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

43067

Vol. 63, No. 155

Wednesday, August 12, 1998

OFFICE OF GOVERNMENT ETHICS

5 CFR Parts 2634 and 2636

RINs 3209–AA00 and 3209–AA13

Removal of Obsolete Regulations

Concerning the Inoperative Statutory

Honorarium Bar, Revisions to Related

Supplemental Reporting

Requirements, and Conforming

Technical Amendments

AGENCY: Office of Government Ethics

(OGE).

ACTION: Final rule; technical

amendments and removals.

SUMMARY: The Office of Government

Ethics is removing obsolete executive

branch regulatory provisions

implementing the statutory honorarium

bar, which is no longer legally

operative. In addition, OGE is removing

related executive branch regulatory

provisions concerning a dormant special

reporting requirement for payments to

charitable organizations in lieu of

honoraria. That reporting requirement is

being subsumed (for those few to whom

it may apply) as part of the overall

executive branch financial disclosure

regulation, but will remain inactive for

now, pending further examination. For

conformity with these changes, OGE is

also making minor technical

amendments to regulatory provisions

covering the overall executive branch

financial disclosure system and the

statutory restrictions for certain

employees on outside earned income,

employment and affiliations.

DATES: These technical amendments

and removals are effective August 12,

1998, except that § 2634.302(a)(2) is

stayed indefinitely until OGE makes a

final determination about its status.

Once that determination is made, OGE

will publish an appropriate document

in the Federal Register, and will also

notify executive branch departments

and agencies by memorandum.

ADDRESSES: Office of Government

Ethics, Suite 500, 1201 New York

Avenue, NW., Washington, DC 20005–

3917, Attn.: Mr. G. Sid Smith. A copy

of the OGE Memorandum noted in the

‘‘Supplementary Information’’ section

below may be obtained from OGE’s Web

site on the Internet at http://

www.usoge.gov, or by contacting Mr.

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.

SUPPLEMENTARY INFORMATION: In

National Treasury Employees Union v.

United States, 513 U.S. 454 (1995), the

U.S. Supreme Court overturned, as to

most executive branch employees, the

honorarium bar at 5 U.S.C. app., section

501(b) which had been enacted as part

of the Ethics Reform Act of 1989.

Subsequently, the Department of Justice

determined that because of the scope of

the Supreme Court decision, the

statutory ban on receipt of honoraria

was inoperative as to all Government

employees. See OGE Memorandum to

Designated Agency Ethics Officials,

General Counsels and Inspectors

General of February 28, 1996 (# DO–96–

012). On that basis, this rulemaking

removes the provisions in OGE’s

executive branchwide regulations at

subpart B of 5 CFR part 2636 that

previously implemented the

honorarium bar, which is now legally

inoperative. By final rule at 62 FR

48746–48748 (September 17, 1997),

OGE has already removed crossreferences to the honorarium bar that

were contained in the executive branch

regulations on financial disclosure and

standards of ethical conduct at 5 CFR

parts 2634 and 2635.

By this current rulemaking, OGE is

also removing from 5 CFR part 2636 the

provisions in § 2636.205 on special

confidential reporting of information

about payments to charitable

organizations in lieu of honoraria, as a

supplement to employee financial

disclosure reports. That requirement

was specified in the financial disclosure

portion of the Ethics Reform Act of 1989

(5 U.S.C. app., section 102(a)(1)(A)), but

has never been activated for the

executive branch. The effective date of

the provisions in 5 CFR part 2636 to

implement this special reporting

requirement was deferred several times

by OGE, most recently indefinitely at 57

FR 5369 (February 14, 1992), pending

development of a reporting form.

Subsequently, because of legal

uncertainties about the related portion

of the Ethics Reform Act of 1989 which

had banned receipt of honoraria, as well

as overall policy issues about how to

implement the reporting requirement

itself, this special reporting requirement

remained inactive. With the

determination by the Department of

Justice that the statutory bar on receipt

of honoraria is legally inoperative, as

discussed above, the implementing

provisions of 5 CFR part 2636 on

supplemental disclosure are no longer

necessary. That results because, by

removing a major incentive for

payments to charitable organizations in

lieu of honoraria (which had been

permissible notwithstanding the

honorarium bar), the determination that

the honorarium bar is no longer

operative will virtually eliminate the

need for employees to make these

supplemental reports, in OGE’s opinion.

While the statutory requirement for

supplemental reporting of information

about charitable payments in lieu of

honoraria remains, it no longer justifies

a separate regulatory structure and form,

and the attendant continuing need for

distinct Paperwork Reduction Act

clearance.

In place thereof, this special

supplemental reporting requirement

will be preserved in a dormant status,

by subsuming its basic outline into the

overall executive branch financial

disclosure system at 5 CFR part 2634.

Minor changes to that part are being

made by this current rulemaking to

conform with the law by limiting the

potential scope of this special reporting

requirement to public financial

disclosure filers, to eliminate reference

to a supplemental report form, and to

preserve the supplemental reporting

requirement as dormant (not currently

effective) for the executive branch,

pending further determination of its

viability. Its viability remains somewhat

of an open question, in light of the

inoperability of the related honorarium

bar, since these provisions were enacted

together as part of the Ethics Reform Act

of 1989. If this supplemental reporting

requirement is subsequently activated,

OGE will notify affected executive

branch departments and agencies, and
43068 Federal Register / Vol. 63, No. 155 /Wednesday, August 12, 1998 /Rules and Regulations

provide them with appropriate

guidance.

Finally, in order to conform with the

removals and changes discussed above,

OGE is making minor technical

amendments to the regulatory

provisions in 5 CFR part 2636

concerning restrictions under 5 U.S.C.

app., section 501(a) and section 502 on

outside earned income, employment

and affiliations which apply to certain

noncareer employees. Those technical

amendments remove references that

become obsolete, in light of the changes

discussed above.

Administrative Procedure Act

Pursuant to 5 U.S.C. 553(b) and (d), as

Director of the Office of Government

Ethics, I find good cause exists for

waiving the general notice of proposed

rulemaking and 30-day delay in

effectiveness as to these revisions. The

notice and delayed effective date are

being waived because these technical

amendments to certain OGE regulations

concern matters of agency organization,

practice and procedure. Furthermore, it

is in the public interest that the obsolete

provisions be removed as soon as

possible.

Executive Order 12866

In promulgating these technical

amendments to its regulations, 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

amendments have 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 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 this rulemaking, involving

technical amendments and removals,

eliminates the detailed separate

regulatory structure (old OMB

paperwork control #3209–0004, now

expired), which had been developed but

never made effective in the executive

branch, for supplemental reporting of

payments in lieu of honoraria to

charitable organizations. Executive

branch employees filing public financial

disclosure reports (SF 278s, OMB

control #3209–0001) will be advised of

this supplemental confidential reporting

requirement by separate OGE guidance

and by their agencies, if it is

subsequently activated. For now, it will

be subsumed by the financial disclosure

regulation at 5 CFR part 2634, which

will preserve the basic outline of this

supplemental requirement. Further, if it

is activated, OGE expects a very low

volume of these supplemental reports,

amounting to less than 50 per year for

the entire executive branch, with fewer

than 10 private citizen filers per year.

These paperwork determinations have

been approved by the Office of

Management and Budget.

List of Subjects

5 CFR Part 2634

Administrative practice and

procedure, Certificates of divestiture,

Conflict of interests, Financial

disclosure, Government employees,

Penalties, Privacy, Reporting and

recordkeeping requirements, Trusts and

trustees.

5 CFR Part 2636

Administrative practice and

procedure, Conflict of interests,

Government employees, Penalties.

Approved: December 12, 1997.

Stephen D. Potts,

Director, Office of Government Ethics.

For the reasons set forth in the

preamble, the Office of Government

Ethics is amending parts 2634 and 2636

of chapter XVI of 5 CFR as follows:

PART 2634—[AMENDED]

1. The authority citation for part 2634

continues to read as follows:

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

Government Act of 1978); 26 U.S.C. 1043;

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. In § 2634.302, paragraph (a)(2) is

revised to read as follows and is

immediately stayed indefinitely:

§ 2634.302 Income.

(a) * * *

(2) In the case of payments to

charitable organizations in lieu of

honoraria, public filers shall also file a

separate confidential listing of

recipients, along with dates and

amounts of payments, to the extent

known. (See 5 U.S.C. app. 102(a)(1)(A)

and app. 501(c).)

* * * * *

§ 2634.601 [Amended]

3. Section 2634.601 is amended by

removing paragraph (c) and

redesignating paragraph (d) as new

paragraph (c).

PART 2636—[AMENDED]

4. The authority citation for part 2636

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.

5. The heading of part 2636 is revised

to read as follows:

PART 2636—LIMITATIONS ON

OUTSIDE EARNED INCOME,

EMPLOYMENT AND AFFILIATIONS

FOR CERTAIN NONCAREER

EMPLOYEES

6. Section 2636.101 is revised to read

as follows:

§ 2636.101 Purpose.

This part is issued under authority of

title VI of the Ethics Reform Act of 1989

(Pub. L. 101–194, as amended), to

implement the 15 percent outside

earned income limitation at 5 U.S.C.

app. 501(a) and the limitations at 5

U.S.C. app. 502 on outside employment

and affiliations, which are applicable to

certain noncareer employees.

§ 2636.102 [Amended]

7. Section 2636.102 is amended by

removing from paragraph (a) the words

and terms ‘‘or to receive and review

reports of honoraria recipients under

§ 2636.204 of this part’’.

8. Section 2636.103 is amended by

revising paragraph (a)(2)(i) to read as

follows:

§ 2636.103 Advisory opinions.

(a) * * *

(2) * * *

(i) Whether a particular entity

qualifies as a charitable organization to

which a payment in lieu of honoraria

may be excluded from the definition of

outside earned income and

compensation under § 2636.303(b)(7) of

this part; or

* * * * *

§ 2636.104 [Amended]

9. Section 2636.104 is amended by

removing from the first sentence of

paragraph (a) the words ‘‘who accepts

an honorarium or engages in any other

conduct’’ and adding in their place the

words ‘‘who engages in any conduct’’,

by removing the last sentence of

paragraph (a), and by removing

paragraphs (c) and (d).
Federal Register / Vol. 63, No. 155 /Wednesday, August 12, 1998 /Rules and Regulations 43069

Subpart B—[Removed and Reserved]

10. Subpart B of part 2636 is removed

and reserved.

11. Section 2636.302 is amended by

removing the sentence fragment at the

end of the undesignated introductory

text, by removing paragraphs (a) and (b),

and by adding a new sentence at the end

of that section to read as follows:

§ 2636.302 Relationship to other laws and

regulations.

* * * In particular, a covered

noncareer employee should accept

compensation only after determining

that its receipt does not violate section

102 of Executive Order 12674, as

amended, which prohibits a covered

noncareer employee who is also a

Presidential appointee to a full-time

noncareer position from receiving any

outside earned income for outside

employment or for any other activity

performed during that Presidential

appointment.

12. Section 2636.303 is amended by

removing from the penultimate sentence

in the undesignated text at the end of

paragraph (c) the words and terms

‘‘under § 2636.204 of this part’’ and

adding in their place the words and

terms ‘‘under 5 U.S.C. app. 501(c)’’, and

by revising paragraph (b)(7) to read as

follows:

§ 2636.303 Definitions.

* * * * *

(b) * * *

(7) Payments to charitable

organizations in lieu of honoraria, as

described in 5 U.S.C. app. 501(c) and

app. 505; or

* * * * *

[FR Doc. 98–20829 Filed 8–11–98; 8:45 am]

BILLING CODE 6345–01–P

FEDERAL TRADE COMMISSION

5 CFR Part 5701

RIN 3209–AA15

Supplemental Standards of Ethical

Conduct for Employees of the Federal

Trade Commission

AGENCY: Federal Trade Commission

(FTC).

ACTION: Final rule.

SUMMARY: The Federal Trade

Commission, with the concurrence of

the Office of Government Ethics (OGE),

is issuing a final rule amendment for

employees of the FTC that supplements

5 CFR part 2635, the Standards of

Ethical Conduct for Employees of the

Executive Branch (Standards), issued by

OGE. This supplemental regulation

provision narrows for FTC employees

restrictions contained in the Standards

on employees’ personal fundraising

activities. The final rule is effective

upon issuance.

EFFECTIVE DATE: August 12, 1998.

ADDRESSES: Send comments to Ira S.

Kaye, Federal Trade Commission, Room

594, 6th and Pennsylvania Ave., NW,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Ira S. Kaye, (202) 326–2426, Federal

Trade Commission, Office of the

General Counsel.

SUPPLEMENTARY INFORMATION:

I. Background

On August 7, 1992, the Office of

Governmental Ethics (OGE) published a

final rule entitled ‘‘Standards of Ethical

Conduct for Employees of the Executive

Branch’’ (Standards). See 57 FR 35006–

35067, as corrected at 57 FR 48557, 57

FR 52583, and 60 FR 51667, and

amended at 61 FR 42965–42970 (as

corrected at 61 FR 48733), 61 FR 50689–

50691 (interim rule revisions adopted as

final at 62 FR 12531), and 62 FR 48746–

48748, with additional grace period

extensions at 59 FR 4779–4780, 60 FR

6390–6391, 60 FR 66857–66858, and 61

FR 40950–40952. The Standards,

codified at 5 CFR part 2653 and

effective February 3, 1993, establish

uniform standards of ethical conduct

applicable to all executive branch

personnel.

The Standards, at 5 CFR 2635.105,

authorize executive branch agencies,

with OGE’s concurrence, to publish

agency-specific supplemental

regulations necessary to implement

their respective ethics programs. On

May 27, 1993, the FTC published, with

OGE’s concurrence, an interim rule

establishing a supplemental standard of

conduct, 5 CFR 5701.101, requiring that

all FTC employees receive prior

approval before engaging in outside

employment (58 FR 30695–30696). The

interim rule prescribed a 45-day

comment period and invited comments

from all interested parties. This interim

rule is not being finalized at this time.

The FTC is now issuing a second

supplemental regulation because it has

determined that a new provision

concerning fundraising activities, to be

codified in a new § 5701.102 of 5 CFR,

is currently necessary to the successful

implementation of the Commission’s

ethics program.

II. Analysis of the Amendment

New Section 5701.102 of the final rule

supplements the executive branch-wide

Standards at 5 CFR 2635.808(c)

regarding fundraising in a personal

capacity. That standard bars employees

from personally soliciting funds from

those persons known by the employee

to be ‘‘prohibited sources’’ as defined in

5 CFR 2635.203(d), including, pursuant

to 2635.203(d)(3), any person who

‘‘conducts activities regulated by the

employee’s agency.’’ (‘‘prohibited

source’’ is also defined in subparagraphs

(d)(1), (d)(2), (d)(4) and (d)(5) of

§ 2635.203 to include ‘‘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; . . . (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.’’)

Because the FTC has enforcement

authority over unfair methods of

competition in or affecting commerce

and unfair or deceptive acts or practices

in or affecting commerce, virtually all

businesses are ‘‘prohibited sources’’ for

FTC employees. The Commission has

determined that given the breadth of

this enforcement authority, the

fundraising provision is unnecessarily

restrictive for FTC employees.

Accordingly, § 5701.102 provides that it

shall be permissible for FTC employees

to solicit funds or other support from a

person who is a prohibited source only

by virtue of the definition in 5 CFR

2635.203(d)(3), because the person is

regulated by the FTC (provided that the

other provision of 5 CFR 2635.808(c)

continue to apply).

Employees of the FTC, however, will

not be allowed to solicit contributions

from a person known to be a

‘‘prohibited source’’ for the other

defined reasons listed in 2635.203(d).

Thus, an FTC employee may not engage

in charitable fundraising from any

person (including an organization a

majority of whose members are such

persons) seeking official action by the

FTC, doing business with the FTC or

having interests that may be

substantially affected by the

performance or nonperformance of the

employee’s official duties.

III. Matters of Regulatory Procedure

Administrative Procedure Act

This rule amendment relates solely to

agency management and personnel, and,

thus, is not subject to the notice and

comment requirements of the

Administrative Procedure Act, 5 U.S.C.

553(a)(2).