[Federal Register Volume 70, Number 28 (Friday, February 11, 2005)]
[Proposed Rules]
[Pages 7192-7196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2644]


 ========================================================================
 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. 70, No. 28 / Friday, February 11, 2005 / 
Proposed Rules  

[[Page 7192]]



SOCIAL SECURITY ADMINISTRATION

5 CFR Chapter LXXXI

RINs 0960-AE48, 3209-AA15


Supplemental Standards of Ethical Conduct for Employees of the 
Social Security Administration

AGENCY: Social Security Administration (SSA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Social Security Administration (SSA), with the concurrence 
of the Office of Government Ethics (OGE), proposes to issue regulations 
that would supplement, for officers and employees of SSA, the OGE 
Standards of Ethical Conduct for Employees of the Executive Branch. The 
proposed regulations would set forth prohibitions and prior approval 
requirements for certain outside employment and other outside 
activities for all SSA employees, and would set forth additional prior 
approval requirements for SSA Administrative Law Judges.

DATES: To be sure that your comments are considered, we must receive 
them by March 14, 2005.

ADDRESSES: You may give us your comments by: Using our Internet 
facility (i.e., Social Security Online) at http://policy.ssa.gov/
pnpublic.nsf/LawsRegs or the Federal eRulemaking Portal at http://
www.regulations.gov; e-mail to [email protected]; telefax to (410) 
966-2830; or letter to the Commissioner of Social Security, P.O. Box 
17703, Baltimore, MD 21235-7703. You may also deliver them to the 
Office of Regulations, Social Security Administration, 100 Altmeyer 
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8 
a.m. and 4:30 p.m. on regular business days. Comments are posted on our 
Internet site at http://policy.ssa.gov/pnpublic.nsf/LawsRegs or you may 
inspect them physically on regular business days by making arrangements 
with the contact person shown in this preamble.

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at http://www.gpoaccess.gov/fr/
index.html. It is also available on the Internet site for SSA (i.e., 
Social Security Online) at http://policy.ssa.gov/pnpublic.nsf/LawsRegs.

FOR FURTHER INFORMATION CONTACT: Asim A. Akbari, Office of the General 
Counsel, General Law Division, telephone (410) 966-6581, fax (410) 597-
0071, or TTY 1-410-966-5609. For information on eligibility or filing 
for benefits, call our national toll-free numbers, 1-800-772-1213 or 
TTY 1-800-325-0778, or visit our Internet Web site, Social Security 
Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 7, 1992, (at 57 FR 35006-35067) OGE published Standards 
of Ethical Conduct for Employees of the Executive Branch (OGE 
Standards), which as corrected and amended are codified at 5 CFR part 
2635. Effective generally on February 3, 1993, the OGE Standards 
established uniform rules applicable to all executive branch personnel.
    Pursuant to 5 CFR 2635.105, executive branch agencies are 
authorized to publish, with the concurrence of OGE, supplemental 
regulations deemed necessary to implement their respective ethics 
programs. SSA and OGE have determined that the following proposed 
supplemental regulations are necessary and appropriate in view of SSA's 
programs and operations, and to fulfill the purposes of the OGE 
Standards. The supplemental regulations would be issued in a new 
chapter LXXXI, consisting of part 9101, of 5 CFR.

II. Analysis of the Proposed Regulations

Proposed Sec.  9101.101 General

    This proposed section would state the purpose of the supplemental 
regulation. Also, it would include cross-references to other issuances 
applicable to SSA employees, including regulations on financial 
disclosure, financial interests, and employee responsibilities and 
conduct and implementing SSA guidance and procedures issued in 
accordance with the executive branch-wide Standards.

Proposed Sec.  9101.102 Outside Employment and Other Outside Activities

    Under 5 CFR 2635.403(a), an agency may, by supplemental regulation, 
prohibit its employees from having compensated outside employment, when 
the agency determines that having that outside employment would cause a 
reasonable person to question the impartiality and objectivity with 
which agency programs are administered. Such outside employment 
prohibited by an agency's supplemental regulation would, in turn, be 
``conflicting outside employment'' and therefore barred by the 
executive branch-wide Standards, under 5 CFR 2635.802(a). In addition, 
under 5 CFR 2635.803 where it is determined to be necessary or 
desirable for the purpose of administering its ethics program, an 
agency shall by supplemental regulation require employees or any 
category of employees to obtain approval before engaging in specific 
types of outside activities, including outside employment.
    SSA has determined that SSA employees'' having the outside 
employment described below would cause a reasonable person to question 
the impartiality and objectivity with which SSA programs are 
administered. In addition, SSA has determined that it is necessary or 
desirable for the purpose of administering its ethics program to impose 
on its employees the prior approval requirements described below.
    (a) Applicability. The outside employment and activity prohibitions 
and the prior approval requirements imposed by paragraphs (c) and (d), 
respectively, of this proposed section, would apply to all SSA 
employees, except special Government employees. Nevertheless, special 
Government employees remain subject to other statutory and regulatory 
authorities governing their outside activities, including bars on their 
representational activities at 18 U.S.C. 203(c) and 205(c), and 
applicable provisions of 5 CFR part 2635.
    (b) Definitions. Proposed Sec.  9101.102(b) would set forth 
definitions of the terms used in the section.
    (c) Prohibited Outside Employment and Activities. Proposed Sec.  
9101.102(c)

[[Page 7193]]

would prohibit an SSA employee from engaging in consultative or 
professional services, for compensation, to prepare, or assist in the 
preparation of, any grant applications, contract proposals, program 
reports, or other documents that are intended for submission to SSA. 
Note that such conduct, if undertaken on an uncompensated basis, though 
not expressly prohibited by proposed paragraph (c), would be subject to 
the prior approval requirement in proposed paragraph (d).
    (d) Prior Approval for Outside Employment and Other Outside 
Activities. Proposed Sec.  9101.102(d) would require employees to 
obtain written approval prior to engaging in certain outside employment 
or other outside activities. The prior approval requirement would be an 
integral part of SSA's ethics program. SSA, with OGE's concurrence, 
believes that the prior approval requirement is necessary to ensure 
that an employee's participation in outside employment or other outside 
activities does not adversely affect operations within the employing 
component or place the employee at risk of violating applicable 
statutes and regulations governing employee conduct. SSA deems the 
prior approval requirement necessary to preclude the appearance that an 
outside employment or other outside activity mentioned above may have 
been obtained through the use of the employee's official position and 
to address a number of other potential ethics concerns. Given that SSA 
annually provides millions of dollars of funding in SSA grants, 
contracts, cooperative research and development agreements and other 
funding relationships, SSA has determined that requiring approval prior 
to engaging in such SSA-funded activities is critical to protect 
against questions arising regarding the impartiality and objectivity of 
its employees and the administration of SSA's programs. In fulfilling 
its mission, SSA would be hindered if members of the public were to 
question whether SSA employees were using their public position or 
workplace connections for private remunerative gain attributable, 
directly or indirectly, to appropriated funds. In addition, an 
appearance of misuse of an employee's official position may arise where 
an employee is providing professional or consultative services; 
engaging in teaching, speaking, writing, or editing that relates to his 
or her official duties or is undertaken upon invitation by a prohibited 
source; or providing services to a non-Federal entity as an officer, 
director, or board member, or, with certain exceptions for nonprofit 
organizations, as a member of a group, such as an advisory board. 
Therefore, prior approval would be required for such outside employment 
activities as well.
    (1) General Approval Requirement. Proposed Sec.  9101.102(d)(1) 
would list the employment or activities, with or without compensation, 
for which prior written approval would be required for SSA employees. 
Proposed Sec.  9101.102(d)(1)(iii) would exclude from the prior 
approval requirement certain services for enumerated nonprofit 
organizations that are uncompensated (other than reimbursement of 
expenses) and do not involve the provision of professional or 
consultative services. Proposed Sec.  9101.102(d)(5) would likewise 
exclude those categories of outside employment and activities exempted 
thereunder (see the discussion of that provision below).
    (2) Additional Approval Requirement Applicable to Administrative 
Law Judges (ALJs). Under proposed Sec.  9101.102(d)(2), SSA ALJs would 
be required to obtain prior written approval for all outside 
employment, with only limited exceptions. SSA has determined that it is 
necessary to the administration of its ethics program to have this 
broad prior approval requirement for its ALJs. SSA ALJs have the 
responsibility for issuing decisions on benefit claims under titles II 
and XVI of the Social Security Act. SSA must ensure the public that the 
hearing process is fair and that there is no appearance that an ALJ has 
a conflict of any kind that would undermine the process. ALJs hear and 
decide cases from the public on a daily basis. Thus, ALJs are one of 
the most visible SSA employees to the public. ALJ activities, both in 
and out of the office, are scrutinized by the public. Due to their 
heightened notoriety by the public as compared to other SSA employees, 
the proposed prior approval requirement in Sec.  9101.102(d)(2) would 
allow SSA to assist ALJs in avoiding outside employment activities that 
may create a perception of partiality in the decision-making process.
    Consistent with the other prior approval provisions applicable to 
all SSA employees, proposed Sec.  9101.102(d)(2)(ii) would not require 
approval for participation in the activities of certain enumerated 
nonprofit organizations, unless the participation were to involve the 
provision of professional or consultative services, were to be 
performed for compensation (other than reimbursement of expenses), or, 
additionally, the activity relates to the employee's official duties 
within the meaning of 5 CFR 2635.807(a)(2)(i)(B) through (E). Moreover, 
the proposed prior approval requirement would not apply, as provided at 
Sec.  9101.102(d)(2)(iii) as proposed, to those categories of 
employment that have been exempted, pursuant to Sec.  9101.102(d)(5) as 
proposed, based on a determination that such employment activities 
generally would be approved and are not likely to involve conduct 
prohibited by statute or Federal regulation.
    (3) Submission of Requests for Prior Approval. Proposed Sec.  
9101.102(d)(3) would specify that employees would have to submit prior 
approval requests in writing to their immediate supervisor at least 30 
days in advance in order to allow a reasonable time before the proposed 
activity for the consideration of the requested approval of outside 
activities. Employees would be required to include information in their 
prior approval requests sufficient to assess the activity. Upon a 
significant change in the nature or scope of the outside employment or 
in the employee's SSA position, proposed Sec.  9101.102(d)(3)(ii) would 
require the employee to submit a revised request for approval.
    (4) Standard for Approval. Proposed Sec.  9101.102(d)(4) would 
specify the standard for approval of outside employment or other 
activities. Each proposed activity would be reviewed on a case-by-case 
basis in order to determine that the activity is not expected to 
involve conduct prohibited by statute or Federal regulation, including 
5 CFR part 2635 and the SSA supplemental regulations. A proposed note 
that would follow Sec.  9101.102 would advise employees that the 
granting of approval for an outside activity does not relieve the 
employee of the obligation to abide by all applicable laws and 
regulations governing employee conduct. The note would put employees on 
notice that approval merely constitutes an assessment that the 
activity, as described on the approval request, generally does not 
appear likely to violate any criminal statutes or other ethics rules. 
The note would serve as a reminder to employees that during the course 
of an otherwise approvable activity, situations may arise, or actions 
may be contemplated that nevertheless pose ethical concerns. SSA ethics 
officials are available to provide advice and guidance to SSA employees 
as to such situations.
    (5) Responsibilities of the Designated Agency Ethics Official or 
Designee. Proposed Sec.  9101.102(d)(5) would provide that the 
Designated Agency Ethics Official (DAEO) may issue instructions or 
manual issuances that

[[Page 7194]]

will be distributed to all SSA offices exempting categories of 
employment or other activities from the prior approval requirement, 
after a determination that the employment or activities within those 
categories would generally be approved and are not likely to involve 
conduct prohibited by statute or Federal regulation, including the OGE 
Standards and this supplemental regulation. Through these instructions 
or manual issuances, SSA may specify internal procedures governing the 
submission of prior approval requests and maintenance of records, 
designate appropriate officials to act on such requests, and include 
examples of outside employment or other outside activities that are 
permissible or impermissible consistent with the OGE Standards and this 
part.

Clarity of the Proposed Rules

    In addition to your substantive comments on these proposed rules, 
we invite your comments on how to make the rules easier to understand. 
For example:
     Have we organized the material to suit your needs?
     Are the requirements in the rules clearly stated?
     Do the rules contain technical language or jargon that may 
be avoided or that is not clear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
     Would more (but shorter) sections be better?
     What else could we do to make the rules easier to 
understand?

III. Matters of Regulatory Procedure

Executive Order 12866, Regulatory Planning and Review

    In issuing this proposed rule, SSA has adhered to the regulatory 
philosophy and the applicable principles of regulations set forth in 
section 1 of Executive Order 12866 of September 30, 1993. This proposed 
rule is limited to agency organization, management, or personnel 
matters, and thus is not a ``significant regulatory action,'' as 
defined in sections 3(d) through (f) of the Executive Order.

Executive Order 12988

    As Commissioner of Social Security I have reviewed this proposed 
rule 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

    SSA has determined under the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) that this proposed regulation will not have a significant 
economic impact on a substantial number of small entities because it 
affects only SSA employees.

Paperwork Reduction Act

    SSA has determined that the reporting requirements contained in 
proposed Sec.  9101.102(d) are exempt from coverage under the Paperwork 
Reduction Act as specified in 5 CFR 1320.3(c)(4).

Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
chapter 25, subchapter II), this proposed regulation will not 
significantly or uniquely affect small governments and will not result 
in increased expenditures by State, local, and tribal governments, or 
by the private sector, of $100 million or more (as adjusted for 
inflation) in any one year.

Congressional Review Act

    SSA has determined that this rulemaking is a nonmajor rule under 
the Congressional Review Act (5 U.S.C. chapter 8) and will, before the 
future final rule takes effect, submit a report thereon to the United 
States Senate, House of Representatives and General Accounting Office 
in accordance with that law.

List of Subjects in 5 CFR Part 9101

    Conflict of interests, Government employees.

    Dated: January 26, 2005.
Jo Anne B. Barnhart,
Commissioner of Social Security.

    Approved: February 1, 2005.
Marilyn L. Glynn,
Acting Director, Office of Government Ethics.

    For the reasons set forth in the preamble, the Social Security 
Administration, with the concurrence of the Office of Government 
Ethics, is proposing to amend title 5 of the Code of Federal 
Regulations by adding a new chapter LXXXI, consisting of part 9101, to 
read as follows:

Chapter LXXXI--Social Security Administration

PART 9101--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE SOCIAL SECURITY ADMINISTRATION

Sec.
9101.101 General.
9101.102 Outside employment and other outside activities.

    Authority: 5 U.S.C. 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, 2635.802, 2635.803.


Sec.  9101.101  General.

    (a) Purpose. In accordance with 5 CFR 2635.105, the regulations in 
this part apply to employees of Social Security Administration (SSA) 
and supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635.
    (b) Cross-references. In addition to 5 CFR part 2635 and this part, 
SSA employees are required to comply with implementing guidance and 
procedures issued by SSA in accordance with 5 CFR 2635.105(c). SSA 
employees are also subject to the executive branch-wide financial 
disclosure regulations at 5 CFR part 2634, the financial interests 
regulations at 5 CFR part 2640, and the employee responsibilities and 
conduct regulations at 5 CFR part 735.


Sec.  9101.102  Outside employment and other outside activities.

    (a) Applicability. This section applies to all SSA employees, 
except special Government employees.
    (b) Definitions. For the purposes of this section:
    Compensation has the meaning set forth in 5 CFR 
2635.807(a)(2)(iii).
    Consultative services means the provision of personal services by 
an employee, including the rendering of advice or consultation, which 
requires advanced knowledge in a field of science or learning 
customarily acquired by a course of specialized instruction and study 
in an institution of higher education, hospital, or other similar 
facility.
    Employment means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee, whether or not for compensation, or any self-employment 
business activity. It includes but it is not limited to personal 
services as an officer, director, employee, agent, attorney, 
consultant, contractor, general partner, or trustee.
    Professional services means the provision of personal services by 
an employee, including the rendering of advice or consultation, which 
involves application of the skills of a profession as defined in 5 CFR 
2636.305(b)(1) or involves a fiduciary relationship as defined in 5 CFR 
2636.305(b)(2).
    Receive has the meaning set forth in 5 CFR 2635.807(a)(2)(iv).
    (c) Prohibited outside employment and activities--prohibited 
assistance in the preparation of grant applications or

[[Page 7195]]

contract proposals. An employee shall not provide to or on behalf of 
any person consultative or professional services, for compensation, 
which includes preparing, or assisting in the preparation of, any grant 
application, contract proposal, program report or other document 
intended for submission to SSA.
    (d) Prior approval for outside employment and other outside 
activities. (1) General approval requirement. Except to the extent that 
the SSA Designated Agency Ethics Official has exempted the employment 
or other activity under paragraph (d)(5) of this section, an employee 
shall obtain written approval prior to engaging, with or without 
compensation, in the following outside employment or activities:
    (i) Providing professional or consultative services, including 
service as an expert witness;
    (ii) Engaging in teaching, speaking, writing, or editing that:
    (A) Relates to the employee's official duties within the meaning of 
5 CFR 2635.807(a)(2)(i)(B) through (E); or
    (B) Would be undertaken as a result of an invitation to engage in 
the activity that was extended to the employee by a person who is a 
prohibited source within the meaning of 5 CFR 2635.203(d).
    (iii) Providing services to a non-Federal entity as an officer, 
director, or board member, or as a member of a group such as a planning 
commission advisory council, editorial board, scientific or technical 
advisory board or panel, which require the provision of advice, counsel 
or consultation, unless the service is provided, without compensation 
other than reimbursement of expenses, to a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service or civic organization and does not involve the provision 
of professional or consultative services within the meaning of 
paragraph (b) of this section.
    (iv) Engaging in an activity funded by an SSA grant, contract, 
cooperative research and development agreement, or other funding 
relationship.
    (2) Additional approval requirement for Administrative Law Judges. 
(i) In addition to the approval requirements set forth in paragraph 
(d)(1) of this section, an SSA Administrative Law Judge shall obtain 
written approval prior to engaging in any outside employment, except as 
provided in paragraphs (d)(2)(ii) and (d)(2)(iii) of this section.
    (ii) The requirement of paragraph (d)(2)(i) of this section does 
not apply to participation in the activities of a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service or civic organization, unless the participation involves 
the provision of professional or consultative services within the 
meaning of paragraph (b) of this section, is performed for compensation 
other than the reimbursement of expenses, or the activity relates to 
the employee's official duties within the meaning of 5 CFR 
2635.807(a)(2)(i)(B) through (E).
    (iii) The requirement of paragraph (d)(2)(i) of this section shall 
not apply to the extent that an employment activity has been exempted, 
pursuant to paragraph (d)(5) of this section.
    (3) Submission of request for approval. (i) An employee seeking to 
engage in any of the activities for which advance approval is required 
shall allow not less than 30 days before the proposed activity for the 
consideration of the written request for approval. The employee shall 
submit the request for approval to his or her immediate supervisor. All 
requests for prior approval shall include the following information:
    (A) The employee's name, organizational component, position title, 
grade and salary;
    (B) The nature of the proposed outside employment or other outside 
activity, including a full description of the specific duties or 
services to be performed;
    (C) A description of the employee's official duties that relate in 
any way to the proposed activity;
    (D) The name and address of the person or organization for whom or 
with which the work or activity will be done, including the location 
where the services will be performed;
    (E) The estimated total time that will be devoted to the activity. 
There must be a statement of the estimated number of hours per year and 
a statement of the anticipated beginning and ending date;
    (F) A statement as to whether the work can be performed entirely 
outside of the employee's regular duty hours and, if not, the estimated 
number of hours of absence that will be required;
    (G) The method or basis of any compensation (e.g., fee, per diem, 
honorarium, royalties, stock options, travel and expenses, or other);
    (H) A statement whether the compensation is derived from an SSA 
grant, contract, cooperative agreement, or other source of SSA funding;
    (I) For activities involving the provision of consultative or 
professional services, a statement indicating whether the client, 
employer, or other person on whose behalf the services are to be 
performed is receiving, or intends to seek, SSA or Federal Government 
benefits, an SSA grant, contract, cooperative research and development 
agreement, or other funding relationship; and
    (J) For activities involving teaching, speaking, writing, or 
editing, the proposed text of any disclaimer required by 5 CFR 
2635.807(b)(2) or by the instructions or manual issuances authorized 
under paragraph (d)(5) of this section. However, no advance approval 
for the disclaimer is required if the disclaimer reads as follows: 
``This (article, book, etc.) was (written, edited) by (employee's name) 
in (his or her) private capacity. No official support or endorsement by 
the Social Security Administration or the United States is intended or 
should be inferred.'' Where a disclaimer is required for an article, 
book or other writing, the disclaimer will be printed in a reasonably 
prominent position in the writing itself.
    (ii) Upon a significant change in the nature or scope of the 
outside employment or in the employee's SSA position, the employee must 
submit a revised request for approval.
    (4) Standard for approval. Approval shall be granted only upon a 
determination that the outside employment or activity is not expected 
to involve conduct prohibited by statute or Federal regulation, 
including 5 CFR part 2635 and this part.
    (5) Responsibilities of the Designated Agency Ethics Official or 
Designee. The SSA Designated Agency Ethics Official may issue an 
instruction or manual issuance exempting categories of employment or 
other outside activities from a requirement of prior written approval 
based on a determination that the employment or activities within those 
categories would generally be approved and would not be likely to 
involve conduct prohibited by statute or Federal regulation, including 
5 CFR part 2635 and this part. Through these instructions or manual 
issuances, SSA may specify internal procedures governing the submission 
of prior approval requests and maintenance of records, designate 
appropriate officials to act on such requests, and include examples of 
outside employment or other outside activities that are permissible or 
impermissible consistent with the OGE Standards and this part.


    Note to Sec.  9101.102: The granting of approval for an outside 
activity does not relieve the employee of the obligation to abide by 
all applicable laws and regulations governing employee conduct. 
Approval merely constitutes an assessment that the activity as 
described on the submission generally does not appear likely to 
violate

[[Page 7196]]

any criminal statutes or other ethics rules. Employees are reminded 
that during the course of an otherwise approvable activity, 
situations may arise, or actions may be contemplated, that 
nevertheless, pose ethical concerns. SSA ethics officials are 
available to provide advice and guidance to SSA employees as to such 
situations.

[FR Doc. 05-2644 Filed 2-10-05; 8:45 am]
BILLING CODE 4191-02-P