[Federal Register Volume 79, Number 1 (Thursday, January 2, 2014)]
[Rules and Regulations]
[Pages 1-2]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30668]



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 Rules and Regulations
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  Federal Register / Vol. 79, No. 1 / Thursday, January 2, 2014 / Rules 
and Regulations  

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OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2641

RIN 3209-AA14


Post-Employment Conflict of Interest Regulations; Exempted Senior 
Employee Positions

AGENCY: Office of Government Ethics (OGE).

ACTION: Final rule; revocation of exemptions.

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SUMMARY: The Office of Government Ethics is issuing this final rule to 
provide notice of the revocation of certain regulatory exemptions of 
senior employee positions at the Securities and Exchange Commission 
from certain criminal post-employment restrictions.

DATES: This rule is effective without further notice on April 2, 2014.

FOR FURTHER INFORMATION CONTACT: Christopher J. Swartz, Assistant 
Counsel, Ethics Law & Policy Branch, Office of Government Ethics; 
telephone: 202-482-9300; TTY: 800-877-8339; FAX: 202-482-9237.

SUPPLEMENTARY INFORMATION:

I. Substantive Discussion: Background and Revocation of Exemptions for 
Certain Positions

    18 U.S.C. 207(c) prohibits a former ``senior employee'' for a 
period of one year from knowingly making, with the intent to influence, 
any communication to or appearance before an employee of the department 
or agency in which he served in any capacity during the one-year period 
prior to termination from senior service, if that communication or 
appearance is made on behalf of any other person, except the United 
States. For purposes of 18 U.S.C. 207(c), a ``senior employee'' 
includes, inter alia, any employee (other than an individual covered by 
the ``very senior employee'' one-year restriction in 18 U.S.C. 207(d)) 
who was employed in a position for which the rate of pay is specified 
in or fixed according to the Executive Schedule, in a position for 
which the rate of basic pay is equal to or greater than 86.5 percent of 
the rate of basic pay payable for level II of the Executive Schedule, 
or in a position which is held by an active duty commissioned officer 
of the uniformed services who is serving in a grade or rank for which 
the pay grade is O-7 or above.
    The representational bar of 18 U.S.C. 207(c) usually applies to all 
senior positions. However, 18 U.S.C. 207(c)(2)(C) provides that the 
Director of OGE may exempt any position or category of positions from 
the one-year prohibition under 18 U.S.C. 207(c) (and consequently the 
prohibition of 18 U.S.C. 207(f)), if the Director determines, after a 
review requested by the department or agency concerned, that the 
imposition of the restrictions with respect to the particular position 
or positions would create an undue hardship on the department or agency 
in obtaining qualified personnel to fill such position or positions, 
and that granting the waiver would not create the potential for use of 
undue influence or unfair advantage.
    The Director of OGE regularly reviews these position exemptions 
and, in consultation with the department or agency concerned, makes 
such additions and deletions as are necessary. As specified in 5 CFR 
2641.301(j)(3)(ii), the Director must respond to exemption and 
revocation requests from agency ethics officials and maintain a 
compilation of all exempted positions or categories of positions. Once 
an exemption has been granted, the Designated Agency Ethics Official at 
the relevant agency may, at any time, request that the exemption be 
revoked. See 5 CFR 2641.301(j)(3)(i). Under 5 CFR 2641.301(j)(4), the 
revocation of a waiver becomes effective 90 days after OGE has 
published notice of the revocation in the Federal Register. If a 
revocation is granted, all employees occupying positions covered by the 
exemption will become subject to the prohibitions of 18 U.S.C. 207(c) 
and (f) as of the effective date. However, any ``[i]ndividual who 
formerly served in a position for which a waiver of restrictions was 
applicable will not become subject to 18 U.S.C. 207(c) (or section 
207(f)) if the waiver is revoked after [the employee's] termination 
from the position.'' See 5 CFR 2641.301(j)(4) (emphasis added).
    In 1991, the Securities and Exchange Commission (SEC) requested, 
and was granted, exemptions for the positions of Solicitor, Office of 
the General Counsel and Chief Litigation Counsel, Division of 
Enforcement. In 2003, the SEC requested and was granted additional 
exemptions for the position of Deputy Chief Litigation Counsel, 
Division of Enforcement, SK-17 Positions, SK-16 and lower-graded SK 
positions supervised by employees in SK-17 positions, and SK-16 and 
lower-graded SK positions not supervised by employees in SK-17 
positions. These exemptions were predicated on recruitment and 
retention considerations resulting from the implementation of a new pay 
system that converted many GS-15 positions into ``senior employee'' 
positions above the statutory pay threshold.
    Pursuant to the procedures prescribed in 5 CFR 2641.301(j), in June 
2013, the SEC requested that the Director of OGE revoke the exemptions 
for these positions. In support of its request, the SEC explained that 
the original bases for these exemptions no longer existed. In 
particular, the SEC indicated that it was no longer experiencing undue 
hardship in obtaining qualified personnel to fill the covered 
positions. Furthermore, the SEC indicated that discontinuing the 
exemptions would create parity between SEC employees occupying the 
covered positions and employees in similar positions at other financial 
regulatory agencies who are currently subject to the one year cooling-
off prohibitions of 18 U.S.C. 207(c) and (f). For these reasons, the 
SEC no longer believed these exemptions to be necessary or desirable. 
Therefore, pursuant to 5 CFR 2641.301(j), OGE granted SEC's request, 
and on October 3, 2013, published notice in the Federal Register, at 78 
FR 61153, revoking those exemptions and amending the listing of 
exempted positions maintained by OGE in Appendix A to part 2641 of 
title 5.
    Following publication, but prior to the effective date, the SEC 
requested that OGE withdraw and rescind its publication of October 3, 
2013, to allow the SEC more time to effectively educate affected 
employees before the exemption revocation took effect. OGE agreed, and 
on November 25, 2013, OGE

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withdrew and rescinded the notice of revocation and final rule amending 
Appendix A to part 2641 of title 5. See 78 FR 70191. In the withdrawal 
notice, OGE indicated that it planned to republish this notice and 
final rule in January 2014.
    Accordingly, OGE is now republishing that notice and final rule. 
OGE hereby gives notice that the above-referenced post-employment 
exemptions, granted on October 29, 1991; November 10, 2003; and 
December 4, 2003, respectively, will expire and are revoked effective 
on April 2, 2014. As of the effective date, a person occupying any one 
of these positions will become subject to the post-employment 
restrictions of 18 U.S.C. 207(c) and (f) if the rate of basic pay for 
the position is equal to or greater than 86.5 percent of the rate of 
basic pay payable for level II of the Executive Schedule.
    As stated in 5 CFR 2641.301(j)(3)(ii), the Director of OGE is 
required to ``maintain a listing of positions or categories of 
positions in Appendix A to [5 CFR part 2641] for which the 18 U.S.C. 
207(c) restriction has been waived.'' As such, Appendix A of this part 
is being amended to remove references to those SEC positions that are 
no longer exempt from the restrictions of 18 U.S.C. 207(c) and (f). 
These positions include: Solicitor, Office of General Counsel; Chief 
Litigation Counsel, Division of Enforcement; Deputy Chief Litigation 
Counsel, Division of Enforcement; SK-17 Positions; SK-16 and lower-
graded SK positions supervised by employees in SK-17 positions; and SK-
16 and lower-graded SK positions not supervised by employees in SK-17 
positions.

II. Matters of Regulatory Procedure

Administrative Procedure Act

    Pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 
553(b), OGE finds good cause to waive the notice-and-comment 
requirements of the APA, as the codification of OGE's revocation of 
exempted positions is technical in nature, and it is important and in 
the public interest that the codification of OGE's revocation of 
exempted positions be published in the Federal Register as promptly as 
possible. For these reasons, OGE is issuing this regulation as a final 
rule effective 90 days after publication.

Regulatory Flexibility Act

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

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply 
because this regulation does not contain information collection 
requirements that require 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 5, subchapter II), this final rule would 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.

Executive Order 12866

    In promulgating this final rule, the Office of Government Ethics 
has adhered to the regulatory philosophy and the applicable principles 
of regulation set forth in section 1 of Executive Order 12866, 
Regulatory Planning and Review. This rule has not been reviewed by the 
Office of Management and Budget under that Executive order since it is 
not ``significant'' under the order.

Executive Order 12988

    As Director of the Office of Government Ethics, I have reviewed 
this final rule 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 2641

    Conflict of interests, Government employees.

    Approved: December 18, 2013.
Walter M. Shaub, Jr.,
Director, Office of Government Ethics.

    Accordingly, for the reasons set forth in the preamble, the Office 
of Government Ethics is amending part 2641 of subchapter B of chapter 
XVI of title 5 of the Code of Federal Regulations as follows:

PART 2641--POST-EMPLOYEMENT CONFLICT OF INTEREST RESTRICTIONS

0
1. The authority citation for part 2641 continues to read as follows:

    Authority:  5 U.S.C. App. (Ethics in Government Act of 1978); 18 
U.S.C. 207; 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.

Appendix A to Part 2641 [Amended]

0
2. Appendix A to part 2641 is amended by removing the listing for the 
Securities and Exchange Commission (and all positions thereunder).

[FR Doc. 2013-30668 Filed 12-31-13; 8:45 am]
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