Application of 18 U.S.C. § 208 to Service by Executive Branch

Employees on Boards of Standard-Setting Organizations

U nder 18 U S.C. § 208, a federal employee may serve as a mem ber o f the board o f a private voluntary 

standards organization to the extent necessary to perm it participation in his or her official capacity 

in the organization’s standard-setting activities.

August 24, 1998

M e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l

O f f ic e o f G o v e r n m e n t E t h ic s

This responds to your request of August 10, 1998 for our opinion whether, 

absent a waiver, 18 U.S.C. §208 (1994) would forbid employees of the executive 

branch from serving, in their official capacities, as members of the boards of private voluntary standards organizations. We believe that, to the extent necessary 

to permit the federal employees to take part in the standard-setting activities, § 208 

does not bar such service.

Section 208 prohibits an officer or employee from taking part as a government 

official in any “ particular matter” in which he or she has a financial interest. 

The statute imputes to the employee the financial interests of certain other persons 

and entities, including an “ organization in which he is serving as officer, director, 

trustee, general partner or employee.” 18 U.S.C. § 208(a). In an earlier opinion, 

we observed that when an employee is acting in his or her official capacity as 

a director or officer of an outside entity, the work for that entity necessarily entails 

official action affecting the entity’s financial interests. We therefore concluded 

that, under 18 U.S.C. §208, the “ broad prohibition against conflicts of interest 

within the federal government would prevent a government employee from serving 

on the board of directors of an outside organization in his or her official capacity, 

in the absence of: (1) statutory authority or a release of fiduciary obligations by 

the organization that might eliminate the conflict of interest, or (2) a waiver of 

the requirements of § 208(a), pursuant to 18 U.S.C. § 208(b).” Service on the

Board o f Directors o f Non-Federal Entities by Federal Bureau o f Investigation

Personnel in Their Official Capacities, 20 Op. O.L.C. 379, 379 (1996) (“ FBI 

Opinion” ). In particular, if “Congress has authorized the service by statute, the 

official ‘serves . . . in an ex officio rather than personal capacity,’ owes a duty 

only to the United States, and does not violate section 208.” Service by Federal

Officials on the Board o f Directors o f the Bank fo r International Settlements, 21 

Op. O.L.C. 87 (1997) (citation omitted) (“ FRB Opinion” ).

Since the FBI Opinion, we have had a number of occasions to consider whether 

particular statutes confer authority for service on outside boards. We have found 

such authority in a range of circumstances. Sometimes the statutes expressly contemplated official service on an outside board. See Memorandum for Files, from

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Application o f 18 U.S.C. §208 to Service by Executive Branch Em ployees on B oards o f StandardSetting Organizations

Daniel Koffsky, Special Counsel, Office of Legal Counsel, Re: Foundations and

Commissions Under Fulbright Program (Oct. 24, 1997); Memorandum for Files, 

from Daniel Koffsky, Special Counsel, Office of Legal Counsel, Re: Service on

Outside Board (Feb. 27, 1998) (United States-India Fund for Cultural, Educational, and Scientific Cooperation). In another instance, the statute was less 

explicit, but we found the authority because service on the outside entity was 

a means by which the United States negotiated with foreign governments and 

“ the breadth of the President’s power [in that area] counsels a broad reading of 

congressional authorization for particular means by which the power may be exercised.” FRB Opinion, 21 Op. O.L.C. at 89 (citation omitted). In one other 

instance, where the agency largely conducts its operations in secret and had to 

create the outside entity to preserve the secrecy of its work, we concluded that 

the outside organization was, for relevant purposes, a part of the federal government, and thus no conflict existed.

As this experience in applying the principles of the FBI Opinion has made clear, 

Congress has enacted a variety of arrangements contemplating, directly or 

indirectly, that federal employees will participate in outside organizations, 

including by serving on their boards, and it would frustrate these arrangements 

if such service were considered a disqualifying “ director[ship]” under 18 U.S.C. 

§208. See Applicability o f 18 U.S.C. §208 to Proposed Appointment o f Government Official to the Board o f Connie Lee, 18 Op. O.L.C. 136, 138 (1994) (categories of service considered outside statute). We believe that there are circumstances in which statutory authority for service on an outside board can be 

found even though Congress has not expressly addressed that service. When Congress has specifically provided for participation in outside organizations and such 

participation, to carry out the statutory purposes, entails service on a board, statutory authorization may be inferred.

Here, Congress has provided that, in general, federal agencies and departments 

“ shall use technical standards that are developed or adopted by voluntary consensus standards bodies” and, in carrying out this requirement, “ shall consult 

with voluntary, private sector, consensus standards bodies and shall, when such 

participation is in the public interest and is compatible with agency and departmental missions, authorities, priorities, and budget resources, participate with such

bodies in the development o f technical standards." National Technology Transfer 

and Advancement Act of 1995, Pub. L. No. 104—113, § 12(d)(1) & (2), 110 Stat. 

775, 783 (1996), 15 U.S.C. §272 note (1994) (emphasis added). As the legislative 

history explains, Congress desired and anticipated that federal agencies would 

“ work closely” with voluntary standard-setting organizations, that these organizations would “ include active government participation,” and that agencies would 

“ work with these voluntary consensus standards bodies, whenever and wherever 

appropriate.” H.R. Rep. No. 104—390, at 15, 25 (1995). When the board of an 

outside organization plays an integral role in the process of setting standards, it

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Opinions of the Office o f Legal Counsel in Volume 22

would therefore frustrate the statute to forbid federal employees from being on 

the board. They could not then take the “ active” role that Congress mandated. 

To carry out the statute, therefore, employees may serve on these outside boards 

without running afoul of 18 U.S.C. §208, if the boards are engaged in the 

standard-setting activities in which Congress directed federal agencies to participate.

To be sure, §208 allows for waivers when the employee’s “ interest is not so 

substantial as to be deemed likely to affect the integrity of the services which 

the Government may expect,” 18 U.S.C. § 208(b)(1), and thus a conclusion that 

§ 208 generally would bar employees from serving on standard-setting bodies in 

their official capacities would not necessarily have prevented the service in every 

instance. Nevertheless, reliance on the waiver procedure would not be consonant 

with the statutory scheme here. Congress itself has resolved the possible conflict 

between duties to the organization and duties to the United States, at least to 

the extent that the criminal prohibition may be at issue.

We would not reach the same conclusion, however, if the board of an organization had only administrative responsibilities and was not directly involved in 

standard-setting. In that event, the congressional direction to “ participate . . . in 

the development of technical standards” would not apply. Consequently, in 

accordance with the FBI Opinion, § 208 would bar the service on the board, absent 

a waiver or an effective release from fiduciary duty.

Finally, you also ask us to confirm your view that an employee’s service in 

an official capacity as the chair of a working committee or subcommittee of a 

standard-setting organization, to the extent the position imposes no fiduciary duty 

and creates no employer-employee relationship, would not implicate 18 U.S.C. 

§ 208. We agree that service in such a position would not itself trigger the statute. 

Indeed, we are far from certain that a position other than one specified in § 208— 

“ officer, director, trustee, general partner or employee” —could be the basis for 

imputing an organization’s financial interest to the employee, even if that other 

position created a fiduciary duty to the organization. In any event, the positions 

you describe would not give rise to an imputed disqualification.

BETH NOLAN 

Deputy Assistant Attorney General

Office of Legal Counsel

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