[Federal Register Volume 65, Number 191 (Monday, October 2, 2000)]
[Rules and Regulations]
[Pages 58635-58640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25136]



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  Federal Register / Vol. 65, No. 191 / Monday, October 2, 2000 / Rules 
and Regulations  

[[Page 58635]]



DEPARTMENT OF AGRICULTURE

5 CFR Part 8301

RIN 3209-AA15


Supplemental Standards of Ethical Conduct for Employees of the 
Department of Agriculture

AGENCY: Department of Agriculture (Department or USDA).

ACTION: Final rule.

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

SUMMARY: The Department of Agriculture (Department or USDA), with the 
concurrence of the Office of Government Ethics (OGE), is issuing final 
regulations for Department employees that supplement the Standards of 
Ethical Conduct for Employees of the Executive Branch (Standards), as 
issued by OGE. The final rule, effective upon publication, sets forth 
as final both a general requirement for certain Department employees to 
obtain prior approval before engaging in outside employment and 
separate, more-extensive prior approval requirements for employees of 
the USDA Farm Service Agency (FSA), Food Safety and Inspection Service 
(FSIS), Office of the General Counsel (OGC), and Office of Inspector 
General (OIG). The final rule also contains certain restrictions on 
financial interests applicable to FSA employees.

EFFECTIVE DATE: These regulations are effective October 2, 2000.

FOR FURTHER INFORMATION CONTACT: John C. Surina, Director, Office of 
Ethics, U.S. Department of Agriculture, Room 348-W--Stop 0122, 1400 
Independence Avenue, S.W., Washington, D.C. 20250-0122, telephone (202) 
720-2251.

SUPPLEMENTARY INFORMATION:

I. Background

    On March 24, 2000, with the concurrence and co-signature of OGE, 
USDA published for comment an interim final rule, with a request for 
comments, establishing supplemental standards of ethical conduct for 
employees of USDA (65 FR 15825-15830). The interim rule was issued to 
supplement the Standards of Ethical Conduct for Employees of the 
Executive branch published by OGE on August 7, 1992, and effective on 
February 3, 1993 (57 FR 35006-35067, as corrected at 57 FR 48557 and 57 
FR 52583). The Standards, as corrected and amended, are codified at 5 
CFR part 2635. On October 3, 1997, the Department's Employee Conduct 
and Responsibilities regulations were removed. See 62 FR 51759-51760.
    The interim rule was issued pursuant to 5 CFR 2635.105, which 
authorizes agencies, with the concurrence of OGE, to publish agency-
specific supplemental regulations that are necessary to implement their 
respective ethics programs. The Department, with OGE concurrence, 
determined that the supplemental rules for codification in new chapter 
LXXII of 5 CFR, consisting of part 8301, were necessary to the success 
of its ethics program.
    The interim rule prescribed a 30-day comment period and invited 
comments from all interested parties. USDA received ten timely comments 
and one late comment and, after careful consideration of each comment, 
has made appropriate modifications to the rule. The Department, with 
OGE's concurrence, is now publishing as a final rule the Supplemental 
Standards of Ethical Conduct for Employees of the Department of 
Agriculture, for codification in part 8301 title 5 of the Code of 
Federal Regulations.

II. Summary of the Comments

    As noted, the Department received a total of eleven comments (ten 
were timely; one was late), all by electronic mail. Seven comments were 
received from employees of the Office of the General Counsel (OGC), 
USDA; one from an employee of Departmental Administration, USDA; one 
from an employee of the Farm Service Agency (FSA), USDA; one from a 
non-employee farmer; and one from a person whose affiliation, if any, 
could not be determined. Except for the comments of the farmer and the 
FSA employee, all comments concerned either the general requirement for 
prior approval for outside employment or the additional requirement for 
prior approval by OGC of outside practice of law by OGC attorneys not 
already covered under the general requirement. The FSA employee was 
complimentary in assessing the interim rule and wanted to expand the 
coverage of prohibited transactions with regard to FSA employees. The 
non-employee farmer inquired as to the rationale for limiting the 
prohibited transactions provisions only to FSA Federal employees, 
rather than also including FSA county employees.

III. Analysis of the Comments

Section 8301.102 General prior approval requirement for outside 
employment

    All but one of the comments concerning the requirement to obtain 
approval before engaging in outside employment came from OGC attorneys 
and most of those comments addressed, concurrently, both the general 
requirement applicable to financial disclosure report filers and the 
special requirement for non filing attorneys within OGC found in 
Sec. 8301.105. Accordingly, to the extent that these comments relate to 
both sections, they will be addressed in connection with the general 
requirement.
    Four comments were received which asserted that the requirement for 
seeking prior approval for outside employment was unnecessary. Three 
commenters believed themselves capable of independently judging whether 
an outside activity would be in conflict with their official 
responsibilities. Two other commenters were inclined in that direction, 
adding that the presupposed ethical dangers that justify the 
requirement could be addressed more effectively through law enforcement 
and more ethics training to help employees identify conflicts. Two 
other commenters pointed to the fact that the interim language does not 
attempt to identify the potential conflicts that are of concern and 
went on to state that since the conflicts of concern were already 
prohibited, there was no need for the prior approval requirement. One 
commenter criticized the requirement on the basis that it presumes that 
USDA employees are engaged in unethical behavior. Finally, one 
commenter noted that the same goal already was achieved by way of 
confidential financial disclosure.
    Notwithstanding the concerns of the commenters, the Department 
still sees a

[[Page 58636]]

clear need for requiring prior approval for outside employment by 
persons occupying sensitive positions. The Department has therefore 
determined that such prior approval of outside employment for persons 
covered by Sec. 8301.102, and the additional prior approval 
requirements articulated in Secs. 8301.103 through 8301.106, are 
essential to the missions of the Department and its agencies. The most 
obvious purpose for having a prior approval requirement is to help 
Federal officers and employees avoid entering into actual or apparent 
conflict situations, rather than limiting agencies to reliance upon 
after-the-fact responses, such as through prosecution or disciplinary 
action. Accordingly, the Department believes that requiring prior 
approval for outside employment by persons occupying sensitive 
positions is necessary and that the benefits accruing from this 
requirement, in terms of protecting not only its officers and employees 
but also the integrity of its programs and operations, outweigh the 
limited imposition and burden posed to individual officers and 
employees.
    The Department believes that the general prior approval requirement 
is not overly burdensome or unnecessarily intrusive. First, persons not 
obliged to file financial disclosure reports are exempt from this 
requirement. Moreover, paragraph (e) of Sec. 8301.102 provides agencies 
and components with the authority, through internal agency procedures, 
to specify broad categories of outside employment that presumptively 
present no conflict of interest concerns. Leaving the determination of 
exempt categories of employment to the individual agencies and 
components accords those entities greater flexibility in developing and 
modifying lists of exempted occupational categories since they are not 
subject to a cumbersome rulemaking process.
    Three comments viewed the regulation as possibly constituting a 
prior restraint on First Amendment rights. One commenter expressed this 
point in terms of the outside practice of law; a second commenter in 
terms of uncompensated teaching, speaking, or writing that relates to 
one's official duties. The Department is not insensitive to the 
intrusiveness of any conflict of interest regulations as they 
necessarily cover personal financial holdings and activities away from 
one's job. On the other hand, the courts have acknowledged the 
justification for narrowly tailored prophylactic measures to protect 
the public interest from the reality and appearance of the corrosive 
impact of conflicting private interests. In this respect, it must be 
pointed out that the prior approval requirement does not prohibit any 
form of expression or association. In Williams v. Internal Revenue 
Service, 919 F.2d 745 (D.C. Cir. 1990), the court held that an agency 
regulation that required employees to obtain permission from the agency 
before engaging in outside employment, and that was tailored to the 
Government's interest in efficiency and avoiding the appearance of 
impropriety, did not violate employees' First Amendment rights. 
Therefore, the Department does not agree with the commenter's argument 
that the requirement for obtaining prior approval for outside 
employment generally violates First Amendment rights.
    At the same time, one commenter pointed to the recent ruling in 
Sanjour v. EPA, 56 F.3d 85 (D.C. Cir. 1995), on remand, 7 F. Supp. 2d 
14 (D.D.C. 1998), as a basis for attacking the regulation on First 
Amendment grounds. The Department disagrees with the commenter in terms 
of the legal impact of Sanjour on this regulation. Nonetheless, the 
Department amends this section by: (1) deleting the requirement in 
paragraph (b)(2) to obtain prior approval for uncompensated teaching, 
speaking, writing, and editing; and (2) redesignating paragraph (b)(3) 
as paragraph (b)(2).
    One commenter asserted that the definition of ``employment,'' in 
paragraph (b), is overly broad in that it would include providing 
uncompensated personal services in managing an educational trust for 
one's children, or in serving as a trustee or agent for a family 
estate, or serving as executor of a will. Conversely, the commenter 
points out that, under paragraph (b)(3)(i), an employee could manage a 
religious endowment fund, social investment club, fraternal 
organization, or the assets of a recreational group.
    The Department finds the comment to be valid in cases where the 
fiduciary duties (guardian, executor, administrator, trustee, or 
personal fiduciary) relate solely to services provided to, or in 
conjunction with, individuals. From a practical standpoint, requiring 
prior approval to perform these family tasks on behalf of individuals 
is an unnecessary burden. On the other hand, the Department does not 
concur in the comment to the extent that such services are provided to, 
or in conjunction with, a for-profit entity. In the estimation of USDA, 
there is a significantly greater likelihood that outside employment 
with for-profit entities may raise conflict of interest and ethical 
concerns than in the case of fiduciary services provided to 
individuals. Accordingly, the Department sees justification for 
requiring prior approval for such services. Therefore, the Department 
amends redesignated paragraph (b)(2) of the interim rule by inserting 
prior to the word ``entity'', comma following by ``for-profit.''
    One commenter questioned both the necessity of requiring the 
employee to provide the estimated total time to be devoted to outside 
employment [paragraph (c)(5)] and a statement as to whether the work 
can be performed entirely outside of the employee's regular duty hours 
[paragraph (c)(6)]. The Department has amended the interim rule by: (1) 
Deleting paragraphs (c)(5) and (c)(6); and (2) redesignating paragraphs 
(c)(7) through (c)(10) as paragraphs (c)(5) through (c)(8).
    Several comments sought greater clarification and specificity on 
both the standards to be employed in evaluating outside employment 
requests and on the procedures to be employed. Specifically, three 
commenters expressed a wish to see a set time from by which management 
must act on a request, so that failure to act on the request within the 
required time frame would constitute de facto approval of the request. 
Three commenters suggested that the regulation contain some avenue of 
appeal from a negative determination. Two commenters wanted specificity 
as to how often their approved requests needed to be updated. Two other 
commenters wanted greater specificity as to the specific standards 
employed by USDA to gauge whether a given outside activity presents an 
unacceptable conflict. One commenter wanted greater clarification of 
what was meant by the term ``reasonable time'' in paragraph (c). 
Finally, another commenter wanted a requirement for the agency to 
provide written notification of its determination.
    While the Department sees that such process considerations are 
valid, the regulations accord each specific USDA agency and component 
broad authority to fashion a prior approval policy that best fits its 
particular needs. Thus, the Department does not adopt these comments; 
rather they are left to be addressed through the implementing 
procedures within each agency and component. As to the standards 
employed to gauge whether a given outside activity presents an 
unacceptable conflict, the Department believes that sufficient 
specificity is provided in this regulation through reference to the 
relevant part of the Code of Federal Regulations. Greater

[[Page 58637]]

specificity may be provided through implementing procedures within each 
agency and component.
    The Department, in conforming to its intent to provide broad 
authority to its separate agencies and components to fashion prior 
approval requirement procedures specifically tailored to their needs, 
is amending the interim rule by: (1) Deleting the words ``[T]he DAEO 
or, with the concurrence of the DAEO,'' in paragraph (e), and replacing 
those words with ``The agency designee for;'' and (2) deleting from 
paragraph (d) the words ``(or the DAEO, when there is not an agency 
designee).''

Section 8301.103  Additional rules for employees of the Farm Service 
Agency

    As stated, the Department received two comments related to the 
provision prohibiting certain financial transactions involving Farm 
Service Agency (FSA) employees. The FSA employee wanted the Department 
to apply the prohibitions to ``members of the employees [sic] 
household,'' rather than to ``employee, spouse, or minor child,'' as 
was used in the regulation. The commenter questioned the justification 
in the interim rule for acting to address abuses and conflicts 
involving the financial interests of employees, spouses, and minor 
children, while leaving unaddressed the similar abuses and conflicts 
involving the financial interests of cohabitation partners and children 
who have reached majority. While the commenters' concerns are 
appreciated, the provisions of subpart D of the branchwide Standards do 
not extend beyond the limitations contained in the basic financial 
conflict of interest statute, 18 U.S.C. 208. That statute prohibits a 
Federal officer or employee from participating officially in any 
particular matter in which the officer or employee has a financial 
interest. For purposes of that statute, financial interests owned by 
the employee's spouse or minor child are deemed to be the financial 
interests of the employee. Accordingly, the Department did not have the 
authority to extend this prohibition beyond the bounds of that statute.
    The non-employee commenter questioned why the interim rule did not 
apply to FSA county employees and why employees were still eligible to 
obtain guaranteed loans. The conflict of interest statutes and the 
Standards are limited in their application to Federal employees. FSA 
County committee personnel and county office employees are not Federal 
employees for purposes of these statutes. See 65 FR 15826. As a result, 
this supplement must be limited to Federal employees. However, the 
Department may publish under different authority similar rules 
concerning FSA county employees. Farm Service Agency guaranteed loans 
were not included in this prohibition because those loans involve 
commercial monies, rather than the very limited pot of Federal monies 
available through FSA direct loans. Moreover, FSA direct loans are the 
vehicle by which USDA serves as the ``lender of last resort'' to 
farmers on the financial brink; those loan monies must be reserved for 
those persons.

Section 8301.105  Additional rules for employees of the Office of the 
General Counsel

    Two of the comments contended that both the general promulgation of 
the rules, as well as imposition of the additional prior approval 
requirement under Sec. 8301.105, were subject to negotiations under the 
collective bargaining process. The Department disagrees with the notion 
that the promulgation and enforcement of regulations are subject to 
collective bargaining negotiations under the Federal Service Labor-
Management Relations Act. The promulgation of regulations is fully 
within the broad authorities accorded to Federal agencies. More 
specifically, however, not only does this regulation implement a 
Govermentwide regulation (5 CFR part 2635), but the Department also has 
established a compelling need for its agency-specific rules and has 
made a determination that they are essential to the missions of the 
USDA agencies for which they have been adopted.
    Two commenters addressed the fact that almost all State bars have 
rules proscribing conflicts of interest by attorneys. This, they 
contended, made the prior approval requirement redundant in terms of 
limiting outside practice or law. One of the two asserted that, 
generally, standards imposed by the bars were more stringent and more 
easily enforced than the regime set out in the supplement. The other 
commenter proposed that, should a dispute arise between an attorney and 
his or her supervisor over whether an outside activity conflicted with 
his or her official duties, the issue could be presented for resolution 
to the bar to which the attorney belongs. If the bar sided with the 
Government, but the employee proceeded with the outside activity 
nonetheless, then the Government could file a bar complaint. 
(Presumably, if the bar sided with the employee, the Government would 
be powerless to take action against the employee.)
    The subject matter at issue is not proper for determination or 
interpretation by State bar associations. The Federal Government cannot 
abdicate a core management function, such as staff supervision, to an 
outside party. At the same time, the suggestion misses the entire point 
of requiring prior approval for certain types of outside employment, 
which is to prevent an employee from violating a Federal criminal 
statute or ethical conduct rule, rather than having to take 
disciplinary action after the fact.

Sections 8301.103(f), and 8301.104 Through 8301.106 Additional Prior 
Approval Requirements

    One commenter noted, in reference to Sec. 8301.105, that the 
additional requirements for requesting prior approval for outside 
employment provide that requests are processed in accordance with the 
procedures in paragraph (c) of Sec. 8301.102, but do not specify 
whether such requests will be determined on the standard for approval 
set forth in paragraph (d) of Sec. 8301.102. The Department agrees with 
this comment. Accordingly, the Department will specify in all 
additional prior approval requirements, that the request shall be 
determined based on the standard for approval set forth in paragraph 
(d) of Sec. 8301.102.

IV. Matters of Regulatory Procedure

Congressional Review

    The Department has found that this rulemaking is not a rule as 
defined in 5 U.S.C. 804, and, thus, does not require review by 
Congress. This rulemaking is related to Department personnel.

Executive Orders Nos. 12866 and 12988

    Since this rule relates to Department personnel, it is exempt from 
the provisions of Executive Orders Nos. 12866 and 12988.

Regulatory Flexibility Act

    The Department 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 Department employees.

Paperwork Reduction Act

    The Department 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.

[[Page 58638]]

Environmental Impact

    This decision will not have a significant impact upon the quality 
of the human environment or the conservation of energy resources.

List of Subjects in 5 CFR Part 8301

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

    Dated: September 25, 2000.
Dan Glickman,
Secretary of Agriculture.

    Approved: September 26, 2000.
F. Gary Davis,
Acting Director, Office of Government Ethics.

    For the reasons set forth in the preamble, the Department of 
Agriculture, with the concurrence of the Office of Government Ethics, 
is revising 5 CFR part 8301 to read as follows:

PART 8301--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE DEPARTMENT OF AGRICULTURE

Sec.
8301.101  General.
8301.102  Prior approval for outside employment.
8301.103  Additional rules for employees of the Farm Service Agency.
8301.104  Additional rules for employees of the Food Safety and 
Inspection Service.
8301.105  Additional rules for employees of the Office of the 
General Counsel.
8301.106  Additional rules for employees of the Office of Inspector 
General.

    Authority: 5 U.S.C. 301, 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), 2635.803.


Sec. 8301.101  General.

    (a) In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Agriculture (Department or 
USDA) and supplement the Standards of Ethical Conduct for Employees of 
the Executive Branch contained in 5 CFR part 2635.
    (b) In addition to 5 CFR part 2635 and this part, employees also 
are required to comply with the executive branch financial disclosure 
regulations at 5 CFR part 2634, the regulations on responsibilities and 
conduct contained in 5 CFR part 735, and Department guidance and 
procedures established pursuant to paragraph (c) of this section.
    (c) With the concurrence of the Designated Agency Ethics Official 
(DAEO), agencies and components of the Department may, in accordance 
with 5 CFR 2635.105(c), issue explanatory guidance for their employees 
and establish procedures necessary to implement this part and part 2635 
of this title. The Deputy Ethics Official for each agency or component 
shall retain copies of all such guidance issued by that agency or 
component.


Sec. 8301.102  Prior approval for outside employment.

    (a) Prior approval requirement. An employee, other than a special 
Government employee, who is required to file either a public or 
confidential financial disclosure report (SF 278 or OGE Form 450), or 
an alternative form of reporting approved by the Office of Government 
Ethics, shall, before engaging in outside employment, obtain written 
approval in accordance with the procedures set forth in paragraph (c) 
of this section.
    (b) Definition of employment. 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 direct, indirect, or deferred compensation other 
than reimbursement of actual and necessary expenses. It also includes, 
irrespective of compensation, the following outside activities.
    (1) Providing personal services as a consultant or professional, 
including service as an expert witness or as an attorney; and
    (2) Providing personal services to a for-profit entity as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, or trustee, which involves decision making or 
policymaking for the non-Federal entity, or the provision of advice or 
counsel.
    (c) Submission of requests for approval. An employee seeking to 
engage in employment for which advance approval is required shall 
submit a written request for approval to the employee's supervisor a 
reasonable time before the employee proposes to begin the employment. 
Upon a significant change in the nature of the outside employment or in 
the employee's official position, the employee shall submit a revised 
request for approval. The supervisor will forward written requests for 
approval to the agency designee, through normal supervisory channels. 
All requests for prior approval shall include the following 
information:
    (1) The employee's name, organizational location, occupational 
title, grade, and salary;
    (2) The nature of the proposed outside employment, including a full 
description of the specific duties or services to be performed;
    (3) A description of the employee's official duties that relate in 
any way to the proposed employment;
    (4) The name and address of the person or organization for whom or 
with which the employee is to be employed, including the location where 
the services will be performed;
    (5) The method or basis of any compensation (e.g., fee, per diem, 
honorarium, royalties, stock options, travel and expenses, or other);
    (6) A statement as to whether the compensation is derived from a 
USDA grant, contract, cooperative agreement, or other source of USDA 
funding;
    (7) For employment involving the provision of consultative or 
professional services, a statement indicating whether the client, 
employer, or other person on whose behalf the services are performed is 
receiving, or intends to seek, a USDA grant, contract, cooperative 
agreement, or other funding relationship; and
    (8) For employment involving teaching, speaking, writing or 
editing, the proposed text of any disclaimer required by 5 CFR 
2635.807(b).
    (d) Standard for approval. Approval shall be granted by the agency 
designee unless it is determined that the outside employment is 
expected to involve conduct prohibited by statute or Federal 
regulation, including 5 CFR part 2635.
    (e) Responsibilities of the component agencies. (1) The agency 
designee for each separate agency or component of USDA may issue an 
instruction or manual issuance exempting categories of employment from 
a requirement of prior written approval based on a determination that 
employment within those categories would generally be approved and is 
not likely to involve conduct prohibited by Federal statutes or 
regulations, including 5 CFR part 2635 and this part.
    (2) Department components may specify internal procedures governing 
the submission of prior approval requests, including but not limited 
to: timely submission requirements; determination deadlines; appeals or 
reviews; and requirements for updating requests. Internal procedures 
also should designate appropriate officials to act on such requests. 
The instructions or manual issuances may include examples of outside 
employment that are permissible or impermissible consistent with 5 CFR 
part 2635 and this part. With respect to employment involving teaching, 
speaking or writing, the instructions or manual issuances may specify 
pre-clearance procedures and/or require disclaimers indicating that the 
views expressed do not necessarily represent the views of the agency, 
USDA or the United States.

[[Page 58639]]

    (3) The officials within the respective USDA agencies or components 
responsible for the administrative aspects of these regulations and the 
maintenance of records shall make provisions for the filing and 
retention of requests for approval of outside employment and copies of 
the notification of approval or disapproval.


Sec. 8301.103  Additional rules for employees of the Farm Service 
Agency.

    (a) Application. This section applies only to Farm Service Agency 
(FSA) personnel who are Federal employees within the meaning of 5 
U.S.C. 2105. This section does not apply to FSA community committee 
members, county committee members, and county office personnel, who are 
either elected to their positions or are employees of community or 
county committees established under 16 U.S.C. 590h. For rules 
applicable to FSA community committee members, county committee 
members, and county office personnel, see 7 CFR part 7.
    (b) Definition of FSA program participant. For purposes of this 
section, the phrase ``FSA program participant,'' includes any person 
who is, or is an applicant to become, an FSA borrower, FSA grantee, or 
recipient of any other form of FSA financial assistance available under 
any farm credit, payment or other program administered by FSA.
    (c) Prohibited borrowing. (1) No FSA employee, or spouse or minor 
child of an FSA employee, may directly or indirectly seek or obtain a 
``direct loan'' under paragraph (a)(9) of section 343 of the 
Consolidated Farm and Rural Development Act, 7 U.S.C. 1991(a)(9).
    (2) Nothing in this section bars an FSA employee, or spouse or 
minor child of an FSA employee, from retaining a direct loan secured 
prior to March 24, 2000, or, if subsequent to March 24, 2000, such 
direct loan is secured prior to the FSA employee being appointed to, or 
nominated for, appointment to an FSA position. Any FSA employee who 
either personally has such a pre-existing loan, or whose spouse or 
minor child has such a pre-existing loan, must submit a written 
disqualification from taking any official action on any such loan. 
Other than through the application of normal FSA loan servicing options 
set forth under FSA regulations, the terms of any such pre-existing 
loans shall remain fixed and shall not be subject to renegotiation or 
renewal unless pursuant to policy decision(s) made by the USDA 
Secretary or the FSA Administrator.
    (3) Waiver for FSA State Committee members. A request for an 
exception to the general prohibition of paragraph (c)(1) of this 
section may be submitted by an FSA State Committee member (whether on 
his or her own behalf, or on behalf of the FSA State Committee member's 
spouse or minor child), to the FSA Deputy Administrator for Farm Loans. 
The Deputy Administrator for Farm Loans may grant a written waiver from 
this prohibition based on a determination made with the concurrence of 
the DAEO and the FSA headquarters ethics adviser that:
    (i) The applicant is a current FSA State Committee member or the 
spouse or minor child of a current FSA State Committee member;
    (ii) The applicant meets the statutory qualification requirements 
for obtaining direct loan; and
    (iii) A waiver is not inconsistent with part 2635 of this title nor 
7 U.S.C. 1986 nor 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, including the 
appearance of misuse of non public information, or loss of 
impartiality, or otherwise to ensure confidence in the impartiality and 
objectivity with which agency programs are administered.
    (d) Prohibited real estate purchases. (1) No FSA employee, or 
spouse or minor child of an FSA employee, may directly or indirectly 
purchase real estate held in the FSA inventory, for sale under 
forfeiture to FSA, or from an FSA program participant.
    (2) Waiver. A request for an exception to the prohibition found in 
paragraph (d)(1) of this section may be submitted jointly by the FSA 
program participant and FSA employee (whether on his or her own behalf, 
or on behalf the employee's spouse or minor child), to the FSA State 
Executive Director. The FSA State Executive Director may grant a 
written waiver from this prohibition based on a determination made with 
the advice and clearance of the DAEO and the FSA headquarters ethics 
advisor that the waiver is not inconsistent with part 2635 of this 
title nor 7 U.S.C. 1986 nor 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 agency programs are administered. A waiver under 
this paragraph may impose appropriate conditions, such as requiring 
execution of a written disqualification.
    (e) Prohibited transactions with FSA program participants. (1) 
Except as provided in paragraph (e)(2) of this section, no FSA employee 
or spouse or minor child of an FSA employee may directly or indirectly: 
sell real property to; lease real property to or from; sell to, lease 
to or from, or purchase personal property from; or employ for 
compensation a person whom the FSA employee knows or reasonably should 
know is an FSA program participant directly affected by decisions of 
the particular FSA office in which the FSA employee serves.
    (2) Exceptions. Paragraph (e)(1) of this section does not apply to:
    (i) A sale, lease, or purchase of personal property, if it 
involves:
    (A) Goods available to the general public at posted prices that are 
customary and usual within the community; or
    (B) Property obtained pursuant to public auction; or
    (ii) Transactions listed in (e)(1) of this section determined in 
advance by the appropriate FSA State Executive Director, after 
consulting with the FSA Headquarters ethics advisor, to be consistent 
with part 2635 of this title and otherwise not prohibited by law.
    (f) Additional prior approval requirements for outside employment. 
Any FSA employee not otherwise required to obtain approval for outside 
employment under Sec. 8301.102 shall obtain written approval in 
accordance with the procedures and standards set forth in paragraphs 
(c) and (d) of Sec. 8301.102 before engaging in outside employment, as 
that term is defined by paragraph (b) of Sec. 8301.102, with or for a 
person:
    (1) Whom the FSA employee knows, or reasonably should know, is an 
FSA program participant; and
    (2) Who is directly affected by decisions made by the particular 
FSA office in which the FSA employee serves.


Sec. 8301.104  Additional rules for employees of the Food Safety and 
Inspection Service.

    Any employee of the Food Safety and Inspection Service not 
otherwise required to obtain approval for outside employment under 
Sec. 8301.102, shall, before engaging in any form of outside 
employment, obtain written approval in accordance with the procedures 
and standards set forth in paragraphs (c) and (d) of Sec. 8301.102


Sec. 8301.105  Additional rules for employees of the Office of the 
General Counsel.

    Any attorney serving within the Office of the General Counsel, not 
otherwise required to obtain approval for outside employment under 
Sec. 8301.102, shall obtain written approval, in accordance with the

[[Page 58640]]

procedures and standards set forth in paragraphs (c) and (d) of 
Sec. 8301.102, before engaging in the outside practice of law, whether 
compensated or not.


Sec. 8301.106  Additional rules for employees of the Office of 
Inspector General.

    Any employee of the Office of Inspector General, not otherwise 
required to obtain approval for outside employment under Sec. 8301.102, 
shall obtain written approval, in accordance with the procedures and 
standards set forth in paragraphs (c) and (d) of Sec. 8301.102, before 
engaging in any form of outside employment that involves the following:
    (a) Law enforcement, investigation, security, firearms training, 
defensive tactics training, and protective services;
    (b) Auditing, accounting, bookkeeping, tax preparation, and other 
services involving the analysis, use, or interpretation of financial 
records;
    (c) The practice of law, whether compensated or not; or
    (d) Employment involving personnel, procurement, budget, computer, 
or equal employment opportunity services.
[FR Doc. 00-25136 Filed 9-29-00; 8:45 am]
BILLING CODE 3410-01-M