Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Rules and Regulations 3431 

SUMMARY: This document contains 

corrections to compliance dates for the 

final rule published in the Federal 

Register on December 31, 2008 for 

Flame-Resistant Conveyor Belt, Fire 

Prevention and Detection, and Use of 

Air from the Belt Entry (73 FR 80580). 

In addition, minor typographical errors 

in the SUPPLEMENTARY INFORMATION

section, Compliance dates, are also 

corrected. 

DATES: This correction is effective 

January 21, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Patricia W. Silvey at 

silvey.patricia@dol.gov (E-mail), (202) 

693–9440 (Voice), or (202) 693–9441 

(Fax). 

This notice corrects errors contained 

in the Compliance Date section of FR 

Doc. E8–30639, published on 

Wednesday, December 31, 2008, 

beginning on page 80580. The following 

Corrections should be made: 

1. On page 80580, in the first column, 

the language for item number 3 is 

corrected to read: 

‘‘3. §§ 75.380(d)(7), 75.380(f), 

75.381(c)(5), and 75.381(e) by June 30, 

2009.’’ 

2. Additionally, MSHA inadvertently 

omitted compliance dates for four 

sections of the final rule. Therefore, on 

the same page, in the same column, new 

item 6 should be added to read as 

follows: 

‘‘6. Each mine operator required to 

use an atmospheric monitoring system 

under § 75.350(b) shall comply with the 

following sections within 60 days after 

approval of the mine ventilation plan by 

the district manager. 

1. § 75.350(d)(1), 

2. § 75.351(e)(1)(iii), 

3. § 75.351(e)(1)(iv), and 

4. § 75.352(g).’’ 

Richard E. Stickler, 

Acting Assistant Secretary for Mine Safety 

and Health. 

[FR Doc. E9–1087 Filed 1–16–09; 8:45 am] 

BILLING CODE 4510–43–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 31 

RIN 1505–AC05 

TARP Conflicts of Interest 

AGENCY: Departmental Offices, Treasury. 

ACTION: Interim rule. 

SUMMARY: This interim rule provides 

guidance on conflicts of interest 

pursuant to section 108 of the 

Emergency Economic Stabilization Act 

of 2008 (EESA), which was enacted on 

October 3, 2008. 

DATES: Effective Date: January 21, 2009. 

Comment due date: March 23, 2009. 

ADDRESSES: Interested members of the 

public are invited to submit comments 

on this interim rule. Comments may be 

submitted to Treasury by either of the 

following methods: Submit electronic 

comments through the federal 

government e-rulemaking portal, http:// 

www.regulations.gov, or send comments 

in hard copy to the Executive 

Secretariat, Office of Financial Stability, 

Department of the Treasury, 1500 

Pennsylvania Avenue, NW., 

Washington, DC 20220. 

In general, Treasury will post all 

comments to http://www.regulations.gov 

without change, including any business 

or personal information provided such 

as names, addresses, e-mail addresses, 

or telephone numbers. The Treasury 

will also make such comments available 

for public inspection and copying in the 

Treasury’s Library, Room 1428, Main 

Department Building, 1500 

Pennsylvania Avenue, NW., 

Washington, DC 20220, on official 

business days between the hours of 10 

a.m. and 5 p.m. Eastern Time. Members 

of the public can make an appointment 

to inspect comments by telephoning 

(202) 622–0990. All comments received, 

including attachments and other 

supporting materials, are part of the 

public record and subject to public 

disclosure. 

FOR FURTHER INFORMATION CONTACT: For 

further information regarding this 

interim rule contact the Troubled Asset 

Relief Program Chief Compliance 

Officer, Office of Financial Stability, 

Department of the Treasury, 1500 

Pennsylvania Avenue, Washington, DC, 

20220, (202) 622–2000, or 

TARP.Compliance@do.treas.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 101(a) of EESA requires the 

Secretary of the Treasury to establish a 

Troubled Asset Relief Program (TARP) 

to ‘‘purchase, and to make and fund 

commitments to purchase, troubled 

assets from any financial institution, on 

such terms and conditions as are 

determined by the Secretary, and in 

accordance with this Act and policies 

and procedures developed and 

published by the Secretary.’’ Section 

120 of EESA provides that the TARP 

authorities generally terminate on 

December 31, 2009, unless extended 

upon certification by the Secretary of 

the Treasury to Congress, but no later 

than two years from the date of 

enactment (October 3, 2008). 

Section 108 of EESA authorizes the 

Secretary to issue regulations or 

guidelines necessary to address and 

manage or to prohibit conflicts of 

interest that may arise in connection 

with the administration and execution 

of the EESA authorities. On October 6, 

2008, Treasury issued interim 

guidelines for potential conflicts of 

interest related to the authorities 

granted under EESA. This interim rule 

implements the guidelines by 

addressing conflicts that may arise 

during the selection of individuals or 

entities seeking a contract or financial 

agency agreement with the Treasury 

(retained entities), particularly those 

involved in the acquisition, valuation, 

management, and disposition of 

troubled assets. The interim rule also 

addresses conflicts and other matters 

that may arise in the course of those 

services. The interim rule does not 

address post-employment restrictions 

on Treasury employees, which we 

believe are already adequately covered 

by existing law. 

II. This Interim Rule 

The Department is promulgating this 

interim rule in order to implement the 

interim guidance released on October 6, 

2008. The procedures in this rule 

outline the process for reviewing and 

addressing actual or potential conflicts 

of interest among retained entities 

performing services in conjunction with 

EESA. The procedures set forth in this 

interim rule are effective immediately. 

Upon careful consideration of public 

comments, a final rule will be issued. 

Conflicts of interest may arise under 

EESA in a variety of situations, such as 

when retained entities perform similar 

work for Treasury and private clients. In 

these situations, retained entities may 

find that their duty to private clients 

impairs their objectivity when advising 

Treasury, or their judgment about the 

proper use of nonpublic information. 

Conflicts may also arise from the 

personal interests of individuals 

employed by retained entities. To 

address the potential for organizational 

and personal conflicts of interest, it may 

be necessary to restrict the activities of 

retained entities and key employees, to 

limit the dissemination of information, 

and to impose monitoring and reporting 

requirements. Treasury imposes these 

measures through its contracts and 

financial agent agreements, as well as 

through this interim rule. This interim 

rule does not substitute any provisions 

of the Federal Acquisition Regulation 

and, to the extent the Federal 

Acquisition Regulation applies to any 

contracts Treasury has with a retained 


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3432 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Rules and Regulations 

entity, this interim rule is in addition to 

the Federal Acquisition Regulation. 

The interim rule addresses conflicts 

that may arise in connection with 

contracts and financial agency 

agreements for services under the TARP, 

other than administrative services 

identified by the TARP Chief 

Compliance Officer. Because some 

administrative services do not have 

substantial decision-making authority, 

they are unlikely to present conflicts of 

interest and would not warrant the 

burden imposed by these regulations. 

The interim rule addresses 

organizational conflicts of interest in 

section 31.211. Before entering an 

arrangement for services, prospective 

contractors and financial agents must 

provide Treasury with sufficient 

information to evaluate the potential for 

organizational conflicts of interest and 

plans to mitigate them. Because the 

potential for conflicts is greatest when 

the arrangement relates to the 

acquisition, valuation, disposition, or 

management of assets, private entities 

seeking to perform these services must 

take special care when disclosing 

conflicts and designing mitigation 

plans. Once approved, a conflicts 

mitigation plan becomes a binding term 

of the arrangement. 

Personal conflicts of interest are 

covered in section 31.212. The 

provisions here recognize that, in some 

cases, managers and employees of 

retained entities may have personal 

interests that could impair their 

objectivity. Conflicts may arise from 

their financial holdings and those of 

close family members, as well as from 

other personal interests. The regulation 

requires retained entities to obtain 

information from their managers and 

key employees and evaluate the 

potential for conflicts, and to implement 

monitoring and reporting requirements 

designed to detect conflicts that might 

arise during the arrangement. Treasury 

expects retained entities who assist 

Treasury with the acquisition, 

valuation, management, and disposition 

of troubled assets to have the most 

stringent programs for detecting and 

preventing conflicts of interest. 

Other provisions in the regulations 

notify retained entities of restrictions on 

their conduct while working for 

Treasury. These provisions are not 

designed to be comprehensive; they 

supplement other requirements that 

may be imposed by contract, financial 

agency agreement, and other federal 

laws. Section 31.213 includes 

restrictions on giving and accepting 

gifts, making unauthorized promises, 

and improper uses of government 

property. Section 31.214 describes 

general prohibitions applying to 

retained entities who provide services 

for the acquisition, valuation, 

disposition, and management of 

troubled assets. Section 31.216 prohibits 

certain communications with Treasury 

employees that might improperly 

influence the process of selecting 

contractors and financial agents. Section 

31.217 describes retained entities’ duty 

to keep nonpublic information 

confidential and requires a certification 

of compliance in the form of a 

nondisclosure agreement. A sample 

nondisclosure agreement is available at 

www.treas.gov. 

In the course of implementing EESA, 

Treasury may permit its retained 

entities to use subcontractors (including 

consultants) to assist them in 

completing the work. Because 

subcontractors may have the same 

potential for conflicts of interest as 

those entities having a direct 

relationship with Treasury, these 

regulations impose requirements on 

‘‘retained entities,’’ which are defined to 

include contractors, financial agents, 

and their subcontractors. We 

specifically request comments on the 

practicality of this approach. 

Overall, the regulations recognize that 

the potential for conflicts and measures 

for mitigating them depend on many 

factors, such as the type of services, a 

contractor’s or financial agent’s size and 

business structure, and length of the 

arrangement. Treasury will take these 

factors into account when reviewing 

conflict mitigation plans. In rare cases, 

Treasury may need to waive a potential 

conflict that cannot be adequately 

mitigated. Waiver requests will be 

considered on a case-by-case basis, and 

granted in writing only when Treasury 

determines, in its sole discretion, that 

stronger measures are unnecessary to 

protect the interests of the Treasury. The 

standard for considering waivers 

appears in section 31.215. This section 

does not affect the rules for waiving 

contract provisions in the Federal 

Acquisition Regulations. 

Section 31.218 describes some of the 

measures available to Treasury to 

enforce these interim regulations. 

Measures include rejecting work that is 

tainted by a conflict of interest, 

terminating the arrangement for default, 

and in serious cases, referring violations 

to the United States Department of 

Justice for criminal prosecution. When 

Treasury has discretion in selecting or 

imposing a remedy, it will take into 

account whether the contractor or 

financial agent promptly disclosed the 

problem. 

III. Procedural Requirements 

Justification for Interim Rulemaking 

Under the Office of Federal 

Procurement Policy Act, 41 U.S.C. 418b, 

and Federal Acquisition Regulation 

(FAR) 48 CFR 1.501–3(b), a procurement 

regulation may take effect prior to notice 

and comment when there are urgent and 

compelling circumstances that make 

prior notice and comment 

impracticable. Such a procurement 

regulation must be published in the 

Federal Register and must include a 

statement that the regulation is 

temporary pending completion of a 

minimum 30-day public comment 

period. Under the Administrative 

Procedure Act, 5 U.S.C. 553(b)(B), an 

agency may dispense with notice and 

comment procedures when the agency 

finds that good cause exists that prior 

notice and comment are unnecessary, 

impracticable, or contrary to the public 

interest. For the reasons set forth below, 

a determination has been made that 

urgent and compelling circumstances 

and good cause exist that justify the 

promulgation of this interim rule 

without prior opportunity for public 

comment. 

This rule is promulgated pursuant to 

EESA, the purpose of which is to 

immediately provide authority and 

facilities that the Secretary of the 

Treasury can use to restore liquidity and 

stability to the financial system of the 

United States. Specifically, this rule 

implements section 108, which requires 

the Secretary to develop regulations or 

guidelines for addressing conflicts of 

interest that may arise in connection 

with the administration and execution 

of the authorities provided under EESA. 

Because EESA provides such immediate 

authority to the Secretary to restore 

liquidity and stability to the financial 

system, it is essential that the conflicts 

of interest regulations be issued without 

delay so that anyone participating in the 

TARP program will have clear conflicts 

of interest information as soon as 

possible. Pursuant to 5 U.S.C. 553(b)(B), 

the Treasury finds that it would be 

unnecessary and contrary to the public 

interest to delay the issuance of this rule 

pending an opportunity for public 

comment and good cause exists to 

dispense with this requirement. For the 

same reasons, pursuant to 5 U.S.C. 

553(d)(3), the Treasury has determined 

that there is good cause for the interim 

rule to become effective immediately 

upon publication. While this regulation 

is effective immediately upon 

publication, Treasury is seeking public 

comment on the regulation and will 

consider all comments in developing a 

final rule. 


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Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Rules and Regulations 3433 

Regulatory Planning and Review 

This regulation is a significant 

regulatory action as defined in 3(f)(4) of 

Executive Order 12866, as amended. 

Accordingly this interim final rule has 

been reviewed by the Office of 

Management and Budget (OMB). 

Regulatory Flexibility Act 

Because no notice of proposed 

rulemaking is required, this rule is not 

subject to the provisions of the 

Regulatory Flexibility Act (5 U.S.C 

chapter 6). 

Paperwork Reduction Act 

The information collections contained 

in the rule have been reviewed and 

approved by OMB under the Paperwork 

Reduction Act (44 U.S.C. chapter 35) 

and assigned OMB control number 

1505–0209. Under the Paperwork 

Reduction Act, an agency may not 

conduct or sponsor and a person is not 

required to respond to, a collection of 

information unless it displays a valid 

OMB control number. 

List of Subjects in 31 CFR Part 31 

Conflicts of interest, Contracts, 

Executive compensation, Troubled 

assets. 

■ For the reasons set out in the 

preamble, Title 31 of the Code of 

Federal Regulations is amended as 

follows: 

■ 1. Add part 31 to read as follows: 

PART 31—TROUBLED ASSET RELIEF 

PROGRAM 

Sec. 

31.1 General. 

Subpart A—[Reserved] 

Subpart B—Conflicts of Interest 

31.200 Purpose and scope. 

31.201 Definitions. 

31.211 Organizational conflicts of interest. 

31.212 Personal conflicts of interest. 

31.213 General standards. 

31.214 Limitations on concurrent activities. 

31.215 Grant of Waivers. 

31.216 Communications with Treasury 

employees. 

31.217 Confidentiality of information. 

31.218 Enforcement. 

Authority: 31 U.S.C. 321; Pub. L. 110–343; 

122 Stat 3765. 

§ 31.1 General. 

This Part sets forth regulations to 

implement and administer the 

Emergency Economic Stabilization Act 

of 2008 (Pub. L. 110–343; 122 Stat 

3765). 

Subpart A—[Reserved] 

Subpart B—Conflicts of Interest 

§ 31.200 Purpose and scope. 

(a) Purpose. This regulation sets forth 

standards to address and manage or to 

prohibit conflicts of interest that may 

arise in connection with the 

administration and execution of the 

authorities under the Troubled Asset 

Relief Program (TARP), established 

under sections 101 and 102 of the 

Emergency Economic Stabilization Act 

of 2008 (EESA). 

(b) Scope. This regulation addresses 

actual and potential conflicts of interest 

that may arise from contracts and 

financial agency agreements between 

private sector entities and the Treasury 

for services under the TARP, other than 

administrative services identified by 

TARP Chief Compliance Officer. 

§ 31.201 Definitions. 

As used in this part: 

Arrangement means a contract or 

financial agency agreement between a 

private sector entity and the Treasury 

for services under the TARP, other than 

administrative services identified by the 

TARP Chief Compliance Officer. 

EESA means the Emergency 

Economic Stabilization Act of 2008. 

Key individual means an individual 

providing services to a private sector 

entity who participates personally and 

substantially, through decision, 

approval, disapproval, recommendation, 

or the rendering of advice, in the 

negotiation or performance of, or 

monitoring for compliance under, the 

arrangement with the Treasury. For 

purposes of the definition of key 

individual, the words ‘‘personally and 

substantially’’ shall have the same 

meaning and interpretation as such 

words have in 5 CFR 2635.402(b)(4). 

Management official means an 

individual within a retained entity’s 

organization who has substantial 

responsibility for the direction and 

control of the retained entity’s policies 

and operations. With respect to 

organizations that have a management 

committee or executive committee that 

has been given such responsibilities, 

this means the members of those 

committees and, if no such committee 

exists, this means each of the general 

partners. 

Organizational conflict of interest 

means a situation in which the retained 

entity has an interest or relationship 

that could cause a reasonable person 

with knowledge of the relevant facts to 

question the retained entity’s objectivity 

or judgment to perform under the 

arrangement, or its ability to represent 

the Treasury. Without limiting the scope 

of this definition, organizational 

conflicts of interest may include the 

following situations: 

(1) A prior or current arrangement 

between the Treasury and the retained 

entity that may give the retained entity 

an unfair competitive advantage in 

obtaining a new arrangement with 

Treasury. 

(2) The retained entity is, or 

represents, a party in litigation against 

the Treasury relating to activities under 

the EESA. 

(3) The retained entity provides 

services for Treasury relating to the 

acquisition, valuation, disposition, or 

management of troubled assets at the 

same time it provides those services for 

itself or others. 

(4) The retained entity gains, or stands 

to gain, an unfair competitive advantage 

in private business arrangements or 

investments by using information 

provided under an arrangement or 

obtained or developed pursuant to an 

arrangement with Treasury. 

(5) The retained entity is a potential 

candidate for relief under EESA, is 

currently participating in an EESA 

program, or has a financial interest that 

could be affected by its performance of 

the arrangement. 

Personal conflict of interest means a 

personal, business, or financial interest 

of an individual, his or her spouse, 

minor child, or other family member 

with whom the individual has a close 

personal relationship, that could 

adversely affect the individual’s ability 

to perform under the arrangement, his 

or her objectivity or judgment in such 

performance, or his or her ability to 

represent the interests of the Treasury; 

Related entity means the parent 

company and subsidiaries of a retained 

entity, any entity holding a controlling 

interest in the retained entity, and any 

entity in which the retained entity holds 

a controlling interest. 

Retained entity means the individual 

or entity seeking an arrangement with 

the Treasury or having such an 

arrangement with the Treasury, but does 

not include special government 

employees. A ‘‘retained entity’’ includes 

the subcontractors and consultants it 

hires to perform services under the 

arrangement. 

Special government employee means 

any employee serving the Treasury with 

or without compensation for a period 

not to exceed 130 days during any 365- 

day period on a full-time or intermittent 

basis. 

Treasury means the United States 

Department of the Treasury. 

Treasury employee means an officer 

or employee of the Treasury, including 


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3434 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Rules and Regulations 

a special government employee, or an 

employee of any other government 

agency who is properly acting on behalf 

of the Treasury. 

Troubled assets means residential or 

commercial mortgages and any 

securities, obligations, or other 

instruments that are based on or related 

to such mortgages, that in each case 

originated or was issued on or before 

March 14, 2008; and any other financial 

instrument that the Secretary of the 

Treasury has determined, upon 

transmittal in writing to the appropriate 

committees of Congress, the purchase of 

which is necessary to promote financial 

market stability. 

§ 31.211 Organizational conflicts of 

interest. 

(a) Retained entity’s responsibility. A 

retained entity working under an 

arrangement shall not permit an 

organizational conflict of interest unless 

the conflict has been disclosed to 

Treasury under this Section and 

mitigated under a plan approved by 

Treasury, or Treasury has waived the 

conflict. With respect to arrangements 

for the acquisition, valuation, 

management, or disposition of troubled 

assets, the retained entity shall maintain 

a compliance program designed to 

detect and prevent violations of federal 

securities laws and organizational 

conflicts of interest. 

(b) Information required about the 

retained entity. As early as possible 

before entering an arrangement to 

perform services for Treasury under the 

EESA, a retained entity shall provide 

Treasury with sufficient information to 

evaluate any organizational conflicts of 

interest. The information shall include 

the following: 

(1) The retained entity’s relationship 

to any related entities. 

(2) The categories of troubled assets 

owned or controlled by the retained 

entity and its related entities, if the 

arrangement relates to the acquisition, 

valuation, disposition, or management 

of troubled assets. 

(3) Information concerning all other 

business or financial interests of the 

retained entity, its proposed 

subcontractors, or its related entities, 

which could conflict with the retained 

entity’s obligations under the 

arrangement with Treasury. 

(4) A description of all organizational 

conflicts of interest and potential 

conflicts of interest. 

(5) A written detailed plan to mitigate 

all organizational conflicts of interest, 

along with supporting documents. 

(6) Any other information or 

documentation about the retained 

entity, its proposed subcontractors, or 

its related entities that Treasury may 

request. 

(c) Plans to mitigate organizational 

conflicts of interest. The steps necessary 

to mitigate a conflict may depend on a 

variety of factors, including the type of 

conflict, the scope of work under the 

arrangement, and the organizational 

structure of the retained entity. Some 

conflicts may be so substantial and 

pervasive that they cannot be mitigated. 

Retained entities should consider the 

following measures when designing a 

mitigation plan: 

(1) Adopting, implementing, and 

enforcing appropriate information 

barriers to prevent unauthorized people 

from learning nonpublic information 

relating to the arrangement and isolate 

key individuals from learning how their 

performance under the arrangement 

could affect the financial interests of the 

retained entity, its clients, and related 

entities. 

(2) Divesting assets that give rise to 

conflicts of interest. 

(3) Terminating or refraining from 

business relationships that give rise to 

conflicts of interest. 

(4) If consistent with the terms of the 

arrangement and permitted by Treasury, 

refraining from performing specific 

types of work under the arrangement. 

(5) Any other steps appropriate under 

the circumstances. 

(d) Certification required. When the 

retained entity provides the information 

required by paragraph (b) of this section, 

the retained entity shall certify that the 

information is complete and accurate in 

all material respects. 

(e) Determination required. Prior to 

entering into any arrangement, the 

Treasury must conclude that no 

organizational conflict of interest exists 

that has not been adequately mitigated, 

or if a conflict cannot be adequately 

mitigated, that Treasury has expressly 

waived it. Once Treasury has approved 

a conflicts mitigation plan, the plan 

becomes an enforceable term under the 

arrangement. 

(f) Subsequent notification. The 

retained entity has a continuing 

obligation to search for and to report 

any potential organizational conflict of 

interest. Within five (5) business days 

after learning of a potential 

organizational conflict of interest, the 

retained entity shall disclose the 

potential conflict of interest in writing 

to the TARP Chief Compliance Officer. 

The disclosure shall describe the steps 

it has taken or proposes to take to 

mitigate the potential conflict or request 

a waiver from Treasury. 

(g) Periodic Certification. No later 

than one year after the arrangement’s 

effective date, and at least annually 

thereafter, the retained entity shall 

certify in writing that it has no 

organizational conflicts of interest, or 

explain in detail the extent to which it 

can certify, and describe the actions is 

has taken and plans to take to mitigate 

any conflicts. Treasury may require 

more frequent certifications, depending 

on the arrangement 

(h) Retention of information. A 

retained entity shall retain the 

information needed to comply with this 

section and to support the certifications 

required by this section for three (3) 

years following termination or 

expiration of the arrangement, and shall 

make that information available to 

Treasury upon request. Such retained 

information shall include, but is not 

limited to, written documentation 

regarding the factors the retained entity 

considered in its mitigation plan as well 

as written documentation addressing 

the results of the retained entities’ 

periodic review of the mitigation plan. 

§ 31.212 Personal conflicts of interest. 

(a) Retained entity’s responsibility. A 

retained entity shall ensure that all 

management officials performing work 

under the arrangement and key 

individuals have no personal conflicts 

of interest unless mitigation measures 

have neutralized the conflict, or 

Treasury has waived the conflict. 

(b) Information required. Before 

management officials and key 

individuals begin work under an 

arrangement, a retained entity shall 

obtain information from each of them in 

writing about their personal, business, 

and financial relationships, as well as 

those of their spouses, minor children, 

and other family members with whom 

the individuals have a close personal 

relationship that would cause a 

reasonable person with knowledge of 

the relevant facts to question the 

individual’s ability to perform, his or 

her objectivity or judgment in such 

performance, or his or her ability to 

represent the interests of the Treasury. 

When the arrangement concerns the 

acquisition, valuation, management, or 

disposition of troubled assets, the 

information shall be no less extensive 

than that required of certain new federal 

employees under Office of Government 

Ethics Form 278. Treasury may extend 

the time necessary to meet these 

requirements in urgent and compelling 

circumstances. 

(c) Disqualification. The retained 

entity shall disqualify persons with 

personal conflicts of interests from 

performing work pursuant to the 

arrangement unless mitigation measures 

have neutralized the conflict to the 

satisfaction of the TARP Chief 


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Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Rules and Regulations 3435 

Compliance Officer. The retained entity 

may seek a waiver from the TARP Chief 

Compliance Officer to allow an 

individual with a personal conflict of 

interest to work under the arrangement. 

(d) Initial Certification. No later than 

ten business days after the effective date 

of the arrangement, the retained entity 

shall certify to the Treasury that all 

management officials and key 

individuals performing services under 

the arrangement have no personal 

conflicts of interest, or are subject to a 

mitigation plan or waiver approved by 

Treasury. In making this certification, 

the retained entity may rely on the 

information obtained pursuant to 

paragraph (b) of this section, unless the 

retained entity knows or should have 

known that the information provided is 

false or inaccurate. Treasury may extend 

the certification deadline in urgent and 

compelling circumstances. 

(e) Periodic Certification. No later 

than one year after the arrangement’s 

effective date, and at least annually 

thereafter, the retained entity shall 

renew the certification required by 

paragraph (d) of this section. The 

retained entity shall provide more 

frequent certifications to Treasury when 

requested. 

(f) Retained Entities’ Responsibilities. 

The retained entity shall adopt and 

implement procedures designed to 

discover, monitor, and report personal 

conflicts of interest on a continuous 

basis. 

(g) Subsequent notification. Within 

five business days after learning of a 

personal conflict of interest, the retained 

entity shall notify Treasury of the 

conflict and describe the steps it has 

taken and will take in the future to 

neutralize the conflict. 

(h) Retention of information. A 

retained entity shall retain the 

information needed to comply with this 

section and to support the certifications 

required by this section for three years 

following termination or expiration of 

the arrangement, and shall make that 

information available to Treasury upon 

request. 

§ 31.213 General standards. 

(a) During the time period in which a 

retained entity is seeking an 

arrangement and during the term of any 

arrangement, a retained entity, its 

officers and partners, and its employees 

shall not: 

(1) Accept or solicit favors, gifts, or 

other items of monetary value from any 

individual or entity whom the retained 

entity, officer, partner, or employee 

knows is seeking official action from the 

Treasury in connection with the 

arrangement or has interests which may 

be substantially affected by the 

performance or nonperformance of 

duties to the Treasury under the 

arrangement. 

(2) Improperly use or allow the 

improper use of Treasury property for 

the personal benefit of any individual or 

entity other than the Treasury. 

(3) Make any unauthorized promise or 

commitment on behalf of the Treasury. 

(b) Any individual who acts for or on 

behalf of the Treasury pursuant to an 

arrangement shall comply with 18 

U.S.C. 201, which generally prohibits 

the direct or indirect acceptance by a 

public official of anything of value in 

return for being influenced in, or 

because of, an official act. Violators are 

subject to criminal penalties. 

(c) Any individual or entity who 

provides information or makes a 

certification to the Treasury that is 

relating to services under EESA or 

required pursuant to 31 CFR Part 31 is 

subject to 18 U.S.C. 1001, which 

generally prohibits the making of any 

false or fraudulent statement to a federal 

officer. Upon receipt of information 

indicating that any individual or entity 

has violated any provision of title 18 of 

the U.S. Code or other provision of 

criminal law, Treasury shall refer such 

information to the Department of Justice 

and the Special Inspector General 

provided for under EESA. 

(d) A retained entity shall disclose to 

the Special Inspector General provided 

for the TARP, or the Treasury Office of 

the Inspector General, any credible 

evidence, in connection with the 

designation, services, or closeout of the 

arrangement, that a management 

official, employee, or contractor of the 

retained entity has committed a 

violation of Federal criminal law 

involving fraud, conflict of interest, 

bribery, or gratuity violations found in 

Title 18 of the United States Code, or a 

violation of the civil False Claims Act 

(31 U.S.C. 3729–3733). 

§ 31.214 Limitations on concurrent 

activities. 

Treasury has determined that certain 

market activities by a retained entity 

during the arrangement are likely to 

cause impermissible conflicts of 

interest. Accordingly, the following 

restrictions shall apply unless waived 

pursuant to § 31.215, or Treasury agrees 

in writing to specific mitigation 

measures. 

(a) If the retained entity assists 

Treasury in the acquisition, valuation, 

management, or disposition of specific 

troubled assets, the retained entity, 

management officials performing work 

under the arrangement, and key 

individuals shall not purchase or offer 

to purchase such assets from Treasury, 

or assist anyone else in purchasing or 

offering to purchase such troubled 

assets from the Treasury, during the 

term of its arrangement. 

(b) If the retained entity advises 

Treasury with respect to a program for 

the purchase of troubled assets, the 

retained entity, management officials 

performing work under the 

arrangement, and key individuals shall 

not, during the term of the arrangement, 

sell or offer to sell, or act on behalf of 

anyone with respect to a sale or offer to 

sell, any asset to Treasury under the 

terms of that program. 

§ 31.215 Grant of waivers. 

The TARP Chief Compliance Officer 

may waive a requirement under this 

Part that is not otherwise imposed by 

law when it is clear from the totality of 

the circumstances that a waiver is in the 

government’s interest. 

§ 31.216 Communications with Treasury 

employees. 

(a) Prohibitions. During the course of 

any process for selecting a retained 

entity (including any process using noncompetitive procedures), a retained 

entity participating in the process and 

its representatives shall not: 

(1) Directly or indirectly make any 

offer or promise of future employment 

or business opportunity to, or engage 

directly or indirectly in any discussion 

of future employment or business 

opportunity with, any Treasury 

employee with personal or direct 

responsibility for that procurement. 

(2) Offer, give, or promise to offer or 

give, directly or indirectly, any money, 

gratuity, or other thing of value to any 

Treasury employee, except as permitted 

by Government-Wide Ethics Rules, 5 

CFR part 2635. 

(3) Solicit or obtain from any Treasury 

employee, directly or indirectly, any 

information that is not public and was 

prepared for use by Treasury for the 

purpose of evaluating an offer, 

quotation, or response to enter into an 

arrangement. 

(b) Certification. Before a retained 

entity enters a new arrangement, or 

accepts a modification to an existing 

arrangement, the retained entity must 

certify to the following: 

(1) The retained entity is aware of the 

prohibitions of paragraph (a) of this 

section and, to the best of its knowledge 

after making reasonable inquiry, the 

retained entity has no information 

concerning a violation or possible 

violation of paragraph (a) of this section. 

(2) Each officer, employee, and 

representative of the retained entity who 

participated personally and 


jlentini on PROD1PC65 with RULES
3436 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Rules and Regulations 

substantially in preparing and 

submitting a bid, offer, proposal, or 

request for modification of the 

arrangement has certified that he or she: 

(i) Is familiar with and will comply 

with the requirements of paragraph (a) 

of this section; and 

(ii) Has no information of any 

violations or possible violations of 

paragraph (a) of this section, and will 

report immediately to the retained 

entity any subsequently gained 

information concerning a violation or 

possible violation of paragraph (a) of 

this section. 

§ 31.217 Confidentiality of information. 

(a) Nonpublic information defined. 

Any information that Treasury provides 

to a retained entity under an 

arrangement, or that the retained entity 

obtains or develops pursuant to the 

arrangement, shall be deemed 

nonpublic until the Treasury determines 

otherwise in writing, or the information 

becomes part of the body of public 

information from a source other than the 

retained entity. 

(b) Prohibitions. The retained entity 

shall not: 

(1) Disclose nonpublic information to 

anyone except as required to perform 

the retained entity’s obligations 

pursuant to the arrangement, or 

pursuant to a lawful court order or valid 

subpoena after giving prior notice to 

Treasury. 

(2) Use or allow the use of any 

nonpublic information to further any 

private interest other than as 

contemplated by the arrangement. 

(c) Retained entity’s responsibility. A 

retained entity shall take appropriate 

measures to ensure the confidentiality 

of nonpublic information and to prevent 

its inappropriate use. The retained 

entity shall document these measures in 

sufficient detail to demonstrate 

compliance, and shall maintain this 

documentation for three years after the 

arrangement has terminated. The 

retained entity shall notify the TARP 

Chief Compliance Officer in writing 

within five business days of detecting a 

violation of the prohibitions in 

paragraph (b), above. The security 

measures required by this paragraph 

shall include: 

(1) Security measures to prevent 

unauthorized access to facilities and 

storage containers where nonpublic 

information is stored. 

(2) Security measures to detect and 

prevent unauthorized access to 

computer equipment and data storage 

devices that store or transmit nonpublic 

information. 

(3) Periodic training to ensure that 

persons receiving nonpublic 

information know their obligation to 

maintain its confidentiality and to use it 

only for purposes contemplated by the 

arrangement. 

(4) Programs to ensure compliance 

with federal securities laws, including 

laws relating to insider trading, when 

the arrangement relates to the 

acquisition, valuation, management, or 

disposition of troubled assets. 

(5) A certification from each 

management official performing work 

under the arrangement and each key 

individual stating that he or she will 

comply with the requirements in section 

31.217(b). The retained entity shall 

obtain this certification, in the form of 

a nondisclosure agreement, before a 

management official or key individual 

performs work under the arrangement, 

and then annually thereafter. 

§ 31.218 Enforcement. 

(a) Compliance with these rules 

concerning conflicts of interest is of the 

utmost importance. In the event a 

retained entity or any individual or 

entity providing information pursuant 

to 31 U.S.C. Part 31 violates any of these 

rules, Treasury may impose or pursue 

one or more of the following sanctions: 

(1) Rejection of work tainted by an 

organizational conflict of interest or a 

personal conflict of interest and denial 

of payment for that work. 

(2) Termination of the arrangement for 

default. 

(3) Debarment of the retained entity 

for Federal government contracting and/ 

or disqualification of the retained entity 

from future financial agency 

agreements. 

(4) Imposition of any other remedy 

available under the terms of the 

arrangement or at law. 

(5) In the event of violation of a 

criminal statue, referral to the 

Department of Justice for prosecution of 

the retained entity and/or its officers or 

employees. In such cases, the 

Department of Justice may make direct 

and derivative use of any statements 

and information provided by any entity, 

its representatives and employees or any 

individual, to the extent permitted by 

law. 

(b) To the extent Treasury has 

discretion in selecting or imposing a 

remedy, it will give significant 

consideration to a retained entity’s 

prompt disclosure of any violation of 

these rules. 

Dated: January 14, 2009. 

Neel Kashkari, 

Interim Assistant Secretary for Financial 

Stability. 

[FR Doc. E9–1179 Filed 1–15–09; 4:15 pm] 

BILLING CODE 4810–25–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Part 21 

RIN 2900–AM67 

Increase in Rates Payable Under the 

Survivors’ and Dependents’ 

Educational Assistance Program and 

Other Miscellaneous Issues 

AGENCY: Department of Veterans Affairs. 

ACTION: Final rule; correction. 

SUMMARY: The Department of Veterans 

Affairs (VA) published a document in 

the Federal Register of December 30, 

2008, amending its regulations to reflect 

increases effective for fiscal years 2005, 

2006, 2007, 2008, and 2009. The 

document contained an error in an 

amendatory instruction. We 

inadvertently omitted instruction to the 

editor to add two new paragraphs to the 

section. This document corrects that 

error. 

DATES: Effective Date: This correction is 

effective January 21, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Brandye R. Terrell, Regulation 

Development Team Leader (225C), 

Education Service, Veterans Benefits 

Administration, Department of Veterans 

Affairs, 810 Vermont Ave., NW., 

Washington, DC 20420, (202) 461–9822. 

SUPPLEMENTARY INFORMATION: The VA 

published a document in the Federal 

Register on December 30, 2008, (73 FR 

79645) amending its regulations to 

reflect increases effective for fiscal years 

2005, 2006, 2007, 2008, and 2009, 

respectively. In FR Doc. E8–31033, 

published on December 30, 2008, the 

addition of paragraphs (a)(5) and (a)(6) 

to § 21.3333 was inadvertently omitted 

from amendatory instruction 7a. This 

document corrects that error. 

In rule FR Doc. E8–31033 published 

on December 30, 2008 (73 FR 79645), 

make the following correction: On page 

79651, in the second column, 

amendatory instruction 7a. should read 

as follows: 

a. Revising paragraphs (a)(1), (a)(2), 

and (a)(3), and adding paragraphs (a)(4), 

(a)(5) and (a)(6). 

Approved: January 13, 2009. 

Gloria P. Armstrong, 

Federal Register Liaison Officer. 

[FR Doc. E9–1040 Filed 1–16–09; 8:45 am] 

BILLING CODE 8320–01–P 


jlentini on PROD1PC65 with RULES