This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

11307

Vol. 62, No. 48

Wednesday, March 12, 1997

OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2638

RIN 3209–AA07

Executive Agency Ethics Training

Program Regulation Amendments

AGENCY: Office of Government Ethics

(OGE).

ACTION: Interim rule with request for

comments.

SUMMARY: This interim rule amends the

OGE executive branchwide regulation

on ‘‘Executive Agency Ethics Training

Programs’’ to enable agencies to better

focus their training resources on

training employees in sensitive

positions while ensuring that all

executive branch employees receive

sufficient training to enable them to

understand the ethical responsibilities

concomitant with their Government

positions. While the current OGE

regulation generally requires agencies to

provide annual ‘‘verbal’’ ethics briefings

to covered employees, the interim rule,

once effective, will permit agencies to

fulfill this requirement for most covered

employees by means of a written

briefing, provided generally that the

employees receive verbal briefings at

least once every three calendar years.

Annual ethics briefings for employees

who file public financial disclosure

forms, however, will generally still have

to be verbal and, starting next year

(1998), will additionally be subject to a

further requirement that a qualified

individual be present during and after

the briefings. This will focus agency

ethics training resources upon

employees in sensitive positions, while

simultaneously freeing significant

resources for use in other parts of the

agency’s ethics training program.

Because this rule is being published as

an interim rule, agencies will be able to

take advantage of this flexibility in

conducting their annual ethics briefings

for part of the current 1997 training year

as well as in future years. As noted, the

provision requiring qualified individual

personal presence for public filer

briefings will not take effect until 1998.

DATES: This interim regulation is

effective May 12, 1997, except for

§ 2638.704(d)(2)(ii) and Examples 1

through 3 following that paragraph,

which will become effective on January

1, 1998. Comments by agencies and the

public are invited and are due on or

before April 11, 1997.

ADDRESSES: Office of Government

Ethics, Suite 500, 1201 New York

Avenue, NW., Washington, DC 20005–

3917, Attention: John C. Condray.

Comments may also be sent

electronically to OGE’s Internet E-mail

address at usoge@oge.gov (for E-mail

messages, the subject line should

include the following reference—

‘‘Comments on interim training

regulation amendments’’). Copies of the

two OGE memorandums discussed in

the Supplementary Information section

may be obtained, without charge, by

contacting Mr. Condray at OGE.

Those documents are also available on

OGE’s electronic bulletin board TEBBS

(’’The Ethics Bulletin Board Service’’).

Information about TEBBS may also be

obtained from Mr. Condray. Information

concerning this interim rule, the OGE

memorandums and other OGE

regulations and publications, is also

available on OGE’s World Wide Web

site at http://www.access.gpo.gov/

usoge.

FOR FURTHER INFORMATION CONTACT: John

C. Condray, Office of the General

Counsel and Legal Policy, Office of

Government Ethics; telephone: 202–

208–8000, extension 1152; TDD: 202–

208–8025; FAX: 202–208–8037.

SUPPLEMENTARY INFORMATION:

A. Background and Analysis of Interim

Rule Changes

Section 301 of Executive Order 12674

on Principles of Ethical Conduct, as

modified by Executive Order 12731

(hereinafter referred to as Executive

Order 12674), requires all executive

branch agencies to ensure that all of

their employees review the regulations

that govern their conduct. Section 301

also requires agencies to provide

mandatory annual briefings on ethics

and standards of conduct for all

employees appointed by the President,

all employees in the Executive Office of

the President, all officials required to

file public or confidential financial

disclosure reports, all employees who

are contracting officers and procurement

officials, and any other employees

designated by the agency head.

Agencies are also required to coordinate

with the Office of Government Ethics

(OGE) in developing annual ethics

training plans. In accordance with these

requirements, and consistent with its

authority under the Ethics in

Government Act of 1978, as amended, 5

U.S.C. appendix, OGE promulgated a

final rule implementing these

requirements on April 7, 1992. See 57

FR 11886–11891, as corrected at 57 FR

15219 (April 27, 1992). The current

version of this rule is codified at subpart

G of 5 CFR part 2638, entitled

‘‘Executive Agency Ethics Training

Programs’’ (the ‘‘Training Regulation’’).

In the nearly five years since the

Training Regulation became effective,

OGE has received a number of

comments from ethics officials at the

agency level. Partly in response to these

comments, OGE has twice revised

portions of the regulation. See 57 FR

58399–58400 (December 10, 1992), as

corrected at 57 FR 61612 (December 28,

1992), and 59 FR 12145–12149 (March

16, 1994).

While the basic structure of the

Training Regulation as currently in

effect is regarded as sound, some

agencies have voiced concerns over the

requirement that all employees covered

by the annual training requirement (a

total of approximately 387,000

executive branch employees) receive

annual verbal briefings. These

commenters indicated that providing

the resources to meet this requirement

prevents their agencies from devoting

resources to other desirable ethics

training goals. These include:

developing specific programs for

employees who occupy sensitive

positions and face more difficult

conflicts issues; providing resources to

increase the effectiveness of the initial

ethics orientation received by all

employees; and providing update

training for those employees who are

not required to receive annual briefings.

The latter category is particularly

troublesome, as agencies pointed out

that under the Training Regulation an

employee could receive an initial ethics

orientation and then no other ethics

information during the rest of his or her
11308 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Rules and Regulations

Government career. Of course, the

Training Regulation is a minimum

standard, and agencies are encouraged

to go beyond the minimum standard

when feasible. But OGE is sensitive to

the concern that the Training Regulation

might be preventing agencies from

developing programs to address these

concerns by dictating too strictly the use

of scarce agency resources.

Because of the need to provide

agencies with the ability to more

efficiently use their resources as soon as

possible, and in particular because of

the need to provide this relief for

agencies during the 1997 calendar year

training cycle, OGE is making these

interim rule amendments effective 90

days after the publication of this rule,

on May 12, 1997, except for the

‘‘personal presence’’ requirement for

public filer briefings which, as noted

above, will take effect on January 1,

1998. This course of action should allow

agencies adequate time to prepare for

the new, amended regulatory provisions

and, once they become effective, to

conduct a good portion of their 1997

ethics training in accordance with the

various more flexible requirements.

Thus, agencies will have greater

flexibility in allocating their training

resources while still ensuring that the

requirements of Executive Order 12674

are met.

Annual Ethics Briefings

The most significant changes made in

the interim rule will affect the

requirement that agencies provide

certain ‘‘covered employees,’’ as

specified in section 301 of E.O. 12674

and restated at § 2638.704(b) of the

Training Regulation, with annual ethics

training. The interim rule will divide

covered employees into two categories:

(1) those who are ‘‘covered employees’’

because they file public financial

disclosure reports (SF 278s); and (2) all

other covered employees. While

agencies will still be required to provide

all covered employees with annual

ethics training, now to be called

‘‘briefings,’’ the presentation

requirements for the briefing will vary

depending on which of the two

categories of ‘‘covered employee’’ an

employee falls under. Under the interim

rule, public SF 278 filers will generally

have to receive a verbal ethics briefing

every year (as is the case under the

current version of the Training

Regulation). In addition, starting in

calendar year 1998, the annual briefings

for public filers will have to be offered

with the presence of a qualified

individual able to answer questions. All

other covered employees will generally

only have to receive a verbal ethics

briefing at least once every three

calendar years, with no requirement that

a qualified individual be present.

Written ethics briefings will be required

for those calendar years where such

employees do not receive a verbal ethics

briefing.

The Office of Government Ethics has

decided to distinguish between the level

of annual ethics training provided for

public financial disclosure filers and all

other covered employees for the

following reasons. Public filers occupy

positions that involve policy-making.

Congress has made the determination

that individuals occupying these

positions should disclose their financial

interests on reports that are publicly

available in order to promote public

confidence in the integrity of the policymaking process. The Office of

Government Ethics believes that the

sensitivity and authority of these

positions justify the heightened

standard for annual ethics briefings as

well. Not only does the authority

concomitant with their positions create

increased risks from a conflicts

perspective, but the sensitivity and

visibility of their positions increase the

consequences of any real or apparent

violation of ethics laws and regulations.

From a practical standpoint, these

individuals are easily identifiable.

Agencies should be tracking the

numbers and locations of employees in

these positions as part of the

management of their public financial

disclosure systems. Although OGE

believes that only public filers need

receive the heightened briefings,

comment is invited on this issue.

These interim rule amendments also

retain the feature that allows an agency

to count time spent in a verbal ethics

briefing provided to the employee in

accordance with new § 2638.704(d)(2) or

(d)(3)(ii) against the requirement that an

agency provide the employee with one

hour of official duty time for the initial

ethics orientation, if the briefing and

orientation occur in the same calendar

year. This provides an agency with an

incentive to provide an incoming

employee with a verbal ethics briefing

early in the employee’s Government

service. The term ‘‘verbal’’ will also be

added to § 2638.703(a)(3) on ethics

orientation in the interim rule to avoid

any confusion on this point. Providing

such verbal training quickly is also

helpful to new employees, because it

will enable them to understand and

apply the rules that govern their

conduct to the activities they undertake

as part of their everyday official duties.

In contrast, time spent in a written

annual ethics briefing will not count

against the time requirement for an

initial ethics orientation taking place in

the same year. A written annual ethics

briefing need only include a brief

reminder of the restrictions contained in

the Standards of Ethical Conduct, and

then can move on to focus on other

specialized ethics topics (for example,

post-employment restrictions). Thus, it

may not provide a comprehensive

summary of the Standards as is

contemplated for the initial ethics

orientation. Agencies should note,

however, that if an initial ethics

orientation were also to meet the

content requirements for a written

annual ethics briefing due in the same

calendar year, it could serve as both the

initial ethics training and as the written

annual ethics briefing for covered

employees receiving their annual ethics

briefing in accordance with

§ 2638.704(d)(2)(iii)(A)(2), (d)(2)(iii)(B),

(d)(3)(i) or (d)(3)(iii) of the interim rule

(see the discussion below). This

interrelationship between the initial

ethics orientation and annual ethics

briefing requirements will enable

agencies to make the best use of agency

resources and employee time by

combining initial and annual ethics

briefings where such a combination is

feasible.

Annual Ethics Briefings for Public Filers

As with the current Training

Regulation, § 2638.704(d)(2)(i) of the

interim rule states that agencies must

supply employees who file Standard

Form 278 Executive Branch Personnel

Public Financial Disclosure Reports (SF

278s) with an annual verbal ethics

briefing that is a minimum of one hour

of official duty time in duration.

Beginning next year, the interim rule

amendments will require executive

agencies to take the extra step of

providing the personal presence of a

‘‘qualified individual,’’ as defined at

redesignated paragraph (b) of § 2638.702

in the interim rule, during and

immediately following the briefing in

order to respond to questions or

concerns on the part of public filers

receiving the briefing. Note that the

qualified individual will not have to be

physically present to fulfill this

forthcoming requirement. The key is

that those covered employees receiving

the training have immediate and direct

access to the qualified individual so that

they may raise and resolve questions

that arise during the briefing. The

examples used in the regulation text,

e.g., an ethics briefing provided through

means of video conferencing where the

qualified individual can respond to

employee questions directly as part of

the training even though the qualified

individual is not physically present at
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Rules and Regulations 11309

the training site, illustrate this point.

This increased level of training will be

required, starting in 1998, for the

approximately 21,000 executive branch

employees who file public financial

disclosure reports. These employees

constitute approximately 5.4 percent of

the nearly 387,000 employees currently

receiving annual ethics briefings, based

on agency responses to OGE’s 1995

ethics program questionnaires.

The qualified individual provision is

similar to the requirement initially

imposed when the Training Regulation

was first promulgated in 1992, though

that requirement entailed physical

presence and was much broader in

scope since it applied to all employees

covered by the annual training

requirement. As we indicated in the

preamble to the publication of the April

1992 final rule document, OGE believes

that the presence of an individual

qualified to answer questions at the

annual ethics briefing is the best way to

address employee questions and

concerns raised by the training. See 57

FR 11886, 11889 (April 7, 1992).

Concerns over the ability of agencies to

meet this requirement for all annual

ethics briefings provided to the large

number of employees subject to the

annual briefing requirement, however,

led OGE to conclude that while having

a qualified individual present is often

the most effective means of providing

training, providing the most effective

training was not a realistic minimum

standard for all agencies to provide to

all covered employees. The Office of

Government Ethics accordingly dropped

this requirement in a set of 1994 interim

amendments to the Training Regulation

in favor of requiring ‘‘verbal’’ training,

either in person or by

telecommunications, computer-based

methods or recorded means. See 59 FR

12145, 12146–12147 (March 16, 1994).

This interim rule strikes a new

balance between feasibility concerns

and the desirability of having a qualified

individual able to respond immediately

to questions raised during the ethics

briefing. These interim rule

amendments will thus only require that

a qualified individual be present during

and immediately following the annual

ethics briefings provided to those

covered employees who hold the most

senior and responsible positions, i.e.,

public SF 278 filers. The delayed

effective date of January 1, 1998 for this

requirement will allow agencies

sufficient time to prepare for its

imposition. The limited nature of the

class affected (public SF 278 filers only)

significantly offsets the feasibility

concerns that led to the 1994

amendments that deleted the original

across-the-board in-person requirement.

These concerns are further addressed in

this interim rule by providing agencies

with the option of conducting the

required annual ethics briefing for the

vast majority of covered employees who

are not SF 278 filers through the use of

a written ethics briefing for up to two

out of every three years.

Moreover, the interim rule will retain

the exception permitting agencies to

provide the annual ethics training by a

verbal briefing to public filers without

the presence of a qualified individual

(even when that new requirement

becomes effective next year) or by

written means (starting once the new

rule becomes effective May 12, 1997.

The basic exception is found at 5 CFR

2638.704(d)(2)(i) of the current rule and

§ 2638.704(d)(2)(iii)(A) of this interim

rule. Pursuant to the interim rule

exception, the Designated Agency Ethics

Official or his or her designee can make

a written determination that

circumstances make it impractical to

provide the required verbal briefing to a

particular public SF 278 filer employee

or a group of such employees in

accordance with paragraphs (d)(2)(i) and

(d)(2)(ii) of the new rule. In those cases,

the annual ethics briefing could be

provided, without the presence of a

qualified individual, by

telecommunications, computer-based

methods or recorded means or by

written means, provided that a

minimum of one hour of official duty

time is set aside for employees to attend

the presentation or review the written

materials.

5 CFR 2638.704(d)(2)(ii) of the current

Training Regulation allows agencies to

provide the annual ethics training to

covered employees who are special

Government employees by means of

written briefings or other means at the

agency’s discretion. The interim rule

includes an equivalent section, at

§ 2638.704(d)(2)(iii)(B), for special

Government employees who are public

SF 278 filers. Agencies should note that

public filer special Government

employees receiving their annual ethics

training under this exception must

receive a minimum of one hour of

official duty time for their written

briefings. As with the current Training

Regulation, special Government

employees who are expected to work

fewer than 60 days in a calendar year

would not generally be subject to this

one-hour minimum requirement, as they

are usually not required to file public

financial disclosure reports.

Annual Ethics Briefings for Other

Covered Employees

As noted, agencies currently must

generally provide all covered employees

with a one-hour verbal briefing every

calendar year. The interim rule

amendments will provide significant

new flexibility to agencies in training

covered employees who do not file

public financial disclosure reports.

Under new § 2638.704(d)(3), agencies

will be able to meet the annual briefing

requirement for such employees by

providing them with written ethics

briefings on an annual basis for up to

two out of every three calendar years.

Unlike the written briefings to be

allowed in circumstances qualifying for

an exception for public filers under the

interim rule, there will be no minimum

official duty time requirement for

written ethics briefings provided under

this section. The Office of Government

Ethics believes that imposing a one-hour

written briefing requirement for covered

employees who are not SF 278 filers

would be too burdensome for agencies

administratively. Given the large

number of employees eligible to receive

written briefings, OGE believes that it

would be very difficult for agencies to

keep track of the time each affected

individual employee spends reviewing

the written ethics briefing materials.

Nonetheless, agencies will still be

required to provide such employees

with sufficient official time to review

the written materials provided.

Moreover, at least once every three

years, unless excepted, such covered

employees would have to receive a

verbal ethics briefing of one hour in

duration. However, the verbal briefings

provided to such employees will not

require the personal presence of a

qualified individual during and

immediately following the briefing.

The interim rule amendments retain,

as to the once-every-three-years verbal

briefing requirement for certain

nonpublic filer covered employees, the

exceptions currently found at

§ 2638.704(d)(2) of the Training

Regulation. These exceptions will

permit agencies, at their discretion, to

fulfill the annual briefing requirement

through the use of written materials

every year where: (1) there is a written

determination by the DesignatedAgency

Ethics Official, or his or her designee,

that circumstances make it impractical

to provide a verbal briefing once every

three years for a particular employee or

group of employees; or (2) for special

Government employees expected to

work fewer than 60 days in a calendar

year as well as uniformed service

officers who serve on active duty for 30
11310 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Rules and Regulations

or fewer consecutive days. See

§ 2638.704(d)(3)(iii)(A), (d)(3)(iii)(B) and

(d)(3)(iii)(C). As to the second exception

listed, OGE is not currently aware of any

situation where a special Government

employee subject thereto would receive

an appointment greater than two years

in duration, thus requiring a verbal

ethics briefing under the general rule of

the interim amendments. This particular

exception may therefore be unnecessary.

Although retained in the interim

amendments, OGE requests that any

agencies that have covered special

Government employees meeting the

definition in this exception notify us

during the comment period.

The interim rule amendments, at new

§ 2638.704(d)(3)(iii)(D), provide that

agencies may also provide written

briefings only for employees who are

‘‘covered’’ by the annual training

requirement solely because of

discretionary designation by their

agencies pursuant to renumbered

§ 2638.704(b)(6), including any such

discretionarily designated micropurchasers. See the discussion below.

The interim rule, consistent with OGE

practice to date in administering the

Training Regulation, will not require

agencies to use a particular system to

track which method of training (written

or verbal) has been provided to such

covered employees. The Office of

Government Ethics will instead

continue the practice of allowing

agencies to adopt their own means of

tracking, both for the agencies’ own

records and for OGE oversight purposes.

Annual Ethics Briefings for ‘‘Contracting

Officers’’; Separate Category for Prior

‘‘Procurement Officials’’ Dropped

Numerous statutory and regulatory

changes have occurred recently in the

area of Federal acquisition

requirements, including procurement

integrity provisions. Of particular

significance to the Training Regulation

was the enactment last year of a

complete revision to the procurement

integrity law at 41 U.S.C. 423 and the

issuance in early January of this year of

final implementing Federal Acquisition

Regulation (FAR) provisions thereunder.

See section 4304(a) of the National

Defense Authorization Act for Fiscal

Year 1996, Pub. L. No. 104–106, and 62

FR 226–233 (January 2, 1997). The

amended procurement law sets forth

revised restrictions applicable to certain

agency officials involved in the

contracting process and also revises the

related definitions, including those

directly relevant to the Training

Regulation.

In accordance with section 301(c) of

Executive Order 12674 (issued in 1989

and modified in 1990 by E.O. 12731),

the Training Regulation has specified

two categories of contracting personnel

who are ‘‘covered employees’’ subject to

the annual ethics training requirement—

‘‘contracting officers’’ and ‘‘procurement

officials.’’ See current 5 CFR

2638.704(b)(5) and (b)(6). This interim

rulemaking will update the Training

Regulation provisions regarding annual

training of agency officials involved in

contracting functions in light of the

procurement changes.

First, the old term ‘‘procurement

official’’ (prior 41 U.S.C. 423(p)(3)), as

referenced in E.O. 12674, is no longer

found or defined in the amended

procurement integrity statute nor the

above-cited implementing FAR rule.

There is only a reference to

‘‘procurement officers’’ [emphasis

added] in the heading of one of the

procurement integrity statutory

restrictions, at amended paragraph (c) of

41 U.S.C. 423 regarding actions required

of certain agency officials when

contacted by offerors regarding nonFederal employment. That amended

provision indicates that a ‘‘procurement

officer’’ is an agency official who is

participating personally and

substantially in a Federal agency

procurement for a contract in excess of

the simplified acquisition threshold.

The simplified acquisition threshold is

defined in 48 CFR 2.101, as revised, as

$100,000, except for certain limited

contracts outside the United States,

where the threshold is $200,000. For

purposes of the demanding annual

ethics briefing requirement under

theTraining Regulation, OGE has

decided that the residual, informal

reference to ‘‘procurement officers’’

[emphasis added] in section 423(c) of

the amended procurement integrity

statute is, thus far, too uncertain a

concept, particularly when coupled

with the removal of the ‘‘Procurement

Integrity Certification for Procurement

Officials’’ (Optional Form 333)

requirement in the above-cited FAR

final rulemaking under the amended

procurement integrity law.

Therefore, OGE has decided to

remove the separate covered employee

category for ‘‘procurement officials’’

from § 2638.704(b). The Office of

Government Ethics notes that many

agency employees involved in contracts

over the simplified acquisition

threshold will be otherwise covered as

contracting officers or confidential

financial disclosure report filers.

Agencies may also discretionarily

designate certain of them to receive

annual briefings if they deem it

appropriate. See § 2638.704(b)(4), (b)(5)

and (b)(6) of this interim rule.

In contrast, the new procurement

integrity definition of ‘‘contracting

officer’’ in amended 41 U.S.C. 423(f)(5)

is similar to the old definition at prior

section 423(p)(4) of the law. The

specific category for annual training of

‘‘contracting officers,’’ at

§ 2638.704(b)(5) of the Training

Regulation, will therefore be retained

with a reference to the new procurement

law provision. There is one related

important development brought about

by the passage of the Federal

Acquisition Streamlining Act of 1994

(FASA), Pub. L. No. 103–355. Among

the steps taken by FASA to simplify

acquisition procedures was the creation

of simplified procedures for ‘‘micropurchases,’’ defined as those

acquisitions of supplies or services

(except construction), the aggregate

amount of which does not exceed

$2,500 ($2,000 for construction). An

interim rule implementing this portion

of FASA was published as Federal

Acquisition Circular (FAC) 90–24, 59 FR

64784–64788 (December 15, 1994), with

the Federal Acquisition Regulatory

Council adopting a final rule, with

changes to the interim rule, as

published as part of FAC 90–40, 61 FR

39189–39199 (July 26, 1996). See 41

U.S.C. 428(f) and 48 CFR 2.101, as

revised. To maximize the benefit of

these simplified procedures, agency

heads are encouraged to delegate micropurchase authority to individuals who

will be using the supplies or services

being purchased. See 48 CFR 1.603(b),

as revised. Under the July 1996 final

rule in FAC 90–40, individuals

delegated micro-purchase authority are

now not required to be ‘‘contracting

officers’’ for the purposes of the Federal

Acquisition Regulation. See 48 CFR

1.603(b), as revised. (Under the prior,

interim FAR rule, micro-purchase

authority holders were deemed

contracting officers (see 48 CFR

13.601(d) (1996 edition), now

removed).)

In order to harmonize the Training

Regulation with the goals of FASA

which encourages agencies to delegate

micro-purchase authority widely, OGE

will not require agencies to provide

annual briefings to micro-purchasers

who are not contracting officers. (Of

course, contracting officers who are also

‘‘micro-purchasers’’ will still need to

receive annual training based on their

contracting officer status.) Individual

agencies may, if they deem it

appropriate based on conflict of interest

concerns, discretionarily designate some

or all of their micro-purchasers who are

not contracting officers (or otherwise in

a specifically covered category of
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Rules and Regulations 11311

employees, see § 2638.704(b)) as

covered employees subject to annual

briefings under the discretionary

designation provision at renumbered

and revised § 2638.704(b)(6) (old 5 CFR

2638.704(b)(7)). In such cases, the

interim rule at new

§ 2638.704(d)(3)(iii)(D) will permit

agencies to provide annual briefings for

any such discretionarily designated

non-‘‘contracting officer’’ micropurchasers solely through distribution

of written materials (without the

requirement for verbal briefings at least

once every three years). This exception

for written briefings will likewise apply

to any other employees who are

‘‘covered employees’’ for annual ethics

training purposes solely because of

discretionary designation by their

agencies pursuant to new

§ 2638.704(b)(6).

Other Issues

The Office of Government Ethics is

also amending 5 CFR 2638.701. This

change will add language explicitly

including the Standards of Ethical

Conduct for Employees of the Executive

Branch, 5 CFR part 2635 (‘‘Standards’’),

and any agency supplemental regulation

thereto, as items that employees must be

made aware of through agency ethics

training programs. The interim rule will

also explicitly reference the conflict of

interest statutes, 18 U.S.C. chapter 11.

These interim rule changes will not

substantively change the requirements

of subpart G; an agency meeting the

requirements of 5 CFR 2638.703 and

2638.704 will continue to fulfill the

general requirement of § 2638.701.

Reference to the Standards and

supplemental regulations thereto were

left out of § 2638.701, when it was

originally published in the Federal

Register in April 1992, because they had

not been published at that time. The

change in the interim rule will update

the § 2638.701 reference.

The interim rule amendments will

also make certain other, minor changes

to the Training Regulation. Executive

Order 12674 requires agencies to

coordinate with OGE in developing

annual agency ethics training plans. The

current Training Regulation, at 5 CFR

2638.702(a)(3), provides that agencies

are to file this written plan for annual

ethics training with OGE by August 31

of each calendar year. The interim rule,

at revised and redesignated

§ 2638.702(c), will formally eliminate

the requirement that agencies file their

plans with OGE on an annual basis.

While the filing requirement was useful

during the initial stage of the

implementation of the Training

Regulation, the utility of the measure

has declined as agencies have become

proficient in planning and providing the

required ethics training. For this reason,

OGE sent a memorandum to Designated

Agency Ethics Officials (DAEO) on July

6, 1995 (DO–95–028), indicating that

agencies should continue to develop

written plans for annual ethics training,

coordinating with OGE where

necessary, but should maintain the

plans at the agency rather than filing

them each year with OGE. As noted in

that memorandum, such coordination

can include: consulting with OGE

concerning upcoming OGE training

materials, including videotapes, that

may be useful in administering an

agency’s training program; contacting

OGE’s Ethics Information Center to

obtain training materials from other

executive branch agencies that may be

adapted to the agency’s needs; or

consulting with OGE concerning other

issues or problems an agency is facing

in providing ethics training. The interim

rule will codify that change in policy.

Even though agencies will no longer

be required to file their annual ethics

training plans with OGE, agencies

remain subject to the requirement of

Executive Order 12674 and the Training

Regulation that they develop annual

agency ethics training plans. See the

OGE memorandum to DAEOs of January

6, 1997 (DO–97–002). The Office of

Government Ethics will include the

plans as a program element subject to

the periodic agency ethics program

reviews that OGE conducts. The plans

should be completed by January 1 of the

calendar year that they cover. The

interim rule will slightly adjust the

information required in the plan to

conform to the changes in the structure

of the annual ethics briefing and will

require agencies to include a brief

narrative description of the agency’s

annual ethics briefings. The Office of

Government Ethics anticipates that a

typical narrative will be only one or two

paragraphs in length, and will include

information concerning the projected

content of the briefings, the method of

presentation to be used, and the

anticipated number of employees who

will receive different types of

presentations if the agency plans to use

a number of different methods.

Since these interim rule amendments

to the Training Regulation take effect on

May 12, 1997, except for

§ 2638.704(d)(2)(ii) and Examples 1

through 3 following that section, which

will take effect on January 1, 1998, OGE

will allow agencies to count any 1997

calendar year training already

completed under the current version of

the Training Regulation before the

effective date of these interim rule

amendments. Thus, agencies will not

have to redo any 1997 ethics training

properly conducted under the 5 CFR

part 2638, subpart G training

requirements effective at the time of

training. The new, generally liberalized

training requirements should be

followed for the remainder of 1997.

While the interim rule amendments

will substantially alter § 2638.704, on

annual agency ethics training

(designated as ‘‘annual ethics briefings’’

under the interim revision), they will

not significantly alter § 2638.703, initial

agency ethics orientation. Some

commenters have indicated a desire that

OGE amend the Training Regulation to

require that the initial ethics orientation

be verbal instead of allowing the use of

written materials. The Office of

Government Ethics encourages agencies

to strengthen the initial ethics

orientation, and believes that verbal

training is generally more effective than

using written materials. However, OGE

believes that the current fiscal situation

makes it unreasonable to require

agencies to provide employees receiving

their initial ethics orientation with

verbal training. Such a requirement will

be particularly difficult for those

agencies with widely scattered facilities.

The other changes to subpart G

contained in the interim rule should

provide agencies with the ability to shift

some of their ethics training resources to

provide a more comprehensive initial

ethics orientation for their new

employees. The Office of Government

Ethics notes that many agencies have

already made some effort to expand the

scope of their initial ethics orientations.

The most recent results available from

OGE’s Annual Agency Ethics Program

Questionnaire (for CY 1995) showed

that only 24 of 125 responding agencies

provided their employees with nothing

more than a copy of the Standards and

an hour of official duty time for their

ethics orientation. In addition to the

potential for providing a more

comprehensive initial ethics orientation,

the changes made by the interim rule

amendments will also place agencies in

a better position to provide those

employees who do not receive annual

ethics briefings with periodic ethicsrelated updates or training to ensure

that all employees better understand the

statutes and regulations that govern

their conduct.

For these reasons, the interim rule

only makes minor changes to

§ 2638.703. The interim rule will amend

§ 2638.703(a)(3) to reflect changes to the

annual ethics training requirement. The

interim rule will also amend

§ 2638.703(b)(2), substituting ‘‘each

employee’’ for ‘‘employees’’ to bring the
11312 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Rules and Regulations

section into conformity with the

language used in other parts of the

section. The interim rule will add

agency supplemental regulations to

those materials that must be included

with a copy of the Standards furnished

for purposes of review only in

accordance with § 2638.703(b)(1), as

well as requiring that any agency

supplemental ethics regulations be

included in a summary provided to

employees under § 2638.703(b)(2). Each

of these subsections is also being

amended to include the relevant agency

supplemental regulations among the

materials whose complete text must be

retained and readily accessible in an

employee’s immediate office area for an

agency to use these exceptions to

§ 2638.703(a)(1).

In addition to the above changes, the

interim rule amendments also substitute

the term ‘‘ethics briefing’’ for the term

‘‘ethics training’’ in § 2638.704 and in

cross-references throughout subpart G.

The new language parallels the language

used in E.O. 12674, but does not

represent a substantive change in the

regulation.

As stated earlier, the goal of these

interim rule amendments is to enable

agencies to more efficiently use the

resources that are currently available to

the ethics training programs. Should

these changes result in a diminishing

level of resources for ethics training,

OGE of course might have to seek to

further amend the Training Regulation

to reimpose the current across-the-board

verbal briefing requirement.

B. Matters of Regulatory Procedure

Administrative Procedure Act

Pursuant to sections 553 (b) and (d) of

title 5 of the United States Code, I find

good cause for waiving the general

notice of proposed rulemaking. Because

the changes made by these interim rule

amendments to the Training Regulation

will enable agencies to more efficiently

use their resources to provide required

Government ethics orientation and

annual briefings to their employees, it is

essential to the administration of the

executive branch ethics program that

the changes made by this interim rule

become effective in time for agencies to

implement them during the course of

their calendar year 1997 training cycle.

However, this is an interim rule which

will generally become effective on May

12, 1997, with a delayed effective date

of January 1, 1998 for new

§ 2638.704(d)(2)(ii) and Examples 1

through 3 following that section.

Moreover, this rule provides for a 30-

day comment period. All interested

persons are invited to submit written

comments to OGE on these interim rule

amendments, to be received on or before

April 11, 1997. The Office of

Government Ethics will review all

comments received and consider any

modifications which appear warranted

to these amendments in adopting a final

rule in this matter.

Executive Order 12866

In promulgating these interim

amendments to the executive

branchwide Government ethics training

regulation, the Office of Government

Ethics has adhered to the regulatory

philosophy and the applicable

principles of regulation set forth in

section 1 of Executive Order 12866,

Regulatory Planning and Review. This

interim rule has also been reviewed by

the Office of Management and Budget

under that Executive Order.

Regulatory Flexibility Act

As Director of the Office of

Government Ethics, I certify under the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) that this interim rule will not

have a significant economic impact on

a substantial number of small entities

because it affects only Federal executive

branch agencies and their employees.

Paperwork Reduction Act

The Paperwork Reduction Act (44

U.S.C. chapter 35) does not apply to this

interim rule because it does not contain

information collection requirements that

require the approval of the Office of

Management and Budget.

List of Subjects in 5 CFR Part 2638

Administrative practice and

procedure, Conflict of interests,

Government employees, Reporting and

recordkeeping requirements.

Approved: February 4, 1997.

Stephen D. Potts,

Director, Office of Government Ethics.

Accordingly, for the reasons set forth

in the preamble, the Office of

Government Ethics is amending subpart

G of part 2638 of chapter XVI of title 5

of the Code of Federal Regulations as

follows:

PART 2638—[AMENDED]

1. The authority citation for part 2638

continues to read as follows:

Authority: 5 U.S.C. App. (Ethics in

Government Act of 1978); E.O. 12674, 54 FR

15159, 3 CFR, 1989 Comp., p. 215, as

modified by E.O. 12731, 55 FR 42547, 3 CFR,

1990 Comp., p. 306.

Subpart G—Executive Agency Ethics

Training Programs

2. Section 2638.701 is revised to read

as follows:

§ 2638.701 Executive agency ethics

training programs; generally.

Each executive branch agency shall

maintain a program of ethics training

designed to ensure that all of its

employees are aware of: the Federal

conflict of interest statutes, located at

chapter 11 of title 18 of the United

States Code; the Principles of Ethical

Conduct, found in part I of Executive

Order 12674, as modified; the Standards

of Ethical Conduct for Employees of the

Executive Branch, codified at 5 CFR part

2635, and any agency supplemental

regulation thereto; and how to contact

agency ethics officials when the

employee needs advice concerning

ethics issues. As a minimum, each

agency program shall consist of the

initial ethics orientation required by

§ 2638.703 of this subpart and the

annual ethics briefing required by

§ 2638.704 of this subpart. For purposes

of this subpart, the term ‘‘employee’’

shall include special Government

employees (as defined in 18 U.S.C.

202(a)) and officers of the uniformed

services.

3. Section 2638.702 is amended by

removing paragraph (b), removing the

paragraph designation (a), and

redesignating paragraphs (a)(1), (a)(2)

and (a)(3) as new paragraphs (a), (b), and

(c), respectively; further redesignating in

newly designated paragraph (b),

paragraphs (i) through (v) as paragraphs

(b) (1) through (5), respectively;

removing the word ‘‘training’’ and

adding the word ‘‘briefing’’ in newly

designated paragraphs (b) introductory

text and (b)(5); and revising newly

redesignated paragraph (c) to read as

follows:

§ 2638.702 Responsibilities of the

designated agency ethics official; review by

the Office of Government Ethics.

* * * * *

(c) Develop each year a written plan

for annual ethics training to be

conducted by the agency. The written

plan for annual ethics training shall be

completed by the beginning of the

calendar year covered by the plan. In

developing their written plans for

annual ethics training, agencies shall

coordinate with OGE where necessary.

The plan shall contain a brief narrative

description of the agency’s annual

ethics training, and shall also include:

(1) An estimate of the total number of

agency employees who will be provided

annual ethics briefings, including:
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Rules and Regulations 11313

(i) An estimate of the number of

public filers described in

§ 2638.704(b)(3) of this subpart who

must be provided annual ethics

briefings, including:

(A) An estimate of the number of

public filers to whom annual ethics

briefings will be presented verbally with

a qualified individual present in

accordance with § 2638.704(d)(2)(ii) of

this subpart;

(B) An estimate of the number of

public filers to whom annual ethics

briefings will be presented under the

exception provided at

2638.704(d)(2)(iii)(A) of this subpart;

and

(C) An estimate of the number of

special Government employees who are

public filers to whom the annual ethics

briefing will be presented in accordance

with the exception provided at

2638.704(d)(2)(iii)(B) of this subpart;

and

(ii) An estimate of the number of

covered employees other than public

filers described in § 2638.704(b)(3) of

this subpart who must be provided

annual ethics briefings, including:

(A) An estimate of the number of

covered employees who will receive a

verbal annual ethics briefing in

accordance with 2638.704(d)(3)(ii) of

this subpart;

(B) An estimate of the number of

covered employees who will receive a

written ethics briefing in accordance

with 2638.704(d)(3)(i) of this subpart;

(C) An estimate of the number of

covered employees who will receive a

written ethics briefing in accordance

with the exception provided at

§ 2638.704(d)(3)(iii)(A) of this subpart;

(D) An estimate of the number of

special Government employees and the

number of officers in the uniformed

services who will receive a written

ethics briefing in accordance with the

exceptions provided at § 2638.704

(d)(3)(iii)(B) and (d)(3)(iii)(C) of this

subpart; and

(E) An estimate of the number of

covered employees who will receive a

written ethics briefing in accordance

with the exception provided at

§ 2638.704(d)(3)(iii)(D) of this subpart;

and

(2) Any other information that the

designated agency ethics official

believes will facilitate OGE’s review of

the agency’s ethics training program.

4. Section 2638.703 is amended by

revising the second sentence of

paragraph (a)(3) and revising paragraphs

(b)(1) and (b)(2) to read as follows:

§ 2638.703 Initial agency ethics

orientation.

(a) * * *

(3) * * * If the agency provides

verbal ethics training during official

duty time, including a verbal ethics

briefing provided in accordance with

§ 2638.704(d) of this subpart, or a

nominee or other new entrant receives

verbal ethics training provided by the

Office of Government Ethics or the

White House Office, the period of

official duty time set aside for

individual review may be reduced by

the time spent in such training.

(b) * * *

(1) Furnishing each employee a copy

of the Standards of Ethical Conduct for

Employees of the Executive Branch at

part 2635 of this chapter, and any

supplemental regulation of the

concerned agency, for the purposes of

review only, provided that copies of the

complete text of part 2635 and any

supplemental regulation of the

concerned agency are retained and

readily accessible in the employee’s

immediate office for use by several

employees; or

(2) Providing each employee with

materials that summarize part I of

Executive Order 12674, as modified by

Executive Order 12731, 3 CFR, 1990

Comp., p. 306, the Standards of Ethical

Conduct for Employees of the Executive

Branch at part 2635 of this chapter, and

any supplemental regulation of the

concerned agency. To ensure that all

employees have access to all of the

information contained in these

documents, an agency using this

alternative must ensure that copies of

the complete text of part 2635 and the

agency’s supplemental regulation

thereto (if any) are retained and readily

accessible in the employees’ immediate

office area.

5. Section 2638.704 is amended by

removing the word ‘‘training’’ and

adding the word ‘‘briefings’’ in its place

in paragraph (b)(4), revising the section

heading and paragraphs (a), (b)(5) and

(d), removing paragraph (b)(6),

redesignating paragraph (b)(7) as new

paragraph (b)(6) and revising the text

thereof, and revising the introductory

text of paragraph (c), to read as follows:

§ 2638.704 Annual ethics briefings.

(a) Annual ethics briefings. Executive

branch agencies must provide each

employee identified in paragraph (b) of

this section with an ethics briefing every

calendar year. This briefing must meet

the content requirements contained in

paragraph (c) of this section and the

presentation requirements contained in

paragraph (d) of this section.

(b) * * *

(5) Contracting officers within the

meaning of 41 U.S.C. 423(f)(5); and

(6) Other agency employees

designated by the head of the agency or

his or her designee based on a

determination that such briefings are

desirable in view of their particular

official duties.

(c) Content. Agencies are encouraged

to vary the emphasis and content of

annual agency ethics briefings from year

to year as necessary within the context

of their ethics programs. The emphasis

and content are generally a matter of

each agency’s sole discretion. However,

each briefing must include, as a

minimum:

* * * * *

(d) Presentation. The annual ethics

briefing shall be presented in

accordance with the following

requirements:

(1) A qualified individual, as defined

in § 2638.702(b) of this subpart, shall:

(i) Present the briefing, if the briefing

is presented in person;

(ii) Prepare the recorded materials or

presentation, if the briefing is presented

by telecommunications, computer-based

methods or recorded means; or

(iii) Prepare the written ethics

briefing, if the annual ethics briefing

requirement is satisfied through the use

of a written ethics briefing in

accordance with paragraphs

(d)(2)(iii)(A)(2), (d)(2)(iii)(B), (d)(3)(i) or

(d)(3)(iii) of this section.

(2) Annual briefings for filers of public

financial disclosure reports. (i) The

annual ethics briefings for covered

employees described at paragraph (b)(3)

of this section shall be verbal, either in

person or by telecommunications,

computer-based methods or recorded

means. Employees must be provided a

minimum of one hour of official duty

time for this briefing.

(ii) A qualified individual, as defined

in § 2638.702(b) of this subpart, shall be

present during and immediately

following the presentation. The

qualified individual need not be

physically present at the training site to

meet this requirement. To meet the

‘‘presence’’ requirement, the covered

employees receiving the briefing must

have direct and immediate access to the

qualified individual.

Example 1 to paragraph (d)(2)(ii): An

agency provides annual ethics briefings

for public filers in a regional office by

establishing a video conference link

between a qualified individual in the

headquarters office and the regional

office. Because the link provides for

direct and immediate communication

between the qualified individual and

the employees receiving the briefing,

this arrangement meets the presence

requirement even though the qualified
11314 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Rules and Regulations

individual is not physically located in

the room where the briefing is received.

Example 2 to paragraph (d)(2)(ii): The

agency described in the preceding

example provides a briefing through a

videotaped briefing instead of through a

video conference link. The employees

viewing the videotape are provided with

a telephone at the training site and the

telephone number of a qualified

individual who is standing by during

and immediately following the training

to answer any questions. The briefing

fulfills the physical presence

requirement because the employees

receiving the briefing have direct and

immediate access to a qualified

individual.

Example 3 to paragraph (d)(2)(ii): The

physical presence requirement would

not be met if the facts of Example 2 were

varied so that the employees receiving

the briefing did not have immediate

access to the qualified individual, either

because there was no phone provided at

the training site or because the qualified

individual was not standing by to

respond to any questions raised. Merely

providing the phone number of the

qualified individual, without providing

access to that individual who is

standing by to answer questions raised

during the briefing, does not provide the

employees receiving the training with

the direct and immediate access to the

qualified individual necessary to satisfy

the presence requirement.

(iii) Exceptions. An agency may

provide the annual ethics briefing for

employees described in paragraph (b)(3)

of this section by means other than as

specified in paragraphs (d)(2)(i) and

(d)(2)(ii) of this section only under the

following circumstances:

(A) Where the Designated Agency

Ethics Official, or his or her designee,

has made a written determination that

circumstances make it impractical to

provide the annual verbal ethics briefing

with a qualified individual present, to a

particular employee or group of

employees in accordance with

paragraphs (d)(2)(i) and (d)(2)(ii) of this

section. In such cases, the annual ethics

briefing may be provided without the

presence of a qualified individual,

provided that a minimum of one hour

of official duty time is set aside for

employees to attend the presentation or

review the written materials, either by:

(1) Telecommunications, computerbased methods or recorded means; or

(2) Written means.

Example 1 to paragraph (d)(2)(iii)(A):

The State Department has one public

filer (the Ambassador) in the American

Embassy in Ulan Bator, Mongolia.

Because of the difference in time zones

and the uncertainty of an ambassador’s

schedule, the designated agency ethics

official for the State Department is

justified in making a written

determination that circumstances make

it impractical to provide the annual

ethics training as a verbal briefing,

either with or without the presence of

a qualified individual. The required

annual ethics briefing can therefore be

provided by written means in

accordance with

§ 2638.704(d)(2)(iii)(A)(2). Note that an

initial ethics orientation provided in the

same calendar year in accordance with

§ 2638.703 of this subpart will meet this

annual written ethics briefing

requirement, provided the materials

meet the content requirements stated at

paragraph (c) of this section.

(B) In the case of special Government

employees who are covered employees

under paragraph (b)(3) of this section,

an agency may (without the presence of

a qualified individual) provide the

annual ethics briefing by written or

other means at the agency’s discretion,

provided that a minimum of one hour

of official duty time is set aside for

employees to attend the presentation or

review the written materials.

(3) Annual ethics briefings for all

other covered employees. (i) An agency

may satisfy the annual ethics briefing

requirement for covered employees

other than those described at paragraph

(b)(3) of this section for up to two out

of every three calendar years through

the distribution of a written ethics

briefing to those employees. In such

case, while not required to provide a

minimum of one hour of official duty

time, an agency must provide

employees receiving their annual ethics

briefings under this paragraph with

sufficient official duty time to review

the written materials provided. Note

that an initial ethics orientation

provided in the same calendar year in

accordance with § 2638.703 of this

subpart will meet this annual ethics

briefing requirement (as well as that of

§ 2638.704(d)(3)(iii) of this section),

provided the materials meet the content

requirements stated at paragraph (c) of

this section.

(ii) Except as permitted under

paragraph (d)(3)(iii) of this section, the

ethics briefing for covered employees

other than those described at paragraph

(b)(3) of this section shall be presented

verbally at least once every three years,

either in person or by

telecommunications, computer-based

methods or recorded means. Employees

must be provided a minimum of one

hour of official duty time for this verbal

briefing. Unlike the annual ethics

briefing described at paragraph (d)(2) of

this section, for covered employees

described at paragraph (b)(3) of this

section, a qualified individual need not

be present during and immediately

following the verbal presentation

provided under this paragraph.

(iii) Exceptions. An agency can

provide covered employees receiving

their annual ethics briefings under this

paragraph (d)(3) with written briefings

only, in accordance with paragraph

(d)(3)(i) of this section, every year

without the verbal ethics briefing as

described at paragraph (d)(3)(ii) of this

section at least once in any three

calendar year period, under the

following circumstances:

(A) Where the Designated Agency

Ethics Official, or his or her designee,

has made a written determination that

circumstances make it impractical to

provide an ethics briefing verbally once

every three calendar years to a

particular employee or group of

employees in accordance with

paragraph (d)(3)(ii) of this section;

(B) In the case of special Government

employees who are expected to work

fewer than 60 days in a calendar year;

(C) In the case of officers in the

uniformed services who serve on active

duty for 30 or fewer consecutive days;

or

(D) Where a particular employee or

group of employees are covered

employees solely because of agency

discretionary designation pursuant to

paragraph (b)(6) of this section.

[FR Doc. 97–6160 Filed 3–11–97; 8:45 am]

BILLING CODE 6345–01–U

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV96–932–4 FIR]

Olives Grown In California;

Assessment Rate

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: The Department of

Agriculture (Department) is adopting as

a final rule, without change, the

provisions of an interim final rule

establishing an assessment rate for the

California Olive Committee (Committee)

under Marketing Order No. 932 for the

1997 fiscal year and subsequent fiscal

years. The Committee is responsible for

local administration of the marketing

order which regulates the handling of

olives grown in California.

Authorization to assess olive handlers