This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

41476

Vol. 63, No. 149

Tuesday, August 4, 1998

OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2635

RIN 3209–AA04

Standards of Ethical Conduct for

Employees of the Executive Branch

AGENCY: Office of Government Ethics

(OGE).

ACTION: Proposed rule; amendments.

SUMMARY: The Office of Government

Ethics is proposing minor amendments

to the regulation governing standards of

ethical conduct for executive branch

employees, to conform with interpretive

advice and to improve clarity

concerning gifts from outside sources.

DATES: Comments are invited and must

be received before October 5, 1998.

ADDRESSES: Send comments to the

Office of Government Ethics, Suite 500,

1201 New York Avenue, NW.,

Washington, DC 20005–3917, Attention:

G. Sid Smith.

FOR FURTHER INFORMATION CONTACT: G.

Sid Smith, Senior Associate General

Counsel, Office of Government Ethics;

telephone: 202–208–8000; TDD: 202–

208–8025; FAX: 202–208–8037; Internet

E-mail address: usoge@oge.gov (for Email messages, the subject line should

include the following sentence—

Rulemaking to amend standards of

ethical conduct sections on gifts).

SUPPLEMENTARY INFORMATION:

I. Background

Some six years ago, the Office of

Government Ethics (OGE) issued a final

rule establishing the standards of ethical

conduct, under authority of section

201(a) of Executive Order 12674 (57 FR

35006–35067, August 7, 1992). These

standards and the examples therein, as

amended and codified at 5 CFR part

2635, are the primary source of

guidance for ethics officials and

employees throughout the executive

branch in applying the fourteen

fundamental principles of ethical

conduct contained in the Executive

order. By final rule published at 62 FR

48746–48748 (September 17, 1997),

OGE amended the standards of ethical

conduct regulation, which removed

superseded references to the former

honorarium bar, reflected statutory

changes on procurement integrity,

added references to a new regulation on

conflicts of interest (5 CFR part 2640),

and made other minor corrections and

updates.

Based on feedback from the ethics

community, OGE believes that the

standards of ethical conduct are

generally fulfilling the intended goals of

the Executive order in establishing

useful, practical guidelines for the

executive branch. Over the past six

years, OGE has provided interpretive

advice to ethics officials on the

application of these standards, as

specific fact patterns have arisen. As a

result, OGE has determined that

selected provisions in the standards

should now be amended, in order to

codify some of that advice and to clarify

the intended meaning of the regulatory

language. Minor amendments proposed

herein will accomplish that with respect

to certain provisions in subpart B (Gifts

From Outside Sources). The Office of

Government Ethics will separately

propose minor amendments to other

sections of the standards of ethical

conduct, to further codify interpretive

advice and to improve clarity.

II. Analysis of Proposed Amendments

Section 2635.203

Sections 2635.202 and 2635.203 of the

standards of ethical conduct regulation

(5 CFR part 2635), published as a final

rule in 1992, implemented the general

ban on soliciting or accepting gifts from

prohibited sources described in 5 U.S.C.

7353 and section 101(d) of Executive

Order 12674. In addition,

§ 2635.202(a)(2) included a general ban

on soliciting or accepting gifts from

outside sources if given because of the

employee’s official position. As

indicated in the preamble to the

proposed standards of conduct

regulation in 1991 (56 FR 33780), this

latter provision was intended to codify

OGE’s longstanding interpretation that

employees must avoid actions that

might result in or create the appearance

of using public office for private gain, a

principle that was reinvigorated in 1989

by sections 101(g) and 101(n) of

Executive Order 12674.

Gifts given ‘‘because of the

employee’s official position’’ are, as

defined in § 2635.203(e), those which

would not have been solicited, offered,

or given had the employee not held his

position as a Federal employee. This

definition has been applied too broadly

by some, in OGE’s view, to encompass

gifts based on the mere happenstance

that the recipient is a Government

employee, rather than confining it to

situations where gifts are motivated by

Federal employment status, position, or

the authority and duties related thereto.

Therefore, in order to fully effectuate

the intent of this prohibition, OGE

proposes to amend the definition of gifts

given because of the employee’s official

position at § 2635.203(e), by clarifying

that it applies only where the gift would

not have been solicited, offered, or given

had the employee not held the status,

authority or duties associated with his

Federal position. New Example 2

further illustrates this intended

meaning.

Section 2635.204

Section 2635.204 of the standards of

ethical conduct regulation established

certain exemptions from the gift

prohibitions discussed above, as

authorized by 5 U.S.C. 7353 and

Executive Order 12674. The

introductory text of that section

currently notes that a gift accepted

under one of the exceptions will not be

deemed to violate the fourteen general

principles of ethical behavior contained

in § 2635.101(b) and Executive Order

12674. Some ethics officials and

employees have misunderstood the

primary intent of this statement, which

is that appearance concerns will not

preclude use of the gift exceptions or

require an employee to reject a gift

which falls within one of the

exceptions.

The proposed revision to the

introductory text of § 2635.204

highlights the appearance standard as

the primary principle among the

fourteen that are deemed not to override

acceptance of a gift under one of the

exceptions. As indicated in the 1992

preamble to the final standards of

ethical conduct regulation at 57 FR

35012, this primacy of the gift

exceptions over appearance concerns

helps promote consistency in

application of the gift provisions. Also,

as that preamble indicated, appearance
Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 / Proposed Rules 41477

concerns are already built into the

conditions required for use of the

various gift exceptions, which should

allay any concerns that the appearance

standard might be ignored. Moreover, a

cautionary statement in the introductory

text of § 2635.204 remains, to alert

employees that it may sometimes be

prudent not to accept gifts even though

permitted, and § 2635.202(c)(3) limits

the over-frequent acceptance of gifts

under the exceptions because of the

appearance of using public office for

private gain.

Section 2635.204(a)

The exception for gifts aggregating

$20 or less per occasion has caused

confusion for some ethics officials and

employees as to whether all gifts at a

particular event must be aggregated or

only gifts from each source. A review of

the preambles to the proposed and final

standards of ethical conduct regulation

has led to OGE’s interpretation that only

gifts from the same source must be

aggregated in determining whether the

value is $20 or less (see 56 FR 33781

and 57 FR 35015–35016). Therefore, the

proposed amendment to § 2635.204(a)

specifies that the de minimis exception

allows gifts aggregating $20 or less ‘‘per

source per occasion,’’ and provides a

new example.

To interpret the rule otherwise could

unnecessarily restrict acceptance of de

minimis gifts to those from the first

source that happens to reach a

particular employee at an event or

occasion. Furthermore, applying the $20

maximum to gifts from all sources per

occasion would thwart the intent of the

de minimis exception, which otherwise

focuses on each source. Thus, the term

‘‘per occasion’’ was intended to apply in

the same manner as the term ‘‘in a

calendar year,’’ for which an aggregate

$50 limit from each source applies

under § 2635.204(a).

This proposed amendment

effectuating OGE’s interpretation that

the $20 limit applies per source per

occasion will not permit an employee to

accept an inappropriately high total

value of gifts at a particular occasion or

event, as § 2635.202(c)(3) still restricts

acceptance from the same or different

sources on so frequent a basis that it

creates an appearance of using public

office for private gain. Nor will it permit

an employee to accept a gift worth more

than $20 toward which several sources

have each contributed $20 or less,

because a gift is not divisible for

acceptance purposes unless it consists

of distinct and separate items. This

applies equally to a meal, which OGE

does not consider to be divisible.

III. Matters of Regulatory Procedure

Executive Order 12866

In promulgating these proposed rule

amendments, OGE has adhered to the

regulatory philosophy and the

applicable principles of regulation set

forth in section 1 of Executive Order

12866, Regulatory Planning and Review.

These proposed amendments have also

been reviewed by the Office of

Management and Budget under that

Executive order.

Regulatory Flexibility Act

As Deputy Director of the Office of

Government Ethics, I certify under the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) that this rulemaking will not

have a significant economic impact on

a substantial number of small entities

because it primarily affects Federal

executive branch agencies and their

employees.

Paperwork Reduction Act

The Paperwork Reduction Act (44

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

because these proposed amendments do

not contain any information collection

requirements that require the approval

of the Office of Management and

Budget.

List of Subjects in Part 2635

Conflict of interests, Executive branch

standards of ethical conduct,

Government employees.

Approved: July 29, 1998.

F. Gary Davis,

Deputy Director, Office of Government Ethics.

For the reasons set forth in the

preamble, the Office of Government

Ethics proposes to amend part 2635 of

subchapter B of chapter XVI of title 5 of

the Code of Federal Regulations, as

follows:

PART 2635—[AMENDED]

1. The authority citation for part 2635

continues to read as follows:

Authority: 5 U.S.C. 7301, 7351, 7353; 5

U.S.C. App. (Ethics in Government Act of

1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989

Comp., p. 215, as modified by E.O. 12731, 55

FR 42547, 3 CFR, 1990 Comp., p. 306.

2. Section 2635.203 is amended by

revising paragraph (e) and adding a new

Example 2 after that paragraph to read

as follows:

§ 2635.203 Definitions.

* * * * *

(e) A gift is solicited or accepted

because of the employee’s official

position if it is from a person other than

an employee and would not have been

solicited, offered, or given had the

employee not held the status, authority

or duties associated with his Federal

position.

* * * * *

Example 2: Employees at a regional office

of the Department of Justice (DOJ) work in

Government-leased space at a private office

building, along with various private business

tenants. A major fire in the building during

normal office hours causes a traumatic

experience for all occupants of the building

in making their escape, and it is the subject

of widespread news coverage. A corporate

hotel chain, which does not meet the

definition of a prohibited source for DOJ,

seizes the moment and announces that it will

give a free night’s lodging to all building

occupants and their families, as a public

goodwill gesture. Employees of DOJ may

accept, as this gift is not being given because

of their Government positions. The donor’s

motivation for offering this gift is unrelated

to the DOJ employees’ status, authority or

duties associated with their Federal position,

but instead is based on their mere presence

in the building as occupants at the time of

the fire.

* * * * *

3. The undesignated introductory text

of § 2635.204 is amended by revising the

first sentence to read as follows:

§ 2635.204 Exceptions.

The prohibitions set forth in

§ 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

§ 2635.101(b), including appearances.

* * *

* * * * *

4. Paragraph (a) of § 2635.204 is

amended by adding the words ‘‘per

source’’ before the words ‘‘per occasion’’

in the first sentence, and by adding a

new Example 5 after paragraph (a) to

read as follows:

§ 2635.204 Exceptions.

* * * * *

(a) * * *

* * * * *

Example 5: During off-duty time, an

employee of the Department of Defense

(DOD) attends a trade show involving

companies that are DOD contractors. He is

offered a $15 computer program disk at X

Company’s booth, a $12 appointments

calendar at Y Company’s booth, and a deli

lunch worth $8 from Z Company. The

employee may accept all three of these items

because they do not exceed $20 per source,

even though they total more than $20 at this

single occasion.

* * * * *

[FR Doc. 98–20717 Filed 8–3–98; 8:45 am]

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