[Federal Register Volume 65, Number 172 (Tuesday, September 5, 2000)]
[Proposed Rules]
[Pages 53650-53652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22612]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 65, No. 172 / Tuesday, September 5, 2000 / 
Proposed Rules  

[[Page 53650]]



OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2635

RIN 3209-AAO4


Standards of Ethical Conduct for Employees of the Executive 
Branch; Definition of Compensation for Purposes of Prohibition on 
Acceptance of Compensation in Connection With Certain Teaching, 
Speaking and Writing Activities

AGENCY: Office of Government Ethics (OGE).

ACTION: Interim rule with request for comments.

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SUMMARY: The Office of Government Ethics is amending the prohibition on 
employees' receipt of compensation for outside teaching, speaking, and 
writing, as set forth in the Standards of Ethical Conduct for Employees 
of the Executive Branch, to permit acceptance of travel expenses by 
employees other than covered noncareer employees.

DATES: This interim rule amendment is effective September 5, 2000. 
Comments are invited and must be received on or before November 6, 
2000.

ADDRESSES: Send comments to the Office of Government Ethics, Suite 500, 
1201 New York Avenue, NW., Washington, DC 20005-3917, Attention: Kay L. 
Richman. Comments may also be sent electronically to OGE's Internet E-
mail address at [email protected]. For E-mail messages, the subject line 
should include the following reference--``Comments on the Interim Rule 
Standards Amendment to the Compensation Definition for Teaching, 
Speaking and Writing Activities.''

FOR FURTHER INFORMATION CONTACT: Kay L. Richman, Associate General 
Counsel, Office of Government Ethics; telephone: 202-208-8000; TDD: 
202-208-8025; FAX: 202-208-8037.

SUPPLEMENTARY INFORMATION:

I. Background

    This interim rule, which is being published by the Office of 
Government Ethics (OGE) after consultation with the Department of 
Justice and the Office of Personnel Management, amends 5 CFR 2635.807 
to conform to the May 30, 1995, decision by the United States Court of 
Appeals for the District of Columbia Circuit in Sanjour v. 
Environmental Protection Agency, 56 F.3d 85 (en banc), as clarified in 
the April 14, 1998, decision on remand by the United States District 
Court for the District of Columbia, 7 F. Supp.2d 14 (D.D.C. 1998). 
Sanjour, in which OGE was a co-defendant, involved a First Amendment 
challenge to the regulatory prohibition in 5 CFR 2635.807(a) on 
employee acceptance of travel expense reimbursements in connection with 
unofficial teaching, speaking, and writing that ``relates to * * * 
official duties'' under 5 CFR 2635.807(a)(2)(i). The District Court 
initially rejected the plaintiffs' claims, 786 F. Supp. 1033 (D.D.C. 
1992), as did the Court of Appeals on its first hearing of the case, 
984 F.2d 434 (D.C. Cir. 1993). On May 30, 1995, however, the Court of 
Appeals, in a 5-4 en banc decision on rehearing, sustained the 
employees' First Amendment challenge and held invalid ``the no-expenses 
regulations.'' 56 F.3d 85, 88 (D.C. Cir. 1995). The Court of Appeals en 
banc reasoned that, since a regulation of the General Services 
Administration (GSA), 41 CFR 304-1.3(a), allows travel reimbursements 
from non-Government sources in connection with official speech, whereas 
Sec. 2635.807(a) prohibits travel reimbursements in connection with 
unofficial speech, the regulatory scheme posed a risk of censorship and 
discrimination based on viewpoint. 7 F. Supp.2d at 18 (District Court 
decision on remand, explaining the Court of Appeals decision); see 56 
F.3d at 87, 89, 90, 96-97. At the same time, however, the Appeals Court 
noted that ``the balancing of interests relevant to senior executive 
officials might `present [ ] a different constitutional question.' '' 
56 F.3d at 93. The Court, therefore, explicitly reserved judgment on 
the constitutionality of the regulations as applied to ``senior 
executive employees.'' Id.
    On remand, the District Court entered a final order that enjoined 
enforcement of the bar on nonofficial travel expenses in 5 CFR 
2635.807(a) against ``employees below the senior executive service 
level of employment.'' As the District Court explained, the en banc 
Court of Appeals ruling invalidated the ban on travel expenses in 
connection with all types of teaching, speaking, and writing related to 
duties under Sec. 2635.807(a)(2)(i), not just those related to duties 
under Sec. 2635.807(a)(2)(i)(E)(2). 7 F. Supp.2d at 17-18. The District 
Court, however, did not enjoin enforcement of the GSA regulation, which 
allows travel reimbursements from outside sources in connection with 
official speech. Id. at 18. According to the District Court, ``[o]nce 
the prohibition on travel expense reimbursement for unofficial speech * 
* * is lifted, then there can be no possible constitutional objection 
to allowing agencies to accept travel reimbursements from outside 
sources for official travel.'' Id. at 19.

II. The Amendment

    As presently codified, 5 CFR 2635.807(a) bars employees from 
accepting from non-Government sources ``compensation'' for teaching, 
speaking, or writing that ``relates to * * * official duties.'' 
``Compensation'' is generally defined as including travel expenses, 
except when accepted pursuant to certain statutory authorities that 
relate primarily to official travel activities. 5 CFR 
2635.807(a)(2)(iii). In the revised rule, the introductory text of 
paragraph (a)(2)(iii) and exclusionary paragraphs (A)-(C) thereunder 
remain unchanged but, in response to Sanjour, a new paragraph 
(a)(2)(iii)(D) excludes from the definition of ``compensation'' travel 
expenses incurred in connection with a covered teaching, speaking or 
writing activity, unless the employee is a covered noncareer employee 
as defined in 5 CFR 2636.303(a).
    This amendment affects only travel expenses. The ban on acceptance 
of other forms of compensation remains applicable to all employees to 
the extent the compensation is given for or in connection with 
teaching, speaking, or writing related to duties.
    Under Sec. 2635.807(a) as amended, employees who are not ``covered 
noncareer employees'' will be able to accept travel expenses incurred 
in connection with teaching, speaking, or writing activities that are 
related to duties. ``Covered noncareer employees,'' on the other hand, 
will remain subject to the travel expenses ban. This approach continues 
and formalizes the

[[Page 53651]]

enforcement advice OGE provided pending amendment of Sec. 2635.807(a). 
See OGE Memorandum of November 25, 1998, to Designated Agency Ethics 
Officials (DO-98-034), which is available in the Ethics Resource 
Library section of the OGE Web site, address: http://www.usoge.gov.
    As defined in 5 CFR 2636.303(a), as amended at 64 FR 2421-2422 
(January 14, 1999), the term ``covered noncareer employee'' includes 
certain Presidential appointees, noncareer members of the Senior 
Executive Service (SES) or other SES-type systems, and Schedule C or 
comparable appointees, provided such appointees hold positions ``above 
GS-15 of the General Schedule or, in the case of positions not under 
the General Schedule, for which the rate of basic pay is equal to or 
greater than 120 percent of the minimum rate of basic pay payable for 
GS-15 of the General Schedule.'' The term excludes special Government 
employees, Presidential appointees to positions within the uniformed 
services, and Presidential appointees within the foreign service below 
the level of Assistant Secretary or Chief of Mission.
    Relying on the definition of ``covered noncareer employee'' as a 
means of distinguishing those employees to whom the travel expenses ban 
continues to apply from those employees who are exempt from it makes 
sense for a variety of reasons. By definition, a covered noncareer 
employee is a senior employee at or above the Senior Executive Service 
level of employment. Excluding such employees from the relaxation of 
the teaching, speaking and writing rule thus comports with the 
statement by the en banc Court of Appeals in Sanjour that ``the 
balancing of interests relevant to senior executive officials might 
`present[  ] a different constitutional question than the one we decide 
today' '' and the Court's determination, accordingly, to ``express no 
view on whether the challenged regulations may be applied to senior 
executive employees.'' 56 F.3d at 93, citing United States v. National 
Treasury Employees Union, 513 U.S. 454 (1995). Conversely, exempting 
employees other than covered noncareer employees from the ban is 
consistent with the District Court's clarification, in its decision on 
remand, that the travel expenses ban may not be enforced against 
``federal employees below the senior executive service level of 
employment.'' 7 F. Supp.2d at 17, n.1.
    Insofar as the District Court enjoined enforcement of the travel 
expenses ban only against federal employees below the senior executive 
service level of employment, 7 F. Supp.2d at 17, n. 1, OGE, consistent 
with the court ruling, could have continued the ban against all senior 
employees, career as well as noncareer. The decision to continue the 
ban only against senior noncareer employees, by employing the ``covered 
noncareer employee'' definition in this way, however, accords with the 
higher standards to which the Ethics Reform Act, related regulations, 
and other regulations hold senior officials who are ``covered noncareer 
employees,'' particularly with regard to their outside activities. See 
5 U.S.C. appendix, sections 501(a) and 502; 5 CFR 2635.804 and 
accompanying note; 5 CFR 2635.807(a)(2)(i)(E)(3) and example 6; 5 CFR 
2636.301-2636.307. As a practical matter, moreover, the definition of 
covered noncareer employee has been in use for some time and is 
familiar to agency ethics officials.
    Under amended Sec. 2635.807, therefore, insofar as employees other 
than ``senior,'' i.e. ``covered noncareer,'' employees are concerned, 
the burden, for First Amendment purposes, on unofficial speech that 
relates to duties under 5 CFR 2635.807(a)(2)(i) will no longer be 
greater than the burden on official speech under 31 U.S.C. 1353 and 
GSA's implementing regulation.
    As revised, Sec. 2635.807(a)(2)(iii) includes four new examples 
that illustrate how applicability of the compensation prohibition may 
depend on such circumstances as--whether the payment covers travel 
expenses incurred in connection with a teaching, speaking, or writing 
activity, or constitutes a fee or other form of consideration; whether 
the travel expenses are incurred by a covered noncareer employee or by 
another employee; whether the payment concerns travel that is unrelated 
to the covered teaching, speaking, or writing activity and is, in 
effect, a fee for services; and whether the payment is made in 
connection with a teaching, speaking, or writing activity that is 
officially assigned and for which travel expense payments are 
authorized under specific statutory authority, such as 31 U.S.C. 1353, 
5 U.S.C. 4111 or 7342, or an agency gift acceptance statute.
    As amended, Sec. 2635.807(a)(2)(iii) also includes a note intended 
to alert employees that, independent of Sec. 2635.807, other 
authorities, such as 18 U.S.C. 209, Salary of Government Officials and 
Employees Payable Only by United States, in some circumstances may 
limit or entirely preclude an employee's acceptance of travel expenses.

III. Matters of Regulatory Procedure

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553(b) and (d), as Director of the Office of 
Government Ethics, I find that good cause exists for waiving the 
general requirements of notice of proposed rulemaking, opportunity for 
public comment and 30-day delayed effective date for this interim rule 
amendment. These requirements are being waived because it is in the 
public interest that this regulation take effect as soon as possible in 
order to clarify when Government employees may accept travel expenses 
in connection with teaching, speaking and writing activities that are 
related to official duties. Interested persons are invited to submit 
written comments on this interim rule amendment, to be received by OGE 
on or before November 6, 2000. Before adopting this amendatory interim 
rule as a final rule, OGE will consider all comments received.

Executive Order 12866

    In promulgating this interim rule amendment, the Office of 
Government Ethics has adhered to the regulatory philosophy and the 
applicable principles of regulation set forth in section 1 of Executive 
Order 12866, Regulatory Review and Planning. The amendment has also 
been reviewed by the Office of Management and Budget under that 
Executive order.

Executive Order 12988

    As Director of the Office of Government Ethics, I have reviewed 
this interim amendatory regulation in light of section 3 of Executive 
Order 12988, Civil Justice Reform, and certify that it meets the 
applicable standards provided therein.

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 amendatory 
rule will not have a significant economic impact on a substantial 
number of small entities because it primarily affects Federal executive 
branch employees.

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply 
because this amendment does not contain information collection 
requirements that require the approval of the Office of Management and 
Budget.

[[Page 53652]]

List of Subjects in 5 CFR Part 2635

    Conflict of interests, Executive branch standards of ethical 
conduct, Government employees.

    Approved: July 24, 2000.
Stephen D. Potts,
Director, Office of Government Ethics.
    Accordingly, for the reasons set forth in the preamble, the Office 
of Government Ethics is amending 5 CFR part 2635 as follows:

PART 2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 
EXECUTIVE BRANCH

    1. The authority citation for part 2635 continues to read as 
follows:

    Authority: 5 U.S.C. 7301, 7351, 7353; 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.

Subpart H--Outside Activities

    2. Section 2635.807 is amended by:
    a. Removing the word ``or'' at the end of paragraph (a)(2)(iii)(B);
    b. Removing the period at the end of paragraph (a)(2)(iii)(C) and 
adding in its place a semicolon followed by the word ``or'';
    c. Adding a new paragraph (a)(2)(iii)(D); and
    d. Adding a Note and four Examples following new paragraph 
(a)(2)(iii)(D).
    The additions read as follows:


Sec. 2635.807  Teaching, speaking and writing.

    (a) * * *
    (2) * * *
    (iii) * * *
    (D) In the case of an employee other than a covered noncareer 
employee as defined in 5 CFR 2636.303(a), travel expenses, consisting 
of transportation, lodgings or meals, incurred in connection with the 
teaching, speaking or writing activity.

    Note to Paragraph (a)(2)(iii): Independent of Sec. 2635.807(a), 
other authorities, such as 18 U.S.C. 209, in some circumstances may 
limit or entirely preclude an employee's acceptance of travel 
expenses.
    Example 1 to paragraph (a)(2)(iii): A GS-15 employee of the 
Forest Service has developed and marketed, in her private capacity, 
a speed reading technique for which popular demand is growing. She 
is invited to speak about the technique by a representative of an 
organization that will be substantially affected by a regulation on 
land management which the employee is in the process of drafting for 
the Forest Service. The representative offers to pay the employee a 
$200 speaker's fee and to reimburse all her travel expenses. She may 
accept the travel reimbursements, but not the speaker's fee. The 
speech is related to her duties under Sec. 2635.807(a)(2)(i)(C) and 
the fee is prohibited compensation for such speech; travel expenses 
incurred in connection with the speaking engagement, on the other 
hand, are not prohibited compensation for a career GS-15 employee.
    Example 2 to paragraph (a)(2)(iii): Solely because of her recent 
appointment to a Cabinet-level position, a Government official is 
invited by the Chief Executive Officer of a major international 
corporation to attend firm meetings to be held in Aspen for the 
purpose of addressing senior corporate managers on the importance of 
recreational activities to a balanced lifestyle. The firm offers to 
reimburse the official's travel expenses. The official may not 
accept the offer. The speaking activity is related to duties under 
Sec. 2635.807(a)(2)(i)(B) and, because she is a covered noncareer 
employee as defined in Sec. 2636.303(a) of this chapter, the travel 
expenses are prohibited compensation as to her.
    Example 3 to paragraph (a)(2)(iii): A GS-14 attorney at the 
Federal Trade Commission (FTC) who played a lead role in a recently 
concluded merger case is invited to speak about the case, in his 
private capacity, at a conference in New York. The attorney has no 
public speaking responsibilities on behalf of the FTC apart from the 
judicial and administrative proceedings to which he is assigned. The 
sponsors of the conference offer to reimburse the attorney for 
expenses incurred in connection with his travel to New York. They 
also offer him, as compensation for his time and effort, a free trip 
to San Francisco. The attorney may accept the travel expenses to New 
York, but not the expenses to San Francisco. The lecture relates to 
his official duties under paragraphs (a)(2)(i)(E)(1) and 
(a)(2)(i)(E)(2) of Sec. 2635.807, but because he is not a covered 
noncareer employee as defined in Sec. 2636.303(a) of this chapter, 
the expenses associated with his travel to New York are not a 
prohibited form of compensation as to him. The travel expenses to 
San Francisco, on the other hand, not incurred in connection with 
the speaking activity, are a prohibited form of compensation. If the 
attorney were a covered noncareer employee he would be barred from 
accepting the travel expenses to New York as well as the travel 
expenses to San Francisco.
    Example 4 to paragraph (a)(2)(iii): An advocacy group dedicated 
to improving treatments for severe pain asks the National Institutes 
of Health (NIH) to provide a conference speaker who can discuss 
recent advances in the agency's research on pain. The group also 
offers to pay the employee's travel expenses to attend the 
conference. After performing the required conflict of interest 
analysis, NIH authorizes acceptance of the travel expenses under 31 
U.S.C. 1353 and the implementing General Services Administration 
regulation, 41 CFR part 304-1, and authorizes an employee to 
undertake the travel. At the conference the advocacy group, as 
agreed, pays the employee's hotel bill and provides several of his 
meals. Subsequently the group reimburses the agency for the cost of 
the employee's airfare and some additional meals. All of the 
payments by the advocacy group are permissible. Since the employee 
is speaking officially and the expense payments are accepted under 
31 U.S.C. 1353, they are not prohibited compensation under 
Sec. 2635.807(a)(2)(iii). The same result would obtain with respect 
to expense payments made by non-Government sources properly 
authorized under an agency gift acceptance statute, the Government 
Employees Training Act, 5 U.S.C. 4111, or the foreign gifts law, 5 
U.S.C. 7342.

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[FR Doc. 00-22612 Filed 9-1-00; 8:45 am]
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