Source: http://www.oge.gov/displaytemplates/modelsub.aspx?id=2257&langtype=1033
Timestamp: 2013-05-26 02:42:52
Document Index: 337281690

Matched Legal Cases: ['§ 203', '§ 203', '§ 203', '§ 205', '§ 2640', '§ 2637', '§ 203', '§ 2640', '§ 2637', '§ 207', '§ 2637', '§ 203', '§ 207', '§ 208', '§ 209', '§ 209', 'art 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2635', '§ 2634', '§ 2634', '§ 101', '§ 2634', '§ 2634', '§ 2634', '§ 2634', '§ 207', '§ 207']

Link to PDF Office of Government Ethics 00 x 1 Memorandum dated February 15, 2000, from Stephen D. Potts, Director, to Designated Agency Ethics Officials, General Counsels and Inspectors General Regarding Summary of Ethical Requirements Applicable to Special Government Employees In recent years, we have noted increasing demand from agency officials for guidance concerning the various ethical requirements applicable to special Government employees (SGE). In response, we have prepared the attached summary: "Conflict of Interest and the Special Government Employee." It is our hope that this document will become a convenient tool for all agency officials who have to counsel SGEs or otherwise deal with the unique ethical issues posed by SGEs. In this connection, we specifically ask that you disseminate this summary to other components within your own organization, such as regional offices, that you think may encounter questions pertaining to SGEs. Attachment CONFLICT OF INTEREST AND THE SPECIAL GOVERNMENT EMPLOYEE A Summary of Ethical Requirements Applicable to SGEs The Office of Government Ethics (OGE) frequently receives questions about the ethical requirements applicable to special Government employees (SGE). Many agencies use SGEs, either as advisory committee members or as individual experts or consultants, and OGE knows that these SGEs pose unique challenges for agency ethics officials. SGEs typically are recruited for temporary service to the Government because they provide outside expertise or perspectives that might be unavailable among an agency's regular employees. Frequently, however, these SGEs have substantial outside activities and financial interests that may raise difficult ethics questions. In order to help agencies resolve such questions, OGE is issuing this summary, which attempts to digest, in one place, the various conflict of interest laws and ethics regulations applicable to SGEs.
Definition of SGE The SGE category was created by Congress as a way to apply an important, but limited, set of conflict of interest requirements to a group of individuals who provide important, but limited, services to the Government. SGEs were originally conceived as a "hybrid" class, in recognition of the fact that the "simple categories of 'employee' and 'non-employee' are no longer adequate to describe the multiplicity of ways in which modern government gets its work done." B. Manning, Federal Conflict of Interest Law 30 (1964). It is crucial to distinguish SGEs both from regular employees and from individuals who are not Federal employees at all. These distinctions are important because SGEs are subject to less restrictive conflict of interest requirements than regular employees, but are subject to more restrictive requirements than non-employees, who generally are not covered by the conflict of interest laws at all.
Criminal Conflict of Interest Statutes and Related Restrictions Agency ethics officials regularly deal with five conflict of interest statutes found in Chapter 11, Title 18 of the United States Code: 18 U.S.C. §§ 203, 205, 207, 208, 209. Each of these criminal statutes makes at least some special provision for the treatment of SGEs. The application of these statutes is discussed below, in addition to certain related requirements found in other provisions of law.
A. Restrictions on Representation Two statutes, 18 U.S.C. §§ 203 and 205, impose related restrictions on the outside activities of SGEs, particularly activities involving the representation of others before the Federal Government. Section 203 prohibits an employee from receiving, agreeing to receive, or soliciting compensation for representational services, rendered either personally or by another, before any court or Federal agency or other specified Federal entity, in connection with any particular matter in which the United States is a party or has a direct and substantial interest. It should be noted that section 203 applies not only to representational services provided by the employee personally, but also to services provided by another person with whom the employee is associated, provided that the employee shares in the compensation for such services, for example, through partnership income or profit-sharing arrangements. See 4B Op. O.L.C. 603 (1980).
Both section 203 and section 205 are limited, however, in their application to SGEs. 18 U.S.C. § 203(c) and 18 U.S.C. § 205(c) contain identical provisions that substantially narrow the prohibitions with respect to SGEs. One of the most significant limitations is that SGEs are restricted by sections 203 and 205 only in connection with "particular matters involving specific parties." Such matters typically involve a specific proceeding affecting the legal rights of parties, or an isolatable transaction or related set of transactions between identified parties; examples would include contracts, grants, applications, requests for rulings, litigation, or investigations. Unlike regular employees, SGEs may represent others or receive compensation for representational services in connection with particular matters of general applicability--such as broadly applicable policies, rulemaking proceedings, and legislation--which do not involve specific parties. See 14 Op. O.L.C. 79 (1990); 5 C.F.R. § 2640.102(l)(m); 5 C.F.R. § 2637.201(c)(1).Furthermore, the restrictions on SGEs are narrowly drawn to focus only on those matters in which the SGE actually participated for the Government, as well as, in some cases, those matters actually pending in the SGE's own agency. More specifically, all SGEs are subject to the prohibitions of sections 203 and 205 with respect to those matters in which the SGE "at any time participated personally and substantially as a Government employee or special Government employee." 18 U.S.C. §§ 203(c)(1), 205(c)(1). Guidance on what constitutes personal and substantial participation may be found in regulations construing the same phrase in related conflict of interest statutes. See 5 C.F.R. § 2640.103(a)(2); 5 C.F.R. § 2637.201(d). Likewise, guidance on what constitutes participation in the same particular matter as the matter with respect to which an SGE seeks to provide representational services may be found in regulations construing the analogous requirement in 18 U.S.C. § 207(a). See 5 C.F.R. § 2637.201(c)(4).9 SGEs who have served the Government for more than 60 days during the immediately preceding period of 365 consecutive days are subject to an additional restriction. Such SGEs are subject to the prohibitions of sections 203 and 205 in connection with any covered matter that "is pending in the department or agency of the Government in which [the SGE] is serving." 18 U.S.C. §§ 203(c)(2), 205(c)(2). It should be noted that the 60-day standard for determining the application of this additional restriction is a standard of actual past service, as contrasted with the 130-day standard of estimated future service for determining SGE status discussed above.10 Thus, for example, an SGE may represent another person before the agency in which he or she serves until the point at which the SGE has actually served 60 days in any prior period of 365 days; once the 61st day of service is reached, the SGE must discontinue the representation.
B. Post-Employment Restrictions The criminal post-employment statute, 18 U.S.C. § 207, imposes a number of different restrictions on the activities of former Government employees. Several of these restrictions provide no special treatment for SGEs. The provisions of section 207 that apply in the same way to both SGEs and regular employees include:
C. Financial Conflicts of Interest 18 U.S.C. § 208 prohibits all employees, including SGEs, from participating personally and substantially in any particular matter that has a direct and predictable effect on their own financial interests or the financial interests of others with whom they have certain relationships. In addition to an employee's own personal financial interests, the financial interests of the following persons or organizations are also disqualifying: spouse; minor child; general partner; organization which the individual serves as officer, director, trustee, general partner or employee; person or organization with which the employee is negotiating or has any arrangement concerning prospective employment.18 Because SGEs typically have substantial outside employment and other interests, which are often related to the subject areas for which the Government desires their services, issues under section 208 frequently arise.
D. Supplementation of Federal Salary 18 U.S.C. § 209 prohibits Federal employees from receiving "any salary, or any contribution to or supplementation of salary" from an outside source as compensation for their Government services. SGEs, however, are completely exempt from this prohibition. 18 U.S.C. § 209(c). This means, for example, that SGEs may continue to collect their regular salary from an outside employer for days on which they are providing services to the Government (whether their Government service is paid or unpaid).
Other Ethics Statutes Apart from the five major criminal conflict of interest statutes in Chapter 11 of Title 18, there are other ethics statutes, some of which apply to SGEs and some of which do not.
Standards of Ethical Conduct for Employees of the Executive Branch Generally, SGEs are treated the same as regular employees under the Standards of Ethical Conduct for Employees of the Executive Branch, 5 C.F.R. part 2635. See 5 C.F.R. § 2635.102(h) ("employee" includes SGEs, and employee status not affected by fact that SGE does not perform official duties on given day). There are, however, a few notable exceptions. Only those exceptions, as well as a few other items of particular relevance to SGEs, will be discussed below.23
A. Gifts from Outside Sources SGEs, like all employees, are subject to 5 C.F.R. § 2635.202(a), which prohibits the acceptance of gifts from a "prohibited source" and gifts given because of an employee's official position. The definition of "prohibited source" includes any person seeking official action from the employee's agency, doing or seeking to do business with the employee's agency, conducting activities regulated by the employee's agency, or having interests that may be substantially affected by the employee's official duties; the definition also includes organizations the majority of whose members fall within any of the aforementioned categories. 5 C.F.R. § 2635.203(d). From this definition, it should be immediately apparent that SGEs pose unique issues, because many SGEs are employed by, or have substantial professional and business relationships with, such prohibited sources. For this reason, OGE originally proposed an exception, 5 C.F.R. § 2635.204(e)(2), specifically to permit SGEs to accept various benefits resulting from outside business or employment activities, where it is clear that such benefits are not offered or enhanced because of the employee's official position. See 56 Federal Register 33777, 33782 (July 23, 1991). Although the final version of section 2635.204(e)(2) was broadened to cover all employees, not just SGEs, this exception continues to be of particular importance to SGEs.
B. Presidential Appointees and Covered Noncareer Employees 5 C.F.R. § 2635.804 references certain outside earned income restrictions on specified Presidential appointees and other covered noncareer employees. These restrictions are inapplicable to SGEs. 24
C. Outside Expert Witness Activities Employees generally may not participate as an expert witness, other than on behalf of the United States, in any proceeding before a Federal court or agency in which the United States is a party or has a direct and substantial interest. 5 C.F.R. § 2635.805(a). This prohibition applies whether or not the employee receives compensation for the activity. The Designated Agency Ethics Official may authorize an employee to serve as an expert witness where such service is determined to be in the interest of the Government or where the subject matter of the testimony is determined to be unrelated to the employee's official duties. 5 C.F.R. § 2635.805(c).
D. Outside Teaching, Speaking and Writing 5 C.F.R. § 2635.807(a) generally prohibits an employee from receiving outside compensation for speaking, teaching or writing activities that relate to the employee's official duties. Such activities may relate to an employee's official duties in several different ways: if the activity is performed as part of the employee's official duties (discussed above in connection with supplementation of Federal salary); if the invitation to engage in the activity was extended primarily because of the employee's official position rather than expertise in the subject matter; if the invitation or offer of compensation was extended by someone with interests that may be affected substantially by the employee's duties; or if the information conveyed through the activity draws substantially on nonpublic information obtained through the employee's Government service. 5 C.F.R. § 2635.807(a)(2)(i)(A)-(D). SGEs, like all employees, are prohibited from receiving compensation for activities that are related to their official duties in any of these ways.
E. Fundraising All employees, including SGEs, are equally subject to certain restrictions on personal fundraising for nonprofit organizations. These include restrictions on the use of official title, position and authority, and the solicitation of subordinates. 5 C.F.R. § 2635.808(c). Additionally, employees may not personally solicit funds or other support from a person known by the employee to be a "prohibited source." (The definition of prohibited source is discussed in more detail above, under "Gifts from Outside Sources.") With respect to SGEs, however, this restriction is limited to a narrower subset of the definition of prohibited source. SGEs are prohibited only from personally soliciting persons whose interests may be affected substantially by the performance or nonperformance of the SGE's official duties. 5 C.F.R. § 2635.808(c)(1)(ii).
Financial Disclosure As a general rule, all SGEs must file either a public financial disclosure statement or a confidential financial disclosure statement.
A. Public Reporting SGEs are required to file a public financial disclosure report if they meet two criteria. First, they must perform the duties of their office, or be expected to perform those duties, for more than 60 days in the calendar year. See 5 C.F.R. § 2634.204. Second, they must meet the pay conditions for public filing, i.e., they must be paid at least the equivalent of 120% of the minimum rate of basic pay for GS-15 of the General Schedule (or, if they are members of the uniformed service, they must be at or above pay grade 0-7). See 5 C.F.R. § 2634.202(c). SGEs meeting both of these criteria file the same new entrant, incumbent, and termination reports as regular employees. Additionally, any prospective SGE who is nominated by the President to a position requiring Senate confirmation--regardless of pay level or expected number of service days--may be required by the confirming committee to file an initial "nominee" report.See 5 U.S.C. app. § 101(b)(1).
B. Confidential Reporting Generally, any SGE not required to file a public financial disclosure report must file a confidential financial disclosure report. 5 C.F.R. § 2634.904(b). The SGE must submit the standardized OGE Form 450 and any OGE-approved supplement, unless the SGE's agency has received approval to use an alternative reporting system. 5 C.F.R. § 2634.907 (standard form prescribed by OGE); § 2634.905(c) (OGE-approved alternative). However, SGEs may not use the standardized OGE Optional Form 450-A (Confidential Certificate of No New Interests). 5 C.F.R. § 2634.905(d)(1).
16.Additionally, SGEs, like all employees, may be eligible for a number of exceptions to the various restrictions of 18 U.S.C. § 207. See 18 U.S.C. § 207(h),(j),(k).
24.See footnote 22 and accompanying text.