[Federal Register Volume 83, Number 11 (Wednesday, January 17, 2018)]
[Rules and Regulations]
[Pages 2329-2331]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00688]



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 Rules and Regulations
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  Federal Register / Vol. 83, No. 11 / Wednesday, January 17, 2018 / 
Rules and Regulations  

[[Page 2329]]



OFFICE OF GOVERNMENT ETHICS

5 CFR Parts 2634 and 2636

RIN 3209-AA38


Civil Monetary Penalties Inflation Adjustments for Ethics in 
Government Act Violations

AGENCY: Office of Government Ethics.

ACTION: Final rule.

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SUMMARY: In accordance with the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, the U.S. Office of Government 
Ethics (OGE) is issuing this final rule to make the 2018 annual 
adjustments to the Ethics in Government Act civil monetary penalties.

DATES: Effective date: This final rule is effective January 17, 2018. 
Applicability date: This final rule is applicable January 15, 2018.

FOR FURTHER INFORMATION CONTACT: Kimberly L. Sikora Panza, Associate 
Counsel, General Counsel and Legal Policy Division, Office of 
Government Ethics, Telephone: 202-482-9300; TTY: 800-877-8339; FAX: 
202-482-9237.

SUPPLEMENTARY INFORMATION: 

I. Background

    In November 2015, Congress passed the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Pub. L. 
114-74) (the 2015 Act), which further amended the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410). The 2015 
Act required Federal agencies to make inflationary adjustments to the 
civil monetary penalties (CMPs) within their jurisdiction with an 
initial ``catch-up'' adjustment through an interim final rule effective 
no later than August 1, 2016, and further mandates that Federal 
agencies make subsequent annual inflationary adjustments of their CMPs, 
to be effective no later than January 15 of each year.
    The Ethics in Government Act of 1978 as amended, 5 U.S.C. appendix 
(the Ethics Act) provides for five CMPs.\1\ Specifically, the Ethics 
Act provides for penalties that can be assessed by an appropriate 
United States district court, based upon a civil action brought by the 
Department of Justice, for the following five types of violations:
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    \1\ OGE has previously determined, after consultation with the 
Department of Justice, that the $200 late filing fee for public 
financial disclosure reports that are more than 30 days overdue (see 
section 104(d) of the Ethics Act, 5 U.S.C. appendix, 104(d), and 5 
CFR 2634.704 of OGE's regulations thereunder) is not a CMP as 
defined under the Federal Civil Penalties Inflation Adjustment Act, 
as amended. Therefore, that fee is not being adjusted in this 
rulemaking (nor was it adjusted by OGE in previous CMP rulemakings), 
and will remain at its current amount of $200.
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    (1) Knowing and willful failure to file, report required 
information on, or falsification of a public financial disclosure 
report, 5 U.S.C. appendix 104(a), 5 CFR 2634.701(b);
    (2) knowing and willful breach of a qualified trust by trustees and 
interested parties, 5 U.S.C. appendix 102(f)(6)(C)(i), 5 CFR 
2634.702(a);
    (3) negligent breach of a qualified trust by trustees and 
interested parties, 5 U.S.C. appendix 102(f)(6)(C)(ii), 5 CFR 
2634.702(b);
    (4) misuse of a public report, 5 U.S.C. appendix 105(c)(2), 5 CFR 
2634.703; and
    (5) violation of outside employment/activities provisions, 5 U.S.C. 
appendix 504(a), 5 CFR 2636.104(a).
    In compliance with the 2015 Act and guidance issued by the Office 
of Management and Budget (OMB), on June 28, 2016, the U.S. Office of 
Government Ethics (OGE) published in the Federal Register an interim 
final rule, 81 FR 41787 (June 28, 2016), that made the ``catch up'' 
inflationary adjustments to the five Ethics Act CMPs. On January 24, 
2017, OGE published in the Federal Register a rule adopting as final 
that interim regulation, and also making the 2017 annual inflationary 
adjustments to the Ethics Act CMPs. See 82 FR 8131 (Jan. 24, 2017).
    This rulemaking effectuates the 2018 annual inflationary 
adjustments to the Ethics Act CMPs. In accordance with the 2015 Act, 
these adjustments are based on the percent change between the Consumer 
Price Index for all Urban Consumers (CPI-U) for the month of October 
preceding the date of the adjustment, and the prior year's October CPI-
U. Pursuant to OMB guidance, the cost-of-living adjustment multiplier 
for 2018, based on the CPI-U for October 2017, not seasonally adjusted, 
is 1.02041. To calculate the 2018 annual adjustment, agencies must 
multiply the most recent penalty by the 1.02041 multiplier, and round 
to the nearest dollar.
    Applying the formula established by the 2015 Act and OMB guidance, 
OGE is amending the Ethics Act CMPs through this rulemaking to:
    (1) Increase the three penalties reflected in 5 CFR 2634.702(a), 5 
CFR 2634.703, and 5 CFR 2636.104(a)--which were previously adjusted to 
a maximum of $19,246--to a maximum of $19,639;
    (2) Increase the penalty reflected in 5 CFR 2634.702(b)--which was 
previously adjusted to a maximum of $9,623--to a maximum of $9,819; and
    (3) Increase the penalty reflected in 5 CFR 2634.701(b)--which was 
previously adjusted to a maximum of $57,847--to a maximum of $59,028.
    These adjusted penalty amounts will apply to penalties assessed 
after January 15, 2018 (the applicability date of this final rule) 
whose associated violations occurred after November 2, 2015.
    OGE will continue to make future annual inflationary adjustments to 
the Ethics Act CMPs in accordance with the statutory formula set forth 
in the 2015 Act and OMB guidance.

II. Matters of Regulatory Procedure

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553(b), as Acting Director of the Office of 
Government Ethics, I find that good cause exists for waiving the 
general notice of proposed rulemaking and public comment procedures as 
to these technical amendments. The notice and comment procedures are 
being waived because these amendments, which concern matters of agency 
organization, procedure and practice, are being adopted in accordance 
with statutorily mandated inflation adjustment procedures of the 2015 
Act, which specifies that agencies shall adjust civil monetary 
penalties notwithstanding Section 553 of the Administrative Procedure 
Act. It is also in the public interest that the adjusted rates for 
civil monetary penalties under the Ethics in Government Act become 
effective as

[[Page 2330]]

soon as possible in order to maintain their deterrent effect.

Regulatory Flexibility Act

    As the Acting 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 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 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 13563 and Executive Order 12866

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select the regulatory approaches that 
maximize net benefits (including 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. 
The Office of Management and Budget has determined that rulemakings 
such as this implementing annual inflationary adjustments under the 
2015 Act are not significant regulatory actions under Executive Order 
12866.

Executive Order 12988

    As Acting Director of the Office of Government Ethics, I have 
reviewed this 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

5 CFR Part 2634

    Certificates of divestiture, Conflict of interests, Government 
employees, Penalties, Reporting and recordkeeping requirements, Trusts 
and trustees.

5 CFR Part 2636

    Conflict of interests, Government employees, Penalties.

    Dated: January 11, 2018.
David J. Apol,
Acting Director, U.S. Office of Government Ethics.

    For the reasons set forth in the preamble, the U.S. Office of 
Government Ethics is amending 5 CFR parts 2634 and 2636 as follows:

PART 2634--EXECUTIVE BRANCH FINANCIAL DISCLOSURE, QUALIFIED TRUSTS, 
AND CERTIFICATES OF DIVESTITURE

0
1. The authority citation for part 2634 continues to read as follows:

    Authority:  5 U.S.C. App. (Ethics in Government Act of 1978); 26 
U.S.C. 1043; Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 note 
(Federal Civil Penalties Inflation Adjustment Act of 1990), as 
amended by Sec. 31001, Pub. L. 104-134, 110 Stat. 1321 (Debt 
Collection Improvement Act of 1996) and Sec. 701, Pub. L. 114-74 
(Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015); 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.


0
2. Section 2634.701 is amended by revising paragraph (b) to read as 
follows:


Sec.  2634.701   Failure to file or falsifying reports.

* * * * *
    (b) Civil action. The Attorney General may bring a civil action in 
any appropriate United States district court against any individual who 
knowingly and willfully falsifies or who knowingly and willfully fails 
to file or report any information required by filers of public reports 
under subpart B of this part. The court in which the action is brought 
may assess against the individual a civil monetary penalty in any 
amount, not to exceed the amounts set forth below, as provided by 
section 104(a) of the Act, as amended, and as adjusted in accordance 
with the inflation adjustment procedures prescribed in the Federal 
Civil Penalties Inflation Adjustment Act of 1990, as amended:

------------------------------------------------------------------------
                    Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 14, 2007 and Nov. 2,           $50,000
 2015...................................................
Violation occurring after Nov. 2, 2015..................          59,028
------------------------------------------------------------------------

* * * * *

0
3. Section 2634.702 is revised to read as follows:


Sec.  2634.702   Breaches by trust fiduciaries and interested parties.

    (a) The Attorney General may bring a civil action in any 
appropriate United States district court against any individual who 
knowingly and willfully violates the provisions of Sec.  2634.408(d)(1) 
or (e)(1). The court in which the action is brought may assess against 
the individual a civil monetary penalty in any amount, not to exceed 
the amounts set forth below, as provided by section 102(f)(6)(C)(i) of 
the Act and as adjusted in accordance with the inflation adjustment 
procedures prescribed in the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended:

------------------------------------------------------------------------
                    Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 29, 1999 and Nov. 2,           $11,000
 2015...................................................
Violation occurring after Nov. 2, 2015..................          19,639
------------------------------------------------------------------------

    (b) The Attorney General may bring a civil action in any 
appropriate United States district court against any individual who 
negligently violates the provisions of Sec.  2634.408(d)(1) or (e)(1). 
The court in which the action is brought may assess against the 
individual a civil monetary penalty in any amount, not to exceed the 
amounts set forth below, as provided by section 102(f)(6)(C)(ii) of the 
Act and as adjusted in accordance with the inflation adjustment 
procedures of the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended:

------------------------------------------------------------------------
                    Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 29, 1999 and Nov. 2,            $5,500
 2015...................................................
Violation occurring after Nov. 2, 2015..................           9,819
------------------------------------------------------------------------


0
4. Section 2634.703 is revised to read as follows:


Sec.  2634.703   Misuse of public reports.

    (a) The Attorney General may bring a civil action against any 
person who obtains or uses a report filed under this part for any 
purpose prohibited by section 105(c)(1) of the Act, as incorporated in 
Sec.  2634.603(f). The court in which the action is brought may assess 
against the person a civil monetary penalty in any amount, not to 
exceed the amounts set forth below, as provided by section 105(c)(2) of 
the Act and as adjusted in accordance with the

[[Page 2331]]

inflation adjustment procedures prescribed in the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended:

------------------------------------------------------------------------
                    Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 29, 1999 and Nov. 2,           $11,000
 2015...................................................
Violation occurring after Nov. 2, 2015..................          19,639
------------------------------------------------------------------------

    (b) This remedy shall be in addition to any other remedy available 
under statutory or common law.

PART 2636--LIMITATIONS ON OUTSIDE EARNED INCOME, EMPLOYMENT AND 
AFFILIATIONS FOR CERTAIN NONCAREER EMPLOYEES

0
5. The authority citation for part 2636 continues to read as follows:

    Authority:  5 U.S.C. App. (Ethics in Government Act of 1978); 
Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 note (Federal Civil 
Penalties Inflation Adjustment Act of 1990), as amended by Sec. 
31001, Pub. L. 104-134, 110 Stat. 1321 (Debt Collection Improvement 
Act of 1996) and Sec. 701, Pub. L. 114-74 (Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015); 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.

0
6. Section 2636.104 is amended by revising paragraph (a) to read as 
follows:


Sec.  2636.104   Civil, disciplinary and other action.

    (a) Civil action. Except when the employee engages in conduct in 
good faith reliance upon an advisory opinion issued under Sec.  
2636.103, an employee who engages in any conduct in violation of the 
prohibitions, limitations and restrictions contained in this part may 
be subject to civil action under 5 U.S.C. app. 504(a) and a civil 
monetary penalty of not more than the amounts set forth below, as 
adjusted in accordance with the inflation adjustment procedures 
prescribed in the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended, or the amount of the compensation the individual 
received for the prohibited conduct, whichever is greater.

------------------------------------------------------------------------
                    Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 29, 1999 and Nov. 2,           $11,000
 2015...................................................
Violation occurring after Nov. 2, 2015..................          19,639
------------------------------------------------------------------------

* * * * *
[FR Doc. 2018-00688 Filed 1-16-18; 8:45 am]
 BILLING CODE 6345-03-P