Supplemental standards of ethical conduct for agency employees,

[Federal Register: August 12, 1998 (Volume 63, Number 155)]

[Rules and Regulations]

[Page 43069-43070]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr12au98-2]

FEDERAL TRADE COMMISSION

5 CFR Part 5701

RIN 3209-AA15

Supplemental Standards of Ethical Conduct for Employees of the Federal Trade Commission

AGENCY: Federal Trade Commission (FTC).

ACTION: Final rule.

SUMMARY: The Federal Trade Commission, with the concurrence of the Office of Government Ethics (OGE), is issuing a final rule amendment for employees of the FTC that supplements 5 CFR part 2635, the Standards of Ethical Conduct for Employees of the Executive Branch (Standards), issued by OGE. This supplemental regulation provision narrows for FTC employees restrictions contained in the Standards on employees' personal fundraising activities. The final rule is effective upon issuance.

EFFECTIVE DATE: August 12, 1998.

ADDRESSES: Send comments to Ira S. Kaye, Federal Trade Commission, Room 594, 6th and Pennsylvania Ave., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Ira S. Kaye, (202) 326-2426, Federal Trade Commission, Office of the General Counsel.

SUPPLEMENTARY INFORMATION:

1. Background

   On August 7, 1992, the Office of Governmental Ethics (OGE) published a final rule entitled ``Standards of Ethical Conduct for Employees of the Executive Branch'' (Standards). See 57 FR 35006-35067, as corrected at 57 FR 48557, 57 FR 52583, and 60 FR 51667, and amended at 61 FR 42965-42970 (as corrected at 61 FR 48733), 61 FR 50689-50691 (interim rule revisions adopted as final at 62 FR 12531), and 62 FR 48746-48748, with additional grace period extensions at 59 FR 4779- 4780, 60 FR 6390-6391, 60 FR 66857-66858, and 61 FR 40950-40952. The Standards, codified at 5 CFR part 2653 and effective February 3, 1993, establish uniform standards of ethical conduct applicable to all executive branch personnel.

   The Standards, at 5 CFR 2635.105, authorize executive branch agencies, with OGE's concurrence, to publish agency-specific supplemental regulations necessary to implement their respective ethics programs. On May 27, 1993, the FTC published, with OGE's concurrence, an interim rule establishing a supplemental standard of conduct, 5 CFR 5701.101, requiring that all FTC employees receive prior approval before engaging in outside employment (58 FR 30695-30696). The interim rule prescribed a 45-day comment period and invited comments from all interested parties. This interim rule is not being finalized at this time.

   The FTC is now issuing a second supplemental regulation because it has determined that a new provision concerning fundraising activities, to be codified in a new Sec. 5701.102 of 5 CFR, is currently necessary to the successful implementation of the Commission's ethics program.

2. Analysis of the Amendment

   New Section 5701.102 of the final rule supplements the executive branch-wide Standards at 5 CFR 2635.808(c) regarding fundraising in a personal capacity. That standard bars employees from personally soliciting funds from those persons known by the employee to be ``prohibited sources'' as defined in 5 CFR 2635.203(d), including, pursuant to 2635.203(d)(3), any person who ``conducts activities regulated by the employee's agency.'' (``prohibited source'' is also defined in subparagraphs (d)(1), (d)(2), (d)(4) and (d)(5) of Sec. 2635.203 to include ``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; . . . (4) Has interests that may be substantially affected by 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.'')

   Because the FTC has enforcement authority over unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce, virtually all businesses are ``prohibited sources'' for FTC employees. The Commission has determined that given the breadth of this enforcement authority, the fundraising provision is unnecessarily restrictive for FTC employees. Accordingly, Sec. 5701.102 provides that it shall be permissible for FTC employees to solicit funds or other support from a person who is a prohibited source only by virtue of the definition in 5 CFR 2635.203(d)(3), because the person is regulated by the FTC (provided that the other provision of 5 CFR 2635.808(c) continue to apply).

   Employees of the FTC, however, will not be allowed to solicit contributions from a person known to be a ``prohibited source'' for the other defined reasons listed in 2635.203(d). Thus, an FTC employee may not engage in charitable fundraising from any person (including an organization a majority of whose members are such persons) seeking official action by the FTC, doing business with the FTC or having interests that may be substantially affected by the performance or nonperformance of the employee's official duties.

3. Matters of Regulatory Procedure

   Administrative Procedure Act

   This rule amendment relates solely to agency management and personnel, and, thus, is not subject to the notice and comment requirements of the Administrative Procedure Act, 5 U.S.C. 553(a)(2).

   [[Page 43070]]

   Regulatory Flexibility Act

   The Federal Trade Commission has determined under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this regulation will not have a significant economic impact on a substantial number of small entities because it affects only Federal employees.

   Paperwork Reduction Act

   The Federal Trade Commission has determined that the Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply because this regulation does not contain any information collection requirements that require the approval of the Office of Management and Budget.

   List of Subjects in 5 CFR Part 5701

   Conflicts of interests, Government employees.

   By direction of the Commission.

   Dated: July 28, 1998. Donald S. Clark, Secretary, Federal Trade Commission.

   Approved: August 4, 1998. Stephen D. Potts, Director, Office of Government Ethics.

   For the reasons set forth in the preamble, the Federal Trade Commission, with the concurrence of the Office of Government Ethics, amends 5 CFR part 5701 as follows:

   PART 5701--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES FOR THE FEDERAL TRADE COMMISSION

   1. The authority citation for part 5701 is revised to read as follows:

      Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 1978); 15 U.S.C. 46(g); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.803, 2635.808(c).

   2. A new Sec. 5701.102 is added to read as follows:

      Sec. 5701.102 Fundraising activities

      When engaging in personal fundraising, as described at 5 CFR 2635.808(c), an employee of the Federal Trade Commission may, notwithstanding the prohibition of Sec. 2635.808(c)(1)(i), personally solicit funds from a person who is a prohibited source only under 5 CFR 2635.203(d)(3) (i.e., because the person ``conducts activities regulated by'' the Commission). The other provisions of Sec. 2635.808(c) continue to apply to any such personal fundraising.

      Example 1: A Federal Trade Commission employee is president of the local branch of her college alumni association. The association is seeking contributions from local businesses. The employee may, during her off-duty hours, seek a contribution from a company that is regulated by the Commission, but not from one that she knows is currently under Commission investigation or is seeking official action by the Commission, does business or seeks to do business with the Commission, or has interests that may be substantially affected by the employee's job. While the Standards of Conduct provide that companies under the agency's enforcement authority generally are prohibited sources of an employee's fundraising in a personal capacity, Sec. 5701.102 provides that employees of the FTC may seek charitable contributions from an entity that is a prohibited source only because its activities are subject to agency regulation.

      [FR Doc. 98-21614Filed8-11-98; 8:45 am]

      BILLING CODE 6750-01-M