STANDARDS OF ETHICAL CONDUCT 
                     FOR EMPLOYEES OF THE 
                        EXECUTIVE BRANCH

                         October 2002
                              
                

                    Final Regulation Issued by
               the U.S. Office of Government Ethics

         Codified in 5 C.F.R. Part 2635 (1/1/02 Edition),
         as amended at 67 FR 61761-61762 (Oct. 2, 2002)
         
_______________________________________________________________________                                 
                                                                       
                                                            

                        TABLE OF CONTENTS

SUBPART A - GENERAL PROVISIONS 
     &#167; 2635.101 Basic obligation of public service
     &#167; 2635.102 Definitions
     &#167; 2635.103 Applicability to members of the uniformed services
     &#167; 2635.104 Applicability to employees on detail
     &#167; 2635.105 Supplemental agency regulations
     &#167; 2635.106 Disciplinary and corrective action
     &#167; 2635.107 Ethics advice

SUBPART B - GIFTS FROM OUTSIDE SOURCES 
     &#167; 2635.201 Overview
     &#167; 2635.202 General standards
     &#167; 2635.203 Definitions
     &#167; 2635.204 Exceptions
     &#167; 2635.205 Proper disposition of prohibited gifts

SUBPART C - GIFTS BETWEEN EMPLOYEES
     &#167; 2635.301 Overview
     &#167; 2635.302 General standards
     &#167; 2635.303 Definitions
     &#167; 2635.304 Exceptions

SUBPART D - CONFLICTING FINANCIAL INTEREST
     &#167; 2635.401 Overview
     &#167; 2635.402 Disqualifying financial interests
     &#167; 2635.403 Prohibited financial interests

SUBPART E - IMPARTIALITY IN PERFORMING OFFICIAL DUTIES 
     &#167; 2635.501 Overview
     &#167; 2635.502 Personal and business relationships
     &#167; 2635.503 Extraordinary payments from former employers

SUBPART F - SEEKING OTHER EMPLOYMENT 
     &#167; 2635.601 Overview
     &#167; 2635.602 Applicability and related considerations
     &#167; 2635.603 Definitions
     &#167; 2635.604 Disqualification while seeking employment
     &#167; 2635.605 Waiver or authorization permitting participation 
                while seeking employment
     &#167; 2635.606 Disqualification based on an arrangement concerning
                prospective employment or otherwise after negotiations
                 
SUBPART G - MISUSE OF POSITION 
     &#167; 2635.701 Overview
     &#167; 2635.702 Use of public office for private gain
     &#167; 2635.703 Use of nonpublic information
     &#167; 2635.704 Use of Government property
     &#167; 2635.705 Use of official time

SUBPART H - OUTSIDE ACTIVITIES 
     &#167; 2635.801 Overview
     &#167; 2635.802 Conflicting outside employment and activities
     &#167; 2635.803 Prior approval for outside employment and activities
     &#167; 2635.804 Outside earned income limitations applicable to certain 
                Presidential appointees and other noncareer employees
     &#167; 2635.805 Service as an expert witness
     &#167; 2635.806 Participation in professional associations. [Reserved]
     &#167; 2635.807 Teaching, speaking and writing
     &#167; 2635.808 Fundraising activities 
     &#167; 2635.809 Just financial obligations

SUBPART I - RELATED STATUTORY AUTHORITIES
     &#167; 2635.901 General
     &#167; 2635.902 Related statutes



     PART 2635 - STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EXECUTIVE
		      BRANCH

                 SUBPART A - GENERAL PROVISIONS

&#167; 2635.101 Basic obligation of public service.

(a)     Public service is a public trust.  Each employee has a responsibility to
	the United States Government and its citizens to place loyalty to the
	Constitution, laws and ethical principles above private gain.  To ensure
	that every citizen can have complete confidence in the integrity of the
	Federal Government, each employee shall respect and adhere to the
	principles of ethical conduct set forth in this section, as well as the
	implementing standards contained in this part and in supplemental agency
	regulations.

(b)     General principles.  The following general principles apply to every
	employee and may form the basis for the standards contained in this
	part.  Where a situation is not covered by the standards set forth in
	this part, employees shall apply the principles set forth in this
	section in determining whether their conduct is proper.

  	(1)  Public service is a public trust, requiring employees to place
	     loyalty to the Constitution, the laws and ethical principles above
	     private gain.

	(2)  Employees shall not hold financial interests that conflict with the
	     conscientious performance of duty.

	(3)  Employees shall not engage in financial transactions using
	     nonpublic Government information or allow the improper use of such
	     information to further any private interest.

	(4)  An employee shall not, except as permitted by subpart B of this
	     part, 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.

   	(5)  Employees shall put forth honest effort in the performance of their
	     duties.

   	(6)  Employees shall not knowingly make unauthorized commitments or
	     promises of any kind purporting to bind the Government.

  	(7)  Employees shall not use public office for private gain.

  	(8)  Employees shall act impartially and not give preferential treatment
	     to any private organization or individual.

	(9)  Employees shall protect and conserve Federal property and shall not
	     use it for other than authorized activities.

   	(10) Employees shall not engage in outside employment or activities,
	     including seeking or negotiating for employment, that conflict with
	     official Government duties and responsibilities.

   	(11) Employees shall disclose waste, fraud, abuse, and corruption to
	     appropriate authorities.

   	(12) 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.

   	(13) 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.

   	(14) Employees shall endeavor to avoid any actions creating the
	     appearance that they are violating the law or the ethical standards
	     set forth in this part.  Whether particular circumstances create an
	     appearance that the law or these standards have been violated shall
	     be determined from the perspective of a reasonable person with
	     knowledge of the relevant facts.

(c)     Related statutes.  In addition to the standards of ethical conduct set
	forth in this part, there are conflict of interest statutes that
	prohibit certain conduct.  Criminal conflict of interest statutes of
	general applicability to all employees, 18 U.S.C. 201, 203, 205, 208,
	and 209, are summarized in the appropriate subparts of this part and
	must be taken into consideration in determining whether conduct is
	proper.  Citations to other generally applicable statutes relating to
	employee conduct are set forth in subpart I and employees are further
	cautioned that there may be additional statutory and regulatory
	restrictions applicable to them generally or as employees of their
	specific agencies.  Because an employee is considered to be on notice of
	the requirements of any statute, an employee should not rely upon any
	description or synopsis of a statutory restriction, but should refer to
	the statute itself and obtain the advice of an agency ethics official as
	needed.

&#167; 2635.102 Definitions.

The definitions listed below are used throughout this part.  Additional
definitions appear in the subparts or sections of subparts to which they apply.
For purposes of this part:

(a)	Agency means an executive agency as defined in 5 U.S.C. 105 and the
	Postal Service and the Postal Rate Commission.  It does not include the
	General Accounting Office or the Government of the District of Columbia.

(b)     Agency designee refers to any employee who, by agency regulation,
	instruction, or other issuance, has been delegated authority to make any
	determination, give any approval, or take any other action required or
	permitted by this part with respect to another employee.  An agency may
	delegate these authorities to any number of agency designees necessary
	to ensure that determinations are made, approvals are given, and other
	actions are taken in a timely and responsible manner.  Any provision
	that requires a determination, approval, or other action by the agency
	designee shall, where the conduct in issue is that of the agency head,
	be deemed to require that such determination, approval or action be made
	or taken by the agency head in consultation with the designated agency
	ethics official.

(c)     Agency ethics official refers to the designated agency ethics official
	or to the alternate designated agency ethics official, referred to in &#167;
	2638.202(b) of this chapter, and to any deputy ethics official,
	described in &#167; 2638.204 of this chapter, who has been delegated
	authority to assist in carrying out the responsibilities of the
	designated agency ethics official.

(d)     Agency programs or operations refers to any program or function carried
	out or performed by an agency, whether pursuant to statute, Executive
	order, or regulation.

(e)     Corrective action includes any action necessary to remedy a past
	violation or prevent a continuing violation of this part, including but
	not limited to restitution, change of assignment, disqualification,
	divestiture, termination of an activity, waiver, the creation of a
	qualified diversified or blind trust, or counseling.

(f)     Designated agency ethics official refers to the official designated
	under &#167; 2638.201 of this chapter.

(g)     Disciplinary action includes those disciplinary actions referred to in
	Office of Personnel Management regulations and instructions implementing
	provisions of title 5 of the United States Code or provided for in
	comparable provisions applicable to employees not subject to title 5,
	including but not limited to reprimand, suspension, demotion, and
	removal.  In the case of a military officer, comparable provisions may
	include those in the Uniform Code of Military Justice.

(h)     Employee means any officer or employee of an agency, including a special
	Government employee.  It includes officers but not enlisted members of
	the uniformed services.  For purposes other than subparts B and C of
	this part, it does not include the President or Vice President.  Status
	as an employee is unaffected by pay or leave status or, in the case of a
	special Government employee, by the fact that the individual does not
	perform official duties on a given day.

(i)     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.

(j)     He, his, and him include she, hers and her.

(k)     Person  means an individual, corporation and subsidiaries it controls,
	company, association, firm, partnership, society, joint stock company,
	or any other organization or institution, including any officer,
	employee, or agent of such person or entity.  For purposes of this part,
	a corporation will be deemed to control a subsidiary if it owns 50
	percent or more of the subsidiary's voting securities.  The term is all-
	inclusive and applies to commercial ventures and nonprofit organizations
	as well as to foreign, State, and local governments, including the
	Government of the District of Columbia.  It does not include any agency
	or other entity of the Federal Government or any officer or employee
	thereof when acting in his official capacity on behalf of that agency or
	entity.

(l)     Special Government employee means those executive branch officers or
	employees specified in 18 U.S.C. 202(a).  A special Government employee
	is retained, designated, appointed, or employed to perform temporary
	duties either on a full-time or intermittent basis, with or without
	compensation, for a period not to exceed 130 days during any consecutive
	365-day period.

(m)     Supplemental agency regulation means a regulation issued pursuant to &#167;
	2635.105.

&#167; 2635.103 Applicability to members of the uniformed services.

The provisions of this part, except this section, are not applicable to enlisted
members of the uniformed services.  Each agency with jurisdiction over enlisted
members of the uniformed services shall issue regulations defining the ethical
conduct obligations of enlisted members under its jurisdiction.  Those
regulations shall be consistent with Executive Order 12674, April 12, 1989, as
modified, and may prescribe the full range of statutory and regulatory
sanctions, including those available under the Uniform Code of Military Justice,
for failure to comply with such regulations.

&#167; 2635.104 Applicability to employees on detail.

(a)     Details to other agencies.  Except as provided in paragraph (d) of this
	section, an employee on detail, including a uniformed officer on
	assignment, from his employing agency to another agency for a period in
	excess of 30 calendar days shall be subject to any supplemental agency
	regulations of the agency to which he is detailed rather than to any
	supplemental agency regulations of his employing agency.

(b)     Details to the legislative or judicial branch.  An employee on detail,
	including a uniformed officer on assignment, from his employing agency
	to the legislative or judicial branch for a period in excess of 30
	calendar days shall be subject to the ethical standards of the branch or
	entity to which detailed.  For the duration of any such detail or
	assignment, the employee shall not be subject to the provisions of this
	part, except this section, or, except as provided in paragraph (d) of
	this section, to any supplemental agency regulations of his employing
	agency, but shall remain subject to the conflict of interest
	prohibitions in title 18 of the United States Code.

(c)     Details to non-Federal entities.  Except to the extent exempted in
	writing pursuant to this paragraph, an employee detailed to a non-
	Federal entity remains subject to this part and to any supplemental
	agency regulation of his employing agency.  When an employee is detailed
	pursuant to statutory authority to an international organization or to a
	State or local government for a period in excess of six months, the
	designated agency ethics official may grant a written exemption from
	subpart B of this part based on his determination that the entity has
	adopted written ethical standards covering solicitation and acceptance
	of gifts which will apply to the employee during the detail and which
	will be appropriate given the purpose of the detail.

(d)     Applicability of special agency statutes.  Notwithstanding paragraphs
	(a) and (b) of this section, an employee who is subject to an agency
	statute which restricts his activities or financial holdings
	specifically because of his status as an employee of that agency shall
	continue to be subject to any provisions in the supplemental agency
	regulations of his employing agency that implement that statute.

&#167; 2635.105 Supplemental agency regulations.

In addition to the regulations set forth in this part, an employee shall comply
with any supplemental agency regulations issued by his employing agency under
this section.

(a)     An agency that wishes to supplement this part shall prepare and submit
	to the Office of Government Ethics, for its concurrence and joint
	issuance, any agency regulations that supplement the regulations
	contained in this part.  Supplemental agency regulations which the
	agency determines are necessary and appropriate, in view of its programs
	and operations, to fulfill the purposes of this part shall be:

   	(1)  In the form of a supplement to the regulations in this part; and

   	(2)  In addition to the substantive provisions of this part.

(b)     After concurrence and co-signature by the Office of Government Ethics,
	the agency shall submit its supplemental agency regulations to the
	Federal Register for publication and codification at the expense of the
	agency in title 5 of the Code of Federal Regulations. Supplemental
	agency regulations issued under this section are effective only after
	concurrence and co-signature by the Office of Government Ethics and
	publication in the Federal Register.

(c)     This section applies to any supplemental agency regulations or
	amendments thereof issued under this part.  It does not apply to:

   	(1)  A handbook or other issuance intended merely as an explanation of
	the standards contained in this part or in supplemental agency
	regulations;

   	(2)  An instruction or other issuance the purpose of which is to:

             (i)   Delegate to an agency designee authority to make any
		   determination, give any approval or take any other action
		   required or permitted by this part or by supplemental agency
		   regulations; or

	     (ii)  Establish internal agency procedures for documenting or
		   processing any determination, approval or other action
		   required or permitted by this part or by supplemental agency
		   regulations, or for retaining any such documentation; or

   	(3)  Regulations or instructions that an agency has authority,
	     independent of this part, to issue, such as regulations
	     implementing an agency's gift acceptance statute, protecting
	     categories of nonpublic information or establishing standards for
	     use of Government vehicles.  Where the content of any such
	     regulations or instructions was included in the agency's standards
	     of conduct regulations issued pursuant to Executive Order 11222 and
	     the Office of Government Ethics concurs that they need not be
	     issued as part of an agency's supplemental agency regulations,
	     those regulations or instructions may be promulgated separately
	     from the agency's supplemental agency regulations.

&#167; 2635.106 Disciplinary and corrective action.

(a)     Except as provided in &#167; 2635.107, a violation of this part or of
	supplemental agency regulations may be cause for appropriate corrective
	or disciplinary action to be taken under applicable Governmentwide
	regulations or agency procedures.  Such action may be in addition to any
	action or penalty prescribed by law.

(b)     It is the responsibility of the employing agency to initiate appropriate
	disciplinary or corrective action in individual cases.  However,
	corrective action may be ordered or disciplinary action recommended by
	the Director of the Office of Government Ethics under the procedures at
	part 2638 of this chapter.

(c)     A violation of this part or of supplemental agency regulations, as such,
	does not create any right or benefit, substantive or procedural,
	enforceable at law by any person against the United States, its
	agencies, its officers or employees, or any other person.  Thus, for
	example, an individual who alleges that an employee has failed to adhere
	to laws and regulations that provide equal opportunity regardless of
	race, color, religion, sex, national origin, age, or handicap is
	required to follow applicable statutory and regulatory procedures,
	including those of the Equal Employment Opportunity Commission.

&#167; 2635.107 Ethics advice.

(a)     As required by &#167;&#167; 2638.201 and 2638.202(b) of this chapter, each agency
	has a designated agency ethics official who, on the agency's behalf, is
	responsible for coordinating and managing the agency's ethics program,
	as well as an alternate.  The designated agency ethics official has
	authority under &#167; 2638.204 of this chapter to delegate certain
	responsibilities, including that of providing ethics counseling
	regarding the application of this part, to one or more deputy ethics
	officials.

(b)     Employees who have questions about the application of this part or any
	supplemental agency regulations to particular situations should seek
	advice from an agency ethics official. Disciplinary action for violating
	this part or any supplemental agency regulations will not be taken
	against an employee who has engaged in conduct in good faith reliance
	upon the advice of an agency ethics official, provided that the
	employee, in seeking such advice, has made full disclosure of all
	relevant circumstances.  Where the employee's conduct violates a
	criminal statute, reliance on the advice of an agency ethics official
	cannot ensure that the employee will not be prosecuted under that
	statute.  However, good faith reliance on the advice of an agency ethics
	official is a factor that may be taken into account by the Department of
	Justice in the selection of cases for prosecution.  Disclosures made by
	an employee to an agency ethics official are not protected by an
	attorney-client privilege.  An agency ethics official is required by 28
	U.S.C. 535 to report any information he receives relating to a violation
	of the criminal code, title 18 of the United States Code.

          
                 SUBPART B - GIFTS FROM OUTSIDE SOURCES

&#167; 2635.201 Overview.

This subpart contains standards that prohibit an employee from soliciting or
accepting any gift from a prohibited source or given because of the employee's
official position unless the item is excluded from the definition of a gift or
falls within one of the exceptions set forth in this subpart.

&#167; 2635.202 General standards.

(a)     General prohibitions.  Except as provided in this subpart, an employee
	shall not, directly or indirectly, solicit or accept a gift:

   	(1)  From a prohibited source; or

   	(2)  Given because of the employee's official position.

(b)     Relationship to illegal gratuities statute.  Unless accepted in
	violation of paragraph (c)(1) of this section, a gift accepted under the
	standards set forth in this subpart shall not constitute an illegal
	gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B).

(c)     Limitations on use of exceptions.  Notwithstanding any exception
	provided in this subpart, other than &#167; 2635.204(j), an employee shall
	not:

   	(1)  Accept a gift in return for being influenced in the performance of
	     an official act;

   	(2)  Solicit or coerce the offering of a gift;

   	(3)  Accept gifts from the same or different sources on a basis so
	     frequent that a reasonable person would be led to believe the
	     employee is using his public office for private gain;

	     Example 1:  A purchasing agent for a Veterans Administration
	     hospital routinely deals with representatives of pharmaceutical
	     manufacturers who provide information about new company products.
	     Because of his crowded calendar, the purchasing agent has offered
	     to meet with manufacturer representatives during his lunch hours
	     Tuesdays through Thursdays and the representatives routinely arrive
	     at the employee's office bringing a sandwich and a soft drink for
	     the employee.  Even though the market value of each of the lunches
	     is less than $6 and the aggregate value from any one manufacturer
	     does not exceed the $50 aggregate limitation in &#167; 2635.204(a) on de
	     minimis gifts of $20 or less, the practice of accepting even these
	     modest gifts on a recurring basis is improper.

   	(4)  Accept a gift in violation of any statute.  Relevant statutes
	     applicable to all employees include:

   	     (i)   18 U.S.C. 201(b), which prohibits a public official from
		   seeking, accepting, or agreeing to receive or accept anything
		   of value in return for being influenced in the performance of
		   an official act or for being induced to take or omit to take
		   any action in violation of his official duty.  As used in 18
		   U.S.C. 201(b), the term "public official" is broadly
		   construed and includes regular and special Government
		   employees as well as all other Government officials; and

             (ii)  18 U.S.C. 209, which prohibits an employee, other than a
		   special Government employee, from receiving any salary or any
		   contribution to or supplementation of salary from any source
		   other than the United States as compensation for services as
		   a Government employee.  The statute contains several specific
		   exceptions to this general prohibition, including an
		   exception for contributions made from the treasury of a
		   State, county, or municipality; or

   	(5)  Accept vendor promotional training contrary to applicable
	     regulations, policies or guidance relating to the procurement of
	     supplies and services for the Government, except pursuant to &#167;
	     2635.204(l).

&#167; 2635.203 Definitions.

For purposes of this subpart, the following definitions shall apply:

(a)     Agency  has the meaning set forth in &#167; 2635.102(a).  However, for
	purposes of this subpart, an executive department, as defined in 5
	U.S.C. 101, may, by supplemental agency regulation, designate as a
	separate agency any component of that department which the department
	determines exercises distinct and separate functions.

(b)     Gift  includes any gratuity, favor, discount, entertainment,
	hospitality, loan, forbearance, or other item having monetary value.  It
	includes services as well as gifts of training, transportation, local
	travel, lodgings and meals, whether provided in-kind, by purchase of a
	ticket, payment in advance, or reimbursement after the expense has been
	incurred.  It does not include:

   	(1)  Modest items of food and refreshments, such as soft drinks, coffee
	     and donuts, offered other than as part of a meal;

   	(2)  Greeting cards and items with little intrinsic value, such as
	     plaques, certificates, and trophies, which are intended solely for
	     presentation;

	(3)  Loans from banks and other financial institutions on terms
	     generally available to the public;

	(4)  Opportunities and benefits, including favorable rates and
	     commercial discounts, available to the public or to a class
	     consisting of all Government employees or all uniformed military
	     personnel, whether or not restricted on the basis of geographic
	     considerations;

	(5)  Rewards and prizes given to competitors in contests or events,
	     including random drawings, open to the public unless the employee's
	     entry into the contest or event is required as part of his official
	     duties;

	(6)  Pension and other benefits resulting from continued participation
	     in an employee welfare and benefits plan maintained by a former
	     employer;

   	(7)  Anything which is paid for by the Government or secured by the
	     Government under Government contract;

             Note:  Some airlines encourage those purchasing tickets to join
	     programs that award free flights and other benefits to frequent
	     fliers.  Any such benefit earned on the basis of Government-
	     financed travel belongs to the agency rather than to the employee
	     and may be accepted only insofar as provided under 41 CFR part
	     301-53.

   	(8)  Any gift accepted by the Government under specific statutory
	     authority, including:

             (i)   Travel, subsistence, and related expenses accepted by an
		   agency under the authority of 31 U.S.C. 1353 in connection
		   with an employee's attendance at a meeting or similar
		   function relating to his official duties which takes place
		   away from his duty station. The agency's acceptance must be
		   in accordance with the implementing regulations at 41 CFR
		   part 304-1; and

             (ii)  Other gifts provided in-kind which have been accepted by an
		   agency under its agency gift acceptance statute; or

   	(9)  Anything for which market value is paid by the employee.

(c)     Market value means the retail cost the employee would incur to purchase
	the gift.  An employee who cannot ascertain the market value of a gift
	may estimate its market value by reference to the retail cost of similar
	items of like quality.  The market value of a gift of a ticket entitling
	the holder to food, refreshments, entertainment, or any other benefit
	shall be the face value of the ticket.

   	Example 1:  An employee who has been given an acrylic paperweight
	embedded with the corporate logo of a prohibited source may determine
	its market value based on her observation that a comparable acrylic
	paperweight, not embedded with a logo, generally sells for about $20.

   	Example 2:  A prohibited source has offered an employee a ticket to a
	charitable event consisting of a cocktail reception to be followed by an
	evening of chamber music.  Even though the food, refreshments, and
	entertainment provided at the event may be worth only $20, the market
	value of the ticket is its $250 face value.

(d)     Prohibited source means any person who:

  	(1)  Is seeking official action by the employee's agency;

  	(2)  Does business or seeks to do business with the employee's agency;

  	(3)  Conducts activities regulated by the employee's agency;

  	(4)  Has interests that may be substantially affected by performance or
	     nonperformance of the employee's official duties; or

  	(5)  Is an organization a majority of whose members are described in
	     paragraphs (d) (1) through (4) of this section.

(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.

	Note:  Gifts between employees are subject to the limitations set forth
	in subpart C of this part.

	Example 1:  Where free season tickets are offered by an opera guild to
	all members of the Cabinet, the gift is offered because of their
	official positions.

	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.

(f) 	A gift which is solicited or accepted indirectly includes a gift:

	(1)  Given with the employee's knowledge and acquiescence to his parent,
	     sibling, spouse, child, or dependent relative because of that
	     person's relationship to the employee, or

	(2)  Given to any other person, including any charitable organization,
	     on the basis of designation, recommendation, or other specification
	     by the employee, except as permitted for the disposition of
	     perishable items by &#167; 2635.205(a)(2) or for payments made to
	     charitable organizations in lieu of honoraria under &#167; 2636.204 of
	     this chapter.

	Example 1:  An employee who must decline a gift of a personal computer
	pursuant to this subpart may not suggest that the gift be given instead
	to one of five charitable organizations whose names are provided by the
	employee.

(g)     Vendor promotional training means training provided by any person for
	the purpose of promoting its products or services.  It does not include
	training provided under a Government contract or by a contractor to
	facilitate use of products or services it furnishes under a Government
	contract.

&#167; 2635.204 Exceptions.

The prohibitions set forth in &#167; 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 &#167;
2635.101(b), including appearances.  Even though acceptance of a gift may be
permitted by one of the exceptions contained in paragraphs (a) through (l) of
this section, it is never inappropriate and frequently prudent for an employee
to decline a gift offered by a prohibited source or because of his official
position.

(a)     Gifts of $20 or less.  An employee may accept unsolicited gifts having
	an aggregate market value of $20 or less per source per occasion,
	provided that the aggregate market value of individual gifts received
	from any one person under the authority of this paragraph shall not
	exceed $50 in a calendar year.  This exception does not apply to gifts
	of cash or of investment interests such as stock, bonds, or certificates
	of deposit.  Where the market value of a gift or the aggregate market
	value of gifts offered on any single occasion exceeds $20, the employee
	may not pay the excess value over $20 in order to accept that portion of
	the gift or those gifts worth $20.  Where the aggregate value of
	tangible items offered on a single occasion exceeds $20, the employee
	may decline any distinct and separate item in order to accept those
	items aggregating $20 or less.

	Example 1:  An employee of the Securities and Exchange Commission and
	his spouse have been invited by a representative of a regulated entity
	to a Broadway play, tickets to which have a face value of $30 each.  The
	aggregate market value of the gifts offered on this single occasion is
	$60, $40 more than the $20 amount that may be accepted for a single
	event or presentation. The employee may not accept the gift of the
	evening of entertainment.  He and his spouse may attend the play only if
	he pays the full $60 value of the two tickets.

	Example 2:  An employee of the Defense Mapping Agency has been invited
	by an association of cartographers to speak about his agency's role in
	the evolution of missile technology.  At the conclusion of his speech,
	the association presents the employee a framed map with a market value
	of $18 and a book about the history of cartography with a market value
	of $15.  The employee may accept the map or the book, but not both,
	since the aggregate value of these two tangible items exceeds $20.

	Example 3:  On four occasions during the calendar year, an employee of
	the Defense Logistics Agency was given gifts worth $10 each by four
	employees of a corporation that is a  DLA contractor.  For purposes of
	applying the yearly $50 limitation on gifts of $20 or less from any one
	person, the four gifts must be aggregated because a person is defined at
	&#167; 2635.102(k) to mean not only the corporate entity, but its officers
	and employees as well.  However, for purposes of applying the $50
	aggregate limitation, the employee would not have to include the value
	of a birthday present received from his cousin, who is employed by the
	same corporation, if he can accept the birthday present under the
	exception at &#167; 2635.204(b) for gifts based on a personal relationship.

	Example 4:  Under the authority of 31 U.S.C. 1353 for agencies to accept
	payments from non-Federal sources in connection with attendance at
	certain meetings or similar functions, the Environmental Protection
	Agency has accepted an association's gift of travel expenses and
	conference fees for an employee of its Office of Radiation Programs to
	attend an international conference on "The Chernobyl Experience." While
	at the conference, the employee may accept a gift of $20 or less from
	the association or from another person attending the conference even
	though it was not approved in advance by the EPA.  Although 31 U.S.C.
	1353 is the only authority under which an agency may accept gifts from
	certain non-Federal sources in connection with its employees' attendance
	at such functions, a gift of $20 or less accepted under &#167; 2635.204(a) is
	a gift to the employee rather than to his employing agency.

	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.

(b)     Gifts based on a personal relationship.  An employee may accept a gift
	given under circumstances which make it clear that the gift is motivated
	by a family relationship or personal friendship rather than the position
	of the employee.  Relevant factors in making such a determination
	include the history of the relationship and whether the family member or
	friend personally pays for the gift.

	Example 1:  An employee of the 	Federal Deposit Insurance Corporation
	has been dating a secretary employed by a member bank.  For Secretary's
	Week, the bank has given each secretary 2 tickets to an off-Broadway
	musical review and has urged each to invite a family member or friend to
	share the evening of entertainment.  Under the circumstances, the FDIC
	employee may accept his girlfriend's invitation to the theater.  Even
	though the tickets were initially purchased by the member bank, they
	were given without reservation to the secretary to use as she wished,
	and her invitation to the employee was motivated by their personal
	friendship.

	Example 2:  Three partners in a law firm that handles corporate mergers
	have invited an employee of the Federal Trade Commission to join them in
	a golf tournament at a private club at the firm's expense.  The entry
	fee is $500 per foursome.  The employee cannot accept the gift of one-
	quarter of the entry fee even though he and the three partners have
	developed an amicable relationship as a result of the firm's dealings
	with the FTC.  As evidenced in part by the fact that the fees are to be
	paid by the firm, it is not a personal friendship but a business
	relationship that is the motivation behind the partners' gift.

(c)     Discounts and similar benefits.  In addition to those opportunities and
	benefits excluded from the definition of a gift by &#167; 2635.203(b)(4), an
	employee may accept:

	(1)  Reduced membership or other fees for participation in organization
	     activities offered to all Government employees or all uniformed
	     military personnel by professional organizations if the only
	     restrictions on membership relate to professional qualifications;
	     and

	(2)  Opportunities and benefits, including favorable rates and
	     commercial discounts not precluded by paragraph (c)(3) of this
	     section:

	     (i)  Offered to members of a group or class in which membership is
		  unrelated to Government employment;

	     (ii) Offered to members of an organization, such as an employees'
		  association or agency credit union, in which membership is
		  related to Government employment if the same offer is broadly
		  available to large segments of the public through
		  organizations of similar size; or

	    (iii) Offered by a person who is not a prohibited source to any
		  group or class that is not defined in a manner that
		  specifically discriminates among Government employees on the
		  basis of type of official responsibility or on a basis that
		  favors those of higher rank or rate of pay; provided, however,
		  that

   	(3)  An employee may not accept for personal use any benefit to which
	     the Government is entitled as the result of an expenditure of
	     Government funds.

	     Example 1:  An employee of the Consumer Product Safety Commission
	     may accept a discount of $50 on a microwave oven offered by the
	     manufacturer to all members of the CPSC employees' association.
	     Even though the CPSC is currently conducting studies on the safety
	     of microwave ovens, the $50 discount is a standard offer that the
	     manufacturer has made broadly available through a number of similar
	     organizations to large segments of the public.

	     Example 2:  An Assistant Secretary may not accept a local country
	     club's offer of membership to all members of Department
	     Secretariats which includes a waiver of its $5,000 membership
	     initiation fee.  Even though the country club is not a prohibited
	     source, the offer discriminates in favor of higher ranking
	     officials.

	     Example 3:  The administrative officer for a district office of the
	     Immigration and Naturalization Service has signed an INS order to
	     purchase 50 boxes of photocopy paper from a supplier whose
	     literature advertises that it will give a free briefcase to anyone
	     who purchases 50 or more boxes.  Because the paper was purchased
	     with INS funds, the administrative officer cannot keep the
	     briefcase which, if claimed and received, is Government property.

(d)     Awards and honorary degrees.

	(1)  An employee may accept gifts, other than cash or an investment
	     interest, with an aggregate market value of $200 or less if such
	     gifts are a bona fide award or incident to a bona fide award that
	     is given for meritorious public service or achievement by a person
	     who does not have interests that may be substantially affected by
	     the performance or nonperformance of the employee's official duties
	     or by an association or other organization the majority of whose
	     members do not have such interests.  Gifts with an aggregate market
	     value in excess of $200 and awards of cash or investment interests
	     offered by such persons as awards or incidents of awards that are
	     given for these purposes may be accepted upon a written
	     determination by an agency ethics official that the award is made
	     as part of an established program of recognition:

             (i)  Under which awards have been made on a regular basis or which
		  is funded, wholly or in part, to ensure its continuation on a
		  regular basis; and

             (ii) Under which selection of award recipients is made pursuant to
		  written standards.

	(2)  An employee may accept an honorary degree from an institution of
	     higher education as defined at 20 U.S.C. 1141(a) based on a written
	     determination by an agency ethics official that the timing of the
	     award of the degree would not cause a reasonable person to question
	     the employee's impartiality in a matter affecting the institution.

	(3)  An employee who may accept an award or honorary degree pursuant to
	     paragraph (d)(1) or (2) of this section may also accept meals and
	     entertainment given to him and to members of his family at the
	     event at which the presentation takes place.

	     Example 1:  Based on a determination by an agency ethics official
	     that the prize meets the criteria set forth in &#167; 2635.204(d)(1), an
	     employee of the National Institutes of Health may accept the Nobel
	     Prize for Medicine, including the cash award which accompanies the
	     prize, even though the prize was conferred on the basis of
	     laboratory work performed at NIH.

	     Example 2:  Prestigious University wishes to give an honorary
	     degree to the Secretary of Labor.  The Secretary may accept the
	     honorary degree only if an agency ethics official determines in
	     writing that the timing of the award of the degree would not cause
	     a reasonable person to question the Secretary's impartiality in a
	     matter affecting the university.

	     Example 3:  An ambassador selected by a nonprofit organization as
	     recipient of its annual award for distinguished service in the
	     interest of world peace may, together with his wife, and children,
	     attend the awards ceremony dinner and accept a crystal bowl worth
	     $200 presented during the ceremony.  However, where the
	     organization has also offered airline tickets for the ambassador
	     and his family to travel to the city where the awards ceremony is
	     to be held, the aggregate value of the tickets and the crystal bowl
	     exceeds $200 and he may accept only upon a written determination by
	     the agency ethics official that the award is made as part of an
	     established program of recognition.

(e)     Gifts based on outside business or employment relationships.  An
	employee may accept meals, lodgings, transportation and other benefits:

   	(1)  Resulting from the business or employment activities of an
	     employee's spouse when it is clear that such benefits have not been
	     offered or enhanced because of the employee's official position;

	     Example 1:  A Department of Agriculture employee whose husband is a
	     computer programmer employed by an Agriculture Department
	     contractor may attend the company's annual retreat for all of its
	     employees and their families held at a resort facility.  However,
	     under &#167; 2635.502, the employee may be disqualified from performing
	     official duties affecting her husband's employer.

	     Example 2:  Where the spouses of other clerical personnel have not
	     been invited, an employee of the Defense Contract Audit Agency
	     whose wife is a clerical worker at a defense contractor may not
	     attend the contractor's annual retreat in Hawaii for corporate
	     officers and members of the board of directors, even though his
	     wife received a special invitation for herself and her spouse.

	(2)  Resulting from his outside business or employment activities when
	     it is clear that such benefits have not been offered or enhanced
	     because of his official status; or

             Example 1:  The members of an Army Corps of Engineers environmental
	     advisory committee that meets 6 times per year are special
	     Government employees.  A member who has a consulting business may
	     accept an invitation to a $50 dinner from her corporate client, an
	     Army construction contractor, unless, for example, the invitation
	     was extended in order to discuss the activities of the committee.

        (3)  Customarily provided by a prospective employer in connection with
	     bona fide employment discussions.  If the prospective employer has
	     interests that could be affected by performance or nonperformance
	     of the employee's duties, acceptance is permitted only if the
	     employee first has complied with the disqualification requirements
	     of subpart  F of this part applicable when seeking employment.

             Example 1:  An employee of the Federal Communications Commission
	     with responsibility for drafting regulations affecting all cable
	     television companies wishes to apply for a job opening with a cable
	     television holding company.  Once she has properly disqualified
	     herself from further work on the regulations as required by subpart
	     F of this part, she may enter into employment discussions with the
	     company and may accept the company's offer to pay for her airfare,
	     hotel and meals in connection with an interview trip.

        (4)  For purposes of paragraphs (e)(1) through (3) of this section,
	     employment shall have the meaning set forth in &#167; 2635.603(a).

(f)     Gifts in connection with political activities permitted by the Hatch Act
	Reform Amendments. An employee who, in accordance with the Hatch Act
	Reform Amendments of 1993, at 5 U.S.C. 7323, may take an active part in
	political management or in political campaigns, may accept meals,
	lodgings, transportation and other benefits, including free attendance
	at events, when provided, in connection with such active participation,
	by a political organization described in 26 U.S.C. 527(e).   Any other
	employee, such as a security officer, whose official duties require him
	to accompany an employee to a political event may accept meals, free
	attendance and entertainment provided at the event by such an
	organization.

	Example 1:  The Secretary of the Department of Health and Human Services
	may accept an airline ticket and hotel accommodations furnished by the
	campaign committee of a candidate for the United States Senate in order
	to give a speech in support of the candidate.

(g)     Widely attended gatherings and other events--(1) Speaking and similar
	engagements.  When an employee is assigned to participate as a speaker
	or panel participant or otherwise to present information on behalf of
	the agency at a conference or other event, his acceptance of an offer of
	free attendance at the event on the day of his presentation is
	permissible when provided by the sponsor of the event.  The employee's
	participation in the event on that day is viewed as a customary and
	necessary part of his performance of the assignment and does not involve
	a gift to him or to the agency.

        (2)  Widely attended gatherings.   When there has been a determination
	     that his attendance is in the interest of the agency because it
	     will further agency programs and operations, an employee may accept
	     an unsolicited gift of free attendance at all or appropriate parts
	     of a widely attended gathering of mutual interest to a number of
	     parties from the sponsor of the event or, if more than 100 persons
	     are expected to attend the event and the gift of free attendance
	     has a market value of $285 or less, from a person other than the
	     sponsor of the event.   A gathering is widely attended if it is
	     expected that a large number of persons will attend and that
	     persons with a diversity of views or interests will be present, for
	     example, if it is open to members from throughout the interested
	     industry or profession or if those in attendance represent a range
	     of persons interested in a given matter.   For employees subject to
	     a leave system, attendance at the event shall be on the employee's
	     own time or, if authorized by the employee's agency, on excused
	     absence pursuant to applicable guidelines for granting such
	     absence, or otherwise without charge to the employee's leave
	     account.

        (3)  Determination of agency interest.   The determination of agency
	     interest required by paragraph (g)(2) of this section shall be made
	     orally or in writing by the agency designee.

             (i)  If the person who has extended the invitation has interests
		  that may be substantially affected by the performance or
		  nonperformance of an employee's official duties or is an
		  association or organization the majority of whose members have
		  such interests, the employee's participation may be determined
		  to be in the interest of the agency only where there is a
		  written finding by the agency designee that the agency's
		  interest in the employee's participation in the event
		  outweighs the concern that acceptance of the gift of free
		  attendance may or may not appear to improperly influence the
		  employee in the performance of his official duties.   Relevant
		  factors that should be considered by the agency designee
		  include the importance of the event to the agency, the nature
		  and sensitivity of any pending matter affecting the interests
		  of the person who has extended the invitation, the
		  significance of the employee's role in any such matter, the
		  purpose of the event, the identity of other expected
		  participants and the market value of the gift of free
		  attendance.

             (ii) A blanket determination of agency interest may be issued to
		  cover all or any category of invitees other than those as to
		  whom the finding is required by paragraph (g)(3)(i) of this
		  section. Where a finding under paragraph (g)(3)(i) of this
		  section is required, a written determination of agency
		  interest, including the necessary finding, may be issued to
		  cover two or more employees whose duties similarly affect the
		  interests of the person who has extended the invitation or,
		  where that person is an association or organization, of its
		  members.

   	(4) Free attendance.   For purposes of paragraphs (g)(1) and (g)(2) of
	    this section, free attendance may include waiver of all or part of a
	    conference or other fee or the provision of food, refreshments,
	    entertainment, instruction and materials furnished to all attendees
	    as an integral part of the event.   It does not include travel
	    expenses, lodgings, entertainment collateral to the event, or meals
	    taken other than in a group setting with all other attendees.
	    Where the invitation has been extended to an accompanying spouse or
	    other guest (see paragraph (g)(6) of this section), the market value
	    of the gift of free attendance includes the market value of free
	    attendance by the spouse or other guest as well as the market value
	    of the employee's own attendance.

	    Note:  There are statutory authorities implemented other than by
	    part 2635 under which an agency or an employee may be able to accept
	    free attendance or other items not included in the definition of
	    free attendance, such as travel expenses.

	(5) Cost provided by sponsor of event.   The cost of the employee's
	    attendance will not be considered to be provided by the sponsor, and
	    the invitation is not considered to be from the sponsor of the
	    event, where a person other than the sponsor designates the employee
	    to be invited and bears the cost of the employee's attendance
	    through a contribution or other payment intended to facilitate that
	    employee's attendance. Payment of dues or a similar assessment to a
	    sponsoring organization does not constitute a payment intended to
	    facilitate a particular employee's attendance.

   	(6) Accompanying spouse or other guest.   When others in attendance will
	    generally be accompanied by a spouse or other guest, and where the
	    invitation is from the same person who has invited the employee, the
	    agency designee may authorize an employee to accept an unsolicited
	    invitation of free attendance to an accompanying spouse or to
	    another accompanying guest to participate in all or a portion of the
	    event at which the employee's free attendance is permitted under
	    paragraph (g)(1) or (g)(2) of this section.   The authorization
	    required by this paragraph may be provided orally or in writing.

	    Example 1:  An aerospace industry association that is a prohibited
	    source sponsors an industrywide, two-day seminar for which it
	    charges a fee of $400 and anticipates attendance of approximately
	    400.   An Air Force contractor pays $2,000 to the association so
	    that the association can extend free invitations to five Air Force
	    officials designated by the contractor.   The Air Force officials
	    may not accept the gifts of free attendance.   Because the
	    contractor specified the invitees and bore the cost of their
	    attendance, the gift of free attendance is considered to be provided
	    by the company and not by the sponsoring association.   Had the
	    contractor paid $2,000 to the association in order that the
	    association might invite any five Federal employees, an Air Force
	    official to whom the sponsoring association extended one of the five
	    invitations could attend if his participation were determined to be
	    in the interest of the agency.   The Air Force official could not in
	    any case accept an invitation directly from the nonsponsor
	    contractor because the market value of the gift exceeds $285.

            Example 2:  An employee of the Department of Transportation is
	    invited by a news organization to an annual press dinner sponsored
	    by an association of press organizations.   Tickets for the event
	    cost $285 per person and attendance is limited to 400
	    representatives of press organizations and their guests.   If the
	    employee's attendance is determined to be in the interest of the
	    agency, she may accept the invitation from the news organization
	    because more than 100 persons will attend and the cost of the ticket
	    does not exceed $285.   However, if the invitation were extended to
	    the employee and an accompanying guest, her guest could not be
	    authorized to attend for free since the market value of the gift of
	    free attendance would be $570 and the invitation is from a person
	    other than the sponsor of the event.

       	    Example 3:  An employee of the Department of Energy (DOE) and his
	    wife have been invited by a major utility executive to a small
	    dinner party. A few other officials of the utility and their spouses
	    or other guests are also invited, as is a representative of a
	    consumer group concerned with utility rates and her husband.   The
	    DOE official believes the dinner party will provide him an
	    opportunity to socialize with and get to know those in attendance.
	    The employee may not accept the free invitation under this
	    exception, even if his attendance could be determined to be in the
	    interest of the agency. The small dinner party is not a widely
	    attended gathering.   Nor could the employee be authorized to accept
	    even if the event were instead a corporate banquet to which forty
	    company officials and their spouses or other guests were invited. In
	    this second case, notwithstanding the larger number of persons
	    expected (as opposed to the small dinner party just noted) and
	    despite the presence of the consumer group representative and her
	    husband who are not officials of the utility, those in attendance
	    would still not represent a diversity of views or interests.   Thus,
	    the company banquet would not qualify as a widely attended gathering
	    under those circumstances either.

            Example 4:  An employee of the Department of the Treasury authorized
	    to participate in a panel discussion of economic issues as part of a
	    one-day conference may accept the sponsor's waiver of the conference
	    fee.  Under the separate authority of &#167; 2635.204(a), he may accept a
	    token of appreciation for his speech having a market value of $20 or
	    less.

            Example 5:   An Assistant U.S.  Attorney is invited to attend a
	    luncheon meeting of a local bar association to hear a distinguished
	    judge lecture on cross-examining expert witnesses.  Although members
	    of the bar association are assessed a $15 fee for the meeting, the
	    Assistant U.S. Attorney may accept the bar association's offer to
	    attend for free, even without a determination of agency interest.
	    The gift can be accepted under the $20 de minimis exception at &#167;
	    2635.204(a).

            Example 6:  An employee of the Department of the Interior authorized
	    to speak on the first day of a four-day conference on endangered
	    species may accept the sponsor's waiver of the conference fee for
	    the first day of the conference.  If the conference is widely
	    attended, he may be authorized, based on a determination that his
	    attendance is in the agency's interest, to accept the sponsor's
	    offer to waive the attendance fee for the remainder of the
	    conference.

(h)     Social invitations from persons other than prohibited sources.  An
	employee may accept food, refreshments and entertainment, not including
	travel or lodgings, at a social event attended by several persons where:

        (1)  The invitation is from a person who is not a prohibited source; and

        (2)  No fee is charged to any person in attendance.

	     Example 1:  Along with several other Government officials and a
	     number of individuals from the private sector, the Administrator of
	     the Environmental Protection Agency has been invited to the premier
	     showing of a new adventure movie about industrial espionage.  The
	     producer is paying all costs of the showing.  The Administrator may
	     accept the invitation since the producer is not a prohibited source
	     and no attendance fee is being charged to anyone who has been
	     invited.

	     Example 2:  An employee of the White House Press Office has been
	     invited to a cocktail party given by a noted Washington hostess who
	     is not a prohibited source.  The employee may attend even though he
	     has only recently been introduced to the hostess and suspects that
	     he may have been invited because of his official position.

(i)     Meals, refreshments and entertainment in foreign areas.  An employee
	assigned to duty in, or on official travel to, a foreign area as defined
	in 41 CFR 301-7.3(c) may accept food, refreshments or entertainment in
	the course of a breakfast, luncheon, dinner or other meeting or event
	provided:

        (1)  The market value in the foreign area of the food, refreshments or
	     entertainment provided at the meeting or event, as converted to
	     U.S. dollars, does not exceed the per diem rate for the foreign
	     area specified in  the U.S.  Department of State's Maximum Per Diem
	     Allowances for Foreign Areas, Per Diem Supplement Section 925 to
	     the Standardized Regulations (GC, FA) available from the
	     Superintendent of Documents, U.S. Government Printing Office,
	     Washington, DC 20402;

   	(2)  There is participation in the meeting or event by non-U.S.
	     citizens or by representatives of foreign governments or other
	     foreign entities;

   	(3)  Attendance at the meeting or event is part of the employee's
	     official duties to obtain information, disseminate information,
	     promote the export of U.S.  goods and services, represent the
	     United States or otherwise further programs or operations of the
	     agency or the U.S.  mission in the foreign area; and

        (4)  The gift of meals, refreshments or entertainment is from a person
	     other than a foreign government as defined in 5 U.S.C. 7342(a)(2).

             Example 1:  A number of local businessmen in a developing country
	     are anxious for a U.S.  company to locate a manufacturing facility
	     in their province.  An official of the Overseas Private Investment
	     Corporation may accompany the visiting vice president of the U.S.
	     company to a dinner meeting hosted by the businessmen at a province
	     restaurant where the market value of the food and refreshments does
	     not exceed the per diem rate for that country.

(j)     Gifts to the President or Vice President.  Because of considerations
	relating to the conduct of their offices, including those of protocol
	and etiquette, the President or the Vice President may accept any gift
	on his own behalf or on behalf of any family member, provided that such
	acceptance does not violate &#167; 2635.202(c) (1) or (2), 18 U.S.C. 201(b)
	or 201(c)(3), or the Constitution of the United States.

(k)     Gifts authorized by supplemental agency regulation.  An employee may
	accept any gift the acceptance of which is specifically authorized by a
	supplemental agency regulation.

(l)     Gifts accepted under specific statutory authority.  The prohibitions on
	acceptance of gifts from outside sources contained in this subpart do
	not apply to any item, receipt of which is specifically authorized by
	statute. Gifts which may be received by an employee under the authority
	of specific statutes include, but are not limited to:

        (1)  Free attendance, course or meeting materials, transportation,
	     lodgings, food and refreshments or reimbursements therefor incident
	     to training or meetings when accepted by the employee under the
	     authority of 5 U.S.C. 4111 from an organization with tax-exempt
	     status under 26 U.S.C. 501(c) (3) or from a person to whom the
	     prohibitions in 18 U.S.C. 209 do not apply.  The employee's
	     acceptance must be approved by the agency in accordance with part
	     410 of this title; or

             Note: 26 U.S.C. 501(c)(3) is authority for tax-exempt treatment of
	     a limited class of nonprofit organizations, including those
	     organized and operated for charitable, religious or educational
	     purposes.  Many nonprofit organizations are not exempt from
	     taxation under this section.

        (2)  Gifts from a foreign government or international or multinational
	     organization, or its representative, when accepted by the employee
	     under the authority of the Foreign Gifts and Decorations Act, 5
	     U.S.C. 7342. As a condition of acceptance, an employee must comply
	     with requirements imposed by the agency's regulations or procedures
	     implementing that Act. &#167; 2635.205 Proper disposition of prohibited
	     gifts.

(a)     An employee who has received a gift that cannot be accepted under this
	subpart shall, unless the gift is accepted by an agency acting under
	specific statutory authority:

        (1)  Return any tangible item to the donor or pay the donor its market
	     value. An employee who cannot ascertain the actual market value of
	     an item may estimate its market value by reference to the retail
	     cost of similar items of like quality.  See &#167; 2635.203(c).

             Example 1:  To avoid public embarrassment to the seminar sponsor,
	     an employee of the National Park Service did not decline a
	     barometer worth $200 given at the conclusion of his speech on
	     Federal lands policy.  The employee must either return the
	     barometer or promptly reimburse the sponsor $200.

        (2)  When it is not practical to return a tangible item because it is
	     perishable, the item may, at the discretion of the employee's
	     supervisor or an agency ethics official, be given to an appropriate
	     charity, shared within the recipient's office, or destroyed.

             Example 1:  With approval by the recipient's supervisor, a floral
	     arrangement sent by a disability claimant to a helpful employee of
	     the Social Security Administration may be placed in the office's
	     reception area.

        (3)  For any entertainment, favor, service, benefit or other intangible,
	     reimburse the donor the market value.  Subsequent reciprocation by
	     the employee does not constitute reimbursement.

             Example 1:  A Department of Defense employee wishes to attend a
	     charitable event to which he has been offered a $300 ticket by a
	     prohibited source.  Although his attendance is not in the interest
	     of the agency under &#167; 2635.204(g), he may attend if he reimburses
	     the donor the $300 face value of the ticket.

       (4)   Dispose of gifts from foreign governments or international
	     organizations in accordance with 41 CFR part 101-49, and dispose of
	     materials received in conjunction with official travel in
	     accordance with 41 CFR 101-25.103.

(b)     An agency may authorize disposition or return of gifts at Government
	expense.  Employees may use penalty mail to forward reimbursements
	required or permitted by this section.

(c)     An employee who, on his own initiative, promptly complies with the
	requirements of this section will not be deemed to have improperly
	accepted an unsolicited gift.  An employee who promptly consults his
	agency ethics official to determine whether acceptance of an unsolicited
	gift is proper and who, upon the advice of the ethics official, returns
	the gift or otherwise disposes of the gift in accordance with this
	section, will be considered to have complied with the requirements of
	this section on his own initiative.
	

                     SUBPART C - GIFTS BETWEEN EMPLOYEES

&#167; 2635.301 Overview.

This subpart contains standards that prohibit an employee from giving, donating
to, or soliciting contributions for, a gift to an official superior and from
accepting a gift from an employee receiving less pay than himself, unless the
item is excluded from the definition of a gift or falls within one of the
exceptions set forth in this subpart.

&#167; 2635.302 General standards.

(a)     Gifts to superiors.  Except as provided in this subpart, an employee may
	not:

	(1)  Directly or indirectly, give a gift to or make a donation toward a
	     gift for an official superior; or

	(2)  Solicit a contribution from another employee for a gift to either
	     his own or the other employee's official superior.

(b)     Gifts from employees receiving less pay.  Except as provided in this
	subpart, an employee may not, directly or indirectly, accept a gift from
	an employee receiving less pay than himself unless:

        (1)  The two employees are not in a subordinate-official superior
	     relationship; and

        (2)  There is a personal relationship between the two employees that
	     would justify the gift.

(c)     Limitation on use of exceptions.  Notwithstanding any exception provided
	in this subpart, an official superior shall not coerce the offering of a
	gift from a subordinate.

&#167; 2635.303 Definitions.

For purposes of this subpart, the following definitions shall apply:

(a)     Gift has the meaning set forth in &#167; 2635.203(b).  For purposes of that
	definition an employee will be deemed to have paid market value for any
	benefit received as a result of his participation in any carpool or
	other such mutual arrangement involving another employee or other
	employees if he bears his fair proportion of the expense or effort
	involved.

(b)     Indirectly, for purposes of &#167; 2635.302(b), has the meaning set forth in
	&#167; 2635.203(f).  For purposes of &#167; 2635.302(a), it includes a gift:

        (1) Given with the employee's knowledge and acquiescence by his parent,
	    sibling, spouse, child, or dependent relative; or

        (2) Given by a person other than the employee under circumstances where
	    the employee has promised or agreed to reimburse that person or to
	    give that person something of value in exchange for giving the gift.

(c)     Subject to paragraph (a) of this section, market value has the meaning
	set forth in &#167; 2635.203(c).

(d)     Official superior means any other employee, other than the President and
	the Vice President, including but not limited to an immediate
	supervisor, whose official responsibilities include directing or
	evaluating the performance of the employee's official duties or those of
	any other official superior of the employee.  For purposes of this
	subpart, an employee is considered to be the subordinate of any of his
	official superiors.

(e)     Solicit means to request contributions by personal communication or by
	general announcement.

(f)     Voluntary contribution means a contribution given freely, without
	pressure or coercion.  A contribution is not voluntary unless it is made
	in an amount determined by the contributing employee, except that where
	an amount for a gift is included in the cost for a luncheon, reception
	or similar event, an employee who freely chooses to pay a proportionate
	share of the total cost in order to attend will be deemed to have made a
	voluntary contribution.  Except in the case of contributions for a gift
	included in the cost of a luncheon, reception or similar event, a
	statement that an employee may choose to contribute less or not at all
	shall accompany any recommendation of an amount to be contributed for a
	gift to an official superior.

        Example 1:  A supervisory employee of the Agency for International
	Development has just been reassigned from Washington, DC to Kabul,
	Afghanistan.  As a farewell party, 12 of her subordinates have decided
	to take her out to lunch at the Khyber Repast.  It is understood that
	each will pay for his own meal and that the cost of the supervisor's
	lunch will be divided equally among the twelve.  Even though the amount
	they will contribute is not determined until the supervisor orders
	lunch, the contribution made by those who choose to participate in the
	farewell lunch is voluntary.

&#167; 2635.304 Exceptions.

The prohibitions set forth in &#167; 2635.302(a) and (b) do not apply to a gift given
or accepted under the circumstances described in paragraph (a) or (b) of this
section.  A contribution or the solicitation of a contribution that would
otherwise violate the prohibitions set forth in &#167; 2635.302(a) and (b) may only
be made in accordance with paragraph (c) of this section.

(a)     General exceptions.  On an occasional basis, including any occasion on
	which gifts are traditionally given or exchanged, the following may be
	given to an official superior or accepted from a subordinate or other
	employee receiving less pay:

        (1)  Items, other than cash, with an aggregate market value of $10 or
	     less per occasion;

        (2)  Items such as food and refreshments to be shared in the office
	     among several employees;

        (3)  Personal hospitality provided at a residence which is of a type and
	     value customarily provided by the employee to personal friends;

        (4)  Items given in connection with the receipt of personal hospitality
	     if of a type and value customarily given on such occasions; and

        (5)  Leave transferred under subpart I of part 630 of this title to an
	     employee who is not an immediate supervisor, unless obtained in
	     violation of &#167; 630.912 of this title.

             Example 1:  Upon returning to work following a vacation at the
	     beach, a claims examiner with the Department of Veterans Affairs
	     may give his supervisor, and his supervisor may accept, a bag of
	     saltwater taffy purchased on the boardwalk for $8.

             Example 2:  An employee of the Federal Deposit Insurance
	     Corporation whose bank examination responsibilities require
	     frequent travel may not bring her supervisor, and her supervisor
	     may not accept, souvenir coffee mugs from each of the cities she
	     visits in the course of performing her duties, even though each of
	     the mugs costs less than $5. Gifts given on this basis are not
	     occasional.

             Example 3:  The Secretary of Labor has invited the agency's General
	     Counsel to a dinner party at his home.  The General Counsel may
	     bring a $15 bottle of wine to the dinner party and the Secretary
	     may accept this customary hostess gift from his subordinate, even
	     though its cost is in excess of $10.

             Example 4:  For Christmas, a secretary may give his supervisor, and
	     the supervisor may accept, a poinsettia plant purchased for $10 or
	     less.  The secretary may also invite his supervisor to a Christmas
	     party in his home and the supervisor may attend.

(b)     Special, infrequent occasions.  A gift appropriate to the occasion may
	be given to an official superior or accepted from a subordinate or other
	employee receiving less pay:

        (1)  In recognition of infrequently occurring occasions of personal
	     significance such as marriage, illness, or the birth or adoption of
	     a child; or

        (2)  Upon occasions that terminate a subordinate-official superior
	     relationship, such as retirement, resignation, or transfer.

	     Example 1:  The administrative assistant to the personnel director
	     of the Tennessee Valley Authority may send a $30 floral arrangement
	     to the personnel director who is in the hospital recovering from
	     surgery.  The personnel director may accept the gift.

	     Example 2:  A chemist employed by the Food and Drug Administration
	     has been invited to the wedding of the lab director who is his
	     official superior.  He may give the lab director and his bride, and
	     they may accept, a place setting in the couple's selected china
	     pattern purchased for $70.

	     Example 3:  Upon the occasion of the supervisor's retirement from
	     Federal service, an employee of the Fish and Wildlife Service may
	     give her supervisor a book of wildlife photographs which she
	     purchased for $19.  The retiring supervisor may accept the book.

(c)     Voluntary contributions.  An employee may solicit voluntary
	contributions of nominal amounts from fellow employees for an
	appropriate gift to an official superior and an employee may make a
	voluntary contribution of a nominal amount to an appropriate gift to an
	official superior:

        (1)  On a special, infrequent occasion as described in paragraph (b) of
	     this section; or

        (2)  On an occasional basis, for items such as food and refreshments to
	     be shared in the office among several employees.

        An employee may accept such gifts to which a subordinate or other
	employee receiving less pay than himself has contributed.

        Example 1:  To mark the occasion of his retirement, members of the
	immediate staff of the Under Secretary of the Army would like to give
	him a party and provide him with a gift certificate.  They may
	distribute an announcement of the party and include a nominal amount for
	a retirement gift in the fee for the party.

        Example 2:  The General Counsel of the National Endowment for the Arts
	may not collect contributions for a Christmas gift for the Chairman.
	Christmas occurs annually and is not an occasion of personal
	significance.

        Example 3:  Subordinates may not take up a collection for a gift to an
	official superior on the occasion of the superior's swearing in or
	promotion to a higher grade position within the supervisory chain of
	that organization. These are not events that mark the termination of the
	subordinate-official superior relationship, nor are they events of
	personal significance within the meaning of &#167; 2635.304(b).  However,
	subordinates may take up a collection and employees may contribute $3
	each to buy refreshments to be consumed by everyone in the immediate
	office to mark either such occasion.

        Example 4:  Subordinates may each contribute a nominal amount to a fund
	to give a gift to an official superior upon the occasion of that
	superior's transfer or promotion to a position outside the organization.

        Example 5:  An Assistant Secretary at the Department of the Interior is
	getting married.  His secretary has decided that a microwave oven would
	be a nice gift from his staff and has informed each of the Assistant
	Secretary's subordinates that they should contribute $5 for the gift.
	Her method of collection is improper.  Although she may recommend a $5
	contribution, the recommendation must be coupled with a statement that
	the employee whose contribution is solicited is free to contribute less
	or nothing at all.

     
               SUBPART D - CONFLICTING FINANCIAL INTERESTS

&#167; 2635.401 Overview.

This subpart contains two provisions relating to financial interests.  One is a
disqualification requirement and the other is a prohibition on acquiring or
continuing to hold specific financial interests.  An employee may acquire or
hold any financial interest not prohibited by &#167; 2635.403. Notwithstanding that
his acquisition or holding of a particular interest is proper, an employee is
prohibited in accordance with &#167; 2635.402 of this subpart from participating in
an official capacity in any particular matter in which, to his knowledge, he or
any person whose interests are imputed to him has a financial interest, if the
particular matter will have a direct and predictable effect on that interest.
See also part 2640 of this chapter, for additional guidance amplifying &#167;
2635.402.

&#167; 2635.402 Disqualifying financial interests.

(a)     Statutory prohibition.  An employee is prohibited by criminal statute,
	18 U.S.C. 208(a), from participating personally and substantially in an
	official capacity in any particular matter in which, to his knowledge,
	he or any person whose interests are imputed to him under this statute
	has a financial interest, if the particular matter will have a direct
	and predictable effect on that interest.

        Note: Standards applicable when seeking non-Federal employment are
	contained in subpart F of this part and, if followed, will ensure that
	an employee does not violate 18 U.S.C. 208(a) or this section when he is
	negotiating for or has an arrangement concerning future employment. In
	all other cases where the employee's participation would violate 18
	U.S.C. 208(a), an employee shall disqualify himself from participation
	in the matter in accordance with paragraph (c) of this section or obtain
	a waiver or determine that an exemption applies, as described in
	paragraph (d) of this section.

(b)  Definitions.  For purposes of this section, the following definitions shall
     apply:

        (1) Direct and predictable effect.

            (i)   A particular matter will have a direct effect on a financial
		  interest if there is a close causal link between any decision
		  or action to be taken in the matter and any expected effect of
		  the matter on the financial interest.  An effect may be direct
		  even though it does not occur immediately.  A particular
		  matter will not have a direct effect on a financial interest,
		  however, if the chain of causation is attenuated or is
		  contingent upon the occurrence of events that are speculative
		  or that are independent of, and unrelated to, the matter. A
		  particular matter that has an effect on a financial interest
		  only as a consequence of its effects on the general economy
		  does not have a direct effect within the meaning of this
		  subpart.

       	    (ii)  A particular matter will have a predictable effect if there is
		  a real, as opposed to a speculative possibility that the
		  matter will affect the financial interest.  It is not
		  necessary, however, that the magnitude of the gain or loss be
		  known, and the dollar amount of the gain or loss is
		  immaterial.

	Note:  If a particular matter involves a specific party or parties,
	generally the matter will at most only have a direct and predictable
	effect, for purposes of this subpart, on a financial interest of the
	employee in or with a party, such as the employee's interest by virtue
	of owning stock.  There may, however, be some situations in which, under
	the above standards, a particular matter will have a direct and
	predictable effect on an employee's financial interests in or with a
	nonparty.  For example, if a party is a corporation, a particular matter
	may also have a direct and predictable effect on an employee's financial
	interests through ownership of stock in an affiliate, parent, or
	subsidiary of that party. Similarly, the disposition of a protest
	against the award of a contract to a particular company may also have a
	direct and predictable effect on an employee's financial interest in
	another company listed as a subcontractor in the proposal of one of the
	competing offerors.

	Example 1:  An employee of the National Library of Medicine at the
	National Institutes of Health has just been asked to serve on the
	technical evaluation panel to review proposals for a new library
	computer search system.  DEF Computer Corporation, a closely held
	company in which he and his wife own a majority of the stock, has
	submitted a proposal. Because award of the systems contract to DEF or to
	any other offeror will have a direct and predictable effect on both his
	and his wife's financial interests, the employee cannot participate on
	the technical evaluation team unless his disqualification has been
	waived.

	Example 2:  Upon assignment to the technical evaluation panel, the
	employee in the preceding example finds that DEF Computer Corporation
	has not submitted a proposal. Rather, LMN Corp., with which DEF competes
	for private sector business, is one of the six offerors.  The employee
	is not disqualified from serving on the technical evaluation panel. Any
	effect on the employee's financial interests as a result of the agency's
	decision to award or not award the systems contract to LMN would be at
	most indirect and speculative.

        (2) Imputed interests.  For purposes of 18 U.S.C. 208(a) and this
	    subpart, the financial interests of the following persons will serve
	    to disqualify an employee to the same extent as if they were the
	    employee's own interests:

             (i)  The employee's spouse;

            (ii)  The employee's minor child;

            (iii) The employee's general partner;

            (iv)  An organization or entity which the employee serves as
		  officer, director, trustee, general partner or employee; and

            (v)   A person with whom the employee is negotiating for or has an
		  arrangement concerning prospective employment.  (Employees who
		  are seeking other employment should refer to and comply with
		  the standards in subpart F of this part).

	Example 1:  An employee of the Department of Education serves without
	compensation on the board of directors of Kinder World, Inc., a
	nonprofit corporation that engages in good works.  Even though her
	personal financial interests will not be affected, the employee must
	disqualify herself from participating in the review of a grant
	application submitted by Kinder World.  Award or denial of the grant
	will affect the financial interests of Kinder World and its financial
	interests are imputed to her as a member of its board of directors.

	Example 2:  The spouse of an employee of the Food and Drug
	Administration has obtained a position with a well established
	biomedical research company.  The company has developed an artificial
	limb for which it is seeking FDA approval and the employee would
	ordinarily be asked to participate in the FDA's review and approval
	process.  The spouse is a salaried employee of the company and has no
	direct ownership interest in the company.  Nor does she have an indirect
	ownership interest, as would be the case, for example, if she were
	participating in a pension plan that held stock in the company.  Her
	position with the company is such that the granting or withholding of
	FDA approval will not have a direct and predictable effect on her salary
	or on her continued employment with the company.  Since the FDA approval
	process will not affect his spouse's financial interests, the employee
	is not disqualified under &#167; 2635.402 from participating in that process.
	Nevertheless, the financial interests of the spouse's employer may be
	disqualifying under the impartiality principle, as implemented at &#167;
	2635.502.

   	(3) Particular matter.  The term particular matter encompasses only
	    matters that involve deliberation, decision, or action that is
	    focused upon the interests of specific persons, or a discrete and
	    identifiable class of persons.  Such a matter is covered by this
	    subpart even if it does not involve formal parties and may include
	    governmental action such as legislation or policy-making that is
	    narrowly focused on the interests of such a discrete and
	    identifiable class of persons.  The term particular matter, however,
	    does not extend to the consideration or adoption of broad policy
	    options that are directed to the interests of a large and diverse
	    group of persons.  The particular matters covered by this subpart
	    include a judicial or other proceeding, application, request for a
	    ruling or other determination, contract, claim, controversy, charge,
	    accusation or arrest.

	Example 1:  The Internal Revenue Service's amendment of its regulations
	to change the manner in which depreciation is calculated is not a
	particular matter, nor is the Social Security Administration's
	consideration of changes to its appeal procedures for disability
	claimants.

	Example 2:  Consideration by the Interstate Commerce Commission of
	regulations establishing safety standards for trucks on interstate
	highways involves a particular matter.

	(4) Personal and substantial.  To participate personally means to
	    participate directly.  It includes the direct and active supervision
	    of the participation of a subordinate in the matter.  To participate
	    substantially means that the employee's involvement is of
	    significance to the matter.  Participation may be substantial even
	    though it is not determinative of the outcome of a particular
	    matter.  However, it requires more than official responsibility,
	    knowledge, perfunctory involvement, or involvement on an
	    administrative or peripheral issue.  A finding of substantiality
	    should be based not only on the effort devoted to a matter, but also
	    on the importance of the effort.  While a series of peripheral
	    involvements may be insubstantial, the single act of approving or
	    participating in a critical step may be substantial.  Personal and
	    substantial participation may occur when, for example, an employee
	    participates through decision, approval, disapproval,
	    recommendation, investigation or the rendering of advice in a
	    particular matter.

(c)     Disqualification.  Unless the employee is authorized to participate in
	the particular matter by virtue of a waiver or exemption described in
	paragraph (d) of this section or because the interest has been divested
	in accordance with paragraph (e) of this section, an employee shall
	disqualify himself from participating in a particular matter in which,
	to his knowledge, he or a person whose interests are imputed to him has
	a financial interest, if the particular matter will have a direct and
	predictable effect on that interest.  Disqualification is accomplished
	by not participating in the particular matter.

        (1)  Notification.  An employee who becomes aware of the need to
	     disqualify himself from participation in a particular matter to
	     which he has been assigned should notify the person responsible for
	     his assignment.  An employee who is responsible for his own
	     assignment should take whatever steps are necessary to ensure that
	     he does not participate in the matter from which he is
	     disqualified.  Appropriate oral or written notification of the
	     employee's disqualification may be made to coworkers by the
	     employee or a supervisor to ensure that the employee is not
	     involved in a matter from which he is disqualified.

	(2)  Documentation.  An employee need not file a written
	     disqualification statement unless he is required by part 2634 of
	     this chapter to file written evidence of compliance with an ethics
	     agreement with the Office of Government Ethics or is asked by an
	     agency ethics official or the person responsible for his assignment
	     to file a written disqualification statement.  However, an employee
	     may elect to create a record of his actions by providing written
	     notice to a supervisor or other appropriate official.

	Example 1:  An Assistant Secretary of the Department of the Interior
	owns recreational property that borders on land which is being
	considered for annexation to a national park.  Annexation would directly
	and predictably increase the value of her vacation property and, thus,
	she is disqualified from participating in any way in the Department's
	deliberations or decisions regarding the annexation.  Because she is
	responsible for determining which matters she will work on, she may
	accomplish her disqualification merely by ensuring that she does not
	participate in the matter.  Because of the level of her position,
	however, the Assistant Secretary might be wise to establish a record
	that she has acted properly by providing a written disqualification
	statement to an official superior and by providing written notification
	of the disqualification to subordinates to ensure that they do not raise
	or discuss with her any issues related to the annexation.

(d)     Waiver of or exemptions from disqualification.  An employee who would
	otherwise be disqualified by 18 U.S.C. 208(a) may be permitted to
	participate in a particular matter where the otherwise disqualifying
	financial interest is the subject of a regulatory exemption or
	individual waiver described in this paragraph, or results from certain
	Indian birthrights as described in 18 U.S.C. 208(b)(4).

	(1)  Regulatory exemptions.  Under 18 U.S.C. 208(b)(2), regulatory
	     exemptions of general applicability have been issued by the Office
	     of Government Ethics, based on its determination that particular
	     interests are too remote or too inconsequential to affect the
	     integrity of the services of employees to whom those exemptions
	     apply.   See the regulations in subpart B of part 2640 of this
	     chapter, which supersede any preexisting agency regulatory
	     exemptions.

        (2)  Individual waivers.  An individual waiver enabling the employee to
	     participate in one or more particular matters may be issued under
	     18 U.S.C. 208(b)(1) if, in advance of the employee's participation:

             (i)   The employee:

                   (A) Advises the Government official responsible for the
		       employee's appointment (or other Government official to
		       whom authority to issue such a waiver for the employee
		       has been delegated) about the nature and circumstances of
		       the particular matter or matters; and

	       	   (B) Makes full disclosure to such official of the nature and
		       extent of the disqualifying financial interest; and

	     (ii)  Such official determines, in writing, that the employee's
		   financial interest in the particular matter or matters is not
		   so substantial as to be deemed likely to affect the integrity
		   of the services which the Government may expect from such
		   employee. See also subpart C of part 2640 of this chapter,
		   for additional guidance.

        (3)  Federal advisory committee member waivers.  An individual waiver
	     may be issued under 18 U.S.C. 208(b)(3) to a special Government
	     employee serving on, or under consideration for appointment to, an
	     advisory committee within the meaning of the Federal Advisory
	     Committee Act if the Government official responsible for the
	     employee's appointment (or other Government official to whom
	     authority to issue such a waiver for the employee has been
	     delegated):

             (i)   Reviews the financial disclosure report filed by the special
		   Government employee pursuant to the Ethics in Government Act
		   of 1978; and

             (ii)  Certifies in writing that the need for the individual's
		   services outweighs the potential for a conflict of interest
		   created by the otherwise disqualifying financial interest.
		   See also subpart C of part 2640 of this chapter, for
		   additional guidance.

        (4)  Consultation and notification regarding waivers.  When practicable,
	     an official is required to consult formally or informally with the
	     Office of Government Ethics prior to granting a waiver referred to
	     in paragraph (d) (2) or (3) of this section.  A copy of each such
	     waiver is to be forwarded to the Director of the Office of
	     Government Ethics.

(e)     Divestiture of a disqualifying financial interest.  Upon sale or other
	divestiture of the asset or other interest that causes his
	disqualification from participation in a particular matter, 18 U.S.C.
	208(a) and paragraph (c) of this section will no longer prohibit the
	employee's participation in the matter.

	(1)  Voluntary divestiture.  An employee who would otherwise be
	     disqualified from participation in a particular matter may
	     voluntarily sell or otherwise divest himself of the interest that
	     causes the disqualification.

	(2)  Directed divestiture.  An employee may be required to sell or
	     otherwise divest himself of the disqualifying financial interest if
	     his continued holding of that interest is prohibited by statute or
	     by agency supplemental regulation issued in accordance with &#167;
	     2635.403(a), or if the agency determines in accordance with &#167;
	     2635.403(b) that a substantial conflict exists between the
	     financial interest and the employee's duties or accomplishment of
	     the agency's mission.

	(3)  Eligibility for special tax treatment.  An employee who is directed
	     to divest an interest may be eligible to defer the tax consequences
	     of divestiture under subpart J of part 2634 of this chapter.  An
	     employee who divests before obtaining a certificate of divestiture
	     will not be eligible for this special tax treatment.

(f)     Official duties that give rise to potential conflicts.  Where an
	employee's official duties create a substantial likelihood that the
	employee may be assigned to a particular matter from which he is
	disqualified, the employee should advise his supervisor or other person
	responsible for his assignments of that potential so that conflicting
	assignments can be avoided, consistent with the agency's needs.

&#167; 2635.403 Prohibited financial interests.

An employee shall not acquire or hold any financial interest that he is
prohibited from acquiring or holding by statute, by agency regulation issued in
accordance with paragraph (a) of this section or by reason of an agency
determination of substantial conflict under paragraph (b) of this section.

Note:  There is no statute of Governmentwide applicability prohibiting employees
from holding or acquiring any financial interest.  Statutory restrictions, if
any, are contained in agency statutes which, in some cases, may be implemented
by agency regulations issued independent of this part.

(a)     Agency regulation prohibiting certain financial interests.  An agency
	may, by supplemental agency regulation issued after February 3, 1993,
	prohibit or restrict the acquisition or holding of a financial interest
	or a class of financial interests by agency employees, or any category
	of agency employees, and the spouses and minor children of those
	employees, based on the agency's determination that the acquisition or
	holding of such financial interests would cause a reasonable person to
	question the impartiality and objectivity with which agency programs are
	administered. Where the agency restricts or prohibits the holding of
	certain financial interests by its employees' spouses or minor children,
	any such prohibition or restriction shall be based on a determination
	that there is a direct and appropriate nexus between the prohibition or
	restriction as applied to spouses and minor children and the efficiency
	of the service.

(b)     Agency determination of substantial conflict.  An agency may prohibit or
	restrict an individual employee from acquiring or holding a financial
	interest or a class of financial interests based upon the agency
	designee's determination that the holding of such interest or interests
	will:

	(1)  Require the employee's disqualification from matters so central or
	     critical to the performance of his official duties that the
	     employee's ability to perform the duties of his position would be
	     materially impaired; or

	(2)  Adversely affect the efficient accomplishment of the agency's
	     mission because another employee cannot be readily assigned to
	     perform work from which the employee would be disqualified by
	     reason of the financial interest.

        Example 1:  An Air Force employee who owns stock in a major aircraft
	engine manufacturer is being considered for promotion to a position that
	involves responsibility for development of a new fighter airplane.  If
	the agency determined that engineering and other decisions about the Air
	Force's requirements for the fighter would directly and predictably
	affect his financial interests, the employee could not, by virtue of 18
	U.S.C. 208(a), perform these significant duties of the position while
	retaining his stock in the company.  The agency can require the employee
	to sell his stock as a condition of being selected for the position
	rather than allowing him to disqualify himself in particular matters.
	(c)  Definition of financial interest.  For purposes of this section:

        (1)  Except as provided in paragraph (c)(2) of this section, the term
	     financial interest is limited to financial interests that are owned
	     by the employee or by the employee's spouse or minor children.
	     However, the term is not limited to only those financial interests
	     that would be disqualifying under 18 U.S.C. 208(a) and &#167; 2635.402.
	     The term includes any current or contingent ownership, equity, or
	     security interest in real or personal property or a business and
	     may include an indebtedness or compensated employment relationship.
	     It thus includes, for example, interests in the nature of stocks,
	     bonds, partnership interests, fee and leasehold interests, mineral
	     and other property rights, deeds of trust, and liens, and extends
	     to any right to purchase or acquire any such interest, such as a
	     stock option or commodity future.  It does not include a future
	     interest created by someone other than the employee, his spouse, or
	     dependent child or any right as a beneficiary of an estate that has
	     not been settled.

        Example 1:  A regulatory agency has concluded that ownership by its
	employees of stock in entities regulated by the agency would
	significantly diminish public confidence in the agency's performance of
	its regulatory functions and thereby interfere with the accomplishment
	of its mission.  In its supplemental agency regulations, the agency may
	prohibit its employees from acquiring or continuing to hold stock in
	regulated entities.

        Example 2:  An agency that insures bank deposits may, by supplemental
	agency regulation, prohibit its employees who are bank examiners from
	obtaining loans from banks they examine.  Examination of a member bank
	could have no effect on an employee's fixed obligation to repay a loan
	from that bank and, thus, would not affect an employee's financial
	interests so as to require disqualification under &#167; 2635.402.
	Nevertheless, a loan from a member bank is a discrete financial interest
	within the meaning of &#167; 2635.403(c) that may, when appropriate, be
	prohibited by supplemental agency regulation.

        (2)  The term financial interest includes service, with or without
	     compensation, as an officer, director, trustee, general partner or
	     employee of any person, including a nonprofit entity, whose
	     financial interests are imputed to the employee under &#167; 2635.402(b)
	     (2)(iii) or (iv).

        Example 1:  The Foundation for the Preservation of Wild Horses maintains
	herds of horses that graze on public and private lands.  Because its
	costs are affected by Federal policies regarding grazing permits, the
	Foundation routinely comments on all proposed rules governing use of
	Federal grasslands issued by the Bureau of Land Management. BLM may
	require an employee to resign his uncompensated position as Vice
	President of the Foundation as a condition of his promotion to a policy-
	level position within the Bureau rather than allowing him to rely on
	disqualification in particular cases.

(d)     Reasonable period to divest or terminate.  Whenever an agency directs
	divestiture of a financial interest under paragraph (a) or (b) of this
	section, the employee shall be given a reasonable period of time,
	considering the nature of his particular duties and the nature and
	marketability of the interest, within which to comply with the agency's
	direction.  Except in cases of unusual hardship, as determined by the
	agency, a reasonable period shall not exceed 90 days from the date
	divestiture is first directed.  However, as long as the employee
	continues to hold the financial interest, he remains subject to any
	restrictions imposed by this subpart.

(e)     Eligibility for special tax treatment.  An employee required to sell or
	otherwise divest a financial interest may be eligible to defer the tax
	consequences of divestiture under subpart J of part 2634 of this
	chapter.
	

              SUBPART E - IMPARTIALITY IN PERFORMING OFFICIAL DUTIES

&#167; 2635.501 Overview.

(a)  	This subpart contains two provisions intended to ensure that an employee
	takes appropriate steps to avoid an appearance of loss of impartiality
	in the performance of his official duties. Under &#167; 2635.502, unless he
	receives prior authorization, an employee should not participate in a
	particular matter involving specific parties which he knows is likely to
	affect the financial interests of a member of his household, or in which
	he knows a person with whom he has a covered relationship is or
	represents a party, if he determines that a reasonable person with
	knowledge of the relevant facts would question his impartiality in the
	matter.  An employee who is concerned that other circumstances would
	raise a question regarding his impartiality should use the process
	described in &#167; 2635.502 to determine whether he should or should not
	participate in a particular matter.

(b)  	Under &#167; 2635.503, an employee who has received an extraordinary
	severance or other payment from a former employer prior to entering
	Government service is subject, in the absence of a waiver, to a two-year
	period of disqualification from participation in particular matters in
	which that former employer is or represents a party.

	Note:  Questions regarding impartiality necessarily arise when an
	employee's official duties impact upon the employee's own financial
	interests or those of certain other persons, such as the employee's
	spouse or minor child.  An employee is prohibited by criminal statute,
	18 U.S.C. 208(a), from participating personally and substantially in an
	official capacity in any particular matter in which, to his knowledge,
	he, his spouse, general partner or minor child has a financial interest,
	if the particular matter will have a direct and predictable effect on
	that interest.  The statutory prohibition also extends to an employee's
	participation in a particular matter in which, to his knowledge, an
	organization in which the employee is serving as officer, director,
	trustee, general partner or employee, or with whom he is negotiating or
	has an arrangement concerning prospective employment has a financial
	interest.  Where the employee's participation in a particular matter
	would affect any one of these financial interests, the standards set
	forth in subparts D or F of this part apply and only a statutory waiver
	or exemption, as described in &#167;&#167; 2635.402(d) and 2635.605(a), will
	enable the employee to participate in that matter.  The authorization
	procedures in &#167; 2635.502(d) may not be used to authorize an employee's
	participation in any such matter.  Where the employee complies with all
	terms of the waiver, the granting of a statutory waiver will be deemed
	to constitute a determination that the interest of the Government in the
	employee's participation outweighs the concern that a reasonable person
	may question the integrity of agency programs and operations.
	Similarly, where the employee meets all prerequisites for the
	application of one of the exemptions set forth in subpart B of part 2640
	of this chapter, that also constitutes a determination that the interest
	of the Government in the employee's participation outweighs the concern
	that a reasonable person may question the integrity of agency programs
	and operations.

&#167; 2635.502 Personal and business relationships.

(a)     Consideration of appearances by the employee.  Where an employee knows
	that a particular matter involving specific parties is likely to have a
	direct and predictable effect on the financial interest of a member of
	his household, or knows that a person with whom he has a covered
	relationship is or represents a party to such matter, and where the
	employee determines that the circumstances would cause a reasonable
	person with knowledge of the relevant facts to question his impartiality
	in the matter, the employee should not participate in the matter unless
	he has informed the agency designee of the appearance problem and
	received authorization from the agency designee in accordance with
	paragraph (d) of this section.

        (1)  In considering whether a relationship would cause a reasonable
	     person to question his impartiality, an employee may seek the
	     assistance of his supervisor, an agency ethics official or the
	     agency designee.

        (2)  An employee who is concerned that circumstances other than those
	     specifically described in this section would raise a question
	     regarding his impartiality should use the process described in this
	     section to determine whether he should or should not participate in
	     a particular matter.

(b)     Definitions.  For purposes of this section:

        (1)  An employee has a covered relationship with:

             (i)   A person, other than a prospective employer described in &#167;
		   2635.603(c), with whom the employee has or seeks a business,
		   contractual or other financial relationship that involves
		   other than a routine consumer transaction;

                   Note:  An employee who is seeking employment within the
		   meaning of &#167; 2635.603 shall comply with subpart F of this
		   part rather than with this section.

	     (ii)  A person who is a member of the employee's household, or who
		   is a relative with whom the employee has a close personal
		   relationship;

             (iii) A person for whom the employee's spouse, parent or dependent
		   child is, to the employee's knowledge, serving or seeking to
		   serve as an officer, director, trustee, general partner,
		   agent, attorney, consultant, contractor or employee;

             (iv)  Any person for whom the employee has, within the last year,
		   served as officer, director, trustee, general partner, agent,
		   attorney, consultant, contractor or employee; or

             (v)   An organization, other than a political party described  in
		   26 U.S.C. 527(e), in which the employee is an active
		   participant. Participation is active if, for example, it
		   involves service as an official of the organization or in a
		   capacity similar to that of a committee or subcommittee
		   chairperson or spokesperson, or participation in directing
		   the activities of  the organization.  In other cases,
		   significant time devoted to promoting specific programs of
		   the organization, including coordination of fundraising
		   efforts, is an indication of active  participation.  Payment
		   of dues or the donation or solicitation of financial support
		   does not, in itself, constitute active participation.

                   Note:  Nothing in this section shall be construed to suggest
		   that an employee should not participate in a matter because
		   of his political, religious or moral views.

        (2)  Direct and predictable effect has the meaning set forth in &#167;
	     2635.402(b) (1).

        (3)  Particular matter involving specific parties has the meaning set
	     forth in &#167; 2637.102(a)(7) of this chapter.

             Example 1:  An employee of the General Services Administration has
	     made an offer to purchase a restaurant owned by a local developer.
	     The developer has submitted an offer in response to a GSA
	     solicitation for lease  of office space.  Under the circumstances,
	     she would be correct in concluding that a reasonable person would
	     be likely to question her impartiality if she were to participate
	     in evaluating that developer's or	its competitor's lease
	     proposal.

             Example 2:  An employee of the Department of Labor is providing
	     technical assistance in drafting occupational safety and health
	     legislation that will affect all employers of five or more persons.
	     His wife is employed as an administrative assistant by a large
	     corporation that will incur additional costs if the proposed
	     legislation is enacted. Because the legislation is not a particular
	     matter involving specific parties, the employee may continue to
	     work on the legislation and need not be concerned that his wife's
	     employment with an affected corporation would raise a question
	     concerning his impartiality.

	     Example 3:  An employee of the Defense Logistics Agency who has
	     responsibilities for testing avionics being produced by an Air
	     Force contractor has just learned that his sister-in-law has
	     accepted employment  as an engineer with the contractor's parent
	     corporation. Where the parent corporation is a conglomerate, the
	     employee could reasonably conclude that,  under the circumstances,
	     a reasonable person would not be likely to question his
	     impartiality if he were to continue to perform his test and
	     evaluation responsibilities.

	     Example 4:  An engineer has just resigned from her position as vice
	     president of an electronics company in order to accept employment
	     with the Federal Aviation Administration in a position involving
	     procurement responsibilities.  Although the employee did not
	     receive an extraordinary payment in connection with her resignation
	     and has severed all financial ties with the firm, under the
	     circumstances she would be correct in concluding that her former
	     service as an officer of the company would be likely to cause a
	     reasonable person to question her impartiality if she were to
	     participate in the administration of a DOT contract for which the
	     firm is a first-tier subcontractor.

             Example 5:  An employee of the Internal Revenue Service is a member
	     of a private organization whose purpose is to restore a Victorian-
	     era railroad station and she chairs its annual fundraising drive.
	     Under the circumstances, the employee would be correct in
	     concluding that her active membership in the organization would be
	     likely to cause a reasonable person to question her impartiality if
	     she were to participate in an IRS determination regarding the tax-
	     exempt status of the organization.

(c)     Determination by agency designee.  Where he has information concerning a
	potential appearance problem arising from the financial interest of a
	member of the employee's household in a particular matter involving
	specific parties, or from the role in such matter of a person with whom
	the employee has a covered relationship, the agency designee may make an
	independent determination as to whether a reasonable person with
	knowledge of the relevant facts would be likely to question the
	employee's impartiality in the matter.  Ordinarily, the agency
	designee's determination will be initiated by information provided by
	the employee pursuant to paragraph (a) of this section.  However, at any
	time, including after the employee has disqualified himself from
	participation in a matter pursuant to paragraph (e) of this section, the
	agency designee may make this determination on his own initiative or
	when requested by the employee's supervisor or any other person
	responsible for the employee's assignment.

        (1)  If the agency designee determines that the employee's impartiality
	     is likely to be questioned, he shall then determine, in accordance
	     with paragraph (d) of this section, whether the employee should be
	     authorized to participate in the matter.  Where the agency designee
	     determines that the employee's participation should not be
	     authorized, the employee will be disqualified from participation in
	     the matter in accordance with paragraph (e) of this section.

        (2)  If the agency designee determines that the employee's impartiality
	     is not likely to be questioned, he may advise the employee,
	     including an employee who has reached a contrary conclusion under
	     paragraph (a) of this section, that the employee's participation in
	     the matter would be proper.

(d)     Authorization by agency designee.  Where an employee's participation in
	a particular matter involving specific parties would not violate 18
	U.S.C. 208(a), but would raise a question in the mind of a reasonable
	person about his impartiality, the agency designee may authorize the
	employee to participate in the matter based on a determination, made in
	light of all relevant circumstances, that the interest of the Government
	in the employee's participation outweighs the concern that a reasonable
	person may question the integrity of the agency's programs and
	operations.  Factors which may be taken into consideration include:

	(1)  The nature of the relationship involved;

	(2)  The effect that resolution of the matter would have upon the
	     financial interests of the person involved in the relationship;

	(3)  The nature and importance of the employee's role in the matter,
	     including the extent to which the employee is called upon to
	     exercise discretion in the matter;

	(4)  The sensitivity of the matter;

	(5)  The difficulty of reassigning the matter to another employee; and

	(6)  Adjustments that may be made in the employee's duties that would
	     reduce or eliminate the likelihood that a reasonable person would
	     question the employee's impartiality.

	Authorization by the agency designee shall be documented in writing at
	the agency designee's discretion or when requested by the employee.  An
	employee who has been authorized to participate in a particular matter
	involving specific parties may not thereafter disqualify himself from
	participation in the matter on the basis of an appearance problem
	involving the same circumstances that have been considered by the agency
	designee.

	Example 1:  The Deputy Director of Personnel for the Department of the
	Treasury and an attorney with the Department's Office of General Counsel
	are general partners in a real estate partnership.  The Deputy Director
	advises his supervisor, the Director of Personnel, of the relationship
	upon being assigned to a selection panel for a position for which his
	partner has applied.  If selected, the partner would receive a
	substantial increase in salary.  The agency designee cannot authorize
	the Deputy Director to participate on the panel under the authority of
	this section since the Deputy Director is prohibited by criminal
	statute, 18 U.S.C. 208(a), from participating in a particular matter
	affecting the financial interest of a person who is his general partner.
	See &#167; 2635.402.

	Example 2:  A new employee of the Securities and Exchange Commission is
	assigned to an investigation of insider trading by the brokerage house
	where she had recently been employed. Because of the sensitivity of the
	investigation, the agency designee may be unable to conclude that the
	Government's interest in the employee's participation in the
	investigation outweighs the concern that a reasonable person may
	question the integrity of the investigation, even though the employee
	has severed all financial ties with the company.  Based on consideration
	of all relevant circumstances, the agency designee might determine,
	however, that it is in the interest of the Government for the employee
	to pass on a routine filing by the particular brokerage house.

	Example 3:  An Internal Revenue Service employee involved in a long and
	complex tax audit is advised by her son that he has just accepted an
	entry- level management position with a corporation whose taxes are the
	subject of the audit.  Because the audit is essentially complete and
	because the employee is the only one with an intimate knowledge of the
	case, the agency designee might determine, after considering all
	relevant circumstances, that it is in the Government's interest for the
	employee to complete the audit, which is subject to additional levels of
	review.

(e)     Disqualification.  Unless the employee is authorized to participate in
	the matter under paragraph (d) of this section, an employee shall not
	participate in a particular matter involving specific parties when he or
	the agency designee has concluded, in accordance with paragraph (a) or
	(c) of this section, that the financial interest of a member of the
	employee's household, or the role of a person with whom he has a covered
	relationship, is likely to raise a question in the mind of a reasonable
	person about his impartiality.  Disqualification is accomplished by not
	participating in the matter.

        (1)  Notification.  An employee who becomes aware of the need to
	     disqualify himself from participation in a particular matter
	     involving specific parties to which he has been assigned should
	     notify the person responsible for his assignment.  An employee who
	     is responsible for his own assignment should take whatever steps
	     are necessary to ensure that he does not participate in the matter
	     from which he is disqualified. Appropriate oral or written
	     notification of the employee's disqualification may be made to
	     coworkers by the employee or a supervisor to ensure that the
	     employee is not involved in a particular matter involving specific
	     parties from which he is disqualified.

        (2)  Documentation.  An employee need not file a written
	     disqualification statement unless he is required by part 2634 of
	     this chapter to file written evidence of compliance with an ethics
	     agreement with the Office of Government Ethics or is specifically
	     asked by an agency ethics official or the person responsible for
	     his assignment to file a written disqualification statement.
	     However, an employee may elect to create a record of his actions by
	     providing written notice to a supervisor or other appropriate
	     official.

(f)     Relevant considerations.  An employee's reputation for honesty and
	integrity is not a relevant consideration for purposes of any
	determination required by this section.

&#167; 2635.503 Extraordinary payments from former employers.

(a)     Disqualification requirement.  Except as provided in paragraph (c) of
	this section, an employee shall be disqualified for two years from
	participating in any particular matter in which a former employer is a
	party or represents a party if he received an extraordinary payment from
	that person prior to entering Government service.  The two-year period
	of disqualification begins to run on the date that the extraordinary
	payment is received.

	Example 1:  Following his confirmation hearings and one month before his
	scheduled swearing in, a nominee to the position of Assistant Secretary
	of a department received an extraordinary payment from his employer.
	For one year and 11 months after his swearing in, the Assistant
	Secretary may not participate in any particular matter to which his
	former employer is a party.

	Example 2:  An employee received an extraordinary payment from her
	former employer, a coal mine operator, prior to entering on duty with
	the Department of the Interior.  For two years thereafter, she may not
	participate in a determination regarding her former employer's
	obligation to reclaim a particular mining site, because her former
	employer is a party to the matter. However, she may help to draft
	reclamation legislation affecting all coal mining operations because
	this legislation does not involve any parties.

(b)     Definitions.  For purposes of this section, the following definitions
	shall apply:

        (1)  Extraordinary payment means any item, including cash or an
	     investment interest, with a value in excess of $10,000, which is
	     paid:

             (i)   On the basis of a determination made after it became known to
		   the former employer that the individual was being considered
		   for or had accepted a Government position; and

             (ii)  Other than pursuant to the former employer's established
		   compensation, partnership, or benefits program.  A
		   compensation, partnership, or benefits program will be deemed
		   an established program if it is contained in bylaws, a
		   contract or other written form, or if there is a history of
		   similar payments made to others not entering into Federal
		   service.

       Example 1:  The vice president of a small corporation is nominated to be
       an ambassador.  In recognition of his service to the corporation, the
       board of directors votes to pay him $50,000 upon his confirmation in
       addition to the regular severance payment provided for by the corporate
       bylaws.  The regular severance payment is not an extraordinary payment.
       The gratuitous payment of $50,000 is an extraordinary payment, since the
       corporation had not made similar payments to other departing officers.

        (2)  Former employer includes any person which the employee served as
	     an officer, director, trustee, general partner, agent, attorney,
	     consultant, contractor or employee.

(c)     Waiver of disqualification.  The disqualification requirement of this
	section may be waived based on a finding that the amount of the payment
	was not so substantial as to cause a reasonable person to question the
	employee's ability to act impartially in a matter in which the former
	employer is or represents a party.  The waiver shall be in writing and
	may be given only by the head of the agency or, where the recipient of
	the payment is the head of the agency, by the President or his designee.
	Waiver authority may be delegated by agency heads to any person who has
	been delegated authority to issue individual waivers under 18 U.S.C.
	208(b) for the employee who is the recipient of the extraordinary
	payment.
	

                       SUBPART F - SEEKING OTHER EMPLOYMENT

&#167; 2635.601 Overview.

This subpart contains a disqualification requirement that applies to employees
when seeking employment with persons whose financial interests would be directly
and predictably affected by particular matters in which the employees
participate personally and substantially.  Specifically, it addresses the
requirement of 18 U.S.C. 208(a) that an employee disqualify himself from
participation in any particular matter that will have a direct and predictable
effect on the financial interests of a person "with whom he is negotiating or
has any arrangement concerning prospective employment." See &#167; 2635.402 and &#167;
2640.103 of this chapter.  Beyond this statutory requirement, it also addresses
the issues of lack of impartiality that require disqualification from particular
matters affecting the financial interests of a prospective employer when an
employee's actions in seeking employment fall short of actual employment
negotiations.

&#167; 2635.602 Applicability and related considerations.

To ensure that he does not violate 18 U.S.C. 208(a) or the principles of ethical
conduct contained in &#167; 2635.101(b), an employee who is seeking employment or who
has an arrangement concerning prospective employment shall comply with the
applicable disqualification requirements of &#167;&#167; 2635.604 and 2635.606 if
particular matters in which the employee will be participating personally and
substantially would directly and predictably affect the financial interests of a
prospective employer or of a person with whom he has an arrangement concerning
prospective employment.  Compliance with this subpart also will ensure that the
employee does not violate subpart D or E of this part.

        Note:  An employee who is seeking employment with a person whose
	financial interests are not affected directly and predictably by
	particular matters in which he participates personally and substantially
	has no obligation under this subpart.  An employee may, however, be
	subject to other statutes which impose requirements on  employment
	contacts or discussions, such as 41 U.S.C. 423(c), applicable  to agency
	officials involved in certain procurement matters.

(a)     Related employment restrictions--

        (1)  Outside employment while a Federal employee.  An employee who is
	     contemplating outside employment to be undertaken concurrently with
	     his Federal employment must abide by any limitations applicable to
	     his outside activities under subparts G and H of this part.  He
	     must also comply with any disqualification requirement that may be
	     applicable under subpart D or E of this part as a result of his
	     outside employment activities.

        (2)  Post-employment restrictions.  An employee who is contemplating
	     employment to be undertaken following the termination of his
	     Federal employment should consult an agency ethics official to
	     obtain advice regarding any post-employment restrictions that may
	     be applicable. Regulations implementing the Governmentwide post-
	     employment statute,  18 U.S.C. 207, are contained in parts 2637 and
	     2641 of this chapter. Employees are cautioned that they may be
	     subject to additional statutory prohibitions on post-employment
	     acceptance of compensation from contractors, such as 41 U.S.C.
	     423(d).

(b)     Interview trips and entertainment.  Where a prospective employer who is
	a prohibited source as defined in &#167; 2635.203(d) offers to reimburse an
	employee's travel expenses, or provide other reasonable amenities
	incident to employment discussions, the employee may accept such
	amenities in accordance with &#167; 2635.204(e)(3).

&#167; 2635.603 Definitions.

For purposes of this subpart:

(a)     Employment means any form of non-Federal employment or business
	relationship involving the provision of personal services by the
	employee, whether to be undertaken at the same time as or subsequent to
	Federal employment.  It includes but is not limited to personal services
	as an officer, director, employee, agent, attorney, consultant,
	contractor, general partner or trustee.

	Example 1:  An employee of the Bureau of Indian Affairs who has
	announced her intention to retire is approached by tribal
	representatives concerning a possible consulting contract with the
	tribe.  The independent  contractual relationship the tribe wishes to
	negotiate is employment for  purposes of this subpart.

	Example 2:  An employee of the Department of Health and Human Services
	is invited to a meeting with officials of a nonprofit corporation to
	discuss the possibility of his serving as a member of the corporation's
	board of directors.  Service, with or without compensation, as a member
	of the board of directors constitutes employment for purposes of this
	subpart.

(b)     An employee is seeking employment once he has begun seeking employment
	within the meaning of paragraph (b)(1) of this section and until he is
	no longer seeking employment within the meaning of paragraph (b)(2) of
	this section.

        (1)  An employee has begun seeking employment if he has directly or
	     indirectly:

             (i)   Engaged in negotiations for employment with any person.   For
		   these purposes, as for 18 U.S.C. 208(a), the term
		   negotiations means discussion or communication with another
		   person, or such person's agent or intermediary, mutually
		   conducted with a view toward reaching an agreement regarding
		   possible employment with that person.  The term is not
		   limited to discussions of specific terms and conditions of
		   employment in a specific position;

             (ii)  Made an unsolicited communication to any person, or such
		   person's agent or intermediary, regarding possible employment
		   with that person.  However, the employee has not begun
		   seeking employment if that communication was:

                   (A) For the sole purpose of requesting a job application; or

                   (B) For the purpose of submitting a resume or other
		       employment proposal to a person affected by the
		       performance or nonperformance of the employee's duties
		       only as part of an industry or other discrete class.  The
		       employee will be considered to have begun seeking
		       employment upon receipt of any response indicating an
		       interest in employment discussions; or

             (iii) Made a response other than rejection to an unsolicited
		   communication from any person, or such person's agent or
		   intermediary, regarding possible employment with that person.

        (2)  An employee is no longer seeking employment when:

             (i)  The employee or the prospective employer rejects the
		  possibility of employment and all discussions of possible
		  employment have terminated; or

             (ii) Two months have transpired after the employee's dispatch of an
		  unsolicited resume or employment proposal, provided the
		  employee has received no indication of interest in employment
		  discussions from the prospective employer.

        (3)  For purposes of this definition, a response that defers discussions
	     until the foreseeable future does not constitute rejection of an
	     unsolicited employment overture, proposal, or resume nor rejection
	     of a prospective employment possibility.

             Example 1:  An employee of the Health Care Financing Administration
	     is complimented on her work by an official of a State Health
	     Department who asks her to call if she is ever interested in
	     leaving Federal service. The employee explains to the State
	     official that she is very happy with her job at HCFA and is not
	     interested in another job.  She thanks him for his compliment
	     regarding her work and adds that she'll remember his interest if
	     she ever decides to leave the Government.  The employee has
	     rejected the unsolicited employment overture and has not begun
	     seeking employment. Example 2:  The employee in the preceding
	     example responds by stating that she cannot discuss future
	     employment while she is working on a project affecting the State's
	     health care funding but would like to discuss employment with the
	     State when the project is completed.  Because the employee has
	     merely deferred employment discussions until the foreseeable
	     future, she has begun seeking employment with the State Health
	     Department.

	     Example 3:  An employee of the Defense Contract Audit Agency is
	     auditing the overhead accounts of an Army contractor.  While at the
	     contractor's headquarters, the head of the contractor's accounting
	     division tells the employee that his division is thinking about
	     hiring another accountant and asks whether the employee might be
	     interested in leaving DCAA.  The DCAA employee says he is
	     interested in knowing what kind of work would be involved.  They
	     discuss the duties of the position the accounting division would
	     like to fill and the DCAA employee's qualifications for the
	     position.  They do not discuss salary.  The head of the division
	     explains that he has not yet received authorization to fill the
	     particular position and will get back to the employee when he
	     obtains the necessary approval for additional staffing.  The
	     employee and the contractor's official have engaged in negotiations
	     regarding possible employment.  The employee has begun seeking
	     employment with the Army contractor.

	     Example 4:  An employee of the Occupational Safety and Health
	     Administration helping to draft safety standards applicable to the
	     textile industry has mailed his resume to 25 textile manufacturers.
	     He has not begun seeking employment with any of the twenty-five. If
	     he receives a response from one of the resume recipients indicating
	     an interest in employment discussions, the employee will have begun
	     seeking employment with the respondent at that time.

             Example 5:  A special Government employee of the Federal Deposit
	     Insurance Corporation is serving on an advisory committee formed
	     for the purpose of reviewing rules applicable to all member banks.
	     She mails an unsolicited letter to a member bank offering her
	     services as a contract consultant.  She has not begun seeking
	     employment with the bank until she receives some response
	     indicating an interest in discussing her employment proposal.  A
	     letter merely acknowledging receipt of the proposal is not an
	     indication of interest in employment discussions.

             Example 6:  A geologist employed by the U.S.  Geological Survey has
	     been working as a member of a team preparing the Government's case
	     in an action brought by the Government against six oil companies.
	     The geologist sends her resume to an oil company that is a named
	     defendant in the action.  The geologist has begun seeking
	     employment with that oil company and will be seeking employment for
	     two months from the date the resume was mailed.  However, if she
	     withdraws her application or is notified within the two-month
	     period that her resume has been rejected, she will no longer be
	     seeking employment with the oil company as of the date she makes
	     such withdrawal or receives such notification.

(c)     Prospective employer means any person with whom the employee is seeking
	employment. Where contacts that constitute seeking employment are made
	by or with an agent or other intermediary, the term prospective employer
	includes:

	(1)  A person who uses that agent or other intermediary for the purpose
	     of seeking to establish an employment relationship with the
	     employee if the agent identifies the prospective employer to the
	     employee; and

        (2)  A person contacted by the employee's agent or other intermediary
	     for the purpose of seeking to establish an employment relationship
	     if the agent identifies the prospective employer to the employee.

	     Example 1:  An employee of the Federal Aviation Administration has
	     overall responsibility for airport safety inspections in a three-
	     state area.  She has retained an employment search firm to help her
	     find another job.  The search firm has just reported to the FAA
	     employee that it has given her resume to and had promising
	     discussions with two airport authorities within her jurisdiction.
	     Even though the employee has not personally had employment
	     discussions with either, each airport authority is her prospective
	     employer.  She began seeking employment with each upon learning its
	     identity and that it has been given her resume.

(d)     Direct and predictable effect, particular matter, and personal and
	substantial have the respective meanings set forth in &#167; 2635.402(b)(1),
	(3) and (4).

&#167; 2635.604 Disqualification while seeking employment.

(a)     Obligation to disqualify.  Unless the employee's participation is
	authorized in accordance with &#167; 2635.605, the employee shall not
	participate personally and substantially in a particular matter that, to
	his knowledge, has a direct and predictable effect on the financial
	interests of a prospective employer with whom he is seeking employment
	within the meaning of &#167; 2635.603(b).  Disqualification is accomplished
	by not participating in the particular matter.

(b)     Notification.  An employee who becomes aware of the need to disqualify
	himself from participation in a particular matter to which he has been
	assigned should notify the person responsible for his assignment.  An
	employee who is responsible for his own assignment should take whatever
	steps are necessary to ensure that he does not participate personally
	and substantially in the matter from which he is disqualified.
	Appropriate oral or written notification of the employee's
	disqualification may be made to coworkers by the employee or a
	supervisor to ensure that the employee is not involved in a matter from
	which he is disqualified.

(c)     Documentation.  An employee need not file a written disqualification
	statement unless he is required by part 2634 of this chapter to file
	written evidence of compliance with an ethics agreement with the Office
	of Government Ethics or is specifically asked by an agency ethics
	official or the person responsible for his assignment to file a written
	disqualification statement. However, an employee may elect to create a
	record of his actions by providing written notice to a supervisor or
	other appropriate official.

	Example 1:  An employee of the Department of Veterans Affairs is
	participating in the audit of a contract for laboratory support
	services. Before sending his resume to a lab which is a subcontractor
	under the VA contract, the employee should disqualify himself from
	participation in the audit.  Since he cannot withdraw from participation
	in the contract audit without the approval of his supervisor, he should
	disclose his intentions to his supervisor in order that appropriate
	adjustments in his work assignments can be made.

	Example 2:  An employee of the Food and Drug Administration is contacted
	in writing by a pharmaceutical company concerning possible employment
	with the company.  The employee is involved in testing a drug for which
	the company is seeking FDA approval.  Before making a response that is
	not a rejection, the employee should disqualify himself from further
	participation in the testing. Where he has authority to ask his
	colleague to assume his testing responsibilities, he may accomplish his
	disqualification by transferring the work to that coworker.  However, to
	ensure that his colleague and others with whom he had been working on
	the recommendations do not seek his advice regarding testing or
	otherwise involve him in the matter, it may be necessary for him to
	advise those individuals of his disqualification.

	Example 3:  The General Counsel of a regulatory agency wishes to engage
	in discussions regarding possible employment as corporate counsel of a
	regulated entity.  Matters directly affecting the financial interests of
	the regulated entity are pending within the Office of General Counsel,
	but the General Counsel will not be called upon to act in any such
	matter because signature authority for that particular class of matters
	has been delegated to an Assistant General Counsel.  Because the General
	Counsel is responsible for assigning work within the Office of General
	Counsel, he can in fact accomplish his disqualification by simply
	avoiding any involvement in matters affecting the regulated entity.
	However, because it is likely to be assumed by others that the General
	Counsel is involved in all matters within the cognizance of the Office
	of General Counsel, he would be wise to file a written disqualification
	statement with the Commissioners of the regulatory agency and provide
	his subordinates with written notification of his disqualification, or
	he may be specifically asked by an agency ethics official or the
	Commissioners to file a written disqualification statement.

	Example 4:  A scientist is employed by the National Science Foundation
	as a special Government employee to serve on a panel that reviews grant
	applications to fund research relating to deterioration of the ozone
	layer. She is discussing possible employment as a member of the faculty
	of a university that several years earlier received an NSF grant to
	study the effect of fluorocarbons, but has no grant application pending.
	As long as the university does not submit a new application for the
	panel's review, the employee would not have to take any action to effect
	disqualification.

(d)     Agency determination of substantial conflict.  Where the agency
	determines that the employee's action in seeking employment with a
	particular person will require his disqualification from matters so
	central or critical to the performance of his official duties that the
	employee's ability to perform the duties of his position would be
	materially impaired, the agency may allow the employee to take annual
	leave or leave without pay while seeking employment, or may take other
	appropriate administrative action.

&#167; 2635.605 Waiver or authorization permitting participation while seeking
employment.

(a)     Waiver.  Where, as defined in &#167; 2635.603(b)(1)(i), an employee is
	engaged in discussions that constitute employment negotiations for
	purposes of 18 U.S.C. 208(a), the employee may participate personally
	and substantially in a particular matter that has a direct and
	predictable effect on the financial interests of a prospective employer
	only after receiving a written waiver issued under the authority of 18
	U.S.C. 208(b)(1) or (b)(3). These waivers are described in &#167;
	2635.402(d).   See also subpart C of part 2640 of this chapter.   For
	certain employees, a regulatory exemption under the authority of 18
	U.S.C. 208(b)(2) may also apply (see subpart B of part 2640 of this
	chapter).

	Example 1:  An employee of the Department of Agriculture has had two
	telephone conversations with an orange grower regarding possible
	employment. They have discussed the employee's qualifications for a
	particular position with the grower, but have not yet discussed salary
	or other specific terms of employment.  The employee is negotiating for
	employment within the meaning of 18 U.S.C. 208(a) and &#167; 2635.603(b)(1)
	(i).  In the absence of a written waiver issued under 18 U.S.C. 208(b)
	(1), she may not take official action on a complaint filed by a
	competitor alleging that the grower has shipped oranges in violation of
	applicable quotas.

(b)     Authorization by agency designee.  Where an employee is seeking
	employment within the meaning of &#167; 2635.603(b)(1)(ii) or (iii), a
	reasonable person would be likely to question his impartiality if he
	were to participate personally and substantially in a particular matter
	that has a direct and predictable effect on the financial interests of
	any such prospective employer.  The employee may participate in such
	matters only where the agency designee has authorized his participation
	in accordance with the standards set forth in &#167; 2635.502(d).

	Example 1:  Within the past month, an employee of the Education
	Department mailed her resume to a university.  She is thus seeking
	employment with the university within the meaning of &#167; 2635.603(b)(1)
	(ii) even though she has received no reply.  In the absence of specific
	authorization by the agency designee in accordance with &#167; 2635.502(d),
	she may not participate in an assignment to review a grant application
	submitted by the university.

&#167; 2635.606 Disqualification based on an arrangement concerning prospective
employment or otherwise after negotiations.

(a)     Employment or arrangement concerning employment.  An employee shall be
	disqualified from participating personally and substantially in a
	particular matter that has a direct and predictable effect on the
	financial interests of the person by whom he is employed or with whom he
	has an arrangement concerning future employment, unless authorized to
	participate in the matter by a written waiver issued under the authority
	of 18 U.S.C. 208 (b)(1) or (b)(3), or by a regulatory exemption under
	the authority of 18 U.S.C. 208(b)(2).  These waivers and exemptions are
	described in &#167; 2635.402(d).  See also subparts B and C of part 2640 of
	this chapter.

	Example 1:  A military officer has accepted a job with a defense
	contractor to begin in six months, after his retirement from military
	service.  During the period that he remains with the Government, the
	officer may not participate in the administration of a contract with
	that particular defense contractor unless he has received a written
	waiver under the authority of 18 U.S.C. 208(b)(1).

	Example 2:  An accountant has just been offered a job with the
	Comptroller of the Currency which involves a two-year limited
	appointment.  Her private employer, a large corporation, believes the
	job will enhance her skills and has agreed to give her a two-year unpaid
	leave of absence at the end of which she has agreed to return to work
	for the corporation.  During the two-year period she is to be a COC
	employee, the accountant will have an arrangement concerning future
	employment with the corporation that will require her disqualification
	from participation in any particular matter that will have a direct and
	predictable effect on the corporation's financial interests.

(b)     Offer rejected or not made.  The agency designee for the purpose of &#167;
	2635.502(c) may, in an appropriate case, determine that an employee not
	covered by the preceding paragraph who has sought but is no longer
	seeking employment nevertheless shall be subject to a period of
	disqualification upon the conclusion of employment negotiations.  Any
	such determination shall be based on a consideration of all the relevant
	factors, including those listed in &#167; 2635.502(d), and a determination
	that the concern that a reasonable person may question the integrity of
	the agency's decision making process outweighs the Government's interest
	in the employee's participation in the particular matter.

	Example 1:  An employee of the Securities and Exchange Commission was
	relieved of responsibility for an investigation of a broker-dealer while
	seeking employment with the law firm representing the broker-dealer in
	that matter.  The firm did not offer her the partnership position she
	sought. Even though she is no longer seeking employment with the firm,
	she may continue to be disqualified from participating in the
	investigation based on a determination by the agency designee that the
	concern that a reasonable person might question whether, in view of the
	history of the employment negotiations, she could act impartially in the
	matter outweighs the Government's interest in her participation.
	

                    SUBPART G - MISUSE OF POSITION

&#167; 2635.701 Overview.

This subpart contains provisions relating to the proper use of official time and
authority, and of information and resources to which an employee has access
because of his Federal employment. This subpart sets forth standards relating
to:

(a)     Use of public office for private gain;

(b)     Use of nonpublic information;

(c)     Use of Government property; and

(d)     Use of official time.

&#167; 2635.702 Use of public office for private gain.

An employee shall not use his public office for his own private gain, for the
endorsement of any product, service or enterprise, or for the private gain of
friends, relatives, or persons with whom the employee is affiliated in a
nongovernmental capacity, including nonprofit organizations of which the
employee is an officer or member, and persons with whom the employee has or
seeks employment or business relations.  The specific prohibitions set forth in
paragraphs (a) through (d) of this section apply this general standard, but are
not intended to be exclusive or to limit the application of this section.

(a)     Inducement or coercion of benefits.  An employee shall not use or permit
	the use of his Government position or title or any authority associated
	with his public office in a manner that is intended to coerce or induce
	another person, including a subordinate, to provide any benefit,
	financial or otherwise, to himself or to friends, relatives, or persons
	with whom the employee is affiliated in a nongovernmental capacity.

	Example 1:  Offering to pursue a relative's consumer complaint over a
	household appliance, an employee of the Securities and Exchange
	Commission called the general counsel of the manufacturer and, in the
	course of discussing the problem, stated that he worked at the SEC and
	was responsible for reviewing the company's filings.  The employee
	violated the prohibition against use of public office for private gain
	by invoking his official authority in an attempt to influence action to
	benefit his relative.

	Example 2:  An employee of the Department of Commerce was asked by a
	friend to determine why his firm's export license had not yet been
	granted by another office within the Department of Commerce.  At a
	department-level staff meeting, the employee raised as a matter for
	official inquiry the delay in approval of the particular license and
	asked that the particular license be expedited.  The official used her
	public office in an attempt to benefit her friend and, in acting as her
	friend's agent for the purpose of pursuing the export license with the
	Department of Commerce, may also have violated 18 U.S.C. 205.

(b)     Appearance of governmental sanction.  Except as otherwise provided in
	this part, an employee shall not use or permit the use of his Government
	position or title or any authority associated with his public office in
	a manner that could reasonably be construed to imply that his agency or
	the Government sanctions or endorses his personal activities or those of
	another.  When teaching, speaking, or writing in a personal capacity, he
	may refer to his official title or position only as permitted by &#167;
	2635.807(b).  He may sign a letter of recommendation using his official
	title only in response to a request for an employment recommendation or
	character reference based upon personal knowledge of the ability or
	character of an individual with whom he has dealt in the course of
	Federal employment or whom he is recommending for Federal employment.

	Example 1:  An employee of the Department of the Treasury who is asked
	to provide a letter of recommendation for a former subordinate on his
	staff may provide the recommendation using official stationery and may
	sign the letter using his official title.  If, however, the request is
	for the recommendation of a personal friend with whom he has not dealt
	in the Government, the employee should not use official stationery or
	sign the letter of recommendation using his official title, unless the
	recommendation is for Federal employment.  In writing the letter of
	recommendation for his personal friend, it may be appropriate for the
	employee to refer to his official position in the body of the letter.

(c)     Endorsements.  An employee shall not use or permit the use of his
	Government position or title or any authority associated with his public
	office to endorse any product, service or enterprise except:

	(1)  In furtherance of statutory authority to promote products, services
	     or enterprises; or

	(2)  As a result of documentation of compliance with agency requirements
	     or standards or as the result of recognition for achievement given
	     under an agency program of recognition for accomplishment in
	     support of the agency's mission.

	Example 1:  A Commissioner of the Consumer Product Safety Commission may
	not appear in a television commercial in which she endorses an
	electrical appliance produced by her former employer, stating that it
	has been found by the CPSC to be safe for residential use.

	Example 2:  A Foreign Commercial Service officer from the Department of
	Commerce is asked by a United States telecommunications company to meet
	with representatives of the Government of Spain, which is in the process
	of procuring telecommunications services and equipment.  The company is
	bidding against five European companies and the statutory mission of the
	Department of Commerce includes assisting the export activities of U.S.
	companies.  As part of his official duties, the Foreign Commercial
	Service officer may meet with Spanish officials and explain the
	advantages of procurement from the United States company.

	Example 3:  The Administrator of the Environmental Protection Agency may
	sign a letter to an oil company indicating that its refining operations
	are in compliance with Federal air quality standards even though he
	knows that the company has routinely displayed letters of this type in
	television commercials portraying it as a "trustee of the environment
	for future generations."

	Example 4:  An Assistant Attorney General may not use his official title
	or refer to his Government position in a book jacket endorsement of a
	novel about organized crime written by an author whose work he admires.
	Nor may he do so in a book review published in a newspaper.

(d)     Performance of official duties affecting a private interest.  To ensure
	that the performance of his official duties does not give rise to an
	appearance of use of public office for private gain or of giving
	preferential treatment, an employee whose duties would affect the
	financial interests of a friend, relative or person with whom he is
	affiliated in a nongovernmental capacity shall comply with any
	applicable requirements of &#167; 2635.502.

(e)     Use of terms of address and ranks.  Nothing in this section prohibits an
	employee who is ordinarily addressed using a general term of address,
	such as "The Honorable," or a rank, such as a military or ambassadorial
	rank, from using that term of address or rank in connection with a
	personal activity.

&#167; 2635.703 Use of nonpublic information.

(a)     Prohibition.  An employee shall not engage in a financial transaction
	using nonpublic information, nor allow the improper use of nonpublic
	information to further his own private interest or that of another,
	whether through advice or recommendation, or by knowing unauthorized
	disclosure.

(b)     Definition of nonpublic information.  For purposes of this section,
	nonpublic information is information that the employee gains by reason
	of Federal employment and that he knows or reasonably should know has
	not been made available to the general public.  It includes information
	that he knows or reasonably should know:

        (1)  Is routinely exempt from disclosure under 5 U.S.C. 552 or otherwise
	     protected from disclosure by statute, Executive order or
	     regulation;

        (2)  Is designated as confidential by an agency; or

        (3)  Has not actually been disseminated to the general public and is not
	     authorized to be made available to the public on request.

	Example 1:  A Navy employee learns in the course of her duties that a
	small corporation will be awarded a Navy contract for electrical test
	equipment. She may not take any action to purchase stock in the
	corporation or its suppliers and she may not advise friends or relatives
	to do so until after public announcement of the award.  Such actions
	could violate Federal securities statutes as well as this section.

	Example 2:  A General Services Administration employee involved in
	evaluating proposals for a construction contract cannot disclose the
	terms of a competing proposal to a friend employed by a company bidding
	on the work. Prior to award of the contract, bid or proposal information
	is nonpublic information specifically protected by 41 U.S.C. 423.

	Example 3:  An employee is a member of a source selection team assigned
	to review the proposals submitted by several companies in response to an
	Army solicitation for spare parts. As a member of the evaluation team,
	the employee has access to proprietary information regarding the
	production methods of Alpha Corporation, one of the competitors.  He may
	not use that information to assist Beta Company in drafting a proposal
	to compete for a Navy spare parts contract.  The Federal Acquisition
	Regulation in 48 CFR parts 3, 14 and 15 restricts the release of
	information related to procurements and other contractor information
	that must be protected under 18 U.S.C. 1905 and 41 U.S.C. 423.

	Example 4:  An employee of the Nuclear Regulatory Commission
	inadvertently includes a document that is exempt from disclosure with a
	group of documents released in response to a Freedom of Information Act
	request.  Regardless of whether the document is used improperly, the
	employee's disclosure does not violate this section because it was not a
	knowing unauthorized disclosure made for the purpose of furthering a
	private interest.

	Example 5:  An employee of the Army Corps of Engineers is actively
	involved in the activities of an organization whose goals relate to
	protection of the environment.  The employee may not, other than as
	permitted by agency procedures, give the organization or a newspaper
	reporter nonpublic information about long-range plans to build a
	particular dam.

&#167; 2635.704 Use of Government property.

(a)     Standard.   An employee has a duty to protect and conserve Government
	property and shall not use such property, or allow its use, for other
	than authorized purposes.

(b)     Definitions.   For purposes of this section:

        (1)  Government property includes any form of real or personal property
	     in which the Government has an ownership, leasehold, or other
	     property interest as well as any right or other intangible interest
	     that is purchased with Government funds, including the services of
	     contractor personnel.  The term includes office supplies, telephone
	     and other telecommunications equipment and services, the Government
	     mails, automated data processing capabilities, printing and
	     reproduction facilities, Government records, and Government
	     vehicles.

        (2)  Authorized purposes are those purposes for which Government
	     property is made available to members of the public or those
	     purposes authorized in accordance with law or regulation.

	Example 1:  Under regulations of the General Services Administration at
	41 CFR 101-35.201, an employee may make a personal long distance call
	charged to her personal calling card.

	Example 2:  An employee of the Commodity Futures Trading Commission
	whose office computer gives him access to a commercial service providing
	information for investors may not use that service for personal
	investment research.

	Example 3:  In accordance with Office of Personnel Management
	regulations at part 251 of this title, an attorney employed by the
	Department of Justice may be permitted to use her office word processor
	and agency photocopy equipment to prepare a paper to be presented at a
	conference sponsored by a professional association of which she is a
	member.

&#167; 2635.705 Use of official time.

(a)     Use of an employee's own time.  Unless authorized in accordance with law
	or regulations to use such time for other purposes, an employee shall
	use official time in an honest effort to perform official duties.  An
	employee not under a leave system, including a Presidential appointee
	exempted under 5 U.S.C. 6301(2), has an obligation to expend an honest
	effort and a reasonable proportion of his time in the performance of
	official duties.

	Example 1:  An employee of the Social Security Administration may use
	official time to engage in certain representational activities on behalf
	of the employee union of which she is a member. Under 5 U.S.C. 7131,
	this is a proper use of her official time even though it does not
	involve performance of her assigned duties as a disability claims
	examiner.

	Example 2:  A pharmacist employed by the Department of Veterans Affairs
	has been granted excused absence to participate as a speaker in a
	conference on drug abuse sponsored by the professional association to
	which he belongs. Although excused absence granted by an agency in
	accordance with guidance in chapter 630 of the Federal Personnel Manual
	allows an employee to be absent from his official duties without charge
	to his annual leave account, such absence is not on official time.

(b)     Use of a subordinate's time.   An employee shall not encourage, direct,
	coerce, or request a subordinate to use official time to perform
	activities other than those required in the performance of official
	duties or authorized in accordance with law or regulation.

	Example 1:  An employee of the Department of Housing and Urban
	Development may not ask his secretary to type his personal
	correspondence during duty hours.    Further, directing or coercing a
	subordinate to perform such activities during nonduty hours constitutes
	an improper use of public office for private gain in violation of   &#167;
	2635.702(a).  Where the arrangement is entirely voluntary and
	appropriate compensation is paid, the secretary may type the
	correspondence at home on her own time.  Where the compensation is not
	adequate, however, the arrangement would involve a gift to the superior
	in violation of the standards in subpart C of this part.


                      SUBPART H - OUTSIDE ACTIVITIES

&#167; 2635.801 Overview.

(a)     This subpart contains provisions relating to outside employment, outside
	activities and personal financial obligations of employees that are in
	addition to the principles and standards set forth in other subparts of
	this part.  Several of these provisions apply to uncompensated as well
	as to compensated outside activities.

(b)     An employee who wishes to engage in outside employment or other outside
	activities must comply with all relevant provisions of this subpart,
	including, when applicable:

        (1)  The prohibition on outside employment or any other outside activity
	     that conflicts with the employee's official duties;

	(2)  Any agency-specific requirement for prior approval of outside
	     employment or activities;

	(3)  The limitations on receipt of outside earned income by certain
	     Presidential appointees and other noncareer employees;

	(4)  The limitations on paid and unpaid service as an expert witness;

	(5)  The limitations on participation in professional organizations;

	(6)  The limitations on paid and unpaid teaching, speaking, and writing;
	and

	(7)  The limitations on fundraising activities.

(c)     Outside employment and other outside activities of an employee must also
	comply with applicable provisions set forth in other subparts of this
	part and in supplemental agency regulations.  These include the
	principle that an employee shall endeavor to avoid actions creating an
	appearance of violating any of the ethical standards in this part and
	the prohibition against use of official position for an employee's
	private gain or for the private gain of any person with whom he has
	employment or business relations or is otherwise affiliated in a
	nongovernmental capacity.

(d)     In addition to the provisions of this and other subparts of this part,
	an employee who wishes to engage in outside employment or other outside
	activities must comply with applicable statutes and regulations.
	Relevant provisions of law, many of which are listed in subpart I of
	this part, may include:

	(1)  18 U.S.C. 201(b), which prohibits a public official from seeking,
	     accepting or agreeing to receive or accept anything of value in
	     return for being influenced in the performance of an official act
	     or for being induced to take or omit to take any action in
	     violation of his official duty;

	(2)  18 U.S.C. 201(c), which prohibits a public official, otherwise than
	     as provided by law for the proper discharge of official duty, from
	     seeking, accepting, or agreeing to receive or accept anything of
	     value for or because of any official act;

	(3)  18 U.S.C. 203(a), which prohibits an employee from seeking,
	     accepting, or agreeing to receive or accept compensation for any
	     representational services, rendered personally or by another, in
	     relation to any particular matter in which the United States is a
	     party or has a direct and substantial interest, before any
	     department, agency, or other specified entity. This statute
	     contains several exceptions, as well as standards for special
	     Government employees that limit the scope of the restriction;

	(4)  18 U.S.C. 205, which prohibits an employee, whether or not for
	     compensation, from acting as agent or attorney for anyone in a
	     claim against the United States or from acting as agent or attorney
	     for anyone, before any department, agency, or other specified
	     entity, in any particular matter in which the United States is a
	     party or has a direct and substantial interest.  It also prohibits
	     receipt of any gratuity, or any share of or interest in a claim
	     against the United States, in consideration for assisting in the
	     prosecution of such claim.  This statute contains several
	     exceptions, as well as standards for special Government employees
	     that limit the scope of the restrictions;

	(5)  18 U.S.C. 209, which prohibits an employee, other than a special
	     Government employee, from receiving any salary or any contribution
	     to or supplementation of salary from any source other than the
	     United States as compensation for services as a Government
	     employee.  The statute contains several exceptions that limit its
	     applicability;

	(6)  The Emoluments Clause of the United States Constitution, article I,
	     section 9, clause 8, which prohibits anyone holding an office of
	     profit or trust under the United States from accepting any gift,
	     office, title or emolument, including salary or compensation, from
	     any foreign government except as authorized by Congress.  In
	     addition, 18 U.S.C. 219 generally prohibits any public official
	     from being or acting as an agent of a foreign principal, including
	     a foreign government, corporation or person, if the employee would
	     be required to register as a foreign agent under 22 U.S.C. 611 et
	     seq.;

	(7)  The Hatch Act Reform Amendments, 5 U.S.C. 7321 through 7326, which
	     govern the political activities of executive branch employees; and

	(8)  The limitations on outside employment, 5 U.S.C. App.  (Ethics in
	     Government Act of 1978), which prohibit a covered noncareer
	     employee's receipt of compensation for specified activities and
	     provide that he shall not allow his name to be used by any firm or
	     other entity which provides professional services involving a
	     fiduciary relationship. Implementing regulations are contained in
	     &#167;&#167; 2636.305 through 2636.307 of this chapter.

&#167; 2635.802 Conflicting outside employment and activities.

An employee shall not engage in outside employment or any other outside activity
that conflicts with his official duties.  An activity conflicts with an
employee's official duties:

(a)     If it is prohibited by statute or by an agency supplemental regulation;
or

(b)     If, under the standards set forth in &#167;&#167; 2635.402 and 2635.502, it would
	require the employee's disqualification from matters so central or
	critical to the performance of his official duties that the employee's
	ability to perform the duties of his position would be materially
	impaired.

	Employees are cautioned that even though an outside activity may not be
	prohibited under this section, it may violate other principles or
	standards set forth in this part or require the employee to disqualify
	himself from participation in certain particular matters under either
	subpart D or subpart E of this part.

	Example 1:  An employee of the Environmental Protection Agency has just
	been promoted.  His principal duty in his new position is to write
	regulations relating to the disposal of hazardous waste.  The employee
	may not continue to serve as president of a nonprofit environmental
	organization that routinely submits comments on such regulations.  His
	service as an officer would require his disqualification from duties
	critical to the performance of his official duties on a basis so
	frequent as to materially impair his ability to perform the duties of
	his position.

	Example 2:  An employee of the Occupational Safety and Health
	Administration who was and is expected again to be instrumental in
	formulating new OSHA safety standards applicable to manufacturers that
	use chemical solvents has been offered a consulting contract to provide
	advice to an affected company in restructuring its manufacturing
	operations to comply with the OSHA standards.  The employee should not
	enter into the consulting arrangement even though he is not currently
	working on OSHA standards affecting this industry and his consulting
	contract can be expected to be completed before he again works on such
	standards.  Even though the consulting arrangement would not be a
	conflicting activity within the meaning of &#167; 2635.802, it would create
	an appearance that the employee had used his official position to obtain
	the compensated outside business opportunity and it would create the
	further appearance of using his public office for the private gain of
	the manufacturer.

&#167; 2635.803 Prior approval for outside employment and activities.

When required by agency supplemental regulation issued after February 3, 1993,
an employee shall obtain prior approval before engaging in outside employment or
activities.  Where it is determined to be necessary or desirable for the purpose
of administering its ethics program, an agency shall, by supplemental
regulation, require employees or any category of employees to obtain prior
approval before engaging in specific types of outside activities, including
outside employment.  &#167; 2635.804 Outside earned income limitations applicable to
certain Presidential appointees and other noncareer employees.

(a)     Presidential appointees to full-time noncareer positions.  A
	Presidential appointee to a full-time noncareer position shall not
	receive any outside earned income for outside employment, or for any
	other outside activity, performed during that Presidential appointment.
	This limitation does not apply to any outside earned income received for
	outside employment, or for any other outside activity, carried out in
	satisfaction of the employee's obligation under a contract entered into
	prior to April 12, 1989.

(b)     Covered noncareer employees.  Covered noncareer employees, as defined in
	&#167; 2636.303(a) of this chapter, may not, in any calendar year, receive
	outside earned income attributable to that calendar year which exceeds
	15 percent of the annual rate of basic pay for level II of the Executive
	Schedule under 5 U.S.C. 5313, as in effect on January 1 of such calendar
	year. Employees should consult the regulations implementing this
	limitation, which are contained in &#167;&#167; 2636.301 through 2636.304 of this
	chapter.

        Note: In addition to the 15 percent limitation on outside earned income,
	covered noncareer employees are prohibited from receiving any
	compensation for: practicing a profession which involves a fiduciary
	relationship; affiliating with or being employed by a firm or other
	entity which provides professional services involving a fiduciary
	relationship; serving as an officer or member of the board of any
	association, corporation or other entity; or teaching without prior
	approval.  Implementing regulations are contained in &#167;&#167; 2636.305 through
	2636.307 of this chapter.

(c)     Definitions.  For purposes of this section:

        (1)  Outside earned income has the meaning set forth in &#167; 2636.303(b) of
	     this chapter, except that &#167; 2636.303(b)(8) shall not apply.

        (2)  Presidential appointee to a full-time noncareer position means any
	     employee who is appointed by the President to a full-time position
	     described in 5 U.S.C. 5312 through 5317 or to a position that, by
	     statute or as a matter of practice, is filled by Presidential
	     appointment, other than:

             (i)   A position filled under the authority of 3 U.S.C. 105 or 3
		   U.S.C. 107(a) for which the rate of basic pay is less than
		   that for GS-9, step 1 of the General Schedule;

             (ii)  A position, within a White House operating unit, that is
		   designated as not normally subject to change as a result of a
		   Presidential transition;

             (iii) A position within the uniformed services; or

             (iv)  A position in which a member of the foreign service is
		   serving that does not require advice and consent of the
		   Senate.

	     Example 1:  A career Department of Justice employee who is detailed
	     to a policy-making position in the White House Office that is
	     ordinarily filled by a noncareer employee is not a Presidential
	     appointee to a full-time noncareer position.

	     Example 2:  A Department of Energy employee appointed under &#167;
	     213.3301 of this title to a Schedule C position is appointed by the
	     agency and, thus, is not a Presidential appointee to a full-time
	     noncareer position.

&#167; 2635.805 Service as an expert witness.

(a)     Restriction.  An employee shall not serve, other than on behalf of the
	United States, as an expert witness, with or without compensation, in
	any proceeding before a court or agency of the United States in which
	the United States is a party or has a direct and substantial interest,
	unless the employee's participation is authorized by the agency under
	paragraph (c) of this section.  Except as provided in paragraph (b) of
	this section, this restriction shall apply to a special Government
	employee only if he has participated as an employee or special
	Government employee in the particular proceeding or in the particular
	matter that is the subject of the proceeding.

(b)     Additional restriction applicable to certain special Government
employees.

        (1)  In addition to the restriction described in paragraph (a) of this
	     section, a special Government employee described in paragraph (b)
	     (2) of this section shall not serve, other than on behalf of the
	     United States, as an expert witness, with or without compensation,
	     in any proceeding before a court or agency of the United States in
	     which his employing agency is a party or has a direct and
	     substantial interest, unless the employee's participation is
	     authorized by the agency under paragraph (c) of this section.

        (2)  The restriction in paragraph (b)(1) of this section shall apply to
	     a special Government employee who:

             (i)   Is appointed by the President;

             (ii)  Serves on a commission established by statute; or

             (iii) Has served or is expected to serve for more than 60 days in a
		   period of 365 consecutive days.

(c)     Authorization to serve as an expert witness.  Provided that the
	employee's testimony will not violate any of the principles or standards
	set forth in this part, authorization to provide expert witness service
	otherwise prohibited by paragraphs (a) and (b) of this section may be
	given by the designated agency ethics official of the agency in which
	the employee serves when:

        (1)  After consultation with the agency representing the Government in
	     the proceeding or, if the Government is not a party, with the
	     Department of Justice and the agency with the most direct and
	     substantial interest in the matter, the designated agency ethics
	     official determines that the employee's service as an expert
	     witness is in the interest of the Government; or

        (2)  The designated agency ethics official determines that the subject
	     matter of the testimony does not relate to the employee's official
	     duties within the meaning of &#167; 2635.807(a)(2)(i).

(d)     Nothing in this section prohibits an employee from serving as a fact
	witness when subpoenaed by an appropriate authority.

&#167; 2635.806 Participation in professional associations.  [Reserved]

&#167; 2635.807 Teaching, speaking and writing.

(a)     Compensation for teaching, speaking or writing.  Except as permitted by
	paragraph (a)(3) of this section, an employee, including a special
	Government employee, shall not receive compensation from any source
	other than the Government for teaching, speaking or writing that relates
	to the employee's official duties.

        (1)  Relationship to other limitations on receipt of compensation.  The
	     compensation prohibition contained in this section is in addition
	     to any other limitation on receipt of compensation set forth in
	     this chapter, including:

             (i)   The requirement contained in &#167; 2636.307 of this chapter that
		   covered noncareer employees obtain advance authorization
		   before engaging in teaching for compensation; and

             (ii)  The prohibitions and limitations in &#167; 2635.804 and in &#167;
		   2636.304 of this chapter on receipt of outside earned income
		   applicable to certain Presidential appointees and to other
		   covered noncareer employees.

        (2)  Definitions.  For purposes of this paragraph:

             (i)   Teaching, speaking or writing relates to the employee's
		   official duties if:

                   (A) The activity is undertaken as part of the employee's
		       official duties;

                   (B) The circumstances indicate that the invitation to engage
		       in the activity was extended to the employee primarily
		       because of his official position rather than his
		       expertise on the particular subject matter;

	           (C) The invitation to engage in the activity or the offer of
		       compensation for the activity was extended to the
		       employee, directly or indirectly, by a person who has
		       interests that may be affected substantially by
		       performance or nonperformance of the employee's official
		       duties;

                   (D) The information conveyed through the activity draws
		       substantially on ideas or official data that are
		       nonpublic information as defined in &#167; 2635.703(b); or

                   (E) Except as provided in paragraph (a)(2)(i)(E)(4) of this
		       section, the subject of the activity deals in significant
		       part with:

                       (1)  Any matter to which the employee presently is
			    assigned or to which the employee had been assigned
			    during the previous one-year period;

                       (2)  Any ongoing or announced policy, program or
			    operation of the agency; or

		       (3)  In the case of a noncareer employee as defined in &#167;
			    2636.303(a) of this chapter, the general subject
			    matter area, industry, or economic sector primarily
			    affected by the programs and operations of his
			    agency.

		       (4)  The restrictions in paragraphs (a)(2)(i)(E)(2) and
			    (3) of this section do not apply to a special
			    Government employee. The restriction in paragraph
			    (a)(2)(i)(E)(1) of this section applies only during
			    the current appointment of a special Government
			    employee; except that if the special Government
			    employee has not served or is not expected to serve
			    for more than 60 days during the first year or any
			    subsequent one- year period of that appointment, the
			    restriction applies only to particular matters
			    involving specific parties in which the special
			    Government employee has participated or is
			    participating personally and substantially.

		   Note:  Section 2635.807(a)(2)(i)(E) does not preclude an
		   employee, other than a covered noncareer employee, from
		   receiving compensation for teaching, speaking or writing on a
		   subject within the employee's discipline or inherent area of
		   expertise based on his educational background or experience
		   even though the teaching, speaking or writing deals generally
		   with a subject within the agency's areas of responsibility.

	Example 1:  The Director of the Division of Enforcement at the Commodity
	Futures Trading Commission has a keen interest in stamp collecting and
	has spent years developing his own collection as well as studying the
	field generally.  He is asked by an international society of
	philatelists to give a series of four lectures on how to assess the
	value of American stamps. Because the subject does not relate to his
	official duties, the Director may accept compensation for the lecture
	series.  He could not, however, accept a similar invitation from a
	commodities broker.

	Example 2:  A scientist at the National Institutes of Health, whose
	principal area of Government research is the molecular basis of the
	development of cancer, could not be compensated for writing a book which
	focuses specifically on the research she conducts in her position at
	NIH, and thus, relates to her official duties.  However, the scientist
	could receive compensation for writing or editing a textbook on the
	treatment of all cancers, provided that the book does not focus on
	recent research at NIH, but rather conveys scientific knowledge gleaned
	from the scientific community as a whole.  The book might include a
	chapter, among many other chapters, which discusses the molecular basis
	of cancer development.  Additionally, the book could contain brief
	discussions of recent developments in cancer treatment, even though some
	of those developments are derived from NIH research, as long as it is
	available to the public.

	Example 3:  On his own time, a National Highway Traffic Safety
	Administration employee prepared a consumer's guide to purchasing a safe
	automobile that focuses on automobile crash worthiness statistics
	gathered and made public by NHTSA.  He may not receive royalties or any
	other form of compensation for the guide.  The guide deals in
	significant part with the programs or operations of NHTSA and,
	therefore, relates to the employee's official duties.  On the other
	hand, the employee could receive royalties from the sale of a consumer's
	guide to values in used automobiles even though it contains a brief,
	incidental discussion of automobile safety standards developed by NHTSA.

	Example 4:  An employee of the Securities and Exchange Commission may
	not receive compensation for a book which focuses specifically on the
	regulation of the securities industry in the United States, since that
	subject concerns the regulatory programs or operations of the SEC.  The
	employee may, however, write a book about the advantages of investing in
	various types of securities as long as the book contains only an
	incidental discussion of any program or operation of the SEC.

	Example 5:  An employee of the Department of Commerce who works in the
	Department's employee relations office is an acknowledged expert in the
	field of Federal employee labor relations, and participates in
	Department negotiations with employee unions.  The employee may receive
	compensation from a private training institute for a series of lectures
	which describe the decisions of the Federal Labor Relations Authority
	concerning unfair labor practices, provided that her lectures do not
	contain any significant discussion of labor relations cases handled at
	the Department of Commerce, or the Department's labor relations
	policies. Federal Labor Relations Authority decisions concerning Federal
	employee unfair labor practices are not a specific program or operation
	of the Department of Commerce and thus do not relate to the employee's
	official duties.  However, an employee of the FLRA could not give the
	same presentations for compensation.

	Example 6:  A program analyst employed at the Environmental Protection
	Agency may receive royalties and other compensation for a book about the
	history of the environmental movement in the United States even though
	it contains brief references to the creation and responsibilities of the
	EPA.  A covered noncareer employee of the EPA, however, could not
	receive compensation for writing the same book because it deals with the
	general subject matter area affected by EPA programs and operations.
	Neither employee could receive compensation for writing a book that
	focuses on specific EPA regulations or otherwise on its programs and
	operations.

	Example 7:  An attorney in private practice has been given a one year
	appointment as a special Government employee to serve on an advisory
	committee convened for the purpose of surveying and recommending
	modification of procurement regulations that deter small businesses from
	competing for Government contracts.  Because his service under that
	appointment is not expected to exceed 60 days, the attorney may accept
	compensation for an article about the anticompetitive effects of certain
	regulatory certification requirements even though those regulations are
	being reviewed by the advisory committee.  The regulations which are the
	focus of the advisory committee deliberations are not a particular
	matter involving specific parties. Because the information is nonpublic,
	he could not, however, accept compensation for an article which recounts
	advisory committee deliberations that took place in a meeting closed to
	the public in order to discuss proprietary information provided by a
	small business.

	Example 8:  A biologist who is an expert in marine life is employed for
	more than 60 days in a year as a special Government employee by the
	National Science Foundation to assist in developing a program of grants
	by the Foundation for the study of coral reefs.  The biologist may
	continue to receive compensation for speaking, teaching and writing
	about marine life generally and coral reefs specifically.  However,
	during the term of her appointment as a special Government employee, she
	may not receive compensation for an article about the NSF program she is
	participating in developing.  Only the latter would concern a matter to
	which the special Government employee is assigned.

	Example 9:  An expert on international banking transactions has been
	given a one-year appointment as a special Government employee to assist
	in analyzing evidence in the Government's fraud prosecution of owners of
	a failed savings and loan association.  It is anticipated that she will
	serve fewer than 60 days under that appointment.  Nevertheless, during
	her appointment, the expert may not accept compensation for an article
	about the fraud prosecution, even though the article does not reveal
	nonpublic information. The prosecution is a particular matter that
	involves specific parties.

             (ii)  Agency has the meaning set forth in &#167; 2635.102(a), except
		   that any component of a department designated as a separate
		   agency under &#167; 2635.203(a) shall be considered a separate
		   agency.

	    (iii)  Compensation includes any form of consideration, remuneration
		   or income, including royalties, given for or in connection
		   with the employee's teaching, speaking or writing activities.
		   Unless accepted under specific statutory authority, such as
		   31 U.S.C. 1353, 5 U.S.C. 4111 or 7342, or an agency gift
		   acceptance statute, it includes transportation, lodgings and
		   meals, whether provided in kind, by purchase of a ticket, by
		   payment in advance or by reimbursement after the expense has
		   been incurred.  It does not include:

		   (A) Items offered by any source that could be accepted from a
		       prohibited source under subpart B of this part;

		   (B) Meals or other incidents of attendance such as waiver of
		       attendance fees or course materials furnished as part of
		       the event at which the teaching or speaking takes place;

		   (C) Copies of books or of publications containing articles,
		       reprints of articles, tapes of speeches, and similar
		       items that provide a record of the teaching, speaking or
		       writing activity; or

		   (D) In the case of an employee other than a covered noncareer
		       employee as defined in 5 CFR 2636.303(a), travel
		       expenses, consisting of transportation, lodgings or
		       meals, incurred in connection with the teaching, speaking
		       or writing activity.

		   Note to Paragraph (a)(2)(iii): Independent of &#167; 2635.807(a),
		   other authorities, such as 18 U.S.C. 209, in some
		   circumstances may limit or entirely preclude an employee's
		   acceptance of travel expenses. In addition, employees who
		   file financial disclosure reports should be aware that,
		   subject to applicable thresholds and exclusions, travel and
		   travel reimbursements accepted from sources other than the
		   United States Government must be reported on their financial
		   disclosure reports.

		   Example 1 to paragraph (a)(2)(iii): A GS 15 employee of the
		   Forest Service has developed and marketed, in her private
		   capacity, a speed reading technique for which popular demand
		   is growing. She is invited to speak about the technique by a
		   representative of an organization that will be substantially
		   affected by a regulation on land management which the
		   employee is in the process of drafting for the Forest
		   Service. The representative offers to pay the employee a $200
		   speaker's fee and to reimburse all her travel expenses. She
		   may accept the travel reimbursements, but not the speaker's
		   fee. The speaking activity is related to her official duties
		   under &#167; 2635.807(a)(2)(i)(C) and the fee is prohibited
		   compensation for such speech; travel expenses incurred in
		   connection with the speaking engagement, on the other hand,
		   are not prohibited compensation for a GS 15 employee.

		   Example 2 to paragraph (a)(2)(iii): Solely because of her
		   recent appointment to a Cabinet-level position, a Government
		   official is invited by the Chief Executive Officer of a major
		   international corporation to attend firm meetings to be held
		   in Aspen for the purpose of addressing senior corporate
		   managers on the importance of recreational activities to a
		   balanced lifestyle. The firm offers to reimburse the
		   official's travel expenses. The official may not accept the
		   offer. The speaking activity is related to official duties
		   under &#167; 2635.807(a)(2)(i)(B) and, because she is a covered
		   noncareer employee as defined in &#167; 2636.303(a) of this
		   chapter, the travel expenses are prohibited compensation as
		   to her.

		   Example 3 to paragraph (a)(2)(iii): A GS 14 attorney at the
		   Federal Trade Commission (FTC) who played a lead role in a
		   recently concluded merger case is invited to speak about the
		   case, in his private capacity, at a conference in New York.
		   The attorney has no public speaking responsibilities on
		   behalf of the FTC apart from the judicial and administrative
		   proceedings to which he is assigned. The sponsors of the
		   conference offer to reimburse the attorney for expenses
		   incurred in connection with his travel to New York. They also
		   offer him, as compensation for his time and effort, a free
		   trip to San Francisco. The attorney may accept the travel
		   expenses to New York, but not the expenses to San Francisco.
		   The lecture relates to his official duties under paragraphs
		   (a)(2)(i)(E)(1) and (a)(2)(i)(E) (2) of &#167; 2635.807, but
		   because he is not a covered noncareer employee as defined in
		   &#167; 2636.303(a) of this chapter, the expenses associated with
		   his travel to New York are not a prohibited form of
		   compensation as to him. The travel expenses to San Francisco,
		   on the other hand, not incurred in connection with the
		   speaking activity, are a prohibited form of compensation. If
		   the attorney were a covered noncareer employee he would be
		   barred from accepting the travel expenses to New York as well
		   as the travel expenses to San Francisco.

		   Example 4 to paragraph (a)(2)(iii): An advocacy group
		   dedicated to improving treatments for severe pain asks the
		   National Institutes of Health (NIH) to provide a conference
		   speaker who can discuss recent advances in the agency's
		   research on pain. The group also offers to pay the employee's
		   travel expenses to attend the conference. After performing
		   the required conflict of interest analysis, NIH authorizes
		   acceptance of the travel expenses under 31 U.S.C. 1353 and
		   the implementing General Services Administration regulation,
		   as codified under 41 CFR chapter 304, and authorizes an
		   employee to undertake the travel. At the conference the
		   advocacy group, as agreed, pays the employee's hotel bill and
		   provides several of his meals. Subsequently the group
		   reimburses the agency for the cost of the employee's airfare
		   and some additional meals. All of the payments by the
		   advocacy group are permissible. Since the employee is
		   speaking officially and the expense payments are accepted
		   under 31 U.S.C. 1353, they are not prohibited compensation
		   under &#167; 2635.807(a)(2) (iii). The same result would obtain
		   with respect to expense payments made by non-Government
		   sources properly authorized under an agency gift acceptance
		   statute, the Government Employees Training Act, 5 U.S.C.
		   4111, or the foreign gifts law, 5 U.S.C. 7342.

             (iv)  Receive means that there is actual or constructive receipt of
		   the compensation by the employee so that the employee has the
		   right to exercise dominion and control over the compensation
		   and to direct its subsequent use.  Compensation received by
		   an employee includes compensation which is:

		   (A) Paid to another person, including a charitable
		       organization, on the basis of designation, recommendation
		       or other specification by the employee; or

		   (B) Paid with the employee's knowledge and acquiescence to
		       his parent, sibling, spouse, child, or dependent
		       relative.

	     (v)   Particular matter involving specific parties has the meaning
		   set forth in &#167; 2637.102(a)(7) of this chapter.

	     (vi)  Personal and substantial participation has the meaning set
		   forth in &#167; 2635.402(b)(4).

         (3) Exception for teaching certain courses.  Notwithstanding that the
	     activity would relate to his official duties under paragraphs (a)
	     (2)(i) (B) or (E) of this section, an employee may accept
	     compensation for teaching a course requiring multiple presentations
	     by the employee if the course is offered as part of:

             (i)   The regularly established curriculum of:

                   (A) An institution of higher education as defined at 20
		       U.S.C. 1141(a);

                   (B) An elementary school as defined at 20 U.S.C. 2891(8); or

                   (C) A secondary school as defined at 20 U.S.C. 2891(21); or

             (ii)  A program of education or training sponsored and funded by
		   the Federal Government or by a State or local government
		   which is not offered by an entity described in paragraph (a)
		   (3)(i) of this section.

	       Example 1:  An employee of the Cost Accounting Standards Board
	       who teaches an advanced accounting course as part of the regular
	       business school curriculum of an accredited university may
	       receive compensation for teaching the course even though a
	       substantial portion of the course deals with cost accounting
	       principles applicable to contracts with the Government.

	       Example 2:  An attorney employed by the Equal Employment
	       Opportunity Commission may accept compensation for teaching a
	       course at a state college on the subject of Federal employment
	       discrimination law.  The attorney could not accept compensation
	       for teaching the same seminar as part of a continuing education
	       program sponsored by her bar association because the subject of
	       the course is focused on the operations or programs of the EEOC
	       and the sponsor of the course is not an accredited educational
	       institution.

	       Example 3:  An employee of the National Endowment for the
	       Humanities is invited by a private university to teach a course
	       that is a survey of Government policies in support of artists,
	       poets and writers.  As part of his official duties, the employee
	       administers a grant that the university has received from the
	       NEH.  The employee may not accept compensation for teaching the
	       course because the university has interests that may be
	       substantially affected by the performance or nonperformance of
	       the employee's duties. Likewise, an employee may not receive
	       compensation for any teaching that is undertaken as part of his
	       official duties or that involves the use of nonpublic
	       information.

(b)     Reference to official position.  An employee who is engaged in teaching,
	speaking or writing as outside employment or as an outside activity
	shall not use or permit the use of his official title or position to
	identify him in connection with his teaching, speaking or writing
	activity or to promote any book, seminar, course, program or similar
	undertaking, except that:

        (1)  An employee may include or permit the inclusion of his title or
	     position as one of several biographical details when such
	     information is given to identify him in connection with his
	     teaching, speaking or writing, provided that his title or position
	     is given no more prominence than other significant biographical
	     details;

        (2)  An employee may use, or permit the use of, his title or position in
	     connection with an article published in a scientific or
	     professional journal, provided that the title or position is
	     accompanied by a reasonably prominent disclaimer satisfactory to
	     the agency stating that the views expressed in the article do not
	     necessarily represent the views of the agency or the United States;
	     and

        (3)  An employee who is ordinarily addressed using a general term of
	     address, such as "The Honorable," or a rank, such as a military or
	     ambassadorial rank, may use or permit the use of that term of
	     address or rank in connection with his teaching, speaking or
	     writing.

	Note:  Some agencies may have policies requiring advance agency review,
	clearance, or approval of certain speeches, books, articles or similar
	products to determine whether the product contains an appropriate
	disclaimer, discloses nonpublic information, or otherwise complies with
	this section.

	Example 1:  A meteorologist employed with the National Oceanic and
	Atmospheric Administration is asked by a local university to teach a
	graduate course on hurricanes.  The university may include the
	meteorologist's Government title and position together with other
	information about his education and previous employment in course
	materials setting forth biographical data on all teachers involved in
	the graduate program.  However, his title or position may not be used to
	promote the course, for example, by featuring the meteorologist's
	Government title, Senior Meteorologist, NOAA, in bold type under his
	name.  In contrast, his title may be used in this manner when the
	meteorologist is authorized by NOAA to speak in his official capacity.

	Example 2:  A doctor just employed by the Centers for Disease Control
	has written a paper based on his earlier independent research into cell
	structures.  Incident to the paper's publication in the Journal of the
	American Medical Association, the doctor may be given credit for the
	paper, as Dr.  M.  Wellbeing, Associate Director, Centers for Disease
	Control, provided that the article also contains a disclaimer, concurred
	in by the CDC, indicating that the paper is the result of the doctor's
	independent research and does not represent the findings of the CDC.

	Example 3:  An employee of the Federal Deposit Insurance Corporation has
	been asked to give a speech in his private capacity, without
	compensation, to the annual meeting of a committee of the American
	Bankers Association on the need for banking reform.  The employee may be
	described in his introduction at the meeting as an employee of the
	Federal Deposit Insurance Corporation provided that other pertinent
	biographical details are mentioned as well.

&#167; 2635.808 Fundraising activities.

An employee may engage in fundraising only in accordance with the restrictions
in part 950 of this title on the conduct of charitable fundraising in the
Federal workplace and in accordance with paragraphs (b) and (c) of this section.

(a)     Definitions.  For purposes of this section:

        (1)  Fundraising  means the raising of funds for a nonprofit
	     organization, other than a political organization as defined in 26
	     U.S.C. 527(e), through:

             (i)   Solicitation of funds or sale of items; or

             (ii)  Participation in the conduct of an event by an employee where
		   any portion of the cost of attendance or participation may be
		   taken as a charitable tax deduction by a person incurring
		   that cost.

        (2)  Participation in the conduct of an event means active and visible
	     participation in the promotion, production, or presentation of the
	     event and includes serving as honorary chairperson, sitting at a
	     head table during the event, and standing in a reception line. The
	     term does not include mere attendance at an event provided that, to
	     the employee's knowledge, his attendance is not used by the
	     nonprofit organization to promote the event.  While the term
	     generally includes any public speaking during the event, it does
	     not include the delivery of an official speech as defined in
	     paragraph (a)(3) of this section or any seating or other
	     participation appropriate to the delivery of such a speech. Waiver
	     of a fee for attendance at an event by a participant in the conduct
	     of that event does not constitute a gift for purposes of subpart B
	     of this part.

	     Note:  This section does not prohibit fundraising for a political
	     party, candidate for partisan political office, or partisan
	     political group. However, there are statutory restrictions that
	     apply to political fundraising.  For example, under the Hatch Act
	     Reform Amendments of 1993, at 5 U.S.C. 7323(a), employees may not
	     knowingly solicit, accept, or receive a political contribution from
	     any person, except under limited circumstances.  In addition,
	     employees are prohibited by 18 U.S.C. 607 from soliciting or
	     receiving political contributions in Federal offices, and, except
	     as permitted by the Hatch Act Reform Amendments, are prohibited by
	     18 U.S.C. 602 from knowingly soliciting political contributions
	     from other employees.

	     Example 1:  The Secretary of Transportation has been asked to serve
	     as master of ceremonies for an All-Star Gala.  Tickets to the event
	     cost $150 and are tax deductible as a charitable donation, with
	     proceeds to be donated to a local hospital.  By serving as master
	     of ceremonies, the Secretary would be participating in fundraising.

        (3)  Official speech means a speech given by an employee in his official
	     capacity on a subject matter that relates to his official duties,
	     provided that the employee's agency has determined that the event
	     at which the speech is to be given provides an appropriate forum
	     for the dissemination of the information to be presented and
	     provided that the employee does not request donations or other
	     support for the nonprofit organization. Subject matter relates to
	     an employee's official duties if it focuses specifically on the
	     employee's official duties, on the responsibilities, programs, or
	     operations of the employee's agency as described in &#167; 2635.807(a)
	     (2)(i)(E), or on matters of Administration policy on which the
	     employee has been authorized to speak.

	     Example 1:  The Secretary of Labor is invited to speak at a banquet
	     honoring a distinguished labor leader, the proceeds of which will
	     benefit a nonprofit organization that assists homeless families.
	     She devotes a major portion of her speech to the Administration's
	     Points of Light initiative, an effort to encourage citizens to
	     volunteer their time to help solve serious social problems.
	     Because she is authorized to speak on Administration policy, her
	     remarks at the banquet are an official speech.  However, the
	     Secretary would be engaged in fundraising if she were to conclude
	     her official speech with a request for donations to the nonprofit
	     organization.

             Example 2:  A charitable organization is sponsoring a two-day
	     tennis tournament at a country club in the Washington, DC area to
	     raise funds for recreational programs for learning disabled
	     children.  The organization has invited the Secretary of Education
	     to give a speech on federally funded special education programs at
	     the awards dinner to be held at the conclusion of the tournament
	     and a determination has been made that the dinner is an appropriate
	     forum for the particular speech. The Secretary may speak at the
	     dinner and, under &#167; 2635.204(g)(1), he may partake of the meal
	     provided to him at the dinner.

        (4)  Personally solicit means to request or otherwise encourage
	     donations or other support either through person-to-person contact
	     or through the use of one's name or identity in correspondence or
	     by permitting its use by others.  It does not include the
	     solicitation of funds through the media or through either oral
	     remarks, or the contemporaneous dispatch of like items of mass-
	     produced correspondence, if such remarks or correspondence are
	     addressed to a group consisting of many persons, unless it is known
	     to the employee that the solicitation is targeted at subordinates
	     or at persons who are prohibited sources within the meaning of &#167;
	     2635.203(d). It does not include behind-the-scenes assistance in
	     the solicitation of funds, such as drafting correspondence,
	     stuffing envelopes, or accounting for contributions.

	     Example 1:  An employee of the Department of Energy who signs a
	     letter soliciting funds for a local private school does not
	     "personally solicit" funds when 500 copies of the letter, which
	     makes no mention of his DOE position and title, are mailed to
	     members of the local community, even though some individuals who
	     are employed by Department of Energy contractors may receive the
	     letter.

(b)     Fundraising in an official capacity.  An employee may participate in
	fundraising in an official capacity if, in accordance with a statute,
	Executive order, regulation or otherwise as determined by the agency, he
	is authorized to engage in the fundraising activity as part of his
	official duties.  When authorized to participate in an official
	capacity, an employee may use his official title, position and
	authority.

	Example 1:  Because participation in his official capacity is authorized
	under part 950 of this title, the Secretary of the Army may sign a
	memorandum to all Army personnel encouraging them to donate to the
	Combined Federal Campaign.

(c)     Fundraising in a personal capacity.  An employee may engage in
	fundraising in his personal capacity provided that he does not:

        (1)  Personally solicit funds or other support from a subordinate or
	     from any person:

             (i)   Known to the employee, if the employee is other than a
		   special Government employee, to be a prohibited source within
		   the meaning of &#167; 2635.203(d); or

             (ii)  Known to the employee, if the employee is a special
		   Government employee, to be a prohibited source within the
		   meaning of &#167; 2635.203(d)(4) that is a person whose interests
		   may be substantially affected by performance or
		   nonperformance of his official duties.

	(2)  Use or permit the use of his official title, position or any
	     authority associated with his public office to further the
	     fundraising effort, except that an employee who is ordinarily
	     addressed using a general term of address, such as "The Honorable,"
	     or a rank, such as a military or ambassadorial rank, may use or
	     permit the use of that term of address or rank for such purposes;
	     or

	(3)  Engage in any action that would otherwise violate this part.

	Example 1:  A nonprofit organization is sponsoring a golf tournament to
	raise funds for underprivileged children.  The Secretary of the Navy may
	not enter the tournament with the understanding that the organization
	intends to attract participants by offering other entrants the
	opportunity, in exchange for a donation in the form of an entry fee, to
	spend the day playing 18 holes of golf in a foursome with the Secretary
	of the Navy.

	Example 2:  An employee of the Merit Systems Protection Board may not
	use the agency's photocopier to reproduce fundraising literature for her
	son's private school.  Such use of the photocopier would violate the
	standards at &#167; 2635.704 regarding use of Government property.

	Example 3:  An Assistant Attorney General may not sign a letter
	soliciting funds for a homeless shelter as "John Doe, Assistant Attorney
	General."  He also may not sign a letter with just his signature, "John
	Doe," soliciting funds from a prohibited source, unless the letter is
	one of many identical, mass-produced letters addressed to a large group
	where the solicitation is not known to him to be targeted at persons who
	are either prohibited  sources or subordinates.

&#167; 2635.809 Just financial obligations.

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.  For purposes of this section, a just
financial obligation includes any financial obligation acknowledged by the
employee or reduced to judgment by a court.  In good faith means an honest
intention to fulfill any just financial obligation in a timely manner.  In the
event of a dispute between an employee and an alleged creditor, this section
does not require an agency to determine the validity or amount of the disputed
debt or to collect a debt on the alleged creditor's behalf.


                 SUBPART I - RELATED STATUTORY AUTHORITIES

&#167; 2635.901 General.

In addition to the standards of ethical conduct set forth in subparts A through
H of this part, there are a number of statutes that establish standards to which
an employee's conduct must conform. The list set forth in &#167; 2635.902 references
some of the more significant of those statutes.  It is not comprehensive and
includes only references to statutes of general applicability.  While it
includes references to several of the basic conflict of interest statutes whose
standards are explained in more detail throughout this part, it does not include
references to statutes of more limited applicability, such as statutes that
apply only to officers and employees of the Department of Defense.

&#167; 2635.902 Related statutes.

(a)   The prohibition against solicitation or receipt of bribes (18 U.S.C.
      201(b)).

(b)   The prohibition against solicitation or receipt of illegal gratuities (18
      U.S.C. 201(c)).

(c)   The prohibition against seeking or receiving compensation for certain
      representational services before the Government (18 U.S.C. 203).

(d)   The prohibition against assisting in the prosecution of claims against the
      Government or acting as agent or attorney before the Government (18 U.S.C.
      205).

(e)   The post-employment restrictions applicable to former employees (18 U.S.C.
      207, with implementing regulations at parts 2637 and 2641 of this
      chapter).

(f)   The prohibition on certain former agency officials' acceptance of
      compensation from a contractor (41 U.S.C. 423(d)).

(g)   The prohibition against participating in matters affecting an employee's
      own financial interests or the financial interests of other specified
      persons or organizations (18 U.S.C. 208).

(h)   The actions required of certain agency officials when they contact, or are
      contacted by, offerors or bidders regarding non-Federal employment (41
      U.S.C. 423(c)).

(i)   The prohibition against receiving salary or any contribution to or
      supplementation of salary as compensation for Government service from a
      source other than the United States (18 U.S.C. 209).

(j)   The prohibition against gifts to superiors (5 U.S.C. 7351).

(k)   The prohibition against solicitation or receipt of gifts from specified
      prohibited sources (5 U.S.C. 7353).

(l)   The prohibition against fraudulent access and related activity in
      connection with computers (18 U.S.C. 1030).

(m)   The provisions governing receipt and disposition of foreign gifts and
      decorations (5 U.S.C. 7342).

(n)   [Reserved]

(o)   The prohibitions against certain political activities (5 U.S.C. 7321
      through 7326 and 18 U.S.C. 602, 603, 606 and 607).

(p)   The prohibitions against disloyalty and striking (5 U.S.C. 7311 and 18
      U.S.C. 1918).

(q)   The general prohibition (18 U.S.C. 219) against acting as the agent of a
      foreign principal required to register under the Foreign Agents
      Registration Act (22 U.S.C. 611 through 621).

(r)   The prohibition against employment of a person convicted of participating
      in or promoting a riot or civil disorder (5 U.S.C. 7313).

(s)   The prohibition against employment of an individual who habitually uses
      intoxicating beverages to excess (5 U.S.C. 7352).

(t)   The prohibition against misuse of a Government vehicle (31 U.S.C. 1344).

(u)   The prohibition against misuse of the franking privilege (18 U.S.C. 1719).

(v)   The prohibition against fraud or false statements in a Government matter
      (18 U.S.C. 1001).

(w)   The prohibition against concealing, mutilating or destroying a public
      record (18 U.S.C. 2071). (x) The prohibition against counterfeiting or
      forging transportation requests (18 U.S.C. 508).

(y)   The restrictions on disclosure of certain sensitive Government information
      under the Freedom of Information Act and the Privacy Act (5 U.S.C. 552 and
      552a).

(z)   The prohibitions against disclosure of classified information (18 U.S.C.
      798 and 50 U.S.C. 783(a)).

(aa)  The prohibition against disclosure of proprietary information and certain
      other information of a confidential nature (18 U.S.C. 1905).

(bb)  The prohibitions on disclosing and obtaining certain procurement
      information (41 U.S.C. 423(a) and (b)).

(cc)  The prohibition against unauthorized use of documents relating to claims
      from or by the Government (18 U.S.C. 285).

(dd)  The prohibition against certain personnel practices (5 U.S.C. 2302).

(ee)  The prohibition against interference with civil service examinations (18
      U.S.C. 1917).

(ff)  The restrictions on use of public funds for lobbying (18 U.S.C. 1913).

(gg)  The prohibition against participation in the appointment or promotion of
      relatives (5 U.S.C. 3110).

(hh)  The prohibition against solicitation or acceptance of anything of value to
      obtain public office for another (18 U.S.C. 211).

(ii)  The prohibition against conspiracy to commit an offense against or to
      defraud the United States (18 U.S.C. 371).

(jj)  The prohibition against embezzlement or conversion of Government money or
      property (18 U.S.C. 641).

(kk)  The prohibition against failing to account for public money (18 U.S.C.
      643).

(ll)  The prohibition against embezzlement of the money or property of another
      person that is in the possession of an employee by reason of his
      employment (18 U.S.C. 654).