[Federal Register Volume 60, Number 234 (Wednesday, December 6, 1995)]
[Notices]
[Pages 62469-62471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29723]



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OFFICE OF GOVERNMENT ETHICS


Submission of Proposed Modified Form for Executive Branch 
Confidential Financial Disclosure Reporting to OMB for Approval Under 
the Paperwork Reduction Act

AGENCY: Office of Government Ethics (OGE).

ACTION: Notice.

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SUMMARY: The Office of Government Ethics has submitted a proposed new 
OGE Form 450 for confidential financial disclosure reporting under its 
executive branch regulations for approval by the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act. This new form will 
replace the existing Standard Form (SF) 450.

DATES: Comments on this proposal should be received by January 5, 1996.

ADDRESSES: Comments should be sent to Joseph F. Lackey, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
New Executive Office Building, Room 10235, Washington, DC 20503; 
telephone: 202-395-7316.

FOR FURTHER INFORMATION CONTACT: William E. Gressman, Office of the 
General Counsel and Legal Policy, Office of Government Ethics, 1201 New 
York Avenue, NW., Washington, DC 20005-3917; telephone: 202-523-5757 
(ext. 1110), FAX: 202-523-6325. A copy of OGE's draft form, as well as 
the rest of OGE's paperwork submission package to OMB, may be obtained, 
without charge, by contacting Mr. Gressman.

SUPPLEMENTARY INFORMATION: The Office of Government Ethics is 
submitting a proposed new OGE Form 450 Executive Branch Confidential 
Financial Disclosure Report for three-year approval by OMB under the 
Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). On September 1, 
1995, OGE published an advance paperwork notice of the proposed new OGE 
Form 450 (see 60 FR 45722-45723). During the public comment period on 
that advance notice, OGE received seven requests by persons outside OGE 
for copies of the proposed new form and two comment letters, both of 
which were from Federal agencies (the Nuclear Regulatory Commission and 
the Defense Logistics Agency (DLA)). The two comment letters generally 
questioned certain aspects of the confidential financial disclosure 
system, including the underlying OGE regulation codified at 5 CFR part 
2634. The comment letters also urged a few specific changes to the 
wording or concepts of the proposed form. Upon review, OGE has 
determined not to modify the underlying reporting format nor the 
proposed form itself (except, as to the form, for a couple of 
clarifying revisions). In part in response to certain DLA suggestions, 
the revisions to the proposed form add references in the instructions 
(on page 2) to the reporting of ``401k'' plans and clarify that the 
individual holdings of such plans as well as Individual Retirement 
Accounts and trusts must generally be reported. The Office of 
Government Ethics' reasons for not otherwise modifying either the 
proposed form or the underlying regulation follow.
    The Office of Government Ethics has already removed, by FR 
issuance, the requirement for reporting of Government securities, bank 
accounts and certain similar items which do not normally present much 
potential for a conflict of interest. See below for a discussion of 
this 1993 change, which is not reflected in the existing SF 450, but 
will be in the proposed OGE Form 450. In addition, in the three years 
since the 

[[Page 62470]]
new executive branchwide confidential disclosure system took effect in 
the fall of 1992, the overall system has worked well according to the 
agency feedback that OGE has received. This is particularly so since 
OGE and the agencies have been flexible within the regulatory 
framework, allowing for appropriate limitations on coverage, exceptions 
and alternative forms where justified. Further, OGE is committed to a 
future fundamental reassessment of the basic structure of the 
confidential disclosure system. For now, though, the redesigned 
proposed OGE Form 450 represents urgently needed improvements and 
updates to the existing Standard Form 450 which it will replace.
    As noted, once finally approved by OMB and adopted by OGE, the new 
OGE form will replace the existing SF 450 Executive Branch Personnel 
Confidential Financial Disclosure Report. The SF 450 collects, as will 
the future OGE Form 450, information required under OGE's executive 
branchwide regulatory provisions. See subpart I of 5 CFR part 2634. The 
new OGE Form 450 will serve, as does the current SF 450, as the uniform 
report form for collection, on a confidential basis, of financial 
information required by the OGE regulation from certain new entrant and 
incumbent employees of the executive branch departments and agencies in 
order to allow ethics officials to conduct conflict of interest reviews 
and to resolve any actual or potential conflicts found.
    The basis for the OGE regulation and the report form is two-fold. 
First, section 201(d) of Executive Order 12674 of April 12, 1989 (as 
modified by Executive Order 12731 of October 17, 1990) makes OGE 
responsible for the establishment of a system of nonpublic 
(confidential) financial disclosure by executive branch employees to 
complement the system of public disclosure under the Ethics in 
Government Act of 1978 (the ``Ethics Act''), as amended, 5 U.S.C. 
appendix. Second, section 107(a) of the Ethics Act further provides 
authority for OGE as the supervising ethics office for the executive 
branch of the Federal Government to require that appropriate executive 
agency employees file confidential financial disclosure reports, ``in 
such form as the supervising ethics office may prescribe.'' The current 
SF 450, together with the underlying OGE confidential disclosure 
regulation, both initially adopted in 1992 after appropriate clearances 
from OMB as well as the General Services Administration (GSA) for the 
standard form, constitute the form OGE has prescribed for such 
confidential financial disclosure in the executive branch. The Office 
of Government Ethics recently sought and subsequently obtained a 
limited paperwork renewal from OMB as to the existing SF 450 in order 
to allow sufficient time for OGE to develop and clear the new OGE Form 
450 which is the subject of this notice. See 60 FR 34258-34259 (June 
30, 1995). The new OGE form will not require GSA clearance, since it is 
not a standard (or optional) form under the GSA program. The Office of 
Government Ethics will provide further information in the future to the 
agencies and the public about the details of phasing in the new form, 
once it is finally cleared and adopted, and phasing out the existing 
standard form.
    Since the OGE's financial disclosure regulation at 5 CFR part 2634 
and the reporting format were adopted in 1992, there have been certain 
revisions to each. The most significant of these is the determination 
of OGE to exclude from general executive branch confidential financial 
disclosure the reporting of cash accounts in depository institutions 
(including banks), money market mutual funds and accounts and U.S. 
Government obligations and securities. See 58 FR 63023-63024 (November 
30, 1993). The Office of Government Ethics has directed executive 
departments and agencies to notify all filers of this change, which is 
not reflected on the SF 450 itself. The new OGE replacement form will 
reflect that change, as well as various other changes and improvements 
in the reporting format, to make it clearer and more user-friendly. A 
more complete set of instructions for filling out the form is included 
in the draft OGE Form 450 and helpful examples are set forth on the 
reporting parts.
    The Office of Government Ethics expects that the new form should be 
ready, after OMB clearance, for dissemination to executive branch 
departments and agencies early next year. As noted above, the Office of 
Government Ethics will provide appropriate guidance and phase-in time 
to departments and agencies once the new form is available. The new 
form will be made available in paper, on electronic disk and on OGE's 
electronic bulletin board entitled ``The Ethics Bulletin Board System'' 
(TEBBS). In addition, OGE will work on making available a future 
electronic version of the form, to allow employees the option of 
preparing it on a computer. The Office of Government Ethics also 
intends to permit departments and agencies to develop or utilize 
electronic versions of the form on their own, provided that they 
precisely duplicate the paper original to the extent possible.
    Since 1992, various agencies have developed, with OGE review/
approval, alternative reporting formats, such as certificates of no 
conflict, for certain classes of employees. Other agencies provide for 
additional disclosures pursuant to independent organic statutes and in 
certain other circumstances when authorized by OGE. However, the future 
OGE Form 450, as successor to the current SF 450, will remain the 
uniform executive branch report form for most of those executive branch 
employees who are required by their agencies to report confidentially 
on their financial interests. The confidential report form is to be 
filed by each reporting individual with the designated agency ethics 
official at the executive department or agency where he or she is or 
will be employed.
    Reporting individuals are regular employees whose positions have 
been designated by their agency as requiring confidential financial 
disclosure in order to help avoid conflicts with their assigned 
responsibilities; additionally, all special Government employees (SGEs) 
are generally required to file. Agencies may, if appropriate under the 
OGE regulation, exclude certain regular employees or SGEs as provided 
in 5 CFR 2634.905. Reports are normally required to be filed within 30 
days of entering a covered position (or earlier if required by the 
agency concerned), and again annually if the employee serves for more 
than 60 days in the position. As indicated in Sec. 2634.907 of the OGE 
regulation, the information required to be collected includes assets 
and sources of income, gifts and travel reimbursements, liabilities, 
employment agreements and arrangements, and outside positions, subject 
to certain thresholds and exclusions.
    Most of the persons who file this report form are current executive 
branch Government employees at the time they complete the forms. 
However, some filers are private citizens who are asked by their 
prospective agency to file a new entrant report prior to entering 
Government service in order to permit advance checking for any 
potential conflicts of interest and resolution thereof by agreement to 
recuse, divest, obtain a waiver, or take other remedial steps. Based on 
OGE's annual agency ethics questionnaire responses, approximately 
285,000 SF 450 report forms were filed during 1994 throughout the 
executive branch. Of these, OGE estimates that no more than between 5% 
and 10%, or some 14,250 to 28,500 per year, are filed by private 
citizens whose agencies require that 

[[Page 62471]]
they file their new entrant reports prior to assuming Government 
responsibilities.
    Each filing is estimated to take an average of one and one-half 
hours. The number of private citizens whose reports are filed each year 
with OGE is less than 10, but pursuant to 5 CFR 1320.3(c)(4)(i), the 
lower limit for this general regulatory-based requirement is set at 10 
private persons (OGE-processed reports). This yields an annual 
reporting burden of 15 hours, the same as in the current OMB inventory 
for this information collection. The remainder of the private citizen 
reports are filed with other departments and agencies throughout the 
executive branch.
    Public comment is again invited on each aspect of the proposed new 
OGE Form 450 as set forth in this second notice, including specifically 
views on the need for and practical utility of this proposed modified 
collection of information, the accuracy of OGE's burden estimate, the 
enhancement of quality, utility and clarity of the information 
collected, and the minimization of burden (including the use of 
information technology). The Office of Government Ethics, in 
consultation with OMB, will consider all comments received, which will 
become a matter of public record.

    Approved: November 30, 1995.
Donald E. Campbell,
Deputy Director, Office of Government Ethics.
[FR Doc. 95-29723 Filed 12-5-95; 8:45 am]
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