RD Instruction 2045-BB

PART 2045 - General

Subpart BB - Employee Responsibilities and Conduct

## [TABLE OF CONTENTS]{.underline}

[Sec]{.underline}. [Page]{.underline}

2045.1351 General. 1

2045.1352 Definitions. 2

2045.1353 General or specialized farm organizations. 3

2045.1354 Safeguarding information. 3

2045.1355 Miscellaneous provisions. 3

\(a\) Reporting misconduct. 3

\(b\) Nondiscrimination. 4

\(c\) Courtesy. 4

\(d\) Judicial proceedings. 4

\(e\) Safety and health. 5

\(f\) Purchase of Rural Development-financed property

(real or personal) in Government inventory;

or purchase of Rural Development-mortgaged property

(real or personal) on which foreclosure action

has been initiated or taken by the Government;

or Rural Development-financed property (real or

personal) being sold at fore closure. 5

\(g\) Sale of real estate to Rural Development applicants

or borrowers. 5

\(h\) Rural Development assistance to employees, members of

families of employees, close relatives,

or business or close personal associates. 6

\(i\) Business or personal transactions between employees

(not including Committee members) and Rural Development

applicants/borrowers or persons having or seeking

business with Rural Development. 7

(j) Participation by employee in Rural Development-

> financed organizations. 8

\(k\) County or Area Committee actions and certifications. 9

\(l\) Business or personal transactions between County

Committee members and Rural Development borrowers. 9

\(m\) Miscellaneous statutory provisions. 10

\(n\) Reporting bribes or attempted bribery. 10

\(o\) Cooperation with investigators (734-23(c)). 11

\(p\) Acquiring land after reviewing or acting on an

application for such land. 11

2045.1356 Counseling and Advisory Service (735-3); Designation

of Agency and Assistant Agency Deputy Counselors. 11

2045.1357 Approval levels for Purchase of Products or Receipt of

Services from Persons, Firms, or Establishments for which

Employees Conduct Regulatory Activities (735-23(e)). 11

(09-22-93) PN 213

RD Instruction 2045-BB

Table of Contents (Con.)

Page 2

[Sec]{.underline}. [Page]{.underline}

2045.1358 Outside Employment and Activities (735-13). 12

2045.1359 Conflicts of Interest (735-14). 12

2945.1360 Executive Branch Personnel Confidential Financial

Disclosure Report. 12

2045.1361 Reporting gifts received from foreign governments

(735-12 (e)). 13

2045.1362 - 2045.1400 \[Reserved\] 13

Exhibit A - Employee Responsibilities and Conduct.

Exhibit B - Conflict of Interest.

Exhibit C - Guides on Sale of Real Estate by Employees.

## oOo 

RD Instruction 2045-BB

PART 2045 - GENERAL

SUBPART BB - EMPLOYEE RESPONSIBILITIES AND CONDUCT

§2045.1351 [General]{.underline}.

\(a\) Each Rural Development employee is required to give faithful
service to the public. This specifically includes the requirement that
each employee knows and observe the rules on employee responsibilities
and conduct stated in this Subpart and each of the following Exhibits to
this Subpart:

\(1\) Exhibit A, Employee Responsibilities and Conduct. This provides
Part 735 of the Personnel Regulations of the U.S. Department of
Agriculture.

\(2\) Exhibit B, Conflict of Interest. This provides examples of
conflicts of interest, which are prohibited by Exhibit A.

\(3\) Exhibit C, Guides on Sale of Real Estate by Employees. This
provides guides for determining situations in which it is permissible
for employees to sell personally owned real estate to Rural Development
applicants and borrowers.

\(b\) References in this Subpart to sections in Part 735 may appear in
parentheses.

\(c\) Exhibit A provides for a counseling service (735-3). This Subpart
accomplishes that objective. Each employee is responsible for seeking
needed clarification of sections of this Subpart either from his/her
supervisor (735-6) or from the appropriate Agency Assistant Deputy
Counselor (See Section 2045.1356 of this Subpart).

\(d\) This Subpart is not to be construed as all-inclusive. Employees
also are subject to:

\(1\) Federal statutes;

\(2\) Other RD Instructions;

\(3\) USDA Administrative Regulations; and

\(4\) Regulations of outside authority, including but not limited to the
Office of Personnel Management and the General Services Administration.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DISTRIBUTION: W, S, D, C and all Employees Personnel

including County Committee members General

## 1

(1-28-81) PN 763

RD Instruction 2045-BB

§2045.1351 (Con.)

\(e\) Supervisors have the additional responsibilities stated in Exhibit
A (735-6).

\(f\) Violation of any provision of this Subpart and/or any other
regulation or procedure may result in consideration for disciplinary or
adverse action.

§2045.1352 [Definitions]{.underline}.

\(a\) \"Appearance of a conflict of interest\" is defined in Section
735-2(d).

\(b\) \"Applicant or borrower\" includes all persons or organizations,
individually or collectively, applying for or receiving loan or grant
financial assistance from or through Rural Development. Voluntary
membership in a utility or public facility-type organization is not
considered as being an applicant or borrower.

\(c\) \"Approving official\" unless an exception is made, is the
Director, Personnel Division, for National Office employees, State
Directors for employees under their jurisdictions, and Director, Finance
Office, for Finance Office employees.

\(d\) \"Assistance\" includes grants and any loans made, insured, or
guaranteed by Rural Development.

\(e\) \"Conflict of interest\" is defined in Section 735-2(c).

\(f\) \"Close relatives\" means the spouse and relatives of an employee
or the spouse of the employee including:

Grandfather Grandmother Uncle

Father Mother Aunt

Brother Sister Nephew

Son Daughter Niece

Grandson Granddaughter First cousin

Includes also the above individuals with the \"step\" relationship (for
example, \"step-father,\" \"step-brother,\" and others).

\(g\) \"Employee\" includes all Rural Development personnel, including
County or Area Committee members except as otherwise specifically
stated.

\(h\) \"Gratuitous Employee\" includes Comprehensive Employment and
Training Act (CETA) enrollees and any other individuals working in Rural
Development

## 2 

RD Instruction 2045-BB

§ 2045.1352(h) (Con.)

offices on an official basis without being paid wages through Rural
Development. For purposes of this Subpart, \"gratuitous employees\" are
considered as \"employees\" unless otherwise stated.

\(i\) \"Members of family\" is defined in Section 735-2 (i).

\(j\) \"Outside employment or activity\" is defined in Section\
835-2 (h). It includes, but is not limited to, a work or activity
performed in exchange for other work, activity, goods, or commodities.

\(k\) \"Special Government employees\" is defined in Section 735-2 (f).
(Revised 10-06-99, PN 311).

\(l\) \"Speculation\" includes buying and selling on a short term basis
with the intent to profit.

§ 2045.1353 [General or specialized farm organizations]{.underline}.

\(a\) Exhibit A of this Instruction, Section 735-21 (a) puts
restrictions on employee activities with regard to farm organizations.

\(b\) Exhibit A of this Instruction, Section 735-21 (b)(1) gives County
Committee members exemption from Section 735-21 (a), but they must not
show favoritism to a particular farm organization.

§ 2045.1354 [Safeguarding information]{.underline}.

Refer to RD Instruction 2018-F and Section 735-20 for guidance on
releasing information from Rural Development records.

§ 2045.1355 [Miscellaneous provisions]{.underline}.

\(a\) [Reporting misconduct]{.underline}.

\(1\) Each employee is required to report the misconduct of another
employee. Failure to report misconduct will result in consideration for
disciplinary or adverse action. (See § 2045.1355(n) of this Instruction
and § 2012.53(d) of RD Instruction 2012-B, with respect to reporting
bribes or attempted bribes.) (Revised 10-06-99,\
PN 311.)

## 3

## (Revision 3)

(01-28-81) PN 763

RD Instruction 2045-BB

§ 2045.1355(a) (Con.)

\(2\) The Office of the Inspector General, USDA, receives and
investigates complaints or information from employees concerning the
possible existence of any activity constituting a violation of law,
rules, or regulations, or mismanagement, gross waste of funds, abuse of
authority or substantial and specific danger to the public health and
safety. The Inspector General does not disclose the identity of a
complaining employee without the employee\'s consent; unless such
disclosure is unavoidable during the course of an investigation. (See §
2012.64 of RD Instruction 2012-B.) Whistleblower complaints may be made
as follows: (Revised 03-16-94, PN 220.)

\(i\) In writing to the Office of the Inspector General,\
P.O. Box 23399, Washington, D.C. 20026. Complaints need not be signed.

\(ii\) By telephone to toll free number 1-800-424-9121 for\
field employees; Washington, D.C., area employees call\
(202)690-1622. (Revised 03-16-94, PN 220.)

\(b\) [Nondiscrimination]{.underline}. Disciplinary action will be
proposed against employees who practice discrimination, or who are aware
of discrimination and do not make a report of it.

\(1\) [Program discrimination]{.underline}. There will be no
discrimination in Rural Development programs. Send reports of any
discrimination to the Administrator, Attention: Equal Opportunity
Officer.

\(2\) [Federally financed construction contracts]{.underline}. Equal
employment opportunity is mandatory on such projects. If a contractor
with a contract over \$10,000 given Rural Development financing (in
whole or in part) has discriminatory practices, Rural Development
employees must make a report to the Administrator, Attention: Equal
Opportunity Officer.

\(3\) [Equal Employment Opportunity]{.underline}. There can be no
discrimination in Federal employment, before or after employment. Send
reports of any discrimination to the Administrator, Attention: Equal
Employment Opportunity Coordinator.

\(c\) [Courtesy]{.underline}. Employees must be courteous to the public,
and to other employees. The Civil Service Reform Act of 1978 provides
that an employee may be suspended for 15 days or less for discourteous
conduct to the public confirmed by an immediate supervisor\'s report of
four such instances within any one-year period or any other pattern of
discourteous conduct.

## 4

## (Revision 3) 

RD Instruction 2045-BB

§2045.1355 (Con.)

\(d\) [Judicial proceedings]{.underline}.

\(1\) In any court action in which the United States is a party,
employees cannot give voluntary testimony, except for the U.S. or
themselves. Inform supervisors about any subpoena (see Rural Development
Instruction 2066-A). Information is released in accordance with RD
Instruction 2018-F. (Revised 8-7-85, PN 974.)

4A

(Added 03-16-94, PN 220)

(1-28-81) PN 763

RD Instruction 2045-BB

§ 2045.1355(d) (Con.)

\(2\) If an employee becomes the object of a civil suit in connection
with official duties:

\(i\) Notify the Regional Attorney of the Office of the General Counsel
(OGC), USDA, through the State Director.

\(ii\) If only the employee is named, obtain through the State Director,
the Regional Attorney\'s advice on how to write letters requesting
Justice Department representation.

\(iii\) Make sure the Regional Attorney and State Director take action.

\(iv\) The Government pays any judgments against both the employee and
the Federal Government.

\(v\) The employee is responsible for any judgment against the employee
only.

\(e\) [Safety and health]{.underline}. Each employee is responsible for
safe performance of duties. Supervisors must make sure that working
conditions are safe. Violations of RD Instruction 2069-A are misconduct.
Employees doing official duties after hours are counted as on duty.

\(f\) [Purchase of Rural Development-financed property (real or
personal) in Government inventory; or purchase of Rural
Development-mortgaged property (real or personal) on which foreclosure
action has been initiated or taken by the Government; or Rural
Development-financed property (real or personal) being sold at
foreclosure]{.underline}. The purchase of all such property by Rural
Development employees or members of family of employees (except County
Committee members and their close relatives) is prohibited, except that
this prohibition does not apply when preservation loan servicing rights
are being exercised under RD Instruction 1951-S. This prohibition
includes the acquisition of such property through the actions of a third
party. (Revised 02-04-93, SPECIAL PN.)

\(g\) [Sale of real estate to Rural Development applicants or
borrowers]{.underline}.

\(1\) No employee knowingly can sell, directly or indirectly, personal
real estate to an Rural Development applicant or borrower, or act as an
agent for a close relative doing so. Exceptions: see § 2045.1355 (g)(2)
and (4) below.

\(2\) The approving official can give an exception to § 2045.1355 (g)(1)
for a noncommittee member employee, if it is shown that:

\(i\) The sale is in the applicant\'s or borrower\'s best interests. The
approval official must show the applicant\'s or borrower\'s name and the
reasons why the sale is in that person\'s best interests.

## 5

## (Revision 4)

(1-28-81) PN 763

RD Instruction 2045-BB

§ 2045.1355(g)(2) (Con.)

\(ii\) Denial of the exception can cause hardship to the applicant,
borrower, or employee.

\(iii\) There is no favoritism, duress, or improper advantage.

\(iv\) The approval official has made all of these determinations before
the sale. The reasons become part of the loan docket and also are filed
on the temporary side of the Official Personnel Folder for the employee
making the sale.

\(3\) Post-approval is not given for an employee\'s sale to a person,
group of persons, or entity whom the employee knew to be applicant or
borrower. Instead, disciplinary action may be proposed against the
seller and those who knew of the sale.

\(4\) Exceptions may be given for Committeemembers to the subject
restrictions of § 2045.1355(g)(1) if the transaction is in compliance
with § 2045.1355(g)(2)(i) and (iii) through (iv).

\(5\) Exhibit C applies in determining that the requirements of\
§ 2045.1355(g)(2) and (g)(4) have been met.

\(6\) An exception is not given if the employee uses information
obtained through employment in order to find a buyer.

\(7\) Under § 2045.1355(g)(2), the Director, Personnel Division, may
grant an exception to § 2045.1355(g)(1) to State Directors or the Deputy
Administrator, Finance Office.

\(h\) [Rural Development assistance to employee, member of family of
employee, close relative or business or close personal
associate]{.underline}. (Revised 02-04-93, SPECIAL PN.)

\(1\) Employees (not including County Committee members) and members of
families of employees are not eligible for Rural Development assistance,
except as provided in 7 CFR part 3550 for Section 502 loans. This
prohibition applies to the individual, to a group of which the
individual is a member, or to an entity of any kind in which the
individual has a financial interest. (Revised 01-23-03, SPECIAL PN.)

\(2\) Processing and Servicing Rural Development assistance to employees
(including County Committee members and closing agents) members of their
families, close relatives and business or close personal associates is
subject to the provisions of RD Instruction 1900-D.

## 6

## (Revision 4) 

RD Instruction 2045-BB

§2045.1355 (Con.)

\(i\) [Business or personal transactions between employees (not
including committee members) and Rural Development applicants/borrowers
or persons having or seeking business with Rural
Development]{.underline}. (Renumbered 02-04-93, SPECIAL PN.)

\(1\) Gifts, gratuities, entertainment, and favors, (735-12c): Employees
cannot solicit or receive from applicants, borrowers, or persons with
actual or potential business with Rural Development any items of more
than nominal value. Invitations to hunting or fishing trips, bottles or
cans of alcoholic beverages, free transportation, etc. Employees can be
present at functions open to the public.

\(2\) Except as given in §2045.1355 (i)(3), employees cannot get into,
or try to get into, business or personal transactions with Rural
Development applicants, borrowers, or business contacts (not including
banks, etc., at which the employee gets treatment as any other
customer). This prohibition includes: (Revised 02-04-93, SPECIAL PN.)

\(i\) Purchase of real or personal property mortgaged or pledged to the
Government through or by Rural Development.

\(ii\) Hiring of an applicant, borrower, or business contact for the
benefit of the employee or the employee\'s member of family; or being
hired by an applicant, borrower, or business contact.

\(iii\) Taking of credit from Rural Development-financed cooperative
associations.

\(iv\) Taking of a lease on a farm from a or business contact for the
benefit of the employee or the employee\'s member of family; or being
hired by an applicant, borrower, or business contact.

\(v\) Making a lease on a farm to a borrower or business contact.

\(vi\) Getting into any long-term contractual business relationship with
an applicant, borrower, or business contact.

\(3\) Except as provided in 2045.1355 (i)(4) an approving official may
grant a written exception to 2045.1355 (i)(2)(i) through (v)

## 7

## (Revision 2)

(1-28-81) PN 763

RD Instruction 2045-BB

§2045.1355 (i)(3) (Con.)

if the transaction: (a) involves no duress or favoritism and (b) the
approving official finds the transaction to be in the applicant\'s or
borrower\'s interest. The following additional conditions must be met
prior to the approving official granting the written exception: (Revised
02-04-93, SPECIAL PN.)

\(i\) The employee must apply in advance and in writing for the
exception.

\(ii\) The employee must furnish adequate written justification for the
exception.

\(4\) No exception is given for a long-term contractual relationship.
Generally, long-term is defined as exceeding one calendar year This
restriction may not be circumvented by the use of a series of one-year
agreements or contracts.

\(5\) Employees can buy goods and services from Rural Development
applicants or borrowers when the goods and services are made available
to the general public by the applicants or borrowers at identical prices
and terms. Examples include, but are not limited to, service stations,
grocery stores, and cafes. The employee must insure the relationship is
proper and no advantage is received.

\(6\) Employee\'s members of family cannot get into transactions with
Rural Development borrowers or applicants by coercion or on behalf of
employees, or if the borrowers or applicants have a fear of causing ill
will if they do not.

\(7\) The provisions of §2045.1355 (i) apply when a person involved in a
long-term continuing relationship with an Rural Development employee
first applies for an Rural Development loan. (Revised 02-04-93, SPECIAL
PN.)

\(j\) [Participation by employee in Rural Development-financed
organizations]{.underline}. (Renumbered 02-04-93, SPECIAL PN.)

\(1\) With prior approval of the approving official, employees may
participate as members of Rural Development-financed water or sewer
systems (735-23(e)). Employees specifically are permitted the use or
benefit without prior approval of the approving official of Rural
Development-financed community facilities including, but not limited to,
fire-fighting organizations, hospitals, and libraries. Employees also
may utilize the services of motels financed by Rural Development.

\(2\) Employees and committee members cannot do any of these for an
Rural Development-financed association or organization; be an official;
perform any business function; provide clerical services; keep

## 8

## (Revision 2) 

RD Instruction 2045-BB

§2045.1355 (j)(2) (Con.)

records; make reports, or develop operating budgets. Rural Development
employees can give training to members of Rural Development-financed
associations or organizations to protect the Government\'s interests.

\(3\) Employees and County Committee members cannot be members of
grazing associations, nonincorporated Economic Opportunity (EO)
Cooperatives, or for-profit rental housing groups and closely held labor
housing organizations, but can be members of other organizations.
(Revised 02-04-93, SPECIAL PN.)

\(4\) No County Committee members can take official action on Rural
Development financial assistance to organizations and associations in
which they are members, except with respect to facilities that will have
effect on all Committee members and alternates in the area. The County
Supervisor sends a statement to the State Director about such interests.
The State Director can authorize the Committee members to take action if
the interest is not so substantial as to be deemed likely to affect the
integrity of certifications or recommendations by the Committee members.
(Revised 02-04-93, SPECIAL PN.)

\(5\) Only with the State Director\'s prior approval can employers be
members of other organizations or associations that receive or apply for
Rural Development financial assistance. Approval is given only if the
employee\'s financial interest in the group is too remote or
inconsequential to affect the integrity of the employee\'s service.

\(k\) [County or Area Committee actions and certifications]{.underline}.
(Renumbered 02-04-93, SPECIAL PN.)

\(1\) A Committee member cannot be part of any Rural Development action
for which he or she must furnish a certification or recommendation on
(1) a loan to buy any property in which self, spouse, a close relative
or business partner has or will get any interest, or (2) any applicant
or borrower who is a close relative or business partner of self or
spouse. (Section 336 of the Consolidated Farm and Rural Development Act,
as amended)

\(2\) If a Committee member becomes involved as in §2045.1355 (k)(1),
the County Supervisor must insure the Committee member does not take
part in related Committee action. The other members take the action.
Real estate transactions in which a Committee member has an interest
have the restrictions of §2045.1355 (g). (Revised 02-04-93, SPECIAL PN.)

## 9

## (Revision 2)

(1-28-81) PN 763

RD Instruction 2045-BB

§2045.1355 (Con.)

\(l\) [Business or personal transactions between County Committee
members and Rural Development borrowers]{.underline}. Business
transactions between Committee members and borrowers in which the
Committee members receive an advantage over others because of their
positions are not allowed. Transactions seen as questionable require the
County Supervisor\'s approval. Transactions involving real estate, when
a Committee member has an interest, have the restrictions of §2045.1355
(g). (Renumbered 02-04-93, SPECIAL PN.)

\(m\) [Miscellaneous statutory provisions]{.underline}. (Renumbered
02-04-93, SPECIAL PN.)

\(1\) [Striking (Sections 735-24 (a) (5))]{.underline}. Employees cannot
take part in any strikes against the Government, any of its agencies, or
any wholly owned Government corporation.

\(2\) [Fraud or false statements in Government matters (735-24\
(a) (46))]{.underline}. \"Falsifying\" includes withholding or
destroying information involving a Government matter. Employees can be
prosecuted for: (1) making false statements in any official document;
(2) withholding material facts; or (3) using a document known to include
false information. That which is prohibited by law also is prohibited by
this Instruction. False or fraudulent statements include, but are not
limited to, the following:

\(i\) Loan dockets. An employee may not knowingly make or use false
statements in an applicant\'s or borrower\'s records, including (among
others) loan documents and receipts for loan payments.

\(ii\) Administrative records. Making false entries in Rural Development
administrative records concerned with the administration of public
business.

\(iii\) Travel vouchers. False odometer readings, arrival and departure
times, and claims for expenses. Keep careful records.

\(iv\) Committee certifications. Approval officials must not falsely
sign vouchers having statements that properly written Committee
certifications have been obtained when, in fact, they have not been
obtained; or use documents signed in blank by Committee members; or sign
any Committee member's name to a document.

## 10

## (Revision 2) 

RD Instruction 2045-BB

§2045.1355 (Con.)

\(n\) [Reporting bribes or attempted bribery]{.underline}. Each employee
is required to report bribes or attempted bribes directly to the 24-HOUR
DIRECT OFFICE OF INSPECTOR GENERAL (OIG) BRIBERY HOTLINE available by
calling (202) 720-7257, in accordance with §2012.53 (c) of RD
Instruction 2012-B). (Revised 03-16-94, PN 220.)

## 10A

## (Added 03-16-94, PN 220)

(1-28-81) PN 763

RD Instruction 2045-BB

§2045.1355 (Con.)

\(o\) [Cooperation with investigators (735-23(c))]{.underline}.
(Renumbered 02-04-93, SPECIAL PN.)

Each employee is required to furnish sworn statements to authorized
representatives of the Department except when invoking the protection of
the Fifth Amendment to the Constitution with respect to
self-incrimination in a criminal matter. The employee has the right to
review, to have his/her representative review, to amend, and to receive
a copy of the signed statement, upon request.

\(p\) [Acquiring land after reviewing or acting on an application for
such land]{.underline}. (Renumbered 02-04-93, SPECIAL PN.)

\(1\) Employees, including County Committee members, who have acted on
or reviewed an application from a person to purchase land, are
prohibited from acquiring, either directly or indirectly, any interest
in such land for a period of 3 years after the date of the application
review.

\(2\) The Administrator may grant an exception for a former member of
the County Committee to make such a purchase, provided the request is
made in advance; and provided the former member submits clear and
convincing evidence that he/she acted in good faith in working with the
loan application. The request for an exception will be made through the
State Director to the Administrator. The State Director must provide
recommendations to the Administrator when an exception is requested.

§2045.1356 [Counseling and Advisory Service (735-3); Designation of
Agency and Assistant Agency Deputy Counselor]{.underline}.

The designated Agency Deputy Counselor is the Administrator. Designated
Agency Assistant Deputy Counselors are: the Associate Administrator;
State Directors; Director, Finance Office; Director, Personnel Division;
and Chief, Employee Relations Branch. An employee may ask the Agency
Deputy (or Agency Assistant Deputy) Counselor for advice about conduct
regulations.

§2045.1357 [Approval levels for Purchase of Products or Receipt of
Services from Persons, Firms, or Establishments for which Employees
Conduct Regulatory Activities (735-23(e))]{.underline}.

State Directors for employees in states; the Director, Finance office;
and the Director, Personnel Division, for employees in the National
Office, will serve as approval officials for granting approval for
employees to purchase products or receive services as covered by Section
735-23 (e). Each transaction must be individually approved.

## 11

## (Revision 3)

(1-28-81) PN 763

RD Instruction 2045-BB

§2045.1358 [Outside employment and activities (735-13)]{.underline}.

Section 735-13 includes the basic outside employment and activities
regulations of the Department of Agriculture.

§2045.1359 [Conflicts of interest (735-14)]{.underline}.

Section 735-14 includes the basic conflict of interest regulations of
the Department of Agriculture.

§2045.1360 [Executive Branch Personnel Confidential Financial Disclosure
Report]{.underline}. (Revised 09-22-93, PN 213.)

RD Instruction 2045-EE tells who must complete Standard Form\
(SF)-450, \"Executive Branch Personnel Confidential Financial Disclosure
Reports,\" and how to provide them.

\(a\) [Special Government Employees exceptions]{.underline}.

\(1\) Under RD Instruction 2045-EE, County Committee members do not have
to complete SF-450.

\(2\) Other Special Government Employees do not have to complete SF-450
unless:

\(i\) The employee is a consultant or expert, as defined in Chapter 304
of the Federal Personnel Manual, or

\(ii\) The employee is in a position listed in RD Instruction 2045-EE in
which a report is required of a regular Government employee.

\(b\) Review of designation of position. An employee may obtain review,
through the grievance procedure in DPM Chapter 771, of the determination
that the employee\'s position requires filing the SF-450.

\(c\) Procedures. See RD Instruction 2045-EE on submission of the
SF-450.

\(d\) Custody and review. See RD Instruction 2045-EE on custody and
review of the SF-450.

## 12

## (Revision 3) 

§2045.1360 (d) (Con.) RD Instruction 2045-BB

\(1\) Officials designated to receive, keep, and review the SF-450s are:
State Directors; the Assistant Administrator, Finance Office; and the
Chief, Employee Relations Branch (ERB), Personnel and Employee Relations
Staff (PERS) for employees under their jurisdiction. The Chief,
Administrative Programs, and Human Resource Managers/Personnel
Management Specialists can provide assistance to State Directors. In the
Finance Office the Personnel Officer and Employee Relations Specialists
can provide assistance to the Assistant Administrator, Finance Office.
In the National Office the reviewers are the Chief, ERB, PERS or his/her
designee. Employee Relations Specialists can provide assistance.

\(2\) If the State Directors or the Assistant Administrator, Finance
Office cannot decide whether there is a conflict, the SF-450 must be
sent to the Chief, ERB, PERS for review and final determination.

§2045.1361 [Reporting gifts received from foreign governments (735-12
(e))]{.underline}.

Employees who receive gifts from foreign governments or their
representatives, including travel or travel expenses, must furnish a
copy of the report required by Exhibit A, Part 735-12 (e)(4), to the
Chief, ERB, PERS. Any gifts received in November or December of one
calendar year must be reported by January 15 of the following calendar
year; otherwise, the 60 calendar day time limit for reporting applies.
The Chief, ERB, PERS will report all gifts from foreign governments to
the Office of Personnel, USDA. (Added 7-21-82, PN 840.)

§§2045.1362 - 2045.1400 \[Reserved\]

Attachments: Exhibits A, B, and C

## o0o

## 13

## (Revision 3)

(1-28-81) PN 763

Exhibit A not automated see manual

RD Instruction 2045-BB

Exhibit B

Page 1

## CONFLICT OF INTEREST

I. [INTRODUCTION]{.underline}.

Conflicts of interest, or the appearance of such, can destroy public
confidence in the Government, and can make employees subject to criminal
prosecution, fiscal charges and/or adverse action.

II\. [PURPOSE]{.underline}.

Conflict of interest regulations are in Exhibit A of this Instruction.
This Exhibit gives examples. The examples are not all-inclusive. This
Exhibit in its entirety applies to National and State Office employees,
and Paragraph V B 1 applies to Finance Office employees. The Director,
Finance Office, will apply to his or her employees such other parts of
this Exhibit as, in his or her discretion, he or she deems appropriate.

III\. [RESPONSIBILITY OF EMPLOYEES]{.underline}.

Employees must avoid conflict and the appearance of conflict in outside
activity, employment or financial interest involving self or members of
family.

IV\. [DEFINITIONS]{.underline}.

Terms are defined in Section 2045.1352 of RD Instruction 2045-BB.

V. [OUTSIDE EMPLOYMENT, ACTIVITIES AND FINANCIAL INTEREST]{.underline}.

A [Prohibited Outside Employment or Activity]{.underline}. Any
employment or activity not compatible with the full and proper discharge
of the employee\'s Rural Development duties. Self-employment or activity
and employment or activity for another person or entity is prohibited if
it is not compatible.

Examples include but are not limited to the following:

1\. Making sales, appraisals or assessments of real estate.

2\. Being a real estate broker, title attorney or title insurance
representative

3\. Construction of houses or other buildings.

(1-28-81) PN 763

RD Instruction 2045-BB

Exhibit B

Page 2

4\. Working for individuals or firms doing business with Rural
Development on a recurring basis (including but not limited to lumber or
building suppliers, farm implement dealers, packagers, contractors and
feed or fertilizer suppliers).

5\. Being on the board of directors of a bank or savings and loan
association that does business within the employee\'s jurisdictional
area.

6\. Working for applicants or borrowers without prior written approval
as in §2045.1355 (j) (3).

7\. Sales of insurance of any kind.

8\. Getting into any employment in violation of RD Instruction 2045-BB.
Exhibit A, Section 735-13.

9\. Land speculation (as an individual, business, or personal entity of
any kind).

B. [Prohibited Financial Interests]{.underline}. Any direct or indirect
financial interest that is or can be seen to be, in substantial conflict
with an employee\'s responsibilities.

1\. Purchase of Rural Development-guaranteed loan paper is prohibited
under any and all circumstances.

2\. The following are prohibited if they occur within the geographic
jurisdictional area of the employee:

a Real estate companies

b Title or abstract companies

c House or building construction companies, or companies subcontracting
part or all of such construction.

d Building supply companies and lumberyards.

e Feed and fertilizer suppliers.

f Bulk gasoline suppliers.

g Insurance companies.

h Land speculation.

RD Instruction 2045-BB

Exhibit B

Page 3

C [Prohibited Outside Activities]{.underline}. Activities which violate
RD Instruction 2045-BB and 2045-CC, including but not limited to service
on the governing body of an Rural Development-financed activity; or
service on a local political body having authority to tax or to zone
property in the area served by the employee in his official, Rural
Development duties.

D [General Prohibition]{.underline}. No employee can hold, help in the
operation of, or have a significant interest in, a business or activity
with direct dealings with Rural Development, or one that sells
repeatedly to Rural Development borrowers or contractors for payment
from Rural Development loan funds.

E [Interest of Relatives]{.underline}. Each employee must examine the
employment, activity and financial interest of a member of family. These
activities are the same as if done by the employee. The Rural
Development duties are crucial in the determination of conflict of
interest. Examples of noncompatible employment of members of family
include but are not limited to:

1 Working as, or for, a packager doing business with Rural Development
in the area served by the employee.

2 Working as, or for, a contractor, who gets recurring business from
Rural Development in the area served by the employee.

F [Serving on Boards of Directors of Banks and Savings and
Loans]{.underline}. An employee or member of family of an employee may
not serve on the board of directors of a bank or savings and loan
association in the geographic jurisdictional area of the employee.

G [Obtaining and Holding Real Estate Licenses]{.underline}.

The employee can have a real estate license, but not sell real estate
commercially. The license can be obtained and kept only with the
approving official\'s prior written consent, and under these conditions.

1 The employee\'s request for the approving official\'s prior written
consent must inform the approving official of all relevant conditions,
including but not limited to the following:

a\. Identity of the sponsoring broker, with a complete, accurate
delineation of the area in which the broker performs business.

b\. Requirements of State law and/or regulation for posting of the real
estate license. The employee must specify, in detail, where the license
will be posted. (If the license must be posted in a place of business in
public view, it cannot be posted in the office of a broker who deals in
Rural Development-financed properties in the geographic jurisdictional
area of the employee).

(1-28-81) PN 763

RD Instruction 2045-BB

Exhibit B

Page 4

2 The approving official may, at his/her discretion, impose such
restrictions on the holding and/or posting of a real estate license as
he or she deems appropriate.

3 An employee cannot select or accept another employee\'s assistance in
finding a sponsor. (The employee doing the solicitation could appear
indebted to the sponsor).

4\. These restrictions will be reviewed with any employee who is trying
to get a real estate license. The employee gives a signed statement that
the employee:

a\. Understands and agrees to the restrictions; and

b\. Understands that commercial selling of real estate during Rural
Development employment is not allowed.

5\. The employee may not utilize the real estate license to sell
property he or she owns personally.

VI RESOLVING CONFLICTS.

A [\"Appearance of a Conflict\"]{.underline} - When a State Director or
other appropriate official decides on the basis of available evidence
that an employee has unknowingly become involved in a situation creating
the appearance of a conflict of interest, he/she will order the employee
to divest himself/ herself of the interest. If the employee complies
with the order, the State Director or other appropriate official will
note the compliance with a warning to the employee not to become
similarly involved in other situations. If the employee refuses to
comply, the State Director or other appropriate official will consider
appropriate disciplinary or adverse action. If the employee subsequently
becomes involved again in a similar appearance of a conflict of
interest, he/she will be ordered to divest himself/herself of the
interest; and the State Director or other appropriate official will
consider appropriate disciplinary or adverse action.

B [\"Conflict of Interest\"]{.underline} - The State Director or other
appropriate official will order the employee to divest himself/herself
of the interest and will consider appropriate disciplinary or adverse
action.

C [Conflict or Appearance of Conflict Created by Activities of Members
of Family or Business Associates]{.underline} -

1 The members of family or business associates will be asked to divest
themselves of the interest creating the conflict or appearance of
conflict.

RD Instruction 2045-BB

Exhibit B

Page 5

2 The State Director or other appropriate official may restrict the
employee\'s official actions if no harm is done to Rural Development
efficiency of operations.

3 The State Director or other appropriate official may remove employee
from the source of conflict by:

a Reassigning the employee to another position or geographic area.

b Accepting the employee\'s resignation.

c Removing the employee.

VII [FORMER EMPLOYEES]{.underline}

A RD Instruction 2045-BB, Exhibit A, Section 735-14 (a) (5) and (6)
state the restrictions applicable to all former employees. A former
employee can act as representative for an applicant or borrower in a
matter in which the employee:

1 Was not a personal and substantial participant, or

2 Did not have any official responsibility during the last year of Rural
Development employment.

B Information obtained as a result of Rural Development employment and
which is not generally available to the public during Rural Development
employment cannot be used later as an aid to private business. For
example, a former employee cannot contact Rural Development applicants
or borrowers whose names he or she obtained while employed by Rural
Development to get customers.

VIII [POLITICAL ACTIVITY BY EMPLOYEES]{.underline}.

RD Instruction 2045-BB, Exhibit A, Part 735-19, and RD Instruction
2045-CC, tell what political activity is allowed for employees.
Political activity which is otherwise permitted, but which creates a
conflict with the employees\' duties, is prohibited.

## oOo

(1-28-81) PN 763

RD Instruction 2045-BB

Exhibit C

## GUIDES ON SALE OF REAL ESTATE BY EMPLOYEES

Approving officials must give consideration to these guidelines in
making determinations under §2045.1355 (h) (2) for the sale of real
estate by employees to Rural Development applicants and borrowers:

1 Availability to the applicant or borrower of other comparable local
housing.

2 Availability of other than Rural Development credit that the applicant
or borrower can use to buy the employee\'s property.

3 If the employee is selling in order to buy a residence at a new duty
station.

4 If the sale price is greater than the local present market value,
approval is not given. \"Recommended market value\" on the appraisal
form is the \"present market value.\" The option price cannot be greater
than this value. An employee not subordinate to the seller makes the
appraisal.

5 As the employee\'s position becomes higher, the approval officer must
be more restrictive, as potential for conflict gets greater with
increases in authority.

6 Give consideration to the method used by the employee to sell the
property. Is the property listed with a realtor, or was the sale
contract private? The applicant or borrower can feel duress to buy from
the employee in order to get a loan.

7 Giving the exception in §2045.1355 (h) (21 is not \"approval.\" All
program procedures and conditions must be met prior to loan approval.

These guidelines are not all inclusive, and each case is individual.
Rural Development loan programs are for the benefit of borrowers, not
employees. The approving official must use good judgment, and be aware
of circumstances and of the effects of public opinion.

## oOo

(4-29-77) SPECIAL PN