[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43411-43415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21412]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 61, No. 165 / Friday, August 23, 1996 / Rules 
and Regulations

[[Page 43411]]



DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

5 CFR Chapter XXIV

18 CFR Part 3c

RIN 3209-AA15
[Docket No. RM95-1-000; Order No. 589]


Supplemental Standards of Ethical Conduct for Employees of the 
Federal Energy Regulatory Commission

Issued August 16, 1996.

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Commission, with the concurrence of the Office of 
Government Ethics (OGE), is issuing regulations for employees of the 
Commission, including members of the Commission, which supplement the 
Standards of Ethical Conduct for Employees of the Executive Branch 
issued by OGE. The supplemental regulations are necessary and 
appropriate in view of the particular needs of the Commission as a 
regulatory body with quasi-judicial functions. The supplemental 
regulations establish prohibitions on holding securities of certain 
companies substantially affected by Commission regulation and require 
Commission employees to seek approval from the Designated Agency Ethics 
Officer of the Commission (DAEO) prior to engaging in certain outside 
activities. The supplemental regulations also require employees to 
document recusals in writing. The Commission is also repealing its 
existing standards of conduct and inserting in their place a cross-
reference to other ethics regulations, and a provision establishing 
standards of cooperation with the Inspector General.

EFFECTIVE DATE: These regulations take effect August 23, 1996.

FOR FURTHER INFORMATION CONTACT: Elizabeth Arnold, Office of the 
General Counsel, General and Administrative Law, Room 91-18, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, D.C. 
20426; telephone 202-208-0457.

SUPPLEMENTARY INFORMATION:

Availability of Documents

    In addition to publishing the full text of this document in the 
Federal Register, the Commission also provides all interested persons 
an opportunity to inspect or copy the contents of this document during 
normal business hours in the Public Reference Room at 888 First Street, 
NE., Washington, D.C. 20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user and may be accessed using a personal computer with a modem by 
dialing (202) 208-1397 if dialing locally or 1-800-856-3920 if dialing 
long distance. To access CIPS, set your communications software to 
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, 
no parity, 8 data bits, and 1 stop bit. The full text of this document 
will be available on CIPS indefinitely in ASCII and in WordPerfect 5.1 
format for one year. The complete text on diskette in WordPerfect 
format may also be purchased from the Commission's copy contractor, La 
Dorn Systems Corporation, also located in the Public Reference Room at 
888 First Street NE., Washington, D.C. 20426.
    The Commission's bulletin board system also can be accessed through 
the FedWorld system directly by modem or through the Internet. To 
access the FedWorld system by modem:

     Dial (703) 321-3339 and logon to the FedWorld system.
     After logging on, type: /go FERC
    To access the FedWorld system through the Internet:
     Telnet to: fedworld.gov
     Select the option: [1] FedWorld
     Logon to the FedWorld System
     Type: /go FERC
        Or:
     Point your Web Browser to: http://www.fedworld.gov
     Scroll down the page to select FedWorld Telnet Site
     Select the option: [1] FedWorld
     Logon to the FedWorld system
     Type: /go FERC

I. Background

    On August 7, 1992, OGE published new 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. Codified at 5 CFR part 2635, the new Standards 
became effective on February 3, 1993, superseding most agency-specific 
standards of conduct on that date.
    In February 1993, the Commission repealed portions of its standards 
of conduct regulations that were superseded by OGE's Standards. 58 FR 
7486. The repealed sections included most of the Commission's conflict 
of interest and ethical conduct regulations, and provisions relating to 
the reporting of outside employment and financial interests. The 
Commission retained for a temporary OGE-approved period its preexisting 
prohibition against the ownership or purchase of the securities of 
jurisdictional companies. The Commission also retained on the basis of 
independent statutory authority provisions barring the disclosure of 
audit information and information relating to the nature and timing of 
future Commission action.
    With the concurrence of OGE, agencies are authorized to publish 
agency-specific supplemental regulations that are necessary to 
implement properly their respective ethics programs. The Commission, 
with OGE's concurrence, has determined that the following supplemental 
regulations, to be codified in part 3401 of new chapter XXIV of 5 CFR, 
are necessary and appropriate to the successful implementation of the 
Commission's ethics program. By this rulemaking, the Commission is also 
revising its own regulations at 18 CFR part 3c to delete the conflicts 
of interest provision being superseded by the new supplemental 
regulations and to establish standards of cooperation with the 
Inspector General.
    The Commission is issuing these regulations pursuant to its 
authority as an independent regulatory body within the Department of 
Energy (DOE). The

[[Page 43412]]

Energy Department published its own supplemental regulations in the 
Federal Register on July 5, 1996, which are not applicable to 
Commission employees. See 61 FR 35085-35088. The Commission has the 
statutory responsibility to manage its own operations, including the 
supervision of its staff. Its officers and employees, in the 
performance of their functions, are not responsible or subject to the 
supervision of any officer or employee of any other part of DOE. 42 
U.S.C. 7171. The Commission is authorized to prescribe rules, 
regulations and policy statements, including such procedural and 
administrative rules as are necessary to the exercise of its functions, 
and is issuing these regulations, with the concurrence of OGE, pursuant 
to its authority to do so, independent of DOE. 42 U.S.C. 7171(f) and 
7172(h).

II. Analysis of the Regulations

Section 3401.101  General

    Section 3401.101 explains that the regulations contained in the 
rule apply to all Commission employees, which include members of the 
Commission, and are supplemental to the Standards. It also notes that 
employees are required to comply with 5 CFR part 2635, the executive 
branch financial disclosure regulations at 5 CFR part 2634, additional 
rules of conduct published in 5 CFR part 735, and the Commission's 
Standards of Conduct at 18 CFR part 3c.

Section 3401.102  Prohibited Financial Interests

    The Standards at 5 CFR 2635.403(a), provide that individual 
agencies may adopt supplemental regulations prohibiting or restricting 
employees from acquiring or holding certain financial interests or 
classes of financial interests if the acquisition or holding would 
cause a reasonable person to question the impartiality with which the 
agency's programs are administered. Where it is necessary to the 
efficiency of the service, such prohibitions may be extended to 
employees' spouses and minor children.
    Under 18 CFR part 3c, the Commission has long prohibited employees, 
their spouses and minor children, from owning the securities of certain 
entities directly or indirectly subject to the jurisdiction of the 
Commission. The Commission has determined that a supplemental 
regulation is needed to retain the general prohibition against 
financial holdings in those companies that are substantially affected 
by Commission regulation in order to protect the integrity of the 
Commission's programs and processes. New section 3401.102 is generally 
similar to the Commission's prior prohibition and identifies the types 
of entities the securities of which employees are prohibited from 
holding or acquiring. The restrictions also will help to maintain 
public confidence that sensitive information relating to agency 
operations is not misused for private gain and will help accomplish the 
Commission's mission by avoiding widespread disqualification of 
employees from the performance of their official duties.
    The Commission has determined that application of the securities 
restrictions in Sec. 3401.102 to spouses and minor children is 
necessary to avoid interference with the ability of employees to do 
their jobs, which must be performed with impartiality, and to enable 
the Commission to carry out its mission effectively. As evidence by 
provisions long included in 18 CFR part 3c, the Commission believes it 
is important to the success of its mission for regulated entities and 
others affected by agency decisions to have this additional degree of 
assurance that agency decisions are not influenced by considerations of 
personal gain on the part of Commission personnel.
    The DAEO will compile annually a Prohibited Securities List (PSL) 
cataloguing the financial interests that employees may not own. The PSL 
is intended to serve as a reference source to assist employees in 
identifying prohibited interests. Whether or not a holding is included 
in the PSL is not conclusive as to its status as a prohibited holding.
    Section 3401.102(b) gives the DAEO authority to grant a written 
waiver of the application of Sec. 3401.102(a) based upon a 
determination that the waiver is not inconsistent with law and the 
executive branch-wide Standards and meets the waiver standard 
established in Sec. 3401.102(b). An employee may be required under the 
waiver to disqualify himself or herself from a particular matter or 
take other appropriate action.
    The waiver provision is intended, in appropriate cases, to ease the 
burden that the prohibited financial interests section may impose on 
the private lives of Commission employees, while ensuring that 
employees do not engage in actions that may interfere with the 
objective and impartial execution of their official duties or raise 
questions about possible misuse of their official positions.

Section 3401.103  Procedures for Accomplishing Disqualification

    Section 3401.103 requires that where employees disqualify 
themselves from a particular matter before the Commission, whether 
because of a conflicting financial interest, a question of the 
employee's impartiality, or because the employee is seeking employment 
with a person who could be affected by the performance of the 
employee's duties, written notification of the recusal must be provided 
to a supervisor and the ethics officer. Under the executive branch-wide 
Standards, employees who become aware of the need to disqualify 
themselves from participation in a particular matter to which they have 
been assigned should notify the person responsible for the assignment. 
An employee is not required under those Standards to file a written 
disqualification statement unless asked by an agency ethics official or 
the person responsible for the assignment to file a written 
disqualification statement. 5 CFR 2635.402(c), 2635.502(e), and 
263.604.
    The Commission has determined that where a disqualification is 
necessary, a written record of the recusal is required to protect both 
the disqualified employee and the Commission. A written recusal 
statement avoids possible questions about the scope and terms of the 
recusal and ensures that the agency will be able to provide adequate 
staffing for the matter from which the employee is recused. The 
Commission has in the past requested written notifications of recusal 
for members of the staff. Accordingly, a written notification 
requirement is being included in these supplemental regulations. The 
written notification provision contained in Sec. 3401.103 is not 
applicable to members of the Commission, who have no supervisors, and 
who indicate their nonparticipation in public matters on the public 
record. In practice, such matters comprise the vast majority of items 
that came before the Commission.
    The supplemental rule merely establishes disqualification 
procedures when recusal is otherwise appropriate. It establishes no 
independent standards as to when recusal is necessary. Moreover, it is 
not the Commission's purpose to impose a technical requirement that 
would result in disciplining an employee for failure to provide written 
notice by some arbitrary deadline. Thus, the notice requirement imposed 
by this regulation is phrased to give an employee flexibility in 
determining precisely when to give notice of disqualification from a 
matter

[[Page 43413]]

to which the employee has been assigned. Notice is to be given when the 
employee becomes aware of the need to disqualify himself from 
participation in the matter. In no way does the notice requirement 
affect the employee's obligation not to participate in the matter.

Section 3401.104  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 its employees to obtain written 
approval before engaging in outside employment. The Commission's 
conduct regulations at 18 CFR part 3c, prior to the repeal of portions 
of the regulations following the effective date of the Standards, 
required prior notification of all proposed outside employment, and 
was, in essence a prior approval requirement. The Commission has 
determined to reinstitute a narrower version of the advance 
notification requirement in the form of a prior approval requirement. 
The Commission does not believe there is a need for a general 
requirement of prior approval for all outside employment. However, in 
order to protect the interests of the Commission by ensuring that 
employees are not engaged in activities that are prohibited by statute 
or Federal regulation, including 5 CFR part 2635, the Commission has 
determined that it is necessary to the administration of its ethics 
programs to require Commission employees to obtain written approval 
before accepting outside employment with a prohibited source. 
Therefore, Sec. 3401.104(a) of this supplemental rule requires that a 
FERC employee who wishes to engage in outside employment with a 
prohibited source must obtain prior written approval from the DAEO 
through normal supervisory channels before engaging in such outside 
employment. Prohibited sources include, for example, entities regulated 
by the Commission, parties to Commission proceedings, and contractors 
doing business or seeking to do business with the Commission.
    This prior approval requirement applies to outside employment 
concurrent with Commission employment. The requirement does not apply 
to employment that will be engaged in after an employee terminates 
Federal service. Standards governing post-employment conflicts of 
interest are found at 18 U.S.C. 207 and 5 CFR part 2641. Nor will the 
prior approval requirement apply to negotiations for employment. The 
standards governing such negotiations are at 18 U.S.C. 208(a) and 
subpart F of 5 CFR part 2635. The prior approval requirement does not 
apply to special Government employees.
    To ensure that Sec. 3401.104 is not itself construed as authority 
to deny permission to engage in outside employment, paragraph (b) 
states that approval shall be granted unless a determination is made 
that the outside employment is expected to involve conduct prohibited 
by statutes or Federal regulation, including 5 CFR part 2635.
    At Sec. 3401.104(c), ``employment'' is broadly defined to cover any 
form of compensated non-Federal employment or business relationship or 
activity involving the provision of personal service by the employee. 
``Compensation'' is defined to exclude actual and necessary expenses 
incurred by the employee in connection with the outside activity.

III. Repeal and Revision of the Commission's Standards of Conduct for 
Employees

    The final rule repeals those portions of the regulations at 18 CFR 
3c governing Commission employees' responsibilities and conduct that 
were preserved pending issuance of the final rule.
    These repeals leave in 18 CFR part 3c and redesignate those 
provisions that the Commission has authority to issue independent of 5 
CFR part 2635. The prohibition against the disclosure of audit 
materials merely summarizes statutory provisions in section 301(b) of 
the Federal Power Act (16 U.S.C. 825(c)) and section 8(b) of the 
Natural Gas Act (15 U.S.C. 717g). The requirement that Commission 
employees must treat information about proposed Commission action as 
confidential is a designation of covered information as confidential 
that is not inconsistent with 5 CFR part 2635 and which the agency is 
free to promulgate apart from the supplemental regulations. The 
provision is founded on the Commission's statutory authority to adopt 
such procedural and administrative rules as are necessary to exercise 
its functions. 42 U.S.C. 7171(f). These provisions are being 
redesignated as Sec. 3c.2 and will follow a new Sec. 3c.1 which 
provides a cross-reference to ethics and other conduct-related 
regulations.
    Section 3c.3 assists employees in adhering to the general principle 
of ethical conduct at 5 CFR 2635.101(b)(11), under which an employee 
shall disclose waste, fraud, abuse, and corruption to appropriate 
authorities. It identifies the Inspector General as an authority to 
which it would be appropriate for an employee to disclose waste, fraud, 
abuse and corruption, and requires employees to cooperate with official 
inquiries by the Inspector General. 5 U.S.C. app., sections 2 and 6. 
This section is adopted at the request of the Inspector General and 
replaces a similar provision formerly applicable both to DOE and the 
Commission. 10 CFR 1010.217.
    The separate conflict of interest provisions applicable to 
``supervisory employees'' of DOE and the Commission under Title VI of 
the Department of Energy Organization Act have been repealed by 
Congress. See National Defense Authorization Act for Fiscal Year 1996, 
Public Law 104-106, section 4304(b)(6), 110 Stat. 642. The implementing 
DOE regulations, which were applicable to the Commission, have also 
been repealed. See 61 FR 5085. Accordingly, those provisions are no 
longer in effect and are not being included in 18 CFR part 3c.

IV. Matters of Regulatory Procedure

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601-612) 
generally requires a description and analysis of final rules that will 
have significant economic impact on a substantial number of small 
entities. The Commission certifies that, pursuant to section 605(b) of 
the RFA, this rule will not have a significant economic impact on a 
substantial number of small entities. This is a procedural rule 
affecting Federal employees and their immediate families. It does not 
impact small entities as defined in the RFA.

Environmental Impact

    The Commission concludes that issuance of this rule would not 
represent a major Federal action having a significant adverse effect on 
the human environment under the Commission regulations implementing the 
National Environmental Policy Act (see 18 CFR part 380). This rule is 
procedural in nature and therefore falls within the categorical 
exemptions provided in the Commission's regulations. Consequently, 
neither an environmental impact statement nor an environmental 
assessment is required. See 18 CFR 380.4(a)(1).

Paperwork Reduction Act Statement

    The Paperwork Reduction Act of 1995 (Pub. L. 104-13, 109 Stat. 163 
(1995)) and the Office of Management and Budget's (OMB's) regulations 
(5 CFR part 1320) require that OMB approve certain information 
collection

[[Page 43414]]

requirements imposed by agency rule. However, this rule contains no 
information collection requirements and therefore is not subject to OMB 
approval.

Administrative Procedure Act

    The Administrative Procedure Act (APA) (5 U.S.C. 551-559) requires 
rulemakings to be published in the Federal Register. The APA generally 
mandates that an opportunity for comment be provided when an agency 
promulgates regulations. Notice and comment are not required, however, 
where a rule relates to agency personnel or agency organization, 
procedure or practice or when the ``agency for good cause finds that 
notice and public procedure thereon are impracticable, unnecessary, or 
contrary to the public interest'' (5 U.S.C. 553 (a)(2) and (b)(3)).
    The Commission finds that notice and comment are unnecessary for 
this rulemaking. The rulemaking concerns agency personnel and agency 
organization, procedure, and practice, and for the most part, restates 
provisions previously contained in earlier Commission ethics rules or 
internal administrative requirements or DOE regulations applicable to 
FERC. The Commission, therefore, finds good cause in accordance with 5 
U.S.C. 553(d)(3) to make these rules effective upon publication in the 
Federal Register.

Congressional Notification

    The Small Business Regulatory Enforcement Fairness Act of 1996 
requires agencies to report to Congress on the promulgation of certain 
final rules prior to their effective dates. 5 U.S.C. 801. That 
reporting requirement does not apply to this final rule because it 
falls within a statutory exception for rules relating to agency 
management or personnel. 5 U.S.C. 804(3)(B).

List of Subjects

5 CFR Part 3401

    Conflict of interests, Government employees, Standards of conduct.

18 CFR Part 3c

    Government employees, Standards of conduct.

    Adopted: August 9, 1996.

    By the Commission.
Lois D. Cashell,
Secretary, Federal Energy Regulatory Commission.

    Approved: August 15, 1996.

Marilyn L. Glynn,
Deputy General Counsel, Office of Government Ethics.

    For the reasons set forth in the preamble, the Commission, with the 
concurrence of the Office of Government Ethics, is amending title 5 and 
title 18, chapter I of the Code of Federal Regulations as set forth 
below.

Title 5--[Amended]

    1. A new chapter XXIV, consisting of part 3401, is added to title 5 
of the Code of Federal Regulations to read as follows:

CHAPTER XXIV--FEDERAL ENERGY REGULATORY COMMISSION

PART 3401--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE FEDERAL ENERGY REGULATORY COMMISSION

Sec.
3401.101  General.
3401.102  Prohibited financial interests.
3401.103  Procedures for accomplishing disqualification.
3401.104  Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government 
Act of 1978); 42 U.S.C. 7171, 7172; 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, 2635.402(c), 2635.403, 
2635.502(e), 2635.604, 2635.803.


Sec. 3401.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Federal Energy Regulatory Commission 
(Commission) and supplement the Standards of Ethical Conduct for 
Employees of the Executive Branch contained in 5 CFR part 2635. In 
addition to the standards in 5 CFR part 2635 and this part, employees 
are subject to the executive branch financial disclosure regulations 
contained in 5 CFR part 2634, additional regulations on 
responsibilities and conduct at 5 CFR part 735, and Commission specific 
provisions contained in 18 CFR part 3c.


Sec. 3401.102  Prohibited financial interests.

    (a) General prohibition. Except as provided in paragraphs (b) and 
(c) of this section, an employee, or the spouse or minor child of an 
employee, shall not acquire or hold any securities of:
    (1) A natural gas company;
    (2) An interstate oil pipeline;
    (3) A hydroelectric licensee or exemptee;
    (4) A public utility;
    (5) Any electric utility engaged in the wholesale sale or 
transmission of electricity or having obtained an interconnection or 
wheeling order under Part II of the Federal Power Act; or
    (6) The parent company of an entity identified in paragraphs (a)(1) 
through (a)(5) of this section.
    (b) Waiver. The DAEO may grant a written waiver from this section 
based on a determination that the waiver is not inconsistent with part 
2635 of this title or otherwise prohibited by law and that, under the 
particular circumstances, application of the provision 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 impose appropriate conditions, such as requiring 
execution of a written disqualification.
    (c) Definitions. For purposes of this section:
    (1) 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 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. It does not include an interest in a 
publicly traded or publicly available mutual fund or other collective 
investment fund, or in a widely held pension or similar fund, provided 
that the fund's prospectus does not indicate the objective or practice 
of concentrating its investments in entities identified in paragraphs 
(a)(1) through (a)(6) of this section, and the employee neither 
exercises control nor has the ability to exercise control over the 
financial interests held in the fund.
    (2) The term parent means a company that possesses, directly or 
indirectly, the power to direct or cause the direction of the 
management and policies of an entity identified in paragraphs (a)(1) 
through (a)(5) of this section.

[[Page 43415]]

Sec. 3401.103  Procedures for accomplishing disqualification.

    (a) An employee, other than a member of the Commission, who is 
required, in accordance with 5 CFR 2635.402(c), 2635.502(e), or 
2635.604(a), to disqualify himself from participation in a particular 
matter before the Commission shall provide written notice of 
disqualification to his supervisor and to the DAEO when he becomes 
aware of the need to disqualify himself from participation in the 
matter. This procedure is required notwithstanding the guidance in 5 
CFR 2635.402(c)(2), 2635.502(e)(2), and 2635.604(c).
    (b) An employee may withdraw written notice under paragraph (a) of 
this section upon determining that disqualification from participation 
in the matter is no longer required. A withdrawal of disqualification 
shall be in writing and shall be provided to the employee's supervisor 
and to the DAEO.


Sec. 3401.104  Prior approval for outside employment.

    (a) Prior approval requirement. An employee, other than a special 
Government employee, must obtain written approval from the DAEO through 
normal supervisory channels before engaging in outside employment with 
any person who is a ``prohibited source'' as that term is defined at 5 
CFR 2635.203(d).
    (b) Approval of requests. Approval under this section shall be 
denied only upon a determination by the DAEO that the outside activity 
is expected to involve conduct prohibited by statute or Federal 
regulations, including 5 CFR part 2635.
    (c) Definitions. For purposes of this section, ``employment'' means 
any form of non-Federal employment or business relationship or activity 
involving the provision of personal services by the employee for 
compensation other than reimbursement of actual and necessary expenses. 
It includes, but is not limited to, personal services as an officer, 
director, employee, agent, attorney, consultant, contractor, general 
partner, or trustee.

Title 18--[Amended]

CHAPTER I--FEDERAL ENERGY REGULATORY COMMISSION

    2. Part 3c of 18 CFR is revised to read as follows:

PART 3c--STANDARDS OF CONDUCT

Sec.
3c.1  Cross-reference to employee ethical conduct standards and 
financial disclosure regulations.
3c.2  Nonpublic information.
3c.3  Reporting fraud, waste, abuse, and corruption and cooperation 
with official inquiries.

    Authority: 15 U.S.C. 717g; 16 U.S.C. 825(b); 42 U.S.C. 7171, 
7172.


Sec. 3c.1  Cross-reference to employee ethical conduct standards and 
financial disclosure regulations.

    Employees of the Federal Energy Regulatory Commission (Commission) 
are subject to the executive branch-wide financial disclosure 
regulations at 5 CFR part 2634, the Standards of Ethical Conduct for 
Employees of the Executive Branch at 5 CFR part 2635, the Commission 
regulations at 5 CFR part 3401 which supplement the Standards of 
Ethical Conduct, and the executive branch-wide employee 
responsibilities and conduct regulation at 5 CFR part 735.


Sec. 3c.2  Nonpublic information.

    (a) Section 301(b) (16 U.S.C. 825(b)) of the Federal Power Act and 
section 8(b) (15 U.S.C. 717g) of the Natural Gas Act prohibit any 
employee, in the absence of Commission or court direction, from 
divulging any fact or information which may come to his or her 
knowledge during the course of examination of books or other accounts.
    (b) The nature and time of any proposed action by the Commission 
are confidential and shall not be divulged to anyone outside the 
Commission. The Secretary of the Commission has the exclusive 
responsibility and authority for authorizing the initial public release 
of information concerning Commission proceedings.


Sec. 3c.3  Reporting fraud, waste, abuse, and corruption and 
cooperation with official inquiries.

    (a) Employees shall, in fulfilling the obligation of 5 CFR 
2635.101(b)(11), report fraud, waste, abuse, and corruption in 
Commission programs, including on the part of Commission employees, 
contractors, subcontractors, grantees, or other recipients of 
Commission financial assistance, to the Office of Inspector General or 
other appropriate Federal authority.
    (b) All alleged violations of the ethical restrictions described in 
Sec. 3c.1 that are reported in accordance with paragraph (a) of this 
section to an appropriate authority within the Commission shall in turn 
be referred by that authority to the Designated Agency Ethics Official 
or his or her designee, or the Inspector General.
    (c) Employees shall cooperate with official inquiries by the 
Inspector General; they shall respond to questions truthfully under 
oath when required, whether orally or in writing, and must provide 
documents and other materials concerning matters of official interest. 
An employee is not required to respond to such official inquiries if 
answers or testimony may subject the employee to criminal prosecution.

[FR Doc. 96-21412 Filed 8-22-96; 8:45 am]
BILLING CODE 6717-01-M