[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Rules and Regulations]
[Pages 39869-39872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19393]
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FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
5 CFR Chapter LXXIV
29 CFR Part 2703
RIN 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
Federal Mine Safety and Health Review Commission
AGENCY: Federal Mine Safety and Health Review Commission (Commission).
ACTION: Final rule.
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SUMMARY: The Federal Mine Safety and Health Review Commission, with the
concurrence of the Office of Government Ethics (OGE), is issuing a
final rule for Commission employees that supplements the Standards of
Ethical Conduct for Employees of the Executive Branch issued by OGE.
This final rule is a necessary supplement to the Standards because it
addresses ethical issues unique to the Commission. The final rule
prohibits the acquisition or holding of certain financial interests and
requires certain employees to obtain prior approval for outside
employment. The Commission also is repealing, except for a regulatory
waiver provision, its old standards of conduct regulations that are
superseded by the Standards, OGE's executive branch-wide financial
disclosure regulations, and this final rule. In their place, the
Commission is adding a cross-reference section to the current ethics
provisions and a section specifying the Chairman's authority to appoint
the Commission's ethics officials.
EFFECTIVE DATE: These regulations are effective July 31, 1996.
FOR FURTHER INFORMATION CONTACT: Norman Gleichman, Designated Agency
Ethics Official, Federal Mine Safety and Health Review Commission, 1730
K Street, NW., 6th Floor, Washington, DC 20006; telephone: (202) 653-
5610 (202-566-2673 for TDD Relay). These are not toll-free numbers.
SUPPLEMENTARY INFORMATION:
I. Background
On August 7, 1992, the Office of Government 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, with additional grace period
extensions at 59 FR 4779-4780, 60 FR 6390-6391, and 60 FR 66857-66858.
The Standards, codified at 5 CFR part 2635 and made effective February
3, 1993, establish uniform standards of ethical conduct that are
applicable to all executive branch employees.
With the concurrence of OGE, 5 CFR 2635.105 authorizes executive
branch agencies to publish agency-specific regulations supplementing 5
CFR part 2635 that are necessary to implement their respective ethics
programs. With OGE's concurrence, the Commission has determined that
the following supplemental regulations, being codified in new 5 CFR
chapter LXXIV, consisting of part 8401, are necessary for successful
implementation of the Commission's ethics program, in light of the
Commission's unique programs and operations.
II. Analysis of the Regulations
Section 8401.101 General
Section 8401.101 explains that the supplemental regulations apply
to Commission employees and supplement the Standards at 5 CFR part
2635. This section also cross-references the executive branch-wide
financial disclosure regulations at 5 CFR part 2634.
Section 8401.102 Prohibited Financial Interests
The Standards, at 5 CFR 2635.403(a), authorize an agency to issue a
supplemental regulation prohibiting or restricting the acquisition or
holding of a financial interest or a class of financial interests by
the agency's employees or any category of its employees, based on a
determination that the acquisition or holding of such interests would
cause a reasonable person to question the imparti ality and objectivity
with which agency programs are administered. Where it is necessary for
the agency to carry out its mission, such prohibitions or restrictions
may be extended to employees' spouses and minor children, since such
family members' financial interests are imputed to employees for
conflict of interest purposes.
Section 8401.102(a) expressly prohibits Commission employees (other
than special Government employees), as well as the spouses and minor
children of such employees, from having any financial interest,
including indebtedness or compensated employment, in any company or
other person who operates, controls, or supervises a mine subject to
the provisions of the Federal Mine Safety and Health Act of 1977, 30
U.S.C. 801 et seq., or any independent contractor performing services
or construction at such a mine. The prohibition has been made
applicable to employees' spouses
[[Page 39870]]
and minor children based on a determination that such application of
the prohibition is necessary to the ability of Commission employees to
fulfill their official duties and the ability of the Commission to
carry out its mission. Furthermore, the prohibition in this section,
including its applicability to employees' spouses and minor children,
is necessary to maintain public confidence in the impartiality and
objectivity with which the Commission conducts its adjudicatory
functions. The Commission believes it important to the success of its
mission that those affected by agency decisions have this additional
degree of assurance that agency decisions are not influenced by
considerations of personal gain on the part of Commission personnel.
A ``financial interest'' is defined in the Standards at 5 CFR
2635.403(c). In accordance with 5 CFR 2635.403(a), Sec. 8401.102(a)
generally prohibits such interests in mining enterprises subject to the
Commission's jurisdiction. This section is essentially a readoption of
29 CFR 2703.09(b), in which the Commission has prohibited employees
from having a financial interest in mining enterprises subject to the
Commission's jurisdiction. The Commission interpreted the provision to
also apply to spouses and minor children of Commission employees.
Section 8401.102(b) sets forth exceptions to the general financial
interest prohibition in Sec. 8401.102(a). The exceptions are intended
to permit the acquisition or holding of financial interests that are
unlikely to raise questions regarding the objective and impartial
performance of Commission employees' official duties or the possible
misuse of their positions.
Under Sec. 8401.102(b)(1), the prohibition in Sec. 8401.102(a) does
not apply to investments in a publicly traded or publicly available
investment fund which, in its prospectus, does not indicate the
objective or practice of concentrating its investments in the
securities of any company or other person who operates, controls, or
supervises a mine subject to the provisions of the Federal Mine Safety
and Health Act of 1977, 30 U.S.C. 801 et seq., or any independent
contractor performing services or construction at such a mine, if the
employee neither exercises control over the financial interests held in
the fund nor has the ability to exercise such control. Under
Sec. 8401.102(b)(2), unless there is a ``substantial conflict'' within
the meaning of 5 CFR 2635.403(b), an employee may own or control a
financial interest obtained prior to the employee's commencement of
employment, through a change in marital status, or through
circumstances beyond the employee's control, such as acquisition by
inheritance, gift, or merger. However, the employee must make full
written disclosure to the Designated Agency Ethics Official (DAEO) and
the employee will be disqualified from participating in any decision or
other particular matter having a direct and predictable effect on the
financial interest in question.
Under Sec. 8401.102(c), the DAEO may require divestiture of a
financial interest that would otherwise be allowed to be retained under
Sec. 8401.102(b)(2), using the standard of ``substantial conflict'' set
forth in 5 CFR 2635.403(b).
Under Sec. 8401.102(d), the DAEO may grant a waiver from the
financial interest prohibition in this section based on a determination
that the waiver is not inconsistent with 5 CFR part 2635 or otherwise
prohibited by law and that, under the particular circumstances,
application of the prohibition is not necessary to avoid the appearance
of misuse of position or loss or impartiality and objectivity with
which Commission programs are administered. An employee may be required
under the waiver to disqualify himself from a particular matter or take
other appropriate action.
Section 8401.103 Prior Approval for Outside Employment
Under 5 CFR 2635.803 an agency that determines it is necessary or
desirable for the purpose of administering its ethics program may, by
supplemental regulation, require employees to obtain prior written
approval before engaging in outside employment. The Commission's old
standards of conduct regulation at 29 CFR 2703.12 (which is now being
repealed) is a grace period (grandfathered) provision which has long
required Commission employees classified at GS-13 or above and
Commission attorneys at any grade level to obtain approval before
engaging in outside employment. The Commission has found this
requirement useful in ensuring that its employees avoid violations of
the standards of conduct and conflict of interest statutes.
In accordance with 5 CFR 2635.803, the Commission has determined
that it is necessary to the administration of its ethics program to
continue to require such prior approval. Accordingly, Sec. 8401.103(a)
provides that a Commission employee, other than a special Government
employee, must obtain the advance written approval from the employee's
immediate supervisor and the DAEO before engaging in any outside
employment. This section also sets forth the minimum information
required to be included in the request for prior approval.
Section 8401.103(b) provides that approval shall be granted only
upon a determination that the outside employment is not expected to
involve conduct prohibited by statute or Federal regulation, including
5 CFR part 2635 and the Commission's supplemental standards of ethical
conduct at this new part 8401 of 5 CFR.
``Employment'' is broadly defined in Sec. 8401.103(c)(1) to cover
services as an agent, contractor, general partner, teacher, trustee, or
writing when done under an arrangement with another person for
production or publication of the written product. It does not, however,
include participation in the activities of a nonprofit charitable,
religious, professional, or public service organization, unless such
activities involve providing professional services as defined in 5 CFR
2636.305(b)(1) or are for compensation other than reimbursement of
expenses.
III. Repeal and Revision of Commission Employee Responsibilities and
Conduct Regulations
The Commission is repealing its old employee responsibilities and
conduct regulations codified at 29 CFR part 2703 which have been
superseded by the new executive branch standards of ethical conduct and
financial disclosure regulations, 5 CFR parts 2634 and 2635, and the
Commission's supplemental standards of ethical conduct established by
this rulemaking. In place of its old standards, the Commission is
issuing a residual cross-reference provision at new 29 CFR 2703.1 to
refer to the executive branch-wide Standards and financial disclosure
regulations and to the Commission's new supplemental standards of
ethical conduct.
In addition, in accordance with the ethics program responsibility
of an agency head, at 5 CFR 2638.202(b), to select a DAEO and alternate
DAEO, the Commission is including in 29 CFR part 2703 a new
Sec. 2703.2, which provides that the Chairman of the Commission shall
appoint such officials to coordinate and manage the Commission's ethics
program. Finally, the Commission is retaining in 29 CFR part 2703 the
regulatory waiver at Sec. 2703.09(c) (now being redesignated as
Sec. 2703.3) which was issued under the prior version of 18 U.S.C.
208(b)(2) (1988) and which has remained in effect pending OGE's
issuance of superseding executive branch-wide regulatory waivers.
[[Page 39871]]
IV. Matters of Regulatory Procedure
Administrative Procedure Act
The Commission has determined that these rules relate solely to
agency organization, procedure, and practice. Therefore, the provisions
of the Administrative Procedure Act, as codified at 5 U.S.C. 553,
generally requiring notice of proposed rulemaking and other opportunity
for public participation, are not applicable. The Commission further
finds that there is good cause to make these rules, which are necessary
to the successful implementation of the Commission's ethics program,
effective upon publication in the Federal Register.
E.O. 12866, Regulatory Planning and Review
The Commission has determined that these rules are not subject to
Office of Management and Budget review under Executive Order 12866.
Regulatory Flexibility Act
The Commission has determined under the Regulatory Flexibility Act
(5 U.S.C. 601-611) that these rules will not have significant economic
impact on a substantial number of small entities because they affect
only Commission employees. Therefore, a Regulatory Flexibility
Statement and Analysis has not been prepared.
Paperwork Reduction Act
The Commission has determined that the Paperwork Reduction Act (44
U.S.C. chapter 35) does not apply because these rules do not contain
any information collection requirements that require the approval of
the Office of Management and Budget.
List of Subjects in 5 CFR Part 8401 and 29 CFR Part 2703
Conflict of interests, Executive branch standards of conduct,
Government employees.
Dated: July 18, 1996.
Mary Lu Jordan,
Chairman, Federal Mine Safety and Health Review Commission.
Approved: July 19, 1996.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the Federal Mine Safety
and Health Review Commission, with the concurrence of the Office of
Government Ethics, is amending title 5 and title 29 of the Code of
Federal Regulations as follows:
TITLE 5--[AMENDED]
1. A new chapter LXXIV, consisting of part 8401, is added to title
5 of the Code of Federal Regulations to read as follows:
CHAPTER LXXIV--FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
PART 8401--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
Sec.
8401.101 General.
8401.102 Prohibited financial interests.
8401.103 Prior approval for outside employment.
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government
Act of 1978); 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, 2635.403(a), 2635.802(a), 2635.803.
Sec. 8401.101 General.
In accordance with 5 CFR 2635.105, the regulations in this part
apply to the employees of the Federal Mine Safety and Health Review
Commission (Commission) and supplement the Standards of Ethical Conduct
for Employees of the Executive Branch at 5 CFR part 2635. Commission
employees also are subject to the executive branch financial disclosure
regulations at 5 CFR part 2634.
Sec. 8401.102 Prohibited financial interests.
(a) Prohibition. Except as provided in this section, no employee
(other than a special Government employee), or spouse or minor child of
such an employee, shall have a financial interest, including
compensated employment or indebtedness, in any company or other person
engaged in mining activities subject to the Federal Mine Safety and
Health Act of 1977 (Federal Mine Safety and Health Act), 30 U.S.C. 801
et seq.
(b) Exceptions. (1) This section does not prohibit an employee, or
the spouse or minor child of an employee, from investing in a publicly
traded or publicly available investment fund which, in its prospectus,
does not indicate the objective or practice of concentrating its
investments in the securities of any company or other person engaged in
mining activities subject to the Federal Mine Safety and Health Act,
provided that the employee neither:
(i) Exercises control over the financial interests held in the
fund; nor
(ii) Has the ability to exercise control over the financial
interests held in the fund.
(2)(i) Unless divestiture is required by paragraph (c) of this
section, this section does not prohibit an employee, or the spouse or
minor child of an employee, from owning or controlling securities of
any company or other person engaged in mining activities subject to the
Federal Mine Safety and Health Act, whenever:
(A) Ownership or control was acquired prior to the employee's
commencement of employment, through a change in marital status, or
through circumstances beyond the employee's control and without the
appearance of attempting to circumvent the prohibitions in this
section, such as acquisition by inheritance, gift, or merger,
acquisition or other change in corporate ownership, provided that: (1)
The employee makes full, written disclosure to the designated agency
ethics official within 30 days after the security is acquired or the
employment is commenced; and
(2) The employee is disqualified from participating in any
decision, examination, audit, or other particular matter having a
direct and predictable effect on such company or other person, in which
the employee holds a direct or indirect interest.
(B) The securities result from a stock split, stock dividend or the
exercise of preemptive rights arising out of securities permitted by
paragraph (b)(2)(i)(A) of this section. This paragraph does not permit
the holding of stocks purchased through voluntary reinvestment of cash
dividends.
(ii) For purposes of this section, the term ``securities'' includes
all interests in debt or equity instruments. The term includes, without
limitation, secured and unsecured bonds, debentures, notes, securitized
assets and commercial paper, as well as all types of preferred and
common stock. The term encompasses both current and contingent
ownership interests, including any beneficial or legal interest derived
from a trust. It extends to any right to acquire or dispose of any long
or short position in such securities and includes, without limitation,
interests convertible into such securities, as well as options, rights,
warrants, puts, calls, and straddles with respect thereto.
(c) Divestiture. The designated agency ethics official may require
an employee to divest a security the employee is otherwise authorized
to retain under paragraph (b)(2) of this section, based on a
determination of substantial conflict under Sec. 2635.403(b) of this
title.
(d) Waivers. The designated agency ethics official may grant a
written
[[Page 39872]]
waiver from the prohibition contained in this section based on a
determination that the waiver is not inconsistent with 5 CFR part 2635
or otherwise prohibited by law and that, under the particular
circumstances, application of the prohibition is not necessary to avoid
the appearance of misuse of position or loss of impartiality, or
otherwise to ensure confidence in the impartiality and objectivity with
which Commission programs are administered. A waiver under this
paragraph may be accompanied by appropriate conditions, such as
requiring execution of a written statement of disqualification.
Notwithstanding the grant of any waiver, an employee remains subject to
the disqualification requirements of 5 CFR 2635.402 and 2635.502.
Sec. 8401.103 Prior approval for outside employment.
(a) Prior approval requirement. (1) Before engaging in any outside
employment, whether or not for compensation, a Commission employee who
is classified at GS-13 or above, as well a Commission attorney at any
grade level, must obtain the written approval of the employee's
immediate supervisor and the designated agency ethics official. This
requirement does not apply to a special Government employee of the
Commission.
(2) Requests for approval shall be forwarded through the employee's
immediate supervisor to the designated agency ethics official and shall
include at a minimum the name of the person, group, or organization for
whom the work is to be performed; the type of work to be performed; and
the proposed hours of work and approximate dates of employment.
(b) Standard for approval. Approval shall be granted only upon a
determination that outside employment is not expected to involve
conduct prohibited by statute or Federal regulation, including 5 CFR
2635 and this part.
(c) Definitions. For purposes of this section:
(1) Employment means any form of non-Federal employment or business
relationship involving the provision of personal services by the
employee. It includes but is not limited to personal services as an
officer, director, employee, agent, attorney, consultant, contractor,
general partner, trustee or teacher. It also includes writing when done
under an arrangement with another person for production or publication
of the written product. It does not, however, include participation in
the activities of a nonprofit charitable, religious, professional,
social, fraternal, educational, recreational, public service or civic
organization, unless such activities involve the provision of
professional services or advice or are for compensation other than
reimbursement expenses.
(2) Professional services means the provision of personal services
by an employee, including the rendering of advice or consultation,
which involves application of the skills of a profession as defined in
5 CFR 2636.305(b)(1).
TITLE 29--[AMENDED]
CHAPTER XXVII--FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
2. Part 2703 of 29 CFR chapter XXVII is revised to read as follows:
PART 2703--EMPLOYEE RESPONSIBILITIES AND CONDUCT
Sec.
2703.1 Cross-reference to employee ethical conduct standards and
financial disclosure regulations.
2703.2 Designated Agency Ethics Official and Alternate Designated
Agency Ethics Official.
2703.3 Conflict of interest exemption.
Authority: 5 U.S.C. 7301; 18 U.S.C. 208; 5 CFR 2638.202.
Sec. 2703.1 Cross-reference to employee ethical conduct standards and
financial disclosure regulations.
Members and employees of the Federal Mine Safety and Review
Commission are subject to the executive branch-wide Standards of
Ethical Conduct at 5 CFR part 2635; the Commission's regulations at 5
CFR part 8401, which supplement the executive branch-wide standards;
and the executive branch-wide financial disclosure regulations at 5 CFR
part 2634.
Sec. 2703.2 Designated Agency Ethics Official and Alternate Designated
Agency Ethics Official.
The Chairman shall appoint an individual to serve as the designated
agency ethics official, and an individual to serve in an acting
capacity in the absence of the primary designated agency ethics
official (alternate designated agency ethics official), to coordinate
and manage the Commission's ethics program.
Sec. 2703.3 Conflict of interest exemption.
The financial interests hereinafter described are, to the extent
indicated, exempted from application of the financial conflict of
interest prohibition at 18 U.S.C. 208(a) because they have been
determined to be too remote or inconsequential to affect the integrity
of a Commission employee's services in any matter in which he may act
in an official capacity:
Ownership of shares of stock, bonds, other corporate securities, or
shares in a mutual fund or regulated fund or regulated investment
company, so long as the current aggregate fair market value of such
holdings in a single enterprise does not exceed $5,000.
[FR Doc. 96-19393 Filed 7-30-96; 8:45 am]
BILLING CODE 6735-01-P