[Federal Register Volume 81, Number 24 (Friday, February 5, 2016)]
[Rules and Regulations]
[Pages 6159-6169]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01318]



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  Federal Register / Vol. 81, No. 24 / Friday, February 5, 2016 / Rules 
and Regulations  

[[Page 6159]]



DEPARTMENT OF HOMELAND SECURITY

5 CFR Chapter XXXVI

[Docket No. DHS-2008-0168]
RINs 1601-AA17, 3209-AA15


Supplemental Standards of Ethical Conduct for Employees of the 
Department of Homeland Security

AGENCY: Office of the Secretary, Department of Homeland Security.

ACTION: Final rule.

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

SUMMARY: The Department of Homeland Security (DHS), with the 
concurrence of the U.S. Office of Government Ethics (OGE), is 
finalizing this rule to supplement the OGE Standards of Ethical Conduct 
for Employees of the Executive Branch (OGE Standards) for DHS 
employees. These regulations supplement the OGE Standards and, among 
other things, set forth employee restrictions on the purchase of 
certain Government-owned property; require employees to report 
allegations of waste, fraud, and abuse; require employees to seek prior 
approval for certain outside employment and activities; prohibit 
employees in some DHS components from engaging in certain types of 
outside employment activities; and require designated components to 
develop instructions regarding the procedures for obtaining prior 
approval for outside employment and activities. These regulations also 
designate components within DHS as separate agencies for purposes of 
determining whether the donor of a gift is a ``prohibited source'' and 
of identifying an employee's agency for the regulations governing 
teaching, speaking, and writing. This rulemaking is necessary in view 
of DHS programs and operations; DHS is comprised of numerous legacy 
agencies which have varying or no supplemental ethics regulations. This 
final rule follows publication of a proposed rule on October 12, 2011. 
We considered public comments on the proposed rule while revising this 
final rule. This final rule includes revisions to the definition of 
``outside employment'' and the additional provisions applicable only to 
employees of the U.S. Customs and Border Protection and U.S. 
Immigration and Customs Enforcement.

DATES: This rule is effective March 7, 2016.

ADDRESSES: Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
are part of docket DHS-2008-0168 and are available for inspection or 
copying from the Internet by going to http://www.regulations.gov, 
inserting DHS-2008-0168 in the ``SEARCH'' box, and then clicking 
``SEARCH.''

FOR FURTHER INFORMATION CONTACT: Ferne L. Mosley, Deputy Ethics 
Official, Department of Homeland Security, 202-447-3302, email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Regulatory History
III. Discussion of NPRM Comments
    A. Comments Regarding the Proposed Definition of ``Outside 
Employment''
    B. Comments Regarding the Proposed Prior Approval Requirement
    C. Comments Regarding Manuals or Instructions on Implementing 
the Prior Approval Requirement
    D. Comments Regarding the Standard of Review of Outside 
Employment and Activity Requests
    E. Comments Regarding Outside Employment Restrictions Specific 
to CBP
    F. Comments Regarding Outside Employment Restrictions Specific 
to ICE
    G. Comments Regarding the Requirement To Report Waste, Fraud, 
Abuse and Corruption
    H. Other Comments
IV. Discussion of Final Rule
    A. 5 CFR 4601.101 General
    B. 5 CFR 4601.102 Designation of DHS Components as Separate 
Agencies
    C. 5 CFR 4601.103 Prior Approval for Outside Employment and 
Activities
    D. 5 CFR 4601.104 Additional Rules for CBP Employees
    E. 5 CFR 4601.105 Additional Rules for FEMA Employees
    F. 5 CFR 4601.106 Additional Rules for ICE Employees
    G. 5 CFR 4601.107 Prohibited Purchases of Property
    H. 5 CFR 4601.108 Reporting Waste, Fraud, Abuse, and Corruption
V. Regulatory Analyses
    A. Executive Orders 12866 and 13563
    B. Small Entities/Regulatory Flexibility Act

Table of Acronyms

CBP U.S. Customs and Border Protection
CDEO Chief Deputy Ethics Official
CFR Code of Federal Regulations
DAEO Designated Agency Ethics Official
DHS Department of Homeland Security
FEMA Federal Emergency Management Agency
ICE U.S. Immigration and Customs Enforcement
NPRM Notice of Proposed Rulemaking
OGE U.S. Office of Government Ethics
U.S.C. United States Code
Sec.  Section Symbol

I. Background

    On August 7, 1992, the U.S. Office of Government Ethics (OGE) 
issued a final rule setting forth the uniform Standards of Ethical 
Conduct for Employees of the Executive Branch (OGE Standards), which, 
as corrected and amended, are codified at 5 CFR part 2635 (57 FR 
35006). Effective on February 3, 1993, the OGE Standards established 
uniform ethics 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. Prior to the creation of DHS, several legacy agencies were 
operating under supplemental ethics regulations issued by their former 
parent departments. The regulations finalized in this action will 
advance the purposes of the OGE Standards. Some outside employment 
interests and activities, if held by employees of certain Department of 
Homeland Security (DHS) components, could cause a reasonable person to 
question an employee's impartiality and objectivity. Particularly in 
view of the breadth of DHS's programs and operations, and because DHS 
is comprised of numerous legacy components with varying or no 
supplemental ethics regulations, this action is both necessary and 
appropriate. This rule will require prior approval of certain outside 
employment and activities to avoid potential conflicts of interest. 
This rule will also

[[Page 6160]]

prohibit conflicting outside employment activities in certain 
components.

II. Regulatory History

    On October 12, 2011, DHS, with OGE's concurrence, published for 
comment a notice of proposed rulemaking (NPRM) to supplement the OGE 
Standards for DHS employees. 76 FR 63206. The NPRM proposed 
supplemental ethics rules designed to implement uniform ethical 
requirements for all DHS employees, many of whom were previously 
employed by 22 other Executive branch departments and agencies prior to 
DHS's formation in 2003. The NPRM also proposed certain ethical 
requirements specific to certain DHS components based on the nature of 
their programs and operations. Specifically, the NPRM proposed to (1) 
set forth employee restrictions on the purchase of certain Government-
owned property; (2) require employees to report allegations of waste, 
fraud, and abuse; (3) require employees to seek prior approval for 
certain outside employment and activities; (4) prohibit employees in 
some DHS components from engaging in certain types of outside 
employment activities; (5) require designated components to develop 
instructions regarding the procedures for obtaining prior approval for 
outside employment and activities; and (6) designate components within 
DHS as a separate agency for purposes of determining whether the donor 
of a gift is a ``prohibited source'' and of identifying an employee's 
agency for the regulations governing teaching, speaking, and writing. 
These proposals sought to strengthen the integrity of DHS programs and 
operations and give the public greater confidence that DHS employees 
are held to a high standard of ethical behavior while carrying out 
DHS's missions. For a more complete discussion of the proposals in the 
NPRM, please refer to the preamble of that document available in the 
public docket for this rulemaking and in the Federal Register at 76 FR 
63206.
    By the close of the NPRM's public comment period on December 12, 
2011, DHS received 12 comment letters. Eight of the commenters 
expressed concern that the NPRM's definition of ``outside employment'' 
was overly broad. Some commenters stated that the definition impeded 
the constitutional rights and lawful political activities of DHS 
employees. Other commenters addressed the necessity for the rule, 
specifically the requirement to seek prior approval for outside 
activities and employment; the requirement for employees to report 
waste, fraud, abuse, and corruption; and the amount of government 
resources and time required to implement the rule's provisions. Other 
commenters generally sought clarification on the impact the rule will 
have on employees serving as U.S. Coast Guard reservists and reservists 
in other military services, as well as the rule's effect on official 
employee interactions with non-Federal entities. There were also 
comments on the agency-specific proposed regulations for employees of 
U.S. Customs & Border Protection (CBP) and U.S. Immigration & Customs 
Enforcement (ICE) components, regarding the broad nature of the 
prohibited outside employment and activities for these employees and 
how this might affect an employee's ability to engage in certain 
routine consumer transactions. In the next section, we discuss the 
public comments in greater detail and provide DHS responses.

III. Discussion of NPRM Comments

A. Comments Regarding the Proposed Definition of ``Outside Employment''

    Comment: One commenter stated that the definition of ``outside 
employment'' should only include employment and activities that 
directly relate to an employee's official duties, because outside 
positions that are unrelated to the employee's duties will not present 
a conflict of interest. The commenter stated that any activity with a 
non-profit organization should be excluded from the definition, even if 
the activity is compensated.
    DHS Response: DHS disagrees. DHS notes that matters that are 
``related to'' the DHS mission or even the employee's official duties 
are not always obvious or intuitive. For example, employees may not 
necessarily be aware of broader DHS mission involvement, grant 
programs, regulatory activities, and the like, which may apply to non-
profit organizations. Moreover, there are occasions when holding a 
fiduciary or compensated position with a non-profit organization, or 
providing personal services to such an organization, may indeed create 
a criminal conflict of interest for an employee. This is true even if 
the non-profit organization's mission does not relate to the employee's 
duties or the programs of the employee's agency.
    For example, all Federal employees are prohibited by criminal 
statute from acting as an agent or attorney on behalf of another in a 
matter in which the United States is a party or has a direct and 
substantial interest before any officer, employee, or court of the 
United States. See 18 U.S.C. 205(a)(2). This rule applies regardless of 
whether the representation relates to the federal employee's assigned 
duties. Accordingly, under one possible scenario, a DHS employee who 
submits a grant application to another government agency in the 
employee's capacity as a board member of a non-profit organization 
would violate a criminal law by signing and submitting the application. 
Additionally, an employee who accepts compensation for such an activity 
would also violate another criminal statute, 18 U.S.C. 203, which 
prohibits employees from accepting compensation for certain 
representational activities before a Federal agency or court. These 
prohibitions also apply to employees holding positions with for-profit 
companies. The above scenario provides an illustration of the rationale 
behind requiring DHS employees to generally obtain prior approval to 
engage in outside employment and activities, and why we are not 
limiting the prohibition on outside employment to activities directly 
related to an employee's official duties or exempting all positions 
with non-profit organizations. These provisions not only help manage 
DHS's ethics program, they also protect employees from inadvertent 
violations of the law. Outside employment and activities--even those 
that appear to be unrelated to DHS's mission or the employee's duties--
may create conflicts of interest or present other ethical 
considerations.
    Comment: Two commenters raised constitutional concerns that the 
definition of ``outside employment,'' to the extent that it may include 
a prior approval requirement for speaking and writing on matters of 
public concern, acted as a prior restraint on free speech. One 
commenter expressed concern that the prior approval requirement for 
speaking, teaching, writing, and political activity would by its nature 
delay the employee's ability to engage in such activities, and that all 
DHS employees would need to obtain prior approval for almost any 
expressive activity undertaken for compensation, including articles or 
speeches on matters of public concern unrelated to DHS's mission of the 
employees' duties. Another commenter expressed concern that writing 
personal letters to a newspaper editor or engaging in social media 
activities and blogging would be deemed to be an activity ``under an 
arrangement with another person,'' which would fall under the prior 
approval requirement.
    DHS Response: The definition proposed in the NPRM was not intended 
to unconstitutionally restrict speech or expression. DHS does not view 
personal, uncompensated

[[Page 6161]]

expressions of opinion, such as writing letters to newspaper editors or 
social media or blogging activities, as being done under an 
``arrangement with another person'' for purposes of the supplemental 
DHS ethics regulations. DHS did not intend to require prior approval to 
engage in these types of uncompensated, personal expressions. 
Additionally, DHS did not intend these regulations to adversely impact 
an employee's ability to engage in or abstain from political activities 
permitted by the Hatch Act, 5 U.S.C. 7321-7326, that Act's related 
regulations, or relevant Executive branch policy. Such expressions are 
generally not the types of activities that would create a conflicting 
financial interest. These expressive activities are also not likely to 
involve a relationship for an employee that, under the OGE Standards, 
would result in an employee's disqualification from participating in an 
official capacity or cause a reasonable person to question an 
employee's impartiality, or otherwise amount to a conflicting outside 
employment or activity. To address the concerns raised by these 
commenters, this final rule narrows the definition of ``outside 
employment'' from what we proposed in the NPRM. Specifically, this 
final rule exempts ``speaking and writing'' from the definition of 
``outside employment,'' provided that these activities are not combined 
with the provision of additional services that otherwise fall within 
the definition. The revised language also refers employees to the 
existing regulations at 5 CFR 2635.807 for further guidance on the 
limitations for accepting compensation for speaking and writing 
activities done in a personal capacity. The final rule retains 
``teaching'' in the definition of ``outside employment,'' even though 
most teaching fits within the exceptions outlined in the OGE Standards.
    Comment: Two commenters raised concerns that the proposed 
definition of ``outside employment'' seemed to include uncompensated 
speaking. The commenters also suggested that DHS should differentiate 
between an employee speaking or writing as a representative of the 
agency as opposed to speaking or writing on the employee's own behalf 
for compensation. The commenters further suggested that the two 
exclusions should appear in the regulatory text within the relevant 
section under separate numbers or other designation.
    DHS Response: DHS agrees that in general, personal expressions such 
as writing letters to the editor and other uncompensated speaking and 
writing activities, should not be covered as ``outside employment or 
activity.'' As explained above, this final rule revises the definition 
of ``outside employment'' from that in the NPRM to generally exempt 
``speaking and writing'' unless it otherwise falls under the 
definition. The revised language also refers employees to the existing 
regulations in 5 CFR 2635.807 for further guidance on the limitations 
for accepting compensation for teaching, speaking and writing 
activities done in a personal capacity.
    Comment: Some commenters raised concerns that the proposed 
definition of ``outside employment'' would impact an employee's ability 
to interact with, prepare materials for, and/or speak to non-Federal 
entities and other organizations in an employee's official capacity.
    DHS Response: DHS disagrees. The regulation states that it applies 
to outside employment and activities, which does not include an 
employee's activities in an official DHS capacity. DHS acknowledges 
that these comments might have been precipitated due to confusion 
created by an errant reference in the proposed rule to 5 CFR 2635.802 
(``relates to an employee's official duties''). This final rule 
contains a corrected reference that appropriately cites to 5 CFR 
2635.807.
    Comment: One commenter stated that the prior approval requirement 
violates employees' privacy, and suggested that the definition of 
``outside employment'' should contain a list that specifically excludes 
certain types of outside employment and activities that would never be 
a conflict for an employee (e.g., a holiday job at a retail store). The 
commenter also suggested that DHS should not require prior approval for 
certain types of employment and other activities. Finally, the 
commenter suggested that DHS should identify, in advance, types of 
employment and other activities that are always prohibited.
    DHS Response: DHS declines to carve out from the ``outside 
employment'' definition and the prior approval requirement additional 
categories of outside employment and activities because the employment 
or activity would never pose an ethical conflict for any DHS employee. 
It is not always obvious or intuitive that a certain type of outside 
employment activity presents an ethical conflict. To adopt the 
commenter's scenario, working at a retail establishment may indeed pose 
a conflict for a DHS employee. For example, ethics rules would prohibit 
outside employment at certain retail stores for ICE employees who 
inspect retail facilities for immigration violations, or other DHS 
employees with official responsibilities for immigration and employment 
verification policies applicable to the retail industry. Although DHS 
does not find sufficient justification to support a broad exclusion for 
retail employment as the commenter suggested, the rule does provide DHS 
components with the discretion to exempt this type of activity under 
their implementing policies based on each component's unique mission. 
As a result, some types of outside employment or activities may be 
excluded by an individual component's implementing instructions.
    Regarding the commenter's other suggestion, although some DHS 
components (specifically, CBP, FEMA, and ICE) have determined that 
certain types of outside employment and other activities should be 
prohibited, those determinations do not apply DHS-wide. For example, 
there is no basis for broadly extending the prohibition on CBP 
employees from working for a customs broker to the employees of other 
DHS components whose missions do not involve customs. Moreover, it is 
not possible to anticipate all types of outside employment and other 
activities that might create a potential conflict. Accordingly, this 
final rule does not adopt the commenter's suggestion for a blanket list 
of prohibited employment or activities, because such a list would 
likely result in overly-broad restrictions for all DHS employees.

B. Comments Regarding the Proposed Prior Approval Requirement

    Comment: One commenter stated that the prior approval requirement 
was unnecessary, stating that DHS employees are ``fully capable of 
determining for themselves whether an activity would conflict with 
their official responsibilities or otherwise adversely affect DHS, or 
create the appearance of impropriety.'' The commenter also stated that 
employees would voluntarily seek ethics advice without a prior approval 
requirement, thus rendering the requirement moot.
    DHS Response: DHS disagrees. Requiring an ethics review is a low-
cost mechanism for avoiding serious consequences that may accrue to 
employees who would otherwise inadvertently run afoul of the rules. 
Employees are often not aware of all applicable ethics statutes, 
regulations, and OGE guidance that may be implicated when engaging in 
outside employment or activities. The OGE Standards establish that 
agencies carry out an ethics program competent to ensure the 
fundamental objectives of providing employees with informed and 
objective guidance. DHS ethics counselors serve as a resource for

[[Page 6162]]

employees and provide employees with guidance and legal opinions in 
order to ensure that employees are aware of and follow the relevant 
ethics regulations and conflict of interest statutes. Many of the 
ethics rules, including ones that may be implicated by outside 
employment and activities, include criminal penalties. Violations of 
these laws may carry civil and criminal penalties and may result in 
termination of employment. In addition, an employee who seeks an 
opinion from an agency ethics official and has made full disclosure of 
all relevant circumstances, and relies in good faith on such an opinion 
is shielded, at a minimum, from agency administrative action. See 5 CFR 
2635.107(b).
    Although many employees voluntarily seek the guidance of an agency 
ethics official before engaging in outside employment or activities, 
some conflicts may not be obvious to employees, thereby putting them at 
unnecessary risk for potential conflicts or violations of the law. 
Therefore, a regulatory requirement for employees to obtain prior 
approval for outside employment and other activities is not only in the 
best interest of DHS and the public, it will also help protect 
employees from inadvertent missteps.
    Comment: One commenter stated that a prior approval requirement 
would be a waste of time and create unnecessary paperwork. The 
commenter also questioned DHS's motives for the prior approval 
requirement.
    DHS Response: For the reasons stated above, the prior approval 
requirement will help protect DHS's interest in the integrity of its 
programs by creating a mechanism to affirmatively provide substantive 
guidance to employees in an effort to avoid potential conflicts of 
interest. The prior approval requirement will also help employees 
comply with the laws governing employee ethics. This prior approval 
requirement is consistent with similar requirements promulgated by 
other cabinet-level departments.
    Additionally, DHS has determined that a uniform prior approval 
requirement in the DHS supplemental ethics regulations is important for 
establishing and maintaining consistency in the DHS ethics program. The 
rule will eliminate discrepancies between certain DHS employees 
previously employed by legacy agencies, who are covered by the legacy 
agency's ethics rules, and employees hired after DHS was created, who 
had not previously been covered by a supplemental ethics regulation. 
This rule will cover all DHS employees.
    Comment: One commenter stated that proposed section 4601.103(a) was 
overbroad and exceeded the DHS and OGE's legal authority to establish 
the prior approval requirement. The commenter characterized the NPRM as 
requiring prior approval for ``all types of activities.''
    DHS Response: DHS disagrees. The prior approval requirement applies 
only to certain types of outside employment and activities as defined 
in the rule. Additionally, section 404 of title 5 App., United States 
Code (U.S.C.) grants OGE the authority to promulgate regulations that 
govern the ethical conduct of Executive branch employees. Further, 5 
CFR 2635.803 permits agencies to require employees to obtain prior 
approval before engaging in certain outside employment or activities.
    Comment: One commenter was concerned that the prior approval 
requirement would have the unintended consequence of requiring members 
of the military (e.g., Army and Air National Guard) to obtain prior 
approval to engage in military service.
    DHS Response: DHS does not intend to require members of the 
military to seek and obtain prior approval before engaging in military 
service. In response to this comment and to avoid any confusion, this 
final rule includes a revised definition of ``outside employment or 
activity'' that specifically excludes military service.
    Comment: One commenter questioned whether the rule would require 
U.S. Coast Guard reservists to obtain prior approval for their full-
time civilian jobs.
    DHS Response: DHS wishes to clarify that a U.S. Coast Guard 
reservist who is on voluntary active duty for a period in excess of one 
hundred and thirty days is considered to be a DHS employee and will be 
subject to the prior approval requirement for outside employment or 
activities. A U.S. Coast Guard reservist who is on active duty solely 
for training or who is involuntarily serving is considered to be a 
``Special Government Employee'' and is not subject to the prior 
approval requirement; the majority of reservists fall into one of these 
latter categories. Accordingly, this rulemaking should have a minimal 
impact on the majority of U.S. Coast Guard reservists.
    Additionally, this final rule requires DHS components to issue 
component-specific instructions or a manual that governs employee 
requests for approval of outside employment or activities. The U.S. 
Coast Guard may address matters such as the one raised by the commenter 
in its instructions or manual.
    Comment: One commenter argued that the prior approval requirement 
will strain the resources of DHS ethics offices.
    DHS Response: DHS disagrees. DHS is aware that this final rule will 
result in employee requests for prior approval of outside employment or 
activities to be reviewed by ethics officials at DHS headquarters and 
at the components. Based on the experience of DHS ethics officials, a 
number of these employee requests will involve outside employment or 
activities that require minimal analysis, are already excluded from the 
regulatory definition of ``outside employment,'' or are (or will be) 
addressed in the relevant component-specific instructions or manual. 
For employee requests that require more detailed analysis by DHS ethics 
officials, DHS expects the prior approval process to help employees 
avoid engaging in prohibited outside employment or activities. As a 
result, DHS employees and ethics officials will encounter fewer 
actualized conflict situations, which DHS expects will offset any 
increased initial time investment on the part of DHS ethics officials 
to process employee requests for prior approval.

C. Comments Regarding Manuals or Instructions on Implementing the Prior 
Approval Requirement

    Comment: One commenter noted that the proposed rule did not discuss 
the particulars of the publication of a ``manual'' and expressed 
concern regarding non-publication within the specified timeline.
    DHS Response: DHS wishes to clarify that component manuals and 
instructions governing employee requests for approval of outside 
employment and activities will be internal DHS documents. In response 
to this comment, however, this final rule clarifies that the component 
instructions or manuals will be issued internally within 60 days of the 
publication of the final rule. Instructions will be issued consistent 
with each component's procedures for issuing internal instructions or 
manuals affecting its employees. Further, the regulation as finalized 
also states that, ``in the absence of a manual or instruction 
identifying a person designated to act upon a request for approval for 
outside employment, the Chief Deputy Ethics Official at each agency 
shall act upon a request.'' The proposed rule already provided 
instruction on how outside employment requests are to be processed 
before a specific DHS component has issued its internal instruction or 
manual.
    Comment: One commenter was concerned that subsequent internal

[[Page 6163]]

agency instructions may require employees to seek prior approval for 
all types of outside employment, even when the definition in the rule 
generally excludes charitable agencies.
    DHS Response: DHS notes that the text of 5 CFR 4601.103(c)(2) 
states that, ``agencies may include in their instructions or manual 
examples of outside employment or activities that are permissible or 
prohibited consistent with 5 CFR part 2635 and this part'' (emphasis 
added). Accordingly, a DHS component's instructions may not require 
prior approval for any activities and employment that do not already 
fall under the regulatory definition of ``outside employment'' and the 
exclusions in 5 CFR 4601.102(d). For example, because the definition in 
the rule excludes activities or personal services with non-profit 
organizations that are non-fiduciary and uncompensated, a DHS 
component's instructions may not include this type of activity as one 
requiring prior approval in an agency instruction; to do so would 
require employees to seek prior approval for employment and activities 
that are inconsistent with regulatory definition of ``outside 
employment.'' Moreover, to help ensure consistency with the applicable 
regulations, the DHS Designated Agency Ethics Official (DAEO) must 
review and approve the relevant component manuals and instructions 
prior to issuance.

D. Comments Regarding the Standard of Review of Outside Employment and 
Activity Requests

    Comment: One commenter suggested that DHS adopt the standard that 
it will approve requests for outside employment unless there is a 
showing that the activity will involve prohibited conduct.
    DHS Response: DHS agrees. This final rule changes the standard in 
the proposed rule, which had provided that DHS would approve outside 
employment requests only upon a determination that the activity does 
not involve prohibited conduct. The final standard requires DHS to 
grant permission to engage in the activity unless the conduct is 
prohibited by law or regulation, including 5 CFR part 2635 and this 
part. Considering the rights of employees to engage in activities and 
employment on their own time within the confines of the law, this 
revised standard still requires the reviewing official(s) to make an 
affirmative determination that the proposed activity or employment does 
or does not create a conflict of interest with the employee's job or 
otherwise violate the law or ethical standards, so the integrity of the 
Department's programs will still be protected but the standard will not 
unduly restrict an employee's ability to participate in outside 
employment and other activities. This standard more accurately reflects 
the basis under the OGE Standards for determining whether an outside 
activity conflicts with an employee's official duties. See generally 5 
CFR part 2635, subpart H.
    Comment: One commenter suggested that there should be deadlines for 
DHS to act on outside employment requests.
    DHS Response: DHS disagrees. While DHS ethics officials consider 
the time sensitivities related to any request for ethics advice, these 
officials must sufficiently develop the facts surrounding each request 
in order to provide accurate ethics guidance. Setting uniform deadlines 
as the commenter suggests could hinder the provision of accurate ethics 
guidance. DHS also disagrees that a request not answered within a 
specific time frame should be presumed approved. This practice would 
not best serve the interests of DHS or its employees because potential 
ethics violations could subject an employee to criminal prosecution or 
administrative action and may disrupt ongoing operations. An employee 
who acts in good faith in reliance on an opinion from an agency ethics 
official, and has made full disclosure of all relevant circumstances, 
is protected from administrative action, and this reliance may also be 
a mitigating factor in instances of potential civil or criminal 
violations. An employee who acts without an opinion from an ethics 
official in violation of the law is not afforded such protection. 5 CFR 
2635.107(b). Accordingly, a standard that would permit an employee to 
act in the absence of guidance from an ethics official would undermine 
the purpose of the ethics program and the role of the agency's ethics 
officials to provide guidance to employees that prevents violations of 
the ethics laws and regulations.
    Comment: One commenter suggested that the rule should contain 
criteria for approval of outside employment and activities.
    DHS Response: DHS notes that the ethics regulations in 5 CFR 
2635.802 already contain criteria for approval of outside employment or 
any other outside activity (and outline the circumstances in which an 
employee's outside employment or activity conflicts with the employee's 
official duties).

E. Comments Regarding Outside Employment Restrictions Specific to CBP

    Comment: One commenter argued that the proposed rule's provisions 
specific to CBP would unnecessarily restrict CBP employees from 
engaging in outside employment or activities. Specifically, the 
commenter suggested that DHS clarify whether a CBP employee is 
prohibited from any employment by a company that engages in the listed 
activities, or only to the extent that the outside employment would 
relate to the prohibited activity. For example, the commenter inquired 
whether a CBP employee would be prohibited from outside employment at a 
law firm that conducts some customs business even if the outside 
employment activity is unrelated to the law firm's customs business.
    DHS Response: DHS disagrees with the commenter's suggestion that 
the proposed rule would unnecessarily restrict CBP employees from 
engaging in outside employment or activities. There are certain types 
of employment and activities that conflict with the official duties of 
CBP employees and, therefore, CBP employees are prohibited from such 
outside employment and activities in any circumstance. Accordingly, 5 
CFR 4601.104(a)(2) prohibits CBP employees from engaging in employment 
or business activities related to importing or exporting merchandise or 
agricultural products, or the entry or departure of persons into or out 
of the United States.
    In addition, there are certain types of employers with which the 
employment of a CBP employee would create a conflict, regardless of the 
nature of the employment activity. Thus, 5 CFR 4601.104(a)(1) prohibits 
a CBP employee from engaging in outside employment activities in 
support of or on behalf of certain types of entities that generally 
engage in business related to CBP missions (e.g., customs, immigration, 
agriculture), even if the CBP employee's actual outside employment 
activity at that entity would be apparently unrelated to any CBP 
mission. The rationale behind this latter prohibition is that 
employment in any capacity with such an entity would expose a CBP 
employee to an environment in which customs, immigration, and/or 
agriculture issues are discussed, and also where the employee may be 
queried or called upon for assistance because of the employee's 
affiliation with CBP. The potential risk in this environment of 
intermingling private and Federal interests constitutes a sufficient 
reason

[[Page 6164]]

to restrict such employment in any capacity with these entities 
engaging in operations regulated by CBP. Finally, we note that the 
Department of the Treasury supplemental ethics regulation included 
substantially the same restriction for former Customs Service employees 
prior to CBP's reorganization under DHS.
    Following review of the proposed regulatory text, DHS has included 
a number of revisions in this final rule. DHS intends the revisions to 
improve clarity without sacrificing important controls over potentially 
problematic employee activities.
    Comment: One commenter argued that the proposed restriction on CBP 
employees to privately engage in employment or activities related to 
the importation or exportation of merchandise is overly broad. 
Specifically, the commenter argued that the provision would prohibit 
CBP employees from: (1) Purchasing products online that would be 
shipped from outside the United States; (2) buying products while on 
vacation that would be shipped back to the United States; or (3) 
sending a non-monetary gift to a friend, relative, or charity outside 
the United States.
    DHS Response: DHS does not intend this provision to cover the types 
of personal transactions highlighted by the commenter. DHS intends the 
provision to cover outside employment in the nature of conducting 
transactions for a business purpose, not the personal use of an 
employee. In response to this comment, DHS has revised the regulatory 
language in this final rule so that it now includes the word 
``business'' to clarify that the restriction does not apply to personal 
transactions similar to those highlighted by the commenter.
    Additionally, in response to this comment, DHS conducted a broader 
review of the CBP provisions in the regulatory text to determine 
whether similar clarifications would be appropriate. As a result of 
that review, this final rule includes another revision to the provision 
that prohibits CBP employees from engaging in outside employment 
activities related to agriculture matters. As proposed, the rule would 
have generally restricted CBP employees from engaging in outside 
employment or activities with a business or other entity that engages 
in services related to ``agriculture matters.'' Regarding this 
regulatory provision, DHS only intends to restrict CBP employees from 
engaging with businesses or entities that deal with agricultural 
matters that relate to CBP's mission. To avoid restricting CBP employee 
involvement in such activities that would not conflict with their 
official duties or CBP's mission, this final rule includes clarifying 
language to that effect in the regulatory text.

F. Comments Regarding Outside Employment Restrictions Specific to ICE

    Comment: One commenter argued that the proposed restriction on ICE 
employees to privately engage in employment or activities related to 
the importation or exportation of merchandise is overly broad. 
Specifically, the commenter expressed concern that the rule as proposed 
would prohibit ICE employees from mailing: (1) Gifts to a relative 
overseas (or receiving gifts from overseas) since the package would 
require inspection; and (2) merchandise to a buyer overseas after a 
lawful online auction.
    DHS Response: Assuming that the commenter's examples are unrelated 
to the operation of a business by an employee, DHS does not intend the 
provision to cover the types of personal transactions highlighted by 
the commenter. DHS intends the rule to cover outside employment in the 
nature of conducting business activities--this does not include 
personal, routine consumer transactions unrelated to the operation of a 
business. In response to this comment, DHS has revised the regulatory 
language in this final rule so that it now includes the word 
``business,'' to clarify the scope of the restriction.
    Additionally, in response to this comment and the CBP-specific 
comment referenced above, DHS also reviewed the ICE-specific provisions 
in the regulatory text to determine whether additional clarifications 
would be appropriate. As a result of that review, this final rule 
includes revisions in parallel with the CBP-specific revisions 
described above.

G. Comments Regarding the Requirement To Report Waste, Fraud, Abuse, 
and Corruption

    Comment: One commenter suggested that DHS employees should be 
required to report not just suspected violations of laws or regulations 
regarding waste, fraud, abuse, and corruption, but also lawful 
activities as well that may constitute suspected waste, fraud, abuse, 
or corruption.
    DHS Response: The proposed rule required employees to ``report 
immediately any suspicions of violations of law or regulation involving 
Department of Homeland Security programs or operations to appropriate 
authorities, such as the Office of the Inspector General.'' DHS has 
revised the final rule to mirror the language in Executive Order 12674 
of April 12, 1989 (as modified by Executive Order 12731) and the 
general principle at 5 CFR 2635.101(b)(11). The final rule requires 
employees to ``disclose waste, fraud, abuse, and corruption to 
appropriate authorities, such as the DHS Office of Inspector General.'' 
DHS emphasizes the responsibility of DHS employees to be stewards of 
Government funds and to protect the integrity of DHS programs and 
operations.
    Comment: Two commenters suggested that DHS provide greater 
specificity in the regulations regarding the appropriate authorities to 
whom employees should report suspected violations.
    DHS Response: The NPRM proposed to require employees to report 
suspected violations to ``appropriate authorities, such as the Office 
of the Inspector General.'' DHS believes this language provides both 
sufficient specificity and flexibility to cover the large number of 
reporting chains of authority throughout DHS. Certain DHS components 
also maintain internal offices of internal affairs, inspections, 
audits, or professional responsibility, which would also be appropriate 
authorities for these purposes.
    Comment: One commenter stated that the proposed rule would require 
employees to have sufficient in-depth knowledge of laws or regulations 
to render legal determinations on whether violations have occurred. The 
same commenter suggested that a requirement to report ``suspicions'' 
creates the potential for abuse and erroneous reporting, and therefore, 
DHS should consider requiring employees to report information that 
gives rise to ``probable cause,'' a standard used by law enforcement in 
certain contexts.
    DHS Response: DHS disagrees with both comments. Employees are 
capable of detecting waste, fraud, abuse, or corruption based on common 
sense and personal observation. Reporting such suspicions imposes no 
requirement on an employee to interpret the law or regulations, 
investigate, or make any determinations on the legal or other 
substantive merits of a potential allegation. Under the final rule, 
employees are responsible for alerting the appropriate authorities of a 
suspected violation. Trained investigators within DHS are able to 
conduct investigations to determine the merits of employee reports.
    Comment: One commenter suggested that there should be a list of the 
types of alleged fraud, waste, abuse, and corruption that should be 
reported. Another commenter requested more

[[Page 6165]]

specific definitions of the terms ``waste,'' ``fraud,'' ``abuse,'' and 
``corruption,'' and questioned whether the requirement to report 
suspicions of waste applied to de minimis forms of waste (e.g., wasting 
small amounts of office supplies).
    DHS Response: Due to the breadth and scope of incidents of possible 
waste, fraud, abuse, and corruption, it would be impractical to provide 
a comprehensive list, and it would also serve to limit the incidents to 
those on the list when other actions may go unreported but still 
qualify as a violation. As stated above, DHS expects employees to use 
common sense when considering whether they have observed reportable 
waste, fraud, abuse, or corruption. Additionally, DHS has issued 
guidelines to assist employees regarding how, when, and where to report 
such allegations. An employee who is unsure about whether there is a 
reporting requirement may consult an agency ethics official or the 
Department's Office of Inspector General.
    Comment: One commenter suggested that the rule should also require 
an employee to report a new arrest or charge.
    DHS Response: This rule deals primarily with outside employment and 
waste, fraud, abuse, and corruption. Matters such as employee arrest 
records are personnel matters (i.e., under the Office of Security of 
the Chief Human Capital Officer) and are outside the scope of this 
rulemaking.

H. Other Comments

    Comment: One commenter suggested that DHS take measures to ensure 
that there are ethical boundaries on corporations and their level of 
influence over national policies.
    DHS Response: This rule deals primarily with outside employment and 
waste, fraud, abuse, and corruption. Matters that deal with the ethical 
boundaries on private corporations and their level of influence over 
national policies are outside the scope of this rulemaking.
    Comment: One commenter suggested that Executive Order 12866 
requires DHS to conduct a cost-benefit analysis reviewed by OMB for 
this rulemaking.
    DHS Response: While the NPRM was not identified as a significant 
regulatory action as defined by section 3(f) of Executive Order 12866, 
DHS did consider the costs and benefits of this rulemaking. This rule 
only regulates DHS employees and imposes no direct costs on the private 
sector. Accordingly, the NPRM certified the proposed rule would not 
have a significant economic impact on a substantial number of small 
entities (76 FR 63207).
    In addition, DHS does not believe this rulemaking would increase 
government costs. To the extent that additional prior approval of 
outside employment activities increases the number of reviews by DHS 
ethics officials of proposed outside employment, this increased volume 
is expected to be offset with fewer conflict situations for ethics 
officials and employees. In summary, this rule only regulates DHS 
employees, is not expected to increase government costs, and is 
expected to reduce the number of conflict situations--and therefore, 
reduce the costs associated with potentially lengthy investigations and 
corrective actions--within DHS. The rule is also expected to result in 
substantial additional benefits, including enhanced transparency into 
prior approval requirements and stronger public confidence in the 
integrity of DHS programs and operations.

IV. Discussion of Final Rule

    Aside from the changes made in response to comments discussed in 
Section III., this final rule adopts the proposals from the NPRM. The 
following discussion provides a summary of the provisions in the final 
rule.

A. 5 CFR 4601.101 General

    This section identifies to whom the supplemental regulations apply. 
It also cross-references to other ethics regulations and guidance 
applicable to DHS employees--including regulations on financial 
disclosure, financial interests, and employee responsibilities and 
conduct--and implementing DHS guidance and procedures issued in 
accordance with the OGE Standards.
    This section further defines the term ``agency designee'' as it 
appears in 5 CFR 2635.102(b), to identify those persons within DHS who 
are designated to act on requests and make determinations relating to 5 
CFR part 2635 and this part. The section also defines the term 
``outside employment'' and lists the types of employment and activities 
that would require prior approval. It also lists activities for which 
prior approval is not required, such as the uncompensated activities 
(other than the reimbursement of expenses) on behalf of a charitable or 
nonprofit organization that do not involve fiduciary duties and do not 
relate to the employee's official duties as defined by 5 CFR 2635.807. 
In addition, this section defines the term ``Chief Deputy Ethics 
Official'' as the person (or persons) within DHS delegated authority by 
the DHS Designated Agency Ethics Official (DAEO) to manage and 
coordinate the ethics programs within DHS's components and offices.

B. 5 CFR 4601.102 Designation of DHS Components as Separate Agencies

    This section identifies certain components within DHS as separate 
agencies for the purposes of the provisions governing prior approval 
for outside activities, accepting gifts from non-Federal sources, 
outside teaching, speaking, and writing activities, and issuing prior 
approval instructions. For those specified purposes, DHS has designated 
eight DHS components as separate agencies and has designated the 
remainder of the DHS components as a single agency. For the limited 
purpose of issuing prior approval instructions, DHS has designated the 
Office of Inspector General as a separate agency. To avoid confusion 
when reading this preamble together with the regulatory text, the 
discussion in this Section IV. will refer to the DHS components as 
``agencies,'' consistent with the regulatory text of this final rule.
    In addition, paragraph (c) of this section explains the 
applicability of these requirements to detailed employees within DHS 
(i.e., an employee from one agency temporarily working for another 
agency). An employee on detail from his/her employing agency to another 
agency for a period in excess of 30 calendar days is subject to the 
supplemental regulations and instructions of the agency to which the 
employee is detailed rather than the employing agency. For example, if 
a U.S. Customs and Border Protection (CBP) employee is detailed to U.S. 
Immigration and Customs Enforcement (ICE) for 60 days, the CBP employee 
will be subject to ICE's supplemental regulations and instructions 
during the period of the detail with ICE.

C. 5 CFR 4601.103 Prior Approval for Outside Employment and Activities

    This section requires employees to obtain written approval prior to 
engaging in any outside employment and activities, as defined by the 
rule. The prior approval requirement is an integral part of DHS's 
ethics program. The prior approval requirement is necessary to ensure 
that an employee's participation in certain outside employment does not 
adversely affect operations within the employing agency or place the 
employee at risk of violating applicable Federal conduct statutes and 
regulations. In addition,

[[Page 6166]]

prior approval is necessary to avoid the appearance that an outside 
employment or activity was obtained through a misuse of the employee's 
official position and to address a number of other potential ethics 
concerns.
    Because DHS provides money in the form of grants and contracts, and 
engages in enforcement, regulatory, and security functions across a 
multitude of industry sectors, requiring prior approval is necessary to 
ensure that the public will have confidence in the integrity of DHS 
programs and operations. In fulfilling its mission, DHS would be 
hindered if members of the public did not have confidence in DHS 
employees' ability to act impartially while performing their official 
duties.
    Section 4601.103(a) requires employees to obtain approval from the 
DHS employee's agency for certain outside employment and activities, 
with or without compensation, unless the employing agency issues an 
instruction or manual exempting such outside employment or activities. 
Section 4601.103(b) describes the standard the agency must follow for 
approval of requests for outside employment and activities. Section 
4601.103(c) describes the responsibilities of DHS agencies for issuing 
instructions to employees on how to request prior approval of outside 
employment and activities.
    Because Special Government Employees may serve at DHS only for a 
limited time during a 365-day period and for a limited purpose (such as 
service on a Federal Advisory Committee or service as a consultant), 
the nature of their service to DHS does not require that they be 
subject to the prior approval requirement for outside employment and 
activities or the additional restrictions applicable to CBP, Federal 
Emergency Management Agency (FEMA), or ICE employees described below.

D. 5 CFR 4601.104 Additional Rules for CBP Employees

    This section prohibits CBP employees, except Special Government 
Employees, from being employed by, or from engaging in, activities in 
support of or on behalf of, an entity that engages in a trade or 
business performing specified customs, immigration, or agriculture 
activities or services.
    This section also requires a CBP employee with a spouse, a relative 
who is a financial dependent or household member, or another household 
member or financial dependent who is employed in a position that the 
CBP employee is prohibited from occupying to notify his or her agency 
designee in writing of the above-described employment circumstances. In 
addition, the employee is disqualified from participating in an 
official capacity in any particular matter involving such person or the 
person's employer unless authorized to do so by the agency designee, 
with the advice and clearance of the CBP Chief Deputy Ethics Official.

E. 5 CFR 4601.105 Additional Rules for FEMA Employees

    This section prohibits certain FEMA employees, except Special 
Government Employees, both intermittent and non-intermittent, from 
being employed by a FEMA contractor. It also provides the procedures 
for requesting a waiver of this restriction.

F. 5 CFR 4601.106 Additional Rules for ICE Employees

    This section prohibits ICE employees, except Special Government 
Employees, from being employed by, or from engaging in activities in 
support of or on behalf of, an entity that engages in a trade or 
business performing specified customs, immigration, or agriculture 
activities or services. This section also requires an ICE employee with 
a spouse, a relative who is a financial dependent or household member, 
or another household member or financial dependent who is employed in a 
position that the ICE employee is prohibited from occupying to notify 
his or her agency designee in writing of the above-described employment 
circumstances. In addition, the employee is disqualified from 
participating in an official capacity in any particular matter 
involving such person or the person's employer unless authorized to do 
so by the agency designee, with the advice and clearance of the ICE 
Chief Deputy Ethics Official.

G. 5 CFR 4601.107 Prohibited Purchases of Property

    This section prohibits the purchase by employees of certain 
Government property under the control of, seized by, forfeited, under 
the direction of, or incident to, the employee's agency. It also sets 
forth the exception and waiver provisions under this section.

H. 5 CFR 4601.108 Reporting Waste, Fraud, Abuse, and Corruption

    This section requires all DHS employees to report allegations of 
waste, fraud, abuse, or corruption to the appropriate authorities 
within DHS, such as the DHS Office of Inspector General or the 
appropriate Office of Internal Affairs or Office of Professional 
Responsibility. Employee responsibilities for reporting suspicions of 
violations of law or regulation to the DHS Office of Inspector General 
or similar office are found in related DHS and agency instructions. 
This regulation complements but does not displace those 
responsibilities.

V. Regulatory Analyses

A. Executive Orders 12866 and 13563

    This rule is not a ``significant regulatory action'' under section 
3(f) of Executive Order 12866, Regulatory Planning and Review, as 
supplemented by Executive Order 13563, Improving Regulation and 
Regulatory Review, and does not require an assessment of potential 
costs and benefits under section 6(a)(3) of that Order. Accordingly, 
the Office of Management and Budget has not reviewed it. As discussed 
previously, this rule only regulates DHS employees and consequently 
does not impose any additional direct costs on the private sector. In 
addition, DHS does not believe this rulemaking would increase 
government costs. To the extent that additional prior approval of 
outside employment activities increases the number of reviews by DHS 
ethics officials of proposed outside employment, this increased volume 
is expected to be offset with fewer conflict situations--and therefore, 
reduce the costs associated with potentially lengthy investigations and 
corrective actions--within DHS. The rule is also expected to result in 
substantial additional benefits, including enhanced transparency into 
prior approval requirements and stronger public confidence in the 
integrity of DHS programs and operations.

B. Small Entities/Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), DHS has 
considered whether this rule will have a significant economic impact on 
a substantial number of small entities. The term ``small entities'' 
comprises small businesses, not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with populations of less than 50,000. 
DHS certifies that this rule would not have a significant economic 
impact on a substantial number of small entities, because it would only 
directly affect DHS employees.

List of Subjects in 5 CFR Part 4601

    Conflict of interests, Government employees.

    For the reasons set forth in the preamble, DHS, with the 
concurrence of the U.S. Office of Government Ethics, is

[[Page 6167]]

amending title 5 of the Code of Federal Regulations by adding chapter 
XXXVI, consisting of part 4601, to read as follows:

Title 5--Administrative Personnel

CHAPTER XXXVI--DEPARTMENT OF HOMELAND SECURITY

PART 4601--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE DEPARTMENT OF HOMELAND SECURITY

Sec.
4601.101 General.
4601.102 Designation of DHS components as separate agencies.
4601.103 Prior approval for outside employment and activities.
4601.104 Additional rules for U.S. Customs and Border Protection 
(CBP) employees.
4601.105 Additional rules for Federal Emergency Management Agency 
(FEMA) employees.
4601.106 Additional rules for U.S. Immigration and Customs 
Enforcement (ICE) employees.
4601.107 Prohibited purchases of property.
4601.108 Reporting waste, fraud, abuse, and corruption.

    Authority:  5 U.S.C. 301, 7301, 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; 5 CFR 2635.105, 2635.203(a), 2635.403(a), 2635.702, 
2635.703, 2635.802(a), 2635.803, 2635.807(a)(2)(ii).


Sec.  4601.101  General.

    (a) Applicability. In accordance with 5 CFR 2635.105, the 
regulations in this part apply to employees of the Department of 
Homeland Security (DHS) and supplement the Standards of Ethical Conduct 
for Employees of the Executive Branch (OGE Standards) in 5 CFR part 
2635.
    (b) Cross-references to other ethics regulations and guidance. In 
addition to the OGE Standards in 5 CFR part 2635 and this part, DHS 
employees are subject to the Executive branch financial disclosure 
regulations contained in 5 CFR parts 2634, the Executive branch 
financial interests regulations contained in 5 CFR part 2640, the 
Executive branch employee responsibilities and conduct regulations 
contained in 5 CFR part 735, and DHS guidance and procedures on 
employee conduct, including those issued under paragraph (c) of this 
section.
    (c) DHS agency instructions. Prior to issuance, the DHS Designated 
Agency Ethics Official (DAEO) must approve any internal instructions or 
manuals that DHS agencies, as designated in Sec.  4601.102 of this 
part, issue to provide explanatory ethics-related guidance and to 
establish procedures necessary to implement 5 CFR part 2635 and this 
part.
    (d) Definitions--(1) Agency designee as used in this part and in 5 
CFR part 2635 means an employee who has been identified in an 
instruction or manual issued by an agency under paragraph (c) of this 
section to make a determination, give an approval, or take other action 
required or permitted by this part or 5 CFR part 2635 with respect to 
another employee.
    (2) Outside employment or activity as used in this part means any 
form of non-Federal employment, business activity, business 
relationship, or other covered activity as identified in this section, 
involving the provision of personal services by the employee, whether 
or not for compensation. It includes, but is not limited to, personal 
services as an officer, director, employee, agent, attorney, advisor, 
consultant, contractor, general partner, trustee, or teacher. There are 
several exclusions and limitations to the definition as described 
immediately below.
    (i) Speaking and writing activities. Outside employment generally 
does not include speaking and writing activities so long as they are 
not combined with the provision of other services that do fall within 
this definition, such as the practice of law and other outside 
employment or activities covered by paragraph (d)(2)(ii)(A) through (D) 
of this section. Employees who wish to engage in compensated speaking 
or writing in a personal capacity are subject to the provisions of 5 
CFR 2635.807 and are encouraged to seek additional guidance from an 
agency ethics official.
    (ii) Nonprofit and other organizations. Outside employment does not 
include participation in the activities of a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service, or civic organization, unless the participation 
involves:
    (A) Acting in a fiduciary capacity,
    (B) Providing professional services for compensation,
    (C) Rendering advice for compensation other than the reimbursement 
of expenses, or
    (D) An activity relating to the employee's official duties as 
defined in 5 CFR 2635.807(a)(2)(i)(A) through (E), to include 
activities relating to any ongoing or announced policy, program, or 
operation of the employee's agency as it is defined at 5 CFR 4601.102.
    (iii) The Hatch Act. Outside employment does not include activities 
otherwise permissible by the Hatch Act and related regulations relating 
to partisan political activities.
    (iv) Military service. Outside employment does not include state or 
Federal military service protected by the Uniformed Services Employment 
and Reemployment Rights Act.
    (v) Additional restrictions for certain employees. Employees of the 
Federal Emergency Management Agency, U.S. Customs and Border 
Protection, and U.S. Immigration and Customs Enforcement should also 
refer to the agency-specific provisions in this part relating to 
outside employment.
    (3) Chief Deputy Ethics Official as used in this part means the 
persons delegated authority by the DHS DAEO to manage and coordinate 
the ethics programs within the DHS components pursuant to the DAEO's 
authority in 5 CFR 2638.204.
    (4) ``Special Government Employee'' as used in this part has the 
same meaning as in 18 U.S.C. 202(a).


Sec.  4601.102  Designation of DHS components as separate agencies.

    (a) Pursuant to 5 CFR 2635.203(a), DHS designates each of the 
following components as a separate agency for purposes of the 
regulations in subpart B of 5 CFR part 2635 governing gifts from 
outside sources, including determining whether the donor of a gift is a 
prohibited source under 5 CFR 2635.203(d); for purposes of the 
regulations in Sec.  4601.103(c) of this part governing the 
establishment of procedures for obtaining prior approval for outside 
employment; for purposes of the regulations in Sec.  4601.103(c) of 
this part governing the designation of officials; and for the purposes 
of the regulations in 5 CFR 2635.807 governing teaching, speaking, and 
writing:
    (1) Federal Emergency Management Agency (FEMA);
    (2) Federal Law Enforcement Training Center;
    (3) Transportation Security Administration;
    (4) U.S. Citizenship and Immigration Services;
    (5) U.S. Coast Guard;
    (6) U.S. Customs and Border Protection (CBP);
    (7) U.S. Immigration and Customs Enforcement (ICE); and
    (8) U.S. Secret Service.
    (b)(1) DHS will treat employees of DHS components not designated as 
separate agencies in paragraph (a) of this section, including employees 
of the Office of the Secretary, as employees of the remainder of DHS. 
For purposes of the regulations in subpart B of 5 CFR part 2635 
governing gifts from outside sources, including determining whether

[[Page 6168]]

the donor of a gift is a prohibited source under 5 CFR 2635.203(d); for 
purposes of the regulations in Sec.  4601.103(c) of this part governing 
the establishment of procedures for obtaining prior approval for 
outside employment; for purposes of the regulations in Sec.  
4601.103(c) of this part governing the designation of officials; and 
for purposes of the regulations in 5 CFR 2635.807 governing teaching, 
speaking, and writing, DHS will treat the remainder of DHS as a single 
agency that is separate from the components designated as separate 
agencies in paragraph (a) of this section.
    (2) For the limited purposes of establishing procedures for 
obtaining prior approval for outside employment and designating 
officials pursuant to Sec.  4601.103(c) of this part, DHS will treat 
the DHS Office of Inspector General as a separate agency.
    (c) An employee on detail from his or her employing agency to 
another agency for a period in excess of 30 calendar days is subject to 
the supplemental regulations and instructions of the agency to which he 
is detailed rather than his or her employing agency.


Sec.  4601.103  Prior approval for outside employment and activities.

    (a) General requirement for approval. A DHS employee, other than a 
Special Government Employee, shall obtain prior written approval before 
engaging in any outside employment or activity (as defined by Sec.  
4601.101 of this part), with or without compensation, unless the 
employee's agency has exempted the outside employment or activity (or 
category or class of outside employment or activity) from this 
requirement by an instruction or manual issued pursuant to paragraph 
(c) of this section.
    (b) Standard for approval. Approval shall be granted unless it has 
been determined that the outside employment is expected to involve 
conduct prohibited by statute or Federal regulation, including 5 CFR 
part 2635 and this part.
    (c) Agency responsibilities. (1) With the approval of the DHS DAEO, 
each agency as set forth in Sec.  4601.102 of this part shall issue 
internal instructions or a manual governing the submission of requests 
for approval of outside employment and activities and designating 
appropriate officials to act on such requests not later than May 5, 
2016.
    (2) The instructions or manual may exempt particular outside 
employment or activities (or categories or classes of outside 
employment or activities) from the prior approval requirement of this 
section if such outside employment or activities would generally be 
approved and are not likely to involve conduct prohibited by statute or 
Federal regulation, including 5 CFR part 2635 and this part. Agencies 
may include in their instructions or manual examples of outside 
employment or activities that are permissible or prohibited consistent 
with 5 CFR part 2635 and this part.
    (3) In the absence of a manual or instruction identifying a person 
designated to act upon a request for approval for outside employment, 
the Chief Deputy Ethics Official at each agency shall act upon a 
request.


Sec.  4601.104  Additional rules for U.S. Customs and Border Protection 
(CBP) employees.

    The following rules apply to employees of CBP, except Special 
Government Employees, and are in addition to Sec. Sec.  4601.101 
through 4601.103 and Sec. Sec.  4601.107 and 4601.108 of this part:
    (a) Prohibitions on outside employment and activities. (1) No CBP 
employee shall be employed by or engage in activities in support of or 
on behalf of a customs broker; international carrier; bonded warehouse; 
foreign trade zone as defined in 15 CFR 400.2; cartman; law firm 
engaged in the practice of customs, immigration, or agriculture law; 
entity engaged in the enforcement of customs, immigration, or 
agriculture law; importation or exportation department of a business; 
or business or other entity which engages in services related to 
agriculture matters where such agriculture matters relate to CBP's 
mission.
    (2) No CBP employee shall, in any private capacity, engage in 
employment or a business activity related to the importation or 
exportation of merchandise or agricultural products requiring 
inspection (other than a personal, routine consumer transaction 
unrelated to the operation of a business), or the entry of persons into 
or departure of persons from the United States.
    (3) No CBP employee shall engage in outside employment or 
activities for a non-profit or other organization that involve 
assisting persons with matters related to the entry of persons or 
merchandise into or the departure of persons or merchandise from the 
United States, or matters related to obtaining temporary or permanent 
residency, citizenship, adjustment of status, or other immigration-
related benefits.
    (b) Restrictions arising from employment of the spouse, relatives, 
members of the employee's household, or financial dependents. (1) A CBP 
employee shall notify in writing his or her agency designee when any of 
the following circumstances exist:
    (i) The spouse of the CBP employee is employed in a position that 
the CBP employee would be prohibited from occupying by paragraph (a) of 
this section;
    (ii) A relative (as defined in 5 CFR 2634.105(o)), who is 
financially dependent on or who is a member of the household of the CBP 
employee, is employed in a position that the CBP employee would be 
prohibited from occupying by paragraph (a) of this section; or
    (iii) Any person, other than the spouse or relative of the CBP 
employee, who is financially dependent on or who is a member of the 
household of the CBP employee, is employed in a position that the CBP 
employee would be prohibited from occupying by paragraph (a) of this 
section.
    (2) The CBP employee shall be disqualified from participating in an 
official capacity in any particular matter involving the individuals 
identified in paragraph (b)(1) of this section, or the employer 
thereof, unless the agency designee, with the advice and clearance of 
the CBP Chief Deputy Ethics Official, authorizes the CBP employee to 
participate in the matter using the standard in 5 CFR 2635.502(d), or 
the waiver provisions in 18 U.S.C. 208(b)(1), as appropriate.


Sec.  4601.105  Additional rules for Federal Emergency Management 
Agency (FEMA) Employees.

    The following rules apply to employees of FEMA, except Special 
Government Employees, and are in addition to Sec. Sec.  4601.101 
through 4601.103 and 4601.107 and 4601.108 of this part:
    (a) Prohibited outside employment (intermittent employees). Except 
as provided in paragraph (c) of this section, no intermittent FEMA 
employees hired under the authority of 42 U.S.C. 5149, which includes 
all Disaster Assistance Employees or Stafford Act Employees and Cadre 
of On-Call Response Employees, shall be employed by a current FEMA 
contractor while a FEMA employee, whether or not they are on activated 
status.
    (b) Prohibited outside employment (non-intermittent employees). 
Except as provided in paragraph (c) of this section, no non-
intermittent FEMA employee shall be employed by a current FEMA 
contractor.
    (c) Waivers. The FEMA Chief Deputy Ethics Official or his or her 
agency designee may grant a written waiver of any prohibition in 
paragraphs (a) and (b) of this section with the DAEO's

[[Page 6169]]

concurrence. To grant the waiver, the FEMA Chief Deputy Ethics Official 
or his or her agency designee must determine that the waiver is 
consistent with 5 CFR part 2635 and not otherwise prohibited by law; 
that the prohibition is not necessary to avoid the appearance of misuse 
of position or loss of impartiality; and that the waiver will not 
undermine the public's confidence in the employee's impartiality and 
objectivity in administering FEMA programs. A waiver under this 
paragraph may impose appropriate conditions, such as requiring 
execution of a written disqualification statement.


Sec.  4601.106  Additional rules for U.S. Immigration and Customs 
Enforcement (ICE) employees.

    The following rules apply to employees of ICE, except Special 
Government Employees, and are in addition to Sec. Sec.  4601.101 
through 4601.103 and 4601.107 and 4601.108 of this part:
    (a) Prohibitions on outside employment and activities. (1) No ICE 
employee shall be employed by or engage in activities in support of or 
on behalf of a customs broker; international carrier; bonded warehouse; 
foreign trade zone as defined in 15 CFR 400.2; cartman; law firm 
engaged in the practice of customs, immigration or agriculture law; 
entity engaged in the enforcement of customs, immigration or 
agriculture law; importation department of a business; or business or 
other entity which engages in agriculture matters where such 
agriculture matters relate to ICE's mission.
    (2) No ICE employee shall, in any private capacity, engage in 
employment or a business activity related to the importation or 
exportation of merchandise or agricultural products requiring 
inspection (other than a personal, routine consumer transaction 
unrelated to the operation of a business), or the entry of persons into 
or the departure of persons from the United States.
    (3) No ICE employee shall engage in outside employment or 
activities for a non-profit or other organization that involve 
assisting persons with matters related to the entry of persons or 
merchandise into or the departure of persons or merchandise from the 
United States, or matters related to obtaining temporary or permanent 
residency, citizenship, adjustment of status, or other immigration-
related benefits.
    (b) Restrictions arising from employment of spouse, relatives, 
members of the employee's household, or financial dependents. (1) An 
ICE employee shall notify in writing his or her agency designee when 
any of the following circumstances exist:
    (i) The spouse of the ICE employee is employed in a position that 
the ICE employee would be prohibited from occupying by paragraph (a) of 
this section;
    (ii) A relative (as defined in 5 CFR 2634.105(o)) who is 
financially dependent on or who is a member of the household of the ICE 
employee is employed in a position that the ICE employee would be 
prohibited from occupying by paragraph (a) of this section; or
    (iii) Any person, other than the spouse or relative of the ICE 
employee, who is financially dependent on or who is a member of the 
household of the ICE employee, is employed in a position that the ICE 
employee would be prohibited from occupying by paragraph (a) of this 
section.
    (2) The ICE employee shall be disqualified from participating in an 
official capacity in any particular matter involving the individuals 
described in paragraph (b)(1) of this section or the employer thereof, 
unless the agency designee, with the advice and clearance of the ICE 
Chief Deputy Ethics Official, authorizes the ICE employee to 
participate in the matter using the standard in 5 CFR 2635.502(d), or 
the waiver provisions in 18 U.S.C. 208(b)(1), as appropriate.


Sec.  4601.107  Prohibited purchases of property.

    (a) General prohibition. Except as provided in paragraph (c) of 
this section, no DHS employee may purchase, directly or indirectly, 
property that is:
    (1) Owned by the Federal Government and under the control of the 
employee's agency, unless the sale of the property is being conducted 
by the General Services Administration; or
    (2) Seized or forfeited under the direction or incident to the 
functions of the employee's agency.
    (b) Designated separate components. For purposes of this section, 
the employee's agency is the relevant separate agency component as set 
forth in Sec.  4601.102 of this part.
    (c) Waiver. Employees may make a purchase prohibited by paragraph 
(a) of this section where a written waiver of the prohibition is issued 
in advance by the agency designee with the clearance of the DAEO or his 
or her designee. A waiver may only be granted if it is not otherwise 
prohibited by law or regulation and the purchase of the property will 
not cause a reasonable person with knowledge of the particular 
circumstances to question the employee's impartiality, or create the 
appearance that the employee has used his or her official position or 
nonpublic information for his or her personal gain.


Sec.  4601.108  Reporting waste, fraud, abuse, and corruption.

    Employees shall disclose waste, fraud, abuse, and corruption to 
appropriate authorities, such as the DHS Office of Inspector General.

Jeh Charles Johnson,
Secretary.
Walter M. Shaub, Jr.,
Director, U.S. Office of Government Ethics.
[FR Doc. 2016-01318 Filed 2-4-16; 8:45 am]
 BILLING CODE 9110-9B-P