[Federal Register Volume 63, Number 243 (Friday, December 18, 1998)]
[Rules and Regulations]
[Pages 69991-69992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33442]



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  Federal Register / Vol. 63, No. 243 / Friday, December 18, 1998 / 
Rules and Regulations  

[[Page 69991]]


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OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2634

RIN 3209-AA00


Technical Amendments to Financial Disclosure Rule for Executive 
Branch Employees

AGENCY: Office of Government Ethics (OGE).

ACTION: Final rule; technical amendments.

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SUMMARY: The Office of Government Ethics is making minor technical 
amendments to the executive branch financial disclosure rule at 5 CFR 
part 2634, which remove obsolete provisions, correct inconsistencies, 
clarify ambiguities, and otherwise conform the text to current 
practice.

EFFECTIVE DATE: December 18, 1998.

ADDRESSES: Office of Government Ethics, Suite 500, 1201 New York 
Avenue, NW., Washington, DC 20005-3917, Attn.: Mr. G. Sid Smith. A copy 
of the two OGE memoranda to designated agency ethics officials noted in 
the SUPPLEMENTARY INFORMATION section below may be obtained from OGE's 
World Wide Web Site on the Internet at http://www.usoge.gov, or by 
contacting Mr. Smith at OGE.

FOR FURTHER INFORMATION CONTACT: G. Sid Smith, Senior Associate General 
Counsel, Office of Government Ethics, telephone: 202-208-8000; TDD: 
202-208-8025; FAX: 202-208-8037.

SUPPLEMENTARY INFORMATION: The regulation at 5 CFR part 2634 was 
promulgated by OGE in 1992 (with various subsequent amendments), to 
implement the financial disclosure requirements of the Ethics Reform 
Act of 1989 (5 U.S.C. app., Secs. 101-111) and section 201(d) of 
Executive Order 12674, as well as other related statutory provisions. 
That regulation governs both the public and confidential financial 
disclosure systems for executive branch employees. As OGE and ethics 
officials throughout the executive branch have gained experience with 
these disclosure systems, a few minor amendments have become necessary, 
in order to correct inconsistencies, clarify ambiguities, and conform 
the text to current practice. Those amendments are summarized below.
    The term ``gift'' is defined in Sec. 2634.105(h) by restating the 
statutory definition and exclusions at 5 U.S.C. app., Sec. 109(5). 
Another section of the regulation at Sec. 2634.304 recognizes 
additional statutory exclusions and exceptions from the gift disclosure 
requirements. For completeness and to eliminate any doubt for filers 
and ethics officials, this rulemaking adds a cross-reference at the end 
of Sec. 2634.105(h) to those additional exclusions, which concern gifts 
from relatives, personal hospitality of an individual, gifts received 
when the filer was not a Government employee, and items valued at $100 
or less.
    Example 2 following Sec. 2634.201(a) illustrates that an employee 
who is not a public filer but who serves in an acting capacity in a 
public filer position for more than 60 days in a calendar year must 
file an incumbent public financial disclosure report. In order to 
eliminate any confusion, this rulemaking adds a sentence at the end of 
Example 2 following Sec. 2634.201(a) to note that, in addition, the 
employee must file a new entrant report the first time that he has 
served for more than 60 days in a calendar year in the position, as 
required by other referenced sections of the regulation.
    Example 2 following Sec. 2634.304(e) illustrates how to determine 
the value of a gift of dinner at a restaurant. This example has caused 
some misunderstanding, because the definition of ``gift'' in 
Sec. 2634.105(h)(4) excludes food and beverages not consumed in 
connection with a gift of overnight lodging. Further, the note after 
the examples following Sec. 2634.304(e) discusses how to determine the 
value of a ticket to an event which includes food, refreshments, 
entertainment and other benefits, but fails to account for the 
exclusion of food and beverages not consumed in connection with a gift 
of overnight lodging. In order to eliminate any ambiguity, this 
rulemaking removes Example 2 following Sec. 2634.304(e), and adds in 
the note after the remaining example following Sec. 2634.304(e) a 
reference to the potential exclusion of food and beverages, along with 
guidance in determining the value thereof.
    Section 2634.902 discusses transition to the new confidential 
financial disclosure reporting system, which became effective on 
October 5, 1992. That section has served its purpose and is no longer 
necessary. Therefore, it is removed, and the section will be reserved.
    Section 2634.903(a) requires persons in positions designated for 
confidential disclosure reporting to file an incumbent report on or 
before October 31 (if they have performed the duties of their position 
for more than 60 days during the reporting period). Some agencies and 
employees have inquired whether this report must be filed if the 
individual leaves Government service prior to the due date. As OGE 
indicated in a memorandum to designated agency ethics officials on July 
31, 1995 (DO-95-030), it would be consistent with the regulatory scheme 
not to require reports in that situation, because the regulation was 
not intended to require reports after a confidential filer has 
terminated Government service. Such a requirement exists only for 
filers covered by the public financial disclosure statute, which 
involves substantially fewer filers and serves the special purpose of 
public scrutiny. In order to codify the 1995 OGE interpretation, this 
rulemaking adds a sentence in Sec. 2634.903(a), to indicate that 
incumbent reports for confidential filers are not required if the 
employee has left Government service prior to the report's due date.
    Section 2634.904(a) defines ``confidential filer'' by requiring 
agencies to designate positions where the duties and responsibilities 
require the employee to participate ``personally and substantially'' 
through decision or the exercise of significant judgment in taking 
certain types of Government actions. Several agencies have asked for 
guidance as to the meaning of the term ``personally and 
substantially.'' As guidance, OGE has referred them to the definitions 
in other OGE regulations, primarily the standards of ethical conduct at 
5 CFR Sec. 2635.402(b)(4). See OGE memorandum to designated agency 
ethics officials of September 14, 1994

[[Page 69992]]

(DO-94-031). This rulemaking codifies that advice by adding a cross-
reference in Sec. 2634.904(a)(1) to Sec. 2635.402(b)(4). While there 
are similar definitions in parts 2637 and 2640 of 5 CFR, the definition 
in the referenced section will suffice.
    Section 2634.907(a) describes the contents of confidential 
financial disclosure reports by referring generally to the information 
required for public reports in subpart C of 5 CFR part 2634. While that 
subpart clearly specifies in Sec. 2634.309 that information must be 
included about the filer's spouse and dependent children, some agencies 
and confidential filers have found the reference to be misleading or 
obscure. In order to eliminate any confusion on that point, this 
rulemaking amends Sec. 2634.907(a) by specifying that confidential 
filers must include information about themselves, their spouse and 
their dependent children.

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553(b) and (d), as Director of the Office of 
Government Ethics, I find good cause exists for waiving the general 
notice of proposed rulemaking, opportunity for public comment and 30-
day delay in effectiveness as to these revisions. The notice, comment 
and delayed effective date are being waived because these technical 
amendments to certain OGE regulations concern matters of agency 
organization, practice and procedure. Furthermore, it is in the public 
interest that the obsolete provisions be removed and that ambiguous 
provisions be clarified as soon as possible.

Executive Order 12866

    In promulgating these technical amendments to its regulations, OGE 
has adhered to the regulatory philosophy and the applicable principles 
of regulation set forth in section 1 of Executive Order 12866, 
Regulatory Planning and Review. These amendments have also been 
reviewed by the Office of Management and Budget under that Executive 
order.

Regulatory Flexibility Act

    As Director of the Office of Government Ethics, I certify under the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) that this rulemaking 
will not have a significant economic impact on a substantial number of 
small entities because it primarily affects Federal executive branch 
agencies and their employees.

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply 
because this rulemaking, involving technical amendments and 
corrections, 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 2634

    Administrative practice and procedure, Certificates of divestiture, 
Conflict of interests, Financial disclosure, Government employees, 
Penalties, Privacy, Reporting and recordkeeping requirements, Trusts 
and trustees.

    Approved: November 5, 1998.
Stephen D. Potts,
Director, Office of Government Ethics.

    For the reasons set forth in the preamble, the Office of Government 
Ethics is amending part 2634 of chapter XVI of 5 CFR as follows:

PART 2634--[AMENDED]

    1. The authority citation for part 2634 continues to read as 
follows:

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 26 
U.S.C. 1043; 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.

    2. Section 2634.105 is amended by:
    a. Removing the word ``or'' at the end of paragraph (h)(5);
    b. Removing the period at the end of paragraph (h)(6) and adding in 
its place a semicolon followed by the word ``or''; and
    c. Adding a new paragraph (h)(7).
    The addition reads as follows:


Sec. 2634.105  Definitions.

* * * * *
    (h) * * *
    (7) Exclusions and exceptions as described at Sec. 2634.304(c) and 
(d).
* * * * *


Sec. 2634.201  [Amended]

    3. Section 2634.201 is amended by adding the sentence ``In 
addition, he must file a new entrant report the first time he serves 
more than 60 days in a calendar year in the position, in accordance 
with Sec. 2634.201(b) and Sec. 2634.204(c)(1).'' at the end of Example 
2 following paragraph (a).


Sec. 2634.304  [Amended]

    4. Section 2634.304 is amended by removing Example 2 following 
paragraph (e), redesignating Example 1 as Example following paragraph 
(e), and adding the sentence ``The value of food and beverages may be 
excludable under Sec. 2634.105(h)(4), if applicable, by making a good 
faith estimate, or by determining their actual cost from the caterer, 
restaurant, or similar source.'' at the end of the note after the newly 
redesignated Example following paragraph (e).


Sec. 2634.902  [Removed and Reserved]

    5. Section 2634.902 is removed and reserved.


Sec. 2634.903  [Amended]

    6. Section 2634.903 is amended by adding the new sentence ``This 
requirement does not apply if the employee has left Government service 
prior to the due date for the report.'' following the first sentence of 
the text in paragraph (a).


Sec. 2634.904  [Amended]

    7. Section 2634.904 is amended by adding the words ``(as defined in 
Sec. 2635.402(b)(4) of this chapter)'' following the words ``personally 
and substantially'' in the introductory text of paragraph (a)(1).


Sec. 2634.907  [Amended]

    8. Section 2634.907 is amended by adding the words ``about himself, 
his spouse and his dependent children,'' following the word 
``information'' in the introductory text of paragraph (a).

[FR Doc. 98-33442 Filed 12-17-98; 8:45 am]
BILLING CODE 6345-01-U