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

35085

Vol. 61, No. 130

Friday, July 5, 1996

DEPARTMENT OF ENERGY

5 CFR Chapter XXIII

10 CFR Part 1010

RINs 1990–AA04, 3209–AA15

Supplemental Standards of Ethical

Conduct for Employees of the

Department of Energy

AGENCY: Department of Energy (DOE).

ACTION: Interim final rule with

invitation for comments.

SUMMARY: The Department of Energy,

with the concurrence of the Office of

Government Ethics (OGE), is issuing a

regulation for employees of DOE that

supplements the Standards of Ethical

Conduct for Employees of the Executive

Branch issued by OGE. This interim rule

is a necessary supplement to the

Standards because it addresses ethical

issues unique to DOE. The

supplemental regulation requires DOE

employees to seek approval from

management prior to engaging in certain

outside activities. The supplemental

regulation also requires employees to

document recusals in writing. DOE is

also revising its residual standards

regulation in its own CFR title and

adding a cross-reference to the new

provisions.

DATES: These regulations take effect July

5, 1996. Comments must be received on

or before September 3, 1996.

ADDRESSES: All comments concerning

these regulations should be addressed to

Susan Beard (Deputy Assistant General

Counsel for Standards of Conduct),

Office of the Assistant General Counsel

for General Law, GC–80, U.S.

Department of Energy, 1000

Independence Avenue, SW,

Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT:

Susan Beard (Deputy Assistant General

Counsel for Standards of Conduct),

Office of the Assistant General Counsel

for General Law, GC–80, U.S.

Department of Energy, 1000

Independence Avenue, SW,

Washington, DC 20585, telephone 202–

586–1522.

SUPPLEMENTARY INFORMATION:

I. Background

On August 7, 1992, OGE published

the Standards of Ethical Conduct for

Employees of the Executive Branch. See

57 FR 35006–35067, as corrected at 57

FR 48557, 57 FR 52583, and 60 FR

51667, with additional grace period

extensions at 59 FR 4779–4780, 60 FR

6390–6391 and 60 FR 66857–66858. The

Standards, codified at 5 CFR part 2635

and effective February 3, 1993, establish

uniform standards of ethical conduct

applicable to all executive branch

personnel.

With the concurrence of OGE, 5 CFR

2635.105 authorizes executive agencies

to publish agency-specific supplemental

regulations that are necessary to

implement an agency’s ethics program.

DOE, with OGE’s concurrence, has

determined that the following

supplemental rules, being codified in

new chapter XXIII of 5 CFR, consisting

of part 3301, are necessary for

successful implementation of DOE’s

ethics program.

II. Analysis of the Regulations

Section 3301.101 General

Section 3301.101 explains that the

regulations contained in the interim rule

apply to all employees of the

Department of Energy, with the

exception of employees of the Federal

Energy Regulatory Commission, and are

supplemental to the uniform executive

branch standards at 5 CFR part 2635.

The Federal Energy Regulatory

Commission was established as part of

DOE by sections 204 and 401 of the

Department of Energy Organization Act

(Pub. L. 95–91, codified at 42 U.S.C.

7134 & 7171). Section 401(d) of that Act

specifies that employees of the Federal

Energy Regulatory Commission shall not

be subject to supervision or direction of

any officer, employee, or agent of any

other part of DOE. Accordingly,

employees of the Federal Energy

Regulatory Commission are not subject

to these regulations.

This section also notes that DOE

employees are subject to the executive

branch financial disclosure regulations

at 5 CFR part 2634, and additional rules

of conduct published in 5 CFR part 735

and DOE’s Conduct of Employees

Regulation at 10 CFR part 1010. In

addition, this section contains

definitions of the terms used in this

part. ‘‘Agency designee’’ is defined as an

employee’s immediate supervisor. This

supplement to the definition of this

term at 5 CFR 2635.102(b) is needed so

that DOE employees know how to

contact their agency designee. This

section also defines the term

‘‘counselor,’’ a term that has historically

been used at DOE, to identify the

persons primarily responsible for

providing counseling on ethics and

standards of conduct matters.

Section 3301.102 Procedure for

Accomplishing Disqualification

Section 3301.102 of the interim rule

supplements the Standards for

disqualification contained in 5 CFR part

2635 by requiring written notice of

employee disqualifications under 5 CFR

2635.402(c), 2635.502(e) and 2635.604.

In the past, it has been DOE’s practice

to require a written notice of employee

disqualification. DOE has determined

that it is necessary to the success of its

ethics program to continue its

procedures for written notice of

employee disqualification. DOE

recognizes the problems noted by the

Office of Government Ethics in adopting

a requirement for written notice of

disqualification on an executive branchwide basis. See 57 FR 35024. It is not

DOE’s purpose to impose an overly

technical requirement that would result

in disciplining an employee for failure

to provide written notice by some

arbitrary deadline. Thus, the notice

requirement imposed by this regulation

is phrased to give an employee

flexibility in determining precisely

when the employee will give notice of

disqualification from a matter to which

the employee has been assigned. Notice

is to be given when the employee

determines that he or she will not

participate in the matter. In no way does

the notice requirement affect the

employee’s obligation not to participate

in the matter.

Section 3301.103 Prior Approval for

Outside Employment

The Standards, at 5 CFR 2635.803,

recognize that individual agencies may

find it necessary or desirable to
35086 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Rules and Regulations

supplement the executive branch-wide

regulations with a requirement that their

employees obtain approval prior to

engaging in outside activities. Pursuant

to 10 CFR 1010.204, which is being

repealed in this rulemaking document,

the Department of Energy has long

required employees, other than special

Government employees, to provide

written notification, and in some cases,

to obtain written permission before

engaging in certain outside activities or

employment. The Department has found

this requirement useful in ensuring that

employees’ outside activities conform to

all applicable laws and regulations, and,

in accordance with 5 CFR 2635.803, has

determined that it is necessary to the

administration of its ethics program to

require any employee of DOE who

wants to engage in outside employment

to obtain prior approval of such activity

from the employee’s supervisor and the

counselor.

Accordingly, new § 3301.103(a)

imposes a requirement on employees to

obtain written approval from their

immediate supervisors before engaging

in such activities, and describes what

must be contained in the approval form.

To ensure that this provision is not itself

construed as authority to deny

permission to engage in any outside

activity, § 3301.103(b) specifies that

approval will be granted unless the

activity is expected to involve conduct

prohibited by statute or regulation.

Section 3301.103(c) defines outside

‘‘employment’’ to include any nonFederal employment involving the

provision of personal services by the

employee.

III. Repeal and Revision of Department

of Energy Conduct of Employees

Regulations

On November 30, 1993, the National

Defense Authorization Act for Fiscal

Year 1994 was enacted. Pub. L. 103–

160, sec. 3161. That statute repealed

certain statutory conflict-of-interest

provisions applicable to DOE

employees. On February 10, 1996, the

National Defense Authorization Act for

Fiscal Year 1996 was enacted. Public

Law 104–106. That statute repealed the

remaining statutory conflict-of-interest

provisions that were unique to DOE.

Accordingly, DOE is repealing the

regulatory provisions in 10 CFR part

1010 implementing the repealed

statutory provisions. This repeal also

applies to those provisions of part 1010

that were applicable to the Federal

Energy Regulatory Commission (FERC).

The FERC is an independent regulatory

commission within the DOE and, to an

extent, is subject to DOE rulemaking

authority. 42 U.S.C. §§ 7134, 7171, &

7254. The FERC has agreed to DOE’s

repeal of this provision, and FERC has

indicated its intention to publish its

own supplemental regulations pursuant

to its own regulatory authority.

Because much of the remainder of 10

CFR part 1010, DOE’s Conduct of

Employees regulation, is largely

superseded by new chapter XXIII of title

5, as added by this rulemaking, and the

provisions of 5 CFR part 2635, DOE is

herewith amending part 1010 to remove

the existing provisions, with the

exception of the provisions concerning

reporting fraud, waste, abuse, and

corruption, cooperation with the

Inspector General, and the conflict of

interest waiver for widely diversified

mutual funds. The latter provision will

only remain in effect until the Office of

Government Ethics publishes final

regulations on 18 U.S.C. 208 (at which

time DOE will repeal the residual

waiver provision at § 1010.105). A new

cross-reference provision is also being

added to part 1010 to refer to the

executive branch-wide Standards and

financial disclosure regulation as well

as the new DOE supplemental standards

regulation.

Section 1010.101 General

Section 1010.101 explains that these

regulations apply to DOE employees,

excluding employees of the Federal

Energy Regulatory Commission.

Section 1010.102 Cross Reference to

Employee Ethical Conduct Standards

and Financial Disclosure Regulations

Section 1010.102 provides crossreferences to the executive branch-wide

Standards at 5 CFR part 2635, to DOE’s

new supplemental regulation at 5 CFR

part 3301, to the executive branch

financial disclosure regulation at 5 CFR

part 2634, and to the executive branchwide employee responsibilities and

conduct regulation at 5 CFR part 735.

Section 1010.103 Reporting Fraud,

Waste, Abuse, and Corruption

Section 1010.103 assists employees in

adhering to the general principle of

ethical conduct at 5 CFR

2635.101(b)(11), under which an

employee shall disclose waste, fraud,

abuse, and corruption to appropriate

authorities. It identifies the

Department’s Office of Inspector

General as an authority to which it

would be appropriate for an employee

to disclose waste, fraud, abuse, and

corruption. In addition, this section

institutes a procedure by which

appropriate authorities within the

Department who receive such

allegations that involve the ethical

restrictions cross-referenced in

§ 1010.102 of this part shall refer those

allegations to the designated agency

ethics official or his delegatee, or the

Inspector General.

Section 1010.104 Cooperation with the

Inspector General

This section requires employees to

cooperate with official inquiries.

Section 2(1) & (2) of the Inspector

General Act, 5 U.S.C. app. sec. 2,

provides that the Inspector General shall

be responsible for conducting

investigative activities relating to the

promotion of economy and efficiency in

the administration of, or the detection

and prevention of fraud and abuse in,

programs and operations of the

Department. This regulation is intended

to facilitate such activities and those

activities provided for in section 6 of the

Inspector General Act, including

accessing materials and information

with respect to agency programs and

operations.

Section 1010.105 Conflict of Interest

Waiver

This section grandfathers an existing

exemption to the prohibition of 5 CFR

2635.402(a). It exempts ownership of

stock in a widely diversified mutual

fund or other regulated investment

company that in turn owns stock in, or

bonds of, another enterprise. This

provision will be repealed by DOE when

the Office of Government Ethics

publishes its final regulation on 18

U.S.C. 208.

IV. Matters of Regulatory Procedure

Review Under Executive Order 12866

Today’s regulatory action has been

determined by the Department of Energy

not to be a ‘‘significant regulatory

action’’ under Executive order 12866,
Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Rules and Regulations 35087

‘‘Regulatory Planning and Review,’’ (58

FR 51735, October 4, 1993).

Accordingly, today’s action was not

subject to review under the Executive

order by the Office of Information and

Regulatory Affairs.

Review Under the Regulatory Flexibility

Act

Pursuant to section 605 of the

Regulatory Flexibility Act (Pub. L. 96–

354), it is hereby certified that the

interim final rule will not have a

significant economic impact on a

substantial number of small entities

within the meaning of the Act. It is

related solely to internal agency

organization, management, or

personnel.

Review Under the National

Environmental Policy Act

This rule revises DOE’s regulations on

standards of conduct. It will not change

the environmental effects of the

regulations being amended. The

Department has therefore determined

that the rule is covered under the

Categorical Exclusion found at

paragraph A.5 of appendix A to subpart

D, 10 CFR part 1021, which applies to

rulemakings interpreting or amending

an existing rule. Accordingly, neither an

environmental assessment nor an

environmental impact statement is

required.

Review Under the Paperwork Reduction

Act

This interim final rule does not

impose a ‘‘collection of information’’

requirement, as defined in 44 U.S.C.

3502(4).

Review Under Executive Order 12988

Section 3 of Executive order 12988 on

Civil Justice Reform, 61 FR 4729

(February 7, 1996), instructs each

agency to adhere to certain requirements

in promulgating new regulations. These

requirements, set forth in section 3(a)

and (b), include eliminating drafting

errors and needless ambiguity, drafting

the regulations to minimize litigation,

providing clear and certain legal

standards for affected legal conduct, and

promoting simplification and burden

reduction. Agencies are also instructed

to make every reasonable effort to

ensure that regulation describes any

administrative proceeding to be

available prior to judicial review and

any provisions for the exhaustion of

administrative remedies. The

Department has determined that today’s

regulatory action meets the

requirements of sections 3(a) and (b) of

Executive order 12988.

Administrative Procedure Act

Since these interim final regulations

relate to agency management and

personnel, they are exempt from notice

and comment rulemaking requirements

under the Administrative Procedure

Act. 5 U.S.C. § 553(a). Accordingly, DOE

is neither giving prior notice nor

providing for a 30-day hiatus between

the date of publication and the date the

regulations take effect. However, DOE

will consider public comments made

within 60 days after the publication of

this interim final rule.

Congressional Notification

The Small Business Regulatory

Enforcement Fairness Act of 1996

requires agencies to report to Congress

on the promulgation of certain final

rules prior to their effective dates. 5

U.S.C. 801. That reporting requirement

does not apply to the interim final rule

in this notice because it falls within a

statutory exception for rules relating to

agency management personnel. 5 U.S.C.

804(3)(B).

List of Subjects

5 CFR Part 3301

Conflict of interests, Government

employees, Energy Department,

Standards of conduct.

10 CFR Part 1010

Conflicts of interest, Government

employees, Energy Department,

Standards of conduct.

Issued in Washington, DC, June 28, 1996.

Robert R. Nordhaus,

General Counsel, Department of Energy.

Approved: June 28, 1996.

F. Gary Davis,

Deputy Director, Office of Government Ethics.

For the reasons set forth in the

preamble, title 5 and chapter X of title

10 of the Code of Federal Regulations

are amended as follows:

TITLE 5—[AMENDED]

1. A new chapter XXIII, consisting of

part 3301, is added to title 5 of the Code

of Federal Regulations to read as

follows:

5 CFR Chapter XXIII—Department of

Energy

PART 3301—SUPPLEMENTAL

STANDARDS OF ETHICAL CONDUCT

FOR EMPLOYEES OF THE

DEPARTMENT OF ENERGY

Sec.

3301.101 General.

3301.102 Procedure for accomplishing

disqualification.

3301.103 Prior approval for outside

employment.

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

App. (Ethics in Government Act); 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,

2635.402(c), 2635.502(e), 2635.604, 2635.802,

2635.803.

§ 3301.101 General.

(a) Purpose. The regulations in this

part apply to employees of the

Department of Energy (DOE), excluding

employees of the Federal Energy

Regulatory Commission, and

supplement the Standards of Ethical

Conduct for Employees of the Executive

Branch contained in 5 CFR part 2635.

DOE employees are also subject to the

regulations on financial disclosure

contained in 5 CFR part 2634, and to

additional regulations on

responsibilities and conduct at 5 CFR

part 735, and DOE specific provisions

contained in 10 CFR part 1010.

(b) Definitions. Unless a term is

otherwise defined in this part, the

definitions set forth in 5 CFR part 2635

apply to terms used in this part. In

addition, for purposes of this part:

Agency designee, as used also in 5

CFR part 2635, means the employee’s

immediate supervisor and, for purposes

of the approval required by

§ 3301.103(a), includes the Counselor.

Counselor means the DOE’s

designated agency ethics official or his

delegates.

§ 3301.102 Procedure for accomplishing

disqualification.

(a) Disqualifying financial interests. A

DOE employee who is required, in

accordance with 5 CFR 2635.402(c), to

disqualify himself from participation in

a particular matter to which he has been

assigned shall, notwithstanding the

guidance in 5 CFR 2635.402(c)(1) and
35088 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Rules and Regulations

(2), provide written notice of

disqualification to his supervisor and

counselor upon determining that he will

not participate in the matter.

(b) Disqualification to ensure

impartiality. A DOE employee who is

required, in accordance with 5 CFR

2635.502(e), to disqualify himself from

participation in a particular matter

involving specific parties to which he

has been assigned shall,

notwithstanding the guidance in 5 CFR

2635.502(e)(1) and (2), provide written

notice of disqualification to his

supervisor and counselor upon

determining that he will not participate

in the matter.

(c) Disqualification from matter

effecting prospective employers. A DOE

employee who is required, in

accordance with 5 CFR 2635.604(a), to

disqualify himself from participation in

a particular matter to which he has been

assigned shall, notwithstanding the

guidance in 5 CFR 2635.604(b) and (c),

provide written notice of

disqualification to his supervisor and

counselor upon determining that he will

not participate in the matter.

(d) Withdrawal of notification. A DOE

employee may withdraw written notice

under paragraphs (a), (b), or (c) of this

section upon deciding that

disqualification from participation in

the matter is no longer required. A

withdrawal of notification shall be in

writing and provided to the employee’s

supervisor and counselor.

§ 3301.103 Prior approval for outside

employment.

(a) Prior approval requirement. Before

engaging in any outside employment,

whether or not for compensation, an

employee, other than a special

Government employee, must obtain

written approval of his immediate

supervisor and the Counselor. Requests

for approval shall include the name of

the person, group or organization for

whom the work is to be performed; the

type of work to be performed; and the

proposed hours of work and

approximate dates of employment.

(b) Standard for approval. Approval

shall be granted unless there is a

determination that the outside

employment is expected to involve

conduct prohibited by statute or Federal

regulation, including 5 CFR part 2635.

(c) Definition of employment. For

purposes of this section, ‘‘employment’’

means any form of non-Federal

employment or business relationship

involving the provision of personal

services by the employee. It includes

but is not limited to personal services as

an officer, director, trustee, general

partner, agent, attorney, consultant,

contractor, employee, advisor, or

teacher. It does not include participating

in the activities of a nonprofit,

charitable, religious, public service or

civic organization, unless such activities

involve the provision of professional

services or are for compensation.

TITLE 10—ENERGY

Chapter X—Department of Energy

(General Provisions)

2. 10 CFR part 1010 is revised to read

as follows:

PART 1010—CONDUCT OF

EMPLOYEES

Sec.

1010.101 General.

1010.102 Cross-reference to employee

ethical conduct standards and financial

disclosure regulations.

1010.103 Reporting wrongdoing.

1010.104 Cooperation with the Inspector

General.

1010.105 Conflict of interest waiver.

Authority: 5 U.S.C. 301, 303; 5 U.S.C. App.

(Inspector General Act of 1978); 18 U.S.C.

208; and 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.

§ 1010.101 General.

This part applies to employees of the

Department of Energy (DOE), excluding

employees of the Federal Energy

Regulatory Commission.

§ 1010.102 Cross-reference to employee

ethical conduct standards and financial

disclosure regulations.

Employees of DOE are subject to the

Standards of Ethical Conduct for

Employees of the Executive Branch at 5

CFR part 2635, the DOE regulation at 5

CFR part 3301 which supplements the

executive branch-wide standards, the

executive branch-wide financial

disclosure regulations at 5 CFR part

2634, and the executive branch-wide

employee responsibilities and conduct

regulation at 5 CFR part 735.

§ 1010.103 Reporting wrongdoing.

(a) Employees shall, in fulfilling the

obligation of 5 CFR 2635.101(b)(11),

report fraud, waste, abuse, and

corruption in DOE programs, including

on the part of DOE employees,

contractors, subcontractors, grantees, or

other recipients of DOE financial

assistance, to the Office of Inspector

General or other appropriate Federal

authority.

(b) All alleged violations of the ethical

restrictions described in section

1010.102 that are reported in

accordance with (a) of this section to an

appropriate authority within the

Department shall in turn be referred by

that authority to the designated agency

ethics official or his delegatee, or the

Inspector General.

§ 1010.104 Cooperation with the Inspector

General.

Employees shall respond to questions

truthfully under oath when required,

whether orally or in writing, and must

provide documents and other materials

concerning matters of official interest.

An employee is not required to respond

to such official inquiries if answers or

testimony may subject the employee to

criminal prosecution.

§ 1010.105 Conflict of interest waiver.

If a financial interest arises from

ownership by an employee, or other

person or enterprise referred to in 5 CFR

2635.402(b)(2), of stock in a widely

diversified mutual fund or other

regulated investment company that in

turn owns stock in, or bonds of, another

enterprise, that financial interest is

exempt from the prohibition of 5 CFR

2635.402(a).

[FR Doc. 96–17115 Filed 7–3–96; 8:45 am]

BILLING CODE 6450–01–P

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 734

RIN 3206–AH33

Political Activities of Federal

Employees

AGENCY: Office of Personnel

Management.

ACTION: Final rule.

SUMMARY: The Office of Personnel

Management (OPM) is issuing final

regulations regarding the political

activity of Federal employees. These

regulations will inform Federal

employees of the political activities

which are permitted and prohibited

under the Hatch Act Reform

Amendments of 1993. Covered

employees also should refer to OPM’s

interim regulations as part 733,

published in the Federal Register in the

February 4, 1994 edition, which

specifically address political activities

connected with local elections in

designated communities.

EFFECTIVE DATE: August 5, 1996.

FOR FURTHER INFORMATION CONTACT:

Jo-Ann Chabot at (202) 606–1700.

SUPPLEMENTARY INFORMATION: On

October 6, 1993, the President signed

the Hatch Act Reform Amendments of

1993. The Reform Amendments became