U.S. Department of Housing and Urban Development
                        Washington, D.C. 20410-3000
 
                              March 12, 1992
 
OFFICE OF THE ASSISTANT SECRETARY
FOR ADMINISTRATION
 
                                                  Ethics Letter 92-1
 
     Special Attention of:
          All HUD Employees
 
     Subject:  Standards of Conduct and Principles of Ethical Service
               for Federal Employees
 
          The purpose of this letter is to provide all HUD employees
     with a copy of the Standards of Conduct, 24 CFR Part 0 and
     Executive Orders 12674 of April 12, 1989 and 12731 of October 17,
     1990.  As Federal employees we are responsible for maintaining
     the highest standards of ethical conduct within the Department.
 
     BACKGROUND.  The HUD Standards of Conduct, 24 CFR Part 0 became
     effective on September 18, 1987.  These Standards of Conduct
     specifically define permissible financial interests and outside
     activities for Department employees, as well as interests which
     are prohibited by the Ethics in Government Act of 1978.
 
          Executive Order 12674 was signed by the President on
     April 12, 1989.  It outlines fundamental principles of ethical
     service for Federal employees and places limitations on outside
     earned income.
 
          Executive Order 12731 was signed by the President on
     October 17, 1990, modifying Executive Order 12674.  It includes
     an exception to the limitations on outside earned income.  Both
     Executive Orders discuss authority of the Office of Government
     Ethics and agency responsibility.
 
     OFFICE OF ETHICS.  Because specific situations differ, you should
     not rely exclusively on the material included here.  You are
     encouraged to call the Office of Ethics for guidance and
     assistance with any questions you may have about how these
     standards apply to you.  Feel free to contact this office at
     708-3815 (Voice/TDD) or FTS 458-3815.
 
     OTHER GUIDANCE AND ASSISTANCE.  Guidance is also available from
     the Regional Counsel's Office and the Regional Office of the
     Inspector General.
 
     _________________________________________________________________
     AE:  Distribution: WA, FA, W-3-1
 
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     DEPARTMENT OF HOUSING AND
     URBAN DEVELOPMENT
 
     Office of the Secretary
 
     24 CFR Part 0
 
      Docket No. R-87-1303; FR 2146
 
     Standards of Conduct
 
     AGENCY:  Office of the Secretary, HUD.
 
     ACTION:  Final rule.
     ____________________________________________________________
 
     SUMMARY:  This rule comprehensively
     amends the Department's Standards of
     Conduct regulations.  It clarifies certain
     provisions of the former regulations and
     eliminates redundant and outdated
     material.  It also conforms the former
     regulations to subsequently enacted
     statutes.
 
          The rule operates prospectively.
     Therefore, in the absence of an actual
     conflict of interest, any financial interest
     properly held or acquired under the
     prior regulation will not have to be
     divested even if its holding or
     acquisition is prohibited under this
     regulation.
          On September 25, 1986 the President
     signed Executive Order 12565 (51 FR
     34437) which amended Executive Order
     11222 to establish a comprehensive
     system of financial reporting for federal
     employees.  The Office of Government
     Ethics (OGE) has published a proposed
     rule (51 FR 43359) implementing
     Executive Order 12565.  This rule would
     significantly revamp the confidential
     reporting system and would require
     every agency to issue regulations in
     accordance with OGE's rule.  Therefore,
     once OGE publishes a final rule
     concerning the confidential financial
 
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     disclosure system, the Department will
     amend Subpart C of these regulations to
     bring it into conformity with OGE
     regulations.
 
     EFFECTIVE DATE:  September 18, 1987.
 
     FOR FURTHER INFORMATION CONTACT:
 
     Mr David D. White.  Assistant General
     Counsel for Administrative Law.  Office
     of General Counsel, Room 10254, 451 7th
     Street. SW., Washington, DC 20410.
     (202) 755-7137 (This is not a toll-free
     number).
 
     SUPPLEMENTARY INFORMATION:
 
     Background
 
          HUD published a proposed rule on
     August 22, 1986 (51 FR 30178) entitled
     "Standards of Conduct."  The rule was
     intended to amend the Standards of
     Conduct regulations by specifically
     defining permissible financial interests
     and outside activities for Department
     employees, as well as interests which
     are prohibited by the Ethics in
     Government Act of 1978 and Office of
     Personnel Management regulation&
          The Department received three
     comments in response to the proposed
     rule.  Two of these comments were from
     HUD employees who suggested various
     technical amendments.  One of these
     commenters also suggested that the
     Department retain the rule in the former
     regulation that permitted an employee to
     obtain FHA insurance on his immediate
     past residence, vacation or retirement
     home.  The Department decided not to
     adopt this suggestion because the thrust
     of the new regulation is to restrict
     employee involvement in HUD-related
     real estate investments, and to relax
     restrictions on real estate investments
     unrelated to the programs of the
 
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     Department.  However, the rule was
     modified somewhat in this regard after
     negotiations with the American
     Federation of Government Employees
     (AFGE), as discussed below.
 
          The third commenter was an official
     of the AFGE.  He made a number of
     preliminary observations in anticipation
     of negotiations concerning the
     Standards of Conduct.  Some of these
     comments were suggested technical
     changes.  He also suggested eliminating
     rules based upon the Government-wide
     Standards of Conduct regulations
     promulgated by the Office of Personnel
     Management.  The Department does not
     have the discretion to modify or
     eliminate those rules.
          However, the rule was also submitted
     in a draft final version to the AFGE for
     review pursuant to Article 5 of the
     Department's Agreement with the
     AFGE.  The AFGE requested
     negotiations concerning certain
     provisions of the rule.  As a result of
     those negotiations this rule deletes the
     provision which required an employee
     to obtain the prior approval of a Deputy
     Counselor before maintaining a publicly
     listed place of business (  0.735-203(d)).
     That rule has been superceded by a new
       0.735-203(d)(1) which requires an
     employee to obtain prior approval
     before using his title or reference to
     Government experience in connection
     with a commercial enterprise.
 
          After discussion with the AFGE we
     also added a new   0.733-204(a)(3)
     which explicitly permits an employee to
     obtain FHA insurance on one single
     family dwelling in addition to the
     employee's current principal residence.
     This change permits an employee for
     example, to retain FHA insured
     financing on any one past residence or
 
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     other investment property.  Under the
     prior regulation, an employee could
     properly obtain FHA insurance on his
     immediate past residence, vacation or
     retirement home.  We agreed to reinstate
     a somewhat modified version of this
     rule because of concerns raised during
     the clearance process and the AFGE
     negotiations concerning the possible
     hardship on employees who may have
     to refinance in connection with a job
     relocation.
 
          The rule was also submitted for
     review to the Office of Government
     Ethics (OGE) pursuant to 5 CFR 735-104.
     In accordance with OGE suggestions,
     we made a number of changes in
       0.735-202 of the rules concerning the
     acceptance of gifts.  First, we reinstated
     at   0.735-202(b)(2) the rule that an
     employee may accept food and
     refreshments of nominal value on
     infrequent occasions at a business
     meeting.  We deleted proposed
     0.735-202(b)(2)(i) which would have permitted
     acceptance of food and refreshments at
     conferences and similar meetings where
     payment by the employee would not be
     practicable.
          Second, as OGE suggested we deleted
       0.733-202(b)(2)(ii) which would have
     permitted acceptance of food and
     refreshments at "meetings which do not
     include the inspection, monitoring, or
     selection of grantees, contractors, or
     others who do business, or are seeking
     to do business, with the Department."
          Third, we revised   0.735-202(b)(5)
     which generally addressed the subject
     of attendance at conferences and social
     functions.  As OGE recommended, we
     revised the regulation to provide for
     case-by-case handling of attendance at
     these functions.  The rule now permits an
     employee to participate in a "widely
     attended luncheon, dinner, conference
     or similar gathering sponsored by a
     trade, technical, professional or other
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     association or similar group for a
     discussion of matters related to the
     work of the Department."  Participation
     must be in the Department's interest and
     approved in advance by the employee's
     supervisor.  However, acceptance of
     food and refreshments from a private
     company in connection with an
     association's activities will be
     impermissible.
          Fourth, we revised   0.735-202(b)(6) to
     include a reference to HUD's gift
     acceptance authority at 42 U.S.C.
     3535(k).  We also added a new   0.735-202(e)
     to state that employees may
     accept certain gifts of travel from
     charitable organizations defined in 26
     U.S.C. 501(c)((3).
          Finally, in   0.735-202(c) we restored
     language which would permit an
     employee to accept gifts of only nominal
     value (not "modest" value) on special
     occasions from persons receiving less
     pay than himself.
 
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          OGE also suggested a number of
     changes to provisions concerning the
     misuse of Government position and
     official title.  In response to these
     suggestions, we revised   0.735-202(d)(2)
     to require an employee to obtain the
     prior approval of a Deputy Counselor
     before using his official title or reference
     to government employment "in
     connection with" a commercial
     enterprise, rather than to "promote" a
     commercial enterprise as the
     rule stated.  OGE objected to the
     implication that an employee's title or
     employment could ever be used to
     promote a commercial enterprise.
          We declined to adopt OGE's
     recommendation that a Deputy
     Counselor approve every proposed use
     of an employee's title in connection with
     a writing.  An employee's use of title in
     connection with a commercial writing
     must be approved by a Deputy
     Counselor under   0.735-203(d)(2).  For
     other writings, an employee must add a
     disclaimer or obtain the prior approval
     of the appropriate Assistant Secretary
     or equivalent or his or her designee
     pursuant to   0.735-203(e)(3).
          OGE also recommended several other
     technical and editorial changes in the
     proposed rule to clarify meaning and
     correct errors.  We have made those
     changes where appropriate.
          In preparing this rule for publication
     in final form, the Department
     reconsidered all changes set forth in the
     proposed rule.  One of the proposed
     revisions would have barred employees
     from acquiring notes or bonds issued by
     a State or local agency if the proceeds
     were to be used for HUD-related
     housing.  After reevaluating the effects of
     this restriction, the Department decided
     the proposed revision was unnecessary
     to prevent a real or apparent conflict of
     interest in most cases, and this final rule
     eliminates the restriction.  However,
     acquisition of such bonds or notes based
     upon any inside information acquired
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     during the course of HUD employment
     would be prohibited by   0.735-201(a)
     and   0.735-206.  Other than this change
     and those discussed above, the rule is
     essentially unchanged from that which
     was published in proposed form.  Major
     changes from the former regulations are
     as follows:
 
     Subpart A
 
          1.  The statement of purpose in
       0.735-101 has been shortened and
     simplified.  In addition, a similar
     statement now set forth in   0.735-201
     has been deleted entirely.
          2.  The provisions of   0.735-104 have
     been modified to clarify the role and
     responsibilities of the Department
     Counselor and to identify the
     Department's Deputy Counselors.  In
     addition, the Inspector General has been
     designated a Deputy Standard of
     Conduct Counselor for employees in the
     Office of Inspector General.
          3.  A new provision has been added in
       0.735-106 authorizing waiver of one or
     more of the regulations restrictions by
     the Department Counselor when their
     application is not necessary to prevent
     an actual or apparent conflict of interest
     in a particular case.
          4.  Section   0.735-201 of the former
     regulations has been eliminated because
     it was superfluous and unnecessary.
     Section   0.735-202 of the former
     regulations has been renumbered
       0.735-201 and all following sections
     are renumbered accordingly.  (Unless
     otherwise indicated, all subsequent
     section references in Subpart B of this
     preamble are to the renumbered
     sections.)
          5.  The prohibition in   0.735-202(a)(3)
     on accepting gifts from a person or
     organization whose interests way be
     substantially affected by the
     performance of an employee's official
     duties has been changed to prohibit
     acceptance when these interests may be
     substantially affected by "the action of
     the Department".
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          6.  A new subparagraph (b)(5) has
     been added to   0.735-202 permitting
     participation by a Department employee
     at a widely-attended luncheon, dinner,
     seminar or other similar gathering
     sponsored by a trade, technical or other
     association.  Participation must be
     approved in advance by the employee's
     supervisor as being in the Department's
     interest.  The rule does not permit an
     employee to accept payment of food and
     refreshments from a private company in
     connection with this type of activity.
          7.  A new subparagraph (b)(6) has
     been added to   0.735-202 permitting
     acceptance by Department employees of
     in-kind contributions toward official
     travel (for example, donated
     transportation tickets and meals) made
     by a non-Federal entity, if consistent
     with the Department's official travel
     policies.  The policies are intended to
     permit such acceptance only in
     circumstance where no actual or
     apparent conflict of interest would
     result.  The policies are available for
     public inspection.
          8.  A new paragraph (e) has been
     added to   0.735-202 permitting
     acceptance of travel expense from a
     charitable organization defined in 28
     U.S.C. 501(c)(3).
          9.  In   735-203(b)(4), the prohibition
     against engaging in outside employment
     or activities related to the substantive
     programs of the Department has been
     clarified so that the prohibition is
     against "active participation in, or
     conduct of, a business dealing with, or
     related to, real estate or manufactured
     housing including, but not limited to,
     real estate brokerage, management and
     sales, architecture, engineering,
     mortgage lending, property insurance,
     appraisal services, construction,
     construction financing, land planning
     and real estate development."  The new
     standard permits employees to engage
     in isolated transactions in areas that are
     generally similar to programs of HUD
     when there is no actual conflict of
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     interest but it does not permit
     employees to engage in any outside
     employment involving a HUD program,
     such as the sale of real estate financed
     with FHA insurance.
          10.  In  0.735-203(b)(5) a provision has
     been added prohibiting an employee
     from "serving as an officer or director of
     any organization which engages in
     lobbying activities concerning HUD's
     Programs."  This provision codifies
     existing Department policy on this issue.
          11.  A provision has been added at
       0.735-203(d)(1) requiring an employee
     to obtain the approval of a Deputy
     Counselor before using his or her title or
     government experience in connection
     with a commercial enterprise.  The
     former provision requiring prior
     approval before maintaining a publicly
     listed place of business has been
     deleted.
          12.  Current provisions concerning
     honoraria in   0.735-203 (e)(4) have been
     revised to reflect the statutory limitation
     (2 U.S.C 441i) on receipt of honoraria.
     The limit with certain exceptions, is
     $2000 per appearance, speech or article.
          13.  A new provision has been added
     in   0.733-203(f) to reflect the statutory
     limitation on outside earned income that
     may be received by Presidential
     appointees at or above GS-16.  That
     limitation is 15% of annual salary.
          14.  In   0.735-203 (g) and (h), new
     provisions have been added
     incorporating the restrictions on outside
     activities set forth in 18 U.S.C. 203 and
     205.  In general, these restrictions pertain
     to off-duty employee involvement in
     outside claims, requests for rulings,
     contracts and applications or other
     similar particular matters in which the
     United States is a party or has a direct
     and substantial interest and which are
     pending before a Federal or District of
     Columbia department or agency or, in
     some instances, court.
 
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          15.  A new   0.735-203(k) has been
     added permitting an employee to serve
     as a member of the Board of a federal
     credit union or a cooperative or
     condominium association for a housing
     project which is not subject to
 
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     Department regulation or, if so
     regulated, in which the employee
     resides.  This provision codifies existing
     Department policy.
          16.  Section 0.725-204, which deals
     with permissible holdings, has been
     revised substantially.  Most restrictions
     on employee investment in non-HUD
     related properties have been eliminated,
     but restrictions against employee
     investment in HUD-related interests or
     properties have been expanded.  Thus,
     the restriction on the number of
     permissible investment units (the so-called
     "six unit rule") has been
     eliminated, but restrictions on FHA-financing
     of properties other than the
     employee's principal residence and one
     other single family unit have been
     expanded.  Most of the new or revised
     provisions in this section reflect this
     change in emphasis, and also codify
     existing Department policy concerning
     HUD-related financial interests.
          17.  The primary purpose of   0.735-204(a)
     of the new regulation is to
     regulate certain financial interests
     acquired after beginning employment
     with the Department.  Prohibited
     interests acquired prior to HUD
     employment are governed by   0.735-204(c).
          18.  The prohibition against the
     acquisition of GNMA securities has
     been eliminated.  Accordingly,
     employees may now purchase GNMA
     securities and funds comprised of
     GNMA securities.  The holding of
     GNMA-guaranteed securities does not
     create a potential conflict-of-interest on
     the part of a HUD employee, because
     actions that may be taken by GNMA
     vis-a-vis the issuer after default will not
     affect the security holder.  GNMA's
     guarantee of timely payment of principal
     and interest on mortgage-backed
     securities is backed by the full faith and
     credit of the United States.  From the
     perspective of the investor, therefore,
     GNMAs are essentially similar to
     Treasury securities, which are not
     prohibited investments.  However, an
 
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     employee who has access to information
     unavailable to the general public
     relevant to GNMA securities (such as
     prepayment trends) is still prohibited
     from acquiring, selling, or otherwise
     dealing in GNMA securities on the basis
     of this "inside information."  GNMA
     transactions based on inside
     information violate   0.735-201(a) of this
     regulation which prohibits using public
     office for private gain and   0.735-206
     which prohibits the use of inside
     information.
          19.  This regulation continues to
     prohibit the holding and acquisition of
     FNMA securities and also bars the
     holding of securities collateralized by
     FNMA securities.  See   0.735-204(a)(1).
     The obligations of FNMA are not
     backed by the full faith and credit of the
     United States, and the interests of
     holders of FNMA debt obligations
     (including guaranteed passthrough
     securities) or equity securities can be
     affected by actions taken by HUD under
     its oversight and regulatory
     responsibility.
          20.  A new provision has been added
     at   0.735-204(a)(3) barring an employee
     from having any interest in a
     Department-owned, insured, or
     subsidized project or unit other than an
     employee's principal residence, subject
     to certain exceptions set forth in
        0.735-204(b).  This is a departure from
     the former rule at   0.735-204(a)(6)
     which permitted an employee, for
     example, to obtain a HUD-insured loan
     for an immediate past residence,
     vacation or retirement home.
          21.  In  0.735-204(a)(4), a new
     provision has been added barring the
     receipt of HUD subsidies under section 8
     of the United States Housing Act of
     1937, as amended, except in certain
     limited situations.  The provision codifies
     existing Department policy.
          22.  The prohibition against
     "speculation" in real estate, in the
     former rule at   0.735-205(a)(8), has been
     deleted since it was ambiguous and
     unenforceable.
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          23.  A new   0.735-204(a)(5) has been
     added barring acquisition of a direct
     creditor interest in mortgages insured by
     HUD.  This restriction is in addition to
     that set forth in   0.735-204(a)(4) which
     prohibits an employee from acquiring an
     interest in a HUD-insured investment
     property.  This provision does not bar
     the acquisition of an indirect interest in
     HUD-insured mortgages, such as
     through GNMA securities.
          24.  A new provision has been added
     in   0.735-204(b)(1) permitting employee
     investments in widely held mutual or
     money market funds which have
     broadly diversified portfolios although
     these funds may have HUD-related
     assets.  The provision codifies existing
     Department policy.
          25.  A new   0.735-204(b)(2) has been
     added permitting investment as a
     limited partner in a large public
     partnership if less than 25% of the
     partnership assets are involved in
     HUD-related housing.  This also codifies
     existing Department policy.
          26.  A new provision has been added
     at   0.735-204(b)(3) which permits an
     employee to obtain FHA insurance on
     one single family residential unit, other
     than the employee's principal residence.
     Under the provision, for example, an
     employee is not required to refinance a
     single family investment property
     formerly occupied as a principal
     residence.
          27.  Section 0.735-204(c) adds a new
     provision setting forth a procedure to
     resolve conflicts which may arise
     because of prohibited interests acquired
     involuntarily or acquired before
     employment with the Department.
     Prohibited interests acquired
     involuntarily or prior to HUD
     employment must be reported to, and
     considered by, a Deputy Counselor.
     Generally, an employee may retain such
     interests in the absence of an actual
     conflict of interest.  For example, an
     employee who owned a property with
 
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     section 8 voucher or certificate holder
     tenants in place prior to HUD
     employment may normally retain the
     property and the tenants after beginning
     employment with the Department.
     However, the employee may not take on
     new section 8 tenants during HUD
     employment.
          28.  A portion of the former regulations
     implementing 18 U.S C. 208 has been
     deleted.  Formerly,   0.735-205(b)(2)
     permitted an employee to act in a matter
     involving a corporation if the employee
     owned stock in the corporation worth
     less than $7500 (and which was less
     than 1% of the total stock in that
     corporation), and if the employee, his or
     her spouse, or minor child was not
     involved in managing the corporation.
     This provision has been deleted because
     the $7500 ceiling is arbitrary and is not
     "inconsequential" within the meaning of
     18 U.S.C. 208.  Further, retaining this
     provision would have been inconsistent
     with other portions of the new rule
     which prohibit the mere acquisition of
     certain HUD-related interests.
        29.  The provision of the former
     regulations at   0.735-205(c) which
     attributed the financial interests of an
     employee's spouse and minor child to
     the employee has been deleted.  The
     Department has determined that
     provision was unfair and unenforceable,
     particularly when an employee's spouse
     had independent means and the
     employee had no actual control over the
     spouse's investments.  Of course, sham
     transactions will still be barred by
       0.735-204.  For example, the acquisition
     of a prohibited interest in the name of a
     minor child will be barred as a sham
     transaction if the employee's funds are
     used to purchase the interest or if the
     employee directs purchase of the
     interest with other funds.
          30.  Section 0.735-205 has been
     expanded to include a prohibition
     against the use of Government
 
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     personnel for other than official
     purposes.  In addition, the prohibition
     against the misuse of Government
     property set forth in this section is
     intended to include intangible property
     such as the Government's rights in data,
     patents, and copyrights, as well as
     products and services it has under
     grants, loans, subsidies, and insurance.
          31.  A new   0.735-207 has been added
     prohibiting an employee from misusing
     his or her supervisory relationship or
     management position to obtain favors
     from, encourage a contribution from, or
     sell to, another HUD employee or
     someone who has business with the
     Department.
          32.  A number of miscellaneous
     employee conduct provisions contained
     in   0.735-207 through 0.735-212 of the
     former regulations have been revised
     and streamlined.
 
     Subpart C
 
          33.  Section 0.735-301 adds a
     provision describing the categories of
     employees required to submit public
     financial disclosure statements.
          34.  A new   0.735-302(a)(4) has been
     added requiring employees at GS-13 or
     above who are involved in conducting
     Departmental investigations to file
     confidential financial disclosure
     statements.
          35.  A new provision has been added
     at   0.735-302(d) requiring all employees
     who serve on Evaluation Boards
     and Technical Evaluation Panels to file
     confidential disclosure statements.
          36.  Much of the technical information
     in the former regulations concerning
     time and place of filing confidential
     statements has been deleted.  This
     information will be set forth in a
     Handbook detailing filing procedures.
 
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     Subpart D
 
          37.  All provisions relating to special
     Government employees have been
     consolidated in Subpart D,   0.735-401
     through 405.
          38.  Section 0.735-402 adds a new
     provision prohibiting special
     Government employees from having
     financial interests or engaging in outside
     employment or activities that constitute
     an actual conflict of interest.  This
     section codifies existing Department
     policy.
 
     Subpart E
 
          39.  Subpart E is new and implements
     the post employment restrictions set
     forth in the Ethics in Government Act of
     1978.
          40.  Section  0.735-213 of the former
     regulations has been transferred to
     Subpart E   0.735-501, to consolidate
     provisions dealing with conduct and
     responsibilities of former employees.
     Section 0.735-501(f) incorporates the
     provisions of 25 U.S.C. 450(f), permitting
     representation before any Federal
     Department, agency, court or
     commission by a former federal
     employee employed by an Indian tribe.
          41.  Sections 0.735-502 through 509 set
     forth provisions concerning disciplinary
     actions that may be initiated against
     former employees who violate post
     employment restrictions.
 
     Determination
 
          HUD regulations published at 24 CFR
     Part 50, implementing section 102(2)(C)
     of the National Environmental Policy
     Act of 1969, contain categorical
     exclusions for certain actions, activities
     and programs specified in   50.20.  Since
     the amendments made by this rule fail
     within the categorical exclusions for
     internal administrative procedures set
     forth in paragraph (k) of   50.20, the
     preparation of an Environmental Impact
     Statement or a Finding of No Significant
     Impact is not required for this rule.
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          Pursuant to the provisions of 5 U.S.C.
     605(b) (the Regulatory Flexibility Act),
     the Undersigned hereby certifies that
     this rule does not have a significant
     economic impact on a substantial
     number of small entities.  The rule
     affects only present and former
     Government employees.
          This rule does not constitute a "major
     rule" as the term is defined in section
     1(b) of the Executive Order on Federal
     Regulation issued by the President on
     February 17, 1981.   Analysis of the rule
     indicates that it does not:  (1) have an
     annual effect on the economy of $100
     million or more; (2) cause a major
     increase in costs or prices for
     consumers, individual industries,
     Federal, State or local government
     agencies, or geographic regions; or (3)
     have a significant adverse effect on
     competition, employment, investment,
     productivity, innovation, or on the
     ability of United States-based
     enterprises to compete with foreign-based
     enterprises in domestic or export
     markets.
          This rule was listed at item 885 in the
     Department's Semiannual Agenda of
     Regulations published on April 27, 1987
     (52 FR 14362 73) pursuant to Executive
     Order 12291 and the Regulatory
     Flexibility Act.
 
     List of Subjects in 24 CFR Part 0
 
          Conflict of interest.
 
          Accordingly, 24 CFR Part 0 is revised
     to read as follows:
 
     Part 0-STANDARDS OF CONDUCT
 
     Subpart A - General Provisions
 
     0.735-101   Purpose.
     0.735-102   Definitions.
     0.735-103   Notification to employees.
     0.735-104   Interpretation and advisory
                 service.
     0.735-105   Disciplinary and other remedial
                 actions.
     0.735-106   Waivers.
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     Subpart B - Conduction and Responsibilities
     of Employees
 
     0.735-201   Prescribed actions.
     0.735-202   Gifts, entertainment and favors.
     0.735-203   Outside employment and other
                 activities.
     0.735-204   Financial interests.
     0.735-205   Misuse of Government personnel
                 and property.
     0.735-206   Misuse of official information.
     0.735-207   Misuse of official position.
     0.735-208   General conduct and conduct
                 prejudicial to the Government.
     0.735-209   Intermediaries and product
                 recommendations.
     0.735-210   Membership in organizations in
                 an official capacity.
     0.735-211   Political activities.
     0.735-212   Miscellaneous statutory
                 provisions.
 
     Subpart C - Statements of Employment and
     Financial Interests
 
     0.735-301   Employees required to file under
                 the Ethics in Government Act of 1978.
     0.735-302   Employees required to file
                 confidential financial disclosure
                 statements.
     0.735-303   Employee's grievance regarding
                 filing requirements.
     0.735-304   Reporting and review
                 requirements.
     0.735-305   Confidentiality of employees'
                 statements.
 
     Subpart D - Conduct and Responsibilities
     of Special Government Employees
 
     0.735-401   Applicable provisions.
     0.735-402   Outside employment activities
                 and financial interests.
     0.735-403   Political activities.
     0.735-404   Financial reporting.
     0.735-405   Post employment restrictions.
 
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     Subpart E - Conduct and Responsibilities of
     Former Employees
 
     0.735-501   Prohibited activities by former
                 employees.
     0.735-502   Disciplinary action.
     0.735-503   Initiating disciplinary proceedings.
     0.735-504   Notices.
     0.735-505   Hearings.
     0.735-506   Decision without a hearing.
     0.735-507   Appeals.
     0.735-508   Sanctions.
     0.735-509   Judicial review.
 
          Authority:  5 U.S.C. 301: 18 U.S.C. 201-212;
     E.O. 11222.3 CFR. 1964-1965 Comp.  p.306; 5
     CFR 735.101-412.
 
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     Subpart A - General Provisions
 
       0.735-101  Purpose.
 
          The maintenance of high standards of
     honesty, integrity and impartiality by
     Government employees is essential for
     the proper performance of the public
     business and the maintenance of
     confidence by citizens in their
     Government.  To inform the public and
     Department staff as to the specific
     application of this general principle, this
     Part sets forth the Department's
     regulations prescribing standards of
     conduct for, and governing the
     submission of statements of employment
     and financial interests by its employees.
     All questions about, or requests for,
     interpretations should be directed to the
     Department Counselor or to a Deputy
     Counselor.
 
       0.735-102  Definitions.
 
          (a)  "Department" means the
     Department of Housing and Urban
     Development.
          (b)  "Employee" means an employee of
     the Department other than a Special
     Government employee.
          (c)  "Special Government employee"
     means a person who is retired,
     designated, appointed or employed by
     the Department to perform temporary
     duties, with or without compensation,
     for not more than 130 days during any
     period of 365 consecutive days, either on
     a full-time or intermittent basis, as
     defined in 18 U.S.C. 202.
          (d)  "Person" means an individual
     human being.
          (e)  "Business entity" means a
     corporation, company, firm, partnership,
     society, joint stock company, or any
     other organization or institution having
     a business purpose, including, but not
     limited to:
          (1)  Non-profit organizations or
     institutions which own or operate
     housing units, and
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          (2)  Educational and other institutions
     doing research and development or
     related work involving grants or other
     types of financial assistance from, or
     contracts with, the Government.
 
       0.735-103  Notification to employees.
 
     The provisions of this Part shall be
     brought to the attention of, and made
     available to, each employee and special
     Government employee at the time of
     entrance on duty and at least annually
     thereafter.  Each revision of this Part
     shall be brought promptly to the
     attention of all employees and special
     Government employees.
 
       0.735-104  Interpretation and advisory
     service.
 
          (a)  Department Counselor.  The
     General Counsel is the Standards of
     Conduct Counselor for the Department
     and shall serve as the Department's
     designee to the Office of Personnel
     Management on matters covered by this
     Part.  The Department Counselor shall be
     responsible for directing and
     coordinating the Department's activities
     under this Part and assuring that
     adequate counseling is provided to
     prospective, present and former
     employees of the Department.
          (b)  Deputy Counselors.  The
     Department's Deputy Standards of
     Conduct Counselors are the Associate
     General Counsel for Equal Opportunity
     and Administrative Law, the Assistant
     General Counsel for Administrative
     Law, all Regional Counsel, and any
     other employee designated by the
     Department Counselor.  The  Department
     Counselor and the Deputy Counselors
     shall provide authoritative, advice to
     former, current and prospective
     Department employees who seek
     guidance on questions of conflicts of
     interest and on other matters covered by
     this Part.  In addition, the Inspector
 
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     General is the Deputy Counselor for
     employees of the Office of Inspector
     General and will provide advice to
     former, current and prospective,
     employees of that office.
 
       0.735-105  Disciplinary and other
     remedial actions.
 
          (a)  When an actual or apparent
     conflict of interest or other violation of
     this Part is not resolved to the
     satisfaction of a Deputy Counselor, the
     matter shall be reported by the Deputy
     counselor to the employee's supervisor;
     copies of the report shall also be
     provided to the Office of Personnel and
     Training and other concerned offices,
     such as the Office of the Inspector
     General and the Office of the
     appropriate Assistant Secretary,
     Regional Administrator or other field
     office head.
          (b)  The employee's supervisor must
     consider the report of the Deputy
     Counselor, initiate appropriate remedial
     action, and inform the Deputy Counselor
     of the action taken.  Remedial action
     may include, but is not limited to:
          (1)  Changes in assigned duties;
          (2)  Divestment by the employee of the
     conflicting interest within a reasonable
     time, but normally not more than 60
     days after notice that a conflict exists;
          (3)  Disciplinary action: or
          (4)  Disqualification for a particular
     assignment.
 
       0.735-106  Waivers.
 
          (a)  The Department Counselor, in an
     individual case, may waive any
     requirement of this Part not required by
     law if the Department Counselor finds
     that application of the requirement is
     not necessary to prevent an actual or
     apparent conflict of interest in a
     particular case.
 
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          (b)  Each such waiver shall be in
     writing and supported by a statement of
     the facts and conclusions on which it is
     based.
          (c)  The Department Counselor's
     authority under this Section may not be
     delegated.
 
     Subpart B - Conduct and
     Responsibilities of Employees
 
       0.735-201  Proscribed actions.
 
          An employee shall avoid any action,
     whether or not specifically prohibited by
     this subpart, which might result in, or
     create the appearance of:
          (a)  Using public office or official title
     for private gain;
          (b)  Giving preferential treatment;
          (c)  Impeding Government efficiency or
      economy;
          (d)  Losing independence or
     impartiality;
          (e)  Making a Government decision
     outside official channels:
          (f)  Adversely affecting the confidence
     of the public in the integrity of the
     Government
          (g)  Discriminating against any other
     employee, or applicant for employment,
     on the ground of race, color, religion,
     national origin, sex, age, or handicap;
          (h)  Excluding any person from
     participating in, or denying to any
     person the benefits of, any program or
     activity administered by the Department
     on the ground of race, color, religion,
     sex, national origin, age, or handicap: or
          (i)  knowingly participating in, or
     attending while on official business, any
     segregated meeting, or meetings held in
     segregated facilities, from which persons
     are excluded because of race, color,
     religion, national origin, sex, age or
     handicap.
 
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       0.735-202  Gifts, entertainment, and
     favors.
 
          (a)  Except as provided in paragraph
     (b) of this section, an employee shall not
     solicit or accept, directly or indirectly,
     any gift, gratuity, favor, entertainment,
     loan, or any other thing of value, from a
     person, State government, local
     government or business entity, or a
     group of persons, State governments,
     local governments or business entities,
     who or which:
 
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          (1)  Has, or is seeking, and contractual
     or other business or financial
     relationship with the Department;
          (2)  Conducts operations or activities
     that are regulated by the Department; or
          (3)  Has interests, or whose members
     or clients have interests, that may be
     substantially affected by the actions of
     the Department.
          (b)  The prohibitions of paragraph (a)
     of this section do not apply:
          (1)  When the circumstances make it
     clear that family or personal
     relationships are the motivating factors
     for a gift, entertainment or favor;
          (2)  To acceptance of food and
     refreshments of nominal value on
     infrequent occasions in the course of a
     business meeting in which the employee
     is properly in attendance;
          (3)  To acceptance by an employee of
     loans from banks or other financial
     institutions on customary terms;
          (4)  To Acceptance by an employee of
     unsolicited advertising or promotional
     material, such as pens, pencils, plaques,
     note pads, calendars, and other items of
     nominal intrinsic value;
          (5)  To participation by an employee at
     a widely attended luncheon, dinner,
     conference, or similar gathering
     sponsored by a trade, technical,
     professional or other association or
     similar group for a discussion of matters
     related to the work of the Department.
     Participation must be approved in
     advance by the employee's supervisor
     as being in the interest of the
     Department.  Acceptance of food and
     refreshments from a private company in
     connection with an association's
     activities is impermissible.
          (6)  To acceptance by the Department
     pursuant to 42 U.S.C. 3535(k) and under
     its policies governing official travel, of a
     donation of transportation, lodging or
     meals from a non-federal entity to
     permit an employee to attend a meeting
     or other event in an official duty status.
 
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          (c) An employee shall not solicit
     contributions for a gift to an official
     superior, make a donation as a gift to an
     official superior, or accept a gift from an
     employee receiving less pay than
     himself or herself (5 U.S.C 7351).
     However, this paragraph does not
     prohibit voluntary gifts or donations of
     modest value made because of special
     circumstances such as marriage, illness
     or retirement.
          (d)  An employee shall not accept any
     gift, present, decoration or other item
     from a foreign government, except as
     authorized by the Foreign Gifts and
     Decorations Act (5 U.S.C. 7342).
          (e)  An employee may accept payment
     of travel, subsistence, and other
     expenses, incident to attendance at a
     meeting, from a charitable organization
     as defined in 26 U.S.C. 501(c)(3), if the
     donor is not a prohibited source
     described in subsection (1) of this
     section (5 U.S.C. 4111).
 
       0.735-203  Outside employment and
     other activities.
 
          (a)  Reference in this section to outside
     employment and outside activities is not
     intended to cover employee
     investments.  That subject is covered in
       0.735-204.
          (b)  An employee shall not engage in
     outside employment or other outside
     activity not compatible with the full and
     proper discharge of the employee's
     official duties and responsibilities.
     Incompatible activities include, but are
     not limited to:
          (1)  Outside activities which tend to
     impair the employee's ability or capacity
     to perform official duties and
     responsibilities.
          (2)  Outside activities that may be
     construed by the public to be the official
     acts of the Department;
          (3)  Outside activities that establish
     relationships or property interests that
     may result in a conflict between private
     interests and official duties;
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          (4)  Active participation in, or conduct
     of, a business dealing with, or related to,
     real estate or manufactured housing
     including, but not limited to, real estate
     brokerage, management and sales,
     architecture, engineering, mortgage
     lending, property insurance, appraisal
     services, construction, construction
     financing, land planning and real estate
     development;
          (5)  Serving as an officer or director of
     any organization which engages in
     lobbying activities concerning
     Department programs;
          (6)  Serving as an officer or director of
     a Department-approved mortgagee,
     lending institution or organization which
     services mortgagees or other securities
     for the Department;
          (7)  Accepting employment, with or
     without compensation, with any person
     or business entity doing business with
     the Department;
          (c)  An employee shall not receive any
     salary or any thing of monetary value
     from a private source as compensation
     for his or her services to the
     Government (18 U.S.C. 209).
          (d)  An employee, must obtain the prior
     approval of the a appropriate Deputy
     Counselor:
          (1)  Before using his or her title of
     reference to his or her government
     employment or experience in connection
     with a commercial enterprise, or
          (2)  Before accepting employment, with
     or without compensation
          (i)  With a State or local government,
     or
          (ii)  In the same professional field as
     that of the employee's official position.
          (e) Employees are encouraged to
     engage in teaching, lecturing, and
     writing that is not prohibited by law,
     Executive order, Office of Personnel
     Management regulation, or this Part,
     except that
 
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          (1)  An employee may not receive
     compensation for any lecture, writing, or
     consultation, the subject matter of which
     is substantially related to the
     responsibilities, programs, or operations
     of the Department;
          (2)  An employee may not, either with
     or without compensation, engage in
     teaching, lecturing or writing that is
     dependent on information obtained as a
     result of his or her Government
     employment, except when that
     information has been made available to
     the general public, or will be made
     available on request, or when the
     appropriate Assistant Secretary or his or
     her designee gives written authorization
     for the use of nonpublic information on
     the basis that the use is in the public
     interest.
        (3)  An employee may use his or her
     title in connection with writing for
     publication only if:
          (i)  The writing contains a statement
     indicating that the views contained
     therein are those of the employee as an
     individual and do not necessarily
     represent the views of the Department
     of Housing and Urban Development; or
          (ii)  Such use of the employee's title is
     approved in advance by the appropriate
     Assistant Secretary or equivalent, or his
     or her designee.
          (4)  An employee may not accept any
     honorarium of more than $2,000 for any
     appearance, speech or article (2 U.S.C.
     441i), except if the honorarium is paid
     directly to a charitable organization at
     the request of the employee and selected
     by the payor from a list of 5 or more
     charitable organizations provided by the
     employee.  In computing the $2,000
     amount, the following may be excluded:
          (i)  Actual travel and subsistence
     expenses for the employee and the
     employee's spouse or aide; and
          (iii)  Amounts paid or incurred for any
     agent's fees or commissions.
 
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          (f)  Any employee who is compensated
     at an amount equal to or above GS-16 in
     the General Schedule and who occupies
     a full-time position, appointment to
     which must be made by the President by
     and with the advice and consent of the
     Senate, may not have in any calendar
     year outside earned income attributable
     to such calendar year which is in excess
     of 15 percent of the employee's salary
     (Pub. L. 95-521, section 210, 5 U.S.C.
     App.).
 
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          (g)  An employee may not directly or
     indirectly seek or receive compensation
     for services, rendered by himself or
     others, in connection with any
     proceeding, application, request for
     ruling, contract, claim, or other
     particular matter in which the United
     States is a party or has a direct and
     substantial interest and which is before
     any Federal or District of Columbia
     department or agency (18 U.S.C. 203).
          (h)  An employee may not act with or
     without compensation, as agent or
     attorney for another;
          (1)  In prosecuting a claim against the
     United States; or
          (2)  In connection with any proceeding,
     application, request for ruling, contract
     or other particular matter in which the
     United States is a party or has a direct
     and substantial interest and which is
     before any Federal or District of
     Columbia department, agency, or court
     (18 U.S.C, 205).
          (i)  Permissible exceptions to the
     prohibitions set forth in paragraphs (g)
     and (h) of this section include:
          (1)  Representation without
     compensation in connection with a
     disciplinary, loyalty, or personnel
     proceeding:
          (2)  Representation with or without
     compensation of parents, spouse, child,
     or those to whom the employee owes a
     fiduciary duty, except in those matters in
     which the employee has participated
     personally and substantially as a
     Government employee or which are the
     subject of his official responsibility; and
          (3)  Statements required to be made
     under penalty for perjury or contempt.
 
     An employee seeking to engage in one of
     these excepted activities is encouraged
     to consult in advance with a Deputy
     Counselor.
          (j)  The prohibitions set forth in
     paragraphs (g) and (h) of this section are
     in addition to, and not in lieu of any
     other restrictions contained in this
     subpart.
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          (k)  This section does not prohibit an
     employee from serving in an individual
     capacity as an officer of a member of
     the Board of Directors of:
          (1)  A Federal Credit Union, or
          (2)  A cooperative or condominium
     association for a housing project which
     is not subject to regulation by the
     Department or, if so regulated, in which
     the employee personally resides.
          (j)  When participating in any activity
     permitted by this section, an employee
     shall make certain that his or her official
     title or Department connection is not
     shown or used in a manner which
     implies that the employee is acting in an
     official capacity.
 
       0.735-204  Financial interests.
 
          (a)  An employee shall not have a
     direct or indirect financial interest that
     conflicts, or appears to conflict, with his
     or her official duties and
     responsibilities.  Such interests include,
     but are not limited to, the voluntary
     acceptance, acquisition, or holding of:
          (1)  Securities issued by the Federal
     National Mortgage Association and
     securities collateralized by FNMA
     securities.
          (2)  FHA debentures or certificates of
     claim.
          (3)  Stock or other interest in a
     Department-owned, insured or
     subsidized multifamily project or single
     family dwelling, cooperative unit, or
     condominium unit, except to the extent
     that the stock or other interest
     represents the employee's principal
     residence.  Employees who wish to
     purchase a Department-held property as
     a principal residence must adhere to the
     procedures established by the Assistant
     Secretary for Housing for the
     administration of the property
     disposition program set forth in
     Handbook 4310.5.
 
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          (4)  Any Department subsidy provided
     pursuant to Section 8 of the United
     States Housing Act of 1937, as amended,
     to or on behalf of a tenant of property
     owned by the employee.  However, an
     employee may accept the benefit of such
     a subsidy when:
          (i)  The employee involuntarily
     acquires a property which at the time of
     acquisition has a tenant receiving such a
     subsidy but only as long as that tenant
     continues to reside in the property, or
          (ii)  An incumbent tenant who has not
     previously received such a subsidy
     becomes the beneficiary thereof but
     only if there is no increase in that
     tenant's rent upon the commencement of
     subsidy payments other than normal
     annual adjustments.
          (5)  Any direct creditor interest in a
     mortgage insured by the Department.
          (b)  Notwithstanding paragraph (a) of
     this section, an employee may accept,
     acquire or hold
          (1)  An interest in a mutual or money
     market fund which has holdings listed in
     paragraph (a) of this section, and which:
          (i)  Has a broadly diversified portfolio
     not specializing in any particular
     industry;
          (ii)  Is widely held; and
          (iii)  Is not under the employee's
     control.
          (2)  A limited partnership interest in a
     large public partnership (i.e. one which
     has at least 5,000 partnership interests)
     less than 25% of the assets of which are
     Department insured or subsidized
     projects;
          (3)  Mortgage insurance provided
     pursuant to section 203 of the National
     Housing Act on any one single family
     residence in addition to the employee's
     current principal residence.
          (c)  If an employee acquires an interest
     prior to the commencement of
     employment with the Department which
     is prohibited under paragraph (a) of this
     section, or involuntarily acquires such a
     prohibited interest after the
 
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     commencement of employment with the
     Department, the matter must be reported
     promptly to a Deputy Counselor.  The
     Deputy Counselor will then determine
     whether retention of the interest is
     permissible or whether divestment or
     other appropriate remedial action is
     required.
          (d)(1)  An employee must not
     participate in his or her capacity as a
     Government employee in any matter in
     which, to his or her knowledge, the
     employee, his or her spouse, minor child,
     any organization in which the employee
     is serving as an officer, director, trustee,
     partner, or staff member, or a partner of
     the employee has financial interest.  In
     addition, an employee must not
     participate in his or her capacity as a
     Government employee in any matter in
     which, to the employee's knowledge, a
     person, business, or nonprofit
     organization with whom the employee is
     negotiating, or has an arrangement for,
     employment has a financial interest.  For
     purposes of this paragraph a "matter"
     includes an application, contract, claim,
     request for a ruling, controversy, charge,
     accusation, arrest, judicial or other
     proceeding, or other particular matter.
     (18 U.S.C. 208(a)).
          (2)  Paragraph (d)(1) of this section
     does not apply:
          (i)  If a Deputy Counselor first
     determines that the financial interest is
     not so substantial as to be deemed likely
     to affect the integrity of the services
     which the Government may expect from
     the employee; or
          (ii)  If the financial interest is within
     one of the following categories which
     are hereby exempted from the
     requirements of section 208(a) of Title
     18, United States Code, as being too
     remote or too inconsequential to affect
     the integrity of an employee's service:
 
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          (A)  Any holding in a widely held
     mutual or money market fund, or
     regulated investment company, which is
     not under the employee's control and
     which has a broadly diversified portfolio
     not specializing in any particular
     industry;
          (B)  Participation in a bona fide
     employee benefit plan, other than a
     profit-sharing or stock-bonus plan, that
     is maintained by a former employer to
 
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     the extent that the employee's rights in
     the plan are vested and require no
     additional services by him or her or
     further payment to the plan by the
     former employer with respect to the
     services of the employee.
 
       0.735-205  Misuse of Government
     personnel and property.
 
          An employee shall not directly or
     indirectly use, or allow the use of,
     Government property of any kind,
     including property leased to the
     Government, or the services of any HUD
     employee, for other than officially
     approved activities.  An employee has a
     positive duty to protect and conserve
     Government property, including
     equipment and supplies, entrusted to
     him or her.
 
       0.735-206  Misuse of official information.
 
          For the purpose of furthering a private
     interest, an employee shall not, except
     as permitted by   0.735-203(e)(2),
     directly or indirectly use, or allow the
     use of, official information which has
     not been made available to the general
     public.
 
       0.735-207  Misuse of official position.
 
          Except as may be permitted in the
     course of official business, an employee
     shall not use his or her supervisory
     relationship or management position,
     directly or indirectly, to seek a favor
     from, encourage a contribution from, or
     attempt to sell to, another HUD
     employee or person who has business
     with HUD.
 
       0.735-208  General conduct and conduct
     prejudicial to the Government.
 
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          (a)  Each employee shall be courteous,
     considerate, and prompt in dealing with
     the public and with persons or
     organizations having business with the
     Department;
          (b)  An employee shall not engage in
     criminal, infamous, dishonest, immoral,
     or notoriously disgraceful conduct, or
     other conduct prejudicial to the
     Government.
 
       0.735-209  Intermediaries and  product
     recommendations.
 
          In communicating with any person or
     organization doing, or seeking to do,
     business with the Department, an
     employee shall not recommend or
     suggest the use of any particular or
     identified nongovernmental
     intermediary to deal with the
     Department, except as required by the
     employee's official duties.
 
       0.735-210   Membership in organizations
     in an official capacity.
 
          (a)  An employee may not, in his or her
     official capacity, serve as a member of a
     non-Federal or private organization
     except where express statutory
     authority exists, or statutory language
     necessarily implies such authority, or
     where the Secretary has determined in
     writing that such service would be
     beneficial to the Department and
     consistent with the employee's service
     to the Department.
          (b)  An employee may be designated to
     serve as a liaison representative of the
     Department to a non-Federal or private
     organization when the Secretary, the
     Under Secretary, an Assistant Secretary,
     the General Counsel, or a Regional
     Administrator, as appropriate, has
     determined in writing that such service
     would be beneficial to the Department
     and provided that:
          (1)  The activity relates to the work of
     the Department.
 
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          (2)  The employee does not participate
     by vote in the policy determinations of
     the organization.
          (3)  The Department is not bound by
     any vote or action taken by the
     organization.
 
       0.735-211  Political activities.
 
          Employees are required to observe the
     prohibitions against partisan political
     activities in 5 U.S.C. 7321-7327 and 18
     U.S.C. 602, 603 and 607.  Regulations
     implementing these restrictions are set
     forth in 5 CFR Part 733.
 
       0.735-212  Miscellaneous statutory
     provisions.
 
          The attention of each employee is
     directed to the following statutory
     provisions which relate to his at her
     conduct:
 
          (a) Pub. L. 96-303, 5 U.S.C 7301 note,
     the "Cods of Ethics for Government
     Service."
          (b)  Chapter 11 of Title 18, United
     States Code, relating to bribery, graft,
     and Conflicts of interest.
          (c)  The prohibition against lobbying
     with appropriated funds (18 U.S.C. 1913).
          (d)  The prohibitions against disloyalty
     and striking (5 U.S.C. 7311, 18 U.S.C.
     1918).
          (e)  The prohibition against the
     employment of a member of a
     Communist organization (50 U.S.C. 784).
          (f)  The prohibitions against :
          (1)  The disclosure of classified
     information (18 U.S.C. 798, 50 U.S.C.
     783(b)); and
          (2)  The disclosure of confidential
     information (18 U.S.C. 1905).
          (g)  The provision relating to the
     habitual use of intoxicants to excess (5
     U.S.C. 7352).
 
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          (h)  The prohibition against the misuse
     or unauthorized use of Government
     vehicle (31 U.S.C. 1944, 18 U.S.C. 641).
          (i)  The prohibition against the misuse
     of the franking privilege (18 U.S.C. 1719).
          (j)  The prohibition against the use of
     deceit in an examination or personnel
     action in connection with Government
     employment (18 U.S.C. 1917).
          (k)  The prohibition against fraud or
     false statements in a Government matter
     (18 U.S.C. 1001).
          (l)  The prohibitions against concealing,
     removing, mutilating or destroying a
     public record (18 U.S.C. 2071).
          (m)  The prohibition against
     counterfeiting and forging transportation
     requests (18 U.S.C. 508).
          (n)  The prohibitions against :
          (1)  Embezzlement and theft of
     Government money, property, or records
     (18 U.S.C. 641);
          (2)  Failing to account for public money
     (18 U.S.C. 643); and
          (3)  Embezzlement or wrongful
     conversion of the money or property of
     another which comes under the control,
     or into the possession, of an employee
     by reason of his employment (18 U.S.C.
     654).
          (o)  The prohibition against
     unauthorized taking or use of documents
     relating to claims from or by the
     Government (18 U.S.C. 285).
          (p)  The prohibitions against an
     employee acting as the agent of a
     foreign principal registered under the
     Foreign Agents Registration Act of 1938,
     as amended (18 U.S.C. 219).
          (q)  The prohibition against the
     employment of an individual convicted
     of felonious rioting or related offenses (5
     U.S.C. 7313).
          (r)  The prohibition against a public
     official appointing or promoting a
     relative, or advocating such an
     appointment or promotion (5 U.S.C.
     3110).
 
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     Subpart C - Statements of
     Employment and Financial Interests
 
       0.735-301  Employees required to file
     under the Ethics in Government Act of
     1978.
 
          (a)  The following employees shall
     submit public financial disclosure
     reports in accordance with the
     provisions of Title II of the Ethics in
     Government Act of 1978, as amended:
          (1)  Officers and employees whose
     positions are classified at GS-16 or
     above of the General Schedule, or
     whose basic rate of pay (excluding
     "step" increases) under other pay
     schedules is equal to, or greater than,
     the rate for GS-16 (step 1);
          (2)  Officers and employees in any
     other positions determined by the
     Director of the Office of Government
 
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     Ethics to be of equal classification to
     GS-16;
          (3)  Administrative Law Judges;
          (4)  Employees in the excepted service
     in positions which are of a confidential
     or policy-making character, unless their
     positions have been excluded by the
     Director of the Office of Government
     Ethics;
          (5)  Designated agency ethics officials.
          (b)  Those employees required to file
     under paragraph (a) of this section are
     subject to the provisions of 5 CFR Part
     734 regarding procedures for filing,
     contents of reports, and penalties for
     failure to file or for falsifying a report.
 
       0.735-302  Employees required to file
     confidential financial disclosure
     statements.
 
          The following categories of
     employees, other than those required to
     file under    0.735-301, shall submit
     confidential statements of employment
     and financial interests:
          (a)  Employees classified at GS-13 at
     above who are in positions which
     include responsibility for making a
     Government decision or taking a
     Government action in regard to:
          (1)  Contracting or procurement;
          (2)  Administering or monitoring grants
     or subsidies;
          (3)  Regulating or auditing private or
     other non-Federal enterprises;
          (4)  Conducting Departmental
     investigations; or
          (5)  Other activities where the decision
     or action has an economic impact on the
     interests of any non-Federal enterprise.
          (b)  Employees classified at GS-13 or
     above who are in positions which the
     Department has determined have duties
     and responsibilities which require the
     incumbent to report employees and
     financial interests in order to avoid
     involvement in possible conflicts of
     interest.
 
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          (c)  Employees classified below CS-13
     who are in positions which otherwise
     meet the criteria in paragraphs (a) or (b)
     of this Section.  These positions have
     been justified in writing to OPM as
     exceptions that are essential to protect
     the integrity of the Government and to
     avoid employee involvement in possible
     conflicts of interest.
          (d)  Employees, regardless of grade
     level, who have been selected to serve
     on a Technical Evaluation Panel or
     Source Evaluation Board.
 
       0.735-303  employee's grievance
     regarding filing requirements.
 
          If an employee believes that his or her
     position has been improperly designated
     as one requiring its incumbent to submit
     a confidential statement of employment
     and financial interest, the employee may
     obtain review of the designation through
     the Department's grievance procedures.
 
       0.735-304  Reporting and review
     requirements.
 
          (a)  Confidential statements of
     employment and financial interest and
     supplementary statements:
          (1)  Shall be submitted on forms
     prescribed by the Department
     Counselor;
          (2)  Shall contain information required
     by the Department Counselor regarding
     the employment background and
     financial interests of the employee, the
     employee's spouse and family members,
     and
          (3)  Shall be submitted at the times and
     places designated by the Department
     Counselor.
          (b)  Notwithstanding paragraph (a)
     this section, the Department Counselor
     shall not require reporting of
     information relating to the interests of
     an employee, or his or her spouse and
 
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     family members, in professional
     associations or charitable, religious,
     social, fraternal, recreational, public
     service, civic or political organizations
     or similar organizations not conducted
     as business enterprises.
          (c)  The appropriate Deputy Counselor
     shall review and retain employees'
     statements and shall advise employees
     as to corrective action if necessary.
 
       0.735.305  Confidentiality of employees'
     statements.
 
          To insure the confidentiality of
     statements filed under   0.735-302, the
     appropriate Deputy Counselors shall not
     allow access to, or allow information to
     be disclosed from, statements except as
     the Office of Personnel Management or
     the Department Counselor may
     determine for good cause shown.
 
     SUBPART D - CONDUCT AND
     RESPONSIBILITIES OF SPECIAL
     GOVERNMENT EMPLOYEES
 
       0.735-401  Applicable provisions.
 
          (a)  Every special Government
     employee is subject to the provisions of
       0.735-101 through 0.735-106, 0.735-201,
       0.735-202, 0.735-204(d), 0.735-205
     through 0.735-210.
          (b)  Every special Government
     employee should become familiar with
     the statutes listed at 0.735-212.
 
       0.735-402  Outside employment,
     activities and financial interests.
 
          (a)  Special Government employees
     may not engage in outside employment
     and activities or have financial interests
     that conflict with the responsibilities
     and duties of Federal employment.
     However, because special Government
     employees usually are employed outside
 
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     the Department, they may engage in
     employment or activities prohibited
     other Federal employees under   0.735-203
     when there is no actual conflict of
     interest.  Special Government employees
     may also have financial interests
     prohibited other Federal employees
     under   0.735-204(a)(1) through (a)(5)
     when there is no actual conflict of
     interest.
          (b)  Notwithstanding the provisions of
     paragraph (a) of this section, a special
     Government employee may not directly
     or indirectly seek or receive
     compensation for services rendered by
     himself, herself or others in connection
     with any proceeding, application,
     request for ruling, contract, claim or
     other particular matter in which the
     United States is a party or has a direct
     and substantial interest and:
          (1)  Which is before any Federal or
     District of Columbia department or
     agency and in which he or she
     participated personally and
     substantially for the Government, or
          (2)  Which is pending before the
     Department, provided that a special
     Government employee who has served
     in the Department no more than 60 days
     in the previous 365 days shall be bound
     only to to a matter in which he or she
     participated personally and
     substantially. 18 U.S.C. 203.
          (c)  Notwithstanding the provisions of
     paragraph (a) of this section, a special
     Government employee may not act, with
     or without compensation, as an agent or
     attorney for another in prosecuting a
     claim against the United States, or in
     connection with any proceeding,
     application, request for ruling, contract
     or other particular matter in which the
     United States is a party or has a direct
     and substantial interest, and
          (1)  Which is before any Federal or
     District of Columbia department, agency
     or court and in which he or she
     participated personally and
     substantially for the Government, or
 
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          (2)  Which is pending before the
     Department, provided that this clause
     shall not apply in the case of a special
     Government employee who has served
     in the Department no more than 60 days
     in the previous 365 days. 18 U.S.C. 205.
          (d)  Permissible exceptions to the
     prohibitions set forth in paragraphs (b)
     and (c) of this section include:
          (1)  Representation without
     compensation in connection with a
     disciplinary, loyalty, or personnel
     proceeding;
          (2)  Representation with or without
     compensation of parents, spouse, child,
     and those to whom the employee owes a
     fiduciary duty except in those matters in
     which the employee has participated
 
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     personally and substantially as a
     Government employ or which are the
     subject of his official responsibility; and
          (3)  Statements required to be made
     under penalty for perjury or contempt.
          (e)  A special Government employee
     seeking to engage in one of the excepted
     activities should consult in advance
     with a Deputy Counselor.
          (f)  The Secretary may allow a special
     Government employee to represent his
     or her regular employer or another
     person or organization before the
     Department in the performance of work
     under a grant or a contract.  The
     Secretary must first certify in the
     Federal Register that such
     representation is in the national interest.
     (18 U.S.C. 205).
          (g)  The prohibitions set forth in
     paragraphs (b) and (c) of this section are
     in addition to any other restrictions
     contained in this subpart and do not
     permit any activities which are
     otherwise prohibited.
 
       0.735-403  Political activities.
 
          Special Government employees are
     bound by the political activity
     restrictions cited in   0.735-211.  Such
     restrictions also apply to a special
     Government employee engaged on an
     irregular or occasional basis, but only on
     days in which service is rendered and
     then for the entire 24 hours of such
     service day.
 
       0.735-404  Financial reporting.
 
          (a)  Special Government employees
     who will work more than 60 days in a
     calendar year must submit public
     financial disclosure reports in
     accordance with the provision of Title
     II of the Ethics in Government Act of
     1978 when their rate of pay is equal to or
     greater than the basic rate for GS-16,
     Step 1.  Such employees are covered by
     the reporting requirements at 5 CFR Part
     734.
 
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          (b)  All special Government employees
     not required to file under paragraph (a)
     of this section shall submit Confidential
     Statements of Employment and
     Financial Interests and supplementary
     statements to the appropriate Deputy
     Counselor for review and custody.
          (e)  The provisions of   0.735-304 and
     O.735-305 are applicable to a special
     Government employee who is required
     to file a statement under paragraph (b)
     of this section.
 
       0.735-405  Post employment restrictions.
 
          All special Government employees
     are bound by the restrictions concerning
     post employment set forth in   0.735-501
     (a) and (b) and are subject to the
     provisions regarding disciplinary
     proceedings set forth in Subpart E.
     However, the restrictions set forth in
       0.735-501 (c) and (d) apply only to
     special Government employees who
     serve as Senior Employees, as defined in
     5 CFR 737.3(a)(6), over sixty days in any
     calendar year.  The exception to the post
     employment restrictions set forth in
       0.735-501(f) for former employees
     employed by an Indian tribe also apply
     to former special Government
     employees.
 
     Subpart E - Conduct and
     Responsibilities of Former Employees
 
       0.735-501  Prohibited activities by former
     employees.
          (a)  No former employee, after
     terminating Government employment,
     shall knowingly act as agent or attorney
     for, or otherwise represent another in
     any formal or informal appearance
     before, or with the intent to influence,
     make any oral or written communication
     on behalf of another to, any agency,
     employee or court of the United States
     or the District of Columbia, in
     connection with any particular
     Government matter involving a specific
     party, in which matter such employee
 
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     participated personally and
     substantially as a Department employee.
          (b)  No former employee, within two
     years after terminating employment by
     the United States shall knowingly act as
     agent or attorney for, or otherwise
     represent another in any formal or
     informal appearance before, or with the
     intent to influence, make any oral or
     written communication on behalf of
     another to, any agency, employee or
     court of the United States or the District
     of Columbia, in connection with any
     particular Government matter involving
     a specific partt, if such matter was
     actually pending under the employee's
     official responsibility as an officer or
     employee within a period of one year
     prior to the termination of such
     responsibility.
        (c)  No former Senior Employee, as
     defined in 5 CFR 737.3(a)(6), within two
     years after terminating employment by
     the United Stated, shall knowingly
     represent or aid, counsel, advise,
     consult, or assist in representing another
     by personal presence at any formal or
     informal appearance before any agency,
     employee or court of the United States
     or the District of Columbia, in
     connection with any particular
     Government matter involving a specific
     party, in which matter he or she
     participated personally and
     substantially.
          (d)  For a period of one year after
     terminating employment by the United
     States, no former Senior Employee shall
     knowingly act as an agent or attorney
     for, or otherwise represent, anyone in a
     formal or informal appearance before, or
     with the intent to influence, make any
     written, or oral communication on behalf
     of anyone, to the Department or any of
     its officers or employees, in connection
     with any particular Government matter,
     whether or not involving a specific
     party, which is pending before the
     Department, or in which it has a direct
     and substantial interest.
 
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          (e)  The prohibitions set forth in
     paragraphs (a) through (d) of this section
     will be applied in accordance with
     regulations of the Office of Government
     Ethics as set forth in 5 CFR Part 737.
          (f)  The prohibitions in paragraphs (a)
     through (d) of this section do not bar a
     former employee employed by an Indian
     tribe from representing the tribe in
     connection with any matter pending
     before any Federal department, agency,
     court or commission.  However, a former
     employee who intends to engage in
     representational activities must advise
     the head of the department, agency,
     court, or commission, in writing, of any
     personal and substantial involvement he
     or she may have had as a federal
     employee in the matter. 25 U.S.C. 450(f).
 
       0.735-502  Disciplinary action.
 
          (a)  Disciplinary action may be taken
     against any former Department
     employee or special Government
     employee (hereafter referred to as
     "former employee") found under this
     subpart to have violated the post
     employment restrictions set forth in
       0.735-405 and 0.735-501 of this Part.
          (b)  The Department Counselor or a
     Deputy Counselor may initiate
     disciplinary proceedings.  For purposes
     of this subpart, such an official is
     referred to as an Initiating Official.
          (c)  Disciplinary action may consist of:
          (1)  Prohibiting the former employee
     from making, on behalf of another,
     except the United States, any informal
     or formal appearance before, or with the
     intent to influence, any oral or written
     communication to the Department, on
     any matter of business for a period not
     to exceed five years.  This prohibition
     may be accomplished by directing
     Department personnel to refuse to
     participate in any such appearance or to
     accept any such communication; or
          (2)  Other appropriate disciplinary
     actions, including but not limited to:
 
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          (i)  Prohibiting, for a definite period of
     not more than five years, the former
     employee from any representation
     activity in connection with a specific
     office in the Department, or with a
     specific matter, in which the employee
     had an interest;
 
___________________________________________________________________________
 
                                 11 ( 5 of 5)
 
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          (ii)  Issuing a letter of warning to the
     former employee.
 
       0.735-503  Initiating disciplinary
     proceedings.
 
          (a)  The Initiating Official, upon
     receiving information indicating grounds
     for disciplinary action, shall request that
     the Office of the Inspector General
     conduct an investigation and report all
     relevant investigative findings back to
     the Initiating Official.
          (b)  The Inspector General shall
     coordinate all investigations under this
     subpart with the Department of Justice
     as appropriate.
        (c) All investigations under this
     subpart shall be conducted in a manner
     which protects the privacy of former
     employees.  To the extent possible,
     information received as a result of the
     Inspector General's investigation shall
     remain confidential except as necessary
     to carry out the purposes of this subpart.
          (d)  After the Inspector General reports
     the facts of the investigation to the
     Initiating Official, the Initiating Official
     shall determine either:
          (1)  That there is reasonable cause to
     believe that a violation has occurred, in
     which event the Initiating Official shall
     expeditiously provide all relevant
     information, along with any comments
     or agency regulation, to the Director of
     the Office of Government Ethics (OGE);
     in addition, the Initiating Official shall
     commence disciplinary action against
     the former employee by serving notice in
     accordance with  0.735-504; or
          (2)  That there is no reasonable basis
     for believing that a violation has
     occurred, in which event the Initiating
     Official shall advise the former
     employee and the Inspector General's
     office of that determination.
 
___________________________________________________________________________
 
                                 12 ( 1 of 5)
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         (e)  In the event disciplinary action is
     initiated, the Department Counselor
     shall promptly appoint an impartial
     hearing officer who shall be a member
     of the HUD Board of Contract Appeals
     or an Administrative Law Judge.  The
     hearing officer shall not have
     participated in any manner in the
     decision to initiate disciplinary action.
 
       0.735-504  Notice.
      (a)  The Initiating Official shall notify
     the former employee of the proposed
     disciplinary action in writing, by
     registered or certified mail, return
     receipt requested, or by any other means
     which gives actual notice or is
     reasonably calculated to give actual
     notice.
          (b)  The Notice shall include:
          (1)  A statement of allegations and the
     basis thereof sufficiently detailed to
     enable the former employee to prepare
     an adequate defense;
          (2)  A statement that the former
     employee is entitled to a hearing with a
     right to counsel if he or she requests a
     hearing within 15 days after receiving
     the notice;
          (3)  A statement explaining the method
     by which a hearing may be requested
     including the name, business address,
     and telephone number of the person to
     be contacted if there are further
     questions;
          (4)  A statement explaining the right to
     submit documentary evidence and a
     report to the hearing officer if a hearing
     is not requested and the method by
     which evidence may be submitted; and
          (5)  The disciplinary action proposed.
 
___________________________________________________________________________
 
                                 12 ( 2 of 5)
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       0.735-505  Hearings.
 
          (a) Formal rules of evidence and
     procedure applicable to a proceeding in
     a court of law will not be applied.
     Parties may object to clearly irrelevant
     material, but technical objections to
     testimony as used in a court of law will
     not be sustained.
          (b)  A former employee, against whom
     disciplinary action is proposed, is
     entitled to a hearing upon a written
     request submitted to the hearing officer
     within 15 days after the former
     employee receives notice as set forth in
       0.735-504.  If no timely request is made,
     the hearing officer may proceed under
       0.735-506 to make a decision without a
     hearing.
          (c)  An attorney from the Department's
     legal staff shall represent the
     Department in the matter.
          (d)  The hearing shall be conducted at
     a reasonable time, date, and place as set
     by the hearing officer.
          (1)  In setting a hearing date, the
     hearing officer shall give due regard to
     the former employee's need for adequate
     time to prepare a defense and to an
     expeditious resolution of allegations
     that may be damaging to the former
      employee's reputation.
          (2)  Notice of the time, date, and place
     of such hearing shall be transmitted in
     writing to all interested parties by the
     hearing officer and shall include a
     statement indicating the nature of the
     proceedings and their purpose.
          (e)  At a hearing, the former employee
     shall have the right to:
          (1)  Represent himself or herself or be
     represented by counsel;
          (2)  Introduce and examine witnesses
     and submit relevant evidence;
          (3)  confront and cross-examine
     adverse witnesses;
          (4)  Present oral argument; and
          (5)  Receive a transcript or recording of
     the proceedings, upon request.
 
___________________________________________________________________________
 
                                 12 ( 3 of 5)
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          (f)  In a hearing, the Department has
     the burden of proof and must establish
     substantial evidence of a violation.
          (g)  The hearing officer shall make a
     determination based exclusively on
     matters of record in the proceeding and
     shall set forth in the decision all findings
     of fact and conclusions of law relevant
     to the matters at issue.
 
       0.735-506  Decision without a hearing.
 
          (a)  If no hearing is requested under
       0.735-505(b), the hearing officer shall
     make a decision on the basis of
     evidence submitted under paragraph (b)
     of this section.  The proposed
     disciplinary action shall be sustained
     upon a showing, by substantial
     evidence, of cause as specified in
       0.735-502.  Notice shall be provided to
     all interested parties stating the findings
     of fact and conclusions of law, the
     sanctions to be imposed if a violation
     has been found, and the procedure for
     filing an appeal to the Secretary.
          (b)  If no hearing is requested, the
     former employee and the Initiating
     Official may submit relevant
     information and reports on their behalf
     to the hearing officer.  In making a
     decision the hearing officer shall
     consider all evidence and reports
     received prior to the decision.
 
       0.735-507  Appeals.
 
          (a)  The former employee may appeal
     the hearing officer's decision finding a
     violation of the post-employment
     restrictions, as set forth in  0.735-405
     and  0.735-501 of this Part, to the
     Secretary by making a written request
     within 20 days of the decision.
          (b)  Upon receiving an appeal, the
     Secretary or his or her designee shall
     review the decision of the hearing
     officer.  The decision of the Secretary or
     designee shall be based solely on:
         (1)  The record of the proceedings if
     there has been a hearing;
 
___________________________________________________________________________
 
                                 12 ( 4 of 5)
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         (2)  The record upon which the hearing
     officer made his or her decision if there
     has not been a hearing; or
         (3)  Those portions of the record cited
     by the parties to limit the issues.
         (c)  If the decision of the hearing
     officer is modified or reversed, the
     decision by the Secretary or designee
     shall state any findings of fact or
     conclusions of law which differ from the
     findings or conclusions of the hearing
     officer.
 
       0.735-508  Sanctions.
 
          Disciplinary action may be imposed
     by the hearing officer if there was no
     appeal, or by the Secretary or his or her
     designee if there was an appeal, against
     a former government employee found to
     have violated the post-employment
     restrictions set forth in   0.735-405 and
     0.735-501 of this Part.  The sanctions
 
___________________________________________________________________________
 
                                 12 ( 5 of 5)
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     shall not exceed those proposed by the
     Initiating Official in the notice which
     initiated the disciplinary action against
     the former employee.
 
       0.735-509  Judicial review.
 
          Any person found to have violated the
     post-employment restrictions set forth in
       0.735-405 and 0.735-501 of this part,
     may seek judicial review of the
     Department's final administrative
     determination.
 
         Dated:  July 7, 1987
 
     Samuel R. Pierce, Ur.,
 
     Secretary, Department of Housing and Urban
     Development.
      FR Doc. 87-16248 Filed 7-16-87; 8:45 am
 
     BILLING CODE 421-32-M
 
___________________________________________________________________________
 
                                   13
 
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                                                             ATTACHMENT II
 
  Federal Register / Vol. 54. No. 71 / Friday, April 14, 1989 /      15159
                     Presidential Documents
___________________________________________________________________________
 
Presidential Documents
 
Executive Order 12674 of April 12, 1989
 
Principles of Ethical Conduct for Government Officers and
Employees
 
By virtue of the authority vested in me as President by the Constitution
and laws of the United States of America, and in order to establish fair
and exacting standards of ethical conduct for all executive branch
employees, it is hereby ordered as follows:
 
PART I-PRINCIPLES OF ETHICAL CONDUCT
 
Section 101.  Principles of Ethical Conduct.  To ensure that every citizen
can have complete confidence in the integrity of the Federal Government,
each Federal employee shall respect and adhere to the fundamental
principles of ethical service as implemented in regulations promulgated
under sections 201 and 301 of this order:
 
(a)  Public service is a public trust, requiring employees to place loyalty
to the Constitution, the laws, and ethical principles above private gain.
 
(b)  Employees shall not hold financial interests that conflict with the
conscientious performance of duty.
 
(c)  Employees shall not engage in financial transactions using nonpublic
Government information or allow the improper use of such information to
further any private interest.
 
(d)  An employee shall not, except pursuant to such reasonable exceptions
as are provided by regulation, solicit or accept any gift or other item of
monetary value from any person or entity seeking official action from,
doing business with, or conducting activities regulated by the employee's
agency, or whose interests may be substantially affected by the performance
or nonperformance of the employee's duties.
 
(e)  Employees shall put forth honest effort in the performance of their
duties.
 
(f)  Employees shall make no unauthorized commitments or promises of any
kind purporting to bind the Government.
 
(g)  Employees shall not use public office for private gain.
 
(h)  Employees shall act impartially and not give preferential treatment to
any private organization or individual.
 
_____________________________________________________________________
                                                             ATTACHMENT II
 
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(i)  Employees shall protect and conserve Federal property and shall not
use it for other than authorized activities.
 
(j)  Employees shall not engage in outside employment or activities,
including seeking or negotiating for employment, that conflict with
official Government duties and responsibilities.
 
(k)  Employees shall disclose waste, fraud, abuse, and corruption to
appropriate authorities.
 
(l)  Employees shall satisfy in good faith their obligations as citizens,
including all just financial obligations, especially those - such as
Federal, State, or local taxes-that are imposed by law.
 
(m)  Employees shall adhere to all laws and regulations that provide equal
opportunity for all Americans regardless of race, color, religion, sex,
national origin, age, or handicap.
 
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(n)  Employees shall endeavor to avoid any actions creating the appearance
that they are violating the law or the ethical standards promulgated
pursuant to this order.
 
Sec. 102.  Limitations on Outside Earned Income.  No employee who is
appointed by the President to a full-time noncareer position in the
executive branch, including all full-time employees in the White House
Office and the Office of Policy Development, shall receive any earned
income for any outside employment or activity performed during that
Presidential appointment.
 
PART II - OFFICE OF GOVERNMENT ETHICS AUTHORITY
 
Sec. 201.  The Office of Government Ethics.  The Office of Government
Ethics shall be responsible for administering this order by:
 
(a)  Promulgating, in consultation with the Attorney General and the Office
of Personnel Management, regulations that establish a single,
comprehensive, and clear set of executive-branch standards of conduct that
shall be objective, reasonable, and enforceable.
 
(b)  Developing, disseminating, and periodically updating an ethics
reference manual for employees of the executive branch describing the
applicable statutes, rules, decisions, and policies.
 
(c)  Promulgating, with the concurrence of the Attorney General,
regulations interpreting the provisions of the general conflict-of-interest
statute, section 208 of title 18, United States Code, and the statute
prohibiting supplementation of salaries, section 209 of title 18, United
States Code.
 
(d)  Promulgating, in consultation with the Attorney General and the Office
of Personnel Management, regulations establishing a system of nonpublic
(confidential) financial disclosure by executive branch employees to
complement the system of public disclosure under the Ethics in Government
Act of 1978.  Such regulations shall include criteria to guide agencies in
determining which employees shall submit these reports.
 
(e)  Ensuring that any implementing regulations issued by agencies under
this order are consistent with and promulgated in accordance with this
order.
 
Sec. 202.  Executive Office of the President.  In that the agencies within
the Executive Office of the President (EOP) currently exercise functions
that are not distinct and separate from each other within the meaning and
for the purposes of section 207(e) of title 18, United States Code, those
agencies shall be treated as one agency under section 207(c) of title 18,
United States Code.
 
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PART III - AGENCY RESPONSIBILITIES
 
Sec. 301.  Agency Responsibilities.  Each agency head is directed to:
 
(a)  Supplement, as necessary and appropriate, the comprehensive
executive-branch-wide regulations of the Office of Government Ethics, with
regulations of special applicability to the particular functions and
activities of that agency.  Any supplementary regulations shall be prepared
as addenda to the branch-wide regulations and promulgated with the
concurrence of the Office of Government Ethics.
 
(b)  Ensure the review by all employees of this order and regulations
promulgated pursuant to the order.
 
(c)  Coordinate with the Office of Government Ethics in developing annual
agency ethics training plans.  Such training shall include mandatory annual
briefings on ethics and standards of conduct for all employees appointed by
the President, all employees in the Executive Office of the President, all
officials required to file public or nonpublic financial disclosure
reports, all employees who are contracting officers and procurement
officials, and any other employees designated by the agency head.
 
(d)  Where practicable, consult formally or informally with the Office of
Government Ethics prior to granting any exemption under section 208 of
title
 
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                                                             ATTACHMENT II
 
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                   Presidential Documents
 
___________________________________________________________________________
 
18, United States Code, and provide the Director of the Office of
Government Ethics a copy of any exemption granted.
 
(e)  Ensure that the rank, responsibilities, authority, staffing, and
resources of the Designated Agency Ethics Official are sufficient to
ensure the effectiveness of the agency ethics program.  Support should
include the provision of a separate budget line item for ethics activities,
where practicable.
 
PART IV-DELEGATIONS OF AUTHORITY
 
Sec. 401.  Delegations to Agency Heads.  Except as provided in section 402
and except in the case of the head of an agency, the authority of the
President under section 208(b) of title 18, United States Code, to grant
exemptions to individuals, is delegated to the head of the agency in which
an individual requiring an exemption is employed or to which the individual
is attached for purposes of administration.
 
Sec. 402.  Delegations to the Counsel to the President.  The authority of
the President under section 208(b) of title 18, United States Code, to
grant exemptions for Presidential appointees to committees, commissions,
boards, or similar groups established by the President is delegated to the
Counsel to the President.
 
Sec. 403.  Delegation Regarding Civil Service.  The Office of Personnel
Management and the Office of Government Ethics, as appropriate, are
delegated the authority vested in the President by 5 U.S.C. 7301 to
establish general regulations for the implementation of this Executive
order.
 
PART V - GENERAL PROVISIONS
 
Sec. 501.  Revocations.  The following are hereby revoked:
 
(a)  Executive Order No. 11222 of May 8, 1965.
 
(b)  Executive Order No. 12565 of September 25, 1986.
 
Sec. 502.  Savings Provision.
 
(a)  All actions already taken by the President or by his delegates
concerning matters affected by this order and in force when this order is
issued, including any regulations issued under Executive Order 11222,
Executive Order 12565 or statutory authority, shall, except as they are
irreconcilable with the provisions of this order or terminate by operation
of law or by Presidential action, remain in effect until properly amended,
modified, or revoked pursuant to the authority conferred by this order or
any regulations promulgated under this order.  Notwithstanding anything in
section 102 of this order, employees may carry out preexisting contractual
obligations entered into before the date of this order.
 
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                   Presidential Documents
 
___________________________________________________________________________
 
(b)  Financial reports filed in confidence (pursuant to the authority of
Executive Order No. 11222, 5 C.F.R. Part 735, and individual agency
regulations) shall continue to be held in confidence.
 
Sec. 503.  Definitions.  For purposes of this order, the term:
 
(a)  "Contracting officers and procurement officials" means all such
officers and officials as defined in the Office of Federal Procurement
Policy Act Amendments of 1988.
 
(b)  "Employee" means any officer or employee of an agency, including a
special Government employee.
 
(c)  "Agency" means any executive agency as defined in 5 U.S.C. 105,
including any executive department as defined in 5 U.S.C. 101,  Government
corporation as defined in 5 U.S.C. 103, or an independent establishment in
the executive branch as defined in 5 U.S.C. 104 (other than the General
Accounting Office), and the United States Postal Service and Postal Rate
Commission.
 
(d)  "Head of an agency" means, in the case of an agency headed by more
than one person, the chair or comparable member of such agency.
 
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(e)  "Special Government employee"  means a special Government employee as
defined in 18 U.S.C. 202(a).
 
Sec. 504.  Judicial Review.  This order is intended only to improve the
internal management of the executive branch and is not intended to create
any right or benefit, substantive or procedural, enforceable at law by a
party against the United States, its agencies, its officers, or any person.
 
THE WHITE HOUSE
April 12, 1989
 
Editorial note:  For the President's message to the Congress and a fact
sheet, both dated April 12, see the Weekly Compilation of Presidential
Documents (vol. 24, no. 15).
 
 FR Doc. 89-9221
File 4-13-89; 11:56 am
 
Billing Code 3195-01-M
 
_____________________________________________________________________
 
                                                            ATTACHMENT III
 
Federal Register / Vol. 55, No. 203 / Friday, October 19, 1990 /     42547
                   Presidential Documents
___________________________________________________________________________
 
Presidential Documents
 
Executive Order 12731 of October 17, 1990
 
Principles of Ethical Conduct for Government Officers and
Employees
 
By virtue of the authority vested in me as President by the Constitution
and the laws of the United States of America, and in order to establish
fair and exacting standards of ethical conduct for all executive branch
employees, it is hereby ordered that Executive Order 12674 of April 12,
1989, is henceforth modified to read as follows:
 
"EXECUTIVE ORDER
 
"_________________
 
"PRINCIPLES OF ETHICAL CONDUCT FOR GOVERNMENT OFFICERS
AND EMPLOYEES
 
"By virtue of the authority vested in me as President by the Constitution
and the laws of the United States of America, and in order to establish
fair and exacting standards of ethical conduct for all executive branch
employees, it is hereby ordered as follows:
 
"Part I - Principles of Ethical Conduct
 
"Section 101.  Principles of Ethical Conduct.  To ensure that every citizen
can have complete confidence in the integrity of the Federal Government,
each Federal employee shall respect and adhere to the fundamental
principles of ethical service as implemented in regulations promulgated
under sections 201 and 301 of this order:
 
   "(a)  Public service is a public trust, requiring employees to place
loyalty to the Constitution, the laws, and ethical principles above
private gain.
 
   "(b)  Employees shall not hold financial interests that conflict with
the conscientious performance of duty.
 
   "(c)  Employees shall not engage in financial transactions using
nonpublic Government information or allow the improper use of such
information to further any private interest.
 
___________________________________________________________________________
 
                                 5 ( 1 of 2)
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                   Presidential Documents
___________________________________________________________________________
 
   "(d)  An employee shall not, except pursuant to such reasonable
exceptions as are provided by regulation, solicit or accept any gift or
other item of monetary value from any person or entity seeking official
action from, doing business with, or conducting activities regulated by
the employee's agency, or whose interests may be substantially affected
by the performance or nonperformance of the employee's duties.
 
   "(e)  Employees shall put forth honest effort in the performance of
their duties.
 
   "(f)  Employees shall make no unauthorized commitments or promises of
any kind purporting to bind the Government.
 
   "(g)  Employees shall not use public office for private gain.
 
   "(h)  Employees shall act impartially and not give preferential
treatment to any private organization or individual.
 
___________________________________________________________________________
 
                                 5 ( 2 of 2)
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                            Presidential Documents
___________________________________________________________________________
 
   "(i)  Employees shall protect and conserve Federal property and shall
not use it for other than authorized activities.
 
   "(j)  Employees shall not engage in outside employment or activities,
including seeking or negotiating for employment, that conflict with
official Government duties and responsibilities.
 
   "(k)  Employees shall disclose waste, fraud, abuse, and corruption to
appropriate authorities.
 
   "(l)  Employees shall satisfy in good faith their obligations as
citizens, including all just financial obligations, especially those - such
as Federal, State, or local taxes-that are imposed by law.
 
   "(m)  Employees shall adhere to all laws and regulations that provide
equal opportunity for all Americans regardless of race, color, religion,
sex, national origin, age, or handicap.
 
   "(n)  Employees shall endeavor to avoid any actions creating the
appearance that they are violating the law or the ethical standards
promulgated pursuant to this order.
 
"Sec. 102.  Limitations on Outside Earned Income.
 
   "(a)  No employee who is appointed by the President to a full-time
noncareer position in the executive branch (including full-time noncareer
employees in the White House Office, the Office of Policy Development, and
the Office of Cabinet Affairs), shall receive any earned income for any
outside employment or activity performed during that Presidential
appointment.
 
   "(b)  The prohibition set forth in subsection (a) shall not apply to any
full-time noncareer employees employed pursuant to 3 U.S.C 105 and 3 U.S.C.
107(a) at salaries below the minimum rate of basic pay then paid for GS-9
of the General Schedule.  Any outside employment must comply with relevant
agency standards of conduct, including any requirements for approval of
outside employment.
 
"PART II - Office of  Government Ethics Authority
 
"Sec. 201.  The Office of Government Ethics.  The Office of Government
Ethics shall be responsible for administering this order by:
 
   "(a)  Promulgating, in consultation with the Attorney General and the
Office of Personnel Management, regulations that establish a single,
comprehensive, and clear set of executive-branch standards of conduct that
shall be objective, reasonable, and enforceable.
 
___________________________________________________________________________
 
                                 6 ( 1 of 2)
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                            Presidential Documents
___________________________________________________________________________
 
   "(b)  Developing, disseminating, and periodically updating an ethics
manual for employees of the executive branch describing the applicable
statutes, rules, decisions, and policies.
 
   "(c)  Promulgating, with the concurrence of the Attorney General,
regulations interpreting the provisions of the post-employment statute,
section 207 of title 18, United States Code; the general
conflict-of-interest statute, section 208 of title 18, United States Code,
and the statute prohibiting supplementation of salaries, section 209 of
title 18, United States Code.
 
   "(d)  Promulgating, in consultation with the Attorney General and the
Office of Personnel Management, regulations establishing a system of
nonpublic (confidential) financial disclosure by executive branch employees
to complement the system of public disclosure under the Ethics in
Government Act of 1978.  Such regulations shall include criteria to guide
agencies in determining which employees shall submit these reports.
 
   "(e)  Ensuring that any implementing regulations issued by agencies
under this order are consistent with and promulgated in accordance with
this order.
 
"Sec. 202.  Executive Office of the President.  In that the agencies within
the Executive Office of the President (EOP) currently exercise functions
that are
 
___________________________________________________________________________
 
                                 6 ( 2 of 2)
 
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                                                            ATTACHMENT III
 
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                   Presidential Documents
___________________________________________________________________________
 
not distinct and separate from each other within the meaning and for the
purposes of section 207(e) of title 18, United States Code, those agencies
shall be treated as one agency under section 207(c) of title 18, United
States Code.
 
"PART III - Agency Responsibility
 
"Sec. 301.  Agency Responsibilities.  Each agency head is directed to:
 
   "(a)  Supplement, as necessary and appropriate, the comprehensive
executive-branch-wide regulations of the Office of Government Ethics, with
regulations of special applicability to the particular functions and
activities of that agency.  Any supplementary agency regulations shall be
prepared as addenda to the branch-wide regulations and promulgated jointly
with the Office of Government Ethics, at the agency's expense, for
inclusion in Title 5 of the Code of Federal Regulations.
 
   "(b)  Ensure the review by all employees of this order and regulations
promulgated pursuant to the order.
 
   "(c)  Coordinate with the Office of Government Ethics in developing
annual agency ethics training plans.  Such training shall include mandatory
annual briefings on ethics and standards of conduct for all employees
appointed by the President, all employees in the Executive Office of the
President, all officials required to file public or nonpublic financial
disclosure reports, all employees who are contracting officers and
procurement officials, and any other employees designated by the agency
head.
 
   "(d)  Where practicable, consult formally or informally with the Office
of Government Ethics prior to granting any exemption under section 208 of
title 18, United States Code, and provide the Director of the Office of
Government Ethics a copy of any exemption granted.
 
   "(e)  Ensure that the rank, responsibilities, authority, staffing, and
resources of the Designated Agency Ethics Official are sufficient to ensure
the effectiveness of the agency ethics program.  Support should include the
provision of a separate budget line item for ethics activities, where
practicable.
 
"PART IV - Delegations of Authority
 
"Sec. 401.  Delegations to Agency Heads.  Except in the case of the head of
an agency, the authority of the President under section 203(d), 205(e), and
208(b) of title 18, United States Code, to grant exemptions or approvals to
individuals, is delegated to the head of the agency in which an individual
requiring an exemption or approval is employed or to which the individual
(or the committee, commission, board, or similar group employing the
individual) is attached for purposes of administration.
___________________________________________________________________________
 
                                 7 ( 1 of 2)
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                   Presidential Documents
___________________________________________________________________________
 
"Sec. 402.  Delegations to the Counsel to the President.
 
   "(a)  Except as provided in section 401, the authority of the President
under section 203(d), 205(e), and 208(b) of title 18, United States Code,
to grant exemptions or approvals for Presidential appointees to committees,
commissions, boards, or similar groups established by the President is
delegated to the Counsel to the President.
 
   "(b)  The authority of the President under sections 203(d), 205(e), and
208(b) of title 18, United States Code, to grant exemptions or approvals
for individuals appointed pursuant to 3 U.S.C. 105 and 3 U.S.C. 107(a), is
delegated to the Counsel to the President.
 
___________________________________________________________________________
 
                                 7 ( 2 of 2)
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"Sec. 403.  Delegation Regarding Civil Service.  The Office of Personnel
Management and the Office of Government Ethics, as appropriate, are
delegated the authority vested in the President by 5 U.S.C. 7301 to
establish general regulations for the implementation of this Executive
order.
 
"PART V - General Provisions
 
"Sec. 501.  Revocations.  The following Executive orders are hereby
revoked:
 
   "(a)  Executive Order No. 11222 of May 8, 1965.
 
   "(b)  Executive Order No. 12565 of September 25, 1986.
 
"Sec. 502.  Savings Provision.
 
   "(a)  All actions already taken by the President or by his delegates
concerning matters affected by this order and in force when this order is
issued, including any regulations issued under Executive Order 11222,
Executive Order 12565, or statutory authority, shall, except as they are
irreconcilable with the provisions of this order or terminate by operation
of law or by Presidential action, remain in effect until properly amended,
modified, or revoked pursuant to the authority conferred by this order or
any regulations promulgated under this order.  Notwithstanding anything in
section 102 of this order, employees may carry out preexisting contractual
obligations entered into before the date of this order.
 
   "(b)  Financial reports filed in confidence (pursuant to the authority
of Executive Order No. 11222, 5 C.F.R. Part 735, and individual agency
regulations) shall continue to be held in confidence.
 
"Sec. 503.  Definitions.  For purposes of this order, the term:
 
   "(a)  'Contracting officers and procurement officials' means all such
officers and officials as defined in the Office of Federal Procurement
Policy Act Amendments of 1988.
 
   "(b)  'Employee' means any officer or employee of an agency, including a
special Government employee.
 
   "(c)  'Agency' means any executive agency as defined in 5 U.S.C. 105,
including any executive department as defined in 5 U.S.C. 101, Government
corporation as defined in 5 U.S.C. 103, or an independent establishment in
the executive branch as defined in 5 U.S.C. 104 (other than the General
Accounting Office), and the United States Postal Service and Postal Rate
Commission.
 
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   "(d)  'Head of an agency' means, in the case of an agency headed by more
than one person, the chair or comparable member of such agency.
 
   "(e)  'Special Government employee' means a special Government employee
as defined in 18 U.S.C. 202(a).
 
"Sec. 504.  Judicial Review.  This order is intended only to improve the
internal management of the executive branch and is not intended to create
any right or benefit, substantive or procedural, enforceable at law by a
party against the United States, its agencies, its officers, or any
person.".
 
THE WHITE HOUSE.
 
October 17, 1990
 
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