[Federal Register Volume 63, Number 155 (Wednesday, August 12, 1998)]
[Rules and Regulations]
[Pages 43069-43070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21614]



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.

Ira S. Kaye, (202) 326-2426, Federal Trade Commission, Office of the 
General Counsel.


I. 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 
    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.

II. 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 
    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.

III. 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:


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

    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. 98-21614 Filed 8-11-98; 8:45 am]