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

22249

Vol. 60, No. 87

Friday, May 5, 1995

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 185

RIN 3206–AF43

Implementation of the Program Fraud

Civil Remedies Act of 1986

AGENCY: Office of Personnel

Management.

ACTION: Correction to final regulations.

SUMMARY: This document contains a

correction to the final regulations which

were published on Friday, February 10,

1995, (60 FR 7891). The regulations

provide procedures to implement the

Program Fraud Civil Remedies Act of

1986.

EFFECTIVE DATE: March 13, 1995.

FOR FURTHER INFORMATION CONTACT:

Murray M. Meeker, Attorney, Office of

the General Counsel, (202) 606–1980.

SUPPLEMENTARY INFORMATION: On

February 10, 1995, OPM published final

regulations to implement the Program

Fraud Civil Remedies Act of 1986. On

April 12, 1995, OPM was advised by an

official from the West Publishing

Company that a typographical error had

resulted in the omission of a portion of

one of the sections. This document

corrects that omission.

Correction

In rule document 95–3347 beginning

on page 7891 in the issue of Friday,

February 10, 1995, make the following

correction:

On page 7899, in the second column,

correct § 185.139(g) to read as follows:

§ 185.139 Appeal to authority head.

* * * * *

(g) In reviewing the initial decision,

the authority head shall not consider

any objection that was not raised before

the ALJ unless the objecting party can

demonstrate extraordinary

circumstances causing the failure to

raise the objection.

* * * * *

Office of Personnel Management.

Lorraine A. Green,

Deputy Director.

[FR Doc. 95–11075 Filed 5–4–95; 8:45 am]

BILLING CODE 6325–01–M

DEPARTMENT OF THE TREASURY

5 CFR Chapter XXI

RIN 3209–AA15

Supplemental Standards of Ethical

Conduct for Employees of the

Department of the Treasury

AGENCY: Department of the Treasury.

ACTION: Final rule.

SUMMARY: The Department of the

Treasury (Department), with the

concurrence of the Office of

Government Ethics (OGE), is issuing a

final rule establishing uniform

supplemental standards of ethical

conduct for the officers and employees

of the Department. The final rule is a

necessary supplement to the Executive

Branch-wide Standards because it

addresses ethical issues unique to the

Department. The final rule is effective

upon publication and establishes

regulations relating to: The designation

of agency components for purposes of

the rules concerning gifts and teaching,

speaking and writing; prohibitions on

the ownership of certain financial

interests; prohibitions on certain forms

of borrowing and extensions of credit;

prohibitions on recommendations

concerning certain securities and

services of certain types of

professionals; limitations on purchases

of assets controlled by the Department

or related to Department operations; and

restrictions on outside employment and

business activities.

EFFECTIVE DATE: May 5, 1995.

FOR FURTHER INFORMATION CONTACT:

Stephen J. McHale, Henry H. Booth, or

R. Peter Rittling, Office of the Assistant

General Counsel (General Law and

Ethics), Department of the Treasury,

telephone (202) 622–0450, FAX (202)

622–1176, e-mail

Peter.Rittling@treas.sprint.com.

SUPPLEMENTARY INFORMATION:

I. Rulemaking Background

On Tuesday August 3, 1993, the

Department, with OGE’s concurrence,

published for comment a proposed rule

to establish supplemental standards of

ethical conduct for all Treasury

Department employees (58 FR 41193–

41203). The proposed rule was intended

to supplement the Standards of Ethical

Conduct for Employees of the Executive

Branch published by OGE on August 7,

1992, and effective February 3, 1993 (5

CFR Part 2635; see also the grace period

extensions at 59 FR 4779–4780, Feb. 2,

1994, and 60 FR 6390–6391, Feb. 2,

1995). The proposed rule was issued

pursuant to 5 CFR 2635.105, which

authorizes executive branch agencies to

publish agency-specific supplemental

regulations necessary to implement

their respective ethics programs. The

Department, with OGE’s concurrence,

determined that the supplemental

regulations contained in the proposed

rule were necessary to implement the

Department’s ethics program

successfully, considering the

Department’s unique programs and

operations.

The proposed rule prescribed a 30-

day comment period and invited

comments from all interested parties.

The Department received timely

comments from six sources, considered

each comment carefully, and made

appropriate modifications to the rule.

The Department, with OGE’s

concurrence, is now publishing as a

final rule the Supplemental Standards

of Ethical Conduct for Employees of the

Department of the Treasury, to be

codified at a new part 3101, Title 5 of

the Code of Federal Regulations.

In a separate rule making, the

Department is issuing as an interim rule

the Department of the Treasury

Employee Rules of Conduct. The Rules

of Conduct will be codified at 31 CFR

Part 0 and will prescribe Departmentspecific employee rules of conduct and

procedure.

II. Summary of the Comments

The Department received comments

from two Department employees, two

private financial institutions and two

bureaus of the Department. The

comments, discussed more fully below,

fall into two general categories. The

comments received from the

Department employees and the financial
22250 Federal Register / Vol. 60, No. 87 / Friday, May 5, 1995 / Rules and Regulations

institutions asked for guidance on the

application of either the rule in general

or a specific section of the rule. The

bureaus’ comments recommended

substantive changes to certain sections

of the rule that applied specifically to

their employees. After the comment

period closed, certain offices in the

Department requested changes to

§ 3101.103 to make it more restrictive

and to increase its coverage to include

an employee’s spouse and minor

children. The suggested changes are

being reviewed and may be

implemented in the future by amending

the rule. At this time, however, this

section applies only to Department

employees.

III. Analysis of the Comments

One Department employee asked

whether the final rule will apply

retroactively. The employee was

concerned that the final rule, once

effective, would be used to discipline

employees for actions taken before the

effective date of the final rule. The final

rule applies prospectively only.

Another Department employee asked

whether § 3101.103, which prohibits

Department employees from purchasing,

either directly or indirectly, certain

Government owned or controlled

property, would apply to the relatives

and friends of Department employees.

Section 3101.103 applies only to

Department employees. However, a

Department employee may not

circumvent the prohibition by having a

friend or relative purchase property for

the employee’s use or possession that

the employee would otherwise be

prohibited from purchasing. This is

considered an indirect purchase and is

prohibited by § 3101.103.

Two private financial institutions

submitted comments asking whether the

final rule will apply to the employees of

private financial institutions. As stated

in the Summary section of the proposed

rule, the regulations will apply only to

the officers and employees of the

Department of the Treasury, with

specific provisions also applicable to

certain members of their families. This

has not been changed; therefore, the

final rule does not apply to private

financial institutions or their

employees.

Finally, two bureaus of the

Department, the OCC and the OTS,

submitted comments recommending

substantive changes to specific sections

of the rule that will apply exclusively to

their employees. All changes were

incorporated into the final rule. In

general, many of the regulations specific

to OTS and OCC employees included in

this rule are based on old OCC and OTS

conduct regulations which predate and

were displaced by the Executive

Branch-wide Standards. These changes

fixed inconsistencies between the new

regulations and the old regulations on

which they are based.

The first change we made was to

§ 3101.109(c)(3)(iii). Section

3101.109(c)(3)(iii) prescribes an

exception to the OTS borrowing

prohibition contained in § 3101.109(c).

As proposed, the exception would have

permitted an OTS employee to obtain a

loan or extension of credit by assuming

a mortgage loan on a personal residence

without first obtaining approval from

the bureau. In the final rule, the

exception is retained but modified to

require the employee to obtain the prior

approval of the Chief Counsel, a

Regional Director, Regional Deputy

Director, or designee before securing a

loan or extension of credit under this

exception.

We also revised § 3101.109(c)(4). As

proposed, § 3101.109(c)(4) would have

permitted covered OTS employees, their

spouses and minor children, to retain

preexisting credit in only three specific

situations. In the final rule,

§ 3101.109(c)(4) is revised to permit the

retention of preexisting credit in a

fourth situation. As modified, a covered

employee, or a spouse or a minor child,

may retain preexisting credit if the

credit was extended before April 30,

1991, the date on which the borrowing

prohibition included in § 3101.109(c)

was first implemented in the old OTS

conduct rules. This final rule continues

the OTS borrowing prohibition;

therefore, it is necessary to include the

exception for preexisting credit obtained

before April 30, 1991, the date that the

prohibition originally took effect.

In the proposed rule, the prohibition

on the purchase of assets in

§ 3101.109(f), applied to all OTS

employees, their spouses and minor

children. In the final rule, the

prohibition in § 3101.109(f) was

modified to apply only to ‘‘covered’’

OTS employees, their spouses and

minor children. The reason for the

modification was to make § 3101.109(f)

consistent with a similar prohibition

contained in the old OTS conduct rules.

The term covered OTS employee is

defined in § 3101.109(a).

In a joint comment, both the OTS and

the OCC recommended changing certain

language in the exception to the

prohibitions against owning certain

financial interests. All recommended

changes were incorporated into the final

rule.

Under §§ 3101.108(a) and 3101.109(b)

of the final rule, OCC employees and

covered OTS employees are prohibited

from owning the securities of entities

regulated by their respective bureaus.

However, under §§ 3101.108(a)(3)(i) and

3101.109(b)(3)(i), which are nearly the

same for the OCC and the OTS, an OCC

or covered OTS employee may invest in

a publicly traded or publicly available

‘‘mutual fund or other collective

investment fund or in a widely held

pension or similar fund’’ if the fund

does not invest more than ‘‘25 percent’’

of its ‘‘assets’’ in the securities of ‘‘one

or more’’ regulated entities.

In general, the revised exception

describes in greater detail the types of

funds in which an employee is

permitted to invest. In the proposed

rule, the exception was limited to

‘‘publicly traded or publicly available

investment fund[s].’’ Now, under the

modified exception, a covered employee

may invest in a ‘‘publicly traded or

publicly available mutual fund or other

collective investment fund,’’ including a

registered investment company like a

money market fund, unit investment

trust, or other publicly traded or

publicly available pooled investment

fund, or a ‘‘widely held pension or

similar fund,’’ such as a deferred

compensation plan administered by a

corporation for its employees.

Additionally, the effect of the

exception, as revised, is to prohibit an

employee from investing in a fund that

invests more than 25 percent of its

assets in the securities of one or more

regulated entities. This modification

simplifies the restriction contained in

the proposed rule that would have

prohibited an employee from investing

in a fund that invested more than 5

percent of its assets in the securities of

one regulated entity or more than 20

percent of its assets in the securities of

a regulated industry. The 25 percent

limitation is based upon current

security law and policy, including the

definition of a diversified management

company and the investment industry

concentration limit contained in §§ 5(b)

and 8(b), respectively, of the Investment

Company Act of 1940 (15 U.S.C. 80a–

5(b), 80a–8(b)). Overall, the changes to

§§ 3101.108(a) and 3101.109(b)(3) will

clarify the standards employees must

follow in making personal investments.

IV. Change in the Final Rule

Section 3101.102 lists the components

of the Department that are designated as

separate agencies for the purposes of the

regulations contained in 5 CFR 2635.807

and subpart B of 5 CFR Part 2635. The

United States Savings Bonds Division,

which was listed as a separate agency in

the proposed rule, is deleted from the

list in the final rule because it was

assumed into the Bureau of the Public
Federal Register / Vol. 60, No. 87 / Friday, May 5, 1995 / Rules and Regulations 22251

Debt after the proposed rule was

published.

Consistent with the additional grace

period extensions at 59 FR 4779–4780

and 60 FR 6390–6391, § 3101.111 has

been modified to grandfather until no

later than January 3, 1996, the Secret

Service rules prohibiting certain kinds

of outside employment.

V. Matters of Regulatory Procedure

Executive Order 12866, Regulatory

Planning and Review

This rule is limited to agency

organization, management and

personnel matters; therefore, it is not

subject to Executive Order 12866.

Regulatory Flexibility Act

It is hereby certified that this rule will

not have significant economic impact on

a substantial number of small entities.

This rule affects only Federal employees

and their immediate families.

List of Subjects in 5 CFR Part 3101

Conflict of interests, Government

employees.

Dated: January 29, 1995.

Edward S. Knight,

General Counsel, Department of the Treasury.

Approved: February 28, 1995.

Stephen D. Potts,

Director, Office of Government Ethics.

For the reasons set forth in the

preamble, the Department of the

Treasury, in concurrence with the Office

of Government Ethics, is amending title

5 of the Code of Federal Regulations by

adding a new chapter XXI, consisting of

part 3101, to read as follows:

CHAPTER XXI—DEPARTMENT OF THE

TREASURY

PART 3101—SUPPLEMENTAL

STANDARDS OF ETHICAL CONDUCT

FOR EMPLOYEES OF THE

DEPARTMENT OF THE TREASURY

Sec.

3101.101 General.

3101.102 Designation of separate agency

components.

3101.103 Prohibition on purchase of certain

assets.

3101.104 Outside employment.

3101.105 Additional rules for Bureau of

Alcohol, Tobacco and Firearms

employees.

3101.106 Additional rules for Internal

Revenue Service employees.

3101.107 Additional rules for Legal

Division employees.

3101.108 Additional rules for Office of the

Comptroller of the Currency employees.

3101.109 Additional rules for Office of

Thrift Supervision employees.

3101.110 Additional rules for United States

Customs Service employees.

3101.111 Additional rules for United States

Secret Service employees.

Authority: 5 U.S.C. 301, 7301, 7353; 5

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

1978); 26 U.S.C. 7214(b); 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 CFR 2635.105,

2635.203(a), 2635.403(a), 2635.803,

2635.807(a)(2)(ii).

§ 3101.101 General.

(a) Purpose. In accordance with 5 CFR

2635.105, the regulations in this part

apply to employees of the Department of

the Treasury and supplement the

Standards of Ethical Conduct for

Employees of the Executive Branch

contained in 5 CFR part 2635.

Employees are required to comply with

5 CFR part 2635, this part, and bureau

guidance and procedures established

pursuant to this section. Department

employees are also subject to any

additional rules of conduct that the

Department or their employing bureaus

are authorized to issue. See 31 CFR part

0, Department of the Treasury Employee

Rules of Conduct.

(b) Bureau instructions. With the

concurrence of the Designated Agency

Ethics Official (DAEO), bureaus of the

Department of the Treasury are

authorized to issue instructions or

manual issuances providing explanatory

guidance and establishing procedures

necessary to implement this part and

part 2635 of this title. See 5 CFR

2635.105(c).

(c) Definition of ‘‘agency designee’’.

As used in this part and in part 2635 of

this title, the term ‘‘agency designee’’

refers to any employee who has been

delegated authority by an instruction or

manual issuance issued by a bureau

under paragraph (b) of this section to

make a determination, give an approval,

or take other action required or

permitted by this part or part 2635 of

this title with respect to another

employee. See 5 CFR 2635.102(b).

§ 3101.102 Designation of separate agency

components.

Pursuant to 5 CFR 2635.203(a), each

of the following components of the

Department of the Treasury is

designated as a separate agency for

purposes of the regulations contained in

subpart B of 5 CFR part 2635 governing

gifts from outside sources and 5 CFR

2635.807 governing teaching, speaking

or writing:

(a) Bureau of Alcohol, Tobacco and

Firearms (ATF);

(b) Bureau of Engraving and Printing;

(c) Bureau of the Public Debt;

(d) Federal Law Enforcement Training

Center;

(e) Financial Management Service;

(f) Internal Revenue Service (IRS);

(g) Office of the Comptroller of the

Currency (OCC);

(h) Office of the Inspector General;

(i) Office of Thrift Supervision (OTS);

(j) United States Customs Service

(USCS);

(k) United States Mint; and

(l) United States Secret Service.

For purposes of this section,

employees in the Legal Division shall be

considered to be part of the bureaus or

offices in which they serve.

Note: As a result of the designations

contained in this section, employees of the

remaining parts of the Department of the

Treasury (e.g., employees in Departmental

Offices, including the Financial Crimes

Enforcement Network) will also be treated as

employees of an agency that is separate from

all of the above listed bureaus and offices for

purposes of determining whether the donor

of a gift is a prohibited source under 5 CFR

2635.203(d) and for identifying an

employee’s ‘‘agency’’ under 5 CFR 2635.807

governing teaching, speaking and writing.

§ 3101.103 Prohibition on purchase of

certain assets.

(a) General prohibition. Except as

provided in paragraph (b) of this

section, no employee of the Department

of the Treasury shall purchase, directly

or indirectly, property:

(1) Owned by the Government and

under the control of the employee’s

bureau (or a bureau over which the

employee exercises supervision); or

(2) Sold under the direction or

incident to the functions of the

employee’s bureau.

(b) Exceptions. The prohibition in

paragraph (a) of this section does not

apply to the purchase of Government

securities or items sold generally to the

public at fixed prices, such as

numismatic items produced by the

United States Mint or foreign gifts

deposited with the Department pursuant

to 5 U.S.C. 7342 that an employee may

purchase pursuant to 41 CFR part 101–

49.

(c) Waiver. An employee may make a

purchase otherwise prohibited by this

section where a written waiver of the

prohibition has been given to the

employee by an agency designee with

the advice and legal clearance of the

DAEO, or the appropriate Office of Chief

or Legal Counsel. Such a waiver may be

granted only on a determination that the

waiver is not otherwise prohibited by

law and that, in the mind of a

reasonable person with knowledge of

the particular circumstances, the

purchase of the asset will not raise a

question as to whether the employee has

used his or her official position or

inside information to obtain an
22252 Federal Register / Vol. 60, No. 87 / Friday, May 5, 1995 / Rules and Regulations

advantageous purchase or create an

appearance of loss of impartiality in the

performance of the employee’s duties.

Note: Employees of the OCC and OTS are

subject to additional limitations on the

purchase of assets that are set out in bureauspecific rules contained in §§ 3101.108 and

3101.109.

§ 3101.104 Outside employment.

(a) General requirement for prior

approval. All Department of the

Treasury employees shall obtain prior

written approval before engaging in any

outside employment or business

activities, with or without

compensation, except to the extent that

the employing bureau issues an

instruction or manual issuance pursuant

to paragraph (b) of this section

exempting an activity or class of

activities from this requirement.

Approval shall be granted only on a

determination that the employment or

activity is not expected to involve

conduct prohibited by statute, part 2635

of this title, or any provision of this part.

Note: Employees of the ATF, IRS, Legal

Division, OCC, USCS and United States

Secret Service are subject to additional

limitations on outside employment and

activities that are set out in bureau-specific

rules contained in this part.

(b) Bureau responsibilities. Each

bureau, which for the purposes of this

section includes the Departmental

Offices and the Office of the Inspector

General, shall issue instructions or

manual issuances governing the

submission of requests for approval of

outside employment or business

activities and designating appropriate

officials to act on such requests. The

instructions or manual issuances may

exempt categories of employment or

activities from the prior approval

requirement based on a determination

that employment or activities within

those categories would generally be

approved and are not likely to involve

conduct prohibited by statute, part 2635

of this title or any provision of this part.

Bureaus may include in their

instructions or issuances examples of

outside employment or activities that

are permissible or impermissible

consistent with this part and part 2635

of this title. Bureaus shall retain in

employees’ Official Personnel Folders

(temporary side) all requests for

approval whether granted or denied.

§ 3101.105 Additional rules for Bureau of

Alcohol, Tobacco and Firearms employees.

The following rules apply to the

employees of the Bureau of Alcohol,

Tobacco and Firearms and are in

addition to §§ 3101.101 through

3101.104:

(a) Prohibited financial interests.

Except as provided in this section, no

employee of the ATF, or spouse or

minor child of an ATF employee, shall

have, directly or indirectly, any

financial interest, including

compensated employment, in the

alcohol, tobacco, firearms or explosives

industries. The term financial interest is

defined in § 2635.403(c) of this title.

(b) Waiver. An agency designee, with

the advice and legal clearance of the

DAEO or Office of the Chief Counsel,

may grant a written waiver of the

prohibition in paragraph (a) of this

section on a determination that the

financial interest is not prohibited by 26

U.S.C. 7214(b) and that, in the mind of

a reasonable person with knowledge of

the particular circumstances, the

financial interest will not create an

appearance of misuse of position or loss

of impartiality, or call into question the

impartiality and objectivity with which

the ATF’s programs are administered. A

waiver under this paragraph may

require appropriate conditions, such as

execution of a written disqualification.

§ 3101.106 Additional rules for Internal

Revenue Service employees.

The following rules apply to the

employees of the Internal Revenue

Service and are in addition to

§§ 3101.101 through 3101.104:

(a) Prohibited recommendations.

Employees of the IRS shall not

recommend, refer or suggest,

specifically or by implication, any

attorney, accountant, or firm of

attorneys or accountants to any person

in connection with any official business

which involves or may involve the IRS.

(b) Prohibited outside employment.

Involvement by an employee of the IRS

in the following types of outside

employment or business activities is

prohibited and shall constitute a

conflict with the employee’s official

duties pursuant to 5 CFR 2635.802:

(1) Performance of legal services

involving Federal, State or local tax

matters;

(2) Appearing on behalf of any

taxpayer as a representative before any

Federal, State, or local government

agency, in an action involving a tax

matter except on written authorization

of the Commissioner of Internal

Revenue;

(3) Engaging in accounting, or the use,

analysis, and interpretation of financial

records when such activity involves tax

matters;

(4) Engaging in bookkeeping, the

recording of transactions, or the recordmaking phase of accounting, when such

activity is directly related to a tax

determination; and

(5) Engaging in the preparation of tax

returns for compensation, gift, or favor.

(c) Seasonal employees. Seasonal

employees of the IRS while in non-duty

status may engage in outside

employment or activities other than

those prohibited by paragraph (b) of this

section without obtaining prior written

permission.

§ 3101.107 Additional rules for Legal

Division employees.

The following rules apply to the

employees of the Legal Division and are

in addition to §§ 3101.101 through

3101.104:

(a) Application of rules of other

bureaus. In addition to the rule

contained in paragraph (b) of this

section, employees in the Legal Division

shall be covered by the rules contained

in this part that are applicable to

employees of the bureaus or offices in

which the Legal Division employees

serve, subject to any instructions which

the General Counsel or appropriate

Chief or Legal Counsel may issue in

accordance with § 3101.101(b).

(b) Prohibited outside employment.

Pursuant to 5 CFR 2635.802, it is

prohibited and shall constitute a

conflict with the employee’s official

duties for an attorney employed in the

Legal Division to engage in the outside

practice of law that might require the

attorney to:

(1) Take a position that is or appears

to be in conflict with the interests of the

Department of the Treasury which is the

client to whom the attorney owes a

professional responsibility; or

(2) Interpret any statute, regulation or

rule administered or issued by the

Department.

§ 3101.108 Additional rules for Office of

the Comptroller of the Currency employees.

The following rules apply to the

employees of the Office of the

Comptroller of the Currency and are in

addition to §§ 3101.101–3101.104:

(a) Prohibited financial interests—(1)

Prohibition. Except as provided in

paragraphs (a)(3) and (g) of this section,

no OCC employee, or spouse or minor

child of an OCC employee, shall own,

directly or indirectly, securities of any

commercial bank (including both

national and State-chartered banks) or

commercial bank affiliate, including a

bank holding company.

(2) Definition of ‘‘securities’’. For

purposes of paragraphs (a)(1) and (a)(3)

of this section, the term ‘‘securities’’

includes all interests in debt or equity

instruments. The term includes, without

limitation, secured and unsecured

bonds, debentures, notes, securitized

assets and commercial paper, as well as
Federal Register / Vol. 60, No. 87 / Friday, May 5, 1995 / Rules and Regulations 22253

all types of preferred and common

stock. The term encompasses both

current and contingent ownership

interests, including any beneficial or

legal interest derived from a trust. It

extends to any right to acquire or

dispose of any long or short position in

such securities and includes, without

limitation, interests convertible into

such securities, as well as options,

rights, warrants, puts, calls, and

straddles with respect thereto.

(3) Exceptions. Nothing in this section

prohibits an OCC employee, or spouse

or minor child of an OCC employee,

from:

(i) Investing in a publicly traded or

publicly available mutual fund or other

collective investment fund or in a

widely held pension or similar fund

provided that the fund does not invest

more than 25 percent of its assets in

securities of one or more commercial

banks (including both national and

State-chartered banks) and commercial

bank affiliates (including bank holding

companies) and the employee neither

exercises control over nor has the ability

to exercise control over the financial

interests held in the fund;

(ii) Investing in the publicly traded

securities of a holding company of a

nonbank bank or of a retailing firm that

owns or sponsors a credit card bank as

defined by the Competitive Equality

Banking Act of 1987, except that an

employee who owns such an interest

must be disqualified from participating

in the regulation or supervision of the

nonbank bank or the credit card bank;

(iii) Using a commercial bank or

commercial bank affiliate as custodian

or trustee of accounts containing taxdeferred retirement funds; or

(iv) Owning any security pursuant to

a waiver granted under paragraph (g) of

this section.

(b) Prohibited borrowing—(1)

Prohibition on employee borrowing.

Except as provided in this section, no

covered OCC employee shall seek or

obtain any loan or extension of credit,

including credit obtained through the

use of a credit card, from any national

bank or from an officer, director,

employee, or subsidiary of any national

bank.

(2) Prohibition on borrowing by a

spouse or minor child. The prohibition

in paragraph (b)(1) of this section shall

apply to the spouse or minor child of a

covered OCC employee unless the loan

or extension of credit:

(i) Is supported only by the income or

independent means of the spouse or

minor child;

(ii) Is obtained on terms and

conditions no more favorable than those

offered to the general public; and

(iii) The covered OCC employee does

not participate in the negotiation for the

loan or serve as co-maker, endorser, or

guarantor of the loan.

(3) Covered OCC employee. For

purposes of the prohibitions on

borrowing contained in paragraphs

(b)(1) and (b)(2) of this section, ‘‘covered

OCC employee’’ means:

(i) An OCC bank examiner; and

(ii) Any other OCC employee

specified in an OCC instruction or

manual issuance whose duties and

responsibilities, as determined by the

Comptroller of the Currency or his or

her designee, require application of the

prohibition on borrowing contained in

this section to ensure public confidence

that the OCC’s programs are conducted

impartially and objectively.

(4) Exceptions. Nothing in this section

prohibits a covered OCC employee, or

the spouse or minor child of a covered

OCC employee, from obtaining a loan or

extension of credit described in

paragraphs (b)(4)(i) through (b)(4)(iii) of

this section from a national bank if the

loan or extension of credit is obtained

on terms and conditions no more

favorable than those offered to the

general public, the employee is not

assigned to examine the bank at the time

the loan or extension of credit is

obtained, and the employee submits to

the Chief Counsel or designee a written

disqualification from examining or

otherwise participating in the

supervision of the bank. The exceptions

provided by this paragraph are for loans

or extensions of credit obtained:

(i) Through use of a credit card issued

by a national bank where:

(A) The employee is assigned to a

district office and the bank is not

headquartered in the employee’s

district;

(B) The employee is assigned to the

Multinational Division and the bank is

not supervised by that Division; or

(C) The employee is assigned to the

Washington office (other than the

Multinational Division);

(ii) Through use of a national bank

credit card sponsored by a retailing firm

(e.g., Nordstrom, Lord and Taylor,

Amoco Oil Company); or

(iii) Through assumption of a

mortgage loan on the employee’s

residence which is liquidated in

accordance with its original terms

without renewal or renegotiation.

(5) Pre-existing credit. This section

does not prohibit a covered OCC

employee, or spouse or minor child of

a covered OCC employee, from retaining

a loan from a national bank on its

original terms if the loan was incurred

prior to employment by the OCC or as

a result of the sale or transfer of a loan

to a national bank or the conversion or

merger of the lender into a national

bank. Any renewal or renegotiation of a

pre-existing loan or extension of credit

will be treated as a new loan subject to

the prohibitions in paragraphs (b)(1) and

(b)(2) of this section.

(c) Restrictions arising from third

party relationships. If any of the entities

listed in paragraphs (c)(1) through (c)(7)

of this section have securities that an

OCC employee would be prohibited

from having by paragraph (a) of this

section, or loans or extensions of credit

that a covered OCC employee would be

prohibited from obtaining under

paragraph (b) of this section, the

employee shall promptly report such

interests to the Chief Counsel or

designee. The Chief Counsel or designee

may require the employee to terminate

the third party relationship, undertake

an appropriate disqualification, or take

other appropriate action necessary,

under the particular circumstances, to

avoid a statutory violation or a violation

of part 2635 of this title, or this part,

including an appearance of misuse of

position or loss of impartiality. This

paragraph applies to any:

(1) Partnership in which the

employee, or spouse or minor child of

the employee, is a general partner;

(2) Partnership in which the

employee, or spouse or minor child of

the employee, individually or jointly

holds more than a 10 percent limited

partnership interest;

(3) Closely held corporation in which

the employee, or spouse or minor child

of the employee, individually or jointly

holds more than a 10 percent equity

interest;

(4) Trust in which the employee, or

spouse or minor child of the employee,

has a legal or beneficial interest;

(5) Investment club or similar

informal investment arrangement

between the employee, or spouse or

minor child of the employee, and

others;

(6) Qualified profit sharing, retirement

or similar plan in which the employee,

or spouse or minor child of the

employee, has an interest; or

(7) Other entity if the employee, or

spouse or minor child of the employee,

individually or jointly holds more than

a 25 percent equity interest.

(d) Prohibited recommendations.

Employees of the OCC shall not make

recommendations or suggestions,

directly or indirectly, concerning the

acquisition or sale or other divestiture of

securities of any commercial bank or

commercial bank affiliate, including a

bank holding company.

(e) Prohibited purchase of assets. No

employee of the OCC, or spouse or
22254 Federal Register / Vol. 60, No. 87 / Friday, May 5, 1995 / Rules and Regulations

minor child of an OCC employee, shall

purchase, directly or indirectly, an asset

(e.g., real property, automobiles,

furniture, or similar items) from a

national bank or national bank affiliate,

including a bank holding company,

unless it is sold at a public auction or

by other means which assure that the

selling price is the asset’s fair market

value.

(f) Outside employment—(1)

Prohibition on outside employment. No

covered OCC employee shall perform

services for compensation for any bank,

banking or loan association, or national

bank affiliate, or for any officer, director

or employee of, or for any person

connected in any capacity with a bank,

banking or loan association or national

bank affiliate.

(2) Covered OCC employee. For

purposes of the prohibitions on outside

employment contained in paragraph

(f)(1) of this section, ‘‘covered OCC

employee’’ means:

(i) An OCC bank examiner; and

(ii) Any other OCC employee

specified in an OCC instruction or

manual issuance whose duties and

responsibilities, as determined by the

Comptroller of the Currency or his or

her designee, require application of the

prohibition on outside employment

contained in this section to ensure

public confidence that the OCC’s

programs are conducted impartially and

objectively.

(g) Waivers. An agency designee may

grant a written waiver from any

provision of this section based on a

determination made with the advice and

legal clearance of the DAEO or Office of

the Chief Counsel that the waiver is not

inconsistent with part 2635 of this title

or otherwise prohibited by law and that,

under the particular circumstances,

application of the prohibition is not

necessary to avoid the appearance of

misuse of position or loss of impartiality

or otherwise to ensure confidence in the

impartiality and objectivity with which

agency programs are administered. A

waiver under this paragraph may

impose appropriate conditions, such as

requiring execution of a written

disqualification.

§ 3101.109 Additional rules for Office of

Thrift Supervision employees.

The following rules apply to the

employees of the Office of Thrift

Supervision and are in addition to

§§ 3101.101 through 3101.104:

(a) Covered OTS employee. For

purposes of this section, the term

‘‘covered OTS employee’’ means:

(1) An OTS examiner;

(2) An employee in a position at OTS

grade 17 or above; and

(3) Any other OTS employee specified

in an OTS instruction or manual

issuance whose duties and

responsibilities, as determined by the

Director of the OTS or his or her

designee, require application of the

prohibitions contained in this section to

ensure public confidence that the OTS’s

programs are conducted impartially and

objectively.

(b) Prohibited financial interests—(1)

Prohibition. Except as provided in

paragraphs (b)(3) and (g) of this section,

no covered OTS employee, or spouse or

minor child of a covered OTS employee,

shall own, directly or indirectly,

securities of any OTS-regulated savings

association or savings association

holding company.

(2) Definition of ‘‘securities’’. For

purposes of paragraphs (b)(1) and (b)(3)

of this section, the term ‘‘securities’’

includes all interests in debt or equity

instruments. The term includes, without

limitation, secured and unsecured

bonds, debentures, notes, securitized

assets and commercial paper, as well as

all types of preferred and common

stock. The term encompasses both

current and contingent ownership

interests, including any beneficial or

legal interest derived from a trust. It

extends to any right to acquire or

dispose of any long or short position in

such securities and includes, without

limitation, interests convertible into

such securities, as well as options,

rights, warrants, puts, calls, and

straddles with respect thereto.

(3) Exceptions. Nothing in this section

prohibits a covered OTS employee, or

spouse or minor child of a covered OTS

employee, from:

(i) Investing in a publicly traded or

publicly available mutual fund or other

collective investment fund or in a

widely held pension or similar fund

provided that the fund does not invest

more than 25 percent of its assets in

securities of one or more OTS-regulated

savings associations or savings

association holding companies and the

employee neither exercises control over

nor has the ability to exercise control

over the financial interests held in the

fund;

(ii) Investing in certain non-financial

holding companies whose principal

business is unrelated to the financial

services industry and which are

identified as such on a list maintained

by the Chief Counsel of the OTS;

(iii) Using a savings association as

custodian or trustee of accounts

containing tax-deferred retirement

funds; or

(iv) Owning any security pursuant to

a waiver granted under paragraph (g) of

this section.

(c) Prohibited borrowing—(1)

Prohibition on employee borrowing.

Except as provided in this section, no

covered OTS employee shall seek or

obtain any loan or extension of credit,

including credit obtained through the

use of a credit card, from any OTSregulated savings association or an

officer, director, employee, or subsidiary

of any such association.

(2) Prohibition on borrowing by a

spouse or minor child. The prohibition

in paragraph (c)(1) of this section shall

apply to the spouse or minor child of a

covered OTS employee unless the loan

or extension of credit:

(i) Is supported only by the income or

independent means of the spouse or

minor child;

(ii) Is obtained on terms and

conditions no more favorable than those

offered to the general public; and

(iii) The covered OTS employee does

not participate in the negotiation for the

loan or serve as co-maker, endorser, or

guarantor of the loan.

(3) Exceptions. Nothing in this section

prohibits a covered OTS employee, or

the spouse or minor child of a covered

OTS employee, from obtaining a loan or

extension of credit described in

paragraphs (c)(3)(i) through (c)(3)(iii) of

this section from an OTS-regulated

savings association if the loan or

extension of credit is obtained on terms

and conditions no more favorable than

those offered to the general public, the

employee is not assigned to examine the

savings association at the time the loan

or extension of credit is obtained, and

the employee submits to the Chief

Counsel or designee a written

disqualification from examining or

otherwise participating in the

supervision of the savings association.

The exceptions provided by this

paragraph are for loans or extensions of

credit obtained:

(i) Through use of a credit card issued

by a savings association where:

(A) The employee is assigned to a

regional office and the savings

association is not headquartered in the

employee’s region; or

(B) The employee is assigned to the

Washington office;

(ii) Through use of a savings

association credit card sponsored by a

retailing firm (e.g., Sears); or

(iii) Through assumption of a

mortgage loan on the employee’s

residence which is liquidated in

accordance with its original terms

without renewal or renegotiation, with

prior approval from the Chief Counsel,

a Regional Director, Regional Deputy

Director or designee.

(4) Pre-existing credit. This section

does not prohibit a covered OTS
Federal Register / Vol. 60, No. 87 / Friday, May 5, 1995 / Rules and Regulations 22255

employee, or spouse or minor child of

a covered OTS employee, from retaining

a loan from an OTS-regulated savings

association on its original terms if the

loan was incurred prior to April 30,

1991, or employment by the OTS,

whichever date is later, or as a result of

the sale or transfer of the loan to a

savings association or the conversion or

merger of the lender into an OTSregulated savings association. Any

renewal or renegotiation of a preexisting loan or extension of credit is

covered by paragraphs (c)(1) and (c)(2)

of this section.

(d) Restrictions arising from third

party relationships. If any of the entities

listed in paragraphs (d)(1) through (d)(7)

of this section have securities that a

covered OTS employee would be

prohibited from having by paragraph (b)

of this section, or loans or extensions of

credit that a covered OTS employee

would be prohibited from obtaining

under paragraph (c) of this section, the

employee shall promptly report such

interests to the Chief Counsel or

designee. The Chief Counsel or designee

may require the employee to terminate

the third party relationship, undertake

an appropriate disqualification, or take

other appropriate action necessary,

under the particular circumstances, to

avoid a statutory violation or a violation

of part 2635 of this title or this part,

including an appearance of misuse of

position or loss of impartiality. This

paragraph (d) applies to any:

(1) Partnership in which the

employee, or spouse or minor child of

the employee, is a general partner;

(2) Partnership in which the

employee, or spouse or minor child of

the employee, individually or jointly

holds more than a 10 percent limited

partnership interest;

(3) Closely held corporation in which

the employee, or spouse or minor child

of the employee, individually or jointly

holds more than a 10 percent equity

interest;

(4) Trust in which the employee, or

spouse or minor child of the employee,

has a legal or beneficial interest;

(5) Investment club or similar

informal investment arrangement

between the employee, or spouse or

minor child of the employee, and

others;

(6) Qualified profit sharing, retirement

or similar plan in which the employee,

or spouse or minor child of the

employee, has an interest; or

(7) Other entity if the employee, or

spouse or minor child of the employee,

individually or jointly holds more than

a 25 percent equity interest.

(e) Prohibited recommendations.

Employees of the OTS shall not make

recommendations or suggestions,

directly or indirectly, concerning the

acquisition or sale, or other divestiture

of securities of any OTS-regulated

savings association or savings

association holding company.

(f) Prohibited purchase of assets. No

covered OTS employee, or spouse or

minor child of a covered OTS employee,

shall purchase, directly or indirectly, an

asset (e.g., real property, automobiles,

furniture, or similar items) from a

savings association or savings

association affiliate, including a savings

association holding company, unless it

is sold at a public auction or by other

means which assure that the selling

price is the asset’s fair market value.

(g) Waivers. An agency designee may

grant a written waiver from any

provision of this section based on a

determination made with the advice and

legal clearance of the DAEO or Office of

the Chief Counsel that the waiver is not

inconsistent with part 2635 of this title

or otherwise prohibited by law and that,

under the particular circumstances,

application of the prohibition is not

necessary to avoid the appearance of

misuse of position or loss of

impartiality, or otherwise to ensure

confidence in the impartiality and

objectivity with which agency programs

are administered. A waiver under this

paragraph may impose appropriate

conditions, such as requiring execution

of a written disqualification.

§ 3101.110 Additional rules for United

States Customs Service employees.

The following rules apply to the

employees of the United States Customs

Service and are in addition to

§§ 3101.101 through 3101.104:

(a) Prohibition on outside

employment. No employee of the USCS

shall work for a customs broker,

international carrier, bonded

warehouse, foreign trade zone, cartman,

law firm engaged in the practice of

customs law or importation department

of a business, nor be employed in any

private capacity related to the

importation or exportation of

merchandise.

(b) Restrictions arising from

employment of relatives. If the spouse of

a USCS employee, or other relative who

is dependent on or resides with a USCS

employee, is employed in a position

that the employee would be prohibited

from occupying by paragraph (a) of this

section, the employee shall file a report

of family member employment with his

or her supervisor. Supervisors shall

forward such reports to the appropriate

Regional Counsel for transmittal to the

Chief Counsel. The employee shall be

disqualified from participation in any

matter involving the relative or the

relative’s employer unless an agency

designee, with the advice and legal

clearance of the DAEO or Office of the

Chief Counsel, authorizes the employee

to participate in the matter using the

standard in § 2635.502(d) of this title.

§ 3101.111 Additional rules for United

States Secret Service employees.

[Reserved]

[FR Doc. 95–10941 Filed 5–4–95; 8:45 am]

BILLING CODE 4810–25–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1036

[DA–95–13]

Milk in the Eastern Ohio-Western

Pennsylvania Marketing Area;

Termination of Certain Provisions of

the Order

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: This rule terminates the

advertising and promotion provisions of

the Eastern Ohio-Western Pennsylvania

Federal milk order. Termination of the

provisions was requested by several

associations of dairy farmers whose

milk is pooled under the order. Two

comments were filed in response to the

proposed termination, and both were in

favor of terminating these provisions.

Termination eliminates redundant

expenses in administering regional

advertising and promotion programs

without affecting producers’

participation.

EFFECTIVE DATE: Amendments 2 and 3

(§§ 1036.73 and 1036.105 through

1036.121) are effective July 1, 1995.

Amendment 4 (§ 1036.122) is effective

August 1, 1995.

FOR FURTHER INFORMATION CONTACT:

Constance M. Brenner, Marketing

Specialist, USDA/AMS/Dairy Division,

Order Formulation Branch, Room 2971,

South Building, P.O. Box 96456,

Washington, DC 20090–6456, (202) 720–

2357.

SUPPLEMENTARY INFORMATION: Prior

document in this proceeding:

Notice of Proposed Termination:

Issued March 21, 1995; published

March 24, 1995 (60 FR 15523).

The Regulatory Flexibility Act (5

U.S.C. 601–612) requires the Agency to

examine the impact of a proposed rule

on small entities. Pursuant to 5 U.S.C.

605(b), the Administrator of the

Agricultural Marketing Service has