Changes and Conflict- of-Interest Exemptions, and Other Updates

OFFICE OF GOVERNMENT ETHICS

5 CFR Parts 2634 and 2635

RINs 3209-AA00 and 3209-AA04

Removal of Superseded References to the Former Honorarium Ban,

Revisions to Conform With Procurement Integrity Changes and Conflict-

of-Interest Exemptions, and Other Updates

AGENCY: Office of Government Ethics (OGE).

ACTION: Final rule; technical amendments.

-----------------------------------------------------------------------

SUMMARY: The Office of Government Ethics is removing superseded

references to the former statutory honorarium bar from the executive

branch regulations on standards of ethical conduct and financial

disclosure. In addition, revisions to the standards of conduct

regulation are being made to reflect statutory changes on procurement

integrity and a new regulation on conflict-of-interest exemptions.

Finally, OGE is removing outdated references in the standards of

conduct regulation to certain grandfathered agency regulations, and

making other minor updates to references and text.

EFFECTIVE DATE: September 17, 1997.

ADDRESSES: Office of Government Ethics, Suite 500, 1201 New York

Avenue, NW., Washington, DC 20005-3917, Attn.: Mr. G. Sid Smith. A copy

of the OGE Memorandum noted in the Supplementary Information section

below may be obtained from OGE's World Wide Web Site on the Internet at

http://www.usoge.gov, from OGE's ethics bulletin board TEBBS (``The

Ethics Bulletin Board System'') at 202-208-8030, or by contacting Mr.

Smith at OGE.

FOR FURTHER INFORMATION CONTACT: G. Sid Smith, Associate General

Counsel,

[[Page 48747]]

Office of Government Ethics, telephone: 202-208-8000; TDD: 202-208-

8025; FAX: 202-208-8037.

SUPPLEMENTARY INFORMATION: In National Treasury Employees Union v.

United States, 513 U.S. 454 (1995), the U.S. Supreme Court overturned,

as to most executive branch employees, the honorarium bar at 5 U.S.C.

app., section 501(b) which had been enacted as part of the Ethics

Reform Act of 1989. Subsequently, the Department of Justice determined

that because of the scope of the Supreme Court decision, the ban on

honoraria was inoperative as to all Government employees. See OGE

Memorandum of February 28, 1996, to Designated Agency Ethics Officials,

General Counsels and Inspectors General (#DO-96-012). This rulemaking

removes the regulatory provisions which refer to the now-overturned

honorarium bar in OGE's executive branchwide financial disclosure and

standards of ethical conduct regulations as codified at 5 CFR parts

2634 and 2635. In a separate rulemaking document to be issued later,

OGE will remove the primary (and now inoperative) executive branchwide

regulatory provisions which implemented the old honorarium bar, along

with various related provisions, in subpart B of 5 CFR part 2636.

The Office of Government Ethics is, in this current rulemaking

document, also updating or eliminating superseded citations and related

text in the OGE executive branchwide standards of ethical conduct

regulation which refer to procurement integrity provisions revised by

the National Defense Authorization Act for Fiscal Year 1996 (Pub. L.

104-106), and to the old Code of Ethics for Government Service (Pub. L.

96-303) which was repealed by Pub. L. 104-179. Additionally, OGE is

adding to the authority citation for the standards of conduct

regulation a reference to 5 U.S.C. 7301, which provides that the

President may prescribe regulations for the conduct of employees in the

executive branch.

This rulemaking updates or adds certain other references in the

standards of ethical conduct regulation, reflecting revisions to

regulations of the Office of Personnel Management and the General

Services Administration. Additionally, it includes several citations

and related text changes to account for the new OGE final regulation at

5 CFR part 2640, which implemented 18 U.S.C. 208 (official actions

affecting a personal financial interest) by providing general

interpretation, executive branchwide exemptions which have replaced any

agency regulatory exemptions, and assistance for agencies in granting

individual waivers. Finally, OGE is removing outdated notes and related

appendixes which refer to certain agency regulations that were

temporarily ``grandfathered'' when OGE first issued the executive

branchwide standards of conduct in 1992 (with subsequent grandfathering

extensions through November 1, 1996).

Matters of Regulatory Procedure

Administrative Procedure Act

Pursuant to 5 U.S.C. 553(b) and (d), as Director of the Office of

Government Ethics, I find good cause exists for waiving the general

notice of proposed rulemaking and 30-day delay in effectiveness as to

these revisions. The notice and delayed effective date are being waived

because these technical amendments to certain OGE regulations concern

matters of agency organization, practice and procedure. Furthermore, it

is in the public interest that the obsolete provisions be removed, the

other out-of-date citations be updated, and the few other passages be

clarified as soon as possible.

Executive Order 12866

In promulgating these technical amendments to its regulations, OGE

has adhered to the regulatory philosophy and the applicable principles

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

Regulatory Planning and Review. These amendments have also been

reviewed by the Office of Management and Budget under that Executive

order.

Regulatory Flexibility Act

As Director of the Office of Government Ethics, I certify under the

Regulatory Flexibility Act (5 U.S.C. chapter 6) that this rulemaking

will not have a significant economic impact on a substantial number of

small entities because it primarily affects Federal executive branch

agencies and their employees.

Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply

because this technical amendments rulemaking does not contain any

information collection requirements that require the approval of the

Office of Management and Budget.

List of Subjects

5 CFR Part 2634

Administrative practice and procedure, Certificates of divestiture,

Conflict of interests, Financial disclosure, Government employees,

Penalties, Privacy, Reporting and record keeping requirements, Trusts

and trustees.

5 CFR Part 2635

Conflict of interests, Executive branch standards of ethical

conduct, Government employees.

Approved: July 18, 1997.

Stephen D. Potts,

Director, Office of Government Ethics.

For the reasons set forth in the preamble, the Office of Government

Ethics is amending parts 2634 and 2635 of chapter XVI of 5 CFR as

follows:

PART 2634--[AMENDED]

1. The authority citation for part 2634 continues to read as

follows:

Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 26

U.S.C. 1043; 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.

Sec. 2634.105 [Amended]

2. Section 2634.105 is amended by removing the last sentence of

paragraph (i).

PART 2635--[AMENDED]

3. The authority citation for part 2635 is revised to read as

follows:

Authority: 5 U.S.C. 7301, 7351, 7353; 5 U.S.C. App. (Ethics in

Government Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp.,

p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp.,

p. 306.

Sec. 2635.202 [Amended]

4. Section 2635.202 is amended by adding the word ``and'' following

the closing semicolon in paragraph (c)(4)(i), by removing the word

``and'' at the end of paragraph (c)(4)(ii) and adding in its place the

word ``or'', and by removing paragraph (c)(4)(iii).

Sec. 2635.204 [Amended]

5. Section 2635.204 is amended by removing Example 5 following

paragraph (a), and by removing at the end of paragraph (l)(1) the terms

``Secs. 410.701 through 410.706 of this title'' and adding in their

place the terms ``part 410 of this title''.

6. Section 2635.401 is amended by adding a sentence at the end of

the section, to read as follows:

Sec. 2635.401 Overview.

* * * See also part 2640 of this chapter, for additional guidance

amplifying Sec. 2635.402.

7. Section 2635.402 is amended by adding the words ``or determine

that an exemption applies'' before the comma after the word ``waiver''

in the second

[[Page 48748]]

sentence of the note following paragraph (a), by adding the words ``or

exemption'' following the word ``waiver'' in the first sentence of the

introductory text of paragraph (c), by adding the words ``or exemptions

from'' between the words ``of'' and ``disqualification'' in the heading

of paragraph (d), by adding the word ``exemption'' following the word

``regulatory'' in the introductory text of paragraph (d), by adding the

sentence ``See also subpart C of part 2640 of this chapter, for

additional guidance.'' at the end of paragraph (d)(2)(ii), by adding

the sentence ``See also subpart C of part 2640 of this chapter, for

additional guidance.'' at the end of paragraph (d)(3)(ii), and by

revising paragraph (d)(1) to read as follows:

Sec. 2635.402 Disqualifying financial interests.

* * * * *

(d) * * *

(1) Regulatory exemptions. Under 18 U.S.C. 208(b)(2), regulatory

exemptions of general applicability have been issued by the Office of

Government Ethics, based on its determination that particular interests

are too remote or too inconsequential to affect the integrity of the

services of employees to whom those exemptions apply. See the

regulations in subpart B of part 2640 of this chapter, which supersede

any preexisting agency regulatory exemptions.

* * * * *

Sec. 2635.403 [Amended]

8. Section 2635.403 is amended by adding the words ``issued after

February 3, 1993'' before the comma after the words ``supplemental

agency regulation'' in the first sentence of paragraph (a), and by

removing the note following paragraph (a).

9. The note following paragraph (b) of section 2635.501 is amended

by adding the words ``or exemption'' before the comma after the word

``waiver'' in the fourth sentence, by removing the word

``respectively'' in the fourth sentence, and by adding a new sentence

at the end of that note, to read as follows:

Sec. 2635.501 Overview.

* * * * *

(b) * * *

Note: * * * Similarly, where the employee meets all

prerequisites for the application of one of the exemptions set forth

in subpart B of part 2640 of this chapter, that also constitutes a

determination that the interest of the Government in the employee's

participation outweighs the concern that a reasonable person may

question the integrity of agency programs and operations.

10. Section 2635.602 is amended by revising the last sentence of

the note following the introductory text and the last sentence of

paragraph (a)(2) to read as follows:

Sec. 2635.602 Applicability and related considerations.

* * * * *

Note: * * * An employee may, however, be subject to other

statutes which impose requirements on employment contacts or

discussions, such as 41 U.S.C. 423(c), applicable to agency

officials involved in certain procurement matters.

(a) * * *

(2) * * * Employees are cautioned that they may be subject to

additional statutory prohibitions on post-employment acceptance of

compensation from contractors, such as 41 U.S.C. 423(d).

* * * * *

11. Section 2635.605 is amended by adding at the end of paragraph

(a) two sentences to read as follows:

Sec. 2635.605 Waiver or authorization permitting participation while

seeking employment.

(a) * * * See also subpart C of part 2640 of this chapter. For

certain employees, a regulatory exemption under the authority of 18

U.S.C. 208(b)(2) may also apply (see subpart B of part 2640 of this

chapter).

* * * * *

Sec. 2635.606 [Amended]

12. Section 2635.606 is amended by adding the phrase ``, or by a

regulatory exemption under the authority of 18 U.S.C. 208 (b)(2)''

between the terms ``(b)(3)'' and the period at the end of the first

sentence of paragraph (a), by adding the phrase ``and exemptions''

between the words ``waivers'' and ``are'' in the second sentence of

paragraph (a), and by adding a new sentence ``See also subparts B and C

of part 2640 of this chapter.'' at the end of paragraph (a).

Sec. 2635.704 [Amended]

13. Section 2635.704 is amended by removing the citation term

``201-21.601'' in Example 1 following paragraph (b)(2) and adding in

place thereof the citation term ``101-35.201'', and by removing the

terms ``chapter 252 of the Federal Personnel Manual'' in Example 3

following paragraph (b)(2) and adding in their place the terms ``Office

of Personnel Management regulations at part 251 of this title''.

Sec. 2635.801 [Amended]

14. Section 2635.801 is amended by adding the word ``and'' after

the closing semicolon in paragraph (d)(7), by removing paragraph

(d)(8), and by redesignating paragraph (d)(9) as paragraph (d)(8).

Sec. 2635.803 [Amended]

15. Section 2635.803 is amended by adding the words ``issued after

February 3, 1993'' before the comma after the word ``regulation'' in

the first sentence, and by removing the note at the end of the section.

Sec. 2635.805 [Amended]

16. Section 2635.805 is amended by removing the phrase ``result in

compensation for an appearance in violation of Sec. 2636.201 of this

chapter or'' in the introductory text of paragraph (c).

Sec. 2635.807 [Amended]

17. Section 2635.807 is amended by removing paragraph (a)(1)(i), by

redesignating paragraphs (a)(1)(ii) and (a)(1)(iii) as paragraphs

(a)(1)(i) and (a)(1)(ii), respectively, by removing Example 1 following

newly designated paragraph (a)(1)(ii), and by removing the last

sentence of Example 1 following paragraph (a)(3)(ii).

18. Section 2635.902 is amended by removing and reserving

paragraphs (l) and (n), and by revising paragraphs (f), (h) and (bb) to

read as follows:

Sec. 2635.902 Related statutes.

* * * * *

(f) The prohibition on certain former agency officials' acceptance

of compensation from a contractor (41 U.S.C. 423(d)).

* * * * *

(h) The actions required of certain agency officials when they

contact, or are contacted by, offerors or bidders regarding non-Federal

employment (41 U.S.C. 423(c)).

* * * * *

(l) [Reserved]

* * * * *

(n) [Reserved]

* * * * *

(bb) The prohibitions on disclosing and obtaining certain

procurement information (41 U.S.C. 423(a) and (b)).

* * * * *

Appendixes A, B, C, and D [Removed]

19. Appendixes A, B, C and D to part 2635 are removed.

[FR Doc. 97-24607 Filed 9-16-97; 8:45 am]

BILLING CODE 6345-01-U