[Federal Register Volume 86, Number 19 (Monday, February 1, 2021)]
[Rules and Regulations]
[Pages 7635-7637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00714]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 
 ========================================================================
 

  Federal Register / Vol. 86, No. 19 / Monday, February 1, 2021 / Rules 
and Regulations  

[[Page 7635]]



OFFICE OF GOVERNMENT ETHICS

5 CFR Parts 2634 and 2636

RIN 3209-AA55


2021 Civil Monetary Penalties Inflation Adjustments for Ethics in 
Government Act Violations

AGENCY: Office of Government Ethics.

ACTION: Final rule.

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

SUMMARY: In accordance with the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, the U.S. Office of Government 
Ethics is issuing this final rule to make the 2021 annual adjustments 
to the Ethics in Government Act civil monetary penalties.

DATES: 
    Effective date: This final rule is effective February 1, 2021.
    Applicability date: This final rule is applicable beginning January 
15, 2021.

FOR FURTHER INFORMATION CONTACT: Margaret Dylus-Yukins, Assistant 
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:
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    (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), the U.S. Office of Government Ethics 
(OGE) made previous inflationary adjustments to the five Ethics Act 
CMPs, and is issuing this rulemaking to effectuate the 2021 annual 
inflationary adjustments to those 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 2021, based on the CPI-U for October 2020, not 
seasonally adjusted, is 1.01182. To calculate the 2021 annual 
adjustment, agencies must multiply the most recent penalty by the 
1.01182 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 $20,489--to a maximum of $20,731;
    (2) Increase the penalty reflected in 5 CFR 2634.702(b)--which was 
previously adjusted to a maximum of $10,245--to a maximum of $10,366; 
and
    (3) Increase the penalty reflected in 5 CFR 2634.701(b)--which was 
previously adjusted to a maximum of $61,585--to a maximum of $62,313.
    These adjusted penalty amounts will apply to penalties assessed 
after January 15, 2021 (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 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 soon as possible in order to maintain their deterrent 
effect.

Regulatory Flexibility Act

    As the 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

[[Page 7636]]

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 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, Financial 
disclosure, Government employees, Penalties, Privacy, Reporting and 
recordkeeping requirements, Trusts and trustees.

5 CFR Part 2636

    Conflict of interests, Government employees, Penalties.


    Dated: January 11, 2021.
Emory Rounds,
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.; 26 U.S.C. 1043; Pub. L. 101-410, 104 
Stat. 890, 28 U.S.C. 2461 note, as amended by Sec. 31001, Pub. L. 
104-134, 110 Stat. 1321 and Sec. 701, Pub. L. 114-74; Pub. L. 112-
105, 126 Stat. 291; 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 in Table 1 to this section, 
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.

                       Table 1 to Sec.   2634.701
------------------------------------------------------------------------
                       Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 14, 2007 and Nov. 2, 2015...   $50,000
Violation occurring after Nov. 2, 2015........................    62,313
------------------------------------------------------------------------

* * * * *

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 in Table 1 to this section, 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.

                       Table 1 to Sec.   2634.702
------------------------------------------------------------------------
                       Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 29, 1999 and Nov. 2, 2015...   $11,000
Violation occurring after Nov. 2, 2015........................    20,731
------------------------------------------------------------------------

    (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 in Table 2 to this section, 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.

                       Table 2 to Sec.   2634.702
------------------------------------------------------------------------
                       Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 29, 1999 and Nov. 2, 2015...    $5,500
Violation occurring after Nov. 2, 2015........................    10,366
------------------------------------------------------------------------


0
4. Section 2634.703 is amended by revising paragraph (a) 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 in Table 1 to this section, as provided by 
section 105(c)(2) 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.

                       Table 1 to Sec.   2634.703
------------------------------------------------------------------------
                       Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 29, 1999 and Nov. 2, 2015...   $11,000
Violation occurring after Nov. 2, 2015........................    20,731
------------------------------------------------------------------------

* * * * *

[[Page 7637]]

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 in Table 1 to this 
section, 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.

                       Table 1 to Sec.   2636.104
------------------------------------------------------------------------
                       Date of violation                         Penalty
------------------------------------------------------------------------
Violation occurring between Sept. 29, 1999 and Nov. 2, 2015...   $11,000
Violation occurring after Nov. 2, 2015........................    20,731
------------------------------------------------------------------------

* * * * *
[FR Doc. 2021-00714 Filed 1-29-21; 8:45 am]
BILLING CODE 6345-03-P