[Federal Register: August 4, 1998 (Volume 63, Number 149)]
[Proposed Rules]
[Page 41476-41477]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04au98-21]
========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
[[Page 41476]]
-----------------------------------------------------------------------
OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2635
RIN 3209-AA04
Standards of Ethical Conduct for Employees of the Executive
Branch
AGENCY: Office of Government Ethics (OGE).
ACTION: Proposed rule; amendments.
-----------------------------------------------------------------------
SUMMARY: The Office of Government Ethics is proposing minor amendments
to the regulation governing standards of ethical conduct for executive
branch employees, to conform with interpretive advice and to improve
clarity concerning gifts from outside sources.
DATES: Comments are invited and must be received before October 5,
1998.
ADDRESSES: Send comments to the Office of Government Ethics, Suite 500,
1201 New York Avenue, NW., Washington, DC 20005-3917, Attention: G. Sid
Smith.
FOR FURTHER INFORMATION CONTACT: G. Sid Smith, Senior Associate General
Counsel, Office of Government Ethics; telephone: 202-208-8000; TDD:
202-208-8025; FAX: 202-208-8037; Internet E-mail address: usoge@oge.gov
(for E-mail messages, the subject line should include the following
sentence--Rulemaking to amend standards of ethical conduct sections on
gifts).
SUPPLEMENTARY INFORMATION:
I. Background
    Some six years ago, the Office of Government Ethics (OGE) issued a
final rule establishing the standards of ethical conduct, under
authority of section 201(a) of Executive Order 12674 (57 FR 35006-
35067, August 7, 1992). These standards and the examples therein, as
amended and codified at 5 CFR part 2635, are the primary source of
guidance for ethics officials and employees throughout the executive
branch in applying the fourteen fundamental principles of ethical
conduct contained in the Executive order. By final rule published at 62
FR 48746-48748 (September 17, 1997), OGE amended the standards of
ethical conduct regulation, which removed superseded references to the
former honorarium bar, reflected statutory changes on procurement
integrity, added references to a new regulation on conflicts of
interest (5 CFR part 2640), and made other minor corrections and
updates.
    Based on feedback from the ethics community, OGE believes that the
standards of ethical conduct are generally fulfilling the intended
goals of the Executive order in establishing useful, practical
guidelines for the executive branch. Over the past six years, OGE has
provided interpretive advice to ethics officials on the application of
these standards, as specific fact patterns have arisen. As a result,
OGE has determined that selected provisions in the standards should now
be amended, in order to codify some of that advice and to clarify the
intended meaning of the regulatory language. Minor amendments proposed
herein will accomplish that with respect to certain provisions in
subpart B (Gifts From Outside Sources). The Office of Government Ethics
will separately propose minor amendments to other sections of the
standards of ethical conduct, to further codify interpretive advice and
to improve clarity.
II. Analysis of Proposed Amendments
Section 2635.203
    Sections 2635.202 and 2635.203 of the standards of ethical conduct
regulation (5 CFR part 2635), published as a final rule in 1992,
implemented the general ban on soliciting or accepting gifts from
prohibited sources described in 5 U.S.C. 7353 and section 101(d) of
Executive Order 12674. In addition, Sec. 2635.202(a)(2) included a
general ban on soliciting or accepting gifts from outside sources if
given because of the employee's official position. As indicated in the
preamble to the proposed standards of conduct regulation in 1991 (56 FR
33780), this latter provision was intended to codify OGE's longstanding
interpretation that employees must avoid actions that might result in
or create the appearance of using public office for private gain, a
principle that was reinvigorated in 1989 by sections 101(g) and 101(n)
of Executive Order 12674.
    Gifts given ``because of the employee's official position'' are, as
defined in Sec. 2635.203(e), those which would not have been solicited,
offered, or given had the employee not held his position as a Federal
employee. This definition has been applied too broadly by some, in
OGE's view, to encompass gifts based on the mere happenstance that the
recipient is a Government employee, rather than confining it to
situations where gifts are motivated by Federal employment status,
position, or the authority and duties related thereto.
    Therefore, in order to fully effectuate the intent of this
prohibition, OGE proposes to amend the definition of gifts given
because of the employee's official position at Sec. 2635.203(e), by
clarifying that it applies only where the gift would not have been
solicited, offered, or given had the employee not held the status,
authority or duties associated with his Federal position. New Example 2
further illustrates this intended meaning.
Section 2635.204
    Section 2635.204 of the standards of ethical conduct regulation
established certain exemptions from the gift prohibitions discussed
above, as authorized by 5 U.S.C. 7353 and Executive Order 12674. The
introductory text of that section currently notes that a gift accepted
under one of the exceptions will not be deemed to violate the fourteen
general principles of ethical behavior contained in Sec. 2635.101(b)
and Executive Order 12674. Some ethics officials and employees have
misunderstood the primary intent of this statement, which is that
appearance concerns will not preclude use of the gift exceptions or
require an employee to reject a gift which falls within one of the
exceptions.
    The proposed revision to the introductory text of Sec. 2635.204
highlights the appearance standard as the primary principle among the
fourteen that are deemed not to override acceptance of a gift under one
of the exceptions. As indicated in the 1992 preamble to the final
standards of ethical conduct regulation at 57 FR 35012, this primacy of
the gift exceptions over appearance concerns helps promote consistency
in application of the gift provisions. Also, as that preamble
indicated, appearance
[[Page 41477]]
concerns are already built into the conditions required for use of the
various gift exceptions, which should allay any concerns that the
appearance standard might be ignored. Moreover, a cautionary statement
in the introductory text of Sec. 2635.204 remains, to alert employees
that it may sometimes be prudent not to accept gifts even though
permitted, and Sec. 2635.202(c)(3) limits the over-frequent acceptance
of gifts under the exceptions because of the appearance of using public
office for private gain.
Section 2635.204(a)
    The exception for gifts aggregating $20 or less per occasion has
caused confusion for some ethics officials and employees as to whether
all gifts at a particular event must be aggregated or only gifts from
each source. A review of the preambles to the proposed and final
standards of ethical conduct regulation has led to OGE's interpretation
that only gifts from the same source must be aggregated in determining
whether the value is $20 or less (see 56 FR 33781 and 57 FR 35015-
35016). Therefore, the proposed amendment to Sec. 2635.204(a) specifies
that the de minimis exception allows gifts aggregating $20 or less
``per source per occasion,'' and provides a new example.
    To interpret the rule otherwise could unnecessarily restrict
acceptance of de minimis gifts to those from the first source that
happens to reach a particular employee at an event or occasion.
Furthermore, applying the $20 maximum to gifts from all sources per
occasion would thwart the intent of the de minimis exception, which
otherwise focuses on each source. Thus, the term ``per occasion'' was
intended to apply in the same manner as the term ``in a calendar
year,'' for which an aggregate $50 limit from each source applies under
Sec. 2635.204(a).
    This proposed amendment effectuating OGE's interpretation that the
$20 limit applies per source per occasion will not permit an employee
to accept an inappropriately high total value of gifts at a particular
occasion or event, as Sec. 2635.202(c)(3) still restricts acceptance
from the same or different sources on so frequent a basis that it
creates an appearance of using public office for private gain. Nor will
it permit an employee to accept a gift worth more than $20 toward which
several sources have each contributed $20 or less, because a gift is
not divisible for acceptance purposes unless it consists of distinct
and separate items. This applies equally to a meal, which OGE does not
consider to be divisible.
III. Matters of Regulatory Procedure
Executive Order 12866
    In promulgating these proposed rule amendments, OGE has adhered to
the regulatory philosophy and the applicable principles of regulation
set forth in section 1 of Executive Order 12866, Regulatory Planning
and Review. These proposed amendments have also been reviewed by the
Office of Management and Budget under that Executive order.
Regulatory Flexibility Act
    As Deputy Director of the Office of Government Ethics, I certify
under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this
rulemaking will not have a significant economic impact on a substantial
number of small entities because it primarily affects Federal executive
branch agencies and their employees.
Paperwork Reduction Act
    The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
because these proposed amendments do not contain any information
collection requirements that require the approval of the Office of
Management and Budget.
List of Subjects in Part 2635
    Conflict of interests, Executive branch standards of ethical
conduct, Government employees.
    Approved: July 29, 1998.
F. Gary Davis,
Deputy Director, Office of Government Ethics.
    For the reasons set forth in the preamble, the Office of Government
Ethics proposes to amend part 2635 of subchapter B of chapter XVI of
title 5 of the Code of Federal Regulations, as follows:
PART 2635--[AMENDED]
    1. The authority citation for part 2635 continues to read as
follows:
    Authority: 5 U.S.C. 7301, 7351, 7353; 5 U.S.C. App. (Ethics in
Government Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp.,
p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp.,
p. 306.
    2. Section 2635.203 is amended by revising paragraph (e) and adding
a new Example 2 after that paragraph to read as follows:
Sec. 2635.203  Definitions.
* * * * *
    (e) A gift is solicited or accepted because of the employee's
official position if it is from a person other than an employee and
would not have been solicited, offered, or given had the employee not
held the status, authority or duties associated with his Federal
position.
* * * * *
    Example 2: Employees at a regional office of the Department of
Justice (DOJ) work in Government-leased space at a private office
building, along with various private business tenants. A major fire
in the building during normal office hours causes a traumatic
experience for all occupants of the building in making their escape,
and it is the subject of widespread news coverage. A corporate hotel
chain, which does not meet the definition of a prohibited source for
DOJ, seizes the moment and announces that it will give a free
night's lodging to all building occupants and their families, as a
public goodwill gesture. Employees of DOJ may accept, as this gift
is not being given because of their Government positions. The
donor's motivation for offering this gift is unrelated to the DOJ
employees' status, authority or duties associated with their Federal
position, but instead is based on their mere presence in the
building as occupants at the time of the fire.
* * * * *
    3. The undesignated introductory text of Sec. 2635.204 is amended
by revising the first sentence to read as follows:
Sec. 2635.204  Exceptions.
    The prohibitions set forth in Sec. 2635.202(a) do not apply to a
gift accepted under the circumstances described in paragraphs (a)
through (l) of this section, and an employee's acceptance of a gift in
accordance with one of those paragraphs will be deemed not to violate
the principles set forth in Sec. 2635.101(b), including appearances. *
* *
* * * * *
    4. Paragraph (a) of Sec. 2635.204 is amended by adding the words
``per source'' before the words ``per occasion'' in the first sentence,
and by adding a new Example 5 after paragraph (a) to read as follows:
Sec. 2635.204  Exceptions.
* * * * *
    (a) * * *
* * * * *
    Example 5: During off-duty time, an employee of the Department
of Defense (DOD) attends a trade show involving companies that are
DOD contractors. He is offered a $15 computer program disk at X
Company's booth, a $12 appointments calendar at Y Company's booth,
and a deli lunch worth $8 from Z Company. The employee may accept
all three of these items because they do not exceed $20 per source,
even though they total more than $20 at this single occasion.
* * * * *
[FR Doc. 98-20717 Filed 8-3-98; 8:45 am]
BILLING CODE 6345-01-U