# Presentation: 359454

## Ethics Issues for  Federal Advisory Committee MembersMaureen O. Wilson, Ph.D.Deputy Ethics CounselorMarch 3, 2008

## 18 USC § 208 Conflict of Interest

- An employee may not
- Personally and substantially
- In a particular matter
- In which s/he has a personal or imputed financial interest
- If the matter will have a direct and predictable effect on that interest

**Notes:**
Most matters coming before the BSC/BSA are general matters  Exception Site Visits
Except grants/contact issues
Tenure review or similar presentation

## 18 USC § 208 Particular Matter

- Matters involving deliberation, decision or action focused upon the interests of a entity or entities
- General  - class of all pharmaceutical companies or cancer centers
- Specific – a company or academic institution

**Notes:**
Most matters coming before the BSC/BSA are general matters  Exception Site Visits
Except grants/contact issues
Tenure review or similar presentation

## 18 USC § 208 Conflict of Interest

- Statutory Waivers
- SGEs may be granted waivers under 18 USC §208(b)(3) to participate in general matters, but not in matters affecting their financial interests
- Matters identified as statutory financial interests are listed under the “*Financial Interests*” section of your recusal list.

**Notes:**
Basis for disclosure and updating 
 For SGEs  208(b)(3) waivers granted based on need for expertise that outweighs conflict
For ex officios 208(b)(1) waivers granted because the financial interest not consider so substantial as to influence the conduct on behalf of the government

## 18 USC § 208Financial Interests

- Stocks, stock options, bonds
- Mutual funds and sector funds
- Salary
- Invention rights and royalties
- Employment interests--professional position or title

## 18 USC § 208Sector Funds

- Stated policy of investing in a limited range of holdings
- Not considered a diversified fund
- Regulatory exemption/waiver only available up to an aggregate value of $50,000
- Biotech/health care sector funds
- Stated policy of investment in biotech/health care devices
- Aggregate value exceeding $50,000 disqualifies member from participating in general and specific matters relating to biotech/healthcare/devices, etc., under regulation.

## 18 USC § 208Financial Interests

- Limited Partnerships
- Venture Capital Corporations – LLC

## 18 USC § 208Limited Partnerships

- Portfolio with a limited number of partners an/or holdings
- Not considered a diversified fund, but can be declared an excepted investment fund – EIF
- An EIF is a *widely held *investment fund (whether a mutual fund, regulated investment company, common trust fund maintained by a bank or similar financial institution, pension or deferred compensation plan, or any other investment fund), if:
- A. The filer *does not exercise control over *and does not have the ability to exercise control over the fund; **and **
- B. *Either,  *the fund is *publicly traded or *available; *or  t*he assets of the fund are *widely diversified*.
- A fund is widely diversified if it holds no more than 5% of the value of its portfolio in the securities of any one issuer (other than the United States Government) and no more than 20% in any particular economic or geographic sector. The significance of an EIF is that it permits reduced financial disclosure information, as indicated in

## Standards of Conduct

- Impartiality – 5 CFR § 2635.502
*Covered Relationships*
- Relates to matters that are not a statutory conflicts of interest, but would raise a question regarding the SGE’s  impartiality in the matter
- – Special concerns regarding activities in the past 12 months

**Notes:**
 Part of reason for updating
Reason why some entries remain for 12 months after conclusion 
Authorization under 5 CFR 2635.502 may be requested

EX:
Relative other than those listed under statute 
organization with which spouse child negotiating employment

## Standards of ConductCovered Relationships

- An entity (other than a prospective employer) with which you hold or seek a business or other relationship or have done so in the past 12 months *	*
*Consultation for a venture capital investment firm*
*Consultation  with a broker related to a sector fund *

**Notes:**
 Part of reason for updating
Reason why some entries remain for 12 months after conclusion 
Authorization under 5 CFR 2635.502 may be requested

EX:
Relative other than those listed under statute 
organization with which spouse child negotiating employment

## Standards of ConductCovered Relationships - Example

*Consultation for a venture capital investment firm*
*Service on the SAB of Interpharma LLC regarding its investments  in start up companies *
*Consultation  with a broker related to a sector fund *
*Smith Barney requests advice regarding a new sector fund, Bioventure II*
*The employing company (Interpharma or Smith Barney) does not conflict with BSA duties, but the clients for which the advice is being provided are the source of conflict*

**Notes:**
 Part of reason for updating
Reason why some entries remain for 12 months after conclusion 
Authorization under 5 CFR 2635.502 may be requested

EX:
Relative other than those listed under statute 
organization with which spouse child negotiating employment

## Conflict Remedies

- Regulatory Waiver
- Waiver (criminal conflict)
- Authorization (conflicting covered relationship)
- Recusal/Disqualification
- Divestiture

**Notes:**
 Concept of bribery
 Other discounts, gratuities or gifts

## Foreign Gifts & Acceptances

- Establishes statutory limitations on acceptance of gifts from foreign governments
- Medals, badges, awards, orders of merit
- Tangible gift items valued at less than $305 (US)
- Educational scholarship or medical treatment
- Travel or expenses for travel occurring entirely outside the U.S.

**Notes:**
Foreign Gifts and Acceptances Act
Limit $260
Peculiarities of travel support

## Standards of Conduct

- Misuse of Position
- Relates to restrictions on the use of public office for personal or private gain:
- Use of title for private gain of the SGE or others
- Use of title or Government position to coerce or induce benefit for self or others
- Use of non-public information to provide benefit

**Notes:**
Inquiry regarding grant yours or another
Communication intended to influence
use of title in communication intended to influence

## Outside Activities

- Compensation is prohibited if  the activity “relates” to your official duties.** **
- You do it as part of your official duties
- Invited mainly because of committee duties
- Invited by a person whose interests may be affected by committee activities
- Activity relies significantly on non-public information
- Concerns a specific matter in which you participated as a committee member within the last 12 months

**Notes:**
Self explanatory

## 18 USC § 205 Representation

- May not
- Represent a third party
- Before the Federal Government
- In a matter involving specific parties
- In which the US is a party or has a substantial interest
- If you personally and substantially participated in the matter as an SGE

**Notes:**
203-compensation in relation to matters that are the subject of the committees activities 
particular  matters
personal and substantial participation
regardless of agency

## 18 USC § 203 Representation with pay

- May not
- Receive compensation
- For representational services
- Rendered by you or another
- Before the Federal government
- In a matter involving specific parties
- In which the US is a party or has a substantial interest
- During your tenure as an SGE

**Notes:**
203-compensation in relation to matters that are the subject of the committees activities 
particular  matters
personal and substantial participation
regardless of agency

## 18 USC § § 203-205 Representation

- Unless
- Done in the proper discharge of your official duties
- For yourself, your parents, spouse, minor children, or an estate for which you are trustee
- The matter is a personnel action

**Notes:**
203-compensation in relation to matters that are the subject of the committees activities 
particular  matters
personal and substantial participation
regardless of agency

## 18 USC § 203 & 205

- Representation with or without compensation in matters pending in your agency.....
- Service _>_ 60 Days in preceding 365
- May not, except in the discharge of official duties, represent any individual or organization before the HHS or the Federal Government in a matter involving specific parties in which the US is a party or has a substantial interest

**Notes:**

205 not applicable if serving < 60 days 

relates to matters pending before the agency in which he serves in which the US is a party 
does not require personal and substantial participation
relates to representation before DHHS

## 18 USC § 207 Post Employment

- May not represent any individual or organization before the Federal government
- In a matter involving specific parties
- In which the US is a party or has a substantial interest
- If you personally and substantially participated in the specific matter as a SGE

**Notes:**
Prohibition on switching sides
Requires personal and substantial participation as part of committee activities
Involving particular matters
And specific parties
In which the US is a party or has a direct and substantial interest

## Other Rules

- Gifts – given to influence you as a committee member, or solely because you are a committee member are prohibited
- Testimony - need agency permission before testifying as an expert for another in a matter in which you participated as an SGE
- Charity - can’t use title or position, and can’t solicit from an entity having interests that could be substantially affected by your committees activities.

**Notes:**
Raising funds for a nonprofit organization other than a political organization  through solicitation of funds or sale of items
Includes personal solicitation through person-to-person contact, use of name directly or by others or 
Participation (active participation not mere attendance) in the conduct of an event where portions of the cost of attendance or participation may be taken as a charitable deduction
Does not 
Include solicitation through media or oral remarks mass produced correspondence if addressed by a group of many people 
Include delivery of official authorized speech 
May not 
solicit from subordinate or any person whose interest may be affected by performance of duties
use/permit use of title, etc.,  to further fundraising
engage in any other prohibited action

## Lobbying/Politics

- Appropriated funds can not be used in lobbying
- The Hatch Act - 5 USC § 7321-7328 limits the “political” activities of SGEs while engaged in the performance of official duties

**Notes:**
18 USC 1913 - prohibition of use of public funds for lobbying 
5 USC 7321 and 18 USC 602, 602, 606, 607
Permissible Activities:  May register and vote -May be candidates for pubic office in non-partisan elections -May assist in voter registration drives-May expression opinions abut candidates-May contribute money to political organizations-May attend and be active at political rallies

Prohibited  Activities:  May not use official authority to interfere with an election-May not knowingly solicit or discourage the political activity of any person who has business before the agency-May not engage in political activity in any Government Office

## Lobbying/Politics

- When authorized, SGEs may engage in educational activities relating to a policy or legislative proposal
- May communicate to members of Congress at the request of Congress

## Lobbying

- All official communications to Congress should be coordinated through the Office of the Assistant Secretary for Legislation
-  For further information, contact:
-  Office of Congressional and Government Relations
- Susan Erickson
- 301-496-5217

## Questions or Concerns

- Maureen O. Wilson, Ph.D.
- wilsonm@mail.nih.gov
- Phone: 	301-496-1148
- Fax:      	301-402-1508