[Federal Register Volume 76, Number 177 (Tuesday, September 13, 2011)]
[Proposed Rules]
[Pages 56330-56339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-23311]
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Proposed Rules
Federal Register
________________________________________________________________________
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. 76, No. 177 / Tuesday, September 13, 2011 /
Proposed Rules
[[Page 56330]]
OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2635
RIN 3209-AA04
Standards of Ethical Conduct for Employees of the Executive
Branch; Proposed Amendments Limiting Gifts From Registered Lobbyists
and Lobbying Organizations
AGENCY: Office of Government Ethics (OGE).
ACTION: Proposed rule; amendments.
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SUMMARY: The Office of Government Ethics is proposing amendments to the
regulation governing standards of ethical conduct for executive branch
employees of the Federal Government, to impose limits on the use of
gift exceptions by all employees to accept gifts from registered
lobbyists and lobbying organizations, and to implement the lobbyist
gift ban for appointees required to sign the Ethics Pledge prescribed
by Executive Order 13490.
DATES: Written comments are invited and must be received before
November 14, 2011.
ADDRESSES: You may submit comments, in writing, to OGE on this proposed
rule, identified by RIN 3209-AA04, by any of the following methods:
E-Mail: [email protected]. Include the reference ``Proposed
Amendments to Part 2635'' in the subject line of the message.
Fax: (202) 482-9237.
Mail/Hand Delivery/Courier: Office of Government Ethics,
Suite 500, 1201 New York Avenue, NW., Washington, DC 20005-3917,
Attention: Richard M. Thomas, Associate General Counsel.
Instructions: All submissions must include OGE's agency name and
the Regulation Identifier Number (RIN), 3209-AA04, for this proposed
rulemaking.
FOR FURTHER INFORMATION CONTACT: Richard M. Thomas, Associate General
Counsel, Office of Government Ethics; telephone: 202-482-9300; TYY:
800-877-8339; FAX: 202-482-9237.
SUPPLEMENTARY INFORMATION:
I. Background
A. Existing OGE Gift Prohibitions
The Standards of Conduct for Employees of the Executive Branch were
initially promulgated by the Office of Government Ethics in 1992 and
are codified at 5 CFR part 2635. See 57 FR 35005-35067 (August 7,
1992). Subpart B of part 2635 sets out the restrictions on the
solicitation and acceptance of gifts from outside sources by employees
of the Executive Branch.
Under subpart B, all executive branch employees are subject to two
general prohibitions: employees shall not, directly or indirectly,
solicit or accept a gift either (1) from a prohibited source, or (2)
given because of the employee's official position. 5 CFR 2635.202(a). A
prohibited source is broadly defined to include any person seeking
official action from the employee's agency, doing or seeking to do
business with the employee's agency, conducting activities regulated by
the employee's agency, or having interests that may be substantially
affected by the employee's official duties; additionally, prohibited
source includes any organization a majority of whose members are
prohibited sources. 5 CFR 2635.203(d). Beyond gifts from prohibited
sources, the rule also proscribes gifts given because of the employee's
official position, which means any gift that would not have been
solicited, offered, or given had the employee not held the status,
authority or duties of his or her Federal position. 5 CFR 2635.203(e).
While the prohibition on gifts from prohibited sources largely derives
from statute, 5 U.S.C. 7353(a), OGE, itself, imposed the regulatory
prohibition on gifts given because of official position as a further
check against appearances that an employee might use his or her
official position for private gain. See 56 FR 33777, 33780 (July 23,
1991)(preamble to proposed part 2635).
Subpart B also contains several exceptions, which are found in 5
CFR 2635.204. These exceptions cover a range of situations--such as
gifts from family members and friends, de minimis gifts, and gifts of
free attendance at widely attended gatherings--and each exception has
its own criteria and limitations. Additionally, there are several
general limitations on the use of the gift exceptions, which are found
at 5 CFR 2635.202(c). These limitations, for example, preclude
employees from relying on the gift exceptions to solicit or coerce the
offering of a gift or to accept a gift in violation of any statute.
B. Executive Order 13490
Against this backdrop of existing regulations, President Obama
imposed an additional gift prohibition on full-time, non-career (i.e.,
political) appointees appointed on or after January 20, 2009. Executive
Order 13490 requires these full-time political appointees to sign an
``Ethics Pledge.'' Exec. Order 13490, section 1, 74 FR 4673, 3 CFR,
2009 Comp., p. 193, January 21, 2009. The first paragraph of the Pledge
is the ``Lobbyist Gift Ban,'' which states: ``I will not accept gifts
from registered lobbyists or lobbying organizations for the duration of
my service as an appointee.'' Id., 13490, section 1, par. 1. The Pledge
ban applies to gifts from lobbyists and organizations that are
currently registered under the Lobbying Disclosure Act (LDA), 2 U.S.C.
1603, as well as any person currently identified as a lobbyist for an
organization in a registration statement or quarterly disclosure report
filed under the LDA. Exec. Order 13490, section 2(e). The Secretary of
the Senate and the Clerk of the House of Representatives maintain
searchable, online databases of registrants and lobbyists under the
LDA, from which appointees and ethics counselors may determine whether
a particular person is a permissible source for a gift under the Pledge
ban.\1\
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\1\ See http://soprweb.senate.gov/index.cfm?event=selectfields;
http://disclosures.house.gov/ld/ldsearch.aspx.
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The Office of Government Ethics issued initial interpretive
guidance to implement the lobbyist gift ban in a Memorandum to
Designated Agency Ethics Officials on February 11, 2009. OGE, DO-09-
007, http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2009/do09007.html. OGE's guidance makes clear that the lobbyist gift ban for
political appointees ``is in addition to the OGE prohibitions on gifts
from `prohibited sources' and gifts `given because of the employee's
official position.' '' Id. (emphasis added). Thus, for example, the ban
applies to gifts
[[Page 56331]]
from registered lobbyists and lobbying organizations even if they do
not lobby the appointee's own agency or they confine their lobbying
solely to the Legislative Branch. Id. Moreover, the lobbyist gift ban
in the Pledge is subject to a more limited set of exceptions than those
otherwise applicable under the OGE gift regulations. Id. The Pledge
intentionally broadened existing gift restrictions, in connection with
registered lobbyists and organizations, because of concerns that gifts
sometimes may appear to be given in connection with efforts by
professional lobbyists to obtain access to the political leadership in
the Executive Branch. The stricter requirements were in large part a
response to various scandals involving the use of gifts by lobbyists
such as Jack Abramoff, and in this regard the Pledge followed similar
efforts by Congress to respond to some of the same concerns. E.g., 153
Cong. Rec. H 6 (January 4, 2007)(adoption of lobbyist gift ban for
House of Representatives); Honest Leadership and Open Government Act of
2007 (HLOGA), Public Law 110-81, sections 203, 305, 541, 542, 544
(various provisions pertaining to lobbyist gifts and contributions).
The OGE guidance also emphasized that the Pledge ban is not limited
to gifts from lobbyists and lobbying firms that provide lobbying
services to others. DO-07-007, at p. 2. Under the plain meaning of the
Executive Order, the phrase ``registered lobbyist or lobbying
organization'' includes any ``organization filing a registration''
under the LDA, not just lobbying firms. Exec. Order 13490, section
2(e). The ban also includes, therefore, organizations that register
because they employ ``at least one in-house lobbyist'' to lobby on
their own behalf, such as a corporation that employs its own
governmental affairs officer who meets the LDA definition of lobbyist
(2 U.S.C. 1602(10)). Id. Nevertheless, the OGE guidance carved out two
categories of organizations from this definition, even though they may
employ their own lobbyists: nonprofit organizations exempt from
taxation under 26 U.S.C. 501(c)(3), and media organizations. Id. at 5-
6. In consultation with the White House Counsel's Office, OGE
determined that these categories of organizations did not implicate the
purposes of the Pledge ban, although the guidance did provide that an
appointee ``still may not accept a gift if the organization employee
who extends the offer is a registered lobbyist him- or herself.'' Id.
at 5.
In addition to the Pledge requirements for full-time political
appointees, the Executive Order directed OGE ``to adopt such rules or
procedures as are necessary or appropriate * * * to apply the lobbyist
gift ban set forth in paragraph 1 of the pledge to all executive branch
employees.'' Exec. Order 13490, sec. 4(c)(3)(ii). OGE is to undertake
this task ``in consultation with the Attorney General and the Counsel
to the President or their designees.'' Id. It was intended that OGE
would take the opportunity to learn from its initial experience in
implementing the lobbyist gift ban for political appointees and then
evaluate how best to extend the limitations to the ranks of career
employees, for whom different considerations may be relevant. This
proposed rule is the result of that evaluation, and OGE's conclusions
about the most appropriate way to extend the lobbyist gift limitation
beyond just the political leadership are summarized below, under
``General Approach.''
Finally, the Executive Order charged OGE with adopting rules and
procedures ``to authorize limited exceptions to the lobbyist gift ban
for circumstances that do not implicate the purposes of the ban.'' Id.
at, section 4(c)(3)(iii). As discussed below, this proposed rule
specifies a limited set of exceptions applicable to full-time political
appointees, as well as an expanded but still limited set of exceptions
applicable to all other employees. Like the initial OGE guidance
Memorandum, the proposed rule also excludes certain types of
organizations from the category of lobbying organizations from which
gifts are banned, with some modifications and additions to the
exclusions as originally described in the Memorandum. OGE intends that
these exclusions from the proposed definition of ``registered lobbyist
or lobbying organization'' would be applicable to all employees,
including full-time political appointees subject to the Pledge.
II. Proposed Amendments to the Standards
A. General Approach
After considering the myriad issues that have arisen under the
lobbyist gift ban for full-time political appointees, as well as the
varied circumstances of the millions of employees to whom Subpart B
applies, the Office of Government Ethics has decided that the best
approach for extending the lobbyist gift ban beyond the core political
personnel is to add a lobbyist limitation to the existing limitations
in section 2635.202(c) on the use of the gift exceptions in the OGE
regulations. In this way, the lobbyist limitation would build on
concepts, prohibitions and exceptions with which employees and agency
ethics officials already are familiar, rather than adding a new stand-
alone prohibition. This approach would extend the real benefits that
OGE already has perceived as a result of the gift ban for political
appointees, without introducing unnecessary complexity or restrictions
that have little relation to the real ethics concerns affecting the
great mass of career and other employees outside the full-time
political leadership of the executive branch.
With the implementation of the current Pledge restriction for
political appointees, OGE believes that the most important salutary
effect has been the elimination of sometimes questionable ``widely-
attended gatherings,'' ``social invitations,'' and other gifts that
might have been permissible under applicable gift exceptions in section
2635.204 had the gifts not been extended by registered lobbyists or
lobbying organizations. While all of the exceptions in section 2635.204
have their appropriate uses, OGE has indeed become concerned that some
of the exceptions may have been used on occasion to permit gifts, such
as attendance at certain events, where the nexus to the purpose of the
exception is attenuated at best. See, e.g., OGE DAEOgram DO-07-047,
http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2007/do07047.html. (widely attended gatherings under section
2635.204(g)(2)). When such gifts are offered by persons who are paid to
influence government action, the concerns obviously are magnified.
However, in the period since the Pledge ban was imposed on political
appointees, OGE has noted a decrease in pressure to extend some of
these exceptions, because the Pledge simply makes the exceptions
unavailable for gifts from lobbyists and lobbying organizations.
The proposed rule, therefore, targets this issue directly. Proposed
section 2635.202(c)(6) would operate as a straightforward limitation on
the use of certain gift exceptions. Unlike the Pledge ban, the proposed
rule does not add a third general prohibition applicable to all
employees (i.e., in addition to the general prohibitions on gifts from
prohibited sources and gifts because of official position). Rather, the
proposed rule would limit the ability of employees to rely on certain
gift exceptions when a prohibited source--or a person giving a gift
because of the employee's official position--also happens to be a
registered lobbyist or lobbying organization. With respect to the large
and diverse class of career and
[[Page 56332]]
other employees who are not required to sign the Pledge, OGE has
determined that there is no demonstrated need for a new general
prohibition against accepting gifts from lobbyists, as long as those
lobbyists are not prohibited sources for an employee and do not even
extend gifts because of the employee's official position. As described
above, the terms ``prohibited source'' and ``because of the employee's
official position'' are already defined quite broadly. Those
restrictions cover so much of the real potential for ethical harm that
it would be difficult to explain to career employees why they also
should be subject to discipline for failing to determine whether a gift
that does not fall within those broad prohibitions is extended by a
registered lobbyist. By contrast, where a gift is extended by a
prohibited source or because of the employee's official position, OGE
believes that it is reasonable to ask employees (and their ethics
counselors) to determine whether a particular donor is a registered
lobbyist or lobbying organization before the employee may rely on
certain exceptions to the OGE gift prohibitions.
At the same time, under proposed section 2635.202(d), full-time
political appointees who must sign the Pledge would remain subject to
the lobbyist gift ban as a separate prohibition. This result is
compelled by Executive Order 13490, and it means that these appointees
will remain barred from accepting gifts from registered lobbyists and
lobbying organizations even when the lobbyist or organization is not a
prohibited source and has not offered the gift because of an
appointee's official position. Apart from the plain meaning of the
Executive Order, the stricter treatment of the political leadership in
the executive branch is justified by experience. Most, if not all, of
the executive branch officials who were implicated in the scandals
involving Jack Abramoff and his associates were political appointees.
Indeed, in the case of career employees, it seems unlikely that
lobbyists would expend significant time and resources to cultivate
access through the use of gifts if the lobbyists (and the clients they
represent) were not prohibited sources. However, one could envision
strategic efforts to cultivate access to the political leadership
generally, even if the lobbyists do not currently qualify as a
prohibited source for a particular political appointee. OGE does not
discount the symbolic value of the Pledge prohibition for the political
class within the Executive Branch, and this broader prophylactic
restriction remains an appropriate response to public concerns about
the use of gifts as a means of access by professional lobbyists.
B. Proposed Section 2635.202(c)(6)
1. Exceptions Unavailable for Lobbyist Gifts
Proposed section 2635.202(c)(6) would preclude employees from using
several of the gift exceptions in section 2635.204 to accept a gift
from a registered lobbyist or lobbying organization. Like the Pledge
ban for full-time political appointees, the proposed rule would not
permit any employee to use the following exceptions in connection with
gifts from registered lobbyists or lobbying organizations: Section
2635.204(a), the $20 de minimis exception; section 2635.204(g)(2), the
widely attended gathering exception (WAG); section 2635.204(h), the
social invitation exception; and section 2635.204(i), the exception for
meals, refreshments and entertainment from private entities in a
foreign area. The de minimis and WAG provisions, in particular, are
among the most widely used exceptions in the OGE gift regulations, so
the change effected by the proposed new limitation is not
inconsiderable. Nevertheless, as explained below, OGE believes that the
proposed lobbyist limitation is appropriate for those popular
exceptions, as well as the social invitation and foreign areas
exceptions.
De Minimis Exception in Section 2635.204(a)
Section 2635.204(a) permits employees to accept gifts, other than
cash or investments, having a market value of $20 per source on a
single occasion. This de minimis exception also allows employees to
accept gifts in the aggregate valued up to $50 per source in any
calendar year.
OGE has determined that it is appropriate to follow the House and
the Senate, as well as the President's Ethics Pledge, in sending a
consistent message that there is no de minimis for lobbyist gifts. Both
the House and Senate amended their de minimis gift rules, in response
to the Abramoff scandals and related concerns, to preclude gifts from
registered lobbyists. See House Ethics Manual at 29-30 (2008); Rule
XXXV of the Standing Rules of the Senate, par. 1(a)(2)(B); HLOGA, sec.
541. While the OGE de minimis exception is set at only $20, as compared
to $50 for the House and Senate, it is nonetheless clear that both
Houses of Congress intended to preclude lunches and other items from
lobbyists even if the gifts were valued well below the de minimis
threshold. See, e.g., Senate Select Committee on Ethics, ``New Ethics
Rules: Gifts and Events'' (September 25, 2007) (``Senators and staff
can no longer accept gifts of any value from registered lobbyists'').
Moreover, although OGE believes that the rules and circumstances of the
Executive Branch ethics program often are unavoidably different from
those of Congress, OGE also is respectful of the ``Sense of the
Congress,'' expressed in section 701 of HLOGA, that similar
restrictions should apply. OGE's experience in implementing the Pledge
ban for political appointees in the Executive Branch has not indicated
any significant problems with eliminating the de minimis exception for
lobbyist gifts, and OGE believes it is time to follow suit for the rest
of the Executive Branch.
Of course, OGE cannot deny the convenience of the $20 de minimis
rule as currently applied. It provides a bright line test, and
employees generally can accept a gift within this limit without even
having to determine whether the donor is a prohibited source or is
extending the offer because of the employee's official position--let
alone without having to determine whether the source is registered
under the Lobbying Disclosure Act. Nevertheless, where the donor is a
prohibited source or is offering a gift because of the employee's
position, OGE believes it is not too much to ask of employees and their
ethics counselors to determine whether the source also is a registered
lobbyist or lobbying organization. In fact, one could say that
heightened sensitivity in the use of any of the gift exceptions,
including the de minimis provision, would be a positive result. As OGE
states in the introduction to the gift exceptions: ``Even though
acceptance of a gift may be permitted by one of the exceptions
contained in paragraphs (a) through (l) of this section, it is never
inappropriate and frequently prudent for an employee to decline a gift
offered by a prohibited source or because of his official position.'' 5
CFR 2635.204. Requiring employees to stop and consider whether a
potential donor is engaged in professional lobbying activities will
further encourage this kind of prudential attitude.
Exception for Widely Attended Gatherings in Section 2635.204(g)(2)
The exception at section 2635.204(g)(2) permits employees to accept
offers of free attendance at certain widely attended gatherings (WAG),
where an agency designee has determined that attendance is in the
interest of the agency. This exception
[[Page 56333]]
has been used to permit attendance of a very wide range of events, from
substantive activities (such as conferences and seminars) that provide
a significant training opportunity, to purely social functions (such as
fundraisers and gala celebrations) that provide an opportunity for
government employees and others to interact in a more relaxed social
setting.
As already noted above, OGE has perceived some instances over the
years in which the WAG exception was used to permit attendance at
events, particularly social events, where the nexus to the government's
interest was attenuated. In fact, OGE issued a memorandum to agency
ethics officials in December 2007 that was partly a call for agencies
to focus on the real purposes of the exception. DO-07-047. The WAG
exception raises particular concerns when free attendance is provided
by a lobbyist. That is for the simple reason that the ``gift'' involved
is something that the employee will enjoy in the very company of the
lobbyist. If one views the problem of lobbyist gifts as the mere
potential for some quid pro quo, then probably an invitation to a gala
ball will not directly influence an official to take action benefiting
the giver. But it is increasingly recognized that the more realistic
problem is not the brazen quid pro quo, but rather the cultivation of
familiarity and access that a lobbyist may use in the future to obtain
a more sympathetic hearing for clients. As one scholar has observed,
``the public's concern is not just that * * * officials will engage in
blatant [selling of their services] to lobbyists but, more subtly, that
they will become partial to the causes of lobbyists' clients because
they spend a lot of time in lobbyists' company.'' Anita S.
Krishnakumar, Towards a Madisonian, Interest-Group-Based, Approach to
Lobbying Regulation, 58 Ala. L. Rev. 513, 524-25 (2007). The WAG
exception, at least when used in connection with social events, can
provide the opportunity for a lobbyist not only to discuss any pending
issues with the employee but also to foster a social bond that may be
of greater use in the long run. Therefore, proposed section
2635.202(c)(6) would preclude the use of the WAG exception where the
gift is offered by a registered lobbyist or lobbying organization.
Having said this, OGE also knows that widely attended gatherings
still can serve important government purposes. For example, OGE does
not believe that employees, including political appointees subject to
the Pledge, should be precluded categorically from accepting offers of
free attendance at substantive events that would provide a legitimate
educational or professional development benefit that furthers the
interests of an agency. Therefore, under the definition of registered
lobbyist or lobbying organization at proposed section 2635.203(h)(4),
discussed below, OGE is proposing to exclude nonprofit professional
associations, scientific organizations and learned societies, at least
with respect to the educational and professional development activities
of those entities. This will preserve a ``substantive core'' of the WAG
exception, regardless of whether the donor is registered under the LDA.
A final word is in order concerning the first paragraph of section
2635.204(g), which permits free attendance at events where an employee
is speaking or presenting information on behalf of the government. As
explained in OGE's initial Memorandum concerning the Pledge ban, the
restriction on the use of section 2635.204(g)(2) does not extend to
section 2635.204(g)(1):
``Appointees still may accept offers of free attendance on the
day of an event when they are speaking or presenting information in
an official capacity, as described in 5 C.F.R. Sec. 2635.204(g)(1),
notwithstanding the lobbyist gift ban. This is not a gift exception,
but simply an application of the definition of `gift' in section
2635.203(b): `The employee's participation in the event on that day
is viewed as a customary and necessary part of his performance of
the assignment and does not involve a gift to him or to the agency.'
5 CFR 2635.204(g)(1).''
DO-09-007, at 4 n.3. Likewise, proposed section 2635.202(c)(6)
would not affect the ability of employees to accept offers of free
attendance in connection with official speaking engagements, as
provided in section 2635.204(g)(1). The same would be true with respect
to agency support personnel ``whose presence at the event is deemed
essential under agency procedures to the speaker's participation at the
event.'' OGE DAEOgram DO-10-003, http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2010/do10003.html.
Exception for Social Invitations in Section 2635.204(h)
Section 2635.204(h) permits employees to accept offers of free
attendance at social events attended by several persons, provided that
the invitation is not from a prohibited source and no attendance fee is
charged to anyone. This exception has been used, for instance, to
permit employees to attend such events as movie screenings and
Washington cocktail parties, as illustrated by the official examples
following the regulatory text. See 5 CFR 2635.204(h)(Examples 1 & 2).
For reasons similar to those discussed above in connection with the
WAG exception, OGE has determined that the social invitation exception
should be unavailable to employees for lobbyist gifts. It is no secret
that social events of this type sometimes are used as ``lobbying
tools.'' Jim Puzzanghera, ``Courtship starts with free film
screenings,'' Los Angeles Times, December 31, 2007, http://articles.latimes.com/2007/dec/31/business/fi-mpaa31 (lobbyist describes
cultivation of relationships through social events as ``soft
lobbying''). It is true that section 2635.204(h) already has an
important limitation in that it may not be used to accept gifts from a
prohibited source. Nevertheless, even though a lobbyist might not have
any matters currently pending before a particular employee's agency,
the lobbyist could use social events as a way to build general good
will with a class of employees in case access is needed for a future
issue or client. It is important to remember that the lobbyist
limitation in proposed section 2635.202(c)(6) will not even come into
play unless the gift is otherwise prohibited under the OGE Standards.
So the only time the limitation would preclude an employee from using
the social invitation exception would be when a lobbyist has at least
extended the invitation because of the employee's official position,
even if the lobbyist is not technically a prohibited source at that
time. The potential for harm, while perhaps latent, is nonetheless
real.
Exception for Meals, Refreshments and Entertainment From Private
Entities in a Foreign Area in Section 2635.204(i)
Section 2635.204(i) permits employees to accept food, refreshments
or entertainment in the course of official attendance at certain
meetings or events in foreign areas. The meeting or event must involve
non-U.S. citizens, or representatives of foreign governments or other
foreign entities, but the source of the gift itself may not be a
foreign government as defined in 5 U.S.C. 7342(a)(2). The market value
of the gift also may not exceed the per diem rate specified for the
foreign area by the Department of State. This exception was included in
the OGE Standards at the request of several agencies with overseas
operations who were concerned that, without such an exception,
``employees will be required to decline the customary invitations of
hospitality that frequently accompany the transaction of business in
many
[[Page 56334]]
foreign countries and that the foreign nationals and entities involved
may be offended.'' 57 FR 35021.
Proposed section 2635.202(c)(6) would bar employees from relying on
this foreign areas exception if the gift is offered by a registered
lobbyist or lobbying organization. OGE does not doubt the utility or
reasonableness of this exception. However, OGE believes that the
exception should not be a vehicle for registered lobbyists and lobbying
organizations to entertain government employees with hospitality, which
could raise some of the same concerns as those discussed above in
connection with WAGs and social invitations. It is not clear how many
registered lobbyists or lobbying organizations even would be
geographically positioned to extend such offers in foreign areas.
However, OGE notes that some foreign private entities do register under
the LDA and may do so in order to avoid the more onerous registration
requirements of the Foreign Agents Registration Act. See 22 U.S.C.
613(h); S. Rep. 105-147, at 4 (1997). Where the private entity engages
in lobbying activity for which it is registered under the LDA, OGE has
determined that there is sufficient reason to preclude an employee from
accepting food and entertainment in the company of that entity.
2. Exceptions Available for Lobbyist Gifts
Exceptions Already Permitted Under Pledge: Section 2635.204(b), (c),
(e)(1), (e)(2), (j), (k) and (l)
Even for full-time political appointees, the Pledge gift ban
recognizes that certain gift exceptions are reasonable even though the
donor is a registered lobbyist or lobbying organization. See Executive
Order 13490, sec. 2(c)(3) (exceptions to Pledge gift ban). The Pledge
permits full-time political appointees to accept the following: Gifts
based on a personal relationship, under section 2635.204(b); discounts
and similar benefits, under section 2635.204(c); gifts resulting from a
spouse's business or employment, under section 2635.204(e)(1);
customary gifts provided by prospective employers, under section
2635.204(e)(3); gifts to President or Vice President, under section
2635.204(j); gifts authorized by an OGE-approved supplemental
regulation, under section 2635.204(k); and gifts accepted under
specific statutory authority, under section 2635.204(l). As explained
in OGE's February 11, 2009 memorandum: ``Because the lobbyist gift ban
is very broad, these common sense exceptions are necessary to avoid
potentially absurd results. Thus, an appointee may accept a birthday
present from his or her spouse who is a registered lobbyist or sign up
for a training course sponsored by a registered lobbying organization
that provides a discount for Federal Government employees.'' DO-09-007,
at 3. The proposed rule extends these exceptions likewise to career
employees and others not subject to the Pledge.
Additional Exceptions Permitted by Proposed Section 2635.202(c)(6)
Additionally, OGE has determined that there is good reason to
permit employees--other than the full-time political appointees subject
to the Pledge--to use three other exceptions that are not applicable to
the Pledge restriction. The additional exceptions are: Section
2635.204(d), for awards and honorary degrees; section 2635.204(e)(2),
for gifts resulting from an employee's outside business or employment;
and section 2635.204(f), for certain benefits in connection with
permissible political activities.
Exception for Awards and Honorary Degrees in Section 2635.204(d)
Section 2635.204(d) sets forth specific criteria under which
employees may accept ``bona fide awards'' for meritorious public
service or achievement. The award must not be extended by a person with
interests that may be substantially affected by the employee's duties
or by an association of such persons. Furthermore, awards of cash or
awards valued in excess of $200 require a written determination by an
agency ethics official that the award is ``made as part of an
established program of recognition'' under which (1) awards have been
made on a regular basis in the past or are funded to ensure their
continuation in the future and (2) the selection of recipients is made
pursuant to written standards. 5 CFR 2635.204(d)(1). Although probably
used less frequently, section 2635.204(d) also sets forth criteria
under which an employee may accept an honorary degree from an
institution of higher education, based on a written determination by an
agency ethics official that the timing of the degree will raise not
raise questions concerning the employee's impartiality in any matter
affecting the institution. 5 CFR 2635.204(d)(2).
OGE has determined that the limitation of proposed section
2635.202(c)(6) should not preclude employees from relying on section
2635.204(d). For one thing, section 2635.204(d) follows a longstanding
interpretation that bona fide awards for meritorious public service and
achievement fall outside the prohibition of salary supplementation in
18 U.S.C. 209, ``primarily because the grantors are typically detached
from and disinterested in the performance of the public official's
duties.'' 8 Op. O.L.C. 143, 144 (1984); see 57 FR 35018. Consequently,
the exception itself already includes both substantive and procedural
safeguards that OGE believes are adequate to prevent real or perceived
abuses when employees outside the political leadership are granted
awards, even where the granting organization is registered under the
LDA. Permitting employees to rely on this exception also would further
one of the specific goals recently articulated by the Office of Science
and Technology Policy concerning the promotion of professional
development of government scientists and engineers. See John P.
Holdren, Director of the Office of Science and Technology Policy,
Memorandum for the Heads of Executive Departments and Agencies,
December 17, 2010 (OSTP Memorandum). Among other things, the OSTP
Memorandum states that agencies should establish policies that
``[a]llow Government scientists and engineers to receive honors and
awards for their research and discoveries with the goal of minimizing,
to the extent practicable, disparities in the potential for private-
sector and public-sector scientists and engineers to accrue the
professional benefits of such honors and awards.'' Id. at 4.
With respect to honorary degrees, under section 2635.204(d)(2),
even the Pledge currently permits acceptance in most cases. That is
because OGE, in consultation with the White House Counsel's Office, has
excluded 501(c)(3) organizations from the category of registered
lobbying organizations from which appointees may not accept gifts under
the Pledge. DO-09-007, at 5. A large percentage of institutions of
higher education, as defined in 20 U.S.C. 1001, are such 501(c)(3)
organizations. Moreover, those institutions of higher education that
OGE has encountered that are not 501(c)(3) organizations have been
state and local universities and colleges. As to the latter, OGE
already has advised informally that such public institutions are so
similar to the educational institutions that have 501(c)(3) status that
the Pledge ban likewise should be inapplicable to them. For the same
reasons, OGE also is proposing to define ``registered lobbyist or
lobbying organization'' to exclude all institutions of higher education
(see discussion of proposed section
[[Page 56335]]
2635.203(h)(2) below). In view of this proposed definition, arguably it
is redundant to exclude honorary degrees from the limitation in
proposed section 2635.202(c)(6). Nevertheless, for purposes of
simplicity, OGE proposes to include a general reference to section
2635.204(d) in its entirety in section 2635.202(c)(6), thus clarifying
that employees may accept both awards and honorary degrees
notwithstanding the lobbyist gift limitation.
Exception for Gifts Resulting From an Employee's Outside Business or
Employment Activities in Section 2635.204(e)(2)
Section 2635.204(e)(2) is one of three separate, but related
exceptions in paragraph (e) of 2635.204, all of which pertain to gifts
offered because of some non-federal business or employment. Paragraphs
(e)(1) and (e)(3), which respectively cover gifts resulting from a
spouse's business or employment and customary gifts given in connection
with an employee's discussions with a prospective employer, are already
applicable to the Pledge gift ban. Paragraph (e)(2), however, is not
applicable to the Pledge ban, in large part because this exception
covers benefits resulting from an employee's own current outside
employment or business, and there was a general assumption that the
political leadership in the Executive Branch would have little need of
such an exception while they focused their time and effort on the
business of the Administration. Indeed, for many Pledge signers, there
are significant ethical limitations and restrictions on their ability
to engage in outside employment and business activities. See 5 U.S.C.
app. 501-505; 5 CFR part 2636; Exec. Order 12674, section 102, 54 FR
15159, 3 CFR, 1989 Comp., p. 215.
However, OGE has determined that section 2635.204(e)(2) does serve
a significant purpose for career employees and others who are not
subject to the Pledge. Many employees have non-Federal employment and
business activities that are consistent with the ethics rules and in
fact may have been approved by agency ethics officials. The vast
majority of Executive Branch employees are not subject to the
limitations on outside business and employment activity cited above,
and their outside activities fulfill many personal and professional
goals that are perfectly legitimate. For example, most part-time
members of Federal commissions and boards have their regular employment
with non-Federal entities; even though it is generally expected that
such employees will not be registered lobbyists themselves, no doubt
many of them work for entities that are registered under the LDA. See
75 FR 67397-67399 (November 2, 2010) (proposed Office of Management and
Budget guidance does not ``restrict the appointment of individuals who
are themselves not Federal registered lobbyists but are employed by
organizations that engage in lobbying activities''). Another example
would be full-time career employees who have approved outside
activities with entities that are registered under the LDA, such as
physicians who have been authorized to engage in the outside practice
of medicine with hospital organizations that also happen to employ
lobbyists. See 5 CFR 5501.106(c)(3)(A) (employees of Food and Drug
Administration may engage in outside medical practice with regulated
entities under certain circumstances). The exception for benefits
resulting from outside business or employment is useful and appropriate
for these employees, particularly given the important proviso in
section 2635.204(e)(2) that such benefits may not be offered or even
``enhanced'' because of employees' official status. See 5 CFR
2635.204(e)(2) (Example 1).
Exception for Gifts in Connection With Permissible Political Activities
in Section 2635.204(f)
Section 2635.204(f) applies to employees who are permitted by the
Hatch Act Reform Amendments of 1993, 5 U.S.C. 7323, to take an active
part in political management or political campaigns. The exception
allows such employees to accept meals, travel and other benefits when
provided in connection with their outside political activities, if the
gift is from a political organization as described in 26 U.S.C. 527(e).
Section 2635.204(f) was promulgated by OGE so that the gift
restrictions would not ``hamper the political activities'' of
employees, where those activities are themselves authorized by Congress
(originally by the Hatch Act and later more extensively by the Hatch
Act Reform Amendments). 56 FR at 33782; see also 61 FR 50689, 50690
(September 27, 1996).
OGE believes that this exception should remain available to
employees--other than those appointees subject to the Pledge--out of
consideration for the rights of employees to participate in political
activities. It is not clear to OGE how likely it is that a political
organization, under 26 U.S.C. 527(e), would also be a registered
lobbying organization, but OGE thinks it best to send a clear message
to employees that nothing in the lobbyist gift limitation is intended
to interfere with their existing rights to participate in political
activities.
C. Proposed Section 2635.202(d)
As discussed above, the proposed rule leaves the lobbyist gift ban
of Executive Order 13490 in place as a separate restriction for
appointees required to sign the Pledge, in addition to the general
restrictions in the OGE regulations on gifts from prohibited sources
and gifts given because of official position. Proposed section
2635.202(d) would accomplish this by reiterating the Pledge ban and
emphasizing that it is in addition to the prohibitions set forth in
section 2635.202(a). The proposed provision allows only those
exceptions permitted expressly by section 2(c)(3) of the Executive
Order: Gifts based on a personal relationship, under section
2635.204(b); discounts and similar benefits, under section 2635.204(c);
gifts resulting from a spouse's business or employment, under section
2635.204(e)(1); customary gifts provided by prospective employers,
under section 2635.204(e)(3); gifts to the President or Vice President,
under section 2635.204(j); gifts authorized by an OGE-approved
supplemental regulation, under section 2635.204(k); and gifts accepted
under specific statutory authority, under section 2635.204(l). Note,
however, that the definition of ``registered lobbyist or lobbying
organization,'' in proposed section 2635.203(h), would apply to the
Pledge restriction at proposed section 2635.202(d); that proposed
definition, as discussed below, would exclude certain organizations
from the Pledge ban.
D. Proposed Section 2635.203(h)
Proposed section 2635.203(h) defines the phrase ``registered
lobbyist or lobbying organization.'' This definition would apply both
to the limitation on the use of the gift exceptions, in proposed
section 2635.202(c)(6), and the additional prohibition for full-time
political appointees (the Pledge ban), in proposed section 2635.202(d).
The proposed definition mainly follows the definition in section
2(e) of Executive Order 13490. The definition includes any lobbyist or
organization that is currently registered under the Lobbying Disclosure
Act (LDA) or identified as a lobbyist in a registration. As discussed
above, the definition in the Executive Order covers not only lobbying
firms that provide services to others but also organizations that
employ in-house lobbyists to lobby on behalf of the organization
itself. The
[[Page 56336]]
proposed rule would retain this scope of coverage. Also following the
Executive Order, the proposed definition does not extend to persons or
organizations that simply retain ``outside'' lobbyists or lobbying
firms: Organizations that are merely ``clients'' but not actually
employers of lobbyists do not have to file registrations under the LDA,
even though they may be listed as clients in registrations filed by the
lobbyists or firms they retain. See DO-09-007, at 2-3.
Like the current OGE guidance applicable to the Pledge ban, the
proposed definition emphasizes, in the Note following section
2635.203(h), that employees may determine whether the source of a gift
is a lobbyist or a lobbying organization by relying on the searchable,
online databases of lobbyists and registrants maintained by the
Secretary of the Senate and the Clerk of the House, pursuant to the
Lobbying Disclosure Act (LDA), 2 U.S.C. 1605(a).\2\ The proposed Note
also includes guidance about how to determine whether a given
registrant or lobbyist currently is registered or listed; the guidance
with respect to the de-listing or cessation of the lobbying activity of
a particular lobbyist is derived from the proposed guidance issued by
the Office of Management and Budget concerning ``Appointment of
Lobbyists to Federal Boards and Commissions.'' OMB, Proposed Guidance,
A1, 75 FR 67397-67399 (November 2, 2010). Additionally, the Note
provides that, ``[w]ith respect to organizations that have
subsidiaries, parents or affiliates that are separate legal entities,
employees need only determine the registration status of the entity
that offered the gift.'' Since the Pledge ban went into effect, OGE has
fielded numerous questions about how to treat gifts from an
organization that is not registered but that has a parent, subsidiary
or affiliate that is registered. In answering these questions, OGE
generally has relied on the guidance provided by the Secretary of the
Senate and the Clerk of the House with respect to the registration
requirements for such entities:
---------------------------------------------------------------------------
\2\ See http://soprweb.senate.gov/index.cfm?event=selectfields;
http://disclosures.house.gov/ld/ldsearch.aspx.
``Assuming a parent entity or national association and its
subsidiary or subordinate are separate legal entities, the parent
makes a determination whether it meets the registration threshold
based upon its own activities, and does not include subordinate
units' lobbying activities in its assessment. Each subordinate must
make its own assessment as to whether any of its own employees meet
the definition of a lobbyist, and then determine if it meets the
---------------------------------------------------------------------------
registration threshold with respect to lobbying expenses.''
Secretary of the Senate & Clerk of the House of Representatives,
Lobbying Disclosure Act Guidance (June 15, 2010), section 5 http://lobbyingdisclosure.house.gov/amended_lda_guide.html. With the
understanding that parents, subsidiaries and affiliates file their own
registrations without regard to each other's activities (albeit with
certain accommodations for a single filing in limited circumstances,
id.), OGE believes that the clearest and most practical approach is to
search the LDA database only for the legal entity that offered the
gift.
The proposed definition of registered lobbyist or lobbying
organization provides four exclusions. These exclusions pertain to
organizations that may be registered under the LDA, but which do not
pose the concerns at which the Executive Order was directed. Two of
these exclusions--for 501(c)(3) organizations and media organizations--
are already found in the current OGE guidance concerning the Pledge
ban. See DO-09-007, at 5-6. A third exclusion--for institutions of
higher education--largely follows from OGE's existing guidance on
501(c)(3) organizations and in fact has been the subject of informal
advice from OGE to agency ethics officials. The fourth exclusion--for
nonprofit professional associations, scientific organizations and
learned societies engaging in educational or professional development
activities--would be new, although the purposes of this exclusion are
related to those for 501(c)(3) organizations and institutions of higher
education. These four exclusions are discussed in more detail below.
It is important to remember that the mere fact that an entity is
excluded from the definition of registered lobbyist or lobbying
organization does not necessarily mean that a gift from such an
organization may be accepted. Rather, it means only that a gift from
such an organization would not trigger the lobbyist limitation at
proposed section 2635.202(c)(6) or the separate gift prohibition for
Pledge signers at proposed section 2635.202(d). Where the gift happens
to be given by a prohibited source, or given because of the employee's
official position, the employee still must rely on an applicable
exception in section 2635.204 to accept the gift. However, in some
cases, this will mean that an employee could rely on an exception that
otherwise would be unavailable, either under section 2635.202(c)(6) or
section 2635.202(d), if the source were not excluded from the
definition of registered lobbyist or lobbying organization. For
example, any employee (including Pledge signers) could use the $20 de
minimis exception to accept a $10 lunch from a prohibited source that
is a 501(c)(3) organization, even though that organization may be
registered under the LDA. However, if that same organization offered to
pay for a $45 dinner, and no other gift exception in section 2635.204
applied, the gift would violate the bar on gifts from a prohibited
source.
Exclusion of 501(c)(3) Organizations in Proposed Section 2635.203(h)(1)
OGE's original guidance concerning the Pledge gift ban excluded
``charitable and other not-for-profit organizations that are exempt
from taxation under 26 U.S.C. 501(c)(3)'' for several reasons: They are
limited by law as to the lobbying in which they may engage; their
exempt purposes often involve activities of particular interest and
value to agencies (e.g., educational, charitable, scientific); and
similar considerations are reflected in the Government Employees
Training Act (5 U.S.C. 4111). DO-09-007, at 5. In OGE's experience, the
exclusion for 501(c)(3) organizations generally has worked well for the
full-time political appointees subject to the Pledge, and it makes
sense to extend it now to the provisions covering all employees, at
proposed section 2635.203(h)(1).
The proposed rule would make one adjustment to the current OGE
guidance concerning gifts from registered 501(c)(3) organizations.
OGE's guidance Memorandum states that, notwithstanding the exclusion of
501(c)(3) organizations, ``appointees still may not accept a gift if
the organization employee who extends the offer is a registered
lobbyist him- or herself.'' Id. Based on experience in implementing the
Pledge ban for political appointees, OGE has decided not to carry this
limitation forward into proposed section 2635.203(h)(1). For one thing,
this limitation has proven difficult to apply in practice. For example,
in determining whether an invitation to an event has actually been
``extended'' by an individual who is the organization's lobbyist,
should one focus on who officially signed the invitation letter, who e-
mailed a PDF copy of the signed letter, or who called the employee to
say that a written invitation is coming? Moreover, the proviso has not
proved to be a meaningful limitation anyway, because the same
invitation can be re-sent through a different messenger who is not
listed as a lobbyist for the organization. OGE believes that the
[[Page 56337]]
clearest and most straightforward approach is to exclude 501(c)(3)
organizations entirely from the definition, without regard to which
organization official conveys the offer.
Exclusion of Institutions of Higher Education in Proposed Section
2635.203(h)(2)
One of the primary reasons that OGE, in consultation with the White
House Counsel's Office, originally excluded 501(c)(3) organizations
from the Pledge gift ban was a desire to avoid creating barriers to
interaction between employees and educational institutions. However,
after issuing the initial guidance Memorandum on the Pledge gift ban,
it came to OGE's attention that some state and local universities and
colleges have not obtained separate 501(c)(3) status, usually for
reasons pertaining to state law. Because it made little sense to
discriminate between those state institutions that have obtained
501(c)(3) status and those that have not, OGE has advised agencies
informally that the latter are not covered by the Pledge ban. Proposed
section 2635.203(h)(2) would codify this guidance. For this purpose,
the proposed rule incorporates the definition of ``institution of
higher education'' in 20 U.S.C. 1001, which includes both ``public and
nonprofit'' institutions. Therefore, under proposed section
2635.203(h)(2), private for-profit institutions of higher education are
not included as part of the exclusion from the definition of
``registered lobbyist or lobbying organization'' and are covered by the
Pledge ban.
Exclusion of Media Organizations in Proposed Section 2635.203(h)(3)
OGE's initial guidance Memorandum concerning the Pledge gift ban
indicated that it was not the intent of the Executive Order to bar
gifts from media organizations. Relying on some of the concerns
underlying the LDA, as well as past Executive Branch concerns about
facilitating interactions between government officials and members of
the press, OGE explained the exclusion as follows: ``The LDA itself
reflects solicitude for the unique constitutional role of the press in
gathering and disseminating information. See 2 U.S.C. 1602(8)(B)(ii).
Likewise, the lobbyist gift ban is not intended to erect unnecessary
barriers to interaction between appointees and journalists. This is
consistent with concerns about the application of the OGE gift
prohibitions to certain press dinners shortly after the Standards of
Conduct became effective. See Memorandum from the Counsel to the
President to All Agency Heads, December 21, 1993 (suspending
enforcement of gift rule with respect to press dinners, pending
revision of rule). ``Therefore, an appointee may accept a gift from an
employee of a media organization, as long as the gift is permissible
under the OGE gift rules, including any applicable exceptions.'' DO-09-
007, at 5-6.
For the same reasons, OGE now proposes to carry forward the media
organization exclusion in the definition at proposed section
2635.203(h)(3). The proposed rule defines media organization by
reference to the definition in the LDA, 2 U.S.C. 1602(11). OGE sees
this as a broad definition, covering print, broadcast, electronic and
other kinds of mass communications organizations.
OGE has added one limitation, however, that was not included in the
original guidance Memorandum. The proposed rule excludes a media
organization only with respect to gifts that are made in connection
with the organization's information gathering or dissemination
activities. This limitation brings the exclusion closer to the purposes
of the Pledge and the LDA, as the latter expressly excludes media
contacts from the definition of ``lobbying contact'' only when those
contacts are made for the purpose of ``gathering and disseminating news
and information to the public,'' 2 U.S.C. 1602(8)(B)(ii). This
limitation will address one question that has arisen under the current
OGE guidance, which is whether gifts from media organizations are
always permitted even if wholly unrelated to the news activities of the
organization. OGE believes there is no reason to exclude media
organization gifts that are extended under other circumstances, such as
a lunch invitation from an executive of a media conglomerate to an
official of the Department of Justice for the purpose of discussing a
proposed corporate acquisition. By contrast, for example, OGE does
intend that the exclusion would permit employees to accept invitations
from media organizations to attend the typical ``press dinners'' at
which journalists and government officials interact with each other, as
such interactions foster relationships that further the news gathering
functions of the organizations.
Proposed section 2635.203(h)(3) would make one additional
modification to the current OGE guidance on the Pledge ban. As with the
exclusion for 501(c)(3) organizations, the initial OGE guidance
Memorandum imposed a limit on gifts from media organizations:
``appointees may not accept a gift if the organization employee who
extends the offer is actually a registered lobbyist.'' DO-09-007, at 6.
For the same reasons discussed above with respect to the exclusion for
501(c)(3) organizations, OGE has not carried this limitation forward in
the proposed rule.
Exclusion for Nonprofit Professional Associations, Scientific
Organizations and Learned Societies Engaging in Educational or
Professional Development Activities in Proposed Section 2635.203(h)(4)
As explained above, under ``Exceptions Unavailable for Lobbyist
Gifts,'' proposed section 2635.202(c)(6) would preclude employees from
relying on the widely attended gathering (WAG) exception, 5 CFR
2635.204(g)(2), to accept a gift from a registered lobbyist or lobbying
organization. However, as also described above, OGE has determined that
certain widely attended events provide legitimate educational and
professional development opportunities that may further agency
interests, even if the offer of free attendance is extended by an
organization that is registered under the LDA. Therefore, proposed
section 2635.203(h)(4) would exclude nonprofit professional
associations, scientific organizations and learned societies from the
definition of registered lobbyist or lobbying organization, with
respect to gifts made in connection with the entity's educational or
professional development activities. Effectively, this would mean that
an employee still could rely on the WAG exception (or other applicable
exceptions) to accept free attendance at a training or professional
development event hosted by one of these entities, without regard to
the LDA registration status of the organization. Nevertheless, because
of the concerns expressed above about gifts of free attendance from
lobbyists, the exclusion will not apply to these organizations in
connection with invitations to purely social events (gala balls,
fundraisers, parties, etc.).\3\
---------------------------------------------------------------------------
\3\ Where an employee is authorized to accept an offer of free
attendance from a nonprofit professional association, scientific
organization or learned society, pursuant to 5 CFR 2635.204(g)(2)
and proposed section 2635.203(h)(4), the employee would be permitted
to accept ``food, entertainment, instruction and materials furnished
to all attendees as an integral part of the event.'' 5 CFR
2635.204(g)(4) (emphasis added). This means, for example, that
employees could attend a reception that is integral to an
educational or professional development event, but could not accept
``entertainment collateral to the event'' or ``meals taken other
than in a group setting with all other attendees.'' Id.; see
generally DO-07-047 (discussing the WAG exception, including what it
means for entertainment to be integral as opposed to collateral).
---------------------------------------------------------------------------
[[Page 56338]]
The proposed exclusion is intended to further the goal, recently
articulated by the Office of Science and Technology Policy, of setting
``policies that promote and facilitate * * * the professional
development of Government scientists and engineers,'' OSTP Memorandum
at 3. However, OGE would not limit this exclusion to scientific
organizations but would extend it to any professional or learned
societies that promote the development or education of members of a
profession or discipline. Many of the entities that sponsor educational
and professional development activities of interest to Federal
employees and their agencies would be 501(c)(3) organizations and,
therefore, excluded already under proposed section 2635.203(h)(1).
Nevertheless, many professional organizations are exempt from taxation
under provisions other than 26 U.S.C. 501(c)(3), so OGE believes the
limited exclusion in proposed section 2635.203(h)(4) is necessary and
appropriate. Although the exclusion is intended to cover a wide range
of organizations devoted to various professions and disciplines, OGE
does not intend that proposed section 2635.203(h)(4) would cover trade
associations, such as associations of manufacturers of particular
products. Trade associations may sponsor educational activities for
their members and even the public, but the primary concern of such
associations generally is not the education and development of members
of a profession or discipline, which is the focus of the proposed
exclusion.\4\
---------------------------------------------------------------------------
\4\ Compare Encyclopedia Britannica (2008) (``trade
association'' is ``voluntary association of business firms organized
on a geographic or industrial basis to promote and develop
commercial and industrial opportunities within its sphere of
operation, to voice publicly the views of members on matters of
common interest, or in some cases to exercise some measure of
control over prices, output, and channels of distribution'');
Collins English Dictionary (2009) (``professional association'' is
``body of persons engaged in the same profession, formed usually to
control entry into the profession, maintain standards, and represent
the profession in discussions with other bodies'').
---------------------------------------------------------------------------
E. Proposed Section 2635.203(i)
Proposed section 2635.203(i) would define the phrase ``full-time,
non-career appointee,'' which is a term describing the types of
political appointees subject to the Pledge under Executive Order 13490.
The proposed definition largely follows the definition of ``appointee''
in section 2(b) of the Executive Order and is consistent with guidance
already issued by OGE concerning which officials are required to sign
the Pledge. See DO-09-010, http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2009/do09010.html; DO-09-020, http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2009/do09020.html.
The definition is included in the proposed rule because proposed
section 2635.202(d) reiterates the Pledge restriction.
III. Matters of Regulatory Procedure
Administrative Procedure Act
Interested persons are invited to submit written comments on this
proposed amendatory rulemaking, to be received by November 14, 2011.
The comments will be carefully considered and any appropriate changes
will be made before a final rule is adopted and published in the
Federal Register by OGE.
Regulatory Flexibility Act
As Acting Director of OGE, I certify under the Regulatory
Flexibility Act (5 U.S.C. chapter 6) that this proposed rule will not
have a significant economic impact on a substantial number of small
entities because it primarily affects Federal employees.
Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
to this proposed rule because it does not contain an information
collection requirement that requires the approval of the Office of
Management and Budget.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
chapter 25, subchapter II), this proposed amendatory rule will not
significantly or uniquely affect small governments and will not result
in increased expenditures by State, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more (as
adjusted for inflation) in any one year.
Congressional Review Act
The Office of Government Ethics has determined that this proposed
rulemaking involves 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 U.S. Senate, House of
Representatives and General Accounting Office in accordance with that
law.
Executive Order 12866 and Executive Order 13563
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated a ``significant regulatory
action'' although not economically significant, under section 3(f) of
Executive Order 12866. Accordingly, the rule has been reviewed by the
Office of Management and Budget.
Executive Order 12988
As Acting Director of the Office of Government Ethics, I have
reviewed this proposed amendatory regulation in light of section 3 of
Executive Order 12988, Civil Justice Reform, and certify that it meets
the applicable standards provided therein.
List of Subjects in 5 CFR Part 2635
Conflict of interests, Executive branch standards of ethical
conduct, Government employees.
Approved: September 7, 2011.
Don W. Fox,
Acting Director, Office of Government Ethics.
Accordingly, for the reasons set forth in the preamble, the Office
of Government Ethics is proposing to amend part 2635 of subchapter B of
chapter XVI of title 5 of the Code of Federal Regulations, as follows:
PART 2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE
EXECUTIVE BRANCH
1. The authority citation for part 2635 is revised 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; E.O. 13490, 74 FR 4673, 3 CFR, 2009 Comp., p. 193.
Subpart B--Gifts From Outside Sources
2. Section 2635.202 is amended by adding, new paragraph (c)(6) and
a new paragraph (d), as follows:
Sec. 2635.202 General standards.
* * * * *
(c) Limitations on use of exceptions. * * *
* * * * *
(6) Accept a gift from a registered lobbyist or lobbying
organization, unless
[[Page 56339]]
pursuant to paragraphs (b), (c), (d), (e), (f), (j), (k) and (l) of
Sec. 2635.204.
(d) Other prohibition applicable to full-time, non-career
appointees. In addition to the general prohibitions set forth in
paragraph (a) of this section pertaining to gifts from a prohibited
source and gifts given because of an employee's official position, a
full-time, non-career appointee who is required to sign the Ethics
Pledge prescribed by section 1 of Executive Order 13490 shall not
accept a gift from a registered lobbyist or lobbying organization,
except pursuant to paragraphs (b), (c), (e)(1), (e)(3), (j), (k), or
(l) of Sec. 2635.204.
3. Section 2635.203 is amended by adding new paragraphs (h) and
(i), as follows:
Sec. 2635.203 Definitions.
* * * * *
(h) Registered lobbyist or lobbying organization means a person
(including an organization) currently registered pursuant to 2 U.S.C.
1603 (Lobbying Disclosure Act) or listed as a lobbyist in such
registration, as found in the databases maintained by the Secretary of
the Senate and the Clerk of the House of Representatives, but it does
not include:
(1) An organization exempt from taxation pursuant to 26 U.S.C.
501(c)(3);
(2) An institution of higher education as defined in 20 U.S.C.
1001;
(3) A media organization as defined in 2 U.S.C. 1602(11), with
respect to any gift made in connection with the information gathering
or dissemination activities of the organization; or
(4) A nonprofit professional association, scientific organization
or learned society, with respect to any gift made in connection with
the entity's educational or professional development activities.
Note to paragraph (h): The Secretary of the Senate and the
Clerk of the House of Representatives maintain searchable, online
databases of registrants and lobbyists, pursuant to 2 U.S.C.
1605(a). Employees may rely on the information contained in those
databases to determine whether any gift source currently is
registered or listed as a lobbyist. For these purposes, a registrant
will not be considered to be currently registered if the person has
filed a termination of registration. Similarly, a lobbyist will not
be considered to be currently listed if the individual has been de-
listed by his or her employer as an active lobbyist reflecting the
actual cessation of the individual's lobbying activities, or if the
individual has not appeared on a quarterly lobbying report for three
consecutive quarters as a result of the individual's actual
cessation of lobbying activities. With respect to organizations that
have subsidiaries, parents or affiliates that are separate legal
entities, employees need only determine the registration status of
the entity that offered the gift.
(i) Full-time, non-career appointee includes every full-time, non-
career Presidential or Vice-Presidential appointee, non-career
appointee in the Senior Executive Service (or other SES-type system),
and appointee to a position that has been excepted from the competitive
service by reason of being of a confidential or policymaking character
(Schedule C and other positions excepted under comparable criteria). It
does not include a career appointee in the Senior Foreign Service or
similar system, nor does it include any person appointed solely as a
uniformed service commissioned officer.
[FR Doc. 2011-23311 Filed 9-12-11; 8:45 am]
BILLING CODE 6345-03-P