Modernization Updates to Standards of Ethical Conduct for Employees of the Executive Branch

Published date17 May 2024
Record Number2024-10339
Citation89 FR 43686
CourtGovernment Ethics Office
SectionRules and Regulations
Federal Register, Volume 89 Issue 97 (Friday, May 17, 2024)
[Federal Register Volume 89, Number 97 (Friday, May 17, 2024)]
                [Rules and Regulations]
                [Pages 43686-43731]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2024-10339]
                [[Page 43685]]
                Vol. 89
                Friday,
                No. 97
                May 17, 2024
                Part IVOffice of Government Ethics-----------------------------------------------------------------------5 CFR Part 2635Modernization Updates to Standards of Ethical Conduct for Employees of
                the Executive Branch; Final Rule
                Federal Register / Vol. 89 , No. 97 / Friday, May 17, 2024 / Rules
                and Regulations
                [[Page 43686]]
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                OFFICE OF GOVERNMENT ETHICS
                5 CFR Part 2635
                RIN 3209-AA43
                Modernization Updates to Standards of Ethical Conduct for
                Employees of the Executive Branch
                AGENCY: Office of Government Ethics.
                ACTION: Final rule.
                -----------------------------------------------------------------------
                SUMMARY: The U.S. Office of Government Ethics (OGE) is issuing this
                final rule updating the Standards of Ethical Conduct for Employees of
                the Executive Branch (Standards). The final rule updates the Standards
                based on OGE's experience gained from application of the regulation
                since its inception. The final rule also incorporates past interpretive
                guidance, adds and updates regulatory examples, improves clarity,
                updates citations, and makes technical corrections.
                DATES: This final rule is effective August 15, 2024.
                FOR FURTHER INFORMATION CONTACT: Kimberly L. Sikora Panza, Senior
                Associate Counsel, or Christie Chung, Assistant Counsel, U.S. Office of
                Government Ethics, 250 E Street SW, Suite 750, Washington, DC 20024-
                3249; Telephone: 202-482-9300; TTY: 800-877-8339; FAX: 202-482-9237.
                SUPPLEMENTARY INFORMATION:
                I. Rulemaking History
                 Pursuant to a provision of the Ethics in Government Act of 1978, 5
                U.S.C. 13122, the Director of the U.S. Office of Government Ethics
                (OGE) is responsible for periodically reviewing, evaluating, and
                updating the rules and regulations that pertain to ethics in the
                executive branch. On February 21, 2023 (88 FR 10774), OGE published for
                public comment a proposed rule setting forth various modernization
                updates to the Standards of Ethical Conduct for Employees of the
                Executive Branch (Standards), which serve as the primary regulatory
                guidance on the standards of ethical conduct for officers and employees
                of the executive branch of the Federal Government (Government). Prior
                to publishing the proposed rule, OGE consulted with the Department of
                Justice and the Office of Personnel Management pursuant to section
                201(a) of Executive Order 12674, as modified by Executive Order 12731,
                and the authorities contained in 5 U.S.C. chapter 131, subchapter II.
                Additionally, OGE solicited and considered the views of executive
                branch agency ethics officials. OGE's proposed updates pertained only
                to subparts A through I of the Standards; separate from the present
                rulemaking, OGE engaged in a comprehensive rulemaking that added to the
                Standards new subpart J, which relates to the creation and operation of
                legal expense funds, and the acceptance of pro bono legal services for
                certain legal matters. See 88 FR 33799 (May 25, 2023).
                 The proposed rule provided for a 60-day comment period, which ended
                on April 24, 2023. During this period, OGE received nineteen responsive
                comment submissions regarding the proposed rule: fourteen from the
                public and five from Federal agencies. OGE also received two comment
                submissions from the public that do not relate to the proposed rule and
                address unrelated matters. After carefully considering all comments and
                making appropriate modifications, and for the reasons set forth below
                and in the preamble to the proposed rule at https://www.govinfo.gov/content/pkg/FR-2023-02-21/pdf/2023-02440.pdf, OGE is publishing this
                final rule.
                II. Discussion of Comments and Changes to Proposed Rule
                 The twenty-one comments that OGE received during the comment period
                are publicly accessible on OGE's website at this address: https://www.oge.gov/web/OGE.nsf/All+docs+By+Cat/08C3B547690B7675852589AA00556758. OGE has reviewed and considered all
                comments submitted by each commenter. OGE is not addressing the two
                comments that pertain to matters unrelated to the rulemaking. The
                following discussion addresses all other comments in the context of the
                specific subparts or sections to which they relate.
                A. General Provisions (Subpart A)
                 OGE received nine comments from individuals who expressed concerns
                about the proposed revisions to Sec. Sec. 2635.101(b)(13) and
                2635.106. In Sec. Sec. 2635.101(b)(13) and 2635.106, OGE proposed to
                add the words ``(including pregnancy, gender identity, and sexual
                orientation)'' after ``sex'' to reflect protected characteristics
                identified by the Equal Employment Opportunity Commission (EEOC) as
                covered by Federal employment discrimination laws. Towards this same
                end, OGE also proposed adding ``genetic information'' in these two
                sections and updating the word ``handicap'' to ``disability.'' These
                commenters specifically criticized the inclusion of ``gender identity''
                and ``sexual orientation'' in Sec. Sec. 2635.101(b)(13) and 2635.106;
                no commenter referenced or objected to the other updates to these
                provisions relating to pregnancy, genetic information, or disability.
                Commenters perceived that the inclusion of ``gender identity'' and
                ``sexual orientation'' would result in an expansion of civil rights,
                and objected to the revisions either categorically or without
                observance of appropriate protections for religious organizations and
                religious conscience.
                 The revisions to Sec. Sec. 2635.101(b)(13) and 2635.106 do not
                effectuate any expansion of, or other change to, civil rights laws.
                Significantly, OGE does not have the authority to promulgate
                regulations expounding on the scope of categories protected by equal
                employment laws and regulations, or other civil rights laws and
                regulations. The updated language merely modernizes the regulatory text
                to include characteristics that the EEOC already recognizes as
                protected under the laws enforced by the Commission. See, e.g.,
                Employees & Applicants, U.S. Equal Emp. Opportunity Comm'n, https://www.eeoc.gov/employees (last visited May 17, 2023). It is both
                necessary and appropriate that provisions in the Standards that refer
                to ``laws and regulations that provide equal opportunity'' list the
                characteristics protected by Federal laws prohibiting employment
                discrimination and enforced by the EEOC.
                 Additionally, OGE received one comment from an individual who
                expressed concern that the addition of ``gender identity'' and ``sexual
                orientation'' infringes on executive branch employees' First Amendment
                and other constitutional rights. As noted above, these revisions are
                merely technical updates referencing types of discrimination already
                recognized by the EEOC. Acknowledgement of the fact that sex-based
                discrimination includes gender identity and sexual orientation in
                Sec. Sec. 2635.101(b)(13) and 2635.106 neither results in any change
                to existent equal opportunity laws or regulations, nor impacts the
                interaction between such laws and the constitutional rights of
                employees.
                 For the above reasons and for the reasons stated in the preamble to
                the proposed rule, OGE therefore is adopting the proposed updates to
                subpart A without further revisions.
                B. Gifts From Outside Sources (Subpart B)
                Subpart B Examples
                 OGE received four suggestions regarding additional examples or
                clarifications that could be made in subpart B. Specifically, one
                agency
                [[Page 43687]]
                commenter suggested that OGE add an example of a ``non-traditional''
                prohibited source, such as an entity that enters into a cooperative
                research and development agreement with a Federal agency, as well as an
                example involving a lottery ticket as a gift; the same agency suggested
                that OGE add an example to Sec. 2635.204(d) involving a Department of
                Defense or other Federal school; and a member of the public suggested
                that OGE clarify gift acceptance limits and issues relating to entities
                like the Kennedy Center where events might be hosted by a corporate
                donor.
                 The examples requested by these commenters involve illustration of
                fairly specific situations. It would not be feasible for OGE to provide
                examples addressing application of the regulation in all of the
                scenarios that may give rise to subpart B considerations. In light of
                the extensive revisions made to subpart B in 2016, which included
                modernization changes and examples, and OGE's determination that the
                current rule provides appropriate guidance, OGE declines these
                suggestions.
                Gift Exclusion and Exception for ``Opportunities and Benefits''
                 One individual commenter requested that OGE reconcile the
                difference between the opportunities and benefits excluded from the
                definition of ``gift'' in Sec. 2635.203(b)(4) and the opportunities
                and benefits excepted from the gift prohibitions by Sec.
                2635.204(c)(2). Specifically, the commenter noted that the
                opportunities and benefits excluded from the ``gift'' definition by
                Sec. 2635.203(b)(4) include ``favorable rates and commercial
                discounts,'' while the opportunities and benefits excepted from the
                subpart B gift prohibitions by Sec. 2635.204(c)(2) include ``favorable
                rates, commercial discounts, and free attendance or participation.''
                The ``free attendance or participation'' language that distinguishes
                these two provisions was added to Sec. 2635.204(c)(2) when OGE
                substantially revised subpart B in 2016. See 81 FR 81641 (Nov. 18,
                2016).
                 OGE notes that the ``opportunities and benefits'' listed in the
                Sec. 2635.203(b)(4) gift exclusion are preceded by the word
                ``including,'' indicating that the list is not intended to be
                exhaustive. As such, one could consider free attendance or
                participation under the gift exclusion, if the appropriate facts
                presented themselves. However, to clear up any confusion, OGE will add
                the words ``free attendance or participation'' to Sec. 2635.203(b)(4)
                to harmonize the language in Sec. Sec. 2635.203(b)(4) and
                2635.204(c)(2).
                Free Attendance Gift Exclusion
                 Section 2635.203(b)(8) excludes from the definition of ``gift''
                free attendance to an event provided by the sponsor of the event to
                certain individuals, including an employee who is assigned to present
                information on behalf of the agency at the event (on any day when the
                employee is presenting), and ``[a]n employee whose presence on any day
                of the event is deemed to be essential by the agency to the presenting
                employee's participation in the event,'' if the employee is
                accompanying the presenting employee. One agency opined that it is
                unclear whether multiple personnel supporting a presenting employee may
                accept free attendance pursuant to this exclusion. Specifically, the
                commenter requested that ``an employee'' in the above-quoted language
                in Sec. 2635.203(b)(8)(ii) be changed to ``any employee'' to clarify
                that multiple supporting personnel may accept free attendance under
                this exclusion.
                 OGE notes that it has previously issued guidance making clear that
                Sec. 2635.203(b)(8)(ii) can be applied to multiple agency personnel.
                See OGE DAEOgram DO-10-003, at 2 (Feb. 18, 2010) (``The number and
                types of personnel necessary, if any, to the speaker's participation
                will vary depending upon who the speaker is and the nature of the
                event.''). Nonetheless, to further address the commenter's concern, OGE
                is updating example 2 to paragraph (b)(8) to reflect that guidance and
                eliminate any doubt that multiple supporting personnel may accept free
                attendance under this exclusion. Specifically, OGE is changing
                ``another employee'' to ``other employees'' and ``accompanying
                employee'' to ``accompanying employees'' in the example.
                De Minimis Gift Exception
                 Three commenters--two individuals and one agency--recommended that
                OGE increase the monetary thresholds for the de minimis gift exception
                at Sec. 2635.204(a), noting the effects of inflation in the
                intervening years since the exception was first adopted. Two other
                commenters made a similar suggestion in 2016 as part of OGE's
                comprehensive rulemaking revising portions of subpart B.
                 After carefully considering this recommendation in 2016, OGE noted
                its concern that ``raising the de minimis would encourage employees to
                accept, and private citizens to give, more expensive and more frequent
                gifts than employees are currently able to accept.'' 81 FR 81641, 81645
                (Nov. 18, 2016). Although OGE acknowledged at that time--and continues
                to acknowledge--the effect of inflation on the relative value of the de
                minimis threshold, OGE continues to believe that $20 is a workable
                amount that serves the narrow purpose of the exception, which is to
                permit only the infrequent acceptance of inexpensive and innocuous
                gifts. Id.; see also 57 FR 35006, 35016 (Aug. 7, 1992). It also
                continues to be the fact that ``no compelling argument has been made to
                support a conclusion that raising the cap on the blanket de minimis
                exception, in order to allow employees to accept more expensive and
                more frequent gifts, would strengthen the integrity of the executive
                branch's operations.'' 81 FR 81645.
                 Independent of these substantive reasons, OGE also declines to
                adopt the suggestion to increase the de minimis threshold in this
                particular rulemaking, the primary focus of which is on technical, non-
                substantive updates. OGE does not think it would be appropriate to
                adjust the Sec. 2635.204(a) dollar value in this final rule without
                having announced in the proposed rule that it was contemplating such an
                increase, thereby providing the public an opportunity to reflect on
                such a proposal and share their input regarding the same.
                Widely Attended Gatherings Exception
                 To improve readability, OGE is making a technical amendment to the
                structure of Sec. 2635.204(g)(2), which defines when a gathering is
                widely attended for purposes of the widely attended gathering (WAG)
                exception. Specifically, OGE is organizing the components of the WAG
                definition at Sec. 2635.204(g)(2) into new separate paragraphs
                (g)(2)(i) through (iii). This update involves no substantive changes to
                the WAG exception.
                 In response to the proposed rule, one agency recommended removing
                the requirement in the WAG exception in Sec. 2635.204(g) that an
                employee attend the event on their own time in their personal capacity
                rather than in their official capacity. Section 2635.204(g) provides
                that an employee could attend a qualifying event either on their own
                time or, if authorized by their agency, on excused absence pursuant to
                applicable guidelines for granting such absence, or otherwise without
                charge to the employee's leave account. The commenter questioned the
                rationale for this requirement that the employee attend on their own
                time, noting that an agency determination that attendance is in the
                agency's interest would suggest the event is related to the employee's
                official duties.
                [[Page 43688]]
                 OGE notes that the requirement that the employee attend in their
                personal capacity is based on appropriations considerations that OGE
                documented in the preamble to the final rule for 5 CFR part 2635. See
                57 FR 35006, 35019-20 (Aug. 7, 1992). The 1992 preamble explains that
                the WAG exception was designed to allow agencies that do not have
                agency gift acceptance authority to permit their employees to accept a
                gift of free attendance at events in which the agency has an interest
                in the employee attending. However, due to appropriations requirements,
                in order for the gift to be accepted by an employee rather than by the
                agency, the employee must attend the event in their personal capacity
                ``off the clock.'' Specifically, this requirement ``is imposed of
                necessity to ensure that the gift is made to the employee rather than
                to the agency and, thus, that it does not improperly augment agency
                appropriations available for payment of expenses of attendance at
                training, meetings or similar events.'' Id. at 35019. For these
                reasons, OGE declines to follow the agency's recommendation.
                C. Gifts Between Employees (Subpart C)
                Gifts to Superiors
                 One individual commented that the proposed new language in Sec.
                2635.302(a)(1), which clarifies that ``an official superior may not
                knowingly accept'' an improper gift from a subordinate, is inconsistent
                with the controlling statutory authority at 5 U.S.C. 7351. The
                commenter also suggested that the knowledge element in this provision
                is unclear.
                 As discussed in the preamble to the proposed rule, the premise that
                official superiors have a responsibility to not knowingly accept
                improper gifts from a subordinate is logically consistent with and
                complements the restrictions articulated in 5 U.S.C. 7351 governing
                gift giving from a subordinate to a superior. The proposed changes to
                Sec. 2635.302(a)(1) appropriately emphasize that superiors should not
                knowingly accept gifts that are improper for employees to give.
                 Regarding the knowledge element relating to a superior's acceptance
                of a gift, it is included in recognition of the fact that the
                regulation covers gifts given ``indirectly'' by an employee--e.g., ones
                given by an employee's parent, sibling, spouse, child, or dependent
                relative with the employee's knowledge and acquiescence. See Sec.
                2635.303(b)(1). Section 2635.302(a) is structured in such a way that
                knowledge is required on the part of both the giver and receiver for
                indirect gifts. For example, an employee will not be in violation of
                the rule if their sibling gives a gift to the employee's superior
                without the employee's knowledge and acquiescence. Similarly, a
                superior will not be in violation of the rule if they accept a gift
                that unbeknownst to them was given by the sibling of an employee with
                the employee's knowledge and acquiescence.
                 For the reasons explained in the preamble to the proposed rule, OGE
                declines the commenter's suggestions, and will adopt the revisions to
                Sec. 2635.302(a)(1) as set forth in the proposed rule.
                Gifts From Employees Receiving Less Pay
                 One individual commenter requested clarification regarding the
                meaning of ``less pay'' in Sec. 2635.302(b) and suggested that the
                rule be amended to specify ``base pay.'' OGE is unable to adopt this
                change. The language in Sec. 2635.302(b), referring to ``employees
                receiving less pay'' incorporates the language of the underlying
                statute. See 5 U.S.C. 7351 (referring to ``an employee receiving less
                pay''). Given this statutory basis, OGE is constrained in its ability
                to revise the regulation to specify ``base pay'' or ``rate of basic
                pay.''
                 Another individual commenter opposed the new language OGE proposed
                to add to Sec. 2635.302(b)(2), which clarifies that the restriction on
                accepting a gift from an employee receiving less pay does not apply
                when the employee giving the gift is the official superior of the
                employee receiving the gift. The commenter expressed concern that this
                rule could provide for unequal treatment among the higher paid
                employees who are now allowed to receive gifts from their superiors,
                although the commenter also recognized that gifts from superiors to
                subordinates are not generally restricted by subpart C.
                 OGE disagrees with the commenter that the updated language is ripe
                for ``favoritism and impropriety.'' As a threshold matter, OGE notes
                that in the status quo, subpart C does not restrict most gifts from
                superiors to their employees because superiors do not typically receive
                less pay than their employees. This structure does not seem to have
                elicited much concern among ethics officials. Furthermore, as OGE noted
                in the proposed rule, ``OGE does not believe that 5 U.S.C. 7351, the
                statute underlying the restriction articulated in Sec. 2635.302(b),
                either contemplated or intended that subordinate employees would be
                restricted from accepting a gift from an official superior who, because
                of the nature of modern compensation systems, receives less pay.'' 88
                FR 10774, 10775 (Feb. 21, 2023). Accordingly, this updated language
                that permits all employees to receive gifts from their superiors in the
                same manner is necessary to modernize and equalize the rule given the
                situations in the current Federal pay system in which a subordinate may
                earn more than their official superior. However, it does not encourage
                the provision of such gifts in an unfair or inequitable manner.
                De Minimis Gift Exception
                 Similar to the related suggestions regarding the subpart B de
                minimis exception, two agency commenters recommended that OGE increase
                the monetary threshold in the gift exception at Sec. 2635.304(a). As
                is the case with the de minimis exception in Sec. 2635.204(a), OGE
                believes that the current value of the de minimis exception in subpart
                C should remain unchanged. As OGE noted when issuing the Standards,
                while it is ``appropriate to permit modest exchanges of gifts between
                coworkers,'' it is important to remain mindful of ``subtle pressures to
                give gifts to superiors'' in an environment ``where superiors and
                subordinates interact daily and where subordinates compete for
                advancement.'' 57 FR 35006, 35022 (Aug. 7, 1992). Notwithstanding
                inflation, OGE believes that the $10 amount remains adequate to permit
                an exchange of a modest token between employees and is ``low enough
                generally to discourage employees from purchasing gifts for their
                superiors.'' Id. OGE further echoes its concern noted above about
                adjusting a de minimis value in this final rule when the public was not
                apprised of such a potential change or given the opportunity to comment
                on it.
                Special Infrequent Occasions Exception
                 One agency commenter suggested that OGE add a new example to the
                exception for special, infrequently occurring occasions to illustrate
                that a superior's promotion is not an occasion of personal
                significance. OGE declines to adopt this suggestion. Example 3 to the
                exception for voluntary contributions in Sec. 2635.304(c) sufficiently
                illustrates that a superior's promotion within the supervisory chain is
                not an appropriate time for subordinates to take up a collection for a
                gift to that official superior because the occasion does not ``mark the
                termination of the subordinate-official superior relationship, nor [is
                it an] event[ ] of personal significance within the meaning of [Sec.
                2635.304(b)].''
                [[Page 43689]]
                 An individual commenter suggested that OGE consider adding
                ``divorce'' to the non-exhaustive list of special, infrequent occasions
                covered by the exception at Sec. 2635.304(b)(1), and also suggested
                that OGE could add further detail in the regulation regarding the
                application of this exception in other contexts, such as traditional
                religious or cultural rites of passage.
                 OGE notes that the statute authorizing OGE to issue regulations
                exempting certain gifts contemplates that OGE may exempt gifts in
                circumstances ``in which gifts are traditionally given or exchanged.''
                5 U.S.C. 7351(c). The list of special, infrequent occasions provided in
                the regulation is not exhaustive, as it is preceded by the phrase
                ``such as.'' OGE does not endeavor to attempt to list all occasions
                that may be covered in the regulation, nor does it believe it would be
                prudent or practicable to articulate every such occasion. The language
                of the exception makes clear that the exception allows for gifts that
                are ``infrequently occurring occasions of personal significance,'' and
                this language should be applied when considering occasions not included
                in the non-exhaustive list.
                 Regarding this same exception, a different individual commenter
                agreed that adding ``bereavement'' to Sec. 2635.304(b) is a beneficial
                change; the individual suggested, however, that there are issues in
                practice with OGE's inclusion of this term without limitation.
                Specifically, the commenter recommended that OGE establish
                ``limitations as to which family members the exception applies.'' OGE
                declines to adopt language qualifying which bereavements constitute an
                infrequently occurring occasion of personal significance, believing
                that it is neither appropriate nor wise to make a categorical
                determination about which losses justify expressions of sympathy. OGE
                notes that a gift in recognition of bereavement must still be
                ``appropriate to the occasion,'' which is a sufficient limiting factor
                that appropriately curtails gift giving and acceptance in the
                bereavement context and addresses any potential for misuse of the
                narrow exception at Sec. 2635.304(b).
                 This same commenter recommended that OGE add birthdays ending in
                zero to the non-exhaustive list of special, infrequent occasions
                covered by Sec. 2635.304(b)(1). Drawing parallels between birthdays
                ending in zero and occasions enumerated in the regulation, the
                individual commented that exclusion of milestone birthdays is
                arbitrary. OGE believes that it would be inappropriate to except gifts
                in connection with birthdays, which includes milestone birthdays, from
                the general rules governing gifts between employees, and thus did not
                revise the regulation to indicate otherwise. As noted in the preamble
                accompanying the proposed rule, OGE does not consider milestone
                birthdays to be infrequently occurring occasions of the sort warranting
                exception under Sec. 2635.304(b). Of course, it may be possible to
                give a gift in recognition of any birthday under another exception,
                such as the exception for gifts with a value of $10 or less and the
                exception for food and refreshments shared in the office among several
                employees. See Sec. 2635.304(a)(1) and (2).
                Exception for Voluntary Contributions of Nominal Amounts
                 One individual commenter suggested that OGE define the term
                ``nominal'' as it is used in the exception at Sec. 2635.304(c) for
                ``voluntary contributions of nominal amounts from fellow employees for
                an appropriate gift to an official superior.'' OGE appreciates this
                suggestion, but has not made a change to the regulation. What
                constitutes a ``nominal'' amount is necessarily context-specific, for
                example, depending on whether the contribution is for items like food
                and refreshments, or for a gift in recognition of a special, infrequent
                occasion. In response to a similar comment when first issuing the
                Standards, OGE explained that it chose to not impose a specific dollar
                limit, even though collections for gifts generally involve individual
                contributions less than five dollars. In doing so, OGE noted that
                ``[w]here contributions meet the regulatory requirement that they be
                entirely voluntary, higher amounts may appropriately be contributed in
                some cases, as when several senior members of an office provide an
                additional contribution to subsidize a collection that has come up
                short of sufficient funds to purchase a desired gift.'' 57 FR 35006,
                35023 (Aug. 7, 1992). The regulation makes clear that the contributions
                must be for ``an appropriate gift,'' which OGE believes provides a
                suitable, non-monetary limit on the use of this exception.
                Disposition of Prohibited Gifts
                 One agency commenter suggested that OGE add a section in this
                subpart that addresses what an employee should do if they inadvertently
                accept a gift that is not permissible under this subpart. In response
                to agency inquiries regarding the disposition of gifts prohibited by
                subpart C, OGE has advised that agencies are free to look to the
                subpart B disposition provisions for guidance regarding how to handle
                such gifts. To provide greater clarity to employees and ethics
                officials, OGE will add a new Sec. 2635.305 to subpart C that is
                consistent with that guidance.
                D. Conflicting Financial Interests (Subpart D)
                Analyzing Imputed Interests and Multi-Entity Organizations
                 One agency commenter requested that OGE add an example in Sec.
                2635.402 illustrating the application of 18 U.S.C. 208 where an
                employee has an imputed financial interest by virtue of their outside
                employment or position with an organization, and there is a particular
                matter that could affect one of the entity's campuses, or a parent,
                affiliate, or subsidiary organization. OGE declines to add such an
                example. As a threshold matter, OGE notes that the Standards already
                provide clear guidance regarding how imputed relationships are
                analyzed. Specifically, Sec. 2635.402(b)(2) explains that ``[f]or
                purposes of 18 U.S.C. 208(a) and this subpart, the financial interests
                of [certain imputed persons, including an organization or entity with
                which an employee serves as officer, director, trustee, general partner
                or employee] will require the recusal of an employee to the same extent
                as if they were the employee's own interests.'' (Emphasis added.)
                Regarding related entities such as parents, subsidiaries, affiliates,
                etc., the Standards generally acknowledge the potential conflicts that
                may arise with respect to the same. See note 2 to Sec. 2635.402(b)(1)
                (recognizing that a party matter may have a direct and predictable
                effect on an employee's financial interest in an affiliate, parent, or
                subsidiary of that party). Ultimately, however, OGE is wary of
                potential misinterpretation and misapplication were it to include an
                example of the sort requested by this commenter, and believes that a
                Legal Advisory is a more suitable means through which to provide
                guidance on the appropriate analysis.
                Example 1 to Sec. 2635.403(b)
                 One individual commenter questioned OGE's proposed inclusion of a
                dollar amount in example 1 to Sec. 2635.403(b) and suggested that the
                value should be removed because it ``is not . . . important for the
                rule's applicability.'' OGE intends to retain the dollar amount in this
                example. As explained in the preamble to the proposed rule, OGE
                proposed adding a specific dollar figure to the amount of stock owned
                by the employee in the example ``to make clear that the de
                [[Page 43690]]
                minimis regulatory exemption in 5 CFR 2640.202 does not apply in this
                scenario.'' Accordingly, as noted in the example, the agency could
                determine that ``the employee could not, by virtue of 18 U.S.C. 208(a),
                perform these significant duties of the position while retaining stock
                in the company.''
                Definition of Financial Interest
                 The same individual commenter questioned OGE's proposed update to
                the definition of ``financial interest'' in 5 CFR 2635.403(c)(1), which
                replaces the word ``dependent child'' with ``minor child,'' and
                expressed a preference for retaining ``dependent child.'' As stated in
                the language of Sec. 2635.401 that this rulemaking will adopt, subpart
                D ``summarizes the relevant statutory restrictions [of 18 U.S.C. 208]
                and some of the regulatory guidance found'' in 5 CFR part 2640, the
                part interpreting and implementing 18 U.S.C. 208. The updated language
                referencing ``minor child'' brings Sec. 2635.403(c)(1) into alignment
                with the language used throughout subpart D, and reflects the
                terminology of the statute proper and its implementing regulation.
                Therefore, OGE declines to retain the ``dependent child'' language in
                Sec. 2635.403(c)(1) or otherwise integrate the concept of ``dependent
                child'' in this subpart.
                E. Impartiality in Performing Official Duties (Subpart E)
                Subpart E Examples
                 OGE received one comment from an individual concerning the
                application of Sec. 2635.502 to particular matters of general
                applicability and requesting the addition of an example illustrating
                that application. As proposed, reorganized Sec. 2635.502 articulates
                the operation of the regulation with respect to particular matters
                involving specific parties in which a household member has a financial
                interest, and particular matters involving specific parties in which
                someone with whom one has a covered relationship is or represents a
                party. Section 2635.502(a)(3) makes clear that employees who are
                concerned about impartiality questions arising from circumstances other
                than the party matters described in the preceding sentence--which could
                include particular matters of general applicability--should utilize the
                process detailed in the regulation, including in paragraph (d), to
                determine whether their participation is appropriate. In 1991, OGE
                addressed this ``catch-all'' provision in the preamble to the proposed
                rulemaking for the Standards, explaining that although the section
                focused on specified relationships and party matters, questions about
                an employee's impartiality could arise from any number of interests or
                relationships they might have, and in connection with their
                participation in matters that do not necessarily involve specific
                parties. 56 FR 33778, 33786 (July 23, 1991). For this reason, Sec.
                2635.502 ``therefore provides that an employee should use the process
                set forth in that section when circumstances other than those
                specifically described raise questions about [their] impartiality in
                the performance of official duties.'' Id. Given this guidance, OGE
                declines to add an example illustrating the specific application of
                Sec. 2635.502 to particular matters of general applicability.
                 For similar reasons, OGE declines to add a very fact-specific
                example suggested by a different individual regarding how previous
                litigation history between an employee and party to a matter might give
                rise to impartiality concerns.
                Employee Work Assignments
                 OGE received two comments from the public expressing concern that
                the new note at Sec. 2635.501 could be viewed as being in conflict
                with, or causing confusion regarding, regulatory language in Sec. Sec.
                2635.105(a) and 2638.602 regarding how supplemental agency ethics
                regulations require OGE's concurrence, with co-signature and
                publication by the agency and OGE. One commenter questioned whether the
                intent of the note was to indicate that agencies have unfettered
                authority to assign work as they see fit, and whether a manager's
                delegation of work based on ethics considerations would be contrary to
                Sec. 2635.105 if not subject to OGE review. The second commenter asked
                OGE to make clear what triggers the requirement to memorialize an
                ethics requirement in a supplemental regulation versus merely issuing
                an agency policy.
                 As discussed in the preamble to the proposed rule, the note is not
                an independent source of authority; it simply reminds agency ethics
                officials that supervisors generally have broad discretion when
                assigning work to employees and that there may be a multitude of
                factors considered by a supervisor in doing so, including appearance or
                impartiality concerns that do not fit squarely within the Standards.
                OGE has no intention to alter the requirements relating to supplemental
                ethics regulations, nor could it do so in this rulemaking, as those
                general requirements are established by Executive order. See E.O.
                12731, sec. 301(a) (Oct. 17, 1990). Agencies wishing to supplement the
                Standards with additional ethics obligations still must follow the
                requirements of Sec. 2635.105, as referenced in Sec. 2638.602, and
                may rely on prior OGE guidance regarding what agency ethics policies
                belong in a supplemental regulation. See, e.g., OGE Legal Advisory LA-
                11-07 (Oct. 31, 2011).
                Covered Relationship Stemming From Certain Familial Relations
                 One individual commenter stated their support for the removal of
                the ``dependent'' qualifier when discussing covered relationships
                relating to certain business activities of children, noting that ``[a]
                non-dependent child is more likely to have relationships that implicate
                impartiality concerns than dependent children, who, being dependents as
                defined at 26 U.S.C. 152 (e.g., minors or students), are relatively
                unlikely to have the sorts of business relationships raising those
                concerns.'' An agency commenter disagreed with OGE's proposal to remove
                the ``dependent'' qualifier, suggesting that the financial co-
                dependence of parents and dependent children is more likely to raise
                concerns regarding impartiality.
                 OGE will adopt as final the change removing the ``dependent''
                qualifier before ``child'' in Sec. 2635.502(b)(1)(iii). This change
                appropriately reflects that there are potential impartiality concerns
                relating to certain business relations of a child regardless of that
                child's dependency, just as long-established language in Sec.
                2635.502(b)(1)(iii) acknowledges impartiality concerns relating to
                certain business relations of a parent, without any dependency
                predicate. The updated language harmonizes the treatment of parents and
                children for purposes of the scope of certain covered relationships
                because both familial relations may raise similar ethics concerns,
                irrespective of any financial connection or perceived financial impact.
                In that regard, OGE notes that nothing in subpart E contemplates that
                there need be a perceived impact on an employee's financial interests
                for there to be concerns about their impartiality, and that many of the
                long-established covered relationships articulated in Sec. 2635.502(b)
                would not seem to involve such a perceived impact. Of course, we note
                that Sec. 2635.502 does not demand a specific outcome regarding
                participation when an appearance concern arises; it merely requires
                that employees engage in the appropriate analysis under this subpart
                before participating. As we stated in the 1992 preamble to the final
                rule for the Standards, ``the importance of relevant facts must be
                emphasized.''
                [[Page 43691]]
                57 FR 35006, 35027 (Aug. 7, 1992). To highlight this point as applied
                to the revised covered relationship provision, OGE is updating new
                example 6 to Sec. 2635.502(b) so that the scenario described involves
                the employment relationship of an adult child. This example now
                illustrates a situation where a covered relationship described in
                paragraph (b)(1)(iii) exists--a covered relationship with the employer
                of an employee's adult child--but the employee could justifiably
                conclude that a reasonable person would not be likely to question their
                impartiality in participating in a party matter involving the child's
                employer.
                Covered Payments and Qualifying Programs
                 OGE received one comment from an agency regarding the proposed
                update to the definition of a ``qualifying program'' at Sec.
                2635.503(b)(2), which requires that the written program ``not treat
                individuals entering Government service more favorably than other
                individuals.'' The commenter noted that this language covers the types
                of commonly written policies that permit for the acceleration of
                benefits or lump sum payouts for individuals entering Government
                service, which can expedite the transition to Government service, and
                expressed concern that this change would cause unnecessary delays and
                conflicts in that transition.
                 OGE notes that the updated language in Sec. 2635.503(b)(2) does
                not affect OGE's position that ``when the ownership of the interest has
                already vested[,] an employee may receive an earlier payment to
                remediate a conflict of interest without running afoul of either 18
                U.S.C. 209 or 5 CFR 2635.503. This is because the employee is entitled
                to receive the payment and only the timing is being altered, not the
                entitlement to the payment itself.'' U.S. Off. of Gov't Ethics,
                Conflicts of Interest Considerations: Corporate Employment 5 (2021),
                https://www.oge.gov/web/OGE.nsf/0/EC83872D932E6DCE852585B6005A1F8C/
                $FILE/Corporate%20Employment.pdf. Accordingly, if an employee receives
                accelerated payment of an already vested equity interest, that payment
                still would not implicate Sec. 2635.503.
                 Regarding the revisions to the definition of ``qualifying
                program,'' which OGE will adopt as proposed, OGE has noted an increase
                in written policies and programs favoring Government employees, which
                OGE did not anticipate when it first promulgated Sec. 2635.503. OGE
                therefore intentionally updated the definition of ``qualifying
                program'' to exclude written plans and programs that provide favorable
                treatment to employees entering Government service, such as accelerated
                vesting of employment-related interests. This approach is consistent
                with how OGE has viewed unwritten practices of treating employees
                entering Government more favorably. Whether made pursuant to a program
                or a practice, a covered payment received from a former employer raises
                ``a legitimate concern, and thus an appearance, that the employee may
                not act impartially in particular matters to which the former employer
                is a party or represents a party.'' 56 FR 33778, 33786 (July 23, 1991).
                OGE does not have any indication that this modernized regulation, which
                is focused on an employee's recusal obligation once serving the
                Government, would cause unnecessary delays and conflicts during the
                transition into Federal service.
                Inclusion of Former Clients in the Former Employer Definition
                 The same agency requested that OGE revise note 1 to paragraph
                (b)(3) in Sec. 2635.503 to ``clarify that former clients are those for
                whom the individual personally provided services, and not all clients
                of a larger firm.'' Note 1 states that the ``former employer''
                definition ``includes former clients for whom an employee may have
                served as an agent, attorney, consultant, or contractor.'' (Emphasis
                added.) OGE believes that the Note is clear on its face that the term
                ``former clients'' refers to those for whom the employee personally
                provided services, and thus will adopt the proposed language without
                amendment.
                F. Seeking Other Employment (Subpart F)
                Subpart F Examples
                 OGE received one comment from an individual requesting an
                additional example in subpart F to clarify whether an employee may rely
                on third-party information to conclude that a prospective employer has
                rejected the possibility of hiring the employee. Specifically, the
                commenter suggested an example where an employee learns from a third
                party that they are no longer under consideration--for example, because
                the position has been filled by someone else. OGE declines to make this
                change for several reasons. First, OGE in 2016 published substantive
                updates to subpart F, which included several new examples to illustrate
                the application of subpart F to modern job searches. This rulemaking is
                only proposing global technical changes throughout subpart F, which is
                consistent with the purpose of the modernization project. Second, OGE
                notes that the legitimacy of the information received from third
                parties is likely to vary significantly on a case-by-case basis. As
                such, an example involving information from a third party would be
                unlikely to provide helpful insight--and worse, could be misconstrued
                to imply that all third-party information can be relied upon in the
                same way. Finally, OGE believes the current structure of subpart F
                provides sufficient guidance to assess scenarios where the employee
                receives credible information that the prospective employer has
                rejected the possibility of employment.
                Seeking Employment Definition
                 This same individual asserted that the definitions in subpart F do
                not take into consideration the possibility that an employee might seek
                employment by posting their interest on social media or meeting with a
                recruiter who will communicate with multiple, potentially unknown,
                companies. OGE disagrees with this commenter. As part of the 2016
                updates to subpart F, OGE modernized the rule and added three new
                examples of seeking employment involving social media. OGE added these
                examples to ``clarify that the rules in this subpart apply regardless
                of the method the employee uses when seeking employment.'' 81 FR 8008,
                8009 (Feb. 17, 2016). As further discussed in the 2016 preamble, the
                examples illustrate that the posting of a profile, resume, or other
                employment information that is not targeted to a specific person is not
                considered an unsolicited communication with an entity regarding
                possible employment; instead such a posting is akin to posting a resume
                on a bulletin board. Moreover, if the employee is using an agent or
                other intermediary when seeking employment, the definition of
                ``prospective employer'' is met only ``if the agent identifies the
                prospective employer to the employee.'' 5 CFR 2635.603(c)(1) and (2)
                and example 2 to paragraph (c) (discussing a scenario involving an
                online resume distribution service that sends resumes to recruiters).
                Accordingly, OGE is declining to make further updates.
                 This individual also suggested that OGE shorten the two-month
                timeframe in Sec. 2635.603(b)(2)(ii), which provides that, in the
                absence of a response from a prospective employer indicating interest,
                an employee is no longer seeking employment--and thus no longer has a
                recusal requirement under subpart F--after two months have elapsed from
                their dispatch of an
                [[Page 43692]]
                unsolicited resume or job proposal. The commenter recommended
                truncating this timeframe given changes in the mechanisms through which
                individuals search for jobs, and potentially quicker responses from
                prospective employers than was the case in years past.
                 The provision about which this commenter is providing input was
                substantively unchanged by the proposed rule, which noted that OGE
                endeavors to make only global technical changes to subpart F that are
                proposed throughout the Standards. OGE does not believe that the two-
                month period prescribed in Sec. 2635.603(b)(2)(ii) is an unreasonably
                excessive period of time in the modern job market. Even with the
                technologies of current day, OGE continues to view two months as a
                realistic period of time within which an individual may expect a
                response to an unsolicited resume or job proposal. Subpart F addresses
                lack of impartiality concerns warranting recusal from particular
                matters affecting the financial interests of a prospective employer
                with whom the employee is seeking employment. In weighing this comment
                against the concerns underpinning subpart F, OGE is not inclined to
                relax the recusal requirement in the manner suggested. Moreover, we
                note, as we did in 1992 when issuing the final rule establishing the
                Standards, ``that the two-month period establishes an outside limit. An
                earlier response from the recipient indicating no interest in pursuing
                the matter further will terminate the employee's disqualification at
                that time.'' 57 FR 35006, 35029 (Aug. 7, 1992). Thus, to the extent
                that the timeframe in ``which an applicant will hear back from a
                prospective employer'' is shorter, as suggested by the commenter, an
                employee who receives a negative response will be relieved of their
                subpart F recusal obligation at that point.
                G. Misuse of Position (Subpart G)
                Letters of Recommendation
                 OGE received multiple comments relating to Sec. 2635.702(b), a
                section in which OGE did not propose any substantive changes. One
                agency commenter recommended that OGE add an additional example to
                Sec. 2635.702(b) to illustrate that an employee may use their official
                title in connection with providing a recommendation for an individual
                with whom they have dealt in the course of Federal employment outside
                of the executive branch--for example, an individual with whom the
                employee worked while assigned to a Congressional office. OGE declines
                to adopt this suggestion, as it considers the language in Sec.
                2635.702(b) to be sufficiently clear in its broad phrasing that an
                employee's official title may be used in connection with a reference
                for an individual with whom the employee has dealt not just in
                connection with executive branch employment, but ``in the course of
                Federal employment.''
                 A different agency requested that the last sentence of Sec.
                2635.702(b) be updated such that employees may recommend individuals
                using their official title not just for Federal employment, but also
                for other opportunities such as Federal internships or educational
                programs. OGE believes that Sec. 2635.702(b) appropriately permits
                recommendations for Federal employment, and declines to expand the
                regulatory language as suggested by the commenter to cover other
                Federally associated opportunities. As a point of clarification,
                however, OGE notes that some internships and positions associated with
                a Federal entity may qualify as ``Federal employment,'' see, e.g., OGE
                Legal Advisory LA-17-09 (Aug. 14, 2017) (discussing different hiring
                authorities for and employment status of student interns), such that it
                would be permissible under Sec. 2635.702(b) for an employee to use
                their official title to recommend an individual for the same.
                 The same agency expressed concern that example 1 to Sec.
                2635.702(b) suggests that ``it is entirely acceptable for an employee
                to recommend a person for Federal employment (including use of the
                employee's title and official letterhead) solely because the person is
                a personal friend.'' As a threshold matter, OGE notes it did not
                propose to substantively update this example in this rulemaking.
                Furthermore, the example is consistent with Sec. 2635.702(b), which
                specifically permits an employee to use their official title to
                recommend individuals for Federal employment, including personal
                friends. As explained in the preamble to the final rule establishing
                the Standards, OGE believes that recommending an individual for Federal
                employment serves an ``official purpose'' that justifies the use of
                official title. See 57 FR 35006, 35031 (Aug. 7, 1992).
                Personal Social Media and Use of Official Photographs
                 As discussed in the proposed rulemaking, OGE is adding a new
                example of an appearance of governmental sanction following Sec.
                2635.702(b), which involves the use of personal social media by an
                Environmental Protection Agency (EPA) employee. The example is
                consistent with OGE's Legal Advisory on personal social media use and
                illustrates the factual determination that agency ethics officials must
                make in evaluating whether a reference to an employee's official title
                or position on social media violates the Standards. See OGE Legal
                Advisory LA-15-03 (Apr. 9, 2015). In particular, the example notes that
                while certain facts alone--such as listing the employee's Government
                title under the ``occupation'' section of their personal social media
                account--would not reasonably be construed as implying governmental
                sanction or endorsement, it would be problematic if the EPA employee
                prominently featured the agency's seal on their social media account
                and made statements asserting or implying that their opinions on
                environmental topics are sanctioned or endorsed by the Government.
                 One agency commenter recommended updating this example to address
                the use of an official Government photograph on personal social media.
                Official photographs, displays including official uniform or insignia,
                and use of agency seals must be consistent with all applicable
                statutes, regulations, and agency policies, including the Standards.
                Employees who choose to display official pictures or include
                photographs of themselves wearing agency uniform or insignia should be
                mindful that doing so can increase the possibility of confusion as to
                whether their social media account and content on that account are
                official or personal; a prominent disclaimer clarifying that all
                content is personal can help obviate such confusion. However, OGE
                declines to update the example to discuss the use of an official
                photograph on a personal social media account. Although the new example
                provides an illustration of how personal social media use might
                implicate ethics rules regarding misuse of position, it is not intended
                to be exhaustive of the myriad ways that employees might engage or post
                on their personal social media accounts. Given the nuance of these
                issues, OGE believes that this topic is best addressed through
                interpretive guidance, and notes that it recently issued a Legal
                Advisory discussing the application of ethics rules to employees'
                activities on personal social media accounts, including the use of
                official photographs. See OGE Legal Advisory LA-23-13, at 2-3 (Sept.
                28, 2023) (discussing the question ``Can I use my official picture or a
                picture of me at a work event as my profile picture [on social
                media]?'').
                [[Page 43693]]
                Acceptable Personal Use of Government Resources
                 As explained in the preamble to the proposed rule, OGE proposed
                replacing example 1 following Sec. 2635.704(b)--which discussed a
                General Services Administration (GSA) regulation that no longer
                exists--with an example that references an agency's de minimis policy
                relating to the personal use of a Government email account. In response
                to this change, one individual commenter requested that OGE provide
                more guidance on acceptable personal use of Government resources, given
                the absence of a GSA regulation and significant technological changes
                in recent years. OGE believes the Standards and examples set forth and
                revised in Sec. 2635.704 are sufficiently clear and can be applied to
                Government property as it continues to evolve with technological
                advances. Furthermore, more specific guidelines about current
                technology than what is already in Sec. 2635.704 and its examples
                would run the risk of quickly becoming outdated. Finally, OGE notes
                that agencies have established more specific policies regarding
                acceptable limited personal use of Government resources by their
                employees, and employees' adherence to these policies would constitute
                an authorized use of Government resources. See OGE Inf. Adv. Op. 97x3
                (Mar. 21, 1997). OGE defers to agencies to interpret such policies and
                to determine whether specific instances of personal use would amount to
                a misuse of Government resources.
                H. Outside Activities (Subpart H)
                Teaching, Speaking, and Writing
                 One individual provided comments regarding OGE's proposed
                ministerial change to Sec. 2635.807(a), which emphasizes the timing
                aspect that an employee ``may not receive compensation from any source
                other than the Government for teaching, speaking, or writing that
                occurs while the person is a Government employee and that relates to
                the employee's official duties.'' (Emphasis added.) The commenter
                incorrectly suggests that the updated language provides for a ``looser
                standard'' than set forth in the original rule; specifically, the
                commenter stated that before this change, Sec. 2635.807 had a
                ``broader application . . . [that] prevents former employees from
                gaining, after the fact from'' their official duties and that the new
                language would ``lessen the broad application and lift the restrictions
                as they would apply to former employees.''
                 As a threshold matter, OGE reiterates that the Standards, including
                subpart H, apply only to current executive branch employees. More
                specifically regarding teaching, speaking, and writing covered by Sec.
                2635.807, OGE has been unequivocal in its guidance that ``ethics rules
                do not restrict receipt of compensation unless the writing occurs
                during Government service.'' OGE DAEOgram DO-08-006, pt. I, at 8 (Mar.
                6, 2008); see also id. (``Section 2635.807 applies to an individual
                while [they] serve[ ] as a Government employee. Therefore, each
                provision contained in section 2635.807 restricts compensation only for
                writing that occurs while an individual is in Government service. If
                the writing is done either before or after Government service, none of
                these provisions will apply.''). Accordingly, OGE declines the
                commenter's suggestion that Sec. 2635.807(a) be phrased disjunctively,
                such that compensation for teaching, speaking, or writing would be
                restricted if the writing occurs while the person is a Government
                employee or if the writing relates to an employee's official duties.
                 One agency commenter characterized Sec. 2635.807 as addressing
                teaching, speaking, or writing ``on `official time' and on personal
                time,'' and suggested that the section be divided into off-duty and
                official duty paragraphs ``rather than housing it all under Outside
                Activities.'' OGE disagrees with the commenter's characterization. As
                noted in Sec. 2635.801(a), subpart H ``contains provisions relating to
                outside employment, [and] outside activities''; Sec. 2635.807
                addresses teaching, speaking, and writing that an employee does as
                outside employment or an outside activity, and is not intended to
                address official duty teaching, speaking, or writing. To the extent
                that this section refers to official capacity teaching, speaking, and
                writing, it does so for limited purposes. First, it refers to official
                capacity activities in certain examples to distinguish between the
                scenarios where the requirements of Sec. 2635.807 do and do not apply.
                See, e.g., Sec. 2635.807(a)(2)(iii), example 4 (describing a scenario
                where payments are not prohibited under the rule restricting
                compensation for speaking relating to official duties because the
                employee is speaking officially); see also Sec. 2635.807(b), example 1
                (noting that the restrictions on reference to official position would
                not apply to an employee who is authorized to speak in their official
                capacity). Second, it notes that ``[t]eaching, speaking, or writing
                relates to the employee's official duties''--and thus is covered by
                Sec. 2635.807(a)--if ``[t]he activity is undertaken as part of the
                employee's official duties.'' This language simply ``incorporates the .
                . . prohibition on supplementation of salary contained in 18 U.S.C.
                209,'' DO-08-006, pt. I, at 19 n.18, and is not intended to provide any
                specific guidance regarding official duty speaking. For these reasons,
                OGE declines the commenter's suggested reorganization.
                 The same commenter asked OGE to address various scenarios relating
                to the extent to which an employee could choose or refuse who they
                present agency information to as part of an outside activity if the
                presentation otherwise meets the requirements of Sec. 2635.807(a). The
                scenarios posed by the commenter are very fact-specific, and
                unfortunately it is not feasible for OGE to include exhaustive examples
                in the regulation discussing the application of Sec. 2635.807 and
                other ethics rules. OGE notes, however, that even if Sec. 2635.807
                would not restrict an employee's teaching, speaking, or writing, the
                employee may not conduct the activity in a way that violates other
                ethics requirements. See, e.g., OGE Inf. Adv. Op. 94x1 (Jan. 10, 1994)
                (``If an employee does not receive any compensation for [their]
                participation in the conference, the speech will not be prohibited by
                section 2635.807. In such an instance, the primary consideration the
                employee should keep in mind is [their] responsibility not to misuse
                [their] position, title, Government property, or nonpublic
                information.'').
                 Finally, OGE declines this commenter's suggestion to impose a
                disclaimer requirement for official teaching, speaking, or writing. To
                the extent that agencies authorize or require the use of disclaimers in
                official speeches to make clear that the speaker is sharing their
                personal views rather than the views of the agency, OGE defers to
                agencies on whether the use of such a disclaimer is appropriate.
                 A different agency expressed concern regarding a minor update OGE
                proposed to make to the existing note to 5 CFR 2635.807(a)(2)(iii).
                Specifically, OGE proposed to delete the reference to 18 U.S.C. 209 in
                the reminder that other authorities in some circumstances may limit or
                preclude an employee's acceptance of travel expenses. OGE's intention
                in deleting the reference was not to make a substantive change but
                rather ``to avoid unnecessary focus on a single statute to the
                potential exclusion of other applicable authorities.'' 88 FR 10774,
                10780 (Feb. 21, 2023). The commenter requested that OGE keep the
                reference to 18 U.S.C. 209 because ``[i]t is helpful to employees and
                legal practitioners to be reminded in this
                [[Page 43694]]
                context that a criminal statute in particular may be triggered.''
                 Based on this feedback, OGE will add back in the reference to 18
                U.S.C. 209 in the referenced note. However, OGE reiterates that other
                authorities may limit or preclude an employee's acceptance of travel
                expenses, so to emphasize that section 209 is one of several
                potentially applicable authorities, OGE has updated the phrase to read
                ``other authorities, including but not limited to 18 U.S.C. 209.''
                 One agency commenter asked that OGE add new language to Sec.
                2635.807(b) permitting ethics officials to apply a fact-based,
                ``totality of circumstances'' test to determine whether an employee
                serving as faculty at Federal universities and schools may include
                their title or position in connection with outside academic or
                scientific editorial board service, and for listings of professional
                society committee membership. The commenter's request for a ``totality
                of circumstances'' test appears to be based on the commenter's
                assertion that, in the context of Federal employees serving as faculty
                at Federal universities and schools, disclaimers and biographical
                sketches required for teaching, speaking, and writing activities under
                Sec. 2635.807(b) ``are not commonly used by publishers'' and
                professional societies.
                 As OGE has previously explained, ``[t]he foundation in the
                Standards underlying the limitations on use of official title is 5 CFR
                2635.702(b), which provides `an employee shall not use or permit the
                use of [their] Government position or title or any authority associated
                with [their] public office in a manner that could reasonably be
                construed to imply that [their] agency or the [G]overnment sanctions or
                endorses [their] personal activities or those of another.''' OGE Inf.
                Adv. Op. 10x1, at 1 (Mar. 19, 2010). Employees engaged in outside
                teaching, speaking, and writing must also meet the use of title
                requirements of Sec. 2635.807(b). OGE has advised that ``[t]he purpose
                of section 807(b)(1) and (b)(2), in conjunction with section 702(b), is
                to ensure that public is not misled as to whether the views expressed
                by an Executive Branch employee in uncompensated teaching, writing, or
                speaking are those of the employee or those of the Government.'' Id. at
                2.
                 OGE believes that the guidance it has previously issued regarding
                use of title in outside activities sufficiently addresses the
                commenter's practical concerns. See, e.g., id. (emphasizing the
                importance of an employee providing relevant biographical details other
                than official title and position in connection with teaching, speaking,
                and writing, as required by Sec. 2635.807(b)(1), and discussing how to
                evaluate whether an employee has complied in good faith with this
                provision); see also OGE Legal Advisory LA-14-08, at 2 (Nov. 19, 2014)
                (stressing the importance of considering the totality of circumstances
                in connection with use of title in other outside activities, such as
                involvement with a professional society, to determine whether a
                reasonable person could construe the reference to imply sanction or
                endorsement of the organization or the employee's personal activities).
                Because OGE believes that subparts G and H and the further guidance on
                those provisions provide appropriate flexibility regarding use of title
                and sufficiently address the commenter's concerns, OGE declines to make
                the commenter's recommended change.
                Fundraising
                 The same agency recommended that OGE amend the definition of
                ``participation in the conduct of an event'' at Sec. 2635.808(a)(2) to
                clarify that the term includes presenting awards and being present on
                stage during the presentation of awards. OGE declines to adopt these
                changes given that the list of examples to which the commenter suggests
                adding is not intended to be exhaustive. Additionally, it is OGE's
                belief that the current language provides sufficient guidance for
                practical application of the regulation by ethics officials and
                employees, without being unnecessarily proscriptive regarding the
                necessarily fact-specific application of this provision.
                 The same agency also requested certain clarifications in the new
                social media examples added to Sec. 2635.808(c) relating to
                fundraising in a personal capacity. In particular, the commenter
                suggested updating example 5 to note that the employee's ``personal
                solicitation'' could be sent by either official or personal email, and
                suggested updating example 6 to note that ``any person'' includes
                subordinates. OGE believes that the cited examples are appropriately
                specific, and therefore declines to incorporate these changes.
                Specifically, the general reference to an email transmission in example
                5 does not suggest that such a transmission need be sent by either a
                personal or an official email to be problematic. Similarly, the
                reference to ``any person'' in example 6 is appropriately broad such
                that it could include a subordinate.
                I. Other
                Incorporation of Obligations From Ethics Pledges
                 One individual commenter recommended that OGE implement certain
                core provisions of recent Presidential ethics pledges that impose
                additional obligations on certain noncareer employees. See, e.g., E.O.
                13490 (Jan. 21, 2009); E.O. 13770 (Jan. 28, 2017); E.O. 13989 (Jan. 20,
                2021). OGE declines to make such a change, which is outside the scope
                of the modernization updates contemplated by this rulemaking, and about
                which public input was requested. OGE further notes that it is the
                prerogative of each Presidential administration to determine what, if
                any, additional ethics obligations it wishes to impose on its
                appointees, and that it would not be appropriate for OGE to implement
                such obligations in a regulation that by design is intended to extend
                across multiple administrations.
                Subpart J
                 As discussed above, OGE recently engaged in a separate rulemaking
                process that culminated in the addition of subpart J to the Standards.
                This rulemaking makes no changes to subpart J, and revises and
                republishes only subparts A through I of the Standards.
                III. Matters of Regulatory Procedure
                Regulatory Flexibility Act
                 As Acting Director of the Office of Government Ethics, I certify
                under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this
                final rule will not have a significant economic impact on a substantial
                number of small entities because it primarily affects current Federal
                executive branch employees.
                Paperwork Reduction Act
                 The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
                because this regulation does not contain information collection
                requirements that require approval of the Office of Management and
                Budget.
                Unfunded Mandates Reform Act
                 For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
                chapter 25, subchapter II), this final rule will not significantly or
                uniquely affect small governments and will not result in increased
                expenditures by State, local, and Tribal governments, in the aggregate,
                or by the private sector, of $100 million or more (as adjusted for
                inflation) in any one year.
                [[Page 43695]]
                Executive Orders 12866, 13563, and 14094
                 In promulgating this rule, the Office of Government Ethics has
                adhered to the regulatory philosophy and the applicable principles of
                regulation set forth in Executive Order 12866, Regulatory Planning and
                Review (58 FR 51735, Oct. 4, 1993); Executive Order 13563, Improving
                Regulation and Regulatory Review (76 FR 3821, Jan. 21, 2011); and
                Executive Order 14094, Modernizing Regulatory Review (88 FR 21879, Apr.
                11, 2023). Executive Orders 13563 and 12866 direct agencies to assess
                all costs and benefits of available regulatory alternatives and, if
                regulation is necessary, to select the regulatory approaches that
                maximize net benefits (including economic, environmental, public health
                and safety effects, distributive impacts, and equity). Executive Order
                13563 emphasizes the importance of quantifying both costs and benefits,
                of reducing costs, of harmonizing rules, and of promoting flexibility.
                 Although the number of substantive changes to the regulation is not
                extensive, the benefits of implementing these changes are significant.
                The existing regulation is not insufficient, but it has not been
                significantly updated since its issuance in 1992. OGE's revisions
                address common questions received from ethics officials, incorporate
                OGE's experience gained from applying the regulation since its
                inception, modernize existing examples and add new examples for more
                useful reference, provide updated citations where regulatory provisions
                or statutes have changed, and make technical corrections. These
                revisions will provide greater clarity for executive branch employees
                and ethics officials. Further, OGE anticipates that this additional
                clarity will increase compliance and reduce the number of inadvertent
                violations.
                 OGE does not anticipate any significant increased costs associated
                with these changes. However, OGE notes that there may be an increase in
                the time burden during the first year in which the regulatory updates
                become effective, particularly for ethics officials, due to necessary
                updates to training materials and other related ethics briefings,
                questions regarding the interpretation of revised regulatory
                provisions, and review of additional OGE guidance.
                 This rule has been designated as a ``significant regulatory
                action'' under Executive Order 12866, although not significant under
                section 3(f)(1) of Executive Order 12866. Accordingly, this rule has
                been reviewed by the Office of Management and Budget.
                Executive Order 12988
                 As Acting Director of the Office of Government Ethics, I have
                reviewed this rule in light of section 3 of Executive Order 12988,
                Civil Justice Reform, and certify that it meets the applicable
                standards provided therein.
                Executive Order 13175
                 The Office of Government Ethics has evaluated this final rule under
                the criteria set forth in Executive Order 13175 and determined that
                Tribal consultation is not required as this final rule has no
                substantial direct effect on one or more Indian tribes, on the
                relationship between the Federal Government and Indian tribes, or on
                the distribution of power and responsibilities between the Federal
                Government and Indian tribes.
                List of Subjects in 5 CFR Part 2635
                 Conflict of interests, Executive branch standards of ethical
                conduct, Government employees.
                 Approved: May 8, 2024
                Shelley K. Finlayson,
                Acting Director, U.S. Office of Government Ethics.
                 For the reasons set forth in the preamble, the U.S. Office of
                Government Ethics amends 5 CFR part 2635 as follows:
                PART 2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE
                EXECUTIVE BRANCH
                0
                1. The authority citation for part 2635 is revised to read as follows:
                 Authority: 5 U.S.C. 7301, 7351, 7353; 5 U.S.C. ch. 131; 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.
                0
                2. Revise and republish subparts A through I to read as follows:
                Subpart A--General Provisions
                Sec.
                2635.101 Basic obligation of public service.
                2635.102 Definitions.
                2635.103 Applicability to enlisted members of the uniformed
                services.
                2635.104 Applicability to employees on detail.
                2635.105 Supplemental agency regulations.
                2635.106 Disciplinary and corrective action.
                2635.107 Ethics advice.
                Subpart B--Gifts From Outside Sources
                2635.201 Overview and considerations for declining otherwise
                permissible gifts.
                2635.202 General prohibition on solicitation or acceptance of gifts.
                2635.203 Definitions.
                2635.204 Exceptions to the prohibition for acceptance of certain
                gifts.
                2635.205 Limitations on use of exceptions.
                2635.206 Proper disposition of prohibited gifts.
                Subpart C--Gifts Between Employees
                2635.301 Overview.
                2635.302 General standards.
                2635.303 Definitions.
                2635.304 Exceptions.
                2635.305 Disposition of prohibited gifts.
                Subpart D--Conflicting Financial Interests
                2635.401 Overview.
                2635.402 Disqualifying financial interests.
                2635.403 Prohibited financial interests.
                Subpart E--Impartiality in Performing Official Duties
                2635.501 Overview.
                2635.502 Personal and business relationships.
                2635.503 Covered payments from former employers.
                Subpart F--Seeking Other Employment
                2635.601 Overview.
                2635.602 Applicability and related considerations.
                2635.603 Definitions.
                2635.604 Recusal while seeking employment.
                2635.605 Waiver or authorization permitting participation while
                seeking employment.
                2635.606 Recusal based on an arrangement concerning prospective
                employment or otherwise after negotiations.
                2635.607 Notification requirements for public financial disclosure
                report filers regarding negotiations for or agreement of future
                employment or compensation.
                Subpart G--Misuse of Position
                2635.701 Overview.
                2635.702 Use of public office for private gain.
                2635.703 Use of nonpublic information.
                2635.704 Use of Government property.
                2635.705 Use of official time.
                Subpart H--Outside Activities
                2635.801 Overview.
                2635.802 Conflicting outside employment and activities.
                2635.803 Prior approval for outside employment and activities.
                2635.804 Outside earned income limitations applicable to certain
                Presidential appointees.
                2635.805 Service as an expert witness.
                2635.806 [Reserved]
                2635.807 Teaching, speaking, and writing.
                2635.808 Fundraising activities.
                2635.809 Just financial obligations.
                Subpart I--Related Statutory Authorities
                2635.901 General.
                2635.902 Related statutes.
                [[Page 43696]]
                Subpart A--General Provisions
                Sec. 2635.101 Basic obligation of public service.
                 (a) Public service is a public trust. Each employee has a
                responsibility to the United States Government and its citizens to
                place loyalty to the Constitution, laws, and ethical principles above
                private gain. To ensure that every citizen can have complete confidence
                in the integrity of the Federal Government, each employee must respect
                and adhere to the principles of ethical conduct set forth in this
                section, as well as the implementing standards contained in this part
                and in supplemental agency regulations.
                 (b) General principles. The following general principles apply to
                every employee and may form the basis for the standards contained in
                this part. When a situation is not covered by the standards set forth
                in this part, employees must apply the principles set forth in this
                section in determining whether their conduct is proper.
                 (1) Public service is a public trust, requiring employees to place
                loyalty to the Constitution, the laws, and ethical principles above
                private gain.
                 (2) Employees shall not hold financial interests that conflict with
                the conscientious performance of duty.
                 (3) Employees shall not engage in financial transactions using
                nonpublic Government information or allow the improper use of such
                information to further any private interest.
                 (4) An employee shall not, except as permitted by subpart B of this
                part, solicit or accept any gift or other item of monetary value from
                any person or entity seeking official action from, doing business with,
                or conducting activities regulated by the employee's agency, or whose
                interests may be substantially affected by the performance or
                nonperformance of the employee's duties.
                 (5) Employees shall put forth honest effort in the performance of
                their duties.
                 (6) Employees shall not knowingly make unauthorized commitments or
                promises of any kind purporting to bind the Government.
                 (7) Employees shall not use public office for private gain.
                 (8) Employees shall act impartially and not give preferential
                treatment to any private organization or individual.
                 (9) Employees shall protect and conserve Federal property and shall
                not use it for other than authorized activities.
                 (10) Employees shall not engage in outside employment or
                activities, including seeking or negotiating for employment, that
                conflict with official Government duties and responsibilities.
                 (11) Employees shall disclose waste, fraud, abuse, and corruption
                to appropriate authorities.
                 (12) Employees shall satisfy in good faith their obligations as
                citizens, including all just financial obligations, especially those--
                such as Federal, State, or local taxes--that are imposed by law.
                 (13) Employees shall adhere to all laws and regulations that
                provide equal opportunity for all Americans regardless of, for example,
                race, color, religion, sex (including pregnancy, gender identity, and
                sexual orientation), national origin, age, genetic information, or
                disability.
                 (14) Employees shall endeavor to avoid any actions creating the
                appearance that they are violating the law or the ethical standards set
                forth in this part. Whether particular circumstances create an
                appearance that the law or these standards have been violated shall be
                determined from the perspective of a reasonable person with knowledge
                of the relevant facts.
                 (c) Related statutes. In addition to the standards of ethical
                conduct set forth in this part, there are conflict of interest statutes
                that prohibit certain conduct. Criminal conflict of interest statutes
                of general applicability to all employees, 18 U.S.C. 201, 203, 205,
                208, and 209, are summarized in the appropriate subparts of this part
                and must be taken into consideration in determining whether conduct is
                proper. Citations to other generally applicable statutes relating to
                employee conduct are set forth in subpart I of this part, and employees
                are further cautioned that there may be additional statutory and
                regulatory restrictions applicable to them generally or as employees of
                their specific agencies. Because an employee is considered to be on
                notice of the requirements of any statute, an employee should not rely
                upon any description or synopsis of a statutory restriction, but should
                refer to the statute itself and obtain the advice of an agency ethics
                official as needed.
                Sec. 2635.102 Definitions.
                 The definitions listed in this section are used throughout this
                part. Additional definitions appear in the subparts or sections of
                subparts to which they apply. For purposes of this part:
                 (a) Agency means an executive agency as defined in 5 U.S.C. 105 and
                the Postal Service and the Postal Regulatory Commission. It does not
                include the Government Accountability Office or the government of the
                District of Columbia.
                 (b) Agency designee refers to any employee who, by agency
                regulation, instruction, or other issuance, has been delegated
                authority to make any determination, give any approval, or take any
                other action required or permitted by this part with respect to another
                employee. An agency may delegate these authorities to any number of
                agency designees necessary to ensure that determinations are made,
                approvals are given, and other actions are taken in a timely and
                responsible manner. Any provision that requires a determination,
                approval, or other action by the agency designee will, when the conduct
                in issue is that of the head of the agency, be deemed to require that
                such determination, approval, or action be made or taken by the head of
                the agency in consultation with the designated agency ethics official.
                 (c) Agency ethics official refers to the designated agency ethics
                official, the alternate designated agency ethics official, any deputy
                ethics official, and any additional ethics official who has been
                delegated authority to assist in carrying out the responsibilities of
                an agency's ethics program. The responsibilities of agency ethics
                officials are described in Sec. 2638.104 of this chapter.
                 (d) Agency programs or operations refers to any program or function
                carried out or performed by an agency, whether pursuant to statute,
                Executive order, or regulation.
                 (e) Corrective action includes any action necessary to remedy a
                past violation or prevent a continuing violation of this part,
                including but not limited to restitution, change of assignment,
                recusal, divestiture, termination of an activity, waiver, the creation
                of a qualified diversified or blind trust, or counseling.
                 (f) Designated agency ethics official refers to the official
                designated under Sec. 2638.104(a) of this chapter.
                 (g) Disciplinary action includes those disciplinary actions
                referred to in Office of Personnel Management regulations at 5 CFR
                chapter I and instructions implementing provisions of title 5 of the
                United States Code or provided for in comparable provisions applicable
                to employees not subject to title 5, including but not limited to
                reprimand, suspension, demotion, and removal. In the case of a military
                officer, comparable provisions may include those in the Uniform Code of
                Military Justice.
                 (h) Employee means any officer or employee of an agency, including
                a special Government employee. It includes officers but not enlisted
                members of the uniformed services. It includes employees of a State or
                local
                [[Page 43697]]
                government or other organization who are serving on detail to an
                agency, pursuant to 5 U.S.C. 3371, et seq. For purposes other than
                subparts B and C of this part, it does not include the President or
                Vice President. Status as an employee is unaffected by pay or leave
                status or, in the case of a special Government employee, by the fact
                that the individual does not perform official duties on a given day.
                 (i) Head of an agency means, in the case of an agency headed by
                more than one person, the chair or comparable member of such agency.
                 (j) Person means an individual, corporation and subsidiaries it
                controls, company, association, firm, partnership, society, joint stock
                company, or any other organization or institution, including any
                officer, employee, or agent of such person or entity. For purposes of
                this part, a corporation will be deemed to control a subsidiary if it
                owns 50 percent or more of the subsidiary's voting securities. The term
                is all-inclusive and applies to commercial ventures and nonprofit
                organizations as well as to foreign, State, and local governments,
                including the government of the District of Columbia. It does not
                include any agency or other entity of the Federal Government or any
                officer or employee thereof when acting in an official capacity on
                behalf of that agency or entity.
                 (k) Special Government employee means those executive branch
                officers or employees specified in 18 U.S.C. 202(a). A special
                Government employee is retained, designated, appointed, or employed to
                perform temporary duties either on a full-time or intermittent basis,
                with or without compensation, for a period not to exceed 130 days
                during any consecutive 365-day period.
                 (l) Supplemental agency regulation means a regulation issued
                pursuant to Sec. 2635.105.
                Sec. 2635.103 Applicability to enlisted members of the uniformed
                services.
                 The provisions of this part are not applicable to enlisted members
                of the uniformed services. However, each agency with jurisdiction over
                enlisted members of the uniformed services may issue regulations
                defining the ethical conduct obligations of enlisted members under its
                jurisdiction. Such regulations or policies, if issued, should be
                consistent with Executive Order 12674, April 12, 1989, as modified, and
                may prescribe the full range of statutory and regulatory sanctions,
                including those available under the Uniform Code of Military Justice,
                for failure to comply with such regulations.
                Sec. 2635.104 Applicability to employees on detail.
                 (a) Details to other agencies. Except as provided in paragraph (d)
                of this section, employees on detail, including uniformed officers on
                assignment, from their employing agencies to another agency for a
                period in excess of 30 calendar days will be subject to any
                supplemental agency regulations of the agency to which they are
                detailed rather than to any supplemental agency regulations of their
                employing agencies.
                 (b) Details to the legislative or judicial branch. Employees on
                detail, including uniformed officers on assignment, from their
                employing agencies to the legislative or judicial branch for a period
                in excess of 30 calendar days will be subject to the ethical standards
                of the branch or entity to which detailed. For the duration of any such
                detail or assignment, employees will not be subject to the provisions
                of this part, except this section, or, except as provided in paragraph
                (d) of this section, to any supplemental agency regulations of their
                employing agencies, but will remain subject to the conflict of interest
                prohibitions in title 18 of the United States Code.
                 (c) Details to non-Federal entities. Except to the extent exempted
                in writing pursuant to this paragraph (c), an employee detailed to a
                non-Federal entity remains subject to this part and to any supplemental
                agency regulation of their employing agency. When an employee is
                detailed pursuant to statutory authority to an international
                organization or to a State or local government for a period in excess
                of six months, the designated agency ethics official may grant a
                written exemption from subpart B of this part based on their
                determination that the entity has adopted written ethical standards
                covering solicitation and acceptance of gifts which will apply to the
                employee during the detail and which will be appropriate given the
                purpose of the detail.
                 (d) Applicability of special agency statutes. Notwithstanding
                paragraphs (a) and (b) of this section, employees who are subject to an
                agency statute which restricts their activities or financial holdings
                specifically because of their status as an employee of that agency will
                continue to be subject to any provisions in the supplemental agency
                regulations of the employing agency that implement that statute.
                Sec. 2635.105 Supplemental agency regulations.
                 In addition to the regulations set forth in this part, employees
                must comply with any supplemental agency regulations issued by their
                employing agencies under this section.
                 (a) An agency that wishes to supplement this part must prepare and
                submit to the Office of Government Ethics, for its concurrence and
                joint issuance, any agency regulations that supplement the regulations
                contained in this part. Supplemental agency regulations which the
                agency determines are necessary and appropriate, in view of its
                programs and operations, to fulfill the purposes of this part must be:
                 (1) In the form of a supplement to the regulations in this part;
                and
                 (2) In addition to the substantive provisions of this part.
                 (b) After concurrence and co-signature by the Office of Government
                Ethics, the agency must submit its supplemental agency regulations to
                the Federal Register for publication and codification at the expense of
                the agency in this title. Supplemental agency regulations issued under
                this section are effective only after concurrence and co-signature by
                the Office of Government Ethics and publication in the Federal
                Register.
                 (c) This section applies to any supplemental agency regulations or
                amendments thereof issued under this part. It does not apply to:
                 (1) A handbook or other issuance intended merely as an explanation
                of the standards contained in this part or in supplemental agency
                regulations;
                 (2) An instruction or other issuance the purpose of which is to:
                 (i) Delegate to an agency designee authority to make any
                determination, give any approval or take any other action required or
                permitted by this part or by supplemental agency regulations; or
                 (ii) Establish internal agency procedures for documenting or
                processing any determination, approval or other action required or
                permitted by this part or by supplemental agency regulations, or for
                retaining any such documentation; or
                 (3) Regulations or instructions that an agency has authority,
                independent of this part, to issue, such as regulations implementing an
                agency's gift acceptance statute, protecting categories of nonpublic
                information, or establishing standards for use of Government vehicles.
                 (d) Employees of a State or local government or other organization
                who are serving on detail to an agency, pursuant to 5 U.S.C. 3371, et
                seq., are subject to any requirements, in addition to those in this
                part, established by a supplemental agency regulation issued under this
                section to the extent that such regulation expressly provides.
                [[Page 43698]]
                Sec. 2635.106 Disciplinary and corrective action.
                 (a) Except as provided in Sec. 2635.107, a violation of this part
                or of supplemental agency regulations may be cause for appropriate
                corrective or disciplinary action to be taken under applicable
                Governmentwide regulations or agency procedures. Such action may be in
                addition to any action or penalty prescribed by law.
                 (b) It is the responsibility of the employing agency to initiate
                appropriate disciplinary or corrective action in individual cases.
                However, corrective action may be ordered or disciplinary action
                recommended by the Director of the Office of Government Ethics under
                the procedures at part 2638 of this chapter.
                 (c) A violation of this part or of supplemental agency regulations,
                as such, does not create any right or benefit, substantive or
                procedural, enforceable at law by any person against the United States,
                its agencies, its officers or employees, or any other person. Thus, for
                example, an individual who alleges that an employee has failed to
                adhere to laws and regulations that provide equal opportunity
                regardless of race, color, religion, sex (including pregnancy, gender
                identity, and sexual orientation), national origin, age, genetic
                information, or disability is required to follow applicable statutory
                and regulatory procedures, including those of the Equal Employment
                Opportunity Commission.
                Sec. 2635.107 Ethics advice.
                 (a) As required by Sec. 2638.104(a) and (d) of this chapter, each
                agency has a designated agency ethics official and an alternate
                designated agency ethics official; these are the employees who have the
                primary responsibility for directing the daily activities of an
                agency's ethics program. Acting directly or through other officials,
                the designated agency ethics official is responsible for providing
                ethics advice and counseling regarding the application of this part.
                 (b) Employees who have questions about the application of this part
                or any supplemental agency regulations to particular situations should
                seek advice from an agency ethics official. Disciplinary action for
                violating this part or any supplemental agency regulations will not be
                taken against an employee who has engaged in conduct in good faith
                reliance upon the advice of an agency ethics official, provided that
                the employee, in seeking such advice, has made full disclosure of all
                relevant circumstances. When the employee's conduct violates a criminal
                statute, reliance on the advice of an agency ethics official cannot
                ensure that the employee will not be prosecuted under that statute.
                However, good faith reliance on the advice of an agency ethics official
                is a factor that may be taken into account by the Department of Justice
                in the selection of cases for prosecution. Disclosures made by an
                employee to an agency ethics official are not protected by an attorney-
                client privilege. Agency ethics officials are required by 28 U.S.C. 535
                to report any information they receive relating to a violation of the
                criminal code, title 18 of the United States Code.
                Subpart B--Gifts From Outside Sources
                Sec. 2635.201 Overview and considerations for declining otherwise
                permissible gifts.
                 (a) Overview. This subpart contains standards that prohibit an
                employee from soliciting or accepting any gift from a prohibited source
                or any gift given because of the employee's official position, unless
                the item is excluded from the definition of a gift (see Sec.
                2635.203(b)) or falls within one of the exceptions set forth in this
                subpart.
                 (b) Considerations for declining otherwise permissible gifts. (1)
                Every employee has a fundamental responsibility to the United States
                and its citizens to place loyalty to the Constitution, laws, and
                ethical principles above private gain. An employee's actions should
                promote the public's trust that this responsibility is being met. For
                this reason, employees should consider declining otherwise permissible
                gifts if they believe that a reasonable person with knowledge of the
                relevant facts would question the employee's integrity or impartiality
                as a result of accepting the gift.
                 (2) Employees who are considering whether acceptance of a gift
                would lead a reasonable person with knowledge of the relevant facts to
                question their integrity or impartiality may consider, among other
                relevant factors, whether:
                 (i) The gift has a high market value;
                 (ii) The timing of the gift creates the appearance that the donor
                is seeking to influence an official action;
                 (iii) The gift was provided by a person who has interests that may
                be substantially affected by the performance or nonperformance of the
                employee's official duties; and
                 (iv) Acceptance of the gift would provide the donor with
                significantly disproportionate access.
                 (3) Notwithstanding paragraph (b)(1) of this section, an employee
                who accepts a gift that qualifies for an exception under Sec. 2635.204
                does not violate this subpart or the Principles of Ethical Conduct set
                forth in Sec. 2635.101(b).
                 (4) Employees who have questions regarding this subpart, including
                whether the employee should decline a gift that would otherwise be
                permitted under an exception found in Sec. 2635.204, should seek
                advice from an agency ethics official.
                 Example 1 to paragraph (b): An employee of the Peace Corps is in
                charge of making routine purchases of office supplies. After a
                promotional presentation to highlight several new products, a vendor
                offers to buy the employee lunch, which costs less than $20. The
                employee is concerned that a reasonable person may question their
                impartiality by accepting the free lunch, as the timing of the offer
                indicates that the donor may be seeking to influence an official action
                and the company has interests that may be substantially affected by the
                performance or nonperformance of the employee's duties. The employee
                concludes that appearance considerations weigh against accepting the
                gift.
                Sec. 2635.202 General prohibition on solicitation or acceptance of
                gifts.
                 (a) Prohibition on soliciting gifts. Except as provided in this
                subpart, an employee may not, directly or indirectly:
                 (1) Solicit a gift from a prohibited source; or
                 (2) Solicit a gift to be given because of the employee's official
                position.
                 (b) Prohibition on accepting gifts. Except as provided in this
                subpart, an employee may not, directly or indirectly:
                 (1) Accept a gift from a prohibited source; or
                 (2) Accept a gift given because of the employee's official
                position.
                 (c) Relationship to illegal gratuities statute. A gift accepted
                pursuant to an exception found in this subpart will not constitute an
                illegal gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B), unless
                it is accepted in return for being influenced in the performance of an
                official act. As more fully described in Sec. 2635.205(d)(1), an
                employee may not solicit or accept a gift if to do so would be
                prohibited by the Federal bribery statute, 18 U.S.C. 201(b).
                 Example 1 to paragraph (c): A Government contractor who specializes
                in information technology software has offered an employee of the
                Department of Energy's information technology acquisition division a
                $15 gift card to a local restaurant if the employee will recommend to
                the agency's contracting officer that the agency select the
                contractor's products during the next
                [[Page 43699]]
                acquisition. Even though the gift card is less than $20, the employee
                may not accept the gift under Sec. 2635.204(a) because it is
                conditional upon official action by the employee. Pursuant to this
                paragraph (c) and Sec. 2635.205(a), notwithstanding any exception to
                the rules in this part, an employee may not accept a gift in return for
                being influenced in the performance of an official act.
                Sec. 2635.203 Definitions.
                 For purposes of this subpart, the following definitions apply:
                 (a) Agency has the meaning set forth in Sec. 2635.102(a). However,
                for purposes of this subpart, an executive department, as defined in 5
                U.S.C. 101, may, by supplemental agency regulation, designate as a
                separate agency any component of that department which the department
                determines exercises distinct and separate functions.
                 (b) Gift includes any gratuity, favor, discount, entertainment,
                hospitality, loan, forbearance, or other item having monetary value. It
                includes services as well as gifts of training, transportation, local
                travel, lodgings, and meals, whether provided in-kind, by purchase of a
                ticket, payment in advance, or reimbursement after the expense has been
                incurred. The term excludes the following:
                 (1) Modest items of food and non-alcoholic refreshments, such as
                soft drinks, coffee, and donuts, offered other than as part of a meal;
                 (2) Greeting cards and items with little intrinsic value, such as
                plaques, certificates, and trophies, which are intended primarily for
                presentation;
                 Example 1 to paragraph (b)(2): After giving a speech at the
                facility of a pharmaceutical company, a Government employee is
                presented with a glass paperweight in the shape of a pill capsule with
                the name of the company's latest drug and the date of the speech
                imprinted on the side. The employee may accept the paperweight because
                it is an item with little intrinsic value which is intended primarily
                for presentation.
                 Example 2 to paragraph (b)(2): After participating in a panel
                discussion hosted by an international media company, a Government
                employee is presented with an inexpensive portable music player
                emblazoned with the media company's logo. The portable music player has
                a market value of $25. The employee may not accept the portable music
                player as it has a significant independent use as a music player rather
                than being intended primarily for presentation.
                 Example 3 to paragraph (b)(2): After giving a speech at a
                conference held by a national association of miners, a Department of
                Commerce employee is presented with a block of granite that is engraved
                with the association's logo, a picture of the Appalachian Mountains,
                the date of the speech, and the employee's name. The employee may
                accept this item because it is similar to a plaque, is designed
                primarily for presentation, and has little intrinsic value.
                 (3) Loans from banks and other financial institutions on terms
                generally available to the public;
                 (4) Opportunities and benefits, including favorable rates,
                commercial discounts, and free attendance or participation available to
                the public or to a class consisting of all Government employees or all
                uniformed military personnel, whether or not restricted on the basis of
                geographic considerations;
                 (5) Rewards and prizes given to competitors in contests or events,
                including random drawings, open to the public unless the employee's
                entry into the contest or event is required as part of the employee's
                official duties;
                 Example 1 to paragraph (b)(5): A Government employee is attending a
                free trade show on official time. The trade show is held in a public
                shopping area adjacent to the employee's office building. The employee
                voluntarily enters a drawing at an individual vendor's booth, which is
                open to the public, by filling in an entry form on the vendor's display
                table and dropping it into the contest box. The employee may accept the
                resulting prize because entry into the contest was not required by or
                related to their official duties.
                 Example 2 to paragraph (b)(5): Attendees at a conference, which is
                not open to the public, are entered in a drawing for a weekend getaway
                to Bermuda as a result of being registered for the conference. A
                Government employee who attends the conference in an official capacity
                could not accept the prize under paragraph (b)(5) of this section, as
                the event is not open to the public.
                 (6) Pension and other benefits resulting from continued
                participation in an employee welfare and benefits plan maintained by a
                current or former employer;
                 (7) Anything which is paid for by the Government or secured by the
                Government under Government contract;
                 Example 1 to paragraph (b)(7): An employee at the Occupational
                Safety and Health Administration is assigned to travel away from their
                duty station to conduct an investigation of a collapse at a
                construction site. The employee's agency is paying for relevant travel
                expenses, including airfare. The employee may accept and retain travel
                promotional items, such as frequent flyer miles, received as a result
                of this official travel, to the extent permitted by 5 U.S.C. 5702 note
                and 41 CFR part 301-53.
                 (8) Free attendance to an event provided by the sponsor of the
                event to:
                 (i) An employee who is assigned to present information on behalf of
                the agency at the event on any day when the employee is presenting;
                 (ii) An employee whose presence on any day of the event is deemed
                to be essential by the agency to the presenting employee's
                participation in the event, provided that the employee is accompanying
                the presenting employee; and
                 (iii) One guest of the presenting employee on any day when the
                employee is presenting, provided that others in attendance will
                generally be accompanied by a guest, the offer of free attendance for
                the guest is unsolicited, and the agency designee, orally or in
                writing, has authorized the presenting employee to accept;
                 Example 1 to paragraph (b)(8): An employee of the Department of the
                Treasury who is assigned to participate in a panel discussion of
                economic issues as part of a one-day conference may accept the
                sponsor's waiver of the conference fee. Under the separate authority of
                Sec. 2635.204(a), the employee may accept a token of appreciation that
                has a market value of $20 or less.
                 Example 2 to paragraph (b)(8): An employee of the Securities and
                Exchange Commission is assigned to present the agency's views at a
                roundtable discussion of an ongoing working group. The employee may
                accept free attendance to the meeting under paragraph (b)(8) of this
                section because the employee has been assigned to present information
                at the meeting on behalf of the agency. If it is determined by the
                agency that it is essential that other employees accompany the
                presenting employee to the roundtable discussion, the accompanying
                employees may also accept free attendance to the meeting under
                paragraph (b)(8)(ii) of this section.
                 Example 3 to paragraph (b)(8): An employee of the United States
                Trade and Development Agency is invited to attend a cocktail party
                hosted by a prohibited source. The employee believes that there will be
                an opportunity to discuss official matters with other attendees while
                at the event. Although the employee may voluntarily discuss official
                matters with other
                [[Page 43700]]
                attendees, the employee has not been assigned to present information on
                behalf of the agency. The employee may not accept free attendance to
                the event under paragraph (b)(8) of this section.
                 (9) Any gift accepted by the Government under specific statutory
                authority, including:
                 (i) Travel, subsistence, and related expenses accepted by an agency
                under the authority of 31 U.S.C. 1353 in connection with an employee's
                attendance at a meeting or similar function relating to the employee's
                official duties which take place away from the employee's duty station,
                provided that the agency's acceptance is in accordance with the
                implementing regulations at 41 CFR chapter 304; and
                 (ii) Other gifts provided in-kind which have been accepted by an
                agency under its agency gift acceptance statute; and
                 (10) Anything for which market value is paid by the employee.
                 (c) Market value means the cost that a member of the general public
                would reasonably expect to incur to purchase the gift. An employee who
                cannot ascertain the market value of a gift may estimate its market
                value by reference to the retail cost of similar items of like quality.
                The market value of a gift of a ticket entitling the holder to food,
                refreshments, entertainment, or any other benefit is deemed to be the
                face value of the ticket.
                 Example 1 to paragraph (c): An employee who has been given a watch
                inscribed with the corporate logo of a prohibited source may determine
                its market value based on the observation that a comparable watch, not
                inscribed with a logo, generally sells for about $50.
                 Example 2 to paragraph (c): During an official visit to a factory
                operated by a well-known athletic footwear manufacturer, an employee of
                the Department of Labor is offered a commemorative pair of athletic
                shoes manufactured at the factory. Although the cost incurred by the
                donor to manufacture the shoes was $17, the market value of the shoes
                would be the $100 that the employee would have to pay for the shoes on
                the open market.
                 Example 3 to paragraph (c): A prohibited source has offered a
                Government employee a ticket to a charitable event consisting of a
                cocktail reception to be followed by an evening of chamber music. Even
                though the food, refreshments, and entertainment provided at the event
                may be worth only $20, the market value of the ticket is its $250 face
                value.
                 Example 4 to paragraph (c): A company offers an employee of the
                Federal Communication Commission (FCC) free attendance for two to a
                private skybox at a ballpark to watch a major league baseball game. The
                skybox is leased annually by the company, which has business pending
                before the FCC. The skybox tickets provided to the employee do not have
                a face value. To determine the market value of the tickets, the
                employee must add the face value of two of the most expensive publicly
                available tickets to the game and the market value of any food,
                parking, or other tangible benefits provided in connection with the
                gift of attendance that are not already included in the cost of the
                most expensive publicly available tickets.
                 Example 5 to paragraph (c): An employee of the Department of
                Agriculture is invited to a reception held by a prohibited source.
                There is no entrance fee to the reception event or to the venue. To
                determine the market value of the gift, the employee must add the
                market value of any entertainment, food, beverages, or other tangible
                benefit provided to attendees in connection with the reception, but
                need not consider the cost incurred by the sponsor to rent or maintain
                the venue where the event is held. The employee may rely on a per-
                person cost estimate provided by the sponsor of the event, unless the
                employee or an agency designee has determined that a reasonable person
                would find that the estimate is clearly implausible.
                 (d) Prohibited source means any person who:
                 (1) Is seeking official action by the employee's agency;
                 (2) Does business or seeks to do business with the employee's
                agency;
                 (3) Conducts activities regulated by the employee's agency;
                 (4) Has interests that may be substantially affected by the
                performance or nonperformance of the employee's official duties; or
                 (5) Is an organization a majority of whose members are described in
                paragraphs (d)(1) through (4) of this section.
                 (e) A gift is given because of the employee's official position if
                the gift is from a person other than an employee and would not have
                been given had the employee not held the status, authority, or duties
                associated with the employee's Federal position.
                 Note 1 to paragraph (e): Gifts between employees are subject to
                the limitations set forth in subpart C of this part.
                 Example 1 to paragraph (e): When free season tickets are offered by
                an opera guild to all members of the Cabinet, the gift is offered
                because of their official positions.
                 Example 2 to paragraph (e): Employees at a regional office of the
                Department of Justice (DOJ) work in Government-leased space at a
                private office building, along with various private business tenants. A
                major fire in the building during normal office hours causes a
                traumatic experience for all occupants of the building in making their
                escape, and it is the subject of widespread news coverage. A corporate
                hotel chain, which does not meet the definition of a prohibited source
                for DOJ, seizes the moment and announces that it will give a free
                night's lodging to all building occupants and their families, as a
                public goodwill gesture. Employees of DOJ may accept, as this gift is
                not being given because of their Government positions. The donor's
                motivation for offering this gift is unrelated to the DOJ employees'
                status, authority, or duties associated with their Federal positions,
                but instead is based on their mere presence in the building as
                occupants at the time of the fire.
                 (f) A gift which is solicited or accepted indirectly includes a
                gift:
                 (1) Given with the employee's knowledge and acquiescence to the
                employee's parent, sibling, spouse, child, dependent relative, or a
                member of the employee's household because of that person's
                relationship to the employee; or
                 (2) Given to any other person, including any charitable
                organization, on the basis of designation, recommendation, or other
                specification by the employee, except the employee has not indirectly
                solicited or accepted a gift by the raising of funds or other support
                for a charitable organization if done in accordance with Sec.
                2635.808.
                 Example 1 to paragraph (f)(2): An employee who must decline a gift
                of a personal computer pursuant to this subpart may not suggest that
                the gift be given instead to one of five charitable organizations whose
                names are provided by the employee.
                 (g) Free attendance includes waiver of all or part of the fee for
                an event or the provision of food, refreshments, entertainment,
                instruction, or materials furnished to all attendees as an integral
                part of the event. It does not include travel expenses, lodgings, or
                entertainment collateral to the event. It does not include meals taken
                other than in a group setting with all other attendees, unless the
                employee is a presenter at the event and is invited to a separate meal
                for participating presenters that is hosted by the sponsor of the
                event. When the offer of free attendance has been extended to an
                accompanying guest, the market value of the gift of free attendance
                includes
                [[Page 43701]]
                the market value of free attendance by both the employee and the guest.
                 (h) Legal expense fund has the meaning set forth in Sec.
                2635.1003.
                 (i) Pro bono legal services has the meaning set forth in Sec.
                2635.1003.
                Sec. 2635.204 Exceptions to the prohibition for acceptance of certain
                gifts.
                 Subject to the limitations in Sec. 2635.205, this section
                establishes exceptions to the prohibitions set forth in Sec.
                2635.202(a) and (b). Even though acceptance of a gift may be permitted
                by one of the exceptions contained in this section, it is never
                inappropriate and frequently prudent for an employee to decline a gift
                if acceptance would cause a reasonable person to question the
                employee's integrity or impartiality. Section 2635.201(b) identifies
                considerations for declining otherwise permissible gifts.
                 (a) Gifts of $20 or less. An employee may accept unsolicited gifts
                having an aggregate market value of $20 or less per source per
                occasion, provided that the aggregate market value of individual gifts
                received from any one person under the authority of this paragraph (a)
                does not exceed $50 in a calendar year. The exception in this paragraph
                (a) does not apply to gifts of cash or of investment interests such as
                stock, bonds, or certificates of deposit. When the market value of a
                gift or the aggregate market value of gifts offered on any single
                occasion exceeds $20, the employee may not pay the excess value over
                $20 in order to accept that portion of the gift or those gifts worth
                $20. When the aggregate value of tangible items offered on a single
                occasion exceeds $20, the employee may decline any distinct and
                separate item in order to accept those items aggregating $20 or less.
                 Example 1 to paragraph (a): An employee of the Securities and
                Exchange Commission and their spouse have been invited by a
                representative of a regulated entity to a community theater production,
                tickets to which have a face value of $30 each. The aggregate market
                value of the gifts offered on this single occasion is $60, $40 more
                than the $20 amount that may be accepted for a single event or
                presentation. The employee may not accept the gift of the evening of
                entertainment. The couple may attend the play only if the employee pays
                the full $60 value of the two tickets.
                 Example 2 to paragraph (a): An employee of the National Geospatial-
                Intelligence Agency has been invited by an association of cartographers
                to speak about the agency's role in the evolution of missile
                technology. At the conclusion of the speech, the association presents
                the employee a framed map with a market value of $18 and a ceramic mug
                that has a market value of $15. The employee may accept the map or the
                mug, but not both, because the aggregate value of these two tangible
                items exceeds $20.
                 Example 3 to paragraph (a): On four occasions during the calendar
                year, an employee of the Defense Logistics Agency (DLA) was given gifts
                worth $10 each by four employees of a corporation that is a DLA
                contractor. For purposes of applying the yearly $50 limitation on gifts
                of $20 or less from any one person, the four gifts must be aggregated
                because a person is defined at Sec. 2635.102(k) to mean not only the
                corporate entity, but its officers and employees as well. However, for
                purposes of applying the $50 aggregate limitation, the employee would
                not have to include the value of a birthday present received from a
                cousin, who is employed by the same corporation, if the cousin's
                birthday present can be accepted under the exception at paragraph (b)
                of this section for gifts based on a personal relationship.
                 Example 4 to paragraph (a): Under the authority of 31 U.S.C. 1353
                for agencies to accept payments from non-Federal sources in connection
                with attendance at certain meetings or similar functions, the
                Environmental Protection Agency (EPA) has accepted an association's
                gift of travel expenses and conference fees for an employee to attend a
                conference on the long-term effect of radon exposure. While at the
                conference, the employee may accept a gift basket of $20 or less from
                one of the companies underwriting the event even though it was not
                approved in advance by the EPA. Although 31 U.S.C. 1353 is the
                authority under which the EPA accepted the gift to the agency of travel
                expenses and conference fees, the gift basket is a gift to the employee
                rather than to the EPA.
                 Example 5 to paragraph (a): During off-duty time, an employee of
                the Department of Defense (DoD) attends a trade show involving
                companies that are DoD contractors. The employee is offered software
                worth $15 at X Company's booth, a calendar worth $12 at Y Company's
                booth, and a deli lunch worth $8 from Z Company. The employee may
                accept all three of these items because they do not exceed $20 per
                source, even though they total more than $20 at this single occasion.
                 Example 6 to paragraph (a): An employee of the Department of
                Defense (DoD) is being promoted to a higher level position in another
                DoD office. Six individuals, each employed by a different defense
                contractor, who have worked with the DoD employee over the years,
                decide to act in concert to pool their resources to buy the employee a
                nicer gift than each could buy separately. Each defense contractor
                employee contributes $20 to buy a desk clock for the DoD employee that
                has a market value of $120. Although each of the contributions does not
                exceed the $20 limit, the employee may not accept the $120 gift because
                it is a single gift that has a market value in excess of $20.
                 Example 7 to paragraph (a): During a holiday party, an employee of
                the Department of State is given a $15 store gift card to a national
                coffee chain by an agency contractor. The employee may accept the card
                as the market value is less than $20. The employee could not, however,
                accept a gift card that is issued by a credit card company or other
                financial institution, because such a card is equivalent to a gift of
                cash.
                 (b) Gifts based on a personal relationship. An employee may accept
                a gift given by an individual under circumstances which make it clear
                that the gift is motivated by a family relationship or personal
                friendship rather than the position of the employee. Relevant factors
                in making such a determination include the history and nature of the
                relationship and whether the family member or friend personally pays
                for the gift.
                 Example 1 to paragraph (b): An employee of the Federal Deposit
                Insurance Corporation (FDIC) has been dating an accountant employed by
                a member bank. As part of its ``Work-Life Balance'' program, the bank
                has given each employee in the accountant's division two tickets to a
                professional basketball game and has urged each to invite a family
                member or friend to share the evening of entertainment. Under the
                circumstances, the FDIC employee may accept the invitation to attend
                the game. Even though the tickets were initially purchased by the
                member bank, they were given without reservation to the accountant to
                use as desired, and the invitation to the employee was motivated by
                their personal friendship.
                 Example 2 to paragraph (b): Three partners in a law firm that
                handles corporate mergers have invited an employee of the Federal Trade
                Commission (FTC) to join them in a golf tournament at a private club at
                the firm's expense. The entry fee is $500 per foursome. The employee
                cannot accept the gift of one-quarter of the entry fee even though the
                employee has developed an amicable relationship with the three partners
                as a result of the firm's dealings with the FTC. As
                [[Page 43702]]
                evidenced in part by the fact that the fees are to be paid by the firm,
                it is not a personal friendship but a business relationship that is the
                motivation behind the partners' gift.
                 Example 3 to paragraph (b): A Peace Corps employee enjoys using a
                social media site on the internet in a personal capacity outside of
                work. The employee has used the site to keep in touch with friends,
                neighbors, coworkers, professional contacts, and other individuals they
                have met over the years through both work and personal activities. One
                of these individuals works for a contractor that provides language
                services to the Peace Corps. The employee was acting in an official
                capacity when they met the individual at a meeting to discuss a matter
                related to the contract between their respective employers. Thereafter,
                the two communicated occasionally regarding contract matters, and later
                also granted one another access to join their social media networks
                through their respective social media accounts. However, the pair did
                not communicate further in their personal capacities, carry on
                extensive personal interactions, or meet socially outside of work. One
                day, the individual, whose employer continues to serve as a Peace Corps
                contractor, contacts the employee to offer a pair of concert tickets
                worth $30 apiece. Although the employee and the individual are
                connected through social media, the circumstances do not demonstrate
                that the gift was clearly motivated by a personal relationship, rather
                than the position of the employee, and therefore the employee may not
                accept the gift pursuant to paragraph (b) of this section.
                 (c) Discounts and similar benefits. In addition to those
                opportunities and benefits excluded from the definition of a gift by
                Sec. 2635.203(b)(4), an employee may accept:
                 (1) A reduction or waiver of the fees for membership or other fees
                for participation in organization activities offered to all Government
                employees or all uniformed military personnel by professional
                organizations if the only restrictions on membership relate to
                professional qualifications; and
                 (2) Opportunities and benefits, including favorable rates,
                commercial discounts, and free attendance or participation not
                precluded by paragraph (c)(3) of this section:
                 (i) Offered to members of a group or class in which membership is
                unrelated to Government employment;
                 (ii) Offered to members of an organization, such as an employees'
                association or agency credit union, in which membership is related to
                Government employment if the same offer is broadly available to large
                segments of the public through organizations of similar size;
                 (iii) Offered by a person who is not a prohibited source to any
                group or class that is not defined in a manner that specifically
                discriminates among Government employees on the basis of type of
                official responsibility or on a basis that favors those of higher rank
                or rate of pay; or
                 (iv) Offered to employees by an established employee organization,
                such as an association composed of Federal employees or a nonprofit
                employee welfare organization, because of the employees' Government
                employment, so long as the employee is part of the class of individuals
                eligible for assistance from the employee organization as set forth in
                the organization's governing documents.
                 Example 1 to paragraph (c)(2): A computer company offers a discount
                on the purchase of computer equipment to all public and private sector
                computer procurement officials who work in organizations with over 300
                employees. An employee who works as the computer procurement official
                for a Government agency could not accept the discount to purchase the
                personal computer under the exception in paragraph (c)(2)(i) of this
                section. The employee's membership in the group to which the discount
                is offered is related to Government employment because membership is
                based on the employee's status as a procurement official with the
                Government.
                 Example 2 to paragraph (c)(2): An employee of the Consumer Product
                Safety Commission (CPSC) may accept a discount of $50 on a microwave
                oven offered by the manufacturer to all members of the CPSC employees'
                association. Even though the CPSC is currently conducting studies on
                the safety of microwave ovens, the $50 discount is a standard offer
                that the manufacturer has made broadly available through a number of
                employee associations and similar organizations to large segments of
                the public.
                 Example 3 to paragraph (c)(2): An Assistant Secretary may not
                accept a local country club's offer of membership to all members of
                Department Secretariats which includes a waiver of its $5,000
                membership initiation fee. Even though the country club is not a
                prohibited source, the offer discriminates in favor of higher-ranking
                officials.
                 Example 4 to paragraph (c)(2): A nonprofit military relief society
                provides access to financial counseling services, loans, and grants to
                all sailors and Marines. A service member may accept financial benefits
                from the relief society, including to cover legal expenses, because the
                benefits are offered by an employee organization that was established
                before the legal matter arose, and because the benefits are being
                offered because of the employees' Government employment, as set forth
                in the relief society's governing documents.
                 (3) An employee may not accept for personal use any benefit to
                which the Government is entitled as the result of an expenditure of
                Government funds, unless authorized by statute or regulation (e.g., 5
                U.S.C. 5702 note, regarding frequent flyer miles).
                 Example 1 to paragraph (c)(3): The administrative officer for a
                field office of U.S. Immigration and Customs Enforcement (ICE) has
                signed an order to purchase 50 boxes of photocopy paper from a supplier
                whose literature advertises that it will give a free briefcase to
                anyone who purchases 50 or more boxes. Because the paper was purchased
                with ICE funds, the administrative officer cannot keep the briefcase
                which, if claimed and received, is Government property.
                 (d) Awards and honorary degrees--(1) Awards. An employee may accept
                a bona fide award for meritorious public service or achievement and any
                item incident to the award, provided that:
                 (i) The award and any item incident to the award are not from a
                person who has interests that may be substantially affected by the
                performance or nonperformance of the employee's official duties, or
                from an association or other organization if a majority of its members
                have such interests; and
                 (ii) If the award or any item incident to the award is in the form
                of cash or an investment interest, or if the aggregate value of the
                award and any item incident to the award, other than free attendance to
                the event provided to the employee and to members of the employee's
                family by the sponsor of the event, exceeds $200, the agency ethics
                official has made a written determination that the award is made as
                part of an established program of recognition.
                 Example 1 to paragraph (d)(1): Based on a written determination by
                an agency ethics official that the prize meets the criteria set forth
                in paragraph (d)(2) of this section, an employee of the National
                Institutes of Health (NIH) may accept the Nobel Prize for Medicine,
                including the cash award which accompanies the prize, even though the
                prize was conferred on the basis of laboratory work performed at NIH.
                [[Page 43703]]
                 Example 2 to paragraph (d)(1): A defense contractor, ABC Systems,
                has an annual award program for the outstanding public employee of the
                year. The award includes a cash payment of $1,000. The award program is
                wholly funded to ensure its continuation on a regular basis for the
                next twenty years and selection of award recipients is made pursuant to
                written standards. An employee of the Department of the Air Force, who
                has duties that include overseeing contract performance by ABC Systems,
                is selected to receive the award. The employee may not accept the cash
                award because ABC Systems has interests that may be substantially
                affected by the performance or nonperformance of the employee's
                official duties.
                 Example 3 to paragraph (d)(1): An ambassador selected by a
                nonprofit organization as a recipient of its annual award for
                distinguished service in the interest of world peace may, together with
                their spouse and children, attend the awards ceremony dinner and accept
                a crystal bowl worth $200 presented during the ceremony. However, if
                the organization has also offered airline tickets for the ambassador
                and the family to travel to the city where the awards ceremony is to be
                held, the aggregate value of the tickets and the crystal bowl exceeds
                $200, and the ambassador may accept only upon a written determination
                by the agency ethics official that the award is made as part of an
                established program of recognition.
                 (2) Established program of recognition. An award and an item
                incident to the award are made pursuant to an established program of
                recognition if:
                 (i) Awards have been made on a regular basis or, if the program is
                new, there is a reasonable basis for concluding that awards will be
                made on a regular basis based on funding or funding commitments; and
                 (ii) Selection of award recipients is made pursuant to written
                standards.
                 (3) Honorary degrees. An employee may accept an honorary degree
                from an institution of higher education, as defined at 20 U.S.C. 1001,
                or from a similar foreign institution of higher education, based on a
                written determination by an agency ethics official that the timing of
                the award of the degree would not cause a reasonable person to question
                the employee's impartiality in a matter affecting the institution.
                 Note 1 to paragraph (d)(3): When the honorary degree is offered
                by a foreign institution of higher education, the agency may need to
                make a separate determination as to whether the institution of
                higher education is a foreign government for purposes of the
                Emoluments Clause of the U.S. Constitution (U.S. Const., art. I,
                sec. 9, cl. 8), which forbids employees from accepting emoluments,
                presents, offices, or titles from foreign governments, without the
                consent of Congress. The Foreign Gifts and Decorations Act, 5 U.S.C.
                7342, however, may permit the acceptance of honorary degrees in some
                circumstances.
                 Example 1 to paragraph (d)(3): A well-known university located in
                the United States wishes to give an honorary degree to the Secretary of
                Labor. The Secretary may accept the honorary degree only if an agency
                ethics official determines in writing that the timing of the award of
                the degree would not cause a reasonable person to question the
                Secretary's impartiality in a matter affecting the university.
                 (4) Presentation events. An employee who may accept an award or
                honorary degree pursuant to paragraph (d)(1) or (3) of this section may
                also accept free attendance to the event provided to the employee and
                to members of the employee's family by the sponsor of an event. In
                addition, the employee may also accept unsolicited offers of travel to
                and from the event provided to the employee and to members of the
                employee's family by the sponsor of the event. Travel expenses accepted
                under this paragraph (d)(4) must be added to the value of the award for
                purposes of determining whether the aggregate value of the award
                exceeds $200.
                 (e) Gifts based on outside business or employment relationships. An
                employee may accept meals, lodgings, transportation, and other
                benefits:
                 (1) Resulting from the business or employment activities of an
                employee's spouse when it is clear that such benefits have not been
                offered or enhanced because of the employee's official position;
                 Example 1 to paragraph (e)(1): A Department of Agriculture employee
                whose spouse is a computer programmer employed by a Department of
                Agriculture contractor may attend the company's annual retreat for all
                of its employees and their families held at a resort facility. However,
                under Sec. 2635.502, the employee may need to recuse from performing
                official duties affecting the spouse's employer.
                 Example 2 to paragraph (e)(1): When the spouses of other clerical
                personnel have not been invited, an employee of the Defense Contract
                Audit Agency whose spouse is a clerical worker at a defense contractor
                may not attend the contractor's annual retreat in Hawaii for corporate
                officers and members of the board of directors, even though the spouse
                received a special invitation from the company for them to attend as a
                couple.
                 (2) Resulting from the employee's outside business or employment
                activities when it is clear that such benefits are based on the outside
                business or employment activities and have not been offered or enhanced
                because of the employee's official status;
                 Example 1 to paragraph (e)(2): The members of an Army Corps of
                Engineers environmental advisory committee that meets six times per
                year are special Government employees. A member who has a consulting
                business may accept an invitation to a $50 dinner from a corporate
                client, an Army construction contractor, unless, for example, the
                invitation was extended in order to discuss the activities of the
                advisory committee.
                 (3) Customarily provided by a prospective employer in connection
                with bona fide employment discussions. If the prospective employer has
                interests that could be affected by performance or nonperformance of
                the employee's duties, acceptance is permitted only if the employee
                first has complied with the recusal requirements of subpart F of this
                part applicable when seeking employment; or
                 Example 1 to paragraph (e)(3): An employee of the Federal
                Communications Commission with responsibility for drafting regulations
                affecting all cable television companies wishes to apply for a job
                opening with a cable television holding company. Once the employee has
                properly recused from further work on the regulations as required by
                subpart F of this part, the employee may enter into employment
                discussions with the company and may accept the company's offer to pay
                for airfare, hotel, and meals in connection with an interview trip.
                 (4) Provided by a former employer to attend a reception or similar
                event when other former employees have been invited to attend, the
                invitation and benefits are based on the former employment
                relationship, and it is clear that such benefits have not been offered
                or enhanced because of the employee's official position.
                 Example 1 to paragraph (e)(4): An employee of the Department of the
                Army is invited by a former employer, an Army contractor, to attend its
                annual holiday dinner party. The former employer traditionally invites
                both its current and former employees to the holiday dinner regardless
                of their current employment activities. Under these circumstances, the
                employee may attend the dinner because the dinner
                [[Page 43704]]
                invitation is a result of the employee's former outside employment
                activities, other former employees have been asked to attend, and the
                gift is not offered because of the employee's official position.
                 (5) For purposes of paragraphs (e)(1) through (4) of this section,
                employment means any form of non-Federal employment or business
                relationship involving the provision of personal services.
                 (f) Gifts in connection with political activities permitted by the
                Hatch Act Reform Amendments. An employee who, in accordance with the
                Hatch Act Reform Amendments of 1993, at 5 U.S.C. 7323, may take an
                active part in political management or in political campaigns, may
                accept meals, lodgings, transportation, and other benefits, including
                free attendance at events, for the employee and an accompanying guest,
                when provided, in connection with such active participation, by a
                political organization described in 26 U.S.C. 527(e). Any other
                employees, such as a security officers, whose official duties require
                them to accompany an employee to a political event, may accept meals,
                free attendance, and entertainment provided at the event by such an
                organization.
                 Example 1 to paragraph (f): The Secretary of the Department of
                Health and Human Services may accept an airline ticket and hotel
                accommodations furnished by the campaign committee of a candidate for
                the United States Senate in order to give a speech in support of the
                candidate.
                 (g) Gifts of free attendance at widely attended gatherings--(1)
                Authorization. When authorized in writing by the agency designee
                pursuant to paragraph (g)(3) of this section, an employee may accept an
                unsolicited gift of free attendance at all or appropriate parts of a
                widely attended gathering. For an employee who is subject to a leave
                system, attendance at the event will be on the employee's own time or,
                if authorized by the employee's agency, on excused absence pursuant to
                applicable guidelines for granting such absence, or otherwise without
                charge to the employee's leave account.
                 (2) Widely attended gatherings. A gathering is widely attended if
                it is expected that:
                 (i) A large number of persons will attend;
                 (ii) Persons with a diversity of views or interests will be
                present, for example, if it is open to members from throughout the
                interested industry or profession or if those in attendance represent a
                range of persons interested in a given matter; and
                 (iii) There will be an opportunity to exchange ideas and views
                among invited persons.
                 (3) Written authorization by the agency designee. The agency
                designee may authorize an employee or employees to accept a gift of
                free attendance at all or appropriate parts of a widely attended
                gathering only if the agency designee issues a written determination
                after finding that:
                 (i) The event is a widely attended gathering, as set forth in
                paragraph (g)(2) of this section;
                 (ii) The employee's attendance at the event is in the agency's
                interest because it will further agency programs or operations;
                 (iii) The agency's interest in the employee's attendance outweighs
                the concern that the employee may be, or may appear to be, improperly
                influenced in the performance of official duties; and
                 (iv) If a person other than the sponsor of the event invites or
                designates the employee as the recipient of the gift of free attendance
                and bears the cost of that gift, the event is expected to be attended
                by more than 100 persons, and the value of the gift of free attendance
                does not exceed $480.
                 (4) Determination of agency interest. In determining whether the
                agency's interest in the employee's attendance outweighs the concern
                that the employee may be, or may appear to be, improperly influenced in
                the performance of official duties, the agency designee may consider
                relevant factors including:
                 (i) The importance of the event to the agency;
                 (ii) The nature and sensitivity of any pending matter affecting the
                interests of the person who extended the invitation and the
                significance of the employee's role in any such matter;
                 (iii) The purpose of the event;
                 (iv) The identity of other expected participants;
                 (v) Whether acceptance would reasonably create the appearance that
                the donor is receiving preferential treatment;
                 (vi) Whether the Government is also providing persons with views or
                interests that differ from those of the donor with access to the
                Government; and
                 (vii) The market value of the gift of free attendance.
                 (5) Cost provided by person other than the sponsor of the event.
                The cost of the employee's attendance will be considered to be provided
                by a person other than the sponsor of the event when such person
                designates the employee to be invited and bears the cost of the
                employee's attendance through a contribution or other payment intended
                to facilitate the employee's attendance. Payment of dues or a similar
                assessment to a sponsoring organization does not constitute a payment
                intended to facilitate a particular employee's attendance.
                 (6) Accompanying guest. When others in attendance will generally be
                accompanied by a guest of their choice, and when the invitation is from
                the same person who has invited the employee, the agency designee may
                authorize an employee to accept an unsolicited invitation of free
                attendance to one accompanying guest to participate in all or a portion
                of the event at which the employee's free attendance is permitted under
                paragraph (g)(1) of this section. The authorization required by this
                paragraph (g)(6) must be provided in writing.
                 Example 1 to paragraph (g): An aerospace industry association that
                is a prohibited source sponsors an industry-wide, two-day seminar for
                which it charges a fee of $800 and anticipates attendance of
                approximately 400. An Air Force contractor pays $4,000 to the
                association so that the association can extend free invitations to five
                Air Force officials designated by the contractor. The Air Force
                officials may not accept the gifts of free attendance because the
                contractor, rather than the association, provided the cost of their
                attendance; the contractor designated the specific employees to receive
                the gift of free attendance; and the value of the gift exceeds $480 per
                employee.
                 Example 2 to paragraph (g): An aerospace industry association that
                is a prohibited source sponsors an industry-wide, two-day seminar for
                which it charges a fee of $25 and anticipates attendance of
                approximately 50. An Air Force contractor pays $125 to the association
                so that the association can extend free invitations to five Air Force
                officials designated by the contractor. The Air Force officials may not
                accept the gifts of free attendance because the contractor, rather than
                the association, provided the cost of their attendance; the contractor
                designated the specific employees to receive the gift of free
                attendance; and the event was not expected to be attended by more than
                100 persons.
                 Example 3 to paragraph (g): An aerospace industry association that
                is a prohibited source sponsors an industry-wide, two-day seminar for
                which it charges a fee of $800 and anticipates attendance of
                approximately 400. An Air Force contractor pays $4,000 in order that
                the association might invite any five Federal employees. An Air
                [[Page 43705]]
                Force official to whom the sponsoring association, rather than the
                contractor, extended one of the five invitations could attend if the
                employee's participation were determined to be in the interest of the
                agency and the employee received a written authorization.
                 Example 4 to paragraph (g): An employee of the Department of
                Transportation is invited by a news organization to an annual press
                dinner sponsored by an association of press organizations. Tickets for
                the event cost $480 per person and attendance is limited to 400
                representatives of press organizations and their guests. If the
                employee's attendance is determined to be in the interest of the agency
                and the agency designee provides a written authorization, the employee
                may accept the invitation from the news organization because more than
                100 persons will attend and the cost of the ticket does not exceed
                $480. However, if the invitation were extended to the employee and an
                accompanying guest, the employee's guest could not be authorized to
                attend for free because the market value of the gift of free attendance
                would exceed $480.
                 Example 5 to paragraph (g): An employee of the Department of Energy
                (DOE) and their spouse have been invited by a major utility executive
                to a small dinner party. A few other officials of the utility and their
                spouses or other guests are also invited, as is a representative of a
                consumer group concerned with utility rates and their spouse. The DOE
                official believes the dinner party will provide an opportunity to
                socialize with and get to know those in attendance. The employee may
                not accept the free invitation under this exception, even if attendance
                could be determined to be in the interest of the agency. The small
                dinner party is not a widely attended gathering. Nor could the employee
                be authorized to accept even if the event were instead a corporate
                banquet to which forty company officials and their spouses or other
                guests were invited. In this second case, notwithstanding the larger
                number of persons expected (as opposed to the small dinner party just
                noted) and despite the presence of the consumer group representative
                and spouse who are not officials of the utility, those in attendance
                would still not represent a diversity of views or interests. Thus, the
                company banquet would not qualify as a widely attended gathering under
                those circumstances either.
                 Example 6 to paragraph (g): An Assistant U.S. Attorney is invited
                to attend a luncheon meeting of a local bar association to hear a
                distinguished judge lecture on cross-examining expert witnesses.
                Although members of the bar association are assessed a $15 fee for the
                meeting, the Assistant U.S. Attorney may accept the bar association's
                offer to attend for free, even without a determination of agency
                interest. The gift can be accepted under the $20 gift exception at
                paragraph (a) of this section.
                 Example 7 to paragraph (g): An employee of the Department of the
                Interior authorized to speak on the first day of a four-day conference
                on endangered species may accept the sponsor's waiver of the conference
                fee for the first day of the conference under Sec. 2635.203(b)(8). If
                the conference is widely attended, the employee may be authorized to
                accept the sponsor's offer to waive the attendance fee for the
                remainder of the conference if the agency designee has made a written
                determination that attendance is in the agency's interest.
                 Example 8 to paragraph (g): A military officer has been approved to
                attend a widely attended gathering, pursuant to paragraph (g) of this
                section, that will be held in the same city as the officer's duty
                station. The defense contractor sponsoring the event has offered to
                transport the officer in a limousine to the event. The officer may not
                accept the offer of transportation because the definition of free
                attendance set forth in Sec. 2635.203(g) excludes travel, and the
                market value of the transportation would exceed $20.
                 (h) Social invitations. An employee may accept food, refreshments,
                and entertainment, not including travel or lodgings, for the employee
                and an accompanying guest, at a social event attended by several
                persons if:
                 (1) The invitation is unsolicited and is from a person who is not a
                prohibited source;
                 (2) No fee is charged to any person in attendance; and
                 (3) If either the sponsor of the event or the person extending the
                invitation to the employee is not an individual, the agency designee
                has made a written determination after finding that the employee's
                attendance would not cause a reasonable person with knowledge of the
                relevant facts to question the employee's integrity or impartiality,
                consistent with Sec. 2635.201(b).
                 Example 1 to paragraph (h): An employee of the White House Press
                Office has been invited to a social dinner for current and former White
                House Press Officers at the home of an individual who is not a
                prohibited source. The employee may attend even if the invitation is
                because of the employee's official position.
                 (i) Meals, refreshments, and entertainment in foreign areas. An
                employee assigned to duty in, or on official travel to, a foreign area
                as defined in 41 CFR 300-3.1 may accept unsolicited food, refreshments,
                or entertainment in the course of a breakfast, luncheon, dinner, or
                other meeting or event provided:
                 (1) The market value in the foreign area of the food, refreshments,
                or entertainment provided at the meeting or event, as converted to U.S.
                dollars, does not exceed the per diem rate for the foreign area
                specified in the U.S. Department of State's Maximum Rates of Per Diem
                Allowances for Travel in Foreign Areas, Per Diem Supplement, section
                925 to the Standardized Regulations (GC-FA), available at
                www.state.gov;
                 (2) There is participation in the meeting or event by non-U.S.
                citizens or by representatives of foreign governments or other foreign
                entities;
                 (3) Attendance at the meeting or event is part of the employee's
                official duties to obtain information, disseminate information, promote
                the export of U.S. goods and services, represent the United States, or
                otherwise further programs or operations of the agency or the U.S.
                mission in the foreign area; and
                 (4) The gift of meals, refreshments, or entertainment is from a
                person other than a foreign government as defined in 5 U.S.C.
                7342(a)(2).
                 Example 1 to paragraph (i): A number of local business owners in a
                developing country are eager for a U.S. company to locate a
                manufacturing facility in their province. An official of the U.S.
                International Development Finance Corporation may accompany the
                visiting vice president of the U.S. company to a dinner meeting hosted
                by the business owners at a province restaurant when the market value
                of the food and refreshments does not exceed the per diem rate for that
                country.
                 (j) Gifts to the President or Vice President. Because of
                considerations relating to the conduct of their offices, including
                those of protocol and etiquette, the President or the Vice President
                may accept any gift on their own behalf or on behalf of any family
                member, provided that such acceptance does not violate Sec.
                2635.205(a) or (b), 18 U.S.C. 201(b) or 201(c)(3), or the Constitution
                of the United States.
                 (k) Gifts authorized by supplemental agency regulation. An employee
                may accept any gift when acceptance of the gift is specifically
                authorized by a supplemental agency regulation issued with the
                concurrence of the Office of
                [[Page 43706]]
                Government Ethics, pursuant to Sec. 2635.105.
                 (l) Gifts accepted under specific statutory authority. The
                prohibitions on acceptance of gifts from outside sources contained in
                this subpart do not apply to any item which a statute specifically
                authorizes an employee to accept. Gifts which may be accepted by an
                employee under the authority of specific statutes include, but are not
                limited to:
                 (1) Free attendance, course or meeting materials, transportation,
                lodgings, food and refreshments, or reimbursements therefor incident to
                training or meetings when accepted by the employee under the authority
                of 5 U.S.C. 4111. The employee's acceptance must be approved by the
                agency in accordance with part 410 of this title; or
                 (2) Gifts from a foreign government or international or
                multinational organization, or its representative, when accepted by the
                employee under the authority of the Foreign Gifts and Decorations Act,
                5 U.S.C. 7342. As a condition of acceptance, an employee must comply
                with requirements imposed by the agency's regulations or procedures
                implementing that Act.
                 (m) Gifts of informational materials. (1) An employee may accept
                unsolicited gifts of informational materials, provided that:
                 (i) The aggregate market value of all informational materials
                received from any one person does not exceed $100 in a calendar year;
                or
                 (ii) If the aggregate market value of all informational materials
                from the same person exceeds $100 in a calendar year, an agency
                designee has made a written determination after finding that acceptance
                by the employee would not be inconsistent with the standard set forth
                in Sec. 2635.201(b).
                 (2) Informational materials are writings, recordings, documents,
                records, or other items that:
                 (i) Are educational or instructive in nature;
                 (ii) Are not primarily created for entertainment, display, or
                decoration; and
                 (iii) Contain information that relates in whole or in part to the
                following categories:
                 (A) The employee's official duties or position, profession, or
                field of study;
                 (B) A general subject matter area, industry, or economic sector
                affected by or involved in the programs or operations of the agency; or
                 (C) Another topic of interest to the agency or its mission.
                 Example 1 to paragraph (m): An analyst at the Agricultural Research
                Service receives an edition of an agricultural research journal in the
                mail from a consortium of private farming operations concerned with
                soil toxicity. The journal edition has a market value of $75. The
                analyst may accept the gift.
                 Example 2 to paragraph (m): An inspector at the Mine Safety and
                Health Administration receives a popular novel with a market value of
                $25 from a mine operator. Because the novel is primarily for
                entertainment purposes, the inspector may not accept the gift.
                 Example 3 to paragraph (m): An employee at the Department of the
                Army is offered an encyclopedia on cyberwarfare from a prohibited
                source. The cost of the encyclopedia is far in excess of $100. The
                agency designee determines that acceptance of the gift would be
                inconsistent with the standard set out in Sec. 2635.201(b). The
                employee may not accept the gift under paragraph (m) of this section.
                 (n) Legal expense funds and pro bono legal services. An employee
                who seeks legal representation for a matter arising in connection with
                the employee's past or current official position, the employee's prior
                position on a campaign of a candidate for President or Vice President,
                or the employee's prior position on a Presidential Transition Team may
                accept:
                 (1) Payments for legal expenses paid out of a legal expense fund
                that is established and operated in accordance with subpart J of this
                part; and
                 (2) Pro bono legal services provided in accordance with subpart J
                of this part.
                Sec. 2635.205 Limitations on use of exceptions.
                 Notwithstanding any exception provided in this subpart, other than
                Sec. 2635.204(j), an employee may not:
                 (a) Accept a gift in return for being influenced in the performance
                of an official act;
                 (b) Use, or permit the use of, the employee's Government position,
                or any authority associated with public office, to solicit or coerce
                the offering of a gift;
                 (c) Accept gifts from the same or different sources on a basis so
                frequent that a reasonable person would be led to believe the employee
                is using the employee's public office for private gain;
                 Example 1 to paragraph (c): A purchasing agent for a Department of
                Veterans Affairs medical center routinely deals with representatives of
                pharmaceutical manufacturers who provide information about new company
                products. Because of a crowded calendar, the purchasing agent has
                offered to meet with manufacturer representatives during lunch hours
                Tuesdays through Thursdays, and the representatives routinely arrive at
                the employee's office bringing a sandwich and a soft drink for the
                employee. Even though the market value of each of the lunches is less
                than $6 and the aggregate value from any one manufacturer does not
                exceed the $50 aggregate limitation in Sec. 2635.204(a) on gifts of
                $20 or less, the practice of accepting even these modest gifts on a
                recurring basis is improper.
                 (d) Accept a gift in violation of any statute; relevant statutes
                applicable to all employees include, but are not limited to:
                 (1) 18 U.S.C. 201(b), which prohibits public officials from,
                directly or indirectly, corruptly demanding, seeking, receiving,
                accepting, or agreeing to receive or accept anything of value
                personally or for any other person or entity in return for being
                influenced in the performance of an official act; being influenced to
                commit or aid in committing, or to collude in, or allow, any fraud, or
                make opportunity for the commission of any fraud, on the United States;
                or for being induced to do or omit to do any action in violation of
                their official duties. As used in 18 U.S.C. 201(b), the term ``public
                official'' is broadly construed and includes regular and special
                Government employees as well as all other Government officials; and
                 (2) 18 U.S.C. 209, which prohibits employees, other than special
                Government employees, from receiving any salary or any contribution to
                or supplementation of salary from any source other than the United
                States as compensation for services as a Government employee. The
                statute contains several specific exceptions to this general
                prohibition, including an exception for contributions made from the
                treasury of a State, county, or municipality;
                 (e) Accept a gift in violation of any Executive order; or
                 (f) Accept any gift when acceptance of the gift is specifically
                prohibited by a supplemental agency regulation issued with the
                concurrence of the Office of Government Ethics, pursuant to Sec.
                2635.105.
                Sec. 2635.206 Proper disposition of prohibited gifts.
                 (a) Unless a gift is accepted by an agency acting under specific
                statutory authority, an employee who has received a gift that cannot be
                accepted under this subpart must dispose of the gift in accordance with
                the procedures set forth in this section. The employee must promptly
                complete the authorized disposition of the gift. The obligation to
                dispose of a gift that cannot be accepted under this subpart is
                independent of an
                [[Page 43707]]
                agency's decision regarding corrective or disciplinary action under
                Sec. 2635.106.
                 (1) Gifts of tangible items. The employee must promptly return any
                tangible item to the donor or pay the donor its market value; or, in
                the case of a tangible item with a market value of $100 or less, the
                employee may destroy the item. An employee who cannot ascertain the
                actual market value of an item may estimate its market value by
                reference to the retail cost of similar items of like quality.
                 Example 1 to paragraph (a)(1): A Department of Commerce employee
                received a $25 T-shirt from a prohibited source after providing
                training at a conference. Because the gift would not be permissible
                under an exception to this subpart, the employee must either return or
                destroy the T-shirt or promptly reimburse the donor $25. Destruction
                may be carried out by physical destruction or by permanently discarding
                the T-shirt by placing it in the trash.
                 Example 2 to paragraph (a)(1): To avoid public embarrassment to the
                seminar sponsor, an employee of the National Park Service did not
                decline a barometer worth $200 given at the conclusion of a speech on
                Federal lands policy. To comply with this section, the employee must
                either promptly return the barometer or pay the donor the market value
                of the gift. Alternatively, the National Park Service may choose to
                accept the gift if permitted under specific statutory gift acceptance
                authority. The employee may not destroy this gift, as the market value
                is in excess of $100.
                 (2) Gifts of perishable items. When it is not practical to return a
                tangible item in accordance with paragraph (a)(1) of this section
                because the item is perishable, the employee may, at the discretion of
                the employee's supervisor or the agency designee, give the item to an
                appropriate charity, share the item within the recipient's office, or
                destroy the item.
                 Example 1 to paragraph (a)(2): With approval by the recipient's
                supervisor, a floral arrangement sent by a disability claimant to a
                helpful employee of the Social Security Administration may be placed in
                the office's reception area.
                 (3) Gifts of intangibles. The employee must promptly reimburse the
                donor the market value for any entertainment, favor, service, benefit,
                or other intangible. Subsequent reciprocation by the employee does not
                constitute reimbursement.
                 Example 1 to paragraph (a)(3): A Department of Defense employee
                wishes to attend a charitable event for which they were offered a $300
                ticket by a prohibited source. Although attendance is not in the
                interest of the agency under Sec. 2635.204(g), the employee may attend
                if they reimburse the donor the $300 face value of the ticket.
                 (4) Gifts from foreign governments or international organizations.
                The employee must dispose of gifts from foreign governments or
                international organizations in accordance with 41 CFR part 102-42.
                 (b) An agency may authorize disposition or return of gifts at
                Government expense. Employees may use penalty mail to forward
                reimbursements required or permitted by this section.
                 (c) Employees who, on their own initiative, promptly comply with
                the requirements of this section will not be deemed to have improperly
                accepted an unsolicited gift. Employees who promptly consult their
                agency ethics official to determine whether acceptance of an
                unsolicited gift is proper and who, upon the advice of the ethics
                official, return the gift or otherwise dispose of the gift in
                accordance with this section, will be considered to have complied with
                the requirements of this section on the employee's own initiative.
                 (d) Employees are encouraged to record any actions they have taken
                to properly dispose of gifts that cannot be accepted under this
                subpart, such as by sending an electronic mail message to the
                appropriate agency ethics official or the employee's supervisor.
                Subpart C--Gifts Between Employees
                Sec. 2635.301 Overview.
                 This subpart contains standards that prohibit an employee from
                giving or contributing to a gift to an official superior, and official
                superiors are prohibited from knowingly accepting such a gift.
                Employees also are prohibited from soliciting a contribution from
                another employee for a gift to an official superior. In addition,
                employees are prohibited from accepting a gift from an employee who
                receives less pay. The prohibitions in this subpart apply unless the
                item is excluded from the definition of a gift (see Sec. 2635.303(a))
                or falls within one of the exceptions set forth in this subpart. Gifts
                from outside sources are subject to the limitations set forth in
                subpart B of this part.
                Sec. 2635.302 General standards.
                 (a) Gifts to superiors. Except as provided in this subpart,
                employees may not:
                 (1) Directly or indirectly, give a gift to or make a contribution
                toward a gift for an official superior, and an official superior may
                not knowingly accept such a gift; or
                 (2) Solicit a contribution from another employee for a gift to
                either their own or the other employee's official superior.
                 (b) Gifts from employees receiving less pay. Except as provided in
                this subpart, employees may not, directly or indirectly, accept a gift
                from an employee who receives less pay unless:
                 (1) There is a personal relationship between the two employees that
                would justify the gift and the employee receiving the gift is not the
                official superior of the employee giving the gift; or
                 (2) The employee giving the gift is the official superior of the
                employee receiving the gift.
                 Example 1 to paragraph (b): A GS-13 Department of Homeland Security
                (DHS) employee has been close personal friends with a neighbor, a GS-15
                employee in another government agency, for many years. During their
                friendship, the GS-13 employee has often allowed the neighbor's family
                to use their vacation house rent-free. The GS-15 employee recently
                accepted a position at DHS, and in the new position will be the direct
                supervisor of the GS-13 employee. Although the personal relationship
                between the two employees justified the gift of rent-free use of the
                vacation home before they were both employed at DHS, for the duration
                of their supervisor-subordinate relationship the GS-13 employee may not
                allow the GS-15 neighbor to use the vacation house rent-free or give
                other gifts, except as permitted by the exceptions contained in this
                subpart.
                 (c) Limitation on use of exceptions. Notwithstanding any exception
                provided in this subpart, an official superior may not coerce the
                offering of a gift from a subordinate.
                Sec. 2635.303 Definitions.
                 For purposes of this subpart, the following definitions apply:
                 (a) Gift has the meaning set forth in Sec. 2635.203(b). For
                purposes of Sec. 2635.203(b) and this paragraph (a) an employee will
                be deemed to have paid market value for any benefit received as a
                result of participating in a carpool or other such mutual arrangement
                between employees if the employee bears a fair proportion of the
                expense or effort involved.
                 (b) Indirectly, for purposes of Sec. 2635.302(b), has the meaning
                set forth in Sec. 2635.203(f). For purposes of Sec. 2635.302(a), it
                includes a gift:
                 (1) Given with the employee's knowledge and acquiescence by the
                employee's parent, sibling, spouse, child, or dependent relative; or
                [[Page 43708]]
                 (2) Given by a person other than the employee when circumstances
                indicate that the employee has promised or agreed to reimburse that
                person or to give that person something of value in exchange for giving
                the gift.
                 (c) Market value has the meaning set forth in Sec. 2635.203(c),
                subject to paragraph (a) of this section.
                 (d) Official superior means any other employee, other than the
                President and the Vice President, including but not limited to an
                immediate supervisor, whose official responsibilities include directing
                or evaluating the performance of the employee's official duties or
                those of any other official superior of the employee. For purposes of
                this subpart, employees are considered to be the subordinates of any of
                their official superiors.
                 (e) Solicit means to request contributions by personal
                communication or by general announcement.
                 (f) Voluntary contribution means a contribution given freely,
                without pressure or coercion. A contribution is not voluntary unless it
                is made in an amount determined by the contributing employee, except
                that when an amount for a gift is included in the cost for a luncheon,
                reception, or similar event, an employee who freely chooses to pay a
                proportionate share of the total cost in order to attend will be deemed
                to have made a voluntary contribution. Except in the case of
                contributions for a gift included in the cost of a luncheon, reception,
                or similar event, a statement that an employee may choose to contribute
                less or not at all must accompany any recommendation of an amount to be
                contributed for a gift to an official superior.
                 Example 1 to paragraph (f): A supervisory employee of the Agency
                for International Development has just been reassigned from Washington,
                DC, to a foreign duty location. As a farewell party, 12 subordinates
                have decided to take the supervisory employee out to lunch at a
                restaurant. It is understood that the employees will pay for their own
                meals and that the cost of the supervisor's lunch will be divided
                equally among the 12. Even though the amount they will contribute is
                not determined until the supervisor orders lunch, the contribution made
                by those who choose to participate in the farewell lunch is voluntary.
                Sec. 2635.304 Exceptions.
                 The prohibitions set forth in Sec. 2635.302(a) and (b) do not
                apply to a gift given or accepted under the circumstances described in
                paragraph (a) or (b) of this section. A contribution or the
                solicitation of a contribution that would otherwise violate the
                prohibitions set forth in Sec. 2635.302(a) and (b) may only be made in
                accordance with paragraph (c) of this section.
                 (a) General exceptions. On an occasional basis, including any
                occasion on which gifts are traditionally given or exchanged, the
                following may be given to an official superior or accepted from a
                subordinate or an employee receiving less pay:
                 (1) Items, other than cash, with an aggregate market value of $10
                or less per occasion;
                 (2) Items such as food and refreshments to be shared in the office
                among several employees;
                 (3) Personal hospitality provided at a residence which is of a type
                and value customarily provided by the employee to personal friends;
                 (4) Items given in connection with the receipt of personal
                hospitality if of a type and value customarily given on such occasions;
                and
                 (5) Unless obtained in violation of Sec. 630.912 of this title,
                leave transferred under subpart I of part 630 of this title to an
                employee who is not an immediate supervisor.
                 Example 1 to paragraph (a): Upon returning to work following a
                vacation at the beach, a claims examiner with the Department of
                Veterans Affairs may give their supervisor, and the supervisor may
                accept, a bag of saltwater taffy purchased on the boardwalk for $8.
                 Example 2 to paragraph (a): An employee of the Federal Deposit
                Insurance Corporation whose bank examination responsibilities require
                frequent travel may not bring their supervisor, and the supervisor may
                not accept, souvenir coffee mugs from each of the cities the employee
                visits in the course of performing examination duties, even though each
                of the mugs costs less than $5. Gifts given on this basis are not
                occasional.
                 Example 3 to paragraph (a): The Secretary of Labor has invited the
                agency's General Counsel to a home dinner party. The General Counsel
                may bring a $15 bottle of wine to the dinner party and the Secretary
                may accept this customary gift from the subordinate, even though its
                cost is in excess of $10.
                 Example 4 to paragraph (a): For the holidays, an assistant may give
                their supervisor, and the supervisor may accept, a small succulent
                plant purchased for $10 or less. The assistant may also invite the
                supervisor to a New Year's Eve party in their home and the supervisor
                may attend.
                 (b) Special, infrequent occasions. A gift appropriate to the
                occasion may be given to an official superior or accepted from a
                subordinate or other employee receiving less pay:
                 (1) In recognition of infrequently occurring occasions of personal
                significance such as marriage, illness, bereavement, or the birth or
                adoption of a child; or
                 (2) Upon occasions that terminate a subordinate-official superior
                relationship, such as retirement, resignation, or transfer.
                 Example 1 to paragraph (b): The administrative assistant to the
                personnel director of the Tennessee Valley Authority may send a $30
                floral arrangement to the personnel director who is in the hospital
                recovering from surgery. The personnel director may accept the gift.
                 Example 2 to paragraph (b): A chemist employed by the Food and Drug
                Administration has been invited to the wedding of the lab director who
                is an official superior. The chemist may give the lab director and the
                lab director's spouse, and the couple may accept, a place setting in
                the couple's selected china pattern purchased for $70.
                 Example 3 to paragraph (b): Upon the occasion of the supervisor's
                retirement from Federal service, an employee of the Fish and Wildlife
                Service may give the supervisor a book of wildlife photographs
                purchased for $19. The retiring supervisor may accept the book.
                 Example 4 to paragraph (b): An economist at the Consumer Financial
                Protection Bureau overhears their supervisor talking about their
                upcoming 50th birthday. Although a 50th birthday may be conventionally
                seen as a unique ``milestone'' worthy of additional celebration, the
                employee may not give their supervisor a $25 bottle of wine as a
                present because a birthday is not an infrequently occurring occasion.
                 (c) Voluntary contributions. (1) An employee may solicit voluntary
                contributions of nominal amounts from fellow employees for an
                appropriate gift to an official superior and an employee may make a
                voluntary contribution of a nominal amount to an appropriate gift to an
                official superior:
                 (i) On a special, infrequent occasion as described in paragraph (b)
                of this section; or
                 (ii) On an occasional basis, for items such as food and
                refreshments to be shared in the office among several employees.
                 (2) An employee may accept such gifts to which a subordinate or an
                employee receiving less pay has voluntarily contributed pursuant to
                paragraph (c)(1) of this section.
                 Example 1 to paragraph (c): To mark the occasion of retirement,
                members of the immediate staff of the Under
                [[Page 43709]]
                Secretary of the Army would like to throw a party and provide the Under
                Secretary with a gift certificate. They may distribute an announcement
                of the party and list a nominal amount for a retirement gift as a
                suggested voluntary contribution for the party.
                 Example 2 to paragraph (c): An employee of the National Endowment
                for the Arts may not collect contributions for a Christmas gift for the
                Chairman. Christmas occurs annually and is not an occasion of personal
                significance.
                 Example 3 to paragraph (c): Subordinates may not take up a
                collection for a gift to an official superior on the occasion of the
                superior's swearing in or promotion to a higher-grade position within
                the supervisory chain of that organization. These are not events that
                mark the termination of the subordinate-official superior relationship,
                nor are they events of personal significance within the meaning of
                paragraph (b) of this section. However, subordinates may take up a
                collection and employees may contribute a nominal amount to buy
                refreshments to be consumed by everyone in the immediate office to mark
                either such occasion.
                 Example 4 to paragraph (c): Subordinates may each contribute a
                nominal amount to a fund to give a gift to an official superior upon
                the occasion of that superior's transfer or promotion to a position
                outside the organization.
                 Example 5 to paragraph (c): An Assistant Secretary at the
                Department of the Interior is getting married. The Assistant
                Secretary's assistant has decided that a microwave oven would be a nice
                gift from the staff and has informed each of the Assistant Secretary's
                subordinates that they should contribute $5 for the gift. The
                assistant's method of collection is improper. Although it is
                permissible to recommend a $5 contribution, the recommendation must be
                coupled with a statement that the employee whose contribution is
                solicited is free to contribute less or nothing at all.
                Sec. 2635.305 Disposition of prohibited gifts.
                 Section 2635.206(a)(1) through (3) may be referenced when
                determining an appropriate disposition of a gift that may not be
                accepted under this subpart.
                Subpart D--Conflicting Financial Interests
                Sec. 2635.401 Overview.
                 Part 2640 of this chapter interprets and is the implementing
                regulation for 18 U.S.C. 208. This subpart summarizes the relevant
                statutory restrictions and some of the regulatory guidance found there.
                Specifically, this subpart contains two provisions relating to
                financial interests. One is a recusal requirement and the other is a
                prohibition on acquiring or continuing to hold specific financial
                interests. An employee may acquire or hold any financial interest not
                prohibited by Sec. 2635.403. Notwithstanding that the acquisition or
                holding of a particular interest is proper, an employee is prohibited
                in accordance with Sec. 2635.402 from participating in an official
                capacity in any particular matter in which, to the employee's
                knowledge, the employee or any person whose interests are imputed to
                the employee has a financial interest, if the particular matter will
                have a direct and predictable effect on that interest.
                Sec. 2635.402 Disqualifying financial interests.
                 (a) Statutory prohibition. An employee is prohibited by criminal
                statute, 18 U.S.C. 208(a), from participating personally and
                substantially in an official capacity in any particular matter in
                which, to the employee's knowledge, the employee or any person whose
                interests are imputed to the employee under this statute has a
                financial interest, if the particular matter will have a direct and
                predictable effect on that interest.
                 Note 1 to paragraph (a): Standards applicable when seeking non-
                Federal employment are contained in subpart F of this part and, if
                followed, will ensure that an employee does not violate 18 U.S.C.
                208(a) or this section when the employee is negotiating for or has
                an arrangement concerning future employment. In all other cases when
                the employee's participation would violate 18 U.S.C. 208(a), an
                employee must recuse from participating in the particular matter in
                accordance with paragraph (c) of this section or obtain a waiver or
                determine that an exemption applies, as described in paragraph (d)
                of this section.
                 (b) Definitions. For purposes of this section, the following
                definitions apply:
                 (1) Direct and predictable effect. (i) A particular matter will
                have a direct effect on a financial interest if there is a close causal
                link between any decision or action to be taken in the matter and any
                expected effect of the matter on the financial interest. An effect may
                be direct even though it does not occur immediately. A particular
                matter will not have a direct effect on a financial interest, however,
                if the chain of causation is attenuated or is contingent upon the
                occurrence of events that are speculative or that are independent of,
                and unrelated to, the matter. A particular matter that has an effect on
                a financial interest only as a consequence of its effects on the
                general economy does not have a direct effect within the meaning of
                this subpart.
                 (ii) A particular matter will have a predictable effect if there is
                a real, as opposed to a speculative possibility that the matter will
                affect the financial interest. It is not necessary, however, that the
                magnitude of the gain or loss be known, and the dollar amount of the
                gain or loss is immaterial.
                 Note 2 to paragraph (b)(1): If a particular matter involves a
                specific party or parties, generally the matter will at most only
                have a direct and predictable effect, for purposes of this subpart,
                on a financial interest of the employee in or with a party, such as
                the employee's interest by virtue of owning stock. There may,
                however, be some situations in which, under the standards of this
                paragraph (b)(1), a particular matter will have a direct and
                predictable effect on an employee's financial interests in or with a
                nonparty. For example, if a party is a corporation, a particular
                matter may also have a direct and predictable effect on an
                employee's financial interests through ownership of stock in an
                affiliate, parent, or subsidiary of that party. Similarly, the
                disposition of a protest against the award of a contract to a
                particular company may also have a direct and predictable effect on
                an employee's financial interest in another company listed as a
                subcontractor in the proposal of one of the competing offerors.
                 Example 1 to paragraph (b)(1): An employee of the National Library
                of Medicine at the National Institutes of Health has just been asked to
                serve on the technical evaluation panel to review proposals for a new
                library computer search system. DEF Computer Corporation, a closely
                held company in which the employee and their spouse own a majority of
                the stock, has submitted a proposal. Because award of the systems
                contract to DEF or to any other offeror will have a direct and
                predictable effect on the financial interests of both the employee and
                the spouse, the employee cannot participate on the technical evaluation
                team unless this disqualification has been waived.
                 Example 2 to paragraph (b)(1): Upon assignment to the technical
                evaluation panel, the employee in example 1 to this paragraph (b)(1)
                finds that DEF Computer Corporation has not submitted a proposal.
                Rather, LMN Corp., with which DEF competes for private sector business,
                is one of the six offerors. The employee need not recuse from serving
                on the technical evaluation panel. Any effect on the employee's
                financial interests as a result of the agency's decision to award or
                not award the systems contract to LMN would be at most indirect and
                speculative.
                 (2) Imputed interests. For purposes of 18 U.S.C. 208(a) and this
                subpart, the financial interests of the following
                [[Page 43710]]
                persons will require the recusal of an employee to the same extent as
                if they were the employee's own interests:
                 (i) The employee's spouse;
                 (ii) The employee's minor child;
                 (iii) The employee's general partner;
                 (iv) An organization or entity which the employee serves as
                officer, director, trustee, general partner, or employee; and
                 (v) A person with whom the employee is negotiating for or has an
                arrangement concerning prospective employment. (Employees who are
                seeking other employment should refer to and comply with the standards
                in subpart F of this part.)
                 Example 1 to paragraph (b)(2): An employee of the Department of
                Education serves without compensation on the board of directors of
                Kinder World, Inc., a nonprofit corporation that engages in good works.
                Even though the employee's personal financial interests will not be
                affected, the employee must recuse from participating in the review of
                a grant application submitted by Kinder World. Award or denial of the
                grant will affect the financial interests of Kinder World and its
                financial interests are imputed to the employee as a member of its
                board of directors.
                 Example 2 to paragraph (b)(2): The spouse of an employee of the
                Food and Drug Administration has obtained a position with a well-
                established biomedical research company. The company has developed an
                artificial limb for which it is seeking FDA approval and the employee
                would ordinarily be asked to participate in the FDA's review and
                approval process. The spouse is a salaried employee of the company and
                has no stock or other direct or indirect ownership interest in the
                company. The spouse's position with the company is such that the
                granting or withholding of FDA approval will not have a direct and
                predictable effect on their salary or continued employment with the
                company. Because the FDA approval process will not affect the spouse's
                financial interests, this section does not require the employee to
                recuse from participating in that process. Nevertheless, because the
                impartiality principle is implicated as a result of the employee's
                covered relationship with the spouse's employer, as identified at Sec.
                2635.502(b)(1)(iii), the employee must follow the procedures
                established in Sec. 2635.502 before participating in the FDA's review
                and approval process.
                 (3) Particular matter. The term particular matter encompasses only
                matters that involve deliberation, decision, or action that is focused
                upon the interests of specific persons, or a discrete and identifiable
                class of persons. Such a matter is covered by this subpart even if it
                does not involve formal parties and may include governmental action
                such as legislation or policy-making that is narrowly focused on the
                interests of such a discrete and identifiable class of persons. The
                term particular matter, however, does not extend to the consideration
                or adoption of broad policy options that are directed to the interests
                of a large and diverse group of persons. The particular matters covered
                by this subpart include a judicial or other proceeding, application,
                request for a ruling or other determination, contract, claim,
                controversy, charge, accusation, or arrest.
                 Example 1 to paragraph (b)(3): The Internal Revenue Service's
                amendment of its regulations to change the manner in which depreciation
                is calculated is not a particular matter, nor is the Social Security
                Administration's consideration of changes to its appeal procedures for
                disability claimants.
                 Example 2 to paragraph (b)(3): Consideration by the Surface
                Transportation Board of regulations establishing safety standards for
                trucks on interstate highways involves a particular matter.
                 (4) Personal and substantial. To participate personally means to
                participate directly. It includes the direct and active supervision of
                the participation of a subordinate in the matter. To participate
                substantially means that the employee's involvement is of significance
                to the matter. Participation may be substantial even though it is not
                determinative of the outcome of a particular matter. However, it
                requires more than official responsibility, knowledge, perfunctory
                involvement, or involvement on an administrative or peripheral issue. A
                finding of substantiality should be based not only on the effort
                devoted to a matter, but also on the importance of the effort. While a
                series of peripheral involvements may be insubstantial, the single act
                of approving or participating in a critical step may be substantial.
                Personal and substantial participation may occur when, for example, an
                employee participates through decision, approval, disapproval,
                recommendation, investigation, or the rendering of advice in a
                particular matter.
                 (c) Recusal. Unless the employee is authorized to participate in
                the particular matter by virtue of a waiver or exemption described in
                paragraph (d) of this section or because the interest has been divested
                in accordance with paragraph (e) of this section, an employee must
                recuse from participating in a particular matter in which, to the
                employee's knowledge, the employee or a person whose interests are
                imputed to the employee has a financial interest, if the particular
                matter will have a direct and predictable effect on that interest.
                Recusal is accomplished by not participating in the particular matter.
                 (1) Notification. Employees who become aware of the need to recuse
                from participating in a particular matter to which they have been
                assigned must take whatever steps are necessary to ensure that they do
                not participate in the matter. Appropriate oral or written notification
                of their recusal may be made to an agency ethics official, coworkers,
                or a supervisor to document and help effectuate the recusal. Public
                filers as defined in subpart F of this part must comply with additional
                notification requirements set forth in Sec. 2635.607 regarding
                negotiations for or agreement of future employment or compensation.
                 (2) Documentation. Employees need not file written recusal
                statements unless they are required by part 2634 of this chapter to
                file written evidence of compliance with an ethics agreement with the
                Office of Government Ethics or a designated agency ethics official, or
                are specifically directed by an agency ethics official or the person
                responsible for their assignments to file written recusal statements.
                However, it is often prudent for employees to create a record of their
                actions by providing written notice to an agency ethics official, a
                supervisor, or other appropriate official. In addition, public filers
                as defined in subpart F of this part must comply with the documentation
                requirements set forth in Sec. 2635.607 regarding negotiations for or
                agreement of future employment or compensation.
                 Example 1 to paragraph (c): An Assistant Secretary of the
                Department of the Interior owns recreational property that borders on
                land which is being considered for annexation to a national park.
                Annexation would directly and predictably increase the value of the
                Assistant Secretary's vacation property and, thus, the Assistant
                Secretary must recuse from participating in any way in the Department's
                deliberations or decisions regarding the annexation. Because the
                Assistant Secretary is responsible for determining their own work
                assignments, they may accomplish their recusal merely by ensuring that
                they do not participate in the particular matter. Because of the level
                of their position, however, the Assistant Secretary might be wise to
                establish a record that they have acted properly by providing a written
                recusal statement to
                [[Page 43711]]
                an official superior and by providing written notification of the
                recusal to subordinates to ensure that they do not raise or discuss any
                issues related to the annexation with the Assistant Secretary.
                 (d) Waiver of or exemptions from recusal requirement. An employee
                who would otherwise be required to recuse under 18 U.S.C. 208(a) may be
                permitted to participate in a particular matter if the financial
                interest that would otherwise require recusal is the subject of a
                regulatory exemption or individual waiver described in this paragraph
                (d), or results from certain Indian birthrights as described in 18
                U.S.C. 208(b)(4).
                 (1) Regulatory exemptions. Under 18 U.S.C. 208(b)(2), regulatory
                exemptions of general applicability have been issued by the Office of
                Government Ethics, based on its determination that particular interests
                are too remote or too inconsequential to affect the integrity of the
                services of employees to whom those exemptions apply. See part 2640,
                subpart B of this chapter.
                 (2) Individual waivers. An individual waiver enabling the employee
                to participate in one or more particular matters may be issued under 18
                U.S.C. 208(b)(1) if, in advance of the employee's participation:
                 (i) The employee:
                 (A) Advises the Government official responsible for the employee's
                appointment (or other Government official to whom authority to issue
                such a waiver for the employee has been delegated) about the nature and
                circumstances of the particular matter or matters; and
                 (B) Makes full disclosure to such official of the nature and extent
                of the relevant financial interest; and
                 (ii) Such official determines, in writing, that the employee's
                financial interest in the particular matter or matters is not so
                substantial as to be deemed likely to affect the integrity of the
                services which the Government may expect from such employee. See part
                2640, subpart C of this chapter (providing additional guidance).
                 (3) Federal advisory committee member waivers. An individual waiver
                may be issued under 18 U.S.C. 208(b)(3) to a special Government
                employee serving on, or under consideration for appointment to, an
                advisory committee within the meaning of the Federal Advisory Committee
                Act if the Government official responsible for the employee's
                appointment (or other Government official to whom authority to issue
                such a waiver for the employee has been delegated):
                 (i) Reviews the financial disclosure report filed by the special
                Government employee pursuant to 5 U.S.C. chapter 131; and
                 (ii) Certifies in writing that the need for the individual's
                services outweighs the potential for a conflict of interest created by
                the relevant financial interest. See part 2640, subpart C, of this
                chapter (providing additional guidance).
                 (4) Consultation and notification regarding waivers. When
                practicable, an official is required to consult formally or informally
                with the Office of Government Ethics prior to granting a waiver
                referred to in paragraph (d)(2) or (3) of this section. A copy of each
                such waiver is to be forwarded to the Director of the Office of
                Government Ethics.
                 (e) Divestiture of a disqualifying financial interest. Upon sale or
                other divestiture of the asset or other interest that would otherwise
                require the employee to recuse from participating in a particular
                matter, 18 U.S.C. 208(a) and paragraph (c) of this section will no
                longer prohibit the employee's participation in the matter.
                 (1) Voluntary divestiture. An employee who would otherwise be
                required to recuse from participating in a particular matter may
                voluntarily sell or otherwise divest the interest that create the
                recusal requirement.
                 (2) Directed divestiture. An employee may be required to sell or
                otherwise divest the disqualifying financial interest if the continued
                holding of that interest is prohibited by statute or by agency
                supplemental regulation issued in accordance with Sec. 2635.403(a), or
                if the agency determines in accordance with Sec. 2635.403(b) that a
                substantial conflict exists between the financial interest and the
                employee's duties or accomplishment of the agency's mission.
                 (3) Eligibility for special tax treatment. An employee who is
                directed to divest an interest may be eligible to defer the tax
                consequences of divestiture under part 2634, subpart J, of this
                chapter. An employee who divests before obtaining a certificate of
                divestiture will not be eligible for this special tax treatment.
                 (f) Official duties that give rise to potential conflicts. When
                their official duties create a substantial likelihood that they may be
                assigned to a particular matter from which they would be required to
                recuse, employees should advise their supervisors or other persons
                responsible for their assignments of that potential so that conflicting
                assignments can be avoided, consistent with the agency's needs.
                Sec. 2635.403 Prohibited financial interests.
                 An employee may not acquire or hold any financial interest that
                agency employees are prohibited from acquiring or holding by statute,
                by agency regulation issued in accordance with paragraph (a) of this
                section, or by reason of an agency determination of substantial
                conflict under paragraph (b) of this section.
                 (a) Agency regulation prohibiting certain financial interests. An
                agency may, by supplemental agency regulation, prohibit or restrict the
                acquisition or holding of a financial interest or a class of financial
                interests by agency employees, or any category of agency employees, and
                the spouses and minor children of those employees, based on the
                agency's determination that the acquisition or holding of such
                financial interests would cause a reasonable person to question the
                impartiality and objectivity with which agency programs are
                administered. When the agency restricts or prohibits the holding of
                certain financial interests by its employees' spouses or minor
                children, any such prohibition or restriction must be based on a
                determination that there is a direct and appropriate nexus between the
                prohibition or restriction as applied to spouses and minor children and
                the efficiency of the service.
                 Note 1 to paragraph (a): There is no statute of Governmentwide
                applicability prohibiting employees from holding or acquiring any
                financial interest. Statutory restrictions, if any, are contained in
                agency statutes which, in some cases, may be implemented by agency
                regulations issued independent of this part.
                 (b) Agency determination of substantial conflict. An agency may
                prohibit or restrict an individual employee from acquiring or holding a
                financial interest or a class of financial interests based upon the
                agency designee's determination that the holding of such interest or
                interests will:
                 (1) Require the employee to recuse from particular matters so
                central or critical to the performance of the employee's official
                duties that their ability to perform the duties of their position would
                be materially impaired; or
                 (2) Adversely affect the efficient accomplishment of the agency's
                mission because another employee cannot be readily assigned to perform
                work from which the employee would be recused by reason of the
                financial interest.
                 Example 1 to paragraph (b): An Air Force employee who owns $33,778
                of stock in a major aircraft engine manufacturer is being considered
                for promotion to a position that involves responsibility for
                development of a new fighter airplane. If the agency determined that
                engineering and other
                [[Page 43712]]
                decisions about the Air Force's requirements for the fighter would
                directly and predictably affect the employee's financial interests, the
                employee could not, by virtue of 18 U.S.C. 208(a), perform these
                significant duties of the position while retaining stock in the
                company. The agency can require the employee to sell the stock as a
                condition of being selected for the position rather than allowing the
                employee to recuse from particular matters.
                 (c) Definition of financial interest. For purposes of this section:
                 (1) Except as provided in paragraph (c)(2) of this section, the
                term financial interest is limited to financial interests that are
                owned by the employee or by the employee's spouse or minor children.
                However, the term is not limited to only those financial interests that
                would require the employee to recuse under 18 U.S.C. 208(a) and Sec.
                2635.402. The term includes any current or contingent ownership,
                equity, or security interest in real or personal property or a
                business, and may include an indebtedness or compensated employment
                relationship. It thus includes, for example, interests in the nature of
                stocks, bonds, partnership interests, fee and leasehold interests,
                mineral and other property rights, deeds of trust, and liens, and
                extends to any right to purchase or acquire any such interest, such as
                a stock option or commodity future. It does not include a future
                interest created by someone other than the employee, the employee's
                spouse, or minor child, or any right as a beneficiary of an estate that
                has not been settled.
                 Example 1 to paragraph (c)(1): A regulatory agency has concluded
                that ownership by its employees of stock in entities regulated by the
                agency would significantly diminish public confidence in the agency's
                performance of its regulatory functions and thereby interfere with the
                accomplishment of its mission. In its supplemental agency regulations,
                the agency may prohibit its employees from acquiring or continuing to
                hold stock in regulated entities.
                 Example 2 to paragraph (c)(1): An agency that insures bank deposits
                may, by supplemental agency regulation, prohibit its employees who are
                bank examiners from obtaining loans from banks they examine.
                Examination of a member bank could have no effect on an employee's
                fixed obligation to repay a loan from that bank and, thus, would not
                affect an employee's financial interests so as to require recusal under
                Sec. 2635.402. Nevertheless, a loan from a member bank is a discrete
                financial interest within the meaning of paragraph (c) of this section
                that may, when appropriate, be prohibited by supplemental agency
                regulation.
                 (2) The term financial interest includes service, with or without
                compensation, as an officer, director, trustee, general partner, or
                employee of any person, including a nonprofit entity, whose financial
                interests are imputed to the employee under Sec. 2635.402(b)(2)(iii)
                or (iv).
                 Example 1 to paragraph (c)(2): The Foundation for the Preservation
                of Wild Horses maintains herds of horses that graze on public and
                private lands. Because its costs are affected by Federal policies
                regarding grazing permits, the Foundation routinely comments on all
                proposed rules governing use of Federal grasslands issued by the Bureau
                of Land Management (BLM). BLM may require an employee to resign from
                their uncompensated position as Vice President of the Foundation as a
                condition of a promotion to a policy-level position within the Bureau
                rather than allowing the employee to rely on recusal in particular
                cases.
                 (d) Reasonable period to divest or terminate. Whenever an agency
                directs divestiture of a financial interest under paragraph (a) or (b)
                of this section, the employee will be given a reasonable period of
                time, considering the nature of their particular duties and the nature
                and marketability of the interest, within which to comply with the
                agency's direction. Except in cases of unusual hardship, as determined
                by the agency, a reasonable period must not exceed 90 days from the
                date divestiture is first directed. However, as long as the employee
                continues to hold the financial interest, all restrictions imposed by
                this subpart remain applicable.
                 (e) Eligibility for special tax treatment. Employees required to
                sell or otherwise divest a financial interest may be eligible to defer
                the tax consequences of divestiture under part 2634, subpart J, of this
                chapter.
                Subpart E--Impartiality in Performing Official Duties
                Sec. 2635.501 Overview.
                 (a) Scope. This subpart is intended to ensure that employees take
                appropriate steps to avoid an appearance of loss of impartiality in the
                performance of their official duties in circumstances other than those
                covered by the criminal conflict of interest statute, 18 U.S.C. 208(a).
                 (1) The provisions of Sec. 2635.502 are designed to help employees
                identify and take appropriate steps regarding their participation in
                particular matters involving specific parties that may cause a
                reasonable person with knowledge of the relevant facts to question
                their impartiality. Employees and agencies should analyze such
                appearance issues, and employees may receive authorization to
                participate in such matters, using the procedures in this subpart.
                 (2) Under Sec. 2635.503, an employee who has received a covered
                payment from a former employer is subject, in the absence of a waiver
                pursuant to Sec. 2635.503(c), to a two-year period of recusal from
                participating in particular matters in which that former employer is or
                represents a party.
                 (3) An employee is prohibited by 18 U.S.C. 208(a) from
                participating personally and substantially in an official capacity in
                any particular matter in which, to the employee's knowledge, the
                employee has a personal or imputed financial interest, if the
                particular matter will have a direct and predictable effect on that
                interest. Section 208(a), its interpreting and implementing regulations
                under part 2640 of this chapter, and the regulations at subparts D and
                F of this part, apply when the particular matter would affect the
                financial interests of one of these persons.
                 (b) Distinction between authorizations under this subpart and
                waivers and exemptions under the criminal conflict of interest law. (1)
                When an employee's participation in a particular matter involving
                specific parties would raise a question in the mind of a reasonable
                person about the employee's impartiality, but would not violate 18
                U.S.C. 208(a), the agency designee may make a determination, as
                explained in Sec. 2635.502(d), and authorize the employee to
                participate in the matter.
                 (2) When the employee's participation in a particular matter would
                affect any one of the financial interests described in 18 U.S.C.
                208(a), only a statutory waiver or exemption, as described in
                Sec. Sec. 2635.402(d) and 2635.605(a), will enable the employee to
                participate in that matter. The specific requirements for regulatory
                exemptions and statutory waivers are contained in part 2640, subparts B
                and C, of this chapter.
                 (3) An applicable waiver or exemption under part 2640 of this
                chapter also authorizes an employee's participation in particular
                matters that would otherwise be restricted by Sec. 2635.502.
                Specifically, if an employee meets all prerequisites for the
                application of one of the regulatory exemptions set forth in part 2640,
                subpart B, of this chapter, that constitutes a determination that the
                interest of the Government in the
                [[Page 43713]]
                employee's participation in a particular matter outweighs the concern
                that a reasonable person may question the integrity of agency programs
                and operations. Similarly, if the employee complies with all terms of a
                statutory waiver granted pursuant to part 2640, subpart C, of this
                chapter, that also constitutes a determination that the interest of the
                Government in the employee's participation in a particular matter
                outweighs the concern that a reasonable person may question the
                integrity of agency programs and operations. In such cases, the
                employee is not required to recuse under Sec. 2635.502(e) or request
                authorization to participate under Sec. 2635.502(d).
                 Note 1 to Sec. 2635.501: Even if the employee or agency
                designee determines that this subpart is not applicable, the
                employee's supervisor or other individuals responsible for assigning
                work to the employee may decide not to assign certain work to the
                employee for other reasons, including to address appearance and
                impartiality concerns not covered by this subpart.
                Sec. 2635.502 Personal and business relationships.
                 (a) Consideration of appearances by the employee. In considering
                whether any of the following would cause a reasonable person to
                question their impartiality, employees may seek the assistance of their
                supervisor, an agency ethics official, or the agency designee.
                 (1) When an employee knows that a particular matter involving
                specific parties is likely to have a direct and predictable effect on
                the financial interest of a member of the employee's household, and the
                employee determines that the circumstances would cause a reasonable
                person with knowledge of the relevant facts to question the employee's
                impartiality in the matter, the employee should not participate in the
                matter unless the employee has received a determination from the agency
                designee regarding the appearance problem in accordance with paragraph
                (c) of this section or received an authorization from the agency
                designee in accordance with paragraph (d) of this section.
                 (2) When an employee knows that a person with whom the employee has
                a covered relationship is or represents a party to a particular matter
                involving specific parties, and the employee determines that the
                circumstances would cause a reasonable person with knowledge of the
                relevant facts to question their impartiality in the matter, the
                employee should not participate in the matter unless the employee has
                received a determination from the agency designee regarding the
                appearance problem in accordance with paragraph (c) of this section or
                received an authorization from the agency designee in accordance with
                paragraph (d) of this section.
                 (3) Employees who are concerned that circumstances other than those
                specifically described in paragraphs (a)(1) and (2) of this section
                would raise a question regarding their impartiality should use the
                process described in this section to determine whether they should not
                participate in a particular matter.
                 (b) Definitions. For purposes of this section:
                 (1) An employee has a covered relationship with:
                 (i) A person, other than a prospective employer described in Sec.
                2635.603(c), with whom the employee has or seeks a business,
                contractual, or other financial relationship that involves other than a
                routine consumer transaction;
                 Note 1 to paragraph (b)(1)(i): An employee who is seeking
                employment within the meaning of Sec. 2635.603 must comply with
                subpart F of this part rather than with this section.
                 (ii) A person who is a member of the employee's household, or who
                is a relative with whom the employee has a close personal relationship;
                 (iii) A person for whom the employee's spouse, parent, or child is,
                to the employee's knowledge, serving or seeking to serve as an officer,
                director, trustee, general partner, agent, attorney, consultant,
                contractor, or employee;
                 (iv) Any person for whom the employee has, within the last year,
                served as officer, director, trustee, general partner, agent, attorney,
                consultant, contractor, or employee; or
                 (v) An organization, other than a political party described in 26
                U.S.C. 527(e), in which the employee is an active participant.
                Participation is active if, for example, it involves service as an
                official of the organization or in a capacity similar to that of a
                committee or subcommittee chairperson or spokesperson, or participation
                in directing the activities of the organization. In other cases,
                significant time devoted to promoting specific programs of the
                organization, including coordination of fundraising efforts, is an
                indication of active participation. Payment of dues or the donation or
                solicitation of financial support does not, in itself, constitute
                active participation.
                 (2) Direct and predictable effect has the meaning set forth in
                Sec. 2635.402(b)(1).
                 (3) Particular matter involving specific parties has the meaning
                set forth in Sec. 2640.102(l) of this chapter.
                 Example 1 to paragraph (b): An employee of the General Services
                Administration (GSA) has made an offer to purchase a restaurant owned
                by a local developer. The developer has submitted an offer in response
                to a GSA solicitation for the lease of office space. Under the
                circumstances, the GSA employee would be correct in concluding that a
                reasonable person would be likely to question their impartiality if
                they were to participate in evaluating that developer's or its
                competitor's lease proposal.
                 Example 2 to paragraph (b): An employee of the Department of Labor
                is providing technical assistance in drafting occupational safety and
                health legislation that will affect all employers of five or more
                persons. The employee's spouse is employed as an administrative
                assistant by a large corporation that will incur additional costs if
                the proposed legislation is enacted. Because the legislation is not a
                particular matter involving specific parties, the employee may continue
                to work on the legislation and need not be concerned that the spouse's
                employment with an affected corporation would raise a question
                concerning the employee's impartiality.
                 Example 3 paragraph (b): An employee of the Bureau of Land
                Management (BLM) is studying environmental problems created by the use
                of hazardous substances on a particular section of public land. BLM has
                a contract with an environmental services company to produce a water
                quality study of the groundwater under this section of land along with
                a recommendation about how to remediate any problems that are found.
                The BLM employee will use the study to help determine the extent of the
                damage and to recommend a solution to any problems that are revealed.
                The employee's parent has accepted a job with this environmental
                services company and will be signing and submitting the report of the
                company's findings. Under these circumstances, the employee would be
                correct in concluding that a reasonable person would be likely to
                question their impartiality if they were to continue participating in
                the study related to this parcel of public land.
                 Example 4 to paragraph (b): An engineer has just resigned from a
                position as vice president of an electronics company in order to accept
                employment with the Federal Aviation Administration (FAA) in a position
                involving procurement responsibilities. Although the employee did not
                receive
                [[Page 43714]]
                a covered payment in connection with the resignation and has severed
                all financial ties with the firm, under the circumstances the employee
                would be correct in concluding that this former service as an officer
                of the company would be likely to cause a reasonable person to question
                their impartiality if they were to participate in the administration of
                an FAA contract for which the firm is a first-tier subcontractor.
                 Example 5 to paragraph (b): An employee of the Internal Revenue
                Service (IRS) is a member of a private organization whose purpose is to
                restore a Victorian-era railroad station, and chairs its annual
                fundraising drive. Under the circumstances, the employee would be
                correct in concluding that this active membership in the organization
                would be likely to cause a reasonable person to question their
                impartiality if they were to participate in an IRS determination
                regarding the tax-exempt status of the organization.
                 Example 6 to paragraph (b): An employee of the Department of
                Defense (DoD) has responsibility for testing avionics produced by a
                large Air Force contractor. The employee just learned that their adult
                child accepted a staff position in the human resources division of that
                contractor. Although the DoD employee has a covered relationship with
                the contractor that employs their child, the employee could justifiably
                conclude that a reasonable person would not be likely to question their
                impartiality because the child's work is unrelated to the avionics
                contract.
                 Example 7 to paragraph (b): An employee of the Department of
                Defense (DoD) leads the office that is testing a new type of jet engine
                produced by a multinational conglomerate's aviation division. The
                employee's lifelong best friend is the head of the conglomerate's
                aviation division and is responsible for presenting and promoting the
                new jet engine. Although the DoD employee does not have a covered
                relationship under paragraph (b)(1) of this section, the employee is
                concerned that, under paragraph (a)(3) of this section, questions
                regarding their impartiality could be raised. Here, the employee could
                justifiably conclude that a reasonable person would be likely to
                question their impartiality if they were to continue performing duties
                related to this jet engine.
                 (c) Determination by agency designee. (1) When the agency designee
                has information concerning a potential appearance problem arising from
                either the financial interest of a member of the employee's household
                in a particular matter involving specific parties or a particular
                matter involving specific parties in which a person with whom the
                employee has a covered relationship is a party or represents a party,
                the agency designee may make an independent determination as to whether
                a reasonable person with knowledge of the relevant facts would be
                likely to question the employee's impartiality in the matter.
                Ordinarily, the agency designee's determination will be initiated by
                information provided by the employee pursuant to paragraph (a) of this
                section. However, at any time, including after an employee has recused
                from participating in a particular matter pursuant to paragraph (e) of
                this section, agency designees may make this determination on their own
                initiative or when requested by the employee's supervisor or any other
                person responsible for the employee's assignment.
                 (2) If the agency designee determines that the employee's
                impartiality is likely to be questioned, the agency designee must then
                determine, in accordance with paragraph (d) of this section, whether
                the employee should be authorized to participate in the matter. If the
                agency designee determines that the employee's participation should not
                be authorized, the employee must recuse from participating in the
                particular matter in accordance with paragraph (e) of this section.
                 (3) If the agency designee determines that the employee's
                impartiality is not likely to be questioned, the agency designee may
                advise the employee, including an employee who has reached a contrary
                conclusion under paragraph (a) of this section, that the employee's
                participation in the matter would be proper.
                 (d) Authorization by agency designee. When an employee's
                participation in a particular matter involving specific parties would
                not violate 18 U.S.C. 208(a), but would raise a question in the mind of
                a reasonable person about the employee's impartiality, the agency
                designee may authorize the employee to participate in the matter based
                on a determination, made in light of all relevant circumstances, that
                the interest of the Government in the employee's participation
                outweighs the concern that a reasonable person may question the
                integrity of the agency's programs and operations.
                 (1) Factors which may be taken into consideration include:
                 (i) The nature of the relationship involved;
                 (ii) The effect that resolution of the matter would have upon the
                financial interests of the person involved in the relationship;
                 (iii) The nature and importance of the employee's role in the
                matter, including the extent to which the employee is called upon to
                exercise discretion in the matter;
                 (iv) The sensitivity of the matter;
                 (v) The difficulty of reassigning the matter to another employee;
                and
                 (vi) Adjustments that may be made in the employee's duties that
                would reduce or eliminate the likelihood that a reasonable person would
                question the employee's impartiality.
                 (2) Authorization by the agency designee will be documented in
                writing at the agency designee's discretion or when requested by the
                employee. An employee who has been authorized to participate in a
                particular matter involving specific parties may not thereafter recuse
                from participating in the matter on the basis of an appearance problem
                involving the same circumstances that have been considered by the
                agency designee.
                 Example 1 to paragraph (d): The Deputy Director of Personnel for
                the Department of the Treasury and an attorney with the Department's
                Office of General Counsel are general partners in a real estate
                partnership. The Deputy Director advises their supervisor, the Director
                of Personnel, of the relationship upon being assigned to a selection
                panel for a position for which the partner has applied. If selected,
                the partner would receive a substantial increase in salary. The agency
                designee cannot authorize the Deputy Director to participate on the
                panel under the authority of this section because the Deputy Director
                is prohibited by criminal statute, 18 U.S.C. 208(a), from participating
                in a particular matter affecting the financial interest of a person who
                is their general partner. See Sec. 2635.402.
                 Example 2 paragraph (d): A new employee of the Securities and
                Exchange Commission is assigned to an investigation of insider trading
                by the brokerage house where they have recently been employed. Because
                of the sensitivity of the investigation, the agency designee may be
                unable to conclude that the Government's interest in the employee's
                participation in the investigation outweighs the concern that a
                reasonable person may question the integrity of the investigation, even
                though the employee has severed all financial ties with the company.
                Based on consideration of all relevant circumstances, the agency
                designee might determine, however, that it is in the interest of the
                Government for the employee to participate in the review of
                [[Page 43715]]
                a routine filing by the particular brokerage house.
                 Example 3 paragraph (d): An Internal Revenue Service employee
                involved in a long and complex tax audit learns that their child has
                just accepted an entry-level management position with a corporation
                whose taxes are the subject of the audit. Because the audit is
                essentially complete and because the employee is the only one with an
                intimate knowledge of the case, the agency designee might determine,
                after considering all relevant circumstances, that it is in the
                Government's interest for the employee to complete the audit, which is
                subject to additional levels of review.
                 (e) Recusal. Unless the employee is authorized to participate in
                the matter under paragraph (d) of this section, an employee may not
                participate in a particular matter involving specific parties when the
                employee or the agency designee has concluded, in accordance with
                paragraph (a) or (c) of this section, that the financial interest of a
                member of the employee's household, or the role of a person with whom
                the employee has a covered relationship, is likely to raise a question
                in the mind of a reasonable person about the employee's impartiality.
                Recusal is accomplished by not participating in the matter. When the
                covered relationship is with a former employer, this recusal
                requirement is for a period of one year after the date of the
                employee's resignation from the position with the former employer.
                 (1) Notification. Employees who become aware of the need to recuse
                from participating in a particular matter involving specific parties to
                which they have been assigned must take whatever steps are necessary to
                ensure that they do not participate in the matter. Appropriate oral or
                written notification of their recusal may be made to an agency ethics
                official, coworkers, or a supervisor to document and help effectuate
                the recusal.
                 (2) Documentation. Employees need not file written recusal
                statements unless they are required by part 2634 of this chapter to
                file written evidence of compliance with an ethics agreement with the
                Office of Government Ethics or a designated agency ethics official, or
                are specifically directed by an agency ethics official or the person
                responsible for their assignments to file written recusal statements.
                However, it is often prudent for employees to create a record of their
                actions by providing written notice to an agency ethics official, a
                supervisor, or other appropriate official.
                 (f) Irrelevant considerations. An employee's reputation for honesty
                and integrity is not a relevant consideration for purposes of any
                determination required by this section.
                 Note 2 to Sec. 2635.502: Nothing in this section should be
                construed to suggest that employees should not participate in a
                matter because of their political, religious, or moral views.
                Sec. 2635.503 Covered payments from former employers.
                 (a) Recusal requirement. Except as provided in paragraph (c) of
                this section, an employee must recuse for two years from participating
                in any particular matter involving specific parties in which the
                employee's former employer is a party or represents a party if the
                employee received a covered payment from that person. The two-year
                period of recusal begins to run on the date that the covered payment is
                received.
                 Example 1 to paragraph (a): Following confirmation hearings and one
                month before their scheduled swearing in, a nominee to the position of
                Assistant Secretary of a department received a covered payment from
                their employer. For one year and 11 months after their swearing in, the
                Assistant Secretary may not participate in any particular matter to
                which the former employer is a party.
                 Example 2 paragraph (a): An employee received a covered payment
                from their former employer, a coal mine operator, prior to entering on
                duty with the Department of the Interior. For two years thereafter, the
                employee may not participate in a determination regarding the former
                employer's obligation to reclaim a particular mining site, because the
                former employer is a party to the matter. However, the employee may
                help to draft reclamation legislation affecting all coal mining
                operations because this legislation does not involve any parties.
                 Example 3 to paragraph (a): An architect accepts a position with
                the Army Corps of Engineers and resigns from a private architecture
                partnership. One month after beginning this new position, the architect
                receives a covered payment from the partnership. The architect may not
                participate in any particular matter involving specific parties in
                which the former partnership is a party until two years after receipt
                of the covered payment, which will be 25 months after beginning service
                with the Corps. Because the payment was not received before the
                architect became an executive branch employee, agency ethics officials
                must also review the payment to determine whether it constituted a
                supplementation of salary under 18 U.S.C. 209.
                 (b) Definitions. For purposes of this section, the following
                definitions apply:
                 (1) Covered payment means any item, including cash or an investment
                interest, with a value in excess of $10,000, which is paid:
                 (i) On the basis of a determination made after it became known to
                the former employer that the individual was being considered for or had
                accepted a Government position; and
                 (ii) Other than pursuant to a qualifying program.
                 (2)(i) A qualifying program is:
                 (A) A compensation, partnership, or benefits program that is
                contained in bylaws, a contract, or other written form, and does not
                treat individuals entering Government service more favorably than other
                individuals; or
                 (B) A program that is not contained in written form, but is
                demonstrated by a history of similar payments made to others not
                entering Government service.
                 (ii) When a program is established in written form, any history of
                making similar payments to others not entering Government service that
                is contrary to an express provision of the written plan is not relevant
                to the evaluation of whether it is a qualifying program.
                 Example 1 to paragraph (b)(2): The vice president of a small
                corporation is nominated to be an ambassador. In recognition of service
                to the corporation, the board of directors votes to pay the departing
                vice president $50,000 upon confirmation in addition to the regular
                severance payment provided for by the corporate bylaws. The regular
                severance payment is not a covered payment because it was made pursuant
                to a qualifying program. The gratuitous payment of $50,000 is a covered
                payment, because the corporation had not made similar payments to other
                departing officers.
                 (3) Former employer includes any person which the employee served
                as an officer, director, trustee, general partner, agent, attorney,
                consultant, contractor, or employee. Payments from an officer,
                employee, or agent of a former employer will be considered to be
                payments from the former employer.
                 Note 1 to paragraph (b)(3): The definition of former employer
                includes former clients for whom an employee may have served as an
                agent, attorney, consultant, or contractor.
                 (c) Waiver of recusal. The recusal requirement of this section may
                be waived based on a finding that the amount of the payment was not so
                substantial as to cause a reasonable person to question the employee's
                ability to act impartially in a matter in which the former employer is
                or represents a party. The waiver must be
                [[Page 43716]]
                in writing and may be given only by the head of the agency or, when the
                recipient of the payment is the head of the agency, by the President or
                the President's designee. Waiver authority may be delegated by the head
                of an agency to any person who has been delegated authority to issue
                individual waivers under 18 U.S.C. 208(b) for the employee who is the
                recipient of the covered payment.
                Subpart F--Seeking Other Employment
                Sec. 2635.601 Overview.
                 This subpart contains a recusal requirement that applies to
                employees when seeking non-Federal employment with persons whose
                financial interests would be directly and predictably affected by
                particular matters in which the employees participate personally and
                substantially. Specifically, it addresses the requirement of 18 U.S.C.
                208(a) that an employee not participate personally and substantially in
                any particular matter that, to the employee's knowledge, will have a
                direct and predictable effect on the financial interests of a person
                with whom the employee is negotiating or has any arrangement concerning
                prospective employment. See Sec. 2635.402 and Sec. 2640.103 of this
                chapter. Beyond the statutory requirement in 18 U.S.C. 208(a), this
                subpart also addresses issues of lack of impartiality that require
                recusal from particular matters affecting the financial interests of a
                prospective employer when an employee's actions in seeking employment
                fall short of actual employment negotiations. In addition, this subpart
                contains the statutory notification requirements that apply to public
                filers when they negotiate for or have agreements of future employment
                or compensation. Specifically, it addresses the requirements of section
                17 of the Representative Louise McIntosh Slaughter Stop Trading on
                Congressional Knowledge Act (STOCK Act), Public Law 112-105, 126 Stat.
                303, that a public filer must submit a written statement identifying
                the entity involved in the negotiations or agreement within three
                business days after commencement of such negotiations or agreement and
                must submit a notification of recusal whenever there is a conflict of
                interest or an appearance of a conflict of interest.
                Sec. 2635.602 Applicability and related considerations.
                 (a) Applicability. (1) To ensure that an employee does not violate
                18 U.S.C. 208(a), section 17 of the STOCK Act, or the principles of
                ethical conduct contained in Sec. 2635.101(b), an employee who is
                seeking employment or who has an arrangement concerning prospective
                employment must comply with the applicable recusal requirements of
                Sec. Sec. 2635.604 and 2635.606 if particular matters in which the
                employee will be participating personally and substantially would, to
                the employee's knowledge, directly and predictably affect the financial
                interests of a prospective employer or of a person with whom the
                employee has an arrangement concerning prospective employment.
                Compliance with this subpart also will ensure that the employee does
                not violate subpart D or E of this part. In addition, a public filer
                who negotiates for or has an agreement of future employment or
                compensation must comply with the requirements of Sec. 2635.607.
                 (2) An employee who is seeking employment with a person whose
                financial interests are not, to the employee's knowledge, affected
                directly and predictably by particular matters in which the employee
                participates personally and substantially has no obligation to recuse
                under this subpart. In addition, nothing in this subpart requires an
                employee, other than a public filer, to notify anyone that the employee
                is seeking employment unless a notification is necessary to implement a
                recusal pursuant to Sec. 2635.604(b). A public filer who negotiates
                for or has an agreement of future employment or compensation must
                comply with the notification requirements in Sec. 2635.607. An
                employee may, however, be subject to other statutes that impose
                requirements on employment contacts or discussions, such as 41 U.S.C.
                2103, which is applicable to agency officials involved in certain
                procurement matters. Employees are encouraged to consult with their
                ethics officials if they have any questions about how this subpart may
                apply to them. Ethics officials are not obligated by this subpart to
                inform supervisors that employees are seeking employment.
                 Example 1 to paragraph (a): Recently, an employee of the Department
                of Education submitted a resume to the University of Delaware for a job
                opening. The employee has begun seeking employment. However, because
                the employee is not participating in any particular matters affecting
                the University of Delaware, there is no requirement that anyone be
                notified that the employee has begun seeking employment.
                 Example 2 to paragraph (a): The employee in example 1 to this
                paragraph (a) has been approached about an employment opportunity at
                the University of Maryland. Because the University of Maryland has
                applied for grants on which the employee has been assigned to work in
                the past, the employee wants to make certain that they do not violate
                the ethics rules. The employee contacts an ethics official to discuss
                the matter. The employee informs the ethics official that they are not
                currently participating in any particular matters affecting the
                University of Maryland. As a result, the ethics official advises the
                employee that they will have no notification obligations under this
                subpart. However, the ethics official cautions the employee that, if
                the employee is assigned to participate in a particular matter
                affecting the University of Maryland while they are seeking employment
                with the University, they must take whatever steps are necessary to
                avoid working on the grant, in accordance with Sec. 2635.604.
                 (b) Related restrictions--(1) Outside employment while a Federal
                employee. An employee who is contemplating outside employment to be
                undertaken concurrently with the employee's Federal employment must
                abide by any limitations applicable to the employee's outside
                activities under subparts G and H of this part, including any
                requirements under supplemental agency regulations to obtain prior
                approval before engaging in outside employment or activities and any
                prohibitions under supplemental agency regulations related to outside
                employment or activities. The employee must also comply with any
                applicable recusal requirement of this subpart, as well as any
                applicable recusal requirements under subpart D or E of this part as a
                result of the employee's outside employment activities.
                 (2) Post-employment restrictions. An employee who is contemplating
                employment to be undertaken following the termination of the employee's
                Federal employment should consult an agency ethics official to obtain
                advice regarding any post-employment restrictions that may be
                applicable. The regulation implementing the Governmentwide post-
                employment statute, 18 U.S.C. 207, is contained in part 2641 of this
                chapter. Employees are cautioned that they may be subject to additional
                statutory prohibitions on post-employment acceptance of compensation
                from contractors, such as 41 U.S.C. 2104.
                 (3) Interview trips and entertainment. When a prospective employer
                who is a prohibited source as defined in Sec. 2635.203(d) offers to
                reimburse an
                [[Page 43717]]
                employee's travel expenses, or provide other reasonable amenities
                incident to employment discussions, the employee may accept such
                amenities in accordance with Sec. 2635.204(e)(3). When a prospective
                employer is a foreign government or international organization, the
                employee must also comply with the Foreign Gifts and Decorations Act, 5
                U.S.C. 7342.
                Sec. 2635.603 Definitions.
                 For purposes of this subpart:
                 (a) Employment means any form of non-Federal employment or business
                relationship involving the provision of personal services by the
                employee, whether to be undertaken at the same time as or subsequent to
                Federal employment. It includes but is not limited to personal services
                as an officer, director, employee, agent, attorney, consultant,
                contractor, general partner, or trustee.
                 Example 1 to paragraph (a): An employee of the Bureau of Indian
                Affairs who has announced their intention to retire is approached by
                Tribal representatives concerning a possible consulting contract with
                the tribe. The contractual relationship the tribe wishes to negotiate
                is employment for purposes of this subpart.
                 Example 2 to paragraph (a): An employee of the Department of Health
                and Human Services is invited to a meeting with officials of a
                nonprofit corporation to discuss the possibility of serving as a member
                of the corporation's board of directors. Service, with or without
                compensation, as a member of the board of directors constitutes
                employment for purposes of this subpart.
                 Example 3 to paragraph (a): An employee at the Department of Energy
                volunteers without compensation to serve dinners at a homeless shelter
                each month. The employee's uncompensated volunteer services in this
                case are not considered an employment or business relationship for
                purposes of this subpart.
                 (b) An employee is seeking employment once the employee has begun
                seeking employment within the meaning of paragraph (b)(1) of this
                section and until the employee is no longer seeking employment within
                the meaning of paragraph (b)(2) of this section.
                 (1) An employee has begun seeking employment if the employee has
                directly or indirectly:
                 (i) Engaged in negotiations for employment with any person. For
                purposes of this paragraph (b)(1)(i), as for 18 U.S.C. 208(a) and
                section 17 of the STOCK Act, the term negotiations means discussion or
                communication with another person, or such person's agent or
                intermediary, mutually conducted with a view toward reaching an
                agreement regarding possible employment with that person. The term is
                not limited to discussions of specific terms and conditions of
                employment in a specific position;
                 (ii) Made an unsolicited communication to any person, or such
                person's agent or intermediary, regarding possible employment with that
                person. However, the employee has not begun seeking employment if that
                communication was for the sole purpose of requesting a job application;
                or
                 (iii) Made a response, other than rejection, to an unsolicited
                communication from any person, or such person's agent or intermediary,
                regarding possible employment with that person.
                 (2) An employee is no longer seeking employment when:
                 (i) The employee or the prospective employer rejects the
                possibility of employment and all discussions of possible employment
                have terminated; or
                 (ii) Two months have transpired after the employee's dispatch of an
                unsolicited resume or employment proposal, provided the employee has
                received no indication of interest in employment discussions from the
                prospective employer.
                 (3) For purposes of this paragraph (b), a response that defers
                discussions until the foreseeable future does not constitute rejection
                of an unsolicited employment overture, proposal, or resume nor
                rejection of a prospective employment possibility.
                 Example 1 to paragraph (b): A paralegal at the Department of the
                Army is in the third year of law school. The paralegal's neighbor, a
                partner in a large law firm in the community, invited the paralegal to
                the law firm for a visit. The paralegal accepted the offer and met with
                an associate at the firm. The associate shared with the paralegal their
                experiences looking for a legal position, discussed what they do in
                their position at the law firm, and explained why they chose that law
                firm. There was no discussion of possible employment with the firm. The
                Army paralegal is not seeking employment at this time. The purpose of
                the visit was informational only.
                 Example 2 to paragraph (b): An employee of the Defense Contract
                Audit Agency (DCAA) is auditing the overhead accounts of an Army
                contractor. While at the contractor's headquarters, the head of the
                contractor's accounting division tells the employee that the division
                is thinking about hiring another accountant and asks whether the
                employee might be interested in leaving DCAA. The DCAA employee asks
                what kind of work would be involved. The DCAA employee has begun
                seeking employment because they made a response other than a rejection
                to the communication regarding possible employment with the Army
                contractor, although they have not yet begun negotiating for
                employment.
                 Example 3 to paragraph (b): The DCAA employee and the head of the
                contractor's accounting division in example 2 to this paragraph (b)
                have a meeting to discuss the duties of the position that the
                accounting division would like to fill and the DCAA employee's
                qualifications for the position. They also discuss ways the DCAA
                employee could remedy one of the missing qualifications, and the
                employee indicates a willingness to obtain the proper qualifications.
                They do not discuss salary. The employee has engaged in negotiations
                regarding possible employment with the contractor.
                 Example 4 to paragraph (b): An employee at the Department of Energy
                (DOE) lists their job duties and employment experience in a profile on
                an online, business-oriented social networking service. The employee's
                profile is not targeted at a specific prospective employer. The
                employee has not begun seeking employment because the posting of a
                profile or resume is not an unsolicited communication with any
                prospective employer.
                 Example 5 to paragraph (b): The DOE employee in example 4 to this
                paragraph (b) was recently notified that a representative of a
                university has viewed their profile. The employee still has not begun
                seeking employment with the university. Subsequently, a representative
                of the university contacts the employee through the online forum to
                inquire whether the employee would be interested in working for the
                university, to which the employee makes a response other than
                rejection. At this point, the employee has begun seeking employment
                with the university until they reject the possibility of employment and
                all discussions of possible employment have terminated.
                 Example 6 to paragraph (b): The DOE employee in examples 4 and 5 to
                this paragraph (b) receives emails from various companies in response
                to the online profile. The employee does not respond. The employee has
                not begun seeking employment with the
                [[Page 43718]]
                companies because they have not made a response.
                 Example 7 to paragraph (b): An official of a State Health
                Department compliments the work of an employee of the Centers for
                Medicare & Medicaid Services (CMS), and asks the CMS employee to reach
                out if they are ever interested in leaving Federal service. The
                employee explains to the State official that they are very happy with
                their job at CMS and is not interested in another job. The employee
                thanks the official for the professional compliment, and adds that
                they'll remember the official's interest if they ever decide to leave
                the Government. The employee has rejected the unsolicited employment
                overture and has not begun seeking employment.
                 Example 8 to paragraph (b): The employee in the example 7 to this
                paragraph (b) responds by stating that they cannot discuss future
                employment while they are working on a project affecting the State's
                health care funding but would like to discuss employment with the State
                when the project is completed. Because the employee has merely deferred
                employment discussions until the foreseeable future, they have begun
                seeking employment with the State Health Department.
                 Example 9 to paragraph (b): Three months prior to the end of the
                current administration, a political appointee at a large department
                receives a telephone call from the managing partner of an international
                law firm. The managing partner asks if the official would be interested
                in joining the law firm. The official says, ``I am not talking to
                anyone about employment until I leave the Government.'' The official
                has rejected the unsolicited employment overture and has not begun
                seeking employment.
                 Example 10 to paragraph (b): A geologist employed by the U.S.
                Geological Survey sends a resume to an oil company. The geologist has
                begun seeking employment with that oil company and will be seeking
                employment for two months from the date the resume was mailed, provided
                the geologist does not receive a response indicating an interest in
                employment discussions. A letter merely acknowledging receipt of the
                resume is not an indication of interest in employment discussions.
                However, if the geologist withdraws the application or is notified
                within the two-month period that the resume has been rejected, they
                will no longer be seeking employment with the oil company as of the
                date they make such withdrawal or receive such notification.
                 (c) Prospective employer means any person with whom the employee is
                seeking employment. When contacts that constitute seeking employment
                are made by or with an agent or other intermediary, the term
                prospective employer means:
                 (1) A person who uses that agent or other intermediary for the
                purpose of seeking to establish an employment relationship with the
                employee if the agent identifies the prospective employer to the
                employee; and
                 (2) A person contacted by the employee's agent or other
                intermediary for the purpose of seeking to establish an employment
                relationship if the agent identifies the prospective employer to the
                employee.
                 Example 1 to paragraph (c): An employee of the Federal Aviation
                Administration (FAA) has retained an employment search firm to help
                them find another job. The search firm has just reported to the FAA
                employee that it has given their resume to and had promising
                discussions with two airport authorities, which the search firm
                identifies to the employee. Even though the employee has not personally
                had employment discussions with either airport authority, each airport
                authority is their prospective employer. The employee began seeking
                employment with each airport authority upon learning its identity and
                that it has been given their resume.
                 Example 2 to paragraph (c): An employee pays for an online resume
                distribution service, which sends their resume to recruiters that
                specialize in their field. The online service has just notified the
                employee that it sent their resume to Software Company A and Software
                Company B. Even though the employee has not personally had employment
                discussions with either company, each software company is their
                prospective employer. The employee began seeking employment with each
                company upon learning from the online service that Software Company A
                and Software Company B had been given their resume by the intermediary.
                 (d) Direct and predictable effect, particular matter, and personal
                and substantial have the respective meanings set forth in Sec.
                2635.402(b)(1), (3), and (4).
                 (e) Public filer means a person required to file a public financial
                disclosure report as set forth in Sec. 2634.202 of this chapter.
                Sec. 2635.604 Recusal while seeking employment.
                 (a) Obligation to recuse. (1) Except as provided in paragraph
                (a)(2) of this section or when the employee's participation has been
                authorized in accordance with Sec. 2635.605, the employee may not
                participate personally and substantially in a particular matter that,
                to the employee's knowledge, has a direct and predictable effect on the
                financial interests of a prospective employer with whom the employee is
                seeking employment within the meaning of Sec. 2635.603(b). Recusal is
                accomplished by not participating in the particular matter.
                 (2) The employee may participate in a particular matter under
                paragraph (a)(1) of this section when:
                 (i) The employee's only communication with the prospective employer
                in connection with the search for employment is the submission of an
                unsolicited resume or other employment proposal;
                 (ii) The prospective employer has not responded to the employee's
                unsolicited communication with a response indicating an interest in
                employment discussions; and
                 (iii) The matter is not a particular matter involving specific
                parties.
                 Example 1 to paragraph (a): A scientist is employed by the National
                Science Foundation (NSF) as a special Government employee to serve on a
                panel that reviews grant applications to fund research relating to
                deterioration of the ozone layer. The scientist is discussing possible
                employment with a university that received an NSF grant several years
                ago to study the effect of fluorocarbons but has no current grant
                applications pending before NSF. The employee is seeking employment,
                but does not need to recuse because there is no particular matter that
                would have a direct and predictable effect on the financial interests
                of the prospective employer. Recusal would be required if the
                university submits a new application for the panel's review.
                 Example 2 to paragraph (a): An employee of the Food and Drug
                Administration is developing a regulation on research criteria for
                approving prescription drugs. They begin discussing possible employment
                with a pharmaceutical company. The employee may not participate
                personally and substantially in the development of the regulation
                because they have begun employment discussions with the pharmaceutical
                company and the regulation is a particular matter of general
                applicability which would have a direct and predictable effect on the
                financial interests of the pharmaceutical company.
                 Example 3 to paragraph (a): A special Government employee of the
                Federal Deposit Insurance Corporation (FDIC) is assigned to advise the
                FDIC on rules
                [[Page 43719]]
                applicable to all member banks. The employee mails an unsolicited
                letter to a member bank offering services as a contract consultant.
                Although the employee is seeking employment, the employee may
                participate in this particular matter of general applicability until
                receipt of some response indicating an interest in discussing the
                employment proposal. A letter merely acknowledging receipt of the
                proposal is not an indication of interest in employment discussions.
                 Example 4 to paragraph (a): An employee of the Occupational Safety
                and Health Administration is conducting an inspection of one of several
                textile companies to which they sent an unsolicited resume. The
                employee may not participate personally and substantially in the
                inspection because they are seeking employment and the inspection is a
                particular matter involving specific parties that will affect the
                textile company.
                 (b) Notification. Employees who become aware of the need to recuse
                from participating in a particular matter to which they have been
                assigned must take whatever steps are necessary to ensure that they do
                not participate in the matter. Appropriate oral or written notification
                of their recusal may be made to an agency ethics official, coworkers,
                or a supervisor to document and help effectuate the recusal. Public
                filers must comply with additional notification requirements set forth
                in Sec. 2635.607.
                 Example 1 to paragraph (b): An employee of the Department of
                Veterans Affairs (VA) is participating in the audit of a contract for
                laboratory support services. Before sending a resume to a lab which is
                a subcontractor under the VA contract, the employee should recuse from
                participating in the audit. Because the employee cannot withdraw from
                participating in the contract audit without supervisor approval, the
                employee should notify the supervisor of the need to recuse for ethics
                reasons so that appropriate adjustments in work assignments can be
                made.
                 Example 2 to paragraph (b): An employee of the Food and Drug
                Administration (FDA) is contacted in writing by a pharmaceutical
                company concerning possible employment with the company. The employee
                is reviewing an application from the same pharmaceutical company, which
                is seeking FDA approval for a new drug product. Once the employee makes
                a response that is not a rejection to the company's communication
                concerning possible employment, the employee must recuse from further
                participation in the review of the application. When the employee has
                authority to ask a colleague to assume reviewing responsibilities, they
                may accomplish recusal by transferring the work to the colleague.
                However, to ensure that the colleague and others with whom they had
                been working on the review do not seek their advice regarding the
                review of the application or otherwise involve them in the matter, it
                may be necessary for the employee to advise those individuals of the
                recusal.
                 (c) Documentation. Employees, other than public filers, need not
                file written recusal statements unless they are required by part 2634
                of this chapter to file written evidence of compliance with an ethics
                agreement with the Office of Government Ethics or a designated agency
                ethics official, or are specifically directed by an agency ethics
                official or the person responsible for their assignments to file
                written recusal statements. However, it is often prudent for employees
                to create a record of their actions by providing written notice to an
                agency ethics official, a supervisor, or other appropriate official.
                Public filers must comply with the documentation requirements set forth
                in Sec. 2635.607.
                 Example 1 to paragraph (c): The General Counsel of a regulatory
                agency will be engaging in discussions regarding possible employment as
                corporate counsel of a regulated entity. Matters directly affecting the
                financial interests of the regulated entity are pending within the
                Office of General Counsel, but the General Counsel will not be called
                upon to act in any such matter because signature authority for that
                particular class of matters has been delegated to an Assistant General
                Counsel. Because the General Counsel is responsible for assigning work
                within the Office of General Counsel, they can, in fact, accomplish
                recusal by simply avoiding any involvement in matters affecting the
                regulated entity. However, because it is likely to be assumed by others
                that the General Counsel is involved in all matters within the
                cognizance of the Office of General Counsel, they would benefit from
                filing a written recusal statement with an agency ethics official or
                the Commissioners of the regulatory agency and providing their
                subordinates with written notification of the recusal. The General
                Counsel may also be specifically directed by an agency ethics official
                or the Commissioners to file a written recusal statement. If the
                General Counsel is a public filer, they must comply with the
                documentation requirements set forth in Sec. 2635.607.
                 (d) Agency determination of substantial conflict. When the agency
                determines that the employee's action in seeking employment with a
                particular person will require the employee to recuse from matters so
                central or critical to the performance of the employee's official
                duties that the employee's ability to perform the duties of the
                employee's position would be materially impaired, the agency may allow
                the employee to take annual leave or leave without pay while seeking
                employment, or may take other appropriate action.
                Sec. 2635.605 Waiver or authorization permitting participation while
                seeking employment.
                 (a) Waiver. When, as defined in Sec. 2635.603(b)(1)(i), an
                employee is engaged in employment negotiations for purposes of 18
                U.S.C. 208(a), the employee may not participate personally and
                substantially in a particular matter that, to the employee's knowledge,
                has a direct and predictable effect on the financial interests of a
                prospective employer. The employee may participate in such matters only
                when the employee has received a written waiver issued under the
                authority of 18 U.S.C. 208(b)(1) or (3). These waivers are described in
                Sec. 2635.402(d) and part 2640, subpart C, of this chapter. For
                certain employees, a regulatory exemption under the authority of 18
                U.S.C. 208(b)(2) may also apply (see part 2640, subpart B, of this
                chapter, including Sec. 2640.203(g) and (i)).
                 Example 1 to paragraph (a): An employee of the Department of
                Agriculture is negotiating for employment within the meaning of 18
                U.S.C. 208(a) and Sec. 2635.603(b)(1)(i) with an orange grower. In the
                absence of a written waiver issued under 18 U.S.C. 208(b)(1), the
                employee may not take official action on a complaint filed by a
                competitor alleging that the grower has shipped oranges in violation of
                applicable quotas.
                 (b) Authorization by agency designee. When an employee is seeking
                employment within the meaning of Sec. 2635.603(b)(1)(ii) or (iii) and
                is not negotiating for employment, a reasonable person would be likely
                to question the employee's impartiality if the employee were to
                participate personally and substantially in a particular matter that,
                to the employee's knowledge, has a direct and predictable effect on the
                financial interests of any such prospective employer. The employee may
                participate in such matters only when the agency designee has
                authorized in writing the employee's participation in accordance
                [[Page 43720]]
                with the standards set forth in Sec. 2635.502(d).
                 Example 1 to paragraph (b): Within the past month, an employee of
                the Department of Education mailed a resume to a university. The
                employee is thus seeking employment with the university within the
                meaning of Sec. 2635.603(b)(1)(ii). In the absence of specific
                authorization by the agency designee in accordance with Sec.
                2635.502(d), the employee may not participate personally and
                substantially in an assignment to review a grant application submitted
                by the university.
                Sec. 2635.606 Recusal based on an arrangement concerning prospective
                employment or otherwise after negotiations.
                 (a) Employment or arrangement concerning employment. An employee
                may not participate personally and substantially in a particular matter
                that, to the employee's knowledge, has a direct and predictable effect
                on the financial interests of the person by whom the employee is
                employed or with whom the employee has an arrangement concerning future
                employment, unless authorized to participate in the matter by a written
                waiver issued under the authority of 18 U.S.C. 208(b)(1) or (3), or by
                a regulatory exemption under the authority of 18 U.S.C. 208(b)(2).
                These waivers and exemptions are described in Sec. 2635.402(d) and
                part 2640, subparts B and C, of this chapter.
                 Example 1 to paragraph (a): A military officer has accepted a job
                with a defense contractor that will begin six months after retirement
                from military service. During the remainder of Government employment,
                the officer may not participate personally and substantially in the
                administration of a contract with that particular defense contractor
                unless a written waiver is issued under the authority of 18 U.S.C.
                208(b)(1).
                 Example 2 to paragraph (a): An accountant has just been offered a
                job with the Office of the Comptroller of the Currency (OCC) which
                involves a two-year limited appointment. The accountant's private
                employer, a large corporation, believes the job will enhance their
                skills and has agreed to give them a two-year unpaid leave of absence
                at the end of which they have agreed to return to work for the
                corporation. During the two-year period that the accountant is to be an
                OCC employee, they will have an arrangement concerning future
                employment with the corporation that will require recusal from
                participating personally and substantially in any particular matter
                that, to their knowledge, will have a direct and predictable effect on
                the corporation's financial interests.
                 (b) Offer rejected or not made. The agency designee for the purpose
                of Sec. 2635.502(c) may, in an appropriate case, determine that an
                employee not covered by paragraph (a) of this section who has sought
                but is no longer seeking employment nevertheless will be subject to a
                period of recusal upon the conclusion of employment negotiations. Any
                such determination will be based on a consideration of all the relevant
                factors, including those listed in Sec. 2635.502(d), and a
                determination that the concern that a reasonable person may question
                the integrity of the agency's decision-making process outweighs the
                Government's interest in the employee's participation in the particular
                matter.
                 Example 1 to paragraph (b): An employee of the Securities and
                Exchange Commission was relieved of responsibility for an investigation
                of a broker-dealer while seeking employment with the law firm
                representing the broker-dealer in that matter. The firm did not offer
                the partnership position the employee sought. Even though the employee
                is no longer seeking employment with the firm, they may continue to be
                recused from participating in the investigation based on a
                determination by the agency designee that the concern that a reasonable
                person might question whether, in view of the history of the employment
                negotiations, they could act impartially in the matter outweighs the
                Government's interest in their participation.
                Sec. 2635.607 Notification requirements for public financial
                disclosure report filers regarding negotiations for or agreement of
                future employment or compensation.
                 (a) Notification regarding negotiations for or agreement of future
                employment or compensation. A public filer who is negotiating for or
                has an agreement of future employment or compensation with a non-
                Federal entity must file a statement notifying an agency ethics
                official of such negotiation or agreement within three business days
                after commencement of the negotiation or agreement. This notification
                statement must be in writing, must be signed by the public filer, and
                must include the name of the non-Federal entity involved in such
                negotiation or agreement and the date on which the negotiation or
                agreement commenced. When a public filer has previously complied with
                the notification requirement in this section regarding the commencement
                of negotiations, the filer need not file a separate notification
                statement when an agreement of future employment or compensation is
                reached with the previously identified non-Federal entity. There is
                also no requirement to file another notification when negotiations have
                been unsuccessful. However, employees may want to do so to facilitate
                the resumption of their duties.
                 Example 1 to paragraph (a): An employee of the Merit Systems
                Protection Board who is a public filer was in private practice prior to
                Government service. The employee receives a telephone call from a
                partner in a law firm who inquires as to whether they would be
                interested in returning to private practice. During this initial
                telephone call with the law firm partner, the employee indicates that
                they are interested in resuming private practice. The partner and
                employee discuss generally the types of issues that would need to be
                agreed upon if the employee were to consider a possible offer to serve
                as ``of counsel'' with the firm, such as salary, benefits, and type of
                work the employee would perform. The employee has begun negotiating for
                future employment with the law firm. Within three business days after
                this initial telephone call, the employee must file written
                notification of the negotiations with the agency ethics official.
                 Example 2 to paragraph (a): The employee in the example 1 to this
                paragraph (a) also negotiates a possible contract with a publisher to
                begin writing a textbook after leaving Government service. Within three
                business days after commencing negotiations, the employee must file
                written notification with the agency ethics official documenting this
                engagement in negotiations for future compensation with the book
                publisher.
                 (b) Notification of recusal. A public filer who files a
                notification statement pursuant to paragraph (a) of this section must
                file with an agency ethics official a notification of recusal whenever
                there is a conflict of interest or appearance of a conflict of interest
                with the non-Federal entity identified in the notification statement.
                The notification statement and the recusal statement may be contained
                in a single document or in separate documents.
                 (c) Advance filing of notification and recusal statements. When a
                public filer is seeking employment within the meaning of Sec.
                2635.603(b)(1)(ii) or (iii) or is considering seeking employment, the
                public filer may elect to file the notification statement pursuant to
                paragraph (a) of this section before negotiations have commenced and
                [[Page 43721]]
                before an agreement of future employment or compensation is reached. A
                public filer may also elect to file the recusal statement pursuant to
                paragraph (b) of this section before the public filer has a conflict of
                interest or appearance of a conflict of interest with the non-Federal
                entity identified in the notification statement. The public filer need
                not file the document again upon commencing negotiations or reaching an
                agreement of future employment or compensation. The advance filing of
                any such document is not construed as a statement that negotiations
                have or have not commenced or that a conflict of interest does or does
                not exist. Although the Office of Government Ethics encourages advance
                filing when a public filer anticipates a realistic possibility of
                negotiations or an agreement, the failure to make an advance filing
                does not violate this subpart or the principles of ethical conduct
                contained in Sec. 2635.101(b).
                 Example 1 to paragraph (c): An employee of the Federal Labor
                Relations Authority who is a public filer began negotiating for future
                employment with a law firm. At the time the employee began negotiating
                for future employment with the law firm, they were not participating
                personally and substantially in a particular matter that, to their
                knowledge, had a direct and predictable effect on the financial
                interest of the law firm. Although the employee was not required to
                file a recusal statement because they did not have a conflict of
                interest or appearance of a conflict of interest with the law firm
                identified in the notification statement, the Office of Government
                Ethics encourages the employee to submit a notification of recusal at
                the same time that they file the notification statement regarding the
                negotiations for future employment in order to ensure that the
                requirement of paragraph (b) of this section is satisfied if a conflict
                of interest or an appearance of a conflict of interest later arises.
                The agency ethics official should counsel the employee on applicable
                requirements but is under no obligation to notify the employee's
                supervisor that the employee is negotiating for employment.
                 Example 2 to paragraph (c): An employee of the General Services
                Administration is contacted by a prospective employer regarding
                scheduling an interview for the following week to begin discussing the
                possibility of future employment. The employee discusses the matter
                with the ethics official and chooses to file a notification and recusal
                statement prior to the interview. The notification and recusal
                statement contain the identity of the prospective employer and an
                estimated date of when the interview will occur. The employee has
                complied with the notification requirement of section 17 of the STOCK
                Act.
                 (d) Definition of agreement of future employment or compensation.
                Agreement of future employment or compensation for the purposes of this
                section means any arrangement concerning employment that will commence
                after the termination of Government service. The term also means any
                arrangement to compensate in exchange for services that will commence
                after the termination of Government service. The term includes, among
                other things, an arrangement to compensate for teaching, speaking, or
                writing that will commence after the termination of Government service.
                Subpart G--Misuse of Position
                Sec. 2635.701 Overview.
                 This subpart contains provisions relating to the proper use of
                official time and authority, and of information and resources to which
                employees have access because of their Federal employment. This subpart
                sets forth standards relating to:
                 (a) Use of public office for private gain;
                 (b) Use of nonpublic information;
                 (c) Use of Government property; and
                 (d) Use of official time.
                Sec. 2635.702 Use of public office for private gain.
                 An employee may not use their public office for their own private
                gain; for the endorsement of any product, service, or enterprise
                (except as otherwise permitted by this part or other applicable law or
                regulation); or for the private gain of friends, relatives, or persons
                with whom the employee is affiliated in a nongovernmental capacity,
                including nonprofit organizations of which the employee is an officer
                or member, and persons with whom the employee has or seeks employment
                or business relations. The specific prohibitions set forth in
                paragraphs (a) through (d) of this section apply this general standard,
                but are not intended to be exclusive or to limit the application of
                this section.
                 (a) Inducement or coercion of benefits. Employees may not use or
                permit the use of their Government position or title, or any authority
                associated with their public office, in a manner that is intended to
                coerce or induce another person, including a subordinate, to provide
                any benefit, financial or otherwise, to the employee or to friends,
                relatives, or persons with whom the employee is affiliated in a
                nongovernmental capacity.
                 Example 1 to paragraph (a): Offering to pursue a relative's
                consumer complaint over a household appliance, an employee of the
                Securities and Exchange Commission called the general counsel of the
                manufacturer and, in the course of discussing the problem, stated that
                they worked at the SEC and were responsible for reviewing the company's
                filings. The employee violated the prohibition against use of public
                office for private gain by invoking their official authority in an
                attempt to influence action to benefit the relative.
                 Example 2 to paragraph (a): An employee of the Department of
                Commerce was asked by a friend to determine why another office within
                the Department of Commerce had not yet granted an export license to the
                friend's firm. At a department-level staff meeting, the employee raised
                as a matter for official inquiry the delay in approval of the
                particular license and asked that the particular license be expedited.
                The official used their public office in an attempt to benefit the
                friend and, in acting as the friend's agent for the purpose of pursuing
                the export license with the Department of Commerce, may also have
                violated 18 U.S.C. 205.
                 (b) Appearance of governmental sanction. Except as otherwise
                provided in this part, employees may not use or permit the use of their
                Government position or title, or any authority associated with their
                public office, in a manner that could reasonably be construed to imply
                that their agency or the Government sanctions or endorses their
                personal activities or those of another. When teaching, speaking, or
                writing in a personal capacity, employees may refer to their official
                title or position only as permitted by Sec. 2635.807(b). When
                providing a verbal or written recommendation, employees may only use
                their official title in response to a request for a recommendation or
                character reference based upon personal knowledge of the ability or
                character of an individual with whom they have dealt in the course of
                Federal employment or whom they are recommending for Federal
                employment.
                 Example 1 to paragraph (b): An employee of the Department of the
                Treasury who is asked to provide a letter of recommendation for a
                former subordinate or for an individual who worked for their team under
                a Government contract may provide the recommendation using official
                stationery and may sign the letter using their official title. If,
                however, the
                [[Page 43722]]
                request is for the recommendation of a personal friend with whom they
                have not dealt in the Government, the employee should not use official
                stationery or sign the letter of recommendation using their official
                title, unless the recommendation is for Federal employment. In writing
                the letter of recommendation for the personal friend, it may be
                appropriate for the employee to make a reference to their official
                position in the body of the letter.
                 Example 2 to paragraph (b): An employee of the Environmental
                Protection Agency (EPA) has a personal social media account. Under
                ``occupation,'' the employee writes ``Analyst at the Environmental
                Protection Agency.'' On the same social media account, the EPA employee
                occasionally discusses topics related to the environment, such as
                recycling, biking to work, and organic gardening. Even though the
                employee is discussing matters related to the EPA's mission and lists
                their position in the area designated for occupation, these facts alone
                would not reasonably be construed as implying governmental sanction or
                endorsement. The same employee may not, for example, redesign the
                social media account so that it prominently features the official EPA
                seal and make statements that either assert or imply that their
                opinions on environmental topics are sanctioned or endorsed by the
                Government.
                 (c) Endorsements. Employees may not use or permit the use of their
                Government position or title or any authority associated with their
                public office to endorse any product, service, or enterprise except:
                 (1) In furtherance of statutory authority to promote products,
                services, or enterprises; or
                 (2) As a result of documentation of compliance with agency
                requirements or standards or as the result of recognition for
                achievement given under an agency program of recognition for
                accomplishment in support of the agency's mission.
                 Example 1 to paragraph (c): A Commissioner of the Consumer Product
                Safety Commission (CPSC) may not appear in a television commercial and
                endorse an electrical appliance produced by a former employer, stating
                that it has been found by the CPSC to be safe for residential use.
                 Example 2 to paragraph (c): A Foreign Commercial Service officer
                from the Department of Commerce is asked by a United States
                telecommunications company to meet with representatives of the
                government of Spain, which is in the process of procuring
                telecommunications services and equipment. The company is bidding
                against five European companies, and the statutory mission of the
                Department of Commerce includes assisting the export activities of U.S.
                companies. As part of official duty activities, the Foreign Commercial
                Service officer may meet with Spanish officials and explain the
                advantages of procurement from the United States company.
                 Example 3 to paragraph (c): The Administrator of the Environmental
                Protection Agency may sign a letter to an oil company indicating that
                its refining operations are in compliance with Federal air quality
                standards even though the Administrator knows that the company has
                routinely displayed letters of this type in television commercials
                portraying it as a ``trustee of the environment for future
                generations.''
                 Example 4 to paragraph (c): An Assistant Attorney General may not
                use their official title or refer to their Government position in a
                book jacket endorsement of a novel about organized crime written by an
                author whose work they admire. Nor may they do so in a book review
                published in a newspaper.
                 (d) Performance of official duties affecting a private interest. To
                ensure that the performance of their official duties does not give rise
                to an appearance of use of public office for private gain or of giving
                preferential treatment, employees whose duties would affect the
                financial interests of a friend, relative, or person with whom they are
                affiliated in a nongovernmental capacity must comply with any
                applicable requirements of Sec. 2635.502.
                 (e) Use of terms of address and ranks. Nothing in this section
                prohibits an employee who is ordinarily addressed using a general term
                of address, such as ``The Honorable'' or ``Judge,'' or a rank, such as
                a military or ambassadorial rank, from using that term of address or
                rank in connection with a personal activity.
                Sec. 2635.703 Use of nonpublic information.
                 (a) Prohibition. Employees may not engage in financial transactions
                using nonpublic information, nor allow the improper use of nonpublic
                information to further their own private interests or those of another,
                whether through advice or recommendation, or by knowing unauthorized
                disclosure.
                 (b) Definition of nonpublic information. For purposes of this
                section, nonpublic information is information that the employee gains
                by reason of Federal employment and that the employee knows or
                reasonably should know has not been made available to the general
                public. It includes information that the employee knows or reasonably
                should know:
                 (1) Is routinely exempt from disclosure under 5 U.S.C. 552 or
                otherwise protected from disclosure by statute, Executive order, or
                regulation;
                 (2) Is designated as confidential by an agency; or
                 (3) Has not actually been disseminated to the general public and is
                not authorized to be made available to the public on request.
                 Example 1 to paragraph (b): A Navy employee learns in the course of
                official duties that a small corporation will be awarded a Navy
                contract for electrical test equipment. The employee may not take any
                action to purchase stock in the corporation or its suppliers, and may
                not advise friends or relatives to do so until after public
                announcement of the award. Such actions could violate Federal
                securities statutes as well as this section.
                 Example 2 to paragraph (b): A General Services Administration
                employee involved in evaluating proposals for a construction contract
                cannot disclose the terms of a competing proposal to a friend employed
                by a company bidding on the work. Prior to award of the contract, bid
                or proposal information is nonpublic information specifically protected
                by 41 U.S.C. 2102.
                 Example 3 to paragraph (b): An employee is a member of a source
                selection team assigned to review the proposals submitted by several
                companies in response to an Army solicitation for spare parts. As a
                member of the evaluation team, the employee has access to proprietary
                information regarding the production methods of Alpha Corporation, one
                of the competitors. The employee may not use that information to assist
                Beta Company in drafting a proposal to compete for a Navy spare parts
                contract. The Federal Acquisition Regulation in 48 CFR parts 3, 14, and
                15 restricts the release of information related to procurements and
                other contractor information that must be protected under 18 U.S.C.
                1905 and 41 U.S.C. 2102.
                 Example 4 to paragraph (b): An employee of the Nuclear Regulatory
                Commission inadvertently includes a document that is exempt from
                disclosure with a group of documents released in response to a Freedom
                of Information Act request. Regardless of whether the document is used
                improperly, the employee's disclosure does not violate this section
                because it was not a knowing unauthorized disclosure made for the
                purpose of furthering a private interest.
                [[Page 43723]]
                 Example 5 to paragraph (b): An employee of the Army Corps of
                Engineers is actively involved in the activities of an organization
                whose goals relate to protection of the environment. The employee may
                not, other than as permitted by agency procedures, give the
                organization or a newspaper reporter nonpublic information about long-
                range plans to build a particular dam.
                Sec. 2635.704 Use of Government property.
                 (a) Standard. Employees have a duty to protect and conserve
                Government property and may not use such property, or allow its use,
                for other than authorized purposes.
                 (b) Definitions. For purposes of this section:
                 (1) Government property includes any form of real or personal
                property in which the Government has an ownership, leasehold, or other
                property interest as well as any right or other intangible interest
                that is purchased with Government funds, including the services of
                contractor personnel. The term includes but is not limited to office
                supplies, telephone and other telecommunications equipment and
                services, Government mail, computers and other electronic devices,
                printing and reproduction facilities, Government records, Government
                email and social media accounts, and Government vehicles.
                 (2) Authorized purposes are those purposes for which Government
                property is made available to members of the public or those purposes
                authorized in accordance with law or regulation. Authorized purposes
                include but are not limited to those uses of Government property that
                are in accordance with an agency's limited or de minimis personal use
                policy.
                 Example 1 to paragraph (b): As permitted under their agency's de
                minimis personal use policy, an employee may send an email from a
                Government email account to a former college roommate to schedule lunch
                for the following day.
                 Example 2 to paragraph (b): An employee of the Commodity Futures
                Trading Commission whose office computer provides access to a
                commercial service providing information for investors may not use that
                service for personal investment research.
                 Example 3 to paragraph (b): In accordance with Office of Personnel
                Management regulations at part 251 of this title, an attorney employed
                by the Department of Justice may be permitted to use their office
                computer and agency photocopy equipment to prepare a paper to be
                presented at a conference sponsored by a professional association of
                which they are a member.
                Sec. 2635.705 Use of official time.
                 (a) Use of an employee's own time. Unless authorized in accordance
                with law or regulations to use such time for other purposes, employees
                must use official time in an honest effort to perform official duties.
                Employees not under a leave system, including Presidential appointees
                exempted under 5 U.S.C. 6301(2), have an obligation to expend an honest
                effort and a reasonable proportion of their time in the performance of
                official duties.
                 Example 1 to paragraph (a): A disability claims examiner of the
                Social Security Administration may use official time to engage in
                certain representational activities on behalf of the employee union of
                which they are a member. Under 5 U.S.C. 7131, this is a proper use of
                official time even though it does not involve performance of assigned
                duties as a disability claims examiner.
                 Example 2 to paragraph (a): A pharmacist employed by the Department
                of Veterans Affairs has been granted an excused absence to participate
                as a speaker in a conference on drug abuse sponsored by the
                professional association to which they belong. Even if an excused
                absence granted by an agency in accordance with Governmentwide
                personnel guidance would allow employees to be absent from their
                official duties without charge to their annual leave accounts, such
                absence would not be on official time.
                 (b) Use of a subordinate's time. Employees may not encourage,
                direct, coerce, or request a subordinate to use official time to
                perform activities other than those required in the performance of
                official duties or authorized in accordance with law or regulation.
                 Example 1 to paragraph (b): A supervisory employee of the
                Department of Housing and Urban Development may not ask an assistant to
                run personal errands for the employee during duty hours. Further,
                directing or coercing a subordinate to perform such activities during
                nonduty hours constitutes an improper use of public office for private
                gain in violation of Sec. 2635.702(a). However, when an arrangement is
                entirely voluntary and appropriate compensation is paid, a subordinate
                may provide services to the superior during nonduty hours. For example,
                a subordinate who enjoys calligraphy may prepare invitations for an
                upcoming party that the superior is organizing with friends and family
                at home on personal time for appropriate compensation. When the
                compensation is not adequate, however, the arrangement would involve a
                gift to the superior in violation of the standards in subpart C of this
                part.
                Subpart H--Outside Activities
                Sec. 2635.801 Overview.
                 (a) This subpart contains provisions relating to outside
                employment, outside activities, and personal financial obligations of
                employees that are in addition to the principles and standards set
                forth in other subparts of this part. Several of the provisions in this
                subpart apply to uncompensated as well as to compensated outside
                activities.
                 (b) Employees who wish to engage in outside employment or other
                outside activities must comply with all relevant provisions of this
                subpart, including, when applicable:
                 (1) The prohibition on outside employment or any other outside
                activity that conflicts with the employee's official duties;
                 (2) Any agency-specific requirement for prior approval of outside
                employment or activities;
                 (3) The limitations on receipt of outside earned income by certain
                Presidential appointees and other noncareer employees;
                 (4) The limitations on paid and unpaid service as an expert
                witness;
                 (5) The limitations on paid and unpaid teaching, speaking, and
                writing; and
                 (6) The limitations on fundraising activities.
                 (c) Outside employment and other outside activities of an employee
                must also comply with applicable provisions set forth in other subparts
                of this part and in supplemental agency regulations. These include the
                principle that an employee must endeavor to avoid actions creating an
                appearance of violating any of the ethical standards in this part and
                the prohibition against use of official position for an employee's
                private gain or for the private gain of any person with whom the
                employee has employment or business relations or is otherwise
                affiliated in a nongovernmental capacity.
                 Example 1 to paragraph (c): An employee of the Occupational Safety
                and Health Administration (OSHA) who was and is expected again to be
                instrumental in formulating new OSHA safety standards applicable to
                manufacturers that use chemical solvents has been offered a consulting
                contract to provide advice to an affected company in restructuring its
                manufacturing operations to comply with the OSHA standards. The
                [[Page 43724]]
                employee should not enter into the consulting arrangement even though
                they are not currently working on OSHA standards affecting this
                industry and the consulting contract can be expected to be completed
                before they again work on such standards. Even though the consulting
                arrangement would not be a conflicting activity within the meaning of
                Sec. 2635.802, it would create an appearance that the employee had
                used their official position to obtain the compensated outside business
                opportunity and it would create the further appearance of using public
                office for the private gain of the manufacturer.
                 (d) In addition to the provisions of this subpart and other
                subparts of this part, an employee who wishes to engage in outside
                employment or other outside activities must comply with applicable
                statutes and regulations. Relevant provisions of law, many of which are
                listed in subpart I of this part, may include:
                 (1) 18 U.S.C. 201(b), which prohibits a public official from
                seeking, accepting or agreeing to receive or accept anything of value
                in return for being influenced in the performance of an official act or
                for being induced to take or omit to take any action in violation of
                official duty;
                 (2) 18 U.S.C. 201(c), which prohibits a public official, otherwise
                than as provided by law for the proper discharge of official duty, from
                seeking, accepting, or agreeing to receive or accept anything of value
                for or because of any official act;
                 (3) 18 U.S.C. 203(a), which prohibits an individual from seeking,
                accepting, or agreeing to receive or accept compensation for any
                representational services, rendered personally or by another at a time
                when the individual is an employee, in relation to any particular
                matter in which the United States is a party or has a direct and
                substantial interest, before any department, agency, or other specified
                entity. This statute contains several exceptions, as well as standards
                for special Government employees that limit the scope of the
                restriction;
                 (4) 18 U.S.C. 205, which prohibits an employee, whether or not for
                compensation, from acting as agent or attorney for anyone in a claim
                against the United States or from acting as agent or attorney for
                anyone, before any department, agency, or other specified entity, in
                any particular matter in which the United States is a party or has a
                direct and substantial interest. It also prohibits receipt of any
                gratuity, or any share of or interest in a claim against the United
                States, in consideration for assisting in the prosecution of such
                claim. This statute contains several exceptions, as well as standards
                for special Government employees that limit the scope of the
                restrictions;
                 (5) 18 U.S.C. 209, which prohibits an employee, other than a
                special Government employee, from receiving any salary or any
                contribution to or supplementation of salary from any source other than
                the United States as compensation for services as a Government
                employee. The statute contains several exceptions that limit its
                applicability;
                 (6) The Emoluments Clause of the United States Constitution,
                article I, section 9, clause 8, which prohibits anyone holding an
                office of profit or trust under the United States from accepting any
                gift, office, title, or emolument, including salary or compensation,
                from any foreign government except as authorized by Congress. In
                addition, 18 U.S.C. 219 generally prohibits any public official from
                being or acting as an agent of a foreign principal, including a foreign
                government, corporation, or person, if the employee would be required
                to register as a foreign agent under 22 U.S.C. 611 et seq.;
                 (7) The Hatch Act Reform Amendments, 5 U.S.C. 7321 through 7326,
                which govern the political activities of executive branch employees;
                and
                 (8) The Ethics in Government Act of 1978 limitations on outside
                employment, 5 U.S.C. chapter 131, subchapter III, which restrict the
                amount of outside earned income that a covered noncareer employee may
                receive, prohibit a covered noncareer employee from receiving
                compensation for specified activities, and provide that a covered
                noncareer employee may not allow their name to be used by any firm or
                other entity that provides professional services involving a fiduciary
                relationship. Implementing regulations are contained in Sec. Sec.
                2636.305 through 2636.307 of this chapter.
                Sec. 2635.802 Conflicting outside employment and activities.
                 (a) Employees may not engage in outside employment or any other
                outside activity that conflicts with their official duties. An activity
                conflicts with an employee's official duties:
                 (1) If it is prohibited by statute or by an agency supplemental
                regulation; or
                 (2) If, under the standards set forth in Sec. Sec. 2635.402 and
                2635.502, it would require the employee's recusal from matters so
                central or critical to the performance of their official duties that
                the employee's ability to perform the duties of the Government position
                would be materially impaired.
                 (b) Employees are cautioned that even though an outside activity
                may not be prohibited under this section, it may violate other
                principles or standards set forth in this part or require the employee
                to recuse from participating in certain particular matters under either
                subpart D or E of this part.
                 Example 1 to paragraph (b): A biochemist, who conducts research at
                the Environmental Protection Agency (EPA), has an outside consulting
                business providing technical guidance on the handling of hazardous
                materials. The biochemist would like to apply for a different EPA
                position, for which the principal duty would be writing regulations on
                the handling of hazardous materials. If the biochemist gets the
                position, the work would have a direct and predictable effect on the
                outside consulting business. Because the biochemist would be required
                to recuse from duties critical to the performance of official duties on
                a basis so frequent as to materially impair their ability to perform
                the duties of the position, they could not continue to operate the
                outside consulting business.
                 Example 2 to paragraph (b): An employee of the Internal Revenue
                Service (IRS) reviews applications for recognition of tax-exempt
                status. Several years ago, the employee became involved with a
                neighborhood group that transports stray animals to nearby adoption
                centers. As its activities expanded, the group created a formal
                organization, and submitted an application for recognition of tax-
                exempt status by the IRS. Under the circumstances, the employee should
                be recused from participating in any IRS determination regarding the
                tax-exempt status of this organization. However, the employee's
                involvement with the organization would not be prohibited by this
                section, because the outside activity would have a limited effect on
                official duties and would not require recusal from matters so central
                or critical to the performance of official duties that the ability to
                perform the duties of the position would be materially impaired.
                Sec. 2635.803 Prior approval for outside employment and activities.
                 When required by agency supplemental regulation, employees must
                obtain prior approval before engaging in outside employment or
                activities. When it is determined to be necessary or desirable for the
                purpose of administering its ethics program, an agency may, by
                supplemental regulation, require employees or any category of employees
                to obtain prior approval before engaging in specific types of outside
                activities, including
                [[Page 43725]]
                outside employment. Whether or not prior approval is required by agency
                supplemental regulations, employees have a continuing responsibility to
                ensure that their outside activities do not conflict with their
                official duties.
                Sec. 2635.804 Outside earned income limitations applicable to certain
                Presidential appointees.
                 This section implements the outside earned income limitations
                applicable to certain Presidential appointees. The outside earned
                income limitations applicable to covered noncareer employees, as
                defined in Sec. 2636.303(a) of this chapter, are implemented in
                Sec. Sec. 2636.301 through 2636.304 of this chapter.
                 (a) Presidential appointees to full-time noncareer positions. A
                Presidential appointee to a full-time noncareer position may not
                receive any outside earned income for outside employment, or for any
                other outside activity, performed during that Presidential appointment.
                 (b) Definitions. For purposes of this section:
                 (1) Outside earned income has the meaning set forth in Sec.
                2636.303(b) of this chapter, except that Sec. 2636.303(b)(7) does not
                apply.
                 (2) Presidential appointee to a full-time noncareer position means
                any employee who is appointed by the President to a full-time position
                described in 5 U.S.C. 5312 through 5317 or to a position that, by
                statute or as a matter of practice, is filled by Presidential
                appointment, other than:
                 (i) A position filled under the authority of 3 U.S.C. 105 or 107(a)
                for which the rate of basic pay is less than that for GS-9, step 1 of
                the General Schedule;
                 (ii) A position, within a White House operating unit, that is
                designated as not normally subject to change as a result of a
                Presidential transition;
                 (iii) A position within the uniformed services; or
                 (iv) A position in which a member of the Foreign Service is serving
                that does not require advice and consent of the Senate.
                 Example 1 to paragraph (b)(2): A career Department of Justice
                employee who is detailed to a policy-making position in the White House
                Office that is ordinarily filled by a noncareer employee is not a
                Presidential appointee to a full-time noncareer position.
                 Example 2 to paragraph (b)(2): A Department of Energy employee
                appointed under Sec. 213.3301 of this title to a Schedule C position
                is appointed by the agency and, thus, is not a Presidential appointee
                to a full-time noncareer position.
                Sec. 2635.805 Service as an expert witness.
                 (a) Restriction. Employees may not serve, other than on behalf of
                the United States, as an expert witness, with or without compensation,
                in any proceeding before a court or agency of the United States in
                which the United States is a party or has a direct and substantial
                interest, unless the employee's participation is authorized by the
                agency under paragraph (c) of this section. Except as provided in
                paragraph (b) of this section, the restriction in this paragraph (a)
                applies to special Government employees only if they have participated
                as an employee or special Government employee in the particular
                proceeding or in the particular matter that is the subject of the
                proceeding.
                 (b) Additional restriction applicable to certain special Government
                employees. (1) In addition to the restriction described in paragraph
                (a) of this section, special Government employees described in
                paragraph (b)(2) of this section may not serve, other than on behalf of
                the United States, as an expert witness, with or without compensation,
                in any proceeding before a court or agency of the United States in
                which their employing agency is a party or has a direct and substantial
                interest, unless the employee's participation is authorized by the
                agency under paragraph (c) of this section.
                 (2) The restriction in paragraph (b)(1) of this section applies to
                special Government employees who:
                 (i) Are appointed by the President;
                 (ii) Serve on a commission established by statute; or
                 (iii) Have served or are expected to serve for more than 60 days in
                a period of 365 consecutive days.
                 (c) Authorization to serve as an expert witness. Provided that the
                employee's testimony will not violate any of the principles or
                standards set forth in this part, authorization to provide expert
                witness service otherwise prohibited by paragraphs (a) and (b) of this
                section may be given by the designated agency ethics official of the
                agency in which the employee serves when:
                 (1) After consultation with the agency representing the Government
                in the proceeding or, if the Government is not a party, with the
                Department of Justice and the agency with the most direct and
                substantial interest in the matter, the designated agency ethics
                official determines that the employee's service as an expert witness is
                in the interest of the Government; or
                 (2) The designated agency ethics official determines that the
                subject matter of the testimony does not relate to the employee's
                official duties within the meaning of Sec. 2635.807(a)(2)(i).
                 (d) Fact witness. Nothing in this section prohibits an employee
                from serving as a fact witness when subpoenaed by an appropriate
                authority.
                Sec. 2635.806 [Reserved]
                Sec. 2635.807 Teaching, speaking, and writing.
                 (a) Compensation for teaching, speaking, or writing. Except for
                teaching certain courses as permitted by paragraph (a)(3) of this
                section, an employee, including a special Government employee, may not
                receive compensation from any source other than the Government for
                teaching, speaking, or writing that occurs while the person is a
                Government employee and that relates to the employee's official duties.
                 (1) Relationship to other limitations on receipt of compensation.
                The compensation prohibition contained in this section is in addition
                to any other limitation on receipt of compensation set forth in this
                chapter, including:
                 (i) The requirement contained in Sec. 2636.307 of this chapter
                that covered noncareer employees obtain advance authorization before
                engaging in teaching for compensation; and
                 (ii) The prohibitions and limitations in Sec. 2635.804 and in
                Sec. 2636.304 of this chapter on receipt of outside earned income
                applicable to certain Presidential appointees and to other covered
                noncareer employees.
                 (2) Definitions. For purposes of this paragraph (a):
                 (i) Teaching, speaking, or writing relates to the employee's
                official duties if:
                 (A) The activity is undertaken as part of the employee's official
                duties;
                 (B) The circumstances indicate that the invitation to engage in the
                activity was extended to the employee primarily because of their
                official position rather than their expertise on the particular subject
                matter;
                 (C) The invitation to engage in the activity or the offer of
                compensation for the activity was extended to the employee, directly or
                indirectly, by a person who has interests that may be affected
                substantially by performance or nonperformance of the employee's
                official duties;
                 (D) The information conveyed through the activity draws
                substantially on ideas or official data that are nonpublic information
                as defined in Sec. 2635.703(b); or
                 (E) Except as provided in paragraph (a)(2)(i)(E)(4) of this
                section, the subject of the activity deals in significant part with:
                [[Page 43726]]
                 (1) Any matter to which the employee presently is assigned or to
                which the employee had been assigned during the previous one-year
                period;
                 (2) Any ongoing or announced policy, program, or operation of the
                agency; or
                 (3) In the case of a noncareer employee as defined in Sec.
                2636.303(a) of this chapter, the general subject matter area, industry,
                or economic sector primarily affected by the programs and operations of
                the employee's agency.
                 (4) The restrictions in paragraphs (a)(2)(i)(E)(2) and (3) of this
                section do not apply to a special Government employee. The restriction
                in paragraph (a)(2)(i)(E)(1) of this section applies only during the
                current appointment of a special Government employee; except that if
                the special Government employee has not served or is not expected to
                serve for more than 60 days during the first year or any subsequent
                one-year period of that appointment, the restriction applies only to
                particular matters involving specific parties in which the special
                Government employee has participated or is participating personally and
                substantially.
                 Note 1 to paragraph (a)(2)(i): Paragraph (a)(2)(i)(E) of this
                section does not preclude an employee, other than a covered
                noncareer employee, from receiving compensation for teaching,
                speaking, or writing on a subject within the employee's discipline
                or inherent area of expertise based on the employee's educational
                background or experience even though the teaching, speaking, or
                writing deals generally with a subject within the agency's areas of
                responsibility.
                 Example 1 to paragraph (a)(2)(i): The Director of the Division of
                Enforcement at the Commodity Futures Trading Commission has a keen
                interest in stamp collecting and has spent years developing a personal
                collection as well as studying the field generally. The Director is
                asked by an international society of philatelists to give a series of
                four lectures on how to assess the value of American stamps. Because
                the subject does not relate to the Director's official duties, it is
                permissible for the Director to accept compensation for the lecture
                series. The Director could not, however, accept a similar invitation
                from a commodities broker.
                 Example 2 to paragraph (a)(2)(i): A scientist at the National
                Institutes of Health (NIH), whose principal area of Government research
                is the molecular basis of the development of cancer, could not be
                compensated for writing a book which focuses specifically on the
                research conducted in this position at NIH, which thus relates to the
                scientist's official duties. However, the scientist could receive
                compensation for writing or editing a textbook on the treatment of all
                cancers, provided that the book does not focus on recent research at
                NIH, but rather conveys scientific knowledge gleaned from the
                scientific community as a whole. The book might include a chapter,
                among many other chapters, which discusses the molecular basis of
                cancer development. Additionally, the book could contain brief
                discussions of recent developments in cancer treatment, even though
                some of those developments are derived from NIH research, as long as it
                is available to the public.
                 Example 3 to paragraph (a)(2)(i): On personal time, a National
                Highway Traffic Safety Administration (NHTSA) employee prepared a
                consumer's guide to purchasing a safe automobile that focuses on
                automobile crash worthiness statistics gathered and made public by
                NHTSA. The employee may not receive royalties or any other form of
                compensation for the guide. The guide deals in significant part with
                the programs or operations of NHTSA and, therefore, relates to the
                employee's official duties. On the other hand, the employee could
                receive royalties from the sale of a consumer's guide to values in used
                automobiles even though it contains a brief, incidental discussion of
                automobile safety standards developed by NHTSA.
                 Example 4 to paragraph (a)(2)(i): An employee of the Securities and
                Exchange Commission (SEC) may not receive compensation for a book which
                focuses specifically on the regulation of the securities industry in
                the United States, because that subject concerns the regulatory
                programs or operations of the SEC. The employee may, however, write a
                book about the advantages of investing in various types of securities
                as long as the book contains only an incidental discussion of any
                program or operation of the SEC.
                 Example 5 to paragraph (a)(2)(i): An employee of the Department of
                Commerce who works in the Department's employee relations office is an
                acknowledged expert in the field of Federal employee labor relations,
                and participates in Department negotiations with employee unions. The
                employee may receive compensation from a private training institute for
                a series of lectures which describe the decisions of the Federal Labor
                Relations Authority concerning unfair labor practices, provided that
                the lectures do not contain any significant discussion of labor
                relations cases handled at the Department of Commerce, or the
                Department's labor relations policies. Federal Labor Relations
                Authority decisions concerning Federal employee unfair labor practices
                are not a specific program or operation of the Department of Commerce
                and thus do not relate to the employee's official duties. However, an
                employee of the FLRA could not give the same presentations for
                compensation.
                 Example 6 to paragraph (a)(2)(i): A program analyst employed at the
                Environmental Protection Agency (EPA) may receive royalties and other
                compensation for a book about the history of the environmental movement
                in the United States even though it contains brief references to the
                creation and responsibilities of the EPA. A covered noncareer employee
                of the EPA, however, could not receive compensation for writing the
                same book because it deals with the general subject matter area
                affected by EPA programs and operations. Neither employee could receive
                compensation for writing a book that focuses on specific EPA
                regulations or otherwise on its programs and operations.
                 Example 7 to paragraph (a)(2)(i): An attorney in private practice
                has been given a one-year appointment as a special Government employee
                to serve on an advisory committee convened for the purpose of surveying
                and recommending modification of procurement regulations that deter
                small businesses from competing for Government contracts. Because
                service under this appointment is not expected to exceed 60 days, the
                attorney may accept compensation for an article about the
                anticompetitive effects of certain regulatory certification
                requirements even though those regulations are being reviewed by the
                advisory committee. The regulations which are the focus of the advisory
                committee deliberations are not a particular matter involving specific
                parties. Because the information is nonpublic, the attorney could not,
                however, accept compensation for an article which recounts advisory
                committee deliberations that took place in a meeting closed to the
                public in order to discuss proprietary information provided by a small
                business.
                 Example 8 to paragraph (a)(2)(i): A biologist who is an expert in
                marine life is employed for more than 60 days in a year as a special
                Government employee by the National Science Foundation (NSF) to assist
                in developing a program of grants by the NSF for the study of coral
                reefs. The biologist may continue to receive compensation for speaking,
                teaching, and writing about marine life generally and coral reefs
                specifically. However, during the term of the appointment as a special
                Government employee, the biologist may not receive compensation for an
                article about the
                [[Page 43727]]
                NSF program being developed. Only the latter would concern a matter to
                which the special Government employee is assigned.
                 Example 9 to paragraph (a)(2)(i): An expert on international
                banking transactions has been given a one-year appointment as a special
                Government employee to assist in analyzing evidence in the Government's
                fraud prosecution of owners of a failed savings and loan association.
                It is anticipated that the expert will serve fewer than 60 days under
                that appointment. Nevertheless, during this appointment, the expert may
                not accept compensation for an article about the fraud prosecution,
                even though the article does not reveal nonpublic information. The
                prosecution is a particular matter that involves specific parties.
                 (ii) Agency has the meaning set forth in Sec. 2635.102(a), except
                that any component of a department designated as a separate agency
                under Sec. 2635.203(a) will be considered a separate agency.
                 (iii) Compensation, for purposes of this paragraph (a):
                 (A) Includes any form of consideration, remuneration, or income,
                including royalties, given for or in connection with the employee's
                teaching, speaking, or writing.
                 (B) Compensation does not include:
                 (1) Items offered by any source that could be accepted from a
                prohibited source under subpart B of this part;
                 (2) Meals or other incidents of attendance such as waiver of
                attendance fees or course materials furnished as part of the event at
                which the teaching or speaking takes place;
                 (3) Copies of books or of publications containing articles,
                reprints of articles, tapes of speeches, and similar items that provide
                a record of the teaching, speaking, or writing activity; or
                 (4) Travel expenses for certain individuals as described in
                paragraph (a)(2)(iii)(C) of this section.
                 (C) For employees other than covered noncareer employees as defined
                in Sec. 2636.303(a) of this chapter, compensation does not include
                travel expenses, consisting of transportation, lodging or meals,
                incurred in connection with the teaching, speaking, or writing
                activity. For covered noncareer employees as defined in Sec.
                2636.303(a) of this chapter, compensation does include transportation,
                lodging, and meals, whether provided in kind, by purchase of a ticket,
                by payment in advance, or by reimbursement after the expense has been
                incurred, unless such travel expenses are accepted under specific
                statutory authority, such as 31 U.S.C. 1353, 5 U.S.C. 4111, or 5 U.S.C.
                7342, or an agency gift acceptance statute.
                 Note 2 to paragraph (a)(2)(iii)(C): Independent of paragraph
                (a) of this section, other authorities, including but not limited to
                18 U.S.C. 209, in some circumstances may limit or entirely preclude
                an employee's acceptance of travel expenses. In addition, employees
                who file financial disclosure reports should be aware that, subject
                to applicable thresholds and exclusions, travel and travel
                reimbursements accepted from sources other than the United States
                Government must be reported on their financial disclosure reports.
                 Example 1 to paragraph (a)(2)(iii): A GS-15 employee of the Forest
                Service has developed and marketed, in a private capacity, a speed-
                reading technique for which popular demand is growing. The employee is
                invited to speak about the technique by a representative of an
                organization that will be substantially affected by a regulation on
                land management which the employee is in the process of drafting for
                the Forest Service. The representative offers to pay the employee a
                $200 speaker's fee and to reimburse all travel expenses. The employee
                may accept the travel reimbursements, but not the speaker's fee. The
                speaking activity is related to official duties under paragraph
                (a)(2)(i)(C) of this section and the fee is prohibited compensation for
                such speech; travel expenses incurred in connection with the speaking
                engagement, on the other hand, are not prohibited compensation for a
                GS-15 employee.
                 Example 2 to paragraph (a)(2)(iii): Solely because of their recent
                appointment to a Cabinet-level position, a Government official is
                invited by the Chief Executive Officer of a major international
                corporation to attend, in their personal capacity, firm meetings to be
                held in Aspen for the purpose of addressing senior corporate managers
                on the importance of recreational activities to a balanced lifestyle.
                The firm offers to reimburse the official's travel expenses. The
                official may not accept the offer. The speaking activity is related to
                official duties under paragraph (a)(2)(i)(B) of this section and,
                because the official is a covered noncareer employee as defined in
                Sec. 2636.303(a) of this chapter, the travel expenses are prohibited
                compensation.
                 Example 3 to paragraph (a)(2)(iii): A GS-14 attorney at the Federal
                Trade Commission (FTC) who played a lead role in a recently concluded
                merger case is invited to speak about the case, in a private capacity,
                at a conference in New York. The attorney has no public speaking
                responsibilities on behalf of the FTC apart from the judicial and
                administrative proceedings to which they are assigned. The sponsors of
                the conference offer to reimburse the attorney for expenses incurred in
                connection with the travel to New York. They also offer the attorney,
                as compensation for time and effort, a free trip to San Francisco. The
                attorney may accept the travel expenses to New York, but not the
                expenses to San Francisco. The lecture relates to official duties under
                paragraphs (a)(2)(i)(E)(1) and (2) of this section, but because the
                attorney is not a covered noncareer employee as defined in Sec.
                2636.303(a) of this chapter, the expenses associated with the travel to
                New York are not a prohibited form of compensation. The travel expenses
                to San Francisco, on the other hand, not incurred in connection with
                the speaking activity, are a prohibited form of compensation. If the
                attorney were a covered noncareer employee, the travel expenses to New
                York as well as the travel expenses to San Francisco would be barred.
                 Example 4 to paragraph (a)(2)(iii): An advocacy group dedicated to
                improving treatments for severe pain asks the National Institutes of
                Health (NIH) to provide a conference speaker who can discuss recent
                advances in the agency's research on pain. The group also offers to pay
                the employee's travel expenses to attend the conference. After
                performing the required conflict of interest analysis, NIH authorizes
                acceptance of the travel expenses under 31 U.S.C. 1353 and the
                implementing General Services Administration regulation, as codified
                under 41 CFR chapter 304, and authorizes an employee to undertake the
                travel. At the conference the advocacy group, as agreed, pays the
                employee's hotel bill, and provides several of the employee's meals.
                Subsequently the group reimburses the agency for the cost of the
                employee's airfare and some additional meals. All of the payments by
                the advocacy group are permissible. Because the employee is speaking
                officially and the expense payments are accepted under 31 U.S.C. 1353,
                they are not prohibited compensation under paragraph (a)(2)(iii) of
                this section. The same result would obtain with respect to expense
                payments made by non-Government sources properly authorized under an
                agency gift acceptance statute, the Government Employees Training Act,
                5 U.S.C. 4111, or the Foreign Gifts and Decorations Act, 5 U.S.C. 7342.
                 (iv) Receive means that there is actual or constructive receipt of
                the compensation by the employee so that the employee has the right to
                exercise dominion and control over the
                [[Page 43728]]
                compensation and to direct its subsequent use. Receipt of compensation
                is attributable to the time that the teaching, speaking, or writing
                occurs when there is actual or constructive receipt of the compensation
                by the employee. If the employee has an enforceable agreement to
                receive compensation for writing undertaken during Government service,
                then compensation is received while the individual is an employee even
                though actual payment may be deferred until after Government service.
                Compensation received by an employee includes compensation which is:
                 (A) Paid to another person, including a charitable organization, on
                the basis of designation, recommendation, or other specification by the
                employee; or
                 (B) Paid with the employee's knowledge and acquiescence to the
                employee's parent, sibling, spouse, child, or dependent relative.
                 (v) Particular matter involving specific parties has the meaning
                set forth in Sec. 2640.102(l) of this chapter.
                 (vi) Personal and substantial participation has the meaning set
                forth in Sec. 2635.402(b)(4).
                 (3) Exception for teaching certain courses. Notwithstanding that
                the activity would relate to their official duties under paragraph
                (a)(2)(i)(B) or (E) of this section, employees may accept compensation
                for teaching a course requiring multiple presentations by the employee
                if the course is offered as part of:
                 (i) The regularly established curriculum of:
                 (A) An institution of higher education as defined at 20 U.S.C. 1001
                or from a similar foreign institution of higher education;
                 Note 3 to paragraph (a)(3)(i)(A): When the course is offered as
                part of the regularly established curriculum of a foreign
                institution of higher education, the agency may need to make a
                separate determination as to whether the institution of higher
                education is a foreign government for purposes of the Emoluments
                Clause of the U.S. Constitution (U.S. Const., art. I, sec. 9, cl.
                8), which forbids employees from accepting emoluments, presents,
                offices, or titles from foreign governments, without the consent of
                Congress.
                 (B) An elementary school as defined at 20 U.S.C. 7801(19); or
                 (C) A secondary school as defined at 20 U.S.C. 7801(45); or
                 (ii) A program of education or training sponsored and funded by the
                Federal Government or by a State or local government which is not
                offered by an entity described in paragraph (a)(3)(i) of this section.
                 Example 1 to paragraph (a)(3): An employee of the Cost Accounting
                Standards Board who teaches an advanced accounting course as part of
                the regular business school curriculum of an accredited university may
                receive compensation for teaching the course even though a substantial
                portion of the course deals with cost accounting principles applicable
                to contracts with the Government.
                 Example 2 to paragraph (a)(3): An attorney employed by the Equal
                Employment Opportunity Commission (EEOC) may accept compensation for
                teaching a course at a state college on the subject of EEOC enforcement
                of Federal employment discrimination law. The attorney could not accept
                compensation for teaching the same seminar as part of a continuing
                education program sponsored by a bar association because the subject of
                the course is focused on the operations or programs of the EEOC, and
                the sponsor of the course is not an accredited educational institution.
                 Example 3 to paragraph (a)(3): An employee of the National
                Endowment for the Humanities (NEH) is invited by a private university
                to teach a course that is a survey of Government policies in support of
                artists, poets, and writers. As part of official duty activities, the
                employee administers a grant that the university has received from the
                NEH. The employee may not accept compensation for teaching the course
                because the university has interests that may be substantially affected
                by the performance or nonperformance of the employee's duties.
                Likewise, an employee may not receive compensation for any teaching
                that is undertaken as part of official duties or that involves the use
                of nonpublic information.
                 (b) Reference to official position. Employees who are engaged in
                teaching, speaking, or writing as outside employment or as an outside
                activity may not use or permit the use of their official title or
                position to identify themselves in connection with a teaching,
                speaking, or writing activity, or to promote any book, seminar, course,
                program, or similar undertaking, except that:
                 (1) Employees may include or permit the inclusion of their title or
                position as one of several biographical details when such information
                is given to identify them in connection with their teaching, speaking,
                or writing, provided that their title or position is given no more
                prominence than other significant biographical details;
                 (2) Employees may use or permit the use of their title or position
                in connection with an article published in a scientific or professional
                journal, provided that the title or position is accompanied by a
                reasonably prominent disclaimer satisfactory to the agency stating that
                the views expressed in the article do not necessarily represent the
                views of the agency or the United States; and
                 (3) Employees who are ordinarily addressed using a general term of
                address, such as ``The Honorable'' or ``Judge,'' or a rank, such as a
                military or ambassadorial rank, may use or permit the use of that term
                of address or rank in connection with their teaching, speaking, or
                writing.
                 Note 4 to paragraph (b): Reference to official title and
                position other than in a teaching, speaking, or writing capacity may
                be made only as permitted by Sec. 2635.702(b). In addition, some
                agencies may have policies requiring advance agency review,
                clearance, or approval of certain speeches, books, articles, or
                similar products to determine whether the product contains an
                appropriate disclaimer, discloses nonpublic information, or
                otherwise complies with this section.
                 Example 1 to paragraph (b): A meteorologist employed with the
                National Oceanic and Atmospheric Administration (NOAA) is asked by a
                local university to teach a graduate course on hurricanes. The
                university may include the meteorologist's Government title and
                position together with other information about the meteorologist's
                education and previous employment in course materials setting forth
                biographical data on all teachers involved in the graduate program.
                However, the meteorologist's title or position may not be used to
                promote the course, for example, by featuring the meteorologist's
                Government title, Senior Meteorologist, NOAA, in bold type under their
                name. In contrast, the meteorologist's title may be used in this manner
                when NOAA authorized speaking in an official capacity.
                 Example 2 to paragraph (b): A doctor just employed by the Centers
                for Disease Control (CDC) has written a paper based on earlier
                independent research into cell structures. Incident to the paper's
                publication in the Journal of the American Medical Association, the
                doctor may be given credit for the paper, as Dr. M. Wellbeing,
                Associate Director, Centers for Disease Control, provided that the
                article also contains a disclaimer, concurred in by the CDC, indicating
                that the paper is the result of the doctor's independent research and
                does not represent the findings of the CDC.
                 Example 3 to paragraph (b): An employee of the Federal Deposit
                Insurance Corporation (FDIC) has been asked to give a speech in a
                private capacity, without compensation, to the
                [[Page 43729]]
                annual meeting of a committee of the American Bankers Association on
                the need for banking reform. The employee may be described in an
                introduction at the meeting as an employee of the FDIC provided that
                other pertinent biographical details are mentioned as well.
                Sec. 2635.808 Fundraising activities.
                 Employees may engage in fundraising only in accordance with the
                restrictions in part 950 of this title on the conduct of charitable
                fundraising in the Federal workplace and in accordance with paragraphs
                (b) and (c) of this section. This section addresses fundraising as
                defined in paragraph (a)(1) of this section, and does not cover all
                scenarios in which an employee might seek to collect donations from a
                fellow employee. For example, employees of an office might decide to
                collect money for a coworker whose family was displaced by a flood; the
                permissibility of such collections should be analyzed under subpart C
                of this part, not this section.
                 (a) Definitions. For purposes of this section:
                 (1) Fundraising means the raising of funds for a nonprofit
                organization, other than a political organization as defined in 26
                U.S.C. 527(e), through:
                 (i) Solicitation of funds or sale of items; or
                 (ii) Participation in the conduct of an event by an employee when
                any portion of the cost of attendance or participation may be taken as
                a charitable tax deduction by a person incurring that cost.
                 (2) Participation in the conduct of an event means active and
                visible participation in the promotion, production, or presentation of
                the event and includes serving as honorary chairperson, sitting at a
                head table during the event, and standing in a reception line. The term
                does not include mere attendance at an event provided that, to the
                employee's knowledge, the employee's attendance is not used by the
                nonprofit organization to promote the event. While the term generally
                includes any public speaking during the event, it does not include the
                delivery of an official speech as defined in paragraph (a)(3) of this
                section or any seating or other participation appropriate to the
                delivery of such a speech. Waiver of a fee for attendance at an event
                by a participant in the conduct of that event does not constitute a
                gift for purposes of subpart B of this part.
                 Example 1 to paragraph (a)(2): The Secretary of Transportation has
                been asked to serve as master of ceremonies for an All-Star Gala.
                Tickets to the event cost $150 and are tax deductible as a charitable
                donation, with proceeds to be donated to a local hospital. By serving
                as master of ceremonies, the Secretary would be participating in
                fundraising.
                 (3) Official speech means a speech given by an employee in an
                official capacity on a subject matter that relates to the employee's
                official duties, provided that the employee's agency has determined
                that the event at which the speech is to be given provides an
                appropriate forum for the dissemination of the information to be
                presented and provided that the employee does not request donations or
                other support for the nonprofit organization. Subject matter relates to
                an employee's official duties if it focuses specifically on the
                employee's official duties, on the responsibilities, programs, or
                operations of the employee's agency as described in Sec.
                2635.807(a)(2)(i)(E), or on matters of Administration policy on which
                the employee has been authorized to speak.
                 Example 1 to paragraph (a)(3): The Secretary of Labor is invited to
                speak at a banquet honoring a distinguished labor leader, the proceeds
                of which will benefit a nonprofit organization that assists homeless
                families. The Secretary devotes a major portion of the speech to the
                Administration's Points of Light initiative, an effort to encourage
                citizens to volunteer their time to help solve serious social problems.
                Because the Secretary is authorized to speak on Administration policy,
                these remarks at the banquet are an official speech. However, the
                Secretary would be engaged in fundraising if the official speech
                concluded with a request for donations to the nonprofit organization.
                 Example 2 to paragraph (a)(3): A charitable organization is
                sponsoring a two-day tennis tournament at a country club in the
                Washington, DC, area to raise funds for recreational programs for
                children with learning disabilities. The organization has invited the
                Secretary of Education to give a speech on federally funded special
                education programs at the awards dinner to be held at the conclusion of
                the tournament, and the agency has determined that the dinner is an
                appropriate forum for the particular speech. The Secretary may speak at
                the dinner and, under Sec. 2635.203(b)(8), may partake of the meal
                provided at the dinner.
                 (4) Personally solicit means to request or otherwise encourage
                donations or other support either through person-to-person contact or
                through the use of one's name or identity in correspondence or by
                permitting its use by others. It does not include the solicitation of
                funds through the media or through either oral remarks, or the
                contemporaneous dispatch of like items of mass-produced correspondence,
                if such remarks or correspondence are addressed to a group consisting
                of many persons, unless it is known to the employee that the
                solicitation is targeted at subordinates or at persons who are
                prohibited sources within the meaning of Sec. 2635.203(d). It does not
                include behind-the-scenes assistance in the solicitation of funds, such
                as drafting correspondence, stuffing envelopes, or accounting for
                contributions.
                 Example 1 to paragraph (a)(4): An employee of the Department of
                Energy (DOE) who signs a letter soliciting funds for a local private
                school does not ``personally solicit'' funds when 500 copies of the
                letter, which makes no mention of the employee's DOE position and
                title, are mailed to members of the local community, even though some
                individuals who are employed by DOE contractors may receive the letter.
                 (b) Fundraising in an official capacity. Employees may participate
                in fundraising in an official capacity if, in accordance with a
                statute, Executive order, regulation, or otherwise as determined by the
                agency, they are authorized to engage in the fundraising activity as
                part of their official duties. When authorized to participate in an
                official capacity, employees may use their official title, position,
                and authority.
                 Example 1 to paragraph (b): Because participation in an official
                capacity is authorized under part 950 of this title, the Secretary of
                the Army may sign a memorandum to all Army personnel encouraging them
                to donate to the Combined Federal Campaign.
                 (c) Fundraising in a personal capacity. An employee may engage in
                fundraising in a personal capacity provided that the employee does not:
                 (1) Personally solicit funds or other support from a subordinate or
                from any person:
                 (i) Known to the employee, if the employee is other than a special
                Government employee, to be a prohibited source within the meaning of
                Sec. 2635.203(d), unless the circumstances make clear that the
                solicitation is motivated by a family relationship or personal
                friendship that would justify the solicitation; or
                 (ii) Known to the employee, if the employee is a special Government
                employee, to be a prohibited source within the meaning of Sec.
                2635.203(d)(4) that is a person whose interests may be substantially
                affected by performance or nonperformance of the employee's official
                duties, unless the circumstances make clear that the solicitation is
                [[Page 43730]]
                motivated by a family relationship or personal friendship that would
                justify the solicitation;
                 (2) Use or permit the use of the employee's official title,
                position, or any authority associated with the employee's public office
                to further the fundraising effort, except that an employee who is
                ordinarily addressed using a general term of address, such ``The
                Honorable,'' or a rank, such as a military or ambassadorial rank, may
                use or permit the use of that term of address or rank for such
                purposes; or
                 (3) Engage in any action that would otherwise violate this part.
                 Note 1 to paragraph (c): This section does not prohibit
                fundraising for a political party, candidate for partisan political
                office, or partisan political group. However, there are statutory
                restrictions that apply to political fundraising. For example, under
                the Hatch Act Reform Amendments of 1993, at 5 U.S.C. 7323(a),
                employees may not knowingly solicit, accept, or receive a political
                contribution from any person, except under limited circumstances. In
                addition, employees are prohibited by 18 U.S.C. 607 from soliciting
                or receiving political contributions in Federal offices, and, except
                as permitted by the Hatch Act Reform Amendments, are prohibited by
                18 U.S.C. 602 from knowingly soliciting political contributions from
                other employees.
                 Example 1 to paragraph (c): A nonprofit organization is sponsoring
                a golf tournament to raise funds for underprivileged children. The
                Secretary of the Navy may not enter the tournament with the
                understanding that the organization intends to attract participants by
                offering other entrants the opportunity, in exchange for a donation in
                the form of an entry fee, to spend the day playing 18 holes of golf in
                a foursome with the Secretary of the Navy.
                 Example 2 to paragraph (c): An employee of the Merit Systems
                Protection Board may not use the agency's photocopier to reproduce
                fundraising literature for their child's private school. Such use of
                the photocopier would violate the standards at Sec. 2635.704 regarding
                use of Government property.
                 Example 3 to paragraph (c): An Assistant Attorney General may not
                sign a letter soliciting funds for a homeless shelter as ``P.J. Doe,
                Assistant Attorney General.'' The Assistant Attorney General also may
                not sign a letter with just a ``P.J. Doe'' signature soliciting funds
                from a prohibited source, unless the letter is one of many identical,
                mass-produced letters addressed to a large group when the solicitation
                is not known to the Assistant Attorney General to be targeted at
                persons who are either prohibited sources or subordinates.
                 Example 4 to paragraph (c): An employee of the Department of
                Commerce is running a half marathon to raise money for a nonprofit
                organization engaged in cancer research, and is looking for people to
                sponsor the race. The employee plans to target specific individuals
                they think will want to contribute, including a close friend with whom
                they regularly meet for dinner. Notwithstanding the fact that the
                friend is employed by a corporation that is a prohibited source, the
                employee may ask the friend to sponsor the race because the
                solicitation is motivated by a personal friendship that would justify
                the solicitation.
                 Example 5 to paragraph (c): The employee in example 4 to this
                paragraph (c) knows that a subordinate employee has expressed an
                interest in this cause and sends the subordinate a direct link to the
                online sponsorship page. The employee has ``personally solicited'' a
                subordinate in violation of paragraph (c)(1) of this section.
                 Example 6 to paragraph (c): The employee in example 4 to this
                paragraph (c) decides that rather than targeting specific individuals
                for contributions, it would be preferable to post a general request and
                a link to information about the race on their personal social media
                account. Because this request may be viewed by any person with whom the
                employee is connected through the social media network and does not
                reference or target any specific individual, it is not considered a
                personal solicitation of any subordinate or prohibited source that is
                connected to the employee.
                Sec. 2635.809 Just financial obligations.
                 Employees must satisfy in good faith their obligations as citizens,
                including all just financial obligations, especially those such as
                Federal, State, or local taxes that are imposed by law. For purposes of
                this section, a just financial obligation includes any financial
                obligation acknowledged by the employee or reduced to judgment by a
                court. In good faith means an honest intention to fulfill any just
                financial obligation in a timely manner. In the event of a dispute
                between an employee and an alleged creditor, this section does not
                require an agency to determine the validity or amount of the disputed
                debt or to collect a debt on the alleged creditor's behalf.
                Subpart I--Related Statutory Authorities
                Sec. 2635.901 General.
                 In addition to the Standards of Ethical Conduct set forth in
                subparts A through H of this part, there are a number of statutes that
                establish standards to which an employee's conduct must conform. The
                list set forth in Sec. 2635.902 references some of the more
                significant of those statutes. It is not comprehensive and includes
                only references to statutes of general applicability. While it includes
                references to several of the basic conflict of interest statutes whose
                standards are explained in more detail throughout this part, it does
                not include references to statutes of more limited applicability, such
                as statutes that apply only to officers and employees of the Department
                of Defense.
                Sec. 2635.902 Related statutes.
                 (a) The prohibition against solicitation or receipt of bribes (18
                U.S.C. 201(b)).
                 (b) The prohibition against solicitation or receipt of illegal
                gratuities (18 U.S.C. 201(c)).
                 (c) The prohibition against seeking or receiving compensation for
                certain representational services before the Government (18 U.S.C.
                203).
                 (d) The prohibition against assisting in the prosecution of claims
                against the Government or acting as agent or attorney before the
                Government (18 U.S.C. 205).
                 (e) The post-employment restrictions applicable to former employees
                (18 U.S.C. 207 and the regulation at part 2641 of this chapter).
                 (f) The prohibition on certain former agency officials' acceptance
                of compensation from a contractor (41 U.S.C. 2104).
                 (g) The prohibition against participating in matters affecting an
                employee's own financial interests or the financial interests of other
                specified persons or organizations (18 U.S.C. 208 and the regulation at
                part 2640 of this chapter).
                 (h) The actions required of certain agency officials when they
                contact, or are contacted by, offerors or bidders regarding non-Federal
                employment (41 U.S.C. 2103).
                 (i) The prohibition against receiving salary or any contribution to
                or supplementation of salary as compensation for Government service
                from a source other than the United States (18 U.S.C. 209).
                 (j) The prohibition against gifts to superiors (5 U.S.C. 7351).
                 (k) The prohibition against solicitation or receipt of gifts from
                [[Page 43731]]
                specified prohibited sources (5 U.S.C. 7353).
                 (l) The prohibition against fraudulent access and related activity
                in connection with computers (18 U.S.C. 1030).
                 (m) The provisions governing receipt and disposition of foreign
                gifts and decorations (5 U.S.C. 7342).
                 (n) [Reserved]
                 (o) The prohibitions against certain political activities (5 U.S.C.
                7321 through 7326 and 18 U.S.C. 602, 603, 606, and 607).
                 (p) The prohibitions against disloyalty and striking (5 U.S.C. 7311
                and 18 U.S.C. 1918).
                 (q) The general prohibition (18 U.S.C. 219) against acting as the
                agent of a foreign principal required to register under the Foreign
                Agents Registration Act (22 U.S.C. 611 through 621).
                 (r) The prohibition against employment of a person convicted of
                participating in or promoting a riot or civil disorder (5 U.S.C. 7313).
                 (s) The prohibition against employment of an individual who
                habitually uses intoxicating beverages to excess (5 U.S.C. 7352).
                 (t) The prohibition against misuse of a Government vehicle (31
                U.S.C. 1344).
                 (u) The prohibition against misuse of the franking privilege (18
                U.S.C. 1719).
                 (v) The prohibition against fraud or false statements in a
                Government matter (18 U.S.C. 1001).
                 (w) The prohibition against concealing, mutilating, or destroying a
                public record (18 U.S.C. 2071).
                 (x) The prohibition against counterfeiting or forging
                transportation requests (18 U.S.C. 508).
                 (y) The restrictions on disclosure of certain sensitive Government
                information under the Freedom of Information Act and the Privacy Act (5
                U.S.C. 552 and 552a).
                 (z) The prohibitions against disclosure of classified information
                (18 U.S.C. 798 and 50 U.S.C. 783(a)).
                 (aa) The prohibition against disclosure of proprietary information
                and certain other information of a confidential nature (18 U.S.C.
                1905).
                 (bb) The prohibitions on disclosing and obtaining certain
                procurement information (41 U.S.C. 2102).
                 (cc) The prohibition against unauthorized use of documents relating
                to claims from or by the Government (18 U.S.C. 285).
                 (dd) The prohibition against certain personnel practices (5 U.S.C.
                2302).
                 (ee) The prohibition against interference with civil service
                examinations (18 U.S.C. 1917).
                 (ff) The restrictions on use of public funds for lobbying (18
                U.S.C. 1913).
                 (gg) The prohibition against participation in the appointment or
                promotion of relatives (5 U.S.C. 3110).
                 (hh) The prohibition against solicitation or acceptance of anything
                of value to obtain public office for another (18 U.S.C. 211).
                 (ii) The prohibition against conspiracy to commit an offense
                against or to defraud the United States (18 U.S.C. 371).
                 (jj) The prohibition against embezzlement or conversion of
                Government money or property (18 U.S.C. 641).
                 (kk) The prohibition against failing to account for public money
                (18 U.S.C. 643).
                 (ll) The prohibition against embezzlement of the money or property
                of another person that is in the possession of an employee by reason of
                their employment (18 U.S.C. 654).
                [FR Doc. 2024-10339 Filed 5-16-24; 8:45 am]
                BILLING CODE 6345-03-P
                

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