[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superseded by the Standards, OGE's executive branch-wide financial 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