[Federal Register Volume 89, Number 97 (Friday, May 17, 2024)]
[Rules and Regulations]
[Pages 43686-43731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10339]



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Vol. 89

Friday,

No. 97

May 17, 2024

Part IV





Office of Government Ethics





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5 CFR Part 2635





Modernization Updates to Standards of Ethical Conduct for Employees of 
the Executive Branch; Final Rule

  Federal Register / Vol. 89 , No. 97 / Friday, May 17, 2024 / Rules 
and Regulations  

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OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2635

RIN 3209-AA43


Modernization Updates to Standards of Ethical Conduct for 
Employees of the Executive Branch

AGENCY: Office of Government Ethics.

ACTION: Final rule.

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SUMMARY: The U.S. Office of Government Ethics (OGE) is issuing this 
final rule updating the Standards of Ethical Conduct for Employees of 
the Executive Branch (Standards). The final rule updates the Standards 
based on OGE's experience gained from application of the regulation 
since its inception. The final rule also incorporates past interpretive 
guidance, adds and updates regulatory examples, improves clarity, 
updates citations, and makes technical corrections.

DATES: This final rule is effective August 15, 2024.

FOR FURTHER INFORMATION CONTACT: Kimberly L. Sikora Panza, Senior 
Associate Counsel, or Christie Chung, Assistant Counsel, U.S. Office of 
Government Ethics, 250 E Street SW, Suite 750, Washington, DC 20024-
3249; Telephone: 202-482-9300; TTY: 800-877-8339; FAX: 202-482-9237.

SUPPLEMENTARY INFORMATION:

I. Rulemaking History

    Pursuant to a provision of the Ethics in Government Act of 1978, 5 
U.S.C. 13122, the Director of the U.S. Office of Government Ethics 
(OGE) is responsible for periodically reviewing, evaluating, and 
updating the rules and regulations that pertain to ethics in the 
executive branch. On February 21, 2023 (88 FR 10774), OGE published for 
public comment a proposed rule setting forth various modernization 
updates to the Standards of Ethical Conduct for Employees of the 
Executive Branch (Standards), which serve as the primary regulatory 
guidance on the standards of ethical conduct for officers and employees 
of the executive branch of the Federal Government (Government). Prior 
to publishing the proposed rule, OGE consulted with the Department of 
Justice and the Office of Personnel Management pursuant to section 
201(a) of Executive Order 12674, as modified by Executive Order 12731, 
and the authorities contained in 5 U.S.C. chapter 131, subchapter II. 
Additionally, OGE solicited and considered the views of executive 
branch agency ethics officials. OGE's proposed updates pertained only 
to subparts A through I of the Standards; separate from the present 
rulemaking, OGE engaged in a comprehensive rulemaking that added to the 
Standards new subpart J, which relates to the creation and operation of 
legal expense funds, and the acceptance of pro bono legal services for 
certain legal matters. See 88 FR 33799 (May 25, 2023).
    The proposed rule provided for a 60-day comment period, which ended 
on April 24, 2023. During this period, OGE received nineteen responsive 
comment submissions regarding the proposed rule: fourteen from the 
public and five from Federal agencies. OGE also received two comment 
submissions from the public that do not relate to the proposed rule and 
address unrelated matters. After carefully considering all comments and 
making appropriate modifications, and for the reasons set forth below 
and in the preamble to the proposed rule at https://www.govinfo.gov/content/pkg/FR-2023-02-21/pdf/2023-02440.pdf, OGE is publishing this 
final rule.

II. Discussion of Comments and Changes to Proposed Rule

    The twenty-one comments that OGE received during the comment period 
are publicly accessible on OGE's website at this address: https://www.oge.gov/web/OGE.nsf/All+docs+By+Cat/08C3B547690B7675852589AA00556758. OGE has reviewed and considered all 
comments submitted by each commenter. OGE is not addressing the two 
comments that pertain to matters unrelated to the rulemaking. The 
following discussion addresses all other comments in the context of the 
specific subparts or sections to which they relate.

A. General Provisions (Subpart A)

    OGE received nine comments from individuals who expressed concerns 
about the proposed revisions to Sec. Sec.  2635.101(b)(13) and 
2635.106. In Sec. Sec.  2635.101(b)(13) and 2635.106, OGE proposed to 
add the words ``(including pregnancy, gender identity, and sexual 
orientation)'' after ``sex'' to reflect protected characteristics 
identified by the Equal Employment Opportunity Commission (EEOC) as 
covered by Federal employment discrimination laws. Towards this same 
end, OGE also proposed adding ``genetic information'' in these two 
sections and updating the word ``handicap'' to ``disability.'' These 
commenters specifically criticized the inclusion of ``gender identity'' 
and ``sexual orientation'' in Sec. Sec.  2635.101(b)(13) and 2635.106; 
no commenter referenced or objected to the other updates to these 
provisions relating to pregnancy, genetic information, or disability. 
Commenters perceived that the inclusion of ``gender identity'' and 
``sexual orientation'' would result in an expansion of civil rights, 
and objected to the revisions either categorically or without 
observance of appropriate protections for religious organizations and 
religious conscience.
    The revisions to Sec. Sec.  2635.101(b)(13) and 2635.106 do not 
effectuate any expansion of, or other change to, civil rights laws. 
Significantly, OGE does not have the authority to promulgate 
regulations expounding on the scope of categories protected by equal 
employment laws and regulations, or other civil rights laws and 
regulations. The updated language merely modernizes the regulatory text 
to include characteristics that the EEOC already recognizes as 
protected under the laws enforced by the Commission. See, e.g., 
Employees & Applicants, U.S. Equal Emp. Opportunity Comm'n, https://www.eeoc.gov/employees (last visited May 17, 2023). It is both 
necessary and appropriate that provisions in the Standards that refer 
to ``laws and regulations that provide equal opportunity'' list the 
characteristics protected by Federal laws prohibiting employment 
discrimination and enforced by the EEOC.
    Additionally, OGE received one comment from an individual who 
expressed concern that the addition of ``gender identity'' and ``sexual 
orientation'' infringes on executive branch employees' First Amendment 
and other constitutional rights. As noted above, these revisions are 
merely technical updates referencing types of discrimination already 
recognized by the EEOC. Acknowledgement of the fact that sex-based 
discrimination includes gender identity and sexual orientation in 
Sec. Sec.  2635.101(b)(13) and 2635.106 neither results in any change 
to existent equal opportunity laws or regulations, nor impacts the 
interaction between such laws and the constitutional rights of 
employees.
    For the above reasons and for the reasons stated in the preamble to 
the proposed rule, OGE therefore is adopting the proposed updates to 
subpart A without further revisions.

B. Gifts From Outside Sources (Subpart B)

Subpart B Examples
    OGE received four suggestions regarding additional examples or 
clarifications that could be made in subpart B. Specifically, one 
agency

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commenter suggested that OGE add an example of a ``non-traditional'' 
prohibited source, such as an entity that enters into a cooperative 
research and development agreement with a Federal agency, as well as an 
example involving a lottery ticket as a gift; the same agency suggested 
that OGE add an example to Sec.  2635.204(d) involving a Department of 
Defense or other Federal school; and a member of the public suggested 
that OGE clarify gift acceptance limits and issues relating to entities 
like the Kennedy Center where events might be hosted by a corporate 
donor.
    The examples requested by these commenters involve illustration of 
fairly specific situations. It would not be feasible for OGE to provide 
examples addressing application of the regulation in all of the 
scenarios that may give rise to subpart B considerations. In light of 
the extensive revisions made to subpart B in 2016, which included 
modernization changes and examples, and OGE's determination that the 
current rule provides appropriate guidance, OGE declines these 
suggestions.
Gift Exclusion and Exception for ``Opportunities and Benefits''
    One individual commenter requested that OGE reconcile the 
difference between the opportunities and benefits excluded from the 
definition of ``gift'' in Sec.  2635.203(b)(4) and the opportunities 
and benefits excepted from the gift prohibitions by Sec.  
2635.204(c)(2). Specifically, the commenter noted that the 
opportunities and benefits excluded from the ``gift'' definition by 
Sec.  2635.203(b)(4) include ``favorable rates and commercial 
discounts,'' while the opportunities and benefits excepted from the 
subpart B gift prohibitions by Sec.  2635.204(c)(2) include ``favorable 
rates, commercial discounts, and free attendance or participation.'' 
The ``free attendance or participation'' language that distinguishes 
these two provisions was added to Sec.  2635.204(c)(2) when OGE 
substantially revised subpart B in 2016. See 81 FR 81641 (Nov. 18, 
2016).
    OGE notes that the ``opportunities and benefits'' listed in the 
Sec.  2635.203(b)(4) gift exclusion are preceded by the word 
``including,'' indicating that the list is not intended to be 
exhaustive. As such, one could consider free attendance or 
participation under the gift exclusion, if the appropriate facts 
presented themselves. However, to clear up any confusion, OGE will add 
the words ``free attendance or participation'' to Sec.  2635.203(b)(4) 
to harmonize the language in Sec. Sec.  2635.203(b)(4) and 
2635.204(c)(2).
Free Attendance Gift Exclusion
    Section 2635.203(b)(8) excludes from the definition of ``gift'' 
free attendance to an event provided by the sponsor of the event to 
certain individuals, including an employee who is assigned to present 
information on behalf of the agency at the event (on any day when the 
employee is presenting), and ``[a]n employee whose presence on any day 
of the event is deemed to be essential by the agency to the presenting 
employee's participation in the event,'' if the employee is 
accompanying the presenting employee. One agency opined that it is 
unclear whether multiple personnel supporting a presenting employee may 
accept free attendance pursuant to this exclusion. Specifically, the 
commenter requested that ``an employee'' in the above-quoted language 
in Sec.  2635.203(b)(8)(ii) be changed to ``any employee'' to clarify 
that multiple supporting personnel may accept free attendance under 
this exclusion.
    OGE notes that it has previously issued guidance making clear that 
Sec.  2635.203(b)(8)(ii) can be applied to multiple agency personnel. 
See OGE DAEOgram DO-10-003, at 2 (Feb. 18, 2010) (``The number and 
types of personnel necessary, if any, to the speaker's participation 
will vary depending upon who the speaker is and the nature of the 
event.''). Nonetheless, to further address the commenter's concern, OGE 
is updating example 2 to paragraph (b)(8) to reflect that guidance and 
eliminate any doubt that multiple supporting personnel may accept free 
attendance under this exclusion. Specifically, OGE is changing 
``another employee'' to ``other employees'' and ``accompanying 
employee'' to ``accompanying employees'' in the example.
De Minimis Gift Exception
    Three commenters--two individuals and one agency--recommended that 
OGE increase the monetary thresholds for the de minimis gift exception 
at Sec.  2635.204(a), noting the effects of inflation in the 
intervening years since the exception was first adopted. Two other 
commenters made a similar suggestion in 2016 as part of OGE's 
comprehensive rulemaking revising portions of subpart B.
    After carefully considering this recommendation in 2016, OGE noted 
its concern that ``raising the de minimis would encourage employees to 
accept, and private citizens to give, more expensive and more frequent 
gifts than employees are currently able to accept.'' 81 FR 81641, 81645 
(Nov. 18, 2016). Although OGE acknowledged at that time--and continues 
to acknowledge--the effect of inflation on the relative value of the de 
minimis threshold, OGE continues to believe that $20 is a workable 
amount that serves the narrow purpose of the exception, which is to 
permit only the infrequent acceptance of inexpensive and innocuous 
gifts. Id.; see also 57 FR 35006, 35016 (Aug. 7, 1992). It also 
continues to be the fact that ``no compelling argument has been made to 
support a conclusion that raising the cap on the blanket de minimis 
exception, in order to allow employees to accept more expensive and 
more frequent gifts, would strengthen the integrity of the executive 
branch's operations.'' 81 FR 81645.
    Independent of these substantive reasons, OGE also declines to 
adopt the suggestion to increase the de minimis threshold in this 
particular rulemaking, the primary focus of which is on technical, non-
substantive updates. OGE does not think it would be appropriate to 
adjust the Sec.  2635.204(a) dollar value in this final rule without 
having announced in the proposed rule that it was contemplating such an 
increase, thereby providing the public an opportunity to reflect on 
such a proposal and share their input regarding the same.
Widely Attended Gatherings Exception
    To improve readability, OGE is making a technical amendment to the 
structure of Sec.  2635.204(g)(2), which defines when a gathering is 
widely attended for purposes of the widely attended gathering (WAG) 
exception. Specifically, OGE is organizing the components of the WAG 
definition at Sec.  2635.204(g)(2) into new separate paragraphs 
(g)(2)(i) through (iii). This update involves no substantive changes to 
the WAG exception.
    In response to the proposed rule, one agency recommended removing 
the requirement in the WAG exception in Sec.  2635.204(g) that an 
employee attend the event on their own time in their personal capacity 
rather than in their official capacity. Section 2635.204(g) provides 
that an employee could attend a qualifying event either on their own 
time or, if authorized by their agency, on excused absence pursuant to 
applicable guidelines for granting such absence, or otherwise without 
charge to the employee's leave account. The commenter questioned the 
rationale for this requirement that the employee attend on their own 
time, noting that an agency determination that attendance is in the 
agency's interest would suggest the event is related to the employee's 
official duties.

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    OGE notes that the requirement that the employee attend in their 
personal capacity is based on appropriations considerations that OGE 
documented in the preamble to the final rule for 5 CFR part 2635. See 
57 FR 35006, 35019-20 (Aug. 7, 1992). The 1992 preamble explains that 
the WAG exception was designed to allow agencies that do not have 
agency gift acceptance authority to permit their employees to accept a 
gift of free attendance at events in which the agency has an interest 
in the employee attending. However, due to appropriations requirements, 
in order for the gift to be accepted by an employee rather than by the 
agency, the employee must attend the event in their personal capacity 
``off the clock.'' Specifically, this requirement ``is imposed of 
necessity to ensure that the gift is made to the employee rather than 
to the agency and, thus, that it does not improperly augment agency 
appropriations available for payment of expenses of attendance at 
training, meetings or similar events.'' Id. at 35019. For these 
reasons, OGE declines to follow the agency's recommendation.

C. Gifts Between Employees (Subpart C)

Gifts to Superiors
    One individual commented that the proposed new language in Sec.  
2635.302(a)(1), which clarifies that ``an official superior may not 
knowingly accept'' an improper gift from a subordinate, is inconsistent 
with the controlling statutory authority at 5 U.S.C. 7351. The 
commenter also suggested that the knowledge element in this provision 
is unclear.
    As discussed in the preamble to the proposed rule, the premise that 
official superiors have a responsibility to not knowingly accept 
improper gifts from a subordinate is logically consistent with and 
complements the restrictions articulated in 5 U.S.C. 7351 governing 
gift giving from a subordinate to a superior. The proposed changes to 
Sec.  2635.302(a)(1) appropriately emphasize that superiors should not 
knowingly accept gifts that are improper for employees to give.
    Regarding the knowledge element relating to a superior's acceptance 
of a gift, it is included in recognition of the fact that the 
regulation covers gifts given ``indirectly'' by an employee--e.g., ones 
given by an employee's parent, sibling, spouse, child, or dependent 
relative with the employee's knowledge and acquiescence. See Sec.  
2635.303(b)(1). Section 2635.302(a) is structured in such a way that 
knowledge is required on the part of both the giver and receiver for 
indirect gifts. For example, an employee will not be in violation of 
the rule if their sibling gives a gift to the employee's superior 
without the employee's knowledge and acquiescence. Similarly, a 
superior will not be in violation of the rule if they accept a gift 
that unbeknownst to them was given by the sibling of an employee with 
the employee's knowledge and acquiescence.
    For the reasons explained in the preamble to the proposed rule, OGE 
declines the commenter's suggestions, and will adopt the revisions to 
Sec.  2635.302(a)(1) as set forth in the proposed rule.
Gifts From Employees Receiving Less Pay
    One individual commenter requested clarification regarding the 
meaning of ``less pay'' in Sec.  2635.302(b) and suggested that the 
rule be amended to specify ``base pay.'' OGE is unable to adopt this 
change. The language in Sec.  2635.302(b), referring to ``employees 
receiving less pay'' incorporates the language of the underlying 
statute. See 5 U.S.C. 7351 (referring to ``an employee receiving less 
pay''). Given this statutory basis, OGE is constrained in its ability 
to revise the regulation to specify ``base pay'' or ``rate of basic 
pay.''
    Another individual commenter opposed the new language OGE proposed 
to add to Sec.  2635.302(b)(2), which clarifies that the restriction on 
accepting a gift from an employee receiving less pay does not apply 
when the employee giving the gift is the official superior of the 
employee receiving the gift. The commenter expressed concern that this 
rule could provide for unequal treatment among the higher paid 
employees who are now allowed to receive gifts from their superiors, 
although the commenter also recognized that gifts from superiors to 
subordinates are not generally restricted by subpart C.
    OGE disagrees with the commenter that the updated language is ripe 
for ``favoritism and impropriety.'' As a threshold matter, OGE notes 
that in the status quo, subpart C does not restrict most gifts from 
superiors to their employees because superiors do not typically receive 
less pay than their employees. This structure does not seem to have 
elicited much concern among ethics officials. Furthermore, as OGE noted 
in the proposed rule, ``OGE does not believe that 5 U.S.C. 7351, the 
statute underlying the restriction articulated in Sec.  2635.302(b), 
either contemplated or intended that subordinate employees would be 
restricted from accepting a gift from an official superior who, because 
of the nature of modern compensation systems, receives less pay.'' 88 
FR 10774, 10775 (Feb. 21, 2023). Accordingly, this updated language 
that permits all employees to receive gifts from their superiors in the 
same manner is necessary to modernize and equalize the rule given the 
situations in the current Federal pay system in which a subordinate may 
earn more than their official superior. However, it does not encourage 
the provision of such gifts in an unfair or inequitable manner.
De Minimis Gift Exception
    Similar to the related suggestions regarding the subpart B de 
minimis exception, two agency commenters recommended that OGE increase 
the monetary threshold in the gift exception at Sec.  2635.304(a). As 
is the case with the de minimis exception in Sec.  2635.204(a), OGE 
believes that the current value of the de minimis exception in subpart 
C should remain unchanged. As OGE noted when issuing the Standards, 
while it is ``appropriate to permit modest exchanges of gifts between 
coworkers,'' it is important to remain mindful of ``subtle pressures to 
give gifts to superiors'' in an environment ``where superiors and 
subordinates interact daily and where subordinates compete for 
advancement.'' 57 FR 35006, 35022 (Aug. 7, 1992). Notwithstanding 
inflation, OGE believes that the $10 amount remains adequate to permit 
an exchange of a modest token between employees and is ``low enough 
generally to discourage employees from purchasing gifts for their 
superiors.'' Id. OGE further echoes its concern noted above about 
adjusting a de minimis value in this final rule when the public was not 
apprised of such a potential change or given the opportunity to comment 
on it.
Special Infrequent Occasions Exception
    One agency commenter suggested that OGE add a new example to the 
exception for special, infrequently occurring occasions to illustrate 
that a superior's promotion is not an occasion of personal 
significance. OGE declines to adopt this suggestion. Example 3 to the 
exception for voluntary contributions in Sec.  2635.304(c) sufficiently 
illustrates that a superior's promotion within the supervisory chain is 
not an appropriate time for subordinates to take up a collection for a 
gift to that official superior because the occasion does not ``mark the 
termination of the subordinate-official superior relationship, nor [is 
it an] event[ ] of personal significance within the meaning of [Sec.  
2635.304(b)].''

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    An individual commenter suggested that OGE consider adding 
``divorce'' to the non-exhaustive list of special, infrequent occasions 
covered by the exception at Sec.  2635.304(b)(1), and also suggested 
that OGE could add further detail in the regulation regarding the 
application of this exception in other contexts, such as traditional 
religious or cultural rites of passage.
    OGE notes that the statute authorizing OGE to issue regulations 
exempting certain gifts contemplates that OGE may exempt gifts in 
circumstances ``in which gifts are traditionally given or exchanged.'' 
5 U.S.C. 7351(c). The list of special, infrequent occasions provided in 
the regulation is not exhaustive, as it is preceded by the phrase 
``such as.'' OGE does not endeavor to attempt to list all occasions 
that may be covered in the regulation, nor does it believe it would be 
prudent or practicable to articulate every such occasion. The language 
of the exception makes clear that the exception allows for gifts that 
are ``infrequently occurring occasions of personal significance,'' and 
this language should be applied when considering occasions not included 
in the non-exhaustive list.
    Regarding this same exception, a different individual commenter 
agreed that adding ``bereavement'' to Sec.  2635.304(b) is a beneficial 
change; the individual suggested, however, that there are issues in 
practice with OGE's inclusion of this term without limitation. 
Specifically, the commenter recommended that OGE establish 
``limitations as to which family members the exception applies.'' OGE 
declines to adopt language qualifying which bereavements constitute an 
infrequently occurring occasion of personal significance, believing 
that it is neither appropriate nor wise to make a categorical 
determination about which losses justify expressions of sympathy. OGE 
notes that a gift in recognition of bereavement must still be 
``appropriate to the occasion,'' which is a sufficient limiting factor 
that appropriately curtails gift giving and acceptance in the 
bereavement context and addresses any potential for misuse of the 
narrow exception at Sec.  2635.304(b).
    This same commenter recommended that OGE add birthdays ending in 
zero to the non-exhaustive list of special, infrequent occasions 
covered by Sec.  2635.304(b)(1). Drawing parallels between birthdays 
ending in zero and occasions enumerated in the regulation, the 
individual commented that exclusion of milestone birthdays is 
arbitrary. OGE believes that it would be inappropriate to except gifts 
in connection with birthdays, which includes milestone birthdays, from 
the general rules governing gifts between employees, and thus did not 
revise the regulation to indicate otherwise. As noted in the preamble 
accompanying the proposed rule, OGE does not consider milestone 
birthdays to be infrequently occurring occasions of the sort warranting 
exception under Sec.  2635.304(b). Of course, it may be possible to 
give a gift in recognition of any birthday under another exception, 
such as the exception for gifts with a value of $10 or less and the 
exception for food and refreshments shared in the office among several 
employees. See Sec.  2635.304(a)(1) and (2).
Exception for Voluntary Contributions of Nominal Amounts
    One individual commenter suggested that OGE define the term 
``nominal'' as it is used in the exception at Sec.  2635.304(c) for 
``voluntary contributions of nominal amounts from fellow employees for 
an appropriate gift to an official superior.'' OGE appreciates this 
suggestion, but has not made a change to the regulation. What 
constitutes a ``nominal'' amount is necessarily context-specific, for 
example, depending on whether the contribution is for items like food 
and refreshments, or for a gift in recognition of a special, infrequent 
occasion. In response to a similar comment when first issuing the 
Standards, OGE explained that it chose to not impose a specific dollar 
limit, even though collections for gifts generally involve individual 
contributions less than five dollars. In doing so, OGE noted that 
``[w]here contributions meet the regulatory requirement that they be 
entirely voluntary, higher amounts may appropriately be contributed in 
some cases, as when several senior members of an office provide an 
additional contribution to subsidize a collection that has come up 
short of sufficient funds to purchase a desired gift.'' 57 FR 35006, 
35023 (Aug. 7, 1992). The regulation makes clear that the contributions 
must be for ``an appropriate gift,'' which OGE believes provides a 
suitable, non-monetary limit on the use of this exception.
Disposition of Prohibited Gifts
    One agency commenter suggested that OGE add a section in this 
subpart that addresses what an employee should do if they inadvertently 
accept a gift that is not permissible under this subpart. In response 
to agency inquiries regarding the disposition of gifts prohibited by 
subpart C, OGE has advised that agencies are free to look to the 
subpart B disposition provisions for guidance regarding how to handle 
such gifts. To provide greater clarity to employees and ethics 
officials, OGE will add a new Sec.  2635.305 to subpart C that is 
consistent with that guidance.

D. Conflicting Financial Interests (Subpart D)

Analyzing Imputed Interests and Multi-Entity Organizations
    One agency commenter requested that OGE add an example in Sec.  
2635.402 illustrating the application of 18 U.S.C. 208 where an 
employee has an imputed financial interest by virtue of their outside 
employment or position with an organization, and there is a particular 
matter that could affect one of the entity's campuses, or a parent, 
affiliate, or subsidiary organization. OGE declines to add such an 
example. As a threshold matter, OGE notes that the Standards already 
provide clear guidance regarding how imputed relationships are 
analyzed. Specifically, Sec.  2635.402(b)(2) explains that ``[f]or 
purposes of 18 U.S.C. 208(a) and this subpart, the financial interests 
of [certain imputed persons, including an organization or entity with 
which an employee serves as officer, director, trustee, general partner 
or employee] will require the recusal of an employee to the same extent 
as if they were the employee's own interests.'' (Emphasis added.) 
Regarding related entities such as parents, subsidiaries, affiliates, 
etc., the Standards generally acknowledge the potential conflicts that 
may arise with respect to the same. See note 2 to Sec.  2635.402(b)(1) 
(recognizing that a party matter may have a direct and predictable 
effect on an employee's financial interest in an affiliate, parent, or 
subsidiary of that party). Ultimately, however, OGE is wary of 
potential misinterpretation and misapplication were it to include an 
example of the sort requested by this commenter, and believes that a 
Legal Advisory is a more suitable means through which to provide 
guidance on the appropriate analysis.
Example 1 to Sec.  2635.403(b)
    One individual commenter questioned OGE's proposed inclusion of a 
dollar amount in example 1 to Sec.  2635.403(b) and suggested that the 
value should be removed because it ``is not . . . important for the 
rule's applicability.'' OGE intends to retain the dollar amount in this 
example. As explained in the preamble to the proposed rule, OGE 
proposed adding a specific dollar figure to the amount of stock owned 
by the employee in the example ``to make clear that the de

[[Page 43690]]

minimis regulatory exemption in 5 CFR 2640.202 does not apply in this 
scenario.'' Accordingly, as noted in the example, the agency could 
determine that ``the employee could not, by virtue of 18 U.S.C. 208(a), 
perform these significant duties of the position while retaining stock 
in the company.''
Definition of Financial Interest
    The same individual commenter questioned OGE's proposed update to 
the definition of ``financial interest'' in 5 CFR 2635.403(c)(1), which 
replaces the word ``dependent child'' with ``minor child,'' and 
expressed a preference for retaining ``dependent child.'' As stated in 
the language of Sec.  2635.401 that this rulemaking will adopt, subpart 
D ``summarizes the relevant statutory restrictions [of 18 U.S.C. 208] 
and some of the regulatory guidance found'' in 5 CFR part 2640, the 
part interpreting and implementing 18 U.S.C. 208. The updated language 
referencing ``minor child'' brings Sec.  2635.403(c)(1) into alignment 
with the language used throughout subpart D, and reflects the 
terminology of the statute proper and its implementing regulation. 
Therefore, OGE declines to retain the ``dependent child'' language in 
Sec.  2635.403(c)(1) or otherwise integrate the concept of ``dependent 
child'' in this subpart.

E. Impartiality in Performing Official Duties (Subpart E)

Subpart E Examples
    OGE received one comment from an individual concerning the 
application of Sec.  2635.502 to particular matters of general 
applicability and requesting the addition of an example illustrating 
that application. As proposed, reorganized Sec.  2635.502 articulates 
the operation of the regulation with respect to particular matters 
involving specific parties in which a household member has a financial 
interest, and particular matters involving specific parties in which 
someone with whom one has a covered relationship is or represents a 
party. Section 2635.502(a)(3) makes clear that employees who are 
concerned about impartiality questions arising from circumstances other 
than the party matters described in the preceding sentence--which could 
include particular matters of general applicability--should utilize the 
process detailed in the regulation, including in paragraph (d), to 
determine whether their participation is appropriate. In 1991, OGE 
addressed this ``catch-all'' provision in the preamble to the proposed 
rulemaking for the Standards, explaining that although the section 
focused on specified relationships and party matters, questions about 
an employee's impartiality could arise from any number of interests or 
relationships they might have, and in connection with their 
participation in matters that do not necessarily involve specific 
parties. 56 FR 33778, 33786 (July 23, 1991). For this reason, Sec.  
2635.502 ``therefore provides that an employee should use the process 
set forth in that section when circumstances other than those 
specifically described raise questions about [their] impartiality in 
the performance of official duties.'' Id. Given this guidance, OGE 
declines to add an example illustrating the specific application of 
Sec.  2635.502 to particular matters of general applicability.
    For similar reasons, OGE declines to add a very fact-specific 
example suggested by a different individual regarding how previous 
litigation history between an employee and party to a matter might give 
rise to impartiality concerns.
Employee Work Assignments
    OGE received two comments from the public expressing concern that 
the new note at Sec.  2635.501 could be viewed as being in conflict 
with, or causing confusion regarding, regulatory language in Sec. Sec.  
2635.105(a) and 2638.602 regarding how supplemental agency ethics 
regulations require OGE's concurrence, with co-signature and 
publication by the agency and OGE. One commenter questioned whether the 
intent of the note was to indicate that agencies have unfettered 
authority to assign work as they see fit, and whether a manager's 
delegation of work based on ethics considerations would be contrary to 
Sec.  2635.105 if not subject to OGE review. The second commenter asked 
OGE to make clear what triggers the requirement to memorialize an 
ethics requirement in a supplemental regulation versus merely issuing 
an agency policy.
    As discussed in the preamble to the proposed rule, the note is not 
an independent source of authority; it simply reminds agency ethics 
officials that supervisors generally have broad discretion when 
assigning work to employees and that there may be a multitude of 
factors considered by a supervisor in doing so, including appearance or 
impartiality concerns that do not fit squarely within the Standards. 
OGE has no intention to alter the requirements relating to supplemental 
ethics regulations, nor could it do so in this rulemaking, as those 
general requirements are established by Executive order. See E.O. 
12731, sec. 301(a) (Oct. 17, 1990). Agencies wishing to supplement the 
Standards with additional ethics obligations still must follow the 
requirements of Sec.  2635.105, as referenced in Sec.  2638.602, and 
may rely on prior OGE guidance regarding what agency ethics policies 
belong in a supplemental regulation. See, e.g., OGE Legal Advisory LA-
11-07 (Oct. 31, 2011).
Covered Relationship Stemming From Certain Familial Relations
    One individual commenter stated their support for the removal of 
the ``dependent'' qualifier when discussing covered relationships 
relating to certain business activities of children, noting that ``[a] 
non-dependent child is more likely to have relationships that implicate 
impartiality concerns than dependent children, who, being dependents as 
defined at 26 U.S.C. 152 (e.g., minors or students), are relatively 
unlikely to have the sorts of business relationships raising those 
concerns.'' An agency commenter disagreed with OGE's proposal to remove 
the ``dependent'' qualifier, suggesting that the financial co-
dependence of parents and dependent children is more likely to raise 
concerns regarding impartiality.
    OGE will adopt as final the change removing the ``dependent'' 
qualifier before ``child'' in Sec.  2635.502(b)(1)(iii). This change 
appropriately reflects that there are potential impartiality concerns 
relating to certain business relations of a child regardless of that 
child's dependency, just as long-established language in Sec.  
2635.502(b)(1)(iii) acknowledges impartiality concerns relating to 
certain business relations of a parent, without any dependency 
predicate. The updated language harmonizes the treatment of parents and 
children for purposes of the scope of certain covered relationships 
because both familial relations may raise similar ethics concerns, 
irrespective of any financial connection or perceived financial impact. 
In that regard, OGE notes that nothing in subpart E contemplates that 
there need be a perceived impact on an employee's financial interests 
for there to be concerns about their impartiality, and that many of the 
long-established covered relationships articulated in Sec.  2635.502(b) 
would not seem to involve such a perceived impact. Of course, we note 
that Sec.  2635.502 does not demand a specific outcome regarding 
participation when an appearance concern arises; it merely requires 
that employees engage in the appropriate analysis under this subpart 
before participating. As we stated in the 1992 preamble to the final 
rule for the Standards, ``the importance of relevant facts must be 
emphasized.''

[[Page 43691]]

57 FR 35006, 35027 (Aug. 7, 1992). To highlight this point as applied 
to the revised covered relationship provision, OGE is updating new 
example 6 to Sec.  2635.502(b) so that the scenario described involves 
the employment relationship of an adult child. This example now 
illustrates a situation where a covered relationship described in 
paragraph (b)(1)(iii) exists--a covered relationship with the employer 
of an employee's adult child--but the employee could justifiably 
conclude that a reasonable person would not be likely to question their 
impartiality in participating in a party matter involving the child's 
employer.
Covered Payments and Qualifying Programs
    OGE received one comment from an agency regarding the proposed 
update to the definition of a ``qualifying program'' at Sec.  
2635.503(b)(2), which requires that the written program ``not treat 
individuals entering Government service more favorably than other 
individuals.'' The commenter noted that this language covers the types 
of commonly written policies that permit for the acceleration of 
benefits or lump sum payouts for individuals entering Government 
service, which can expedite the transition to Government service, and 
expressed concern that this change would cause unnecessary delays and 
conflicts in that transition.
    OGE notes that the updated language in Sec.  2635.503(b)(2) does 
not affect OGE's position that ``when the ownership of the interest has 
already vested[,] an employee may receive an earlier payment to 
remediate a conflict of interest without running afoul of either 18 
U.S.C. 209 or 5 CFR 2635.503. This is because the employee is entitled 
to receive the payment and only the timing is being altered, not the 
entitlement to the payment itself.'' U.S. Off. of Gov't Ethics, 
Conflicts of Interest Considerations: Corporate Employment 5 (2021), 
https://www.oge.gov/web/OGE.nsf/0/EC83872D932E6DCE852585B6005A1F8C/
$FILE/Corporate%20Employment.pdf. Accordingly, if an employee receives 
accelerated payment of an already vested equity interest, that payment 
still would not implicate Sec.  2635.503.
    Regarding the revisions to the definition of ``qualifying 
program,'' which OGE will adopt as proposed, OGE has noted an increase 
in written policies and programs favoring Government employees, which 
OGE did not anticipate when it first promulgated Sec.  2635.503. OGE 
therefore intentionally updated the definition of ``qualifying 
program'' to exclude written plans and programs that provide favorable 
treatment to employees entering Government service, such as accelerated 
vesting of employment-related interests. This approach is consistent 
with how OGE has viewed unwritten practices of treating employees 
entering Government more favorably. Whether made pursuant to a program 
or a practice, a covered payment received from a former employer raises 
``a legitimate concern, and thus an appearance, that the employee may 
not act impartially in particular matters to which the former employer 
is a party or represents a party.'' 56 FR 33778, 33786 (July 23, 1991). 
OGE does not have any indication that this modernized regulation, which 
is focused on an employee's recusal obligation once serving the 
Government, would cause unnecessary delays and conflicts during the 
transition into Federal service.
Inclusion of Former Clients in the Former Employer Definition
    The same agency requested that OGE revise note 1 to paragraph 
(b)(3) in Sec.  2635.503 to ``clarify that former clients are those for 
whom the individual personally provided services, and not all clients 
of a larger firm.'' Note 1 states that the ``former employer'' 
definition ``includes former clients for whom an employee may have 
served as an agent, attorney, consultant, or contractor.'' (Emphasis 
added.) OGE believes that the Note is clear on its face that the term 
``former clients'' refers to those for whom the employee personally 
provided services, and thus will adopt the proposed language without 
amendment.

F. Seeking Other Employment (Subpart F)

Subpart F Examples
    OGE received one comment from an individual requesting an 
additional example in subpart F to clarify whether an employee may rely 
on third-party information to conclude that a prospective employer has 
rejected the possibility of hiring the employee. Specifically, the 
commenter suggested an example where an employee learns from a third 
party that they are no longer under consideration--for example, because 
the position has been filled by someone else. OGE declines to make this 
change for several reasons. First, OGE in 2016 published substantive 
updates to subpart F, which included several new examples to illustrate 
the application of subpart F to modern job searches. This rulemaking is 
only proposing global technical changes throughout subpart F, which is 
consistent with the purpose of the modernization project. Second, OGE 
notes that the legitimacy of the information received from third 
parties is likely to vary significantly on a case-by-case basis. As 
such, an example involving information from a third party would be 
unlikely to provide helpful insight--and worse, could be misconstrued 
to imply that all third-party information can be relied upon in the 
same way. Finally, OGE believes the current structure of subpart F 
provides sufficient guidance to assess scenarios where the employee 
receives credible information that the prospective employer has 
rejected the possibility of employment.
Seeking Employment Definition
    This same individual asserted that the definitions in subpart F do 
not take into consideration the possibility that an employee might seek 
employment by posting their interest on social media or meeting with a 
recruiter who will communicate with multiple, potentially unknown, 
companies. OGE disagrees with this commenter. As part of the 2016 
updates to subpart F, OGE modernized the rule and added three new 
examples of seeking employment involving social media. OGE added these 
examples to ``clarify that the rules in this subpart apply regardless 
of the method the employee uses when seeking employment.'' 81 FR 8008, 
8009 (Feb. 17, 2016). As further discussed in the 2016 preamble, the 
examples illustrate that the posting of a profile, resume, or other 
employment information that is not targeted to a specific person is not 
considered an unsolicited communication with an entity regarding 
possible employment; instead such a posting is akin to posting a resume 
on a bulletin board. Moreover, if the employee is using an agent or 
other intermediary when seeking employment, the definition of 
``prospective employer'' is met only ``if the agent identifies the 
prospective employer to the employee.'' 5 CFR 2635.603(c)(1) and (2) 
and example 2 to paragraph (c) (discussing a scenario involving an 
online resume distribution service that sends resumes to recruiters). 
Accordingly, OGE is declining to make further updates.
    This individual also suggested that OGE shorten the two-month 
timeframe in Sec.  2635.603(b)(2)(ii), which provides that, in the 
absence of a response from a prospective employer indicating interest, 
an employee is no longer seeking employment--and thus no longer has a 
recusal requirement under subpart F--after two months have elapsed from 
their dispatch of an

[[Page 43692]]

unsolicited resume or job proposal. The commenter recommended 
truncating this timeframe given changes in the mechanisms through which 
individuals search for jobs, and potentially quicker responses from 
prospective employers than was the case in years past.
    The provision about which this commenter is providing input was 
substantively unchanged by the proposed rule, which noted that OGE 
endeavors to make only global technical changes to subpart F that are 
proposed throughout the Standards. OGE does not believe that the two-
month period prescribed in Sec.  2635.603(b)(2)(ii) is an unreasonably 
excessive period of time in the modern job market. Even with the 
technologies of current day, OGE continues to view two months as a 
realistic period of time within which an individual may expect a 
response to an unsolicited resume or job proposal. Subpart F addresses 
lack of impartiality concerns warranting recusal from particular 
matters affecting the financial interests of a prospective employer 
with whom the employee is seeking employment. In weighing this comment 
against the concerns underpinning subpart F, OGE is not inclined to 
relax the recusal requirement in the manner suggested. Moreover, we 
note, as we did in 1992 when issuing the final rule establishing the 
Standards, ``that the two-month period establishes an outside limit. An 
earlier response from the recipient indicating no interest in pursuing 
the matter further will terminate the employee's disqualification at 
that time.'' 57 FR 35006, 35029 (Aug. 7, 1992). Thus, to the extent 
that the timeframe in ``which an applicant will hear back from a 
prospective employer'' is shorter, as suggested by the commenter, an 
employee who receives a negative response will be relieved of their 
subpart F recusal obligation at that point.

G. Misuse of Position (Subpart G)

Letters of Recommendation
    OGE received multiple comments relating to Sec.  2635.702(b), a 
section in which OGE did not propose any substantive changes. One 
agency commenter recommended that OGE add an additional example to 
Sec.  2635.702(b) to illustrate that an employee may use their official 
title in connection with providing a recommendation for an individual 
with whom they have dealt in the course of Federal employment outside 
of the executive branch--for example, an individual with whom the 
employee worked while assigned to a Congressional office. OGE declines 
to adopt this suggestion, as it considers the language in Sec.  
2635.702(b) to be sufficiently clear in its broad phrasing that an 
employee's official title may be used in connection with a reference 
for an individual with whom the employee has dealt not just in 
connection with executive branch employment, but ``in the course of 
Federal employment.''
    A different agency requested that the last sentence of Sec.  
2635.702(b) be updated such that employees may recommend individuals 
using their official title not just for Federal employment, but also 
for other opportunities such as Federal internships or educational 
programs. OGE believes that Sec.  2635.702(b) appropriately permits 
recommendations for Federal employment, and declines to expand the 
regulatory language as suggested by the commenter to cover other 
Federally associated opportunities. As a point of clarification, 
however, OGE notes that some internships and positions associated with 
a Federal entity may qualify as ``Federal employment,'' see, e.g., OGE 
Legal Advisory LA-17-09 (Aug. 14, 2017) (discussing different hiring 
authorities for and employment status of student interns), such that it 
would be permissible under Sec.  2635.702(b) for an employee to use 
their official title to recommend an individual for the same.
    The same agency expressed concern that example 1 to Sec.  
2635.702(b) suggests that ``it is entirely acceptable for an employee 
to recommend a person for Federal employment (including use of the 
employee's title and official letterhead) solely because the person is 
a personal friend.'' As a threshold matter, OGE notes it did not 
propose to substantively update this example in this rulemaking. 
Furthermore, the example is consistent with Sec.  2635.702(b), which 
specifically permits an employee to use their official title to 
recommend individuals for Federal employment, including personal 
friends. As explained in the preamble to the final rule establishing 
the Standards, OGE believes that recommending an individual for Federal 
employment serves an ``official purpose'' that justifies the use of 
official title. See 57 FR 35006, 35031 (Aug. 7, 1992).
Personal Social Media and Use of Official Photographs
    As discussed in the proposed rulemaking, OGE is adding a new 
example of an appearance of governmental sanction following Sec.  
2635.702(b), which involves the use of personal social media by an 
Environmental Protection Agency (EPA) employee. The example is 
consistent with OGE's Legal Advisory on personal social media use and 
illustrates the factual determination that agency ethics officials must 
make in evaluating whether a reference to an employee's official title 
or position on social media violates the Standards. See OGE Legal 
Advisory LA-15-03 (Apr. 9, 2015). In particular, the example notes that 
while certain facts alone--such as listing the employee's Government 
title under the ``occupation'' section of their personal social media 
account--would not reasonably be construed as implying governmental 
sanction or endorsement, it would be problematic if the EPA employee 
prominently featured the agency's seal on their social media account 
and made statements asserting or implying that their opinions on 
environmental topics are sanctioned or endorsed by the Government.
    One agency commenter recommended updating this example to address 
the use of an official Government photograph on personal social media. 
Official photographs, displays including official uniform or insignia, 
and use of agency seals must be consistent with all applicable 
statutes, regulations, and agency policies, including the Standards. 
Employees who choose to display official pictures or include 
photographs of themselves wearing agency uniform or insignia should be 
mindful that doing so can increase the possibility of confusion as to 
whether their social media account and content on that account are 
official or personal; a prominent disclaimer clarifying that all 
content is personal can help obviate such confusion. However, OGE 
declines to update the example to discuss the use of an official 
photograph on a personal social media account. Although the new example 
provides an illustration of how personal social media use might 
implicate ethics rules regarding misuse of position, it is not intended 
to be exhaustive of the myriad ways that employees might engage or post 
on their personal social media accounts. Given the nuance of these 
issues, OGE believes that this topic is best addressed through 
interpretive guidance, and notes that it recently issued a Legal 
Advisory discussing the application of ethics rules to employees' 
activities on personal social media accounts, including the use of 
official photographs. See OGE Legal Advisory LA-23-13, at 2-3 (Sept. 
28, 2023) (discussing the question ``Can I use my official picture or a 
picture of me at a work event as my profile picture [on social 
media]?'').

[[Page 43693]]

Acceptable Personal Use of Government Resources
    As explained in the preamble to the proposed rule, OGE proposed 
replacing example 1 following Sec.  2635.704(b)--which discussed a 
General Services Administration (GSA) regulation that no longer 
exists--with an example that references an agency's de minimis policy 
relating to the personal use of a Government email account. In response 
to this change, one individual commenter requested that OGE provide 
more guidance on acceptable personal use of Government resources, given 
the absence of a GSA regulation and significant technological changes 
in recent years. OGE believes the Standards and examples set forth and 
revised in Sec.  2635.704 are sufficiently clear and can be applied to 
Government property as it continues to evolve with technological 
advances. Furthermore, more specific guidelines about current 
technology than what is already in Sec.  2635.704 and its examples 
would run the risk of quickly becoming outdated. Finally, OGE notes 
that agencies have established more specific policies regarding 
acceptable limited personal use of Government resources by their 
employees, and employees' adherence to these policies would constitute 
an authorized use of Government resources. See OGE Inf. Adv. Op. 97x3 
(Mar. 21, 1997). OGE defers to agencies to interpret such policies and 
to determine whether specific instances of personal use would amount to 
a misuse of Government resources.

H. Outside Activities (Subpart H)

Teaching, Speaking, and Writing
    One individual provided comments regarding OGE's proposed 
ministerial change to Sec.  2635.807(a), which emphasizes the timing 
aspect that an employee ``may not receive compensation from any source 
other than the Government for teaching, speaking, or writing that 
occurs while the person is a Government employee and that relates to 
the employee's official duties.'' (Emphasis added.) The commenter 
incorrectly suggests that the updated language provides for a ``looser 
standard'' than set forth in the original rule; specifically, the 
commenter stated that before this change, Sec.  2635.807 had a 
``broader application . . . [that] prevents former employees from 
gaining, after the fact from'' their official duties and that the new 
language would ``lessen the broad application and lift the restrictions 
as they would apply to former employees.''
    As a threshold matter, OGE reiterates that the Standards, including 
subpart H, apply only to current executive branch employees. More 
specifically regarding teaching, speaking, and writing covered by Sec.  
2635.807, OGE has been unequivocal in its guidance that ``ethics rules 
do not restrict receipt of compensation unless the writing occurs 
during Government service.'' OGE DAEOgram DO-08-006, pt. I, at 8 (Mar. 
6, 2008); see also id. (``Section 2635.807 applies to an individual 
while [they] serve[ ] as a Government employee. Therefore, each 
provision contained in section 2635.807 restricts compensation only for 
writing that occurs while an individual is in Government service. If 
the writing is done either before or after Government service, none of 
these provisions will apply.''). Accordingly, OGE declines the 
commenter's suggestion that Sec.  2635.807(a) be phrased disjunctively, 
such that compensation for teaching, speaking, or writing would be 
restricted if the writing occurs while the person is a Government 
employee or if the writing relates to an employee's official duties.
    One agency commenter characterized Sec.  2635.807 as addressing 
teaching, speaking, or writing ``on `official time' and on personal 
time,'' and suggested that the section be divided into off-duty and 
official duty paragraphs ``rather than housing it all under Outside 
Activities.'' OGE disagrees with the commenter's characterization. As 
noted in Sec.  2635.801(a), subpart H ``contains provisions relating to 
outside employment, [and] outside activities''; Sec.  2635.807 
addresses teaching, speaking, and writing that an employee does as 
outside employment or an outside activity, and is not intended to 
address official duty teaching, speaking, or writing. To the extent 
that this section refers to official capacity teaching, speaking, and 
writing, it does so for limited purposes. First, it refers to official 
capacity activities in certain examples to distinguish between the 
scenarios where the requirements of Sec.  2635.807 do and do not apply. 
See, e.g., Sec.  2635.807(a)(2)(iii), example 4 (describing a scenario 
where payments are not prohibited under the rule restricting 
compensation for speaking relating to official duties because the 
employee is speaking officially); see also Sec.  2635.807(b), example 1 
(noting that the restrictions on reference to official position would 
not apply to an employee who is authorized to speak in their official 
capacity). Second, it notes that ``[t]eaching, speaking, or writing 
relates to the employee's official duties''--and thus is covered by 
Sec.  2635.807(a)--if ``[t]he activity is undertaken as part of the 
employee's official duties.'' This language simply ``incorporates the . 
. . prohibition on supplementation of salary contained in 18 U.S.C. 
209,'' DO-08-006, pt. I, at 19 n.18, and is not intended to provide any 
specific guidance regarding official duty speaking. For these reasons, 
OGE declines the commenter's suggested reorganization.
    The same commenter asked OGE to address various scenarios relating 
to the extent to which an employee could choose or refuse who they 
present agency information to as part of an outside activity if the 
presentation otherwise meets the requirements of Sec.  2635.807(a). The 
scenarios posed by the commenter are very fact-specific, and 
unfortunately it is not feasible for OGE to include exhaustive examples 
in the regulation discussing the application of Sec.  2635.807 and 
other ethics rules. OGE notes, however, that even if Sec.  2635.807 
would not restrict an employee's teaching, speaking, or writing, the 
employee may not conduct the activity in a way that violates other 
ethics requirements. See, e.g., OGE Inf. Adv. Op. 94x1 (Jan. 10, 1994) 
(``If an employee does not receive any compensation for [their] 
participation in the conference, the speech will not be prohibited by 
section 2635.807. In such an instance, the primary consideration the 
employee should keep in mind is [their] responsibility not to misuse 
[their] position, title, Government property, or nonpublic 
information.'').
    Finally, OGE declines this commenter's suggestion to impose a 
disclaimer requirement for official teaching, speaking, or writing. To 
the extent that agencies authorize or require the use of disclaimers in 
official speeches to make clear that the speaker is sharing their 
personal views rather than the views of the agency, OGE defers to 
agencies on whether the use of such a disclaimer is appropriate.
    A different agency expressed concern regarding a minor update OGE 
proposed to make to the existing note to 5 CFR 2635.807(a)(2)(iii). 
Specifically, OGE proposed to delete the reference to 18 U.S.C. 209 in 
the reminder that other authorities in some circumstances may limit or 
preclude an employee's acceptance of travel expenses. OGE's intention 
in deleting the reference was not to make a substantive change but 
rather ``to avoid unnecessary focus on a single statute to the 
potential exclusion of other applicable authorities.'' 88 FR 10774, 
10780 (Feb. 21, 2023). The commenter requested that OGE keep the 
reference to 18 U.S.C. 209 because ``[i]t is helpful to employees and 
legal practitioners to be reminded in this

[[Page 43694]]

context that a criminal statute in particular may be triggered.''
    Based on this feedback, OGE will add back in the reference to 18 
U.S.C. 209 in the referenced note. However, OGE reiterates that other 
authorities may limit or preclude an employee's acceptance of travel 
expenses, so to emphasize that section 209 is one of several 
potentially applicable authorities, OGE has updated the phrase to read 
``other authorities, including but not limited to 18 U.S.C. 209.''
    One agency commenter asked that OGE add new language to Sec.  
2635.807(b) permitting ethics officials to apply a fact-based, 
``totality of circumstances'' test to determine whether an employee 
serving as faculty at Federal universities and schools may include 
their title or position in connection with outside academic or 
scientific editorial board service, and for listings of professional 
society committee membership. The commenter's request for a ``totality 
of circumstances'' test appears to be based on the commenter's 
assertion that, in the context of Federal employees serving as faculty 
at Federal universities and schools, disclaimers and biographical 
sketches required for teaching, speaking, and writing activities under 
Sec.  2635.807(b) ``are not commonly used by publishers'' and 
professional societies.
    As OGE has previously explained, ``[t]he foundation in the 
Standards underlying the limitations on use of official title is 5 CFR 
2635.702(b), which provides `an employee shall not use or permit the 
use of [their] Government position or title or any authority associated 
with [their] public office in a manner that could reasonably be 
construed to imply that [their] agency or the [G]overnment sanctions or 
endorses [their] personal activities or those of another.''' OGE Inf. 
Adv. Op. 10x1, at 1 (Mar. 19, 2010). Employees engaged in outside 
teaching, speaking, and writing must also meet the use of title 
requirements of Sec.  2635.807(b). OGE has advised that ``[t]he purpose 
of section 807(b)(1) and (b)(2), in conjunction with section 702(b), is 
to ensure that public is not misled as to whether the views expressed 
by an Executive Branch employee in uncompensated teaching, writing, or 
speaking are those of the employee or those of the Government.'' Id. at 
2.
    OGE believes that the guidance it has previously issued regarding 
use of title in outside activities sufficiently addresses the 
commenter's practical concerns. See, e.g., id. (emphasizing the 
importance of an employee providing relevant biographical details other 
than official title and position in connection with teaching, speaking, 
and writing, as required by Sec.  2635.807(b)(1), and discussing how to 
evaluate whether an employee has complied in good faith with this 
provision); see also OGE Legal Advisory LA-14-08, at 2 (Nov. 19, 2014) 
(stressing the importance of considering the totality of circumstances 
in connection with use of title in other outside activities, such as 
involvement with a professional society, to determine whether a 
reasonable person could construe the reference to imply sanction or 
endorsement of the organization or the employee's personal activities). 
Because OGE believes that subparts G and H and the further guidance on 
those provisions provide appropriate flexibility regarding use of title 
and sufficiently address the commenter's concerns, OGE declines to make 
the commenter's recommended change.
Fundraising
    The same agency recommended that OGE amend the definition of 
``participation in the conduct of an event'' at Sec.  2635.808(a)(2) to 
clarify that the term includes presenting awards and being present on 
stage during the presentation of awards. OGE declines to adopt these 
changes given that the list of examples to which the commenter suggests 
adding is not intended to be exhaustive. Additionally, it is OGE's 
belief that the current language provides sufficient guidance for 
practical application of the regulation by ethics officials and 
employees, without being unnecessarily proscriptive regarding the 
necessarily fact-specific application of this provision.
    The same agency also requested certain clarifications in the new 
social media examples added to Sec.  2635.808(c) relating to 
fundraising in a personal capacity. In particular, the commenter 
suggested updating example 5 to note that the employee's ``personal 
solicitation'' could be sent by either official or personal email, and 
suggested updating example 6 to note that ``any person'' includes 
subordinates. OGE believes that the cited examples are appropriately 
specific, and therefore declines to incorporate these changes. 
Specifically, the general reference to an email transmission in example 
5 does not suggest that such a transmission need be sent by either a 
personal or an official email to be problematic. Similarly, the 
reference to ``any person'' in example 6 is appropriately broad such 
that it could include a subordinate.

I. Other

Incorporation of Obligations From Ethics Pledges
    One individual commenter recommended that OGE implement certain 
core provisions of recent Presidential ethics pledges that impose 
additional obligations on certain noncareer employees. See, e.g., E.O. 
13490 (Jan. 21, 2009); E.O. 13770 (Jan. 28, 2017); E.O. 13989 (Jan. 20, 
2021). OGE declines to make such a change, which is outside the scope 
of the modernization updates contemplated by this rulemaking, and about 
which public input was requested. OGE further notes that it is the 
prerogative of each Presidential administration to determine what, if 
any, additional ethics obligations it wishes to impose on its 
appointees, and that it would not be appropriate for OGE to implement 
such obligations in a regulation that by design is intended to extend 
across multiple administrations.
Subpart J
    As discussed above, OGE recently engaged in a separate rulemaking 
process that culminated in the addition of subpart J to the Standards. 
This rulemaking makes no changes to subpart J, and revises and 
republishes only subparts A through I of the Standards.

III. Matters of Regulatory Procedure

Regulatory Flexibility Act

    As 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 will 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 25, subchapter II), this final rule will not significantly or 
uniquely affect small governments and will not result in increased 
expenditures by State, local, and Tribal governments, in the aggregate, 
or by the private sector, of $100 million or more (as adjusted for 
inflation) in any one year.

[[Page 43695]]

Executive Orders 12866, 13563, and 14094

    In promulgating this rule, the Office of Government Ethics has 
adhered to the regulatory philosophy and the applicable principles of 
regulation set forth in Executive Order 12866, Regulatory Planning and 
Review (58 FR 51735, Oct. 4, 1993); Executive Order 13563, Improving 
Regulation and Regulatory Review (76 FR 3821, Jan. 21, 2011); and 
Executive Order 14094, Modernizing Regulatory Review (88 FR 21879, Apr. 
11, 2023). 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.
    Although the number of substantive changes to the regulation is not 
extensive, the benefits of implementing these changes are significant. 
The existing regulation is not insufficient, but it has not been 
significantly updated since its issuance in 1992. OGE's revisions 
address common questions received from ethics officials, incorporate 
OGE's experience gained from applying the regulation since its 
inception, modernize existing examples and add new examples for more 
useful reference, provide updated citations where regulatory provisions 
or statutes have changed, and make technical corrections. These 
revisions will provide greater clarity for executive branch employees 
and ethics officials. Further, OGE anticipates that this additional 
clarity will increase compliance and reduce the number of inadvertent 
violations.
    OGE does not anticipate any significant increased costs associated 
with these changes. However, OGE notes that there may be an increase in 
the time burden during the first year in which the regulatory updates 
become effective, particularly for ethics officials, due to necessary 
updates to training materials and other related ethics briefings, 
questions regarding the interpretation of revised regulatory 
provisions, and review of additional OGE guidance.
    This rule has been designated as a ``significant regulatory 
action'' under Executive Order 12866, although not significant under 
section 3(f)(1) of Executive Order 12866. Accordingly, this rule has 
been reviewed by the Office of Management and Budget.

Executive Order 12988

    As Acting Director of the Office of Government Ethics, I have 
reviewed this rule in light of section 3 of Executive Order 12988, 
Civil Justice Reform, and certify that it meets the applicable 
standards provided therein.

Executive Order 13175

    The Office of Government Ethics has evaluated this final rule under 
the criteria set forth in Executive Order 13175 and determined that 
Tribal consultation is not required as this final rule has no 
substantial direct effect on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes.

List of Subjects in 5 CFR Part 2635

    Conflict of interests, Executive branch standards of ethical 
conduct, Government employees.

    Approved: May 8, 2024
Shelley K. Finlayson,
Acting Director, U.S. Office of Government Ethics.

    For the reasons set forth in the preamble, the U.S. Office of 
Government Ethics amends 5 CFR part 2635 as follows:

PART 2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 
EXECUTIVE BRANCH

0
1. The authority citation for part 2635 is revised to read as follows:

    Authority:  5 U.S.C. 7301, 7351, 7353; 5 U.S.C. ch. 131; 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. Revise and republish subparts A through I to read as follows:
Subpart A--General Provisions
Sec.
2635.101 Basic obligation of public service.
2635.102 Definitions.
2635.103 Applicability to enlisted members of the uniformed 
services.
2635.104 Applicability to employees on detail.
2635.105 Supplemental agency regulations.
2635.106 Disciplinary and corrective action.
2635.107 Ethics advice.
Subpart B--Gifts From Outside Sources
2635.201 Overview and considerations for declining otherwise 
permissible gifts.
2635.202 General prohibition on solicitation or acceptance of gifts.
2635.203 Definitions.
2635.204 Exceptions to the prohibition for acceptance of certain 
gifts.
2635.205 Limitations on use of exceptions.
2635.206 Proper disposition of prohibited gifts.
Subpart C--Gifts Between Employees
2635.301 Overview.
2635.302 General standards.
2635.303 Definitions.
2635.304 Exceptions.
2635.305 Disposition of prohibited gifts.
Subpart D--Conflicting Financial Interests
2635.401 Overview.
2635.402 Disqualifying financial interests.
2635.403 Prohibited financial interests.
Subpart E--Impartiality in Performing Official Duties
2635.501 Overview.
2635.502 Personal and business relationships.
2635.503 Covered payments from former employers.
Subpart F--Seeking Other Employment
2635.601 Overview.
2635.602 Applicability and related considerations.
2635.603 Definitions.
2635.604 Recusal while seeking employment.
2635.605 Waiver or authorization permitting participation while 
seeking employment.
2635.606 Recusal based on an arrangement concerning prospective 
employment or otherwise after negotiations.
2635.607 Notification requirements for public financial disclosure 
report filers regarding negotiations for or agreement of future 
employment or compensation.
Subpart G--Misuse of Position
2635.701 Overview.
2635.702 Use of public office for private gain.
2635.703 Use of nonpublic information.
2635.704 Use of Government property.
2635.705 Use of official time.
Subpart H--Outside Activities
2635.801 Overview.
2635.802 Conflicting outside employment and activities.
2635.803 Prior approval for outside employment and activities.
2635.804 Outside earned income limitations applicable to certain 
Presidential appointees.
2635.805 Service as an expert witness.
2635.806 [Reserved]
2635.807 Teaching, speaking, and writing.
2635.808 Fundraising activities.
2635.809 Just financial obligations.
Subpart I--Related Statutory Authorities
2635.901 General.
2635.902 Related statutes.

[[Page 43696]]

Subpart A--General Provisions


Sec.  2635.101  Basic obligation of public service.

    (a) Public service is a public trust. Each employee has a 
responsibility to the United States Government and its citizens to 
place loyalty to the Constitution, laws, and ethical principles above 
private gain. To ensure that every citizen can have complete confidence 
in the integrity of the Federal Government, each employee must respect 
and adhere to the principles of ethical conduct set forth in this 
section, as well as the implementing standards contained in this part 
and in supplemental agency regulations.
    (b) General principles. The following general principles apply to 
every employee and may form the basis for the standards contained in 
this part. When a situation is not covered by the standards set forth 
in this part, employees must apply the principles set forth in this 
section in determining whether their conduct is proper.
    (1) Public service is a public trust, requiring employees to place 
loyalty to the Constitution, the laws, and ethical principles above 
private gain.
    (2) Employees shall not hold financial interests that conflict with 
the conscientious performance of duty.
    (3) Employees shall not engage in financial transactions using 
nonpublic Government information or allow the improper use of such 
information to further any private interest.
    (4) An employee shall not, except as permitted by subpart B of this 
part, solicit or accept any gift or other item of monetary value from 
any person or entity seeking official action from, doing business with, 
or conducting activities regulated by the employee's agency, or whose 
interests may be substantially affected by the performance or 
nonperformance of the employee's duties.
    (5) Employees shall put forth honest effort in the performance of 
their duties.
    (6) Employees shall not knowingly make unauthorized commitments or 
promises of any kind purporting to bind the Government.
    (7) Employees shall not use public office for private gain.
    (8) Employees shall act impartially and not give preferential 
treatment to any private organization or individual.
    (9) Employees shall protect and conserve Federal property and shall 
not use it for other than authorized activities.
    (10) Employees shall not engage in outside employment or 
activities, including seeking or negotiating for employment, that 
conflict with official Government duties and responsibilities.
    (11) Employees shall disclose waste, fraud, abuse, and corruption 
to appropriate authorities.
    (12) Employees shall satisfy in good faith their obligations as 
citizens, including all just financial obligations, especially those--
such as Federal, State, or local taxes--that are imposed by law.
    (13) Employees shall adhere to all laws and regulations that 
provide equal opportunity for all Americans regardless of, for example, 
race, color, religion, sex (including pregnancy, gender identity, and 
sexual orientation), national origin, age, genetic information, or 
disability.
    (14) Employees shall endeavor to avoid any actions creating the 
appearance that they are violating the law or the ethical standards set 
forth in this part. Whether particular circumstances create an 
appearance that the law or these standards have been violated shall be 
determined from the perspective of a reasonable person with knowledge 
of the relevant facts.
    (c) Related statutes. In addition to the standards of ethical 
conduct set forth in this part, there are conflict of interest statutes 
that prohibit certain conduct. Criminal conflict of interest statutes 
of general applicability to all employees, 18 U.S.C. 201, 203, 205, 
208, and 209, are summarized in the appropriate subparts of this part 
and must be taken into consideration in determining whether conduct is 
proper. Citations to other generally applicable statutes relating to 
employee conduct are set forth in subpart I of this part, and employees 
are further cautioned that there may be additional statutory and 
regulatory restrictions applicable to them generally or as employees of 
their specific agencies. Because an employee is considered to be on 
notice of the requirements of any statute, an employee should not rely 
upon any description or synopsis of a statutory restriction, but should 
refer to the statute itself and obtain the advice of an agency ethics 
official as needed.


Sec.  2635.102  Definitions.

    The definitions listed in this section are used throughout this 
part. Additional definitions appear in the subparts or sections of 
subparts to which they apply. For purposes of this part:
    (a) Agency means an executive agency as defined in 5 U.S.C. 105 and 
the Postal Service and the Postal Regulatory Commission. It does not 
include the Government Accountability Office or the government of the 
District of Columbia.
    (b) Agency designee refers to any employee who, by agency 
regulation, instruction, or other issuance, has been delegated 
authority to make any determination, give any approval, or take any 
other action required or permitted by this part with respect to another 
employee. An agency may delegate these authorities to any number of 
agency designees necessary to ensure that determinations are made, 
approvals are given, and other actions are taken in a timely and 
responsible manner. Any provision that requires a determination, 
approval, or other action by the agency designee will, when the conduct 
in issue is that of the head of the agency, be deemed to require that 
such determination, approval, or action be made or taken by the head of 
the agency in consultation with the designated agency ethics official.
    (c) Agency ethics official refers to the designated agency ethics 
official, the alternate designated agency ethics official, any deputy 
ethics official, and any additional ethics official who has been 
delegated authority to assist in carrying out the responsibilities of 
an agency's ethics program. The responsibilities of agency ethics 
officials are described in Sec.  2638.104 of this chapter.
    (d) Agency programs or operations refers to any program or function 
carried out or performed by an agency, whether pursuant to statute, 
Executive order, or regulation.
    (e) Corrective action includes any action necessary to remedy a 
past violation or prevent a continuing violation of this part, 
including but not limited to restitution, change of assignment, 
recusal, divestiture, termination of an activity, waiver, the creation 
of a qualified diversified or blind trust, or counseling.
    (f) Designated agency ethics official refers to the official 
designated under Sec.  2638.104(a) of this chapter.
    (g) Disciplinary action includes those disciplinary actions 
referred to in Office of Personnel Management regulations at 5 CFR 
chapter I and instructions implementing provisions of title 5 of the 
United States Code or provided for in comparable provisions applicable 
to employees not subject to title 5, including but not limited to 
reprimand, suspension, demotion, and removal. In the case of a military 
officer, comparable provisions may include those in the Uniform Code of 
Military Justice.
    (h) Employee means any officer or employee of an agency, including 
a special Government employee. It includes officers but not enlisted 
members of the uniformed services. It includes employees of a State or 
local

[[Page 43697]]

government or other organization who are serving on detail to an 
agency, pursuant to 5 U.S.C. 3371, et seq. For purposes other than 
subparts B and C of this part, it does not include the President or 
Vice President. Status as an employee is unaffected by pay or leave 
status or, in the case of a special Government employee, by the fact 
that the individual does not perform official duties on a given day.
    (i) Head of an agency means, in the case of an agency headed by 
more than one person, the chair or comparable member of such agency.
    (j) Person means an individual, corporation and subsidiaries it 
controls, company, association, firm, partnership, society, joint stock 
company, or any other organization or institution, including any 
officer, employee, or agent of such person or entity. For purposes of 
this part, a corporation will be deemed to control a subsidiary if it 
owns 50 percent or more of the subsidiary's voting securities. The term 
is all-inclusive and applies to commercial ventures and nonprofit 
organizations as well as to foreign, State, and local governments, 
including the government of the District of Columbia. It does not 
include any agency or other entity of the Federal Government or any 
officer or employee thereof when acting in an official capacity on 
behalf of that agency or entity.
    (k) Special Government employee means those executive branch 
officers or employees specified in 18 U.S.C. 202(a). A special 
Government employee is retained, designated, appointed, or employed to 
perform temporary duties either on a full-time or intermittent basis, 
with or without compensation, for a period not to exceed 130 days 
during any consecutive 365-day period.
    (l) Supplemental agency regulation means a regulation issued 
pursuant to Sec.  2635.105.


Sec.  2635.103  Applicability to enlisted members of the uniformed 
services.

    The provisions of this part are not applicable to enlisted members 
of the uniformed services. However, each agency with jurisdiction over 
enlisted members of the uniformed services may issue regulations 
defining the ethical conduct obligations of enlisted members under its 
jurisdiction. Such regulations or policies, if issued, should be 
consistent with Executive Order 12674, April 12, 1989, as modified, and 
may prescribe the full range of statutory and regulatory sanctions, 
including those available under the Uniform Code of Military Justice, 
for failure to comply with such regulations.


Sec.  2635.104  Applicability to employees on detail.

    (a) Details to other agencies. Except as provided in paragraph (d) 
of this section, employees on detail, including uniformed officers on 
assignment, from their employing agencies to another agency for a 
period in excess of 30 calendar days will be subject to any 
supplemental agency regulations of the agency to which they are 
detailed rather than to any supplemental agency regulations of their 
employing agencies.
    (b) Details to the legislative or judicial branch. Employees on 
detail, including uniformed officers on assignment, from their 
employing agencies to the legislative or judicial branch for a period 
in excess of 30 calendar days will be subject to the ethical standards 
of the branch or entity to which detailed. For the duration of any such 
detail or assignment, employees will not be subject to the provisions 
of this part, except this section, or, except as provided in paragraph 
(d) of this section, to any supplemental agency regulations of their 
employing agencies, but will remain subject to the conflict of interest 
prohibitions in title 18 of the United States Code.
    (c) Details to non-Federal entities. Except to the extent exempted 
in writing pursuant to this paragraph (c), an employee detailed to a 
non-Federal entity remains subject to this part and to any supplemental 
agency regulation of their employing agency. When an employee is 
detailed pursuant to statutory authority to an international 
organization or to a State or local government for a period in excess 
of six months, the designated agency ethics official may grant a 
written exemption from subpart B of this part based on their 
determination that the entity has adopted written ethical standards 
covering solicitation and acceptance of gifts which will apply to the 
employee during the detail and which will be appropriate given the 
purpose of the detail.
    (d) Applicability of special agency statutes. Notwithstanding 
paragraphs (a) and (b) of this section, employees who are subject to an 
agency statute which restricts their activities or financial holdings 
specifically because of their status as an employee of that agency will 
continue to be subject to any provisions in the supplemental agency 
regulations of the employing agency that implement that statute.


Sec.  2635.105  Supplemental agency regulations.

    In addition to the regulations set forth in this part, employees 
must comply with any supplemental agency regulations issued by their 
employing agencies under this section.
    (a) An agency that wishes to supplement this part must prepare and 
submit to the Office of Government Ethics, for its concurrence and 
joint issuance, any agency regulations that supplement the regulations 
contained in this part. Supplemental agency regulations which the 
agency determines are necessary and appropriate, in view of its 
programs and operations, to fulfill the purposes of this part must be:
    (1) In the form of a supplement to the regulations in this part; 
and
    (2) In addition to the substantive provisions of this part.
    (b) After concurrence and co-signature by the Office of Government 
Ethics, the agency must submit its supplemental agency regulations to 
the Federal Register for publication and codification at the expense of 
the agency in this title. Supplemental agency regulations issued under 
this section are effective only after concurrence and co-signature by 
the Office of Government Ethics and publication in the Federal 
Register.
    (c) This section applies to any supplemental agency regulations or 
amendments thereof issued under this part. It does not apply to:
    (1) A handbook or other issuance intended merely as an explanation 
of the standards contained in this part or in supplemental agency 
regulations;
    (2) An instruction or other issuance the purpose of which is to:
    (i) Delegate to an agency designee authority to make any 
determination, give any approval or take any other action required or 
permitted by this part or by supplemental agency regulations; or
    (ii) Establish internal agency procedures for documenting or 
processing any determination, approval or other action required or 
permitted by this part or by supplemental agency regulations, or for 
retaining any such documentation; or
    (3) Regulations or instructions that an agency has authority, 
independent of this part, to issue, such as regulations implementing an 
agency's gift acceptance statute, protecting categories of nonpublic 
information, or establishing standards for use of Government vehicles.
    (d) Employees of a State or local government or other organization 
who are serving on detail to an agency, pursuant to 5 U.S.C. 3371, et 
seq., are subject to any requirements, in addition to those in this 
part, established by a supplemental agency regulation issued under this 
section to the extent that such regulation expressly provides.

[[Page 43698]]

Sec.  2635.106  Disciplinary and corrective action.

    (a) Except as provided in Sec.  2635.107, a violation of this part 
or of supplemental agency regulations may be cause for appropriate 
corrective or disciplinary action to be taken under applicable 
Governmentwide regulations or agency procedures. Such action may be in 
addition to any action or penalty prescribed by law.
    (b) It is the responsibility of the employing agency to initiate 
appropriate disciplinary or corrective action in individual cases. 
However, corrective action may be ordered or disciplinary action 
recommended by the Director of the Office of Government Ethics under 
the procedures at part 2638 of this chapter.
    (c) A violation of this part or of supplemental agency regulations, 
as such, does not create any right or benefit, substantive or 
procedural, enforceable at law by any person against the United States, 
its agencies, its officers or employees, or any other person. Thus, for 
example, an individual who alleges that an employee has failed to 
adhere to laws and regulations that provide equal opportunity 
regardless of race, color, religion, sex (including pregnancy, gender 
identity, and sexual orientation), national origin, age, genetic 
information, or disability is required to follow applicable statutory 
and regulatory procedures, including those of the Equal Employment 
Opportunity Commission.


Sec.  2635.107  Ethics advice.

    (a) As required by Sec.  2638.104(a) and (d) of this chapter, each 
agency has a designated agency ethics official and an alternate 
designated agency ethics official; these are the employees who have the 
primary responsibility for directing the daily activities of an 
agency's ethics program. Acting directly or through other officials, 
the designated agency ethics official is responsible for providing 
ethics advice and counseling regarding the application of this part.
    (b) Employees who have questions about the application of this part 
or any supplemental agency regulations to particular situations should 
seek advice from an agency ethics official. Disciplinary action for 
violating this part or any supplemental agency regulations will not be 
taken against an employee who has engaged in conduct in good faith 
reliance upon the advice of an agency ethics official, provided that 
the employee, in seeking such advice, has made full disclosure of all 
relevant circumstances. When the employee's conduct violates a criminal 
statute, reliance on the advice of an agency ethics official cannot 
ensure that the employee will not be prosecuted under that statute. 
However, good faith reliance on the advice of an agency ethics official 
is a factor that may be taken into account by the Department of Justice 
in the selection of cases for prosecution. Disclosures made by an 
employee to an agency ethics official are not protected by an attorney-
client privilege. Agency ethics officials are required by 28 U.S.C. 535 
to report any information they receive relating to a violation of the 
criminal code, title 18 of the United States Code.

Subpart B--Gifts From Outside Sources


Sec.  2635.201  Overview and considerations for declining otherwise 
permissible gifts.

    (a) Overview. This subpart contains standards that prohibit an 
employee from soliciting or accepting any gift from a prohibited source 
or any gift given because of the employee's official position, unless 
the item is excluded from the definition of a gift (see Sec.  
2635.203(b)) or falls within one of the exceptions set forth in this 
subpart.
    (b) Considerations for declining otherwise permissible gifts. (1) 
Every employee has a fundamental responsibility to the United States 
and its citizens to place loyalty to the Constitution, laws, and 
ethical principles above private gain. An employee's actions should 
promote the public's trust that this responsibility is being met. For 
this reason, employees should consider declining otherwise permissible 
gifts if they believe that a reasonable person with knowledge of the 
relevant facts would question the employee's integrity or impartiality 
as a result of accepting the gift.
    (2) Employees who are considering whether acceptance of a gift 
would lead a reasonable person with knowledge of the relevant facts to 
question their integrity or impartiality may consider, among other 
relevant factors, whether:
    (i) The gift has a high market value;
    (ii) The timing of the gift creates the appearance that the donor 
is seeking to influence an official action;
    (iii) The gift was provided by a person who has interests that may 
be substantially affected by the performance or nonperformance of the 
employee's official duties; and
    (iv) Acceptance of the gift would provide the donor with 
significantly disproportionate access.
    (3) Notwithstanding paragraph (b)(1) of this section, an employee 
who accepts a gift that qualifies for an exception under Sec.  2635.204 
does not violate this subpart or the Principles of Ethical Conduct set 
forth in Sec.  2635.101(b).
    (4) Employees who have questions regarding this subpart, including 
whether the employee should decline a gift that would otherwise be 
permitted under an exception found in Sec.  2635.204, should seek 
advice from an agency ethics official.
    Example 1 to paragraph (b): An employee of the Peace Corps is in 
charge of making routine purchases of office supplies. After a 
promotional presentation to highlight several new products, a vendor 
offers to buy the employee lunch, which costs less than $20. The 
employee is concerned that a reasonable person may question their 
impartiality by accepting the free lunch, as the timing of the offer 
indicates that the donor may be seeking to influence an official action 
and the company has interests that may be substantially affected by the 
performance or nonperformance of the employee's duties. The employee 
concludes that appearance considerations weigh against accepting the 
gift.


Sec.  2635.202  General prohibition on solicitation or acceptance of 
gifts.

    (a) Prohibition on soliciting gifts. Except as provided in this 
subpart, an employee may not, directly or indirectly:
    (1) Solicit a gift from a prohibited source; or
    (2) Solicit a gift to be given because of the employee's official 
position.
    (b) Prohibition on accepting gifts. Except as provided in this 
subpart, an employee may not, directly or indirectly:
    (1) Accept a gift from a prohibited source; or
    (2) Accept a gift given because of the employee's official 
position.
    (c) Relationship to illegal gratuities statute. A gift accepted 
pursuant to an exception found in this subpart will not constitute an 
illegal gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B), unless 
it is accepted in return for being influenced in the performance of an 
official act. As more fully described in Sec.  2635.205(d)(1), an 
employee may not solicit or accept a gift if to do so would be 
prohibited by the Federal bribery statute, 18 U.S.C. 201(b).
    Example 1 to paragraph (c): A Government contractor who specializes 
in information technology software has offered an employee of the 
Department of Energy's information technology acquisition division a 
$15 gift card to a local restaurant if the employee will recommend to 
the agency's contracting officer that the agency select the 
contractor's products during the next

[[Page 43699]]

acquisition. Even though the gift card is less than $20, the employee 
may not accept the gift under Sec.  2635.204(a) because it is 
conditional upon official action by the employee. Pursuant to this 
paragraph (c) and Sec.  2635.205(a), notwithstanding any exception to 
the rules in this part, an employee may not accept a gift in return for 
being influenced in the performance of an official act.


Sec.  2635.203  Definitions.

    For purposes of this subpart, the following definitions apply:
    (a) Agency has the meaning set forth in Sec.  2635.102(a). However, 
for purposes of this subpart, an executive department, as defined in 5 
U.S.C. 101, may, by supplemental agency regulation, designate as a 
separate agency any component of that department which the department 
determines exercises distinct and separate functions.
    (b) Gift includes any gratuity, favor, discount, entertainment, 
hospitality, loan, forbearance, or other item having monetary value. It 
includes services as well as gifts of training, transportation, local 
travel, lodgings, and meals, whether provided in-kind, by purchase of a 
ticket, payment in advance, or reimbursement after the expense has been 
incurred. The term excludes the following:
    (1) Modest items of food and non-alcoholic refreshments, such as 
soft drinks, coffee, and donuts, offered other than as part of a meal;
    (2) Greeting cards and items with little intrinsic value, such as 
plaques, certificates, and trophies, which are intended primarily for 
presentation;
    Example 1 to paragraph (b)(2): After giving a speech at the 
facility of a pharmaceutical company, a Government employee is 
presented with a glass paperweight in the shape of a pill capsule with 
the name of the company's latest drug and the date of the speech 
imprinted on the side. The employee may accept the paperweight because 
it is an item with little intrinsic value which is intended primarily 
for presentation.
    Example 2 to paragraph (b)(2): After participating in a panel 
discussion hosted by an international media company, a Government 
employee is presented with an inexpensive portable music player 
emblazoned with the media company's logo. The portable music player has 
a market value of $25. The employee may not accept the portable music 
player as it has a significant independent use as a music player rather 
than being intended primarily for presentation.
    Example 3 to paragraph (b)(2): After giving a speech at a 
conference held by a national association of miners, a Department of 
Commerce employee is presented with a block of granite that is engraved 
with the association's logo, a picture of the Appalachian Mountains, 
the date of the speech, and the employee's name. The employee may 
accept this item because it is similar to a plaque, is designed 
primarily for presentation, and has little intrinsic value.
    (3) Loans from banks and other financial institutions on terms 
generally available to the public;
    (4) Opportunities and benefits, including favorable rates, 
commercial discounts, and free attendance or participation available to 
the public or to a class consisting of all Government employees or all 
uniformed military personnel, whether or not restricted on the basis of 
geographic considerations;
    (5) Rewards and prizes given to competitors in contests or events, 
including random drawings, open to the public unless the employee's 
entry into the contest or event is required as part of the employee's 
official duties;
    Example 1 to paragraph (b)(5): A Government employee is attending a 
free trade show on official time. The trade show is held in a public 
shopping area adjacent to the employee's office building. The employee 
voluntarily enters a drawing at an individual vendor's booth, which is 
open to the public, by filling in an entry form on the vendor's display 
table and dropping it into the contest box. The employee may accept the 
resulting prize because entry into the contest was not required by or 
related to their official duties.
    Example 2 to paragraph (b)(5): Attendees at a conference, which is 
not open to the public, are entered in a drawing for a weekend getaway 
to Bermuda as a result of being registered for the conference. A 
Government employee who attends the conference in an official capacity 
could not accept the prize under paragraph (b)(5) of this section, as 
the event is not open to the public.
    (6) Pension and other benefits resulting from continued 
participation in an employee welfare and benefits plan maintained by a 
current or former employer;
    (7) Anything which is paid for by the Government or secured by the 
Government under Government contract;
    Example 1 to paragraph (b)(7): An employee at the Occupational 
Safety and Health Administration is assigned to travel away from their 
duty station to conduct an investigation of a collapse at a 
construction site. The employee's agency is paying for relevant travel 
expenses, including airfare. The employee may accept and retain travel 
promotional items, such as frequent flyer miles, received as a result 
of this official travel, to the extent permitted by 5 U.S.C. 5702 note 
and 41 CFR part 301-53.
    (8) Free attendance to an event provided by the sponsor of the 
event to:
    (i) An employee who is assigned to present information on behalf of 
the agency at the event on any day when the employee is presenting;
    (ii) An employee whose presence on any day of the event is deemed 
to be essential by the agency to the presenting employee's 
participation in the event, provided that the employee is accompanying 
the presenting employee; and
    (iii) One guest of the presenting employee on any day when the 
employee is presenting, provided that others in attendance will 
generally be accompanied by a guest, the offer of free attendance for 
the guest is unsolicited, and the agency designee, orally or in 
writing, has authorized the presenting employee to accept;
    Example 1 to paragraph (b)(8): An employee of the Department of the 
Treasury who is assigned to participate in a panel discussion of 
economic issues as part of a one-day conference may accept the 
sponsor's waiver of the conference fee. Under the separate authority of 
Sec.  2635.204(a), the employee may accept a token of appreciation that 
has a market value of $20 or less.
    Example 2 to paragraph (b)(8): An employee of the Securities and 
Exchange Commission is assigned to present the agency's views at a 
roundtable discussion of an ongoing working group. The employee may 
accept free attendance to the meeting under paragraph (b)(8) of this 
section because the employee has been assigned to present information 
at the meeting on behalf of the agency. If it is determined by the 
agency that it is essential that other employees accompany the 
presenting employee to the roundtable discussion, the accompanying 
employees may also accept free attendance to the meeting under 
paragraph (b)(8)(ii) of this section.
    Example 3 to paragraph (b)(8): An employee of the United States 
Trade and Development Agency is invited to attend a cocktail party 
hosted by a prohibited source. The employee believes that there will be 
an opportunity to discuss official matters with other attendees while 
at the event. Although the employee may voluntarily discuss official 
matters with other

[[Page 43700]]

attendees, the employee has not been assigned to present information on 
behalf of the agency. The employee may not accept free attendance to 
the event under paragraph (b)(8) of this section.
    (9) Any gift accepted by the Government under specific statutory 
authority, including:
    (i) Travel, subsistence, and related expenses accepted by an agency 
under the authority of 31 U.S.C. 1353 in connection with an employee's 
attendance at a meeting or similar function relating to the employee's 
official duties which take place away from the employee's duty station, 
provided that the agency's acceptance is in accordance with the 
implementing regulations at 41 CFR chapter 304; and
    (ii) Other gifts provided in-kind which have been accepted by an 
agency under its agency gift acceptance statute; and
    (10) Anything for which market value is paid by the employee.
    (c) Market value means the cost that a member of the general public 
would reasonably expect to incur to purchase the gift. An employee who 
cannot ascertain the market value of a gift may estimate its market 
value by reference to the retail cost of similar items of like quality. 
The market value of a gift of a ticket entitling the holder to food, 
refreshments, entertainment, or any other benefit is deemed to be the 
face value of the ticket.
    Example 1 to paragraph (c): An employee who has been given a watch 
inscribed with the corporate logo of a prohibited source may determine 
its market value based on the observation that a comparable watch, not 
inscribed with a logo, generally sells for about $50.
    Example 2 to paragraph (c): During an official visit to a factory 
operated by a well-known athletic footwear manufacturer, an employee of 
the Department of Labor is offered a commemorative pair of athletic 
shoes manufactured at the factory. Although the cost incurred by the 
donor to manufacture the shoes was $17, the market value of the shoes 
would be the $100 that the employee would have to pay for the shoes on 
the open market.
    Example 3 to paragraph (c): A prohibited source has offered a 
Government employee a ticket to a charitable event consisting of a 
cocktail reception to be followed by an evening of chamber music. Even 
though the food, refreshments, and entertainment provided at the event 
may be worth only $20, the market value of the ticket is its $250 face 
value.
    Example 4 to paragraph (c): A company offers an employee of the 
Federal Communication Commission (FCC) free attendance for two to a 
private skybox at a ballpark to watch a major league baseball game. The 
skybox is leased annually by the company, which has business pending 
before the FCC. The skybox tickets provided to the employee do not have 
a face value. To determine the market value of the tickets, the 
employee must add the face value of two of the most expensive publicly 
available tickets to the game and the market value of any food, 
parking, or other tangible benefits provided in connection with the 
gift of attendance that are not already included in the cost of the 
most expensive publicly available tickets.
    Example 5 to paragraph (c): An employee of the Department of 
Agriculture is invited to a reception held by a prohibited source. 
There is no entrance fee to the reception event or to the venue. To 
determine the market value of the gift, the employee must add the 
market value of any entertainment, food, beverages, or other tangible 
benefit provided to attendees in connection with the reception, but 
need not consider the cost incurred by the sponsor to rent or maintain 
the venue where the event is held. The employee may rely on a per-
person cost estimate provided by the sponsor of the event, unless the 
employee or an agency designee has determined that a reasonable person 
would find that the estimate is clearly implausible.
    (d) Prohibited source means any person who:
    (1) Is seeking official action by the employee's agency;
    (2) Does business or seeks to do business with the employee's 
agency;
    (3) Conducts activities regulated by the employee's agency;
    (4) Has interests that may be substantially affected by the 
performance or nonperformance of the employee's official duties; or
    (5) Is an organization a majority of whose members are described in 
paragraphs (d)(1) through (4) of this section.
    (e) A gift is given because of the employee's official position if 
the gift is from a person other than an employee and would not have 
been given had the employee not held the status, authority, or duties 
associated with the employee's Federal position.

    Note 1 to paragraph (e):  Gifts between employees are subject to 
the limitations set forth in subpart C of this part.

    Example 1 to paragraph (e): When free season tickets are offered by 
an opera guild to all members of the Cabinet, the gift is offered 
because of their official positions.
    Example 2 to paragraph (e): Employees at a regional office of the 
Department of Justice (DOJ) work in Government-leased space at a 
private office building, along with various private business tenants. A 
major fire in the building during normal office hours causes a 
traumatic experience for all occupants of the building in making their 
escape, and it is the subject of widespread news coverage. A corporate 
hotel chain, which does not meet the definition of a prohibited source 
for DOJ, seizes the moment and announces that it will give a free 
night's lodging to all building occupants and their families, as a 
public goodwill gesture. Employees of DOJ may accept, as this gift is 
not being given because of their Government positions. The donor's 
motivation for offering this gift is unrelated to the DOJ employees' 
status, authority, or duties associated with their Federal positions, 
but instead is based on their mere presence in the building as 
occupants at the time of the fire.
    (f) A gift which is solicited or accepted indirectly includes a 
gift:
    (1) Given with the employee's knowledge and acquiescence to the 
employee's parent, sibling, spouse, child, dependent relative, or a 
member of the employee's household because of that person's 
relationship to the employee; or
    (2) Given to any other person, including any charitable 
organization, on the basis of designation, recommendation, or other 
specification by the employee, except the employee has not indirectly 
solicited or accepted a gift by the raising of funds or other support 
for a charitable organization if done in accordance with Sec.  
2635.808.
    Example 1 to paragraph (f)(2): An employee who must decline a gift 
of a personal computer pursuant to this subpart may not suggest that 
the gift be given instead to one of five charitable organizations whose 
names are provided by the employee.
    (g) Free attendance includes waiver of all or part of the fee for 
an event or the provision of food, refreshments, entertainment, 
instruction, or materials furnished to all attendees as an integral 
part of the event. It does not include travel expenses, lodgings, or 
entertainment collateral to the event. It does not include meals taken 
other than in a group setting with all other attendees, unless the 
employee is a presenter at the event and is invited to a separate meal 
for participating presenters that is hosted by the sponsor of the 
event. When the offer of free attendance has been extended to an 
accompanying guest, the market value of the gift of free attendance 
includes

[[Page 43701]]

the market value of free attendance by both the employee and the guest.
    (h) Legal expense fund has the meaning set forth in Sec.  
2635.1003.
    (i) Pro bono legal services has the meaning set forth in Sec.  
2635.1003.


Sec.  2635.204  Exceptions to the prohibition for acceptance of certain 
gifts.

    Subject to the limitations in Sec.  2635.205, this section 
establishes exceptions to the prohibitions set forth in Sec.  
2635.202(a) and (b). Even though acceptance of a gift may be permitted 
by one of the exceptions contained in this section, it is never 
inappropriate and frequently prudent for an employee to decline a gift 
if acceptance would cause a reasonable person to question the 
employee's integrity or impartiality. Section 2635.201(b) identifies 
considerations for declining otherwise permissible gifts.
    (a) Gifts of $20 or less. An employee may accept unsolicited gifts 
having an aggregate market value of $20 or less per source per 
occasion, provided that the aggregate market value of individual gifts 
received from any one person under the authority of this paragraph (a) 
does not exceed $50 in a calendar year. The exception in this paragraph 
(a) does not apply to gifts of cash or of investment interests such as 
stock, bonds, or certificates of deposit. When the market value of a 
gift or the aggregate market value of gifts offered on any single 
occasion exceeds $20, the employee may not pay the excess value over 
$20 in order to accept that portion of the gift or those gifts worth 
$20. When the aggregate value of tangible items offered on a single 
occasion exceeds $20, the employee may decline any distinct and 
separate item in order to accept those items aggregating $20 or less.
    Example 1 to paragraph (a): An employee of the Securities and 
Exchange Commission and their spouse have been invited by a 
representative of a regulated entity to a community theater production, 
tickets to which have a face value of $30 each. The aggregate market 
value of the gifts offered on this single occasion is $60, $40 more 
than the $20 amount that may be accepted for a single event or 
presentation. The employee may not accept the gift of the evening of 
entertainment. The couple may attend the play only if the employee pays 
the full $60 value of the two tickets.
    Example 2 to paragraph (a): An employee of the National Geospatial-
Intelligence Agency has been invited by an association of cartographers 
to speak about the agency's role in the evolution of missile 
technology. At the conclusion of the speech, the association presents 
the employee a framed map with a market value of $18 and a ceramic mug 
that has a market value of $15. The employee may accept the map or the 
mug, but not both, because the aggregate value of these two tangible 
items exceeds $20.
    Example 3 to paragraph (a): On four occasions during the calendar 
year, an employee of the Defense Logistics Agency (DLA) was given gifts 
worth $10 each by four employees of a corporation that is a DLA 
contractor. For purposes of applying the yearly $50 limitation on gifts 
of $20 or less from any one person, the four gifts must be aggregated 
because a person is defined at Sec.  2635.102(k) to mean not only the 
corporate entity, but its officers and employees as well. However, for 
purposes of applying the $50 aggregate limitation, the employee would 
not have to include the value of a birthday present received from a 
cousin, who is employed by the same corporation, if the cousin's 
birthday present can be accepted under the exception at paragraph (b) 
of this section for gifts based on a personal relationship.
    Example 4 to paragraph (a): Under the authority of 31 U.S.C. 1353 
for agencies to accept payments from non-Federal sources in connection 
with attendance at certain meetings or similar functions, the 
Environmental Protection Agency (EPA) has accepted an association's 
gift of travel expenses and conference fees for an employee to attend a 
conference on the long-term effect of radon exposure. While at the 
conference, the employee may accept a gift basket of $20 or less from 
one of the companies underwriting the event even though it was not 
approved in advance by the EPA. Although 31 U.S.C. 1353 is the 
authority under which the EPA accepted the gift to the agency of travel 
expenses and conference fees, the gift basket is a gift to the employee 
rather than to the EPA.
    Example 5 to paragraph (a): During off-duty time, an employee of 
the Department of Defense (DoD) attends a trade show involving 
companies that are DoD contractors. The employee is offered software 
worth $15 at X Company's booth, a calendar worth $12 at Y Company's 
booth, and a deli lunch worth $8 from Z Company. The employee may 
accept all three of these items because they do not exceed $20 per 
source, even though they total more than $20 at this single occasion.
    Example 6 to paragraph (a): An employee of the Department of 
Defense (DoD) is being promoted to a higher level position in another 
DoD office. Six individuals, each employed by a different defense 
contractor, who have worked with the DoD employee over the years, 
decide to act in concert to pool their resources to buy the employee a 
nicer gift than each could buy separately. Each defense contractor 
employee contributes $20 to buy a desk clock for the DoD employee that 
has a market value of $120. Although each of the contributions does not 
exceed the $20 limit, the employee may not accept the $120 gift because 
it is a single gift that has a market value in excess of $20.
    Example 7 to paragraph (a): During a holiday party, an employee of 
the Department of State is given a $15 store gift card to a national 
coffee chain by an agency contractor. The employee may accept the card 
as the market value is less than $20. The employee could not, however, 
accept a gift card that is issued by a credit card company or other 
financial institution, because such a card is equivalent to a gift of 
cash.
    (b) Gifts based on a personal relationship. An employee may accept 
a gift given by an individual under circumstances which make it clear 
that the gift is motivated by a family relationship or personal 
friendship rather than the position of the employee. Relevant factors 
in making such a determination include the history and nature of the 
relationship and whether the family member or friend personally pays 
for the gift.
    Example 1 to paragraph (b): An employee of the Federal Deposit 
Insurance Corporation (FDIC) has been dating an accountant employed by 
a member bank. As part of its ``Work-Life Balance'' program, the bank 
has given each employee in the accountant's division two tickets to a 
professional basketball game and has urged each to invite a family 
member or friend to share the evening of entertainment. Under the 
circumstances, the FDIC employee may accept the invitation to attend 
the game. Even though the tickets were initially purchased by the 
member bank, they were given without reservation to the accountant to 
use as desired, and the invitation to the employee was motivated by 
their personal friendship.
    Example 2 to paragraph (b): Three partners in a law firm that 
handles corporate mergers have invited an employee of the Federal Trade 
Commission (FTC) to join them in a golf tournament at a private club at 
the firm's expense. The entry fee is $500 per foursome. The employee 
cannot accept the gift of one-quarter of the entry fee even though the 
employee has developed an amicable relationship with the three partners 
as a result of the firm's dealings with the FTC. As

[[Page 43702]]

evidenced in part by the fact that the fees are to be paid by the firm, 
it is not a personal friendship but a business relationship that is the 
motivation behind the partners' gift.
    Example 3 to paragraph (b): A Peace Corps employee enjoys using a 
social media site on the internet in a personal capacity outside of 
work. The employee has used the site to keep in touch with friends, 
neighbors, coworkers, professional contacts, and other individuals they 
have met over the years through both work and personal activities. One 
of these individuals works for a contractor that provides language 
services to the Peace Corps. The employee was acting in an official 
capacity when they met the individual at a meeting to discuss a matter 
related to the contract between their respective employers. Thereafter, 
the two communicated occasionally regarding contract matters, and later 
also granted one another access to join their social media networks 
through their respective social media accounts. However, the pair did 
not communicate further in their personal capacities, carry on 
extensive personal interactions, or meet socially outside of work. One 
day, the individual, whose employer continues to serve as a Peace Corps 
contractor, contacts the employee to offer a pair of concert tickets 
worth $30 apiece. Although the employee and the individual are 
connected through social media, the circumstances do not demonstrate 
that the gift was clearly motivated by a personal relationship, rather 
than the position of the employee, and therefore the employee may not 
accept the gift pursuant to paragraph (b) of this section.
    (c) Discounts and similar benefits. In addition to those 
opportunities and benefits excluded from the definition of a gift by 
Sec.  2635.203(b)(4), an employee may accept:
    (1) A reduction or waiver of the fees for membership or other fees 
for participation in organization activities offered to all Government 
employees or all uniformed military personnel by professional 
organizations if the only restrictions on membership relate to 
professional qualifications; and
    (2) Opportunities and benefits, including favorable rates, 
commercial discounts, and free attendance or participation not 
precluded by paragraph (c)(3) of this section:
    (i) Offered to members of a group or class in which membership is 
unrelated to Government employment;
    (ii) Offered to members of an organization, such as an employees' 
association or agency credit union, in which membership is related to 
Government employment if the same offer is broadly available to large 
segments of the public through organizations of similar size;
    (iii) Offered by a person who is not a prohibited source to any 
group or class that is not defined in a manner that specifically 
discriminates among Government employees on the basis of type of 
official responsibility or on a basis that favors those of higher rank 
or rate of pay; or
    (iv) Offered to employees by an established employee organization, 
such as an association composed of Federal employees or a nonprofit 
employee welfare organization, because of the employees' Government 
employment, so long as the employee is part of the class of individuals 
eligible for assistance from the employee organization as set forth in 
the organization's governing documents.
    Example 1 to paragraph (c)(2): A computer company offers a discount 
on the purchase of computer equipment to all public and private sector 
computer procurement officials who work in organizations with over 300 
employees. An employee who works as the computer procurement official 
for a Government agency could not accept the discount to purchase the 
personal computer under the exception in paragraph (c)(2)(i) of this 
section. The employee's membership in the group to which the discount 
is offered is related to Government employment because membership is 
based on the employee's status as a procurement official with the 
Government.
    Example 2 to paragraph (c)(2): An employee of the Consumer Product 
Safety Commission (CPSC) may accept a discount of $50 on a microwave 
oven offered by the manufacturer to all members of the CPSC employees' 
association. Even though the CPSC is currently conducting studies on 
the safety of microwave ovens, the $50 discount is a standard offer 
that the manufacturer has made broadly available through a number of 
employee associations and similar organizations to large segments of 
the public.
    Example 3 to paragraph (c)(2): An Assistant Secretary may not 
accept a local country club's offer of membership to all members of 
Department Secretariats which includes a waiver of its $5,000 
membership initiation fee. Even though the country club is not a 
prohibited source, the offer discriminates in favor of higher-ranking 
officials.
    Example 4 to paragraph (c)(2): A nonprofit military relief society 
provides access to financial counseling services, loans, and grants to 
all sailors and Marines. A service member may accept financial benefits 
from the relief society, including to cover legal expenses, because the 
benefits are offered by an employee organization that was established 
before the legal matter arose, and because the benefits are being 
offered because of the employees' Government employment, as set forth 
in the relief society's governing documents.
    (3) An employee may not accept for personal use any benefit to 
which the Government is entitled as the result of an expenditure of 
Government funds, unless authorized by statute or regulation (e.g., 5 
U.S.C. 5702 note, regarding frequent flyer miles).
    Example 1 to paragraph (c)(3): The administrative officer for a 
field office of U.S. Immigration and Customs Enforcement (ICE) has 
signed an order to purchase 50 boxes of photocopy paper from a supplier 
whose literature advertises that it will give a free briefcase to 
anyone who purchases 50 or more boxes. Because the paper was purchased 
with ICE funds, the administrative officer cannot keep the briefcase 
which, if claimed and received, is Government property.
    (d) Awards and honorary degrees--(1) Awards. An employee may accept 
a bona fide award for meritorious public service or achievement and any 
item incident to the award, provided that:
    (i) The award and any item incident to the award are not from a 
person who has interests that may be substantially affected by the 
performance or nonperformance of the employee's official duties, or 
from an association or other organization if a majority of its members 
have such interests; and
    (ii) If the award or any item incident to the award is in the form 
of cash or an investment interest, or if the aggregate value of the 
award and any item incident to the award, other than free attendance to 
the event provided to the employee and to members of the employee's 
family by the sponsor of the event, exceeds $200, the agency ethics 
official has made a written determination that the award is made as 
part of an established program of recognition.
    Example 1 to paragraph (d)(1): Based on a written determination by 
an agency ethics official that the prize meets the criteria set forth 
in paragraph (d)(2) of this section, an employee of the National 
Institutes of Health (NIH) may accept the Nobel Prize for Medicine, 
including the cash award which accompanies the prize, even though the 
prize was conferred on the basis of laboratory work performed at NIH.

[[Page 43703]]

    Example 2 to paragraph (d)(1): A defense contractor, ABC Systems, 
has an annual award program for the outstanding public employee of the 
year. The award includes a cash payment of $1,000. The award program is 
wholly funded to ensure its continuation on a regular basis for the 
next twenty years and selection of award recipients is made pursuant to 
written standards. An employee of the Department of the Air Force, who 
has duties that include overseeing contract performance by ABC Systems, 
is selected to receive the award. The employee may not accept the cash 
award because ABC Systems has interests that may be substantially 
affected by the performance or nonperformance of the employee's 
official duties.
    Example 3 to paragraph (d)(1): An ambassador selected by a 
nonprofit organization as a recipient of its annual award for 
distinguished service in the interest of world peace may, together with 
their spouse and children, attend the awards ceremony dinner and accept 
a crystal bowl worth $200 presented during the ceremony. However, if 
the organization has also offered airline tickets for the ambassador 
and the family to travel to the city where the awards ceremony is to be 
held, the aggregate value of the tickets and the crystal bowl exceeds 
$200, and the ambassador may accept only upon a written determination 
by the agency ethics official that the award is made as part of an 
established program of recognition.
    (2) Established program of recognition. An award and an item 
incident to the award are made pursuant to an established program of 
recognition if:
    (i) Awards have been made on a regular basis or, if the program is 
new, there is a reasonable basis for concluding that awards will be 
made on a regular basis based on funding or funding commitments; and
    (ii) Selection of award recipients is made pursuant to written 
standards.
    (3) Honorary degrees. An employee may accept an honorary degree 
from an institution of higher education, as defined at 20 U.S.C. 1001, 
or from a similar foreign institution of higher education, based on a 
written determination by an agency ethics official that the timing of 
the award of the degree would not cause a reasonable person to question 
the employee's impartiality in a matter affecting the institution.

    Note 1 to paragraph (d)(3):  When the honorary degree is offered 
by a foreign institution of higher education, the agency may need to 
make a separate determination as to whether the institution of 
higher education is a foreign government for purposes of the 
Emoluments Clause of the U.S. Constitution (U.S. Const., art. I, 
sec. 9, cl. 8), which forbids employees from accepting emoluments, 
presents, offices, or titles from foreign governments, without the 
consent of Congress. The Foreign Gifts and Decorations Act, 5 U.S.C. 
7342, however, may permit the acceptance of honorary degrees in some 
circumstances.

    Example 1 to paragraph (d)(3): A well-known university located in 
the United States wishes to give an honorary degree to the Secretary of 
Labor. The Secretary may accept the honorary degree only if an agency 
ethics official determines in writing that the timing of the award of 
the degree would not cause a reasonable person to question the 
Secretary's impartiality in a matter affecting the university.
    (4) Presentation events. An employee who may accept an award or 
honorary degree pursuant to paragraph (d)(1) or (3) of this section may 
also accept free attendance to the event provided to the employee and 
to members of the employee's family by the sponsor of an event. In 
addition, the employee may also accept unsolicited offers of travel to 
and from the event provided to the employee and to members of the 
employee's family by the sponsor of the event. Travel expenses accepted 
under this paragraph (d)(4) must be added to the value of the award for 
purposes of determining whether the aggregate value of the award 
exceeds $200.
    (e) Gifts based on outside business or employment relationships. An 
employee may accept meals, lodgings, transportation, and other 
benefits:
    (1) Resulting from the business or employment activities of an 
employee's spouse when it is clear that such benefits have not been 
offered or enhanced because of the employee's official position;
    Example 1 to paragraph (e)(1): A Department of Agriculture employee 
whose spouse is a computer programmer employed by a Department of 
Agriculture contractor may attend the company's annual retreat for all 
of its employees and their families held at a resort facility. However, 
under Sec.  2635.502, the employee may need to recuse from performing 
official duties affecting the spouse's employer.
    Example 2 to paragraph (e)(1): When the spouses of other clerical 
personnel have not been invited, an employee of the Defense Contract 
Audit Agency whose spouse is a clerical worker at a defense contractor 
may not attend the contractor's annual retreat in Hawaii for corporate 
officers and members of the board of directors, even though the spouse 
received a special invitation from the company for them to attend as a 
couple.
    (2) Resulting from the employee's outside business or employment 
activities when it is clear that such benefits are based on the outside 
business or employment activities and have not been offered or enhanced 
because of the employee's official status;
    Example 1 to paragraph (e)(2): The members of an Army Corps of 
Engineers environmental advisory committee that meets six times per 
year are special Government employees. A member who has a consulting 
business may accept an invitation to a $50 dinner from a corporate 
client, an Army construction contractor, unless, for example, the 
invitation was extended in order to discuss the activities of the 
advisory committee.
    (3) Customarily provided by a prospective employer in connection 
with bona fide employment discussions. If the prospective employer has 
interests that could be affected by performance or nonperformance of 
the employee's duties, acceptance is permitted only if the employee 
first has complied with the recusal requirements of subpart F of this 
part applicable when seeking employment; or
    Example 1 to paragraph (e)(3): An employee of the Federal 
Communications Commission with responsibility for drafting regulations 
affecting all cable television companies wishes to apply for a job 
opening with a cable television holding company. Once the employee has 
properly recused from further work on the regulations as required by 
subpart F of this part, the employee may enter into employment 
discussions with the company and may accept the company's offer to pay 
for airfare, hotel, and meals in connection with an interview trip.
    (4) Provided by a former employer to attend a reception or similar 
event when other former employees have been invited to attend, the 
invitation and benefits are based on the former employment 
relationship, and it is clear that such benefits have not been offered 
or enhanced because of the employee's official position.
    Example 1 to paragraph (e)(4): An employee of the Department of the 
Army is invited by a former employer, an Army contractor, to attend its 
annual holiday dinner party. The former employer traditionally invites 
both its current and former employees to the holiday dinner regardless 
of their current employment activities. Under these circumstances, the 
employee may attend the dinner because the dinner

[[Page 43704]]

invitation is a result of the employee's former outside employment 
activities, other former employees have been asked to attend, and the 
gift is not offered because of the employee's official position.
    (5) For purposes of paragraphs (e)(1) through (4) of this section, 
employment means any form of non-Federal employment or business 
relationship involving the provision of personal services.
    (f) Gifts in connection with political activities permitted by the 
Hatch Act Reform Amendments. An employee who, in accordance with the 
Hatch Act Reform Amendments of 1993, at 5 U.S.C. 7323, may take an 
active part in political management or in political campaigns, may 
accept meals, lodgings, transportation, and other benefits, including 
free attendance at events, for the employee and an accompanying guest, 
when provided, in connection with such active participation, by a 
political organization described in 26 U.S.C. 527(e). Any other 
employees, such as a security officers, whose official duties require 
them to accompany an employee to a political event, may accept meals, 
free attendance, and entertainment provided at the event by such an 
organization.
    Example 1 to paragraph (f): The Secretary of the Department of 
Health and Human Services may accept an airline ticket and hotel 
accommodations furnished by the campaign committee of a candidate for 
the United States Senate in order to give a speech in support of the 
candidate.
    (g) Gifts of free attendance at widely attended gatherings--(1) 
Authorization. When authorized in writing by the agency designee 
pursuant to paragraph (g)(3) of this section, an employee may accept an 
unsolicited gift of free attendance at all or appropriate parts of a 
widely attended gathering. For an employee who is subject to a leave 
system, attendance at the event will be on the employee's own time or, 
if authorized by the employee's agency, on excused absence pursuant to 
applicable guidelines for granting such absence, or otherwise without 
charge to the employee's leave account.
    (2) Widely attended gatherings. A gathering is widely attended if 
it is expected that:
    (i) A large number of persons will attend;
    (ii) Persons with a diversity of views or interests will be 
present, for example, if it is open to members from throughout the 
interested industry or profession or if those in attendance represent a 
range of persons interested in a given matter; and
    (iii) There will be an opportunity to exchange ideas and views 
among invited persons.
    (3) Written authorization by the agency designee. The agency 
designee may authorize an employee or employees to accept a gift of 
free attendance at all or appropriate parts of a widely attended 
gathering only if the agency designee issues a written determination 
after finding that:
    (i) The event is a widely attended gathering, as set forth in 
paragraph (g)(2) of this section;
    (ii) The employee's attendance at the event is in the agency's 
interest because it will further agency programs or operations;
    (iii) The agency's interest in the employee's attendance outweighs 
the concern that the employee may be, or may appear to be, improperly 
influenced in the performance of official duties; and
    (iv) If a person other than the sponsor of the event invites or 
designates the employee as the recipient of the gift of free attendance 
and bears the cost of that gift, the event is expected to be attended 
by more than 100 persons, and the value of the gift of free attendance 
does not exceed $480.
    (4) Determination of agency interest. In determining whether the 
agency's interest in the employee's attendance outweighs the concern 
that the employee may be, or may appear to be, improperly influenced in 
the performance of official duties, the agency designee may consider 
relevant factors including:
    (i) The importance of the event to the agency;
    (ii) The nature and sensitivity of any pending matter affecting the 
interests of the person who extended the invitation and the 
significance of the employee's role in any such matter;
    (iii) The purpose of the event;
    (iv) The identity of other expected participants;
    (v) Whether acceptance would reasonably create the appearance that 
the donor is receiving preferential treatment;
    (vi) Whether the Government is also providing persons with views or 
interests that differ from those of the donor with access to the 
Government; and
    (vii) The market value of the gift of free attendance.
    (5) Cost provided by person other than the sponsor of the event. 
The cost of the employee's attendance will be considered to be provided 
by a person other than the sponsor of the event when such person 
designates the employee to be invited and bears the cost of the 
employee's attendance through a contribution or other payment intended 
to facilitate the employee's attendance. Payment of dues or a similar 
assessment to a sponsoring organization does not constitute a payment 
intended to facilitate a particular employee's attendance.
    (6) Accompanying guest. When others in attendance will generally be 
accompanied by a guest of their choice, and when the invitation is from 
the same person who has invited the employee, the agency designee may 
authorize an employee to accept an unsolicited invitation of free 
attendance to one accompanying guest to participate in all or a portion 
of the event at which the employee's free attendance is permitted under 
paragraph (g)(1) of this section. The authorization required by this 
paragraph (g)(6) must be provided in writing.
    Example 1 to paragraph (g): An aerospace industry association that 
is a prohibited source sponsors an industry-wide, two-day seminar for 
which it charges a fee of $800 and anticipates attendance of 
approximately 400. An Air Force contractor pays $4,000 to the 
association so that the association can extend free invitations to five 
Air Force officials designated by the contractor. The Air Force 
officials may not accept the gifts of free attendance because the 
contractor, rather than the association, provided the cost of their 
attendance; the contractor designated the specific employees to receive 
the gift of free attendance; and the value of the gift exceeds $480 per 
employee.
    Example 2 to paragraph (g): An aerospace industry association that 
is a prohibited source sponsors an industry-wide, two-day seminar for 
which it charges a fee of $25 and anticipates attendance of 
approximately 50. An Air Force contractor pays $125 to the association 
so that the association can extend free invitations to five Air Force 
officials designated by the contractor. The Air Force officials may not 
accept the gifts of free attendance because the contractor, rather than 
the association, provided the cost of their attendance; the contractor 
designated the specific employees to receive the gift of free 
attendance; and the event was not expected to be attended by more than 
100 persons.
    Example 3 to paragraph (g): An aerospace industry association that 
is a prohibited source sponsors an industry-wide, two-day seminar for 
which it charges a fee of $800 and anticipates attendance of 
approximately 400. An Air Force contractor pays $4,000 in order that 
the association might invite any five Federal employees. An Air

[[Page 43705]]

Force official to whom the sponsoring association, rather than the 
contractor, extended one of the five invitations could attend if the 
employee's participation were determined to be in the interest of the 
agency and the employee received a written authorization.
    Example 4 to paragraph (g): An employee of the Department of 
Transportation is invited by a news organization to an annual press 
dinner sponsored by an association of press organizations. Tickets for 
the event cost $480 per person and attendance is limited to 400 
representatives of press organizations and their guests. If the 
employee's attendance is determined to be in the interest of the agency 
and the agency designee provides a written authorization, the employee 
may accept the invitation from the news organization because more than 
100 persons will attend and the cost of the ticket does not exceed 
$480. However, if the invitation were extended to the employee and an 
accompanying guest, the employee's guest could not be authorized to 
attend for free because the market value of the gift of free attendance 
would exceed $480.
    Example 5 to paragraph (g): An employee of the Department of Energy 
(DOE) and their spouse have been invited by a major utility executive 
to a small dinner party. A few other officials of the utility and their 
spouses or other guests are also invited, as is a representative of a 
consumer group concerned with utility rates and their spouse. The DOE 
official believes the dinner party will provide an opportunity to 
socialize with and get to know those in attendance. The employee may 
not accept the free invitation under this exception, even if attendance 
could be determined to be in the interest of the agency. The small 
dinner party is not a widely attended gathering. Nor could the employee 
be authorized to accept even if the event were instead a corporate 
banquet to which forty company officials and their spouses or other 
guests were invited. In this second case, notwithstanding the larger 
number of persons expected (as opposed to the small dinner party just 
noted) and despite the presence of the consumer group representative 
and spouse who are not officials of the utility, those in attendance 
would still not represent a diversity of views or interests. Thus, the 
company banquet would not qualify as a widely attended gathering under 
those circumstances either.
    Example 6 to paragraph (g): An Assistant U.S. Attorney is invited 
to attend a luncheon meeting of a local bar association to hear a 
distinguished judge lecture on cross-examining expert witnesses. 
Although members of the bar association are assessed a $15 fee for the 
meeting, the Assistant U.S. Attorney may accept the bar association's 
offer to attend for free, even without a determination of agency 
interest. The gift can be accepted under the $20 gift exception at 
paragraph (a) of this section.
    Example 7 to paragraph (g): An employee of the Department of the 
Interior authorized to speak on the first day of a four-day conference 
on endangered species may accept the sponsor's waiver of the conference 
fee for the first day of the conference under Sec.  2635.203(b)(8). If 
the conference is widely attended, the employee may be authorized to 
accept the sponsor's offer to waive the attendance fee for the 
remainder of the conference if the agency designee has made a written 
determination that attendance is in the agency's interest.
    Example 8 to paragraph (g): A military officer has been approved to 
attend a widely attended gathering, pursuant to paragraph (g) of this 
section, that will be held in the same city as the officer's duty 
station. The defense contractor sponsoring the event has offered to 
transport the officer in a limousine to the event. The officer may not 
accept the offer of transportation because the definition of free 
attendance set forth in Sec.  2635.203(g) excludes travel, and the 
market value of the transportation would exceed $20.
    (h) Social invitations. An employee may accept food, refreshments, 
and entertainment, not including travel or lodgings, for the employee 
and an accompanying guest, at a social event attended by several 
persons if:
    (1) The invitation is unsolicited and is from a person who is not a 
prohibited source;
    (2) No fee is charged to any person in attendance; and
    (3) If either the sponsor of the event or the person extending the 
invitation to the employee is not an individual, the agency designee 
has made a written determination after finding that the employee's 
attendance would not cause a reasonable person with knowledge of the 
relevant facts to question the employee's integrity or impartiality, 
consistent with Sec.  2635.201(b).
    Example 1 to paragraph (h): An employee of the White House Press 
Office has been invited to a social dinner for current and former White 
House Press Officers at the home of an individual who is not a 
prohibited source. The employee may attend even if the invitation is 
because of the employee's official position.
    (i) Meals, refreshments, and entertainment in foreign areas. An 
employee assigned to duty in, or on official travel to, a foreign area 
as defined in 41 CFR 300-3.1 may accept unsolicited food, refreshments, 
or entertainment in the course of a breakfast, luncheon, dinner, or 
other meeting or event provided:
    (1) The market value in the foreign area of the food, refreshments, 
or entertainment provided at the meeting or event, as converted to U.S. 
dollars, does not exceed the per diem rate for the foreign area 
specified in the U.S. Department of State's Maximum Rates of Per Diem 
Allowances for Travel in Foreign Areas, Per Diem Supplement, section 
925 to the Standardized Regulations (GC-FA), available at 
www.state.gov;
    (2) There is participation in the meeting or event by non-U.S. 
citizens or by representatives of foreign governments or other foreign 
entities;
    (3) Attendance at the meeting or event is part of the employee's 
official duties to obtain information, disseminate information, promote 
the export of U.S. goods and services, represent the United States, or 
otherwise further programs or operations of the agency or the U.S. 
mission in the foreign area; and
    (4) The gift of meals, refreshments, or entertainment is from a 
person other than a foreign government as defined in 5 U.S.C. 
7342(a)(2).
    Example 1 to paragraph (i): A number of local business owners in a 
developing country are eager for a U.S. company to locate a 
manufacturing facility in their province. An official of the U.S. 
International Development Finance Corporation may accompany the 
visiting vice president of the U.S. company to a dinner meeting hosted 
by the business owners at a province restaurant when the market value 
of the food and refreshments does not exceed the per diem rate for that 
country.
    (j) Gifts to the President or Vice President. Because of 
considerations relating to the conduct of their offices, including 
those of protocol and etiquette, the President or the Vice President 
may accept any gift on their own behalf or on behalf of any family 
member, provided that such acceptance does not violate Sec.  
2635.205(a) or (b), 18 U.S.C. 201(b) or 201(c)(3), or the Constitution 
of the United States.
    (k) Gifts authorized by supplemental agency regulation. An employee 
may accept any gift when acceptance of the gift is specifically 
authorized by a supplemental agency regulation issued with the 
concurrence of the Office of

[[Page 43706]]

Government Ethics, pursuant to Sec.  2635.105.
    (l) Gifts accepted under specific statutory authority. The 
prohibitions on acceptance of gifts from outside sources contained in 
this subpart do not apply to any item which a statute specifically 
authorizes an employee to accept. Gifts which may be accepted by an 
employee under the authority of specific statutes include, but are not 
limited to:
    (1) Free attendance, course or meeting materials, transportation, 
lodgings, food and refreshments, or reimbursements therefor incident to 
training or meetings when accepted by the employee under the authority 
of 5 U.S.C. 4111. The employee's acceptance must be approved by the 
agency in accordance with part 410 of this title; or
    (2) Gifts from a foreign government or international or 
multinational organization, or its representative, when accepted by the 
employee under the authority of the Foreign Gifts and Decorations Act, 
5 U.S.C. 7342. As a condition of acceptance, an employee must comply 
with requirements imposed by the agency's regulations or procedures 
implementing that Act.
    (m) Gifts of informational materials. (1) An employee may accept 
unsolicited gifts of informational materials, provided that:
    (i) The aggregate market value of all informational materials 
received from any one person does not exceed $100 in a calendar year; 
or
    (ii) If the aggregate market value of all informational materials 
from the same person exceeds $100 in a calendar year, an agency 
designee has made a written determination after finding that acceptance 
by the employee would not be inconsistent with the standard set forth 
in Sec.  2635.201(b).
    (2) Informational materials are writings, recordings, documents, 
records, or other items that:
    (i) Are educational or instructive in nature;
    (ii) Are not primarily created for entertainment, display, or 
decoration; and
    (iii) Contain information that relates in whole or in part to the 
following categories:
    (A) The employee's official duties or position, profession, or 
field of study;
    (B) A general subject matter area, industry, or economic sector 
affected by or involved in the programs or operations of the agency; or
    (C) Another topic of interest to the agency or its mission.
    Example 1 to paragraph (m): An analyst at the Agricultural Research 
Service receives an edition of an agricultural research journal in the 
mail from a consortium of private farming operations concerned with 
soil toxicity. The journal edition has a market value of $75. The 
analyst may accept the gift.
    Example 2 to paragraph (m): An inspector at the Mine Safety and 
Health Administration receives a popular novel with a market value of 
$25 from a mine operator. Because the novel is primarily for 
entertainment purposes, the inspector may not accept the gift.
    Example 3 to paragraph (m): An employee at the Department of the 
Army is offered an encyclopedia on cyberwarfare from a prohibited 
source. The cost of the encyclopedia is far in excess of $100. The 
agency designee determines that acceptance of the gift would be 
inconsistent with the standard set out in Sec.  2635.201(b). The 
employee may not accept the gift under paragraph (m) of this section.
    (n) Legal expense funds and pro bono legal services. An employee 
who seeks legal representation for a matter arising in connection with 
the employee's past or current official position, the employee's prior 
position on a campaign of a candidate for President or Vice President, 
or the employee's prior position on a Presidential Transition Team may 
accept:
    (1) Payments for legal expenses paid out of a legal expense fund 
that is established and operated in accordance with subpart J of this 
part; and
    (2) Pro bono legal services provided in accordance with subpart J 
of this part.


Sec.  2635.205  Limitations on use of exceptions.

    Notwithstanding any exception provided in this subpart, other than 
Sec.  2635.204(j), an employee may not:
    (a) Accept a gift in return for being influenced in the performance 
of an official act;
    (b) Use, or permit the use of, the employee's Government position, 
or any authority associated with public office, to solicit or coerce 
the offering of a gift;
    (c) Accept gifts from the same or different sources on a basis so 
frequent that a reasonable person would be led to believe the employee 
is using the employee's public office for private gain;
    Example 1 to paragraph (c): A purchasing agent for a Department of 
Veterans Affairs medical center routinely deals with representatives of 
pharmaceutical manufacturers who provide information about new company 
products. Because of a crowded calendar, the purchasing agent has 
offered to meet with manufacturer representatives during lunch hours 
Tuesdays through Thursdays, and the representatives routinely arrive at 
the employee's office bringing a sandwich and a soft drink for the 
employee. Even though the market value of each of the lunches is less 
than $6 and the aggregate value from any one manufacturer does not 
exceed the $50 aggregate limitation in Sec.  2635.204(a) on gifts of 
$20 or less, the practice of accepting even these modest gifts on a 
recurring basis is improper.
    (d) Accept a gift in violation of any statute; relevant statutes 
applicable to all employees include, but are not limited to:
    (1) 18 U.S.C. 201(b), which prohibits public officials from, 
directly or indirectly, corruptly demanding, seeking, receiving, 
accepting, or agreeing to receive or accept anything of value 
personally or for any other person or entity in return for being 
influenced in the performance of an official act; being influenced to 
commit or aid in committing, or to collude in, or allow, any fraud, or 
make opportunity for the commission of any fraud, on the United States; 
or for being induced to do or omit to do any action in violation of 
their official duties. As used in 18 U.S.C. 201(b), the term ``public 
official'' is broadly construed and includes regular and special 
Government employees as well as all other Government officials; and
    (2) 18 U.S.C. 209, which prohibits employees, other than special 
Government employees, from receiving any salary or any contribution to 
or supplementation of salary from any source other than the United 
States as compensation for services as a Government employee. The 
statute contains several specific exceptions to this general 
prohibition, including an exception for contributions made from the 
treasury of a State, county, or municipality;
    (e) Accept a gift in violation of any Executive order; or
    (f) Accept any gift when acceptance of the gift is specifically 
prohibited by a supplemental agency regulation issued with the 
concurrence of the Office of Government Ethics, pursuant to Sec.  
2635.105.


Sec.  2635.206  Proper disposition of prohibited gifts.

    (a) Unless a gift is accepted by an agency acting under specific 
statutory authority, an employee who has received a gift that cannot be 
accepted under this subpart must dispose of the gift in accordance with 
the procedures set forth in this section. The employee must promptly 
complete the authorized disposition of the gift. The obligation to 
dispose of a gift that cannot be accepted under this subpart is 
independent of an

[[Page 43707]]

agency's decision regarding corrective or disciplinary action under 
Sec.  2635.106.
    (1) Gifts of tangible items. The employee must promptly return any 
tangible item to the donor or pay the donor its market value; or, in 
the case of a tangible item with a market value of $100 or less, the 
employee may destroy the item. An employee who cannot ascertain the 
actual market value of an item may estimate its market value by 
reference to the retail cost of similar items of like quality.
    Example 1 to paragraph (a)(1): A Department of Commerce employee 
received a $25 T-shirt from a prohibited source after providing 
training at a conference. Because the gift would not be permissible 
under an exception to this subpart, the employee must either return or 
destroy the T-shirt or promptly reimburse the donor $25. Destruction 
may be carried out by physical destruction or by permanently discarding 
the T-shirt by placing it in the trash.
    Example 2 to paragraph (a)(1): To avoid public embarrassment to the 
seminar sponsor, an employee of the National Park Service did not 
decline a barometer worth $200 given at the conclusion of a speech on 
Federal lands policy. To comply with this section, the employee must 
either promptly return the barometer or pay the donor the market value 
of the gift. Alternatively, the National Park Service may choose to 
accept the gift if permitted under specific statutory gift acceptance 
authority. The employee may not destroy this gift, as the market value 
is in excess of $100.
    (2) Gifts of perishable items. When it is not practical to return a 
tangible item in accordance with paragraph (a)(1) of this section 
because the item is perishable, the employee may, at the discretion of 
the employee's supervisor or the agency designee, give the item to an 
appropriate charity, share the item within the recipient's office, or 
destroy the item.
    Example 1 to paragraph (a)(2): With approval by the recipient's 
supervisor, a floral arrangement sent by a disability claimant to a 
helpful employee of the Social Security Administration may be placed in 
the office's reception area.
    (3) Gifts of intangibles. The employee must promptly reimburse the 
donor the market value for any entertainment, favor, service, benefit, 
or other intangible. Subsequent reciprocation by the employee does not 
constitute reimbursement.
    Example 1 to paragraph (a)(3): A Department of Defense employee 
wishes to attend a charitable event for which they were offered a $300 
ticket by a prohibited source. Although attendance is not in the 
interest of the agency under Sec.  2635.204(g), the employee may attend 
if they reimburse the donor the $300 face value of the ticket.
    (4) Gifts from foreign governments or international organizations. 
The employee must dispose of gifts from foreign governments or 
international organizations in accordance with 41 CFR part 102-42.
    (b) An agency may authorize disposition or return of gifts at 
Government expense. Employees may use penalty mail to forward 
reimbursements required or permitted by this section.
    (c) Employees who, on their own initiative, promptly comply with 
the requirements of this section will not be deemed to have improperly 
accepted an unsolicited gift. Employees who promptly consult their 
agency ethics official to determine whether acceptance of an 
unsolicited gift is proper and who, upon the advice of the ethics 
official, return the gift or otherwise dispose of the gift in 
accordance with this section, will be considered to have complied with 
the requirements of this section on the employee's own initiative.
    (d) Employees are encouraged to record any actions they have taken 
to properly dispose of gifts that cannot be accepted under this 
subpart, such as by sending an electronic mail message to the 
appropriate agency ethics official or the employee's supervisor.

Subpart C--Gifts Between Employees


Sec.  2635.301  Overview.

    This subpart contains standards that prohibit an employee from 
giving or contributing to a gift to an official superior, and official 
superiors are prohibited from knowingly accepting such a gift. 
Employees also are prohibited from soliciting a contribution from 
another employee for a gift to an official superior. In addition, 
employees are prohibited from accepting a gift from an employee who 
receives less pay. The prohibitions in this subpart apply unless the 
item is excluded from the definition of a gift (see Sec.  2635.303(a)) 
or falls within one of the exceptions set forth in this subpart. Gifts 
from outside sources are subject to the limitations set forth in 
subpart B of this part.


Sec.  2635.302  General standards.

    (a) Gifts to superiors. Except as provided in this subpart, 
employees may not:
    (1) Directly or indirectly, give a gift to or make a contribution 
toward a gift for an official superior, and an official superior may 
not knowingly accept such a gift; or
    (2) Solicit a contribution from another employee for a gift to 
either their own or the other employee's official superior.
    (b) Gifts from employees receiving less pay. Except as provided in 
this subpart, employees may not, directly or indirectly, accept a gift 
from an employee who receives less pay unless:
    (1) There is a personal relationship between the two employees that 
would justify the gift and the employee receiving the gift is not the 
official superior of the employee giving the gift; or
    (2) The employee giving the gift is the official superior of the 
employee receiving the gift.
    Example 1 to paragraph (b): A GS-13 Department of Homeland Security 
(DHS) employee has been close personal friends with a neighbor, a GS-15 
employee in another government agency, for many years. During their 
friendship, the GS-13 employee has often allowed the neighbor's family 
to use their vacation house rent-free. The GS-15 employee recently 
accepted a position at DHS, and in the new position will be the direct 
supervisor of the GS-13 employee. Although the personal relationship 
between the two employees justified the gift of rent-free use of the 
vacation home before they were both employed at DHS, for the duration 
of their supervisor-subordinate relationship the GS-13 employee may not 
allow the GS-15 neighbor to use the vacation house rent-free or give 
other gifts, except as permitted by the exceptions contained in this 
subpart.
    (c) Limitation on use of exceptions. Notwithstanding any exception 
provided in this subpart, an official superior may not coerce the 
offering of a gift from a subordinate.


Sec.  2635.303  Definitions.

    For purposes of this subpart, the following definitions apply:
    (a) Gift has the meaning set forth in Sec.  2635.203(b). For 
purposes of Sec.  2635.203(b) and this paragraph (a) an employee will 
be deemed to have paid market value for any benefit received as a 
result of participating in a carpool or other such mutual arrangement 
between employees if the employee bears a fair proportion of the 
expense or effort involved.
    (b) Indirectly, for purposes of Sec.  2635.302(b), has the meaning 
set forth in Sec.  2635.203(f). For purposes of Sec.  2635.302(a), it 
includes a gift:
    (1) Given with the employee's knowledge and acquiescence by the 
employee's parent, sibling, spouse, child, or dependent relative; or

[[Page 43708]]

    (2) Given by a person other than the employee when circumstances 
indicate that the employee has promised or agreed to reimburse that 
person or to give that person something of value in exchange for giving 
the gift.
    (c) Market value has the meaning set forth in Sec.  2635.203(c), 
subject to paragraph (a) of this section.
    (d) Official superior means any other employee, other than the 
President and the Vice President, including but not limited to an 
immediate supervisor, whose official responsibilities include directing 
or evaluating the performance of the employee's official duties or 
those of any other official superior of the employee. For purposes of 
this subpart, employees are considered to be the subordinates of any of 
their official superiors.
    (e) Solicit means to request contributions by personal 
communication or by general announcement.
    (f) Voluntary contribution means a contribution given freely, 
without pressure or coercion. A contribution is not voluntary unless it 
is made in an amount determined by the contributing employee, except 
that when an amount for a gift is included in the cost for a luncheon, 
reception, or similar event, an employee who freely chooses to pay a 
proportionate share of the total cost in order to attend will be deemed 
to have made a voluntary contribution. Except in the case of 
contributions for a gift included in the cost of a luncheon, reception, 
or similar event, a statement that an employee may choose to contribute 
less or not at all must accompany any recommendation of an amount to be 
contributed for a gift to an official superior.
    Example 1 to paragraph (f): A supervisory employee of the Agency 
for International Development has just been reassigned from Washington, 
DC, to a foreign duty location. As a farewell party, 12 subordinates 
have decided to take the supervisory employee out to lunch at a 
restaurant. It is understood that the employees will pay for their own 
meals and that the cost of the supervisor's lunch will be divided 
equally among the 12. Even though the amount they will contribute is 
not determined until the supervisor orders lunch, the contribution made 
by those who choose to participate in the farewell lunch is voluntary.


Sec.  2635.304  Exceptions.

    The prohibitions set forth in Sec.  2635.302(a) and (b) do not 
apply to a gift given or accepted under the circumstances described in 
paragraph (a) or (b) of this section. A contribution or the 
solicitation of a contribution that would otherwise violate the 
prohibitions set forth in Sec.  2635.302(a) and (b) may only be made in 
accordance with paragraph (c) of this section.
    (a) General exceptions. On an occasional basis, including any 
occasion on which gifts are traditionally given or exchanged, the 
following may be given to an official superior or accepted from a 
subordinate or an employee receiving less pay:
    (1) Items, other than cash, with an aggregate market value of $10 
or less per occasion;
    (2) Items such as food and refreshments to be shared in the office 
among several employees;
    (3) Personal hospitality provided at a residence which is of a type 
and value customarily provided by the employee to personal friends;
    (4) Items given in connection with the receipt of personal 
hospitality if of a type and value customarily given on such occasions; 
and
    (5) Unless obtained in violation of Sec.  630.912 of this title, 
leave transferred under subpart I of part 630 of this title to an 
employee who is not an immediate supervisor.
    Example 1 to paragraph (a): Upon returning to work following a 
vacation at the beach, a claims examiner with the Department of 
Veterans Affairs may give their supervisor, and the supervisor may 
accept, a bag of saltwater taffy purchased on the boardwalk for $8.
    Example 2 to paragraph (a): An employee of the Federal Deposit 
Insurance Corporation whose bank examination responsibilities require 
frequent travel may not bring their supervisor, and the supervisor may 
not accept, souvenir coffee mugs from each of the cities the employee 
visits in the course of performing examination duties, even though each 
of the mugs costs less than $5. Gifts given on this basis are not 
occasional.
    Example 3 to paragraph (a): The Secretary of Labor has invited the 
agency's General Counsel to a home dinner party. The General Counsel 
may bring a $15 bottle of wine to the dinner party and the Secretary 
may accept this customary gift from the subordinate, even though its 
cost is in excess of $10.
    Example 4 to paragraph (a): For the holidays, an assistant may give 
their supervisor, and the supervisor may accept, a small succulent 
plant purchased for $10 or less. The assistant may also invite the 
supervisor to a New Year's Eve party in their home and the supervisor 
may attend.
    (b) Special, infrequent occasions. A gift appropriate to the 
occasion may be given to an official superior or accepted from a 
subordinate or other employee receiving less pay:
    (1) In recognition of infrequently occurring occasions of personal 
significance such as marriage, illness, bereavement, or the birth or 
adoption of a child; or
    (2) Upon occasions that terminate a subordinate-official superior 
relationship, such as retirement, resignation, or transfer.
    Example 1 to paragraph (b): The administrative assistant to the 
personnel director of the Tennessee Valley Authority may send a $30 
floral arrangement to the personnel director who is in the hospital 
recovering from surgery. The personnel director may accept the gift.
    Example 2 to paragraph (b): A chemist employed by the Food and Drug 
Administration has been invited to the wedding of the lab director who 
is an official superior. The chemist may give the lab director and the 
lab director's spouse, and the couple may accept, a place setting in 
the couple's selected china pattern purchased for $70.
    Example 3 to paragraph (b): Upon the occasion of the supervisor's 
retirement from Federal service, an employee of the Fish and Wildlife 
Service may give the supervisor a book of wildlife photographs 
purchased for $19. The retiring supervisor may accept the book.
    Example 4 to paragraph (b): An economist at the Consumer Financial 
Protection Bureau overhears their supervisor talking about their 
upcoming 50th birthday. Although a 50th birthday may be conventionally 
seen as a unique ``milestone'' worthy of additional celebration, the 
employee may not give their supervisor a $25 bottle of wine as a 
present because a birthday is not an infrequently occurring occasion.
    (c) Voluntary contributions. (1) An employee may solicit voluntary 
contributions of nominal amounts from fellow employees for an 
appropriate gift to an official superior and an employee may make a 
voluntary contribution of a nominal amount to an appropriate gift to an 
official superior:
    (i) On a special, infrequent occasion as described in paragraph (b) 
of this section; or
    (ii) On an occasional basis, for items such as food and 
refreshments to be shared in the office among several employees.
    (2) An employee may accept such gifts to which a subordinate or an 
employee receiving less pay has voluntarily contributed pursuant to 
paragraph (c)(1) of this section.
    Example 1 to paragraph (c): To mark the occasion of retirement, 
members of the immediate staff of the Under

[[Page 43709]]

Secretary of the Army would like to throw a party and provide the Under 
Secretary with a gift certificate. They may distribute an announcement 
of the party and list a nominal amount for a retirement gift as a 
suggested voluntary contribution for the party.
    Example 2 to paragraph (c): An employee of the National Endowment 
for the Arts may not collect contributions for a Christmas gift for the 
Chairman. Christmas occurs annually and is not an occasion of personal 
significance.
    Example 3 to paragraph (c): Subordinates may not take up a 
collection for a gift to an official superior on the occasion of the 
superior's swearing in or promotion to a higher-grade position within 
the supervisory chain of that organization. These are not events that 
mark the termination of the subordinate-official superior relationship, 
nor are they events of personal significance within the meaning of 
paragraph (b) of this section. However, subordinates may take up a 
collection and employees may contribute a nominal amount to buy 
refreshments to be consumed by everyone in the immediate office to mark 
either such occasion.
    Example 4 to paragraph (c): Subordinates may each contribute a 
nominal amount to a fund to give a gift to an official superior upon 
the occasion of that superior's transfer or promotion to a position 
outside the organization.
    Example 5 to paragraph (c): An Assistant Secretary at the 
Department of the Interior is getting married. The Assistant 
Secretary's assistant has decided that a microwave oven would be a nice 
gift from the staff and has informed each of the Assistant Secretary's 
subordinates that they should contribute $5 for the gift. The 
assistant's method of collection is improper. Although it is 
permissible to recommend a $5 contribution, the recommendation must be 
coupled with a statement that the employee whose contribution is 
solicited is free to contribute less or nothing at all.


Sec.  2635.305  Disposition of prohibited gifts.

    Section 2635.206(a)(1) through (3) may be referenced when 
determining an appropriate disposition of a gift that may not be 
accepted under this subpart.

Subpart D--Conflicting Financial Interests


Sec.  2635.401  Overview.

    Part 2640 of this chapter interprets and is the implementing 
regulation for 18 U.S.C. 208. This subpart summarizes the relevant 
statutory restrictions and some of the regulatory guidance found there. 
Specifically, this subpart contains two provisions relating to 
financial interests. One is a recusal requirement and the other is a 
prohibition on acquiring or continuing to hold specific financial 
interests. An employee may acquire or hold any financial interest not 
prohibited by Sec.  2635.403. Notwithstanding that the acquisition or 
holding of a particular interest is proper, an employee is prohibited 
in accordance with Sec.  2635.402 from participating in an official 
capacity in any particular matter in which, to the employee's 
knowledge, the employee or any person whose interests are imputed to 
the employee has a financial interest, if the particular matter will 
have a direct and predictable effect on that interest.


Sec.  2635.402  Disqualifying financial interests.

    (a) Statutory prohibition. An employee is prohibited by criminal 
statute, 18 U.S.C. 208(a), from participating personally and 
substantially in an official capacity in any particular matter in 
which, to the employee's knowledge, the employee or any person whose 
interests are imputed to the employee under this statute has a 
financial interest, if the particular matter will have a direct and 
predictable effect on that interest.

    Note 1 to paragraph (a):  Standards applicable when seeking non-
Federal employment are contained in subpart F of this part and, if 
followed, will ensure that an employee does not violate 18 U.S.C. 
208(a) or this section when the employee is negotiating for or has 
an arrangement concerning future employment. In all other cases when 
the employee's participation would violate 18 U.S.C. 208(a), an 
employee must recuse from participating in the particular matter in 
accordance with paragraph (c) of this section or obtain a waiver or 
determine that an exemption applies, as described in paragraph (d) 
of this section.

    (b) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Direct and predictable effect. (i) A particular matter will 
have a direct effect on a financial interest if there is a close causal 
link between any decision or action to be taken in the matter and any 
expected effect of the matter on the financial interest. An effect may 
be direct even though it does not occur immediately. A particular 
matter will not have a direct effect on a financial interest, however, 
if the chain of causation is attenuated or is contingent upon the 
occurrence of events that are speculative or that are independent of, 
and unrelated to, the matter. A particular matter that has an effect on 
a financial interest only as a consequence of its effects on the 
general economy does not have a direct effect within the meaning of 
this subpart.
    (ii) A particular matter will have a predictable effect if there is 
a real, as opposed to a speculative possibility that the matter will 
affect the financial interest. It is not necessary, however, that the 
magnitude of the gain or loss be known, and the dollar amount of the 
gain or loss is immaterial.

    Note 2 to paragraph (b)(1):  If a particular matter involves a 
specific party or parties, generally the matter will at most only 
have a direct and predictable effect, for purposes of this subpart, 
on a financial interest of the employee in or with a party, such as 
the employee's interest by virtue of owning stock. There may, 
however, be some situations in which, under the standards of this 
paragraph (b)(1), a particular matter will have a direct and 
predictable effect on an employee's financial interests in or with a 
nonparty. For example, if a party is a corporation, a particular 
matter may also have a direct and predictable effect on an 
employee's financial interests through ownership of stock in an 
affiliate, parent, or subsidiary of that party. Similarly, the 
disposition of a protest against the award of a contract to a 
particular company may also have a direct and predictable effect on 
an employee's financial interest in another company listed as a 
subcontractor in the proposal of one of the competing offerors.

    Example 1 to paragraph (b)(1): An employee of the National Library 
of Medicine at the National Institutes of Health has just been asked to 
serve on the technical evaluation panel to review proposals for a new 
library computer search system. DEF Computer Corporation, a closely 
held company in which the employee and their spouse own a majority of 
the stock, has submitted a proposal. Because award of the systems 
contract to DEF or to any other offeror will have a direct and 
predictable effect on the financial interests of both the employee and 
the spouse, the employee cannot participate on the technical evaluation 
team unless this disqualification has been waived.
    Example 2 to paragraph (b)(1): Upon assignment to the technical 
evaluation panel, the employee in example 1 to this paragraph (b)(1) 
finds that DEF Computer Corporation has not submitted a proposal. 
Rather, LMN Corp., with which DEF competes for private sector business, 
is one of the six offerors. The employee need not recuse from serving 
on the technical evaluation panel. Any effect on the employee's 
financial interests as a result of the agency's decision to award or 
not award the systems contract to LMN would be at most indirect and 
speculative.
    (2) Imputed interests. For purposes of 18 U.S.C. 208(a) and this 
subpart, the financial interests of the following

[[Page 43710]]

persons will require the recusal of an employee to the same extent as 
if they were the employee's own interests:
    (i) The employee's spouse;
    (ii) The employee's minor child;
    (iii) The employee's general partner;
    (iv) An organization or entity which the employee serves as 
officer, director, trustee, general partner, or employee; and
    (v) A person with whom the employee is negotiating for or has an 
arrangement concerning prospective employment. (Employees who are 
seeking other employment should refer to and comply with the standards 
in subpart F of this part.)
    Example 1 to paragraph (b)(2): An employee of the Department of 
Education serves without compensation on the board of directors of 
Kinder World, Inc., a nonprofit corporation that engages in good works. 
Even though the employee's personal financial interests will not be 
affected, the employee must recuse from participating in the review of 
a grant application submitted by Kinder World. Award or denial of the 
grant will affect the financial interests of Kinder World and its 
financial interests are imputed to the employee as a member of its 
board of directors.
    Example 2 to paragraph (b)(2): The spouse of an employee of the 
Food and Drug Administration has obtained a position with a well-
established biomedical research company. The company has developed an 
artificial limb for which it is seeking FDA approval and the employee 
would ordinarily be asked to participate in the FDA's review and 
approval process. The spouse is a salaried employee of the company and 
has no stock or other direct or indirect ownership interest in the 
company. The spouse's position with the company is such that the 
granting or withholding of FDA approval will not have a direct and 
predictable effect on their salary or continued employment with the 
company. Because the FDA approval process will not affect the spouse's 
financial interests, this section does not require the employee to 
recuse from participating in that process. Nevertheless, because the 
impartiality principle is implicated as a result of the employee's 
covered relationship with the spouse's employer, as identified at Sec.  
2635.502(b)(1)(iii), the employee must follow the procedures 
established in Sec.  2635.502 before participating in the FDA's review 
and approval process.
    (3) Particular matter. The term particular matter encompasses only 
matters that involve deliberation, decision, or action that is focused 
upon the interests of specific persons, or a discrete and identifiable 
class of persons. Such a matter is covered by this subpart even if it 
does not involve formal parties and may include governmental action 
such as legislation or policy-making that is narrowly focused on the 
interests of such a discrete and identifiable class of persons. The 
term particular matter, however, does not extend to the consideration 
or adoption of broad policy options that are directed to the interests 
of a large and diverse group of persons. The particular matters covered 
by this subpart include a judicial or other proceeding, application, 
request for a ruling or other determination, contract, claim, 
controversy, charge, accusation, or arrest.
    Example 1 to paragraph (b)(3): The Internal Revenue Service's 
amendment of its regulations to change the manner in which depreciation 
is calculated is not a particular matter, nor is the Social Security 
Administration's consideration of changes to its appeal procedures for 
disability claimants.
    Example 2 to paragraph (b)(3): Consideration by the Surface 
Transportation Board of regulations establishing safety standards for 
trucks on interstate highways involves a particular matter.
    (4) Personal and substantial. To participate personally means to 
participate directly. It includes the direct and active supervision of 
the participation of a subordinate in the matter. To participate 
substantially means that the employee's involvement is of significance 
to the matter. Participation may be substantial even though it is not 
determinative of the outcome of a particular matter. However, it 
requires more than official responsibility, knowledge, perfunctory 
involvement, or involvement on an administrative or peripheral issue. A 
finding of substantiality should be based not only on the effort 
devoted to a matter, but also on the importance of the effort. While a 
series of peripheral involvements may be insubstantial, the single act 
of approving or participating in a critical step may be substantial. 
Personal and substantial participation may occur when, for example, an 
employee participates through decision, approval, disapproval, 
recommendation, investigation, or the rendering of advice in a 
particular matter.
    (c) Recusal. Unless the employee is authorized to participate in 
the particular matter by virtue of a waiver or exemption described in 
paragraph (d) of this section or because the interest has been divested 
in accordance with paragraph (e) of this section, an employee must 
recuse from participating in a particular matter in which, to the 
employee's knowledge, the employee or a person whose interests are 
imputed to the employee has a financial interest, if the particular 
matter will have a direct and predictable effect on that interest. 
Recusal is accomplished by not participating in the particular matter.
    (1) Notification. Employees who become aware of the need to recuse 
from participating in a particular matter to which they have been 
assigned must take whatever steps are necessary to ensure that they do 
not participate in the matter. Appropriate oral or written notification 
of their recusal may be made to an agency ethics official, coworkers, 
or a supervisor to document and help effectuate the recusal. Public 
filers as defined in subpart F of this part must comply with additional 
notification requirements set forth in Sec.  2635.607 regarding 
negotiations for or agreement of future employment or compensation.
    (2) Documentation. Employees need not file written recusal 
statements unless they are required by part 2634 of this chapter to 
file written evidence of compliance with an ethics agreement with the 
Office of Government Ethics or a designated agency ethics official, or 
are specifically directed by an agency ethics official or the person 
responsible for their assignments to file written recusal statements. 
However, it is often prudent for employees to create a record of their 
actions by providing written notice to an agency ethics official, a 
supervisor, or other appropriate official. In addition, public filers 
as defined in subpart F of this part must comply with the documentation 
requirements set forth in Sec.  2635.607 regarding negotiations for or 
agreement of future employment or compensation.
    Example 1 to paragraph (c): An Assistant Secretary of the 
Department of the Interior owns recreational property that borders on 
land which is being considered for annexation to a national park. 
Annexation would directly and predictably increase the value of the 
Assistant Secretary's vacation property and, thus, the Assistant 
Secretary must recuse from participating in any way in the Department's 
deliberations or decisions regarding the annexation. Because the 
Assistant Secretary is responsible for determining their own work 
assignments, they may accomplish their recusal merely by ensuring that 
they do not participate in the particular matter. Because of the level 
of their position, however, the Assistant Secretary might be wise to 
establish a record that they have acted properly by providing a written 
recusal statement to

[[Page 43711]]

an official superior and by providing written notification of the 
recusal to subordinates to ensure that they do not raise or discuss any 
issues related to the annexation with the Assistant Secretary.
    (d) Waiver of or exemptions from recusal requirement. An employee 
who would otherwise be required to recuse under 18 U.S.C. 208(a) may be 
permitted to participate in a particular matter if the financial 
interest that would otherwise require recusal is the subject of a 
regulatory exemption or individual waiver described in this paragraph 
(d), or results from certain Indian birthrights as described in 18 
U.S.C. 208(b)(4).
    (1) Regulatory exemptions. Under 18 U.S.C. 208(b)(2), regulatory 
exemptions of general applicability have been issued by the Office of 
Government Ethics, based on its determination that particular interests 
are too remote or too inconsequential to affect the integrity of the 
services of employees to whom those exemptions apply. See part 2640, 
subpart B of this chapter.
    (2) Individual waivers. An individual waiver enabling the employee 
to participate in one or more particular matters may be issued under 18 
U.S.C. 208(b)(1) if, in advance of the employee's participation:
    (i) The employee:
    (A) Advises the Government official responsible for the employee's 
appointment (or other Government official to whom authority to issue 
such a waiver for the employee has been delegated) about the nature and 
circumstances of the particular matter or matters; and
    (B) Makes full disclosure to such official of the nature and extent 
of the relevant financial interest; and
    (ii) Such official determines, in writing, that the employee's 
financial interest in the particular matter or matters is not so 
substantial as to be deemed likely to affect the integrity of the 
services which the Government may expect from such employee. See part 
2640, subpart C of this chapter (providing additional guidance).
    (3) Federal advisory committee member waivers. An individual waiver 
may be issued under 18 U.S.C. 208(b)(3) to a special Government 
employee serving on, or under consideration for appointment to, an 
advisory committee within the meaning of the Federal Advisory Committee 
Act if the Government official responsible for the employee's 
appointment (or other Government official to whom authority to issue 
such a waiver for the employee has been delegated):
    (i) Reviews the financial disclosure report filed by the special 
Government employee pursuant to 5 U.S.C. chapter 131; and
    (ii) Certifies in writing that the need for the individual's 
services outweighs the potential for a conflict of interest created by 
the relevant financial interest. See part 2640, subpart C, of this 
chapter (providing additional guidance).
    (4) Consultation and notification regarding waivers. When 
practicable, an official is required to consult formally or informally 
with the Office of Government Ethics prior to granting a waiver 
referred to in paragraph (d)(2) or (3) of this section. A copy of each 
such waiver is to be forwarded to the Director of the Office of 
Government Ethics.
    (e) Divestiture of a disqualifying financial interest. Upon sale or 
other divestiture of the asset or other interest that would otherwise 
require the employee to recuse from participating in a particular 
matter, 18 U.S.C. 208(a) and paragraph (c) of this section will no 
longer prohibit the employee's participation in the matter.
    (1) Voluntary divestiture. An employee who would otherwise be 
required to recuse from participating in a particular matter may 
voluntarily sell or otherwise divest the interest that create the 
recusal requirement.
    (2) Directed divestiture. An employee may be required to sell or 
otherwise divest the disqualifying financial interest if the continued 
holding of that interest is prohibited by statute or by agency 
supplemental regulation issued in accordance with Sec.  2635.403(a), or 
if the agency determines in accordance with Sec.  2635.403(b) that a 
substantial conflict exists between the financial interest and the 
employee's duties or accomplishment of the agency's mission.
    (3) Eligibility for special tax treatment. An employee who is 
directed to divest an interest may be eligible to defer the tax 
consequences of divestiture under part 2634, subpart J, of this 
chapter. An employee who divests before obtaining a certificate of 
divestiture will not be eligible for this special tax treatment.
    (f) Official duties that give rise to potential conflicts. When 
their official duties create a substantial likelihood that they may be 
assigned to a particular matter from which they would be required to 
recuse, employees should advise their supervisors or other persons 
responsible for their assignments of that potential so that conflicting 
assignments can be avoided, consistent with the agency's needs.


Sec.  2635.403  Prohibited financial interests.

    An employee may not acquire or hold any financial interest that 
agency employees are prohibited from acquiring or holding by statute, 
by agency regulation issued in accordance with paragraph (a) of this 
section, or by reason of an agency determination of substantial 
conflict under paragraph (b) of this section.
    (a) Agency regulation prohibiting certain financial interests. An 
agency may, by supplemental agency regulation, prohibit or restrict the 
acquisition or holding of a financial interest or a class of financial 
interests by agency employees, or any category of agency employees, and 
the spouses and minor children of those employees, based on the 
agency's determination that the acquisition or holding of such 
financial interests would cause a reasonable person to question the 
impartiality and objectivity with which agency programs are 
administered. When the agency restricts or prohibits the holding of 
certain financial interests by its employees' spouses or minor 
children, any such prohibition or restriction must be based on a 
determination that there is a direct and appropriate nexus between the 
prohibition or restriction as applied to spouses and minor children and 
the efficiency of the service.

    Note 1 to paragraph (a):  There is no statute of Governmentwide 
applicability prohibiting employees from holding or acquiring any 
financial interest. Statutory restrictions, if any, are contained in 
agency statutes which, in some cases, may be implemented by agency 
regulations issued independent of this part.

    (b) Agency determination of substantial conflict. An agency may 
prohibit or restrict an individual employee from acquiring or holding a 
financial interest or a class of financial interests based upon the 
agency designee's determination that the holding of such interest or 
interests will:
    (1) Require the employee to recuse from particular matters so 
central or critical to the performance of the employee's official 
duties that their ability to perform the duties of their position would 
be materially impaired; or
    (2) Adversely affect the efficient accomplishment of the agency's 
mission because another employee cannot be readily assigned to perform 
work from which the employee would be recused by reason of the 
financial interest.
    Example 1 to paragraph (b): An Air Force employee who owns $33,778 
of stock in a major aircraft engine manufacturer is being considered 
for promotion to a position that involves responsibility for 
development of a new fighter airplane. If the agency determined that 
engineering and other

[[Page 43712]]

decisions about the Air Force's requirements for the fighter would 
directly and predictably affect the employee's financial interests, the 
employee could not, by virtue of 18 U.S.C. 208(a), perform these 
significant duties of the position while retaining stock in the 
company. The agency can require the employee to sell the stock as a 
condition of being selected for the position rather than allowing the 
employee to recuse from particular matters.
    (c) Definition of financial interest. For purposes of this section:
    (1) Except as provided in paragraph (c)(2) of this section, the 
term financial interest is limited to financial interests that are 
owned by the employee or by the employee's spouse or minor children. 
However, the term is not limited to only those financial interests that 
would require the employee to recuse under 18 U.S.C. 208(a) and Sec.  
2635.402. The term includes any current or contingent ownership, 
equity, or security interest in real or personal property or a 
business, and may include an indebtedness or compensated employment 
relationship. It thus includes, for example, interests in the nature of 
stocks, bonds, partnership interests, fee and leasehold interests, 
mineral and other property rights, deeds of trust, and liens, and 
extends to any right to purchase or acquire any such interest, such as 
a stock option or commodity future. It does not include a future 
interest created by someone other than the employee, the employee's 
spouse, or minor child, or any right as a beneficiary of an estate that 
has not been settled.
    Example 1 to paragraph (c)(1): A regulatory agency has concluded 
that ownership by its employees of stock in entities regulated by the 
agency would significantly diminish public confidence in the agency's 
performance of its regulatory functions and thereby interfere with the 
accomplishment of its mission. In its supplemental agency regulations, 
the agency may prohibit its employees from acquiring or continuing to 
hold stock in regulated entities.
    Example 2 to paragraph (c)(1): An agency that insures bank deposits 
may, by supplemental agency regulation, prohibit its employees who are 
bank examiners from obtaining loans from banks they examine. 
Examination of a member bank could have no effect on an employee's 
fixed obligation to repay a loan from that bank and, thus, would not 
affect an employee's financial interests so as to require recusal under 
Sec.  2635.402. Nevertheless, a loan from a member bank is a discrete 
financial interest within the meaning of paragraph (c) of this section 
that may, when appropriate, be prohibited by supplemental agency 
regulation.
    (2) The term financial interest includes service, with or without 
compensation, as an officer, director, trustee, general partner, or 
employee of any person, including a nonprofit entity, whose financial 
interests are imputed to the employee under Sec.  2635.402(b)(2)(iii) 
or (iv).
    Example 1 to paragraph (c)(2): The Foundation for the Preservation 
of Wild Horses maintains herds of horses that graze on public and 
private lands. Because its costs are affected by Federal policies 
regarding grazing permits, the Foundation routinely comments on all 
proposed rules governing use of Federal grasslands issued by the Bureau 
of Land Management (BLM). BLM may require an employee to resign from 
their uncompensated position as Vice President of the Foundation as a 
condition of a promotion to a policy-level position within the Bureau 
rather than allowing the employee to rely on recusal in particular 
cases.
    (d) Reasonable period to divest or terminate. Whenever an agency 
directs divestiture of a financial interest under paragraph (a) or (b) 
of this section, the employee will be given a reasonable period of 
time, considering the nature of their particular duties and the nature 
and marketability of the interest, within which to comply with the 
agency's direction. Except in cases of unusual hardship, as determined 
by the agency, a reasonable period must not exceed 90 days from the 
date divestiture is first directed. However, as long as the employee 
continues to hold the financial interest, all restrictions imposed by 
this subpart remain applicable.
    (e) Eligibility for special tax treatment. Employees required to 
sell or otherwise divest a financial interest may be eligible to defer 
the tax consequences of divestiture under part 2634, subpart J, of this 
chapter.

Subpart E--Impartiality in Performing Official Duties


Sec.  2635.501  Overview.

    (a) Scope. This subpart is intended to ensure that employees take 
appropriate steps to avoid an appearance of loss of impartiality in the 
performance of their official duties in circumstances other than those 
covered by the criminal conflict of interest statute, 18 U.S.C. 208(a).
    (1) The provisions of Sec.  2635.502 are designed to help employees 
identify and take appropriate steps regarding their participation in 
particular matters involving specific parties that may cause a 
reasonable person with knowledge of the relevant facts to question 
their impartiality. Employees and agencies should analyze such 
appearance issues, and employees may receive authorization to 
participate in such matters, using the procedures in this subpart.
    (2) Under Sec.  2635.503, an employee who has received a covered 
payment from a former employer is subject, in the absence of a waiver 
pursuant to Sec.  2635.503(c), to a two-year period of recusal from 
participating in particular matters in which that former employer is or 
represents a party.
    (3) An employee is prohibited by 18 U.S.C. 208(a) from 
participating personally and substantially in an official capacity in 
any particular matter in which, to the employee's knowledge, the 
employee has a personal or imputed financial interest, if the 
particular matter will have a direct and predictable effect on that 
interest. Section 208(a), its interpreting and implementing regulations 
under part 2640 of this chapter, and the regulations at subparts D and 
F of this part, apply when the particular matter would affect the 
financial interests of one of these persons.
    (b) Distinction between authorizations under this subpart and 
waivers and exemptions under the criminal conflict of interest law. (1) 
When an employee's participation in a particular matter involving 
specific parties would raise a question in the mind of a reasonable 
person about the employee's impartiality, but would not violate 18 
U.S.C. 208(a), the agency designee may make a determination, as 
explained in Sec.  2635.502(d), and authorize the employee to 
participate in the matter.
    (2) When the employee's participation in a particular matter would 
affect any one of the financial interests described in 18 U.S.C. 
208(a), only a statutory waiver or exemption, as described in 
Sec. Sec.  2635.402(d) and 2635.605(a), will enable the employee to 
participate in that matter. The specific requirements for regulatory 
exemptions and statutory waivers are contained in part 2640, subparts B 
and C, of this chapter.
    (3) An applicable waiver or exemption under part 2640 of this 
chapter also authorizes an employee's participation in particular 
matters that would otherwise be restricted by Sec.  2635.502. 
Specifically, if an employee meets all prerequisites for the 
application of one of the regulatory exemptions set forth in part 2640, 
subpart B, of this chapter, that constitutes a determination that the 
interest of the Government in the

[[Page 43713]]

employee's participation in a particular matter outweighs the concern 
that a reasonable person may question the integrity of agency programs 
and operations. Similarly, if the employee complies with all terms of a 
statutory waiver granted pursuant to part 2640, subpart C, of this 
chapter, that also constitutes a determination that the interest of the 
Government in the employee's participation in a particular matter 
outweighs the concern that a reasonable person may question the 
integrity of agency programs and operations. In such cases, the 
employee is not required to recuse under Sec.  2635.502(e) or request 
authorization to participate under Sec.  2635.502(d).

    Note 1 to Sec.  2635.501:  Even if the employee or agency 
designee determines that this subpart is not applicable, the 
employee's supervisor or other individuals responsible for assigning 
work to the employee may decide not to assign certain work to the 
employee for other reasons, including to address appearance and 
impartiality concerns not covered by this subpart.

Sec.  2635.502  Personal and business relationships.

    (a) Consideration of appearances by the employee. In considering 
whether any of the following would cause a reasonable person to 
question their impartiality, employees may seek the assistance of their 
supervisor, an agency ethics official, or the agency designee.
    (1) When an employee knows that a particular matter involving 
specific parties is likely to have a direct and predictable effect on 
the financial interest of a member of the employee's household, and the 
employee determines that the circumstances would cause a reasonable 
person with knowledge of the relevant facts to question the employee's 
impartiality in the matter, the employee should not participate in the 
matter unless the employee has received a determination from the agency 
designee regarding the appearance problem in accordance with paragraph 
(c) of this section or received an authorization from the agency 
designee in accordance with paragraph (d) of this section.
    (2) When an employee knows that a person with whom the employee has 
a covered relationship is or represents a party to a particular matter 
involving specific parties, and the employee determines that the 
circumstances would cause a reasonable person with knowledge of the 
relevant facts to question their impartiality in the matter, the 
employee should not participate in the matter unless the employee has 
received a determination from the agency designee regarding the 
appearance problem in accordance with paragraph (c) of this section or 
received an authorization from the agency designee in accordance with 
paragraph (d) of this section.
    (3) Employees who are concerned that circumstances other than those 
specifically described in paragraphs (a)(1) and (2) of this section 
would raise a question regarding their impartiality should use the 
process described in this section to determine whether they should not 
participate in a particular matter.
    (b) Definitions. For purposes of this section:
    (1) An employee has a covered relationship with:
    (i) A person, other than a prospective employer described in Sec.  
2635.603(c), with whom the employee has or seeks a business, 
contractual, or other financial relationship that involves other than a 
routine consumer transaction;

    Note 1 to paragraph (b)(1)(i):  An employee who is seeking 
employment within the meaning of Sec.  2635.603 must comply with 
subpart F of this part rather than with this section.

    (ii) A person who is a member of the employee's household, or who 
is a relative with whom the employee has a close personal relationship;
    (iii) A person for whom the employee's spouse, parent, or child is, 
to the employee's knowledge, serving or seeking to serve as an officer, 
director, trustee, general partner, agent, attorney, consultant, 
contractor, or employee;
    (iv) Any person for whom the employee has, within the last year, 
served as officer, director, trustee, general partner, agent, attorney, 
consultant, contractor, or employee; or
    (v) An organization, other than a political party described in 26 
U.S.C. 527(e), in which the employee is an active participant. 
Participation is active if, for example, it involves service as an 
official of the organization or in a capacity similar to that of a 
committee or subcommittee chairperson or spokesperson, or participation 
in directing the activities of the organization. In other cases, 
significant time devoted to promoting specific programs of the 
organization, including coordination of fundraising efforts, is an 
indication of active participation. Payment of dues or the donation or 
solicitation of financial support does not, in itself, constitute 
active participation.
    (2) Direct and predictable effect has the meaning set forth in 
Sec.  2635.402(b)(1).
    (3) Particular matter involving specific parties has the meaning 
set forth in Sec.  2640.102(l) of this chapter.
    Example 1 to paragraph (b): An employee of the General Services 
Administration (GSA) has made an offer to purchase a restaurant owned 
by a local developer. The developer has submitted an offer in response 
to a GSA solicitation for the lease of office space. Under the 
circumstances, the GSA employee would be correct in concluding that a 
reasonable person would be likely to question their impartiality if 
they were to participate in evaluating that developer's or its 
competitor's lease proposal.
    Example 2 to paragraph (b): An employee of the Department of Labor 
is providing technical assistance in drafting occupational safety and 
health legislation that will affect all employers of five or more 
persons. The employee's spouse is employed as an administrative 
assistant by a large corporation that will incur additional costs if 
the proposed legislation is enacted. Because the legislation is not a 
particular matter involving specific parties, the employee may continue 
to work on the legislation and need not be concerned that the spouse's 
employment with an affected corporation would raise a question 
concerning the employee's impartiality.
    Example 3 paragraph (b): An employee of the Bureau of Land 
Management (BLM) is studying environmental problems created by the use 
of hazardous substances on a particular section of public land. BLM has 
a contract with an environmental services company to produce a water 
quality study of the groundwater under this section of land along with 
a recommendation about how to remediate any problems that are found. 
The BLM employee will use the study to help determine the extent of the 
damage and to recommend a solution to any problems that are revealed. 
The employee's parent has accepted a job with this environmental 
services company and will be signing and submitting the report of the 
company's findings. Under these circumstances, the employee would be 
correct in concluding that a reasonable person would be likely to 
question their impartiality if they were to continue participating in 
the study related to this parcel of public land.
    Example 4 to paragraph (b): An engineer has just resigned from a 
position as vice president of an electronics company in order to accept 
employment with the Federal Aviation Administration (FAA) in a position 
involving procurement responsibilities. Although the employee did not 
receive

[[Page 43714]]

a covered payment in connection with the resignation and has severed 
all financial ties with the firm, under the circumstances the employee 
would be correct in concluding that this former service as an officer 
of the company would be likely to cause a reasonable person to question 
their impartiality if they were to participate in the administration of 
an FAA contract for which the firm is a first-tier subcontractor.
    Example 5 to paragraph (b): An employee of the Internal Revenue 
Service (IRS) is a member of a private organization whose purpose is to 
restore a Victorian-era railroad station, and chairs its annual 
fundraising drive. Under the circumstances, the employee would be 
correct in concluding that this active membership in the organization 
would be likely to cause a reasonable person to question their 
impartiality if they were to participate in an IRS determination 
regarding the tax-exempt status of the organization.
    Example 6 to paragraph (b): An employee of the Department of 
Defense (DoD) has responsibility for testing avionics produced by a 
large Air Force contractor. The employee just learned that their adult 
child accepted a staff position in the human resources division of that 
contractor. Although the DoD employee has a covered relationship with 
the contractor that employs their child, the employee could justifiably 
conclude that a reasonable person would not be likely to question their 
impartiality because the child's work is unrelated to the avionics 
contract.
    Example 7 to paragraph (b): An employee of the Department of 
Defense (DoD) leads the office that is testing a new type of jet engine 
produced by a multinational conglomerate's aviation division. The 
employee's lifelong best friend is the head of the conglomerate's 
aviation division and is responsible for presenting and promoting the 
new jet engine. Although the DoD employee does not have a covered 
relationship under paragraph (b)(1) of this section, the employee is 
concerned that, under paragraph (a)(3) of this section, questions 
regarding their impartiality could be raised. Here, the employee could 
justifiably conclude that a reasonable person would be likely to 
question their impartiality if they were to continue performing duties 
related to this jet engine.
    (c) Determination by agency designee. (1) When the agency designee 
has information concerning a potential appearance problem arising from 
either the financial interest of a member of the employee's household 
in a particular matter involving specific parties or a particular 
matter involving specific parties in which a person with whom the 
employee has a covered relationship is a party or represents a party, 
the agency designee may make an independent determination as to whether 
a reasonable person with knowledge of the relevant facts would be 
likely to question the employee's impartiality in the matter. 
Ordinarily, the agency designee's determination will be initiated by 
information provided by the employee pursuant to paragraph (a) of this 
section. However, at any time, including after an employee has recused 
from participating in a particular matter pursuant to paragraph (e) of 
this section, agency designees may make this determination on their own 
initiative or when requested by the employee's supervisor or any other 
person responsible for the employee's assignment.
    (2) If the agency designee determines that the employee's 
impartiality is likely to be questioned, the agency designee must then 
determine, in accordance with paragraph (d) of this section, whether 
the employee should be authorized to participate in the matter. If the 
agency designee determines that the employee's participation should not 
be authorized, the employee must recuse from participating in the 
particular matter in accordance with paragraph (e) of this section.
    (3) If the agency designee determines that the employee's 
impartiality is not likely to be questioned, the agency designee may 
advise the employee, including an employee who has reached a contrary 
conclusion under paragraph (a) of this section, that the employee's 
participation in the matter would be proper.
    (d) Authorization by agency designee. When an employee's 
participation in a particular matter involving specific parties would 
not violate 18 U.S.C. 208(a), but would raise a question in the mind of 
a reasonable person about the employee's impartiality, the agency 
designee may authorize the employee to participate in the matter based 
on a determination, made in light of all relevant circumstances, that 
the interest of the Government in the employee's participation 
outweighs the concern that a reasonable person may question the 
integrity of the agency's programs and operations.
    (1) Factors which may be taken into consideration include:
    (i) The nature of the relationship involved;
    (ii) The effect that resolution of the matter would have upon the 
financial interests of the person involved in the relationship;
    (iii) The nature and importance of the employee's role in the 
matter, including the extent to which the employee is called upon to 
exercise discretion in the matter;
    (iv) The sensitivity of the matter;
    (v) The difficulty of reassigning the matter to another employee; 
and
    (vi) Adjustments that may be made in the employee's duties that 
would reduce or eliminate the likelihood that a reasonable person would 
question the employee's impartiality.
    (2) Authorization by the agency designee will be documented in 
writing at the agency designee's discretion or when requested by the 
employee. An employee who has been authorized to participate in a 
particular matter involving specific parties may not thereafter recuse 
from participating in the matter on the basis of an appearance problem 
involving the same circumstances that have been considered by the 
agency designee.
    Example 1 to paragraph (d): The Deputy Director of Personnel for 
the Department of the Treasury and an attorney with the Department's 
Office of General Counsel are general partners in a real estate 
partnership. The Deputy Director advises their supervisor, the Director 
of Personnel, of the relationship upon being assigned to a selection 
panel for a position for which the partner has applied. If selected, 
the partner would receive a substantial increase in salary. The agency 
designee cannot authorize the Deputy Director to participate on the 
panel under the authority of this section because the Deputy Director 
is prohibited by criminal statute, 18 U.S.C. 208(a), from participating 
in a particular matter affecting the financial interest of a person who 
is their general partner. See Sec.  2635.402.
    Example 2 paragraph (d): A new employee of the Securities and 
Exchange Commission is assigned to an investigation of insider trading 
by the brokerage house where they have recently been employed. Because 
of the sensitivity of the investigation, the agency designee may be 
unable to conclude that the Government's interest in the employee's 
participation in the investigation outweighs the concern that a 
reasonable person may question the integrity of the investigation, even 
though the employee has severed all financial ties with the company. 
Based on consideration of all relevant circumstances, the agency 
designee might determine, however, that it is in the interest of the 
Government for the employee to participate in the review of

[[Page 43715]]

a routine filing by the particular brokerage house.
    Example 3 paragraph (d): An Internal Revenue Service employee 
involved in a long and complex tax audit learns that their child has 
just accepted an entry-level management position with a corporation 
whose taxes are the subject of the audit. Because the audit is 
essentially complete and because the employee is the only one with an 
intimate knowledge of the case, the agency designee might determine, 
after considering all relevant circumstances, that it is in the 
Government's interest for the employee to complete the audit, which is 
subject to additional levels of review.
    (e) Recusal. Unless the employee is authorized to participate in 
the matter under paragraph (d) of this section, an employee may not 
participate in a particular matter involving specific parties when the 
employee or the agency designee has concluded, in accordance with 
paragraph (a) or (c) of this section, that the financial interest of a 
member of the employee's household, or the role of a person with whom 
the employee has a covered relationship, is likely to raise a question 
in the mind of a reasonable person about the employee's impartiality. 
Recusal is accomplished by not participating in the matter. When the 
covered relationship is with a former employer, this recusal 
requirement is for a period of one year after the date of the 
employee's resignation from the position with the former employer.
    (1) Notification. Employees who become aware of the need to recuse 
from participating in a particular matter involving specific parties to 
which they have been assigned must take whatever steps are necessary to 
ensure that they do not participate in the matter. Appropriate oral or 
written notification of their recusal may be made to an agency ethics 
official, coworkers, or a supervisor to document and help effectuate 
the recusal.
    (2) Documentation. Employees need not file written recusal 
statements unless they are required by part 2634 of this chapter to 
file written evidence of compliance with an ethics agreement with the 
Office of Government Ethics or a designated agency ethics official, or 
are specifically directed by an agency ethics official or the person 
responsible for their assignments to file written recusal statements. 
However, it is often prudent for employees to create a record of their 
actions by providing written notice to an agency ethics official, a 
supervisor, or other appropriate official.
    (f) Irrelevant considerations. An employee's reputation for honesty 
and integrity is not a relevant consideration for purposes of any 
determination required by this section.

    Note 2 to Sec.  2635.502:  Nothing in this section should be 
construed to suggest that employees should not participate in a 
matter because of their political, religious, or moral views.

Sec.  2635.503  Covered payments from former employers.

    (a) Recusal requirement. Except as provided in paragraph (c) of 
this section, an employee must recuse for two years from participating 
in any particular matter involving specific parties in which the 
employee's former employer is a party or represents a party if the 
employee received a covered payment from that person. The two-year 
period of recusal begins to run on the date that the covered payment is 
received.
    Example 1 to paragraph (a): Following confirmation hearings and one 
month before their scheduled swearing in, a nominee to the position of 
Assistant Secretary of a department received a covered payment from 
their employer. For one year and 11 months after their swearing in, the 
Assistant Secretary may not participate in any particular matter to 
which the former employer is a party.
    Example 2 paragraph (a): An employee received a covered payment 
from their former employer, a coal mine operator, prior to entering on 
duty with the Department of the Interior. For two years thereafter, the 
employee may not participate in a determination regarding the former 
employer's obligation to reclaim a particular mining site, because the 
former employer is a party to the matter. However, the employee may 
help to draft reclamation legislation affecting all coal mining 
operations because this legislation does not involve any parties.
    Example 3 to paragraph (a): An architect accepts a position with 
the Army Corps of Engineers and resigns from a private architecture 
partnership. One month after beginning this new position, the architect 
receives a covered payment from the partnership. The architect may not 
participate in any particular matter involving specific parties in 
which the former partnership is a party until two years after receipt 
of the covered payment, which will be 25 months after beginning service 
with the Corps. Because the payment was not received before the 
architect became an executive branch employee, agency ethics officials 
must also review the payment to determine whether it constituted a 
supplementation of salary under 18 U.S.C. 209.
    (b) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Covered payment means any item, including cash or an investment 
interest, with a value in excess of $10,000, which is paid:
    (i) On the basis of a determination made after it became known to 
the former employer that the individual was being considered for or had 
accepted a Government position; and
    (ii) Other than pursuant to a qualifying program.
    (2)(i) A qualifying program is:
    (A) A compensation, partnership, or benefits program that is 
contained in bylaws, a contract, or other written form, and does not 
treat individuals entering Government service more favorably than other 
individuals; or
    (B) A program that is not contained in written form, but is 
demonstrated by a history of similar payments made to others not 
entering Government service.
    (ii) When a program is established in written form, any history of 
making similar payments to others not entering Government service that 
is contrary to an express provision of the written plan is not relevant 
to the evaluation of whether it is a qualifying program.
    Example 1 to paragraph (b)(2): The vice president of a small 
corporation is nominated to be an ambassador. In recognition of service 
to the corporation, the board of directors votes to pay the departing 
vice president $50,000 upon confirmation in addition to the regular 
severance payment provided for by the corporate bylaws. The regular 
severance payment is not a covered payment because it was made pursuant 
to a qualifying program. The gratuitous payment of $50,000 is a covered 
payment, because the corporation had not made similar payments to other 
departing officers.
    (3) Former employer includes any person which the employee served 
as an officer, director, trustee, general partner, agent, attorney, 
consultant, contractor, or employee. Payments from an officer, 
employee, or agent of a former employer will be considered to be 
payments from the former employer.

    Note 1 to paragraph (b)(3):  The definition of former employer 
includes former clients for whom an employee may have served as an 
agent, attorney, consultant, or contractor.

    (c) Waiver of recusal. The recusal requirement of this section may 
be waived based on a finding that the amount of the payment was not so 
substantial as to cause a reasonable person to question the employee's 
ability to act impartially in a matter in which the former employer is 
or represents a party. The waiver must be

[[Page 43716]]

in writing and may be given only by the head of the agency or, when the 
recipient of the payment is the head of the agency, by the President or 
the President's designee. Waiver authority may be delegated by the head 
of an agency to any person who has been delegated authority to issue 
individual waivers under 18 U.S.C. 208(b) for the employee who is the 
recipient of the covered payment.

Subpart F--Seeking Other Employment


Sec.  2635.601  Overview.

    This subpart contains a recusal requirement that applies to 
employees when seeking non-Federal employment with persons whose 
financial interests would be directly and predictably affected by 
particular matters in which the employees participate personally and 
substantially. Specifically, it addresses the requirement of 18 U.S.C. 
208(a) that an employee not participate personally and substantially in 
any particular matter that, to the employee's knowledge, will have a 
direct and predictable effect on the financial interests of a person 
with whom the employee is negotiating or has any arrangement concerning 
prospective employment. See Sec.  2635.402 and Sec.  2640.103 of this 
chapter. Beyond the statutory requirement in 18 U.S.C. 208(a), this 
subpart also addresses issues of lack of impartiality that require 
recusal from particular matters affecting the financial interests of a 
prospective employer when an employee's actions in seeking employment 
fall short of actual employment negotiations. In addition, this subpart 
contains the statutory notification requirements that apply to public 
filers when they negotiate for or have agreements of future employment 
or compensation. Specifically, it addresses the requirements of section 
17 of the Representative Louise McIntosh Slaughter Stop Trading on 
Congressional Knowledge Act (STOCK Act), Public Law 112-105, 126 Stat. 
303, that a public filer must submit a written statement identifying 
the entity involved in the negotiations or agreement within three 
business days after commencement of such negotiations or agreement and 
must submit a notification of recusal whenever there is a conflict of 
interest or an appearance of a conflict of interest.


Sec.  2635.602  Applicability and related considerations.

    (a) Applicability. (1) To ensure that an employee does not violate 
18 U.S.C. 208(a), section 17 of the STOCK Act, or the principles of 
ethical conduct contained in Sec.  2635.101(b), an employee who is 
seeking employment or who has an arrangement concerning prospective 
employment must comply with the applicable recusal requirements of 
Sec. Sec.  2635.604 and 2635.606 if particular matters in which the 
employee will be participating personally and substantially would, to 
the employee's knowledge, directly and predictably affect the financial 
interests of a prospective employer or of a person with whom the 
employee has an arrangement concerning prospective employment. 
Compliance with this subpart also will ensure that the employee does 
not violate subpart D or E of this part. In addition, a public filer 
who negotiates for or has an agreement of future employment or 
compensation must comply with the requirements of Sec.  2635.607.
    (2) An employee who is seeking employment with a person whose 
financial interests are not, to the employee's knowledge, affected 
directly and predictably by particular matters in which the employee 
participates personally and substantially has no obligation to recuse 
under this subpart. In addition, nothing in this subpart requires an 
employee, other than a public filer, to notify anyone that the employee 
is seeking employment unless a notification is necessary to implement a 
recusal pursuant to Sec.  2635.604(b). A public filer who negotiates 
for or has an agreement of future employment or compensation must 
comply with the notification requirements in Sec.  2635.607. An 
employee may, however, be subject to other statutes that impose 
requirements on employment contacts or discussions, such as 41 U.S.C. 
2103, which is applicable to agency officials involved in certain 
procurement matters. Employees are encouraged to consult with their 
ethics officials if they have any questions about how this subpart may 
apply to them. Ethics officials are not obligated by this subpart to 
inform supervisors that employees are seeking employment.
    Example 1 to paragraph (a): Recently, an employee of the Department 
of Education submitted a resume to the University of Delaware for a job 
opening. The employee has begun seeking employment. However, because 
the employee is not participating in any particular matters affecting 
the University of Delaware, there is no requirement that anyone be 
notified that the employee has begun seeking employment.
    Example 2 to paragraph (a): The employee in example 1 to this 
paragraph (a) has been approached about an employment opportunity at 
the University of Maryland. Because the University of Maryland has 
applied for grants on which the employee has been assigned to work in 
the past, the employee wants to make certain that they do not violate 
the ethics rules. The employee contacts an ethics official to discuss 
the matter. The employee informs the ethics official that they are not 
currently participating in any particular matters affecting the 
University of Maryland. As a result, the ethics official advises the 
employee that they will have no notification obligations under this 
subpart. However, the ethics official cautions the employee that, if 
the employee is assigned to participate in a particular matter 
affecting the University of Maryland while they are seeking employment 
with the University, they must take whatever steps are necessary to 
avoid working on the grant, in accordance with Sec.  2635.604.
    (b) Related restrictions--(1) Outside employment while a Federal 
employee. An employee who is contemplating outside employment to be 
undertaken concurrently with the employee's Federal employment must 
abide by any limitations applicable to the employee's outside 
activities under subparts G and H of this part, including any 
requirements under supplemental agency regulations to obtain prior 
approval before engaging in outside employment or activities and any 
prohibitions under supplemental agency regulations related to outside 
employment or activities. The employee must also comply with any 
applicable recusal requirement of this subpart, as well as any 
applicable recusal requirements under subpart D or E of this part as a 
result of the employee's outside employment activities.
    (2) Post-employment restrictions. An employee who is contemplating 
employment to be undertaken following the termination of the employee's 
Federal employment should consult an agency ethics official to obtain 
advice regarding any post-employment restrictions that may be 
applicable. The regulation implementing the Governmentwide post-
employment statute, 18 U.S.C. 207, is contained in part 2641 of this 
chapter. Employees are cautioned that they may be subject to additional 
statutory prohibitions on post-employment acceptance of compensation 
from contractors, such as 41 U.S.C. 2104.
    (3) Interview trips and entertainment. When a prospective employer 
who is a prohibited source as defined in Sec.  2635.203(d) offers to 
reimburse an

[[Page 43717]]

employee's travel expenses, or provide other reasonable amenities 
incident to employment discussions, the employee may accept such 
amenities in accordance with Sec.  2635.204(e)(3). When a prospective 
employer is a foreign government or international organization, the 
employee must also comply with the Foreign Gifts and Decorations Act, 5 
U.S.C. 7342.


Sec.  2635.603  Definitions.

    For purposes of this subpart:
    (a) Employment means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee, whether to be undertaken at the same time as or subsequent to 
Federal employment. It includes but is not limited to personal services 
as an officer, director, employee, agent, attorney, consultant, 
contractor, general partner, or trustee.
    Example 1 to paragraph (a): An employee of the Bureau of Indian 
Affairs who has announced their intention to retire is approached by 
Tribal representatives concerning a possible consulting contract with 
the tribe. The contractual relationship the tribe wishes to negotiate 
is employment for purposes of this subpart.
    Example 2 to paragraph (a): An employee of the Department of Health 
and Human Services is invited to a meeting with officials of a 
nonprofit corporation to discuss the possibility of serving as a member 
of the corporation's board of directors. Service, with or without 
compensation, as a member of the board of directors constitutes 
employment for purposes of this subpart.
    Example 3 to paragraph (a): An employee at the Department of Energy 
volunteers without compensation to serve dinners at a homeless shelter 
each month. The employee's uncompensated volunteer services in this 
case are not considered an employment or business relationship for 
purposes of this subpart.
    (b) An employee is seeking employment once the employee has begun 
seeking employment within the meaning of paragraph (b)(1) of this 
section and until the employee is no longer seeking employment within 
the meaning of paragraph (b)(2) of this section.
    (1) An employee has begun seeking employment if the employee has 
directly or indirectly:
    (i) Engaged in negotiations for employment with any person. For 
purposes of this paragraph (b)(1)(i), as for 18 U.S.C. 208(a) and 
section 17 of the STOCK Act, the term negotiations means discussion or 
communication with another person, or such person's agent or 
intermediary, mutually conducted with a view toward reaching an 
agreement regarding possible employment with that person. The term is 
not limited to discussions of specific terms and conditions of 
employment in a specific position;
    (ii) Made an unsolicited communication to any person, or such 
person's agent or intermediary, regarding possible employment with that 
person. However, the employee has not begun seeking employment if that 
communication was for the sole purpose of requesting a job application; 
or
    (iii) Made a response, other than rejection, to an unsolicited 
communication from any person, or such person's agent or intermediary, 
regarding possible employment with that person.
    (2) An employee is no longer seeking employment when:
    (i) The employee or the prospective employer rejects the 
possibility of employment and all discussions of possible employment 
have terminated; or
    (ii) Two months have transpired after the employee's dispatch of an 
unsolicited resume or employment proposal, provided the employee has 
received no indication of interest in employment discussions from the 
prospective employer.
    (3) For purposes of this paragraph (b), a response that defers 
discussions until the foreseeable future does not constitute rejection 
of an unsolicited employment overture, proposal, or resume nor 
rejection of a prospective employment possibility.
    Example 1 to paragraph (b): A paralegal at the Department of the 
Army is in the third year of law school. The paralegal's neighbor, a 
partner in a large law firm in the community, invited the paralegal to 
the law firm for a visit. The paralegal accepted the offer and met with 
an associate at the firm. The associate shared with the paralegal their 
experiences looking for a legal position, discussed what they do in 
their position at the law firm, and explained why they chose that law 
firm. There was no discussion of possible employment with the firm. The 
Army paralegal is not seeking employment at this time. The purpose of 
the visit was informational only.
    Example 2 to paragraph (b): An employee of the Defense Contract 
Audit Agency (DCAA) is auditing the overhead accounts of an Army 
contractor. While at the contractor's headquarters, the head of the 
contractor's accounting division tells the employee that the division 
is thinking about hiring another accountant and asks whether the 
employee might be interested in leaving DCAA. The DCAA employee asks 
what kind of work would be involved. The DCAA employee has begun 
seeking employment because they made a response other than a rejection 
to the communication regarding possible employment with the Army 
contractor, although they have not yet begun negotiating for 
employment.
    Example 3 to paragraph (b): The DCAA employee and the head of the 
contractor's accounting division in example 2 to this paragraph (b) 
have a meeting to discuss the duties of the position that the 
accounting division would like to fill and the DCAA employee's 
qualifications for the position. They also discuss ways the DCAA 
employee could remedy one of the missing qualifications, and the 
employee indicates a willingness to obtain the proper qualifications. 
They do not discuss salary. The employee has engaged in negotiations 
regarding possible employment with the contractor.
    Example 4 to paragraph (b): An employee at the Department of Energy 
(DOE) lists their job duties and employment experience in a profile on 
an online, business-oriented social networking service. The employee's 
profile is not targeted at a specific prospective employer. The 
employee has not begun seeking employment because the posting of a 
profile or resume is not an unsolicited communication with any 
prospective employer.
    Example 5 to paragraph (b): The DOE employee in example 4 to this 
paragraph (b) was recently notified that a representative of a 
university has viewed their profile. The employee still has not begun 
seeking employment with the university. Subsequently, a representative 
of the university contacts the employee through the online forum to 
inquire whether the employee would be interested in working for the 
university, to which the employee makes a response other than 
rejection. At this point, the employee has begun seeking employment 
with the university until they reject the possibility of employment and 
all discussions of possible employment have terminated.
    Example 6 to paragraph (b): The DOE employee in examples 4 and 5 to 
this paragraph (b) receives emails from various companies in response 
to the online profile. The employee does not respond. The employee has 
not begun seeking employment with the

[[Page 43718]]

companies because they have not made a response.
    Example 7 to paragraph (b): An official of a State Health 
Department compliments the work of an employee of the Centers for 
Medicare & Medicaid Services (CMS), and asks the CMS employee to reach 
out if they are ever interested in leaving Federal service. The 
employee explains to the State official that they are very happy with 
their job at CMS and is not interested in another job. The employee 
thanks the official for the professional compliment, and adds that 
they'll remember the official's interest if they ever decide to leave 
the Government. The employee has rejected the unsolicited employment 
overture and has not begun seeking employment.
    Example 8 to paragraph (b): The employee in the example 7 to this 
paragraph (b) responds by stating that they cannot discuss future 
employment while they are working on a project affecting the State's 
health care funding but would like to discuss employment with the State 
when the project is completed. Because the employee has merely deferred 
employment discussions until the foreseeable future, they have begun 
seeking employment with the State Health Department.
    Example 9 to paragraph (b): Three months prior to the end of the 
current administration, a political appointee at a large department 
receives a telephone call from the managing partner of an international 
law firm. The managing partner asks if the official would be interested 
in joining the law firm. The official says, ``I am not talking to 
anyone about employment until I leave the Government.'' The official 
has rejected the unsolicited employment overture and has not begun 
seeking employment.
    Example 10 to paragraph (b): A geologist employed by the U.S. 
Geological Survey sends a resume to an oil company. The geologist has 
begun seeking employment with that oil company and will be seeking 
employment for two months from the date the resume was mailed, provided 
the geologist does not receive a response indicating an interest in 
employment discussions. A letter merely acknowledging receipt of the 
resume is not an indication of interest in employment discussions. 
However, if the geologist withdraws the application or is notified 
within the two-month period that the resume has been rejected, they 
will no longer be seeking employment with the oil company as of the 
date they make such withdrawal or receive such notification.
    (c) Prospective employer means any person with whom the employee is 
seeking employment. When contacts that constitute seeking employment 
are made by or with an agent or other intermediary, the term 
prospective employer means:
    (1) A person who uses that agent or other intermediary for the 
purpose of seeking to establish an employment relationship with the 
employee if the agent identifies the prospective employer to the 
employee; and
    (2) A person contacted by the employee's agent or other 
intermediary for the purpose of seeking to establish an employment 
relationship if the agent identifies the prospective employer to the 
employee.
    Example 1 to paragraph (c): An employee of the Federal Aviation 
Administration (FAA) has retained an employment search firm to help 
them find another job. The search firm has just reported to the FAA 
employee that it has given their resume to and had promising 
discussions with two airport authorities, which the search firm 
identifies to the employee. Even though the employee has not personally 
had employment discussions with either airport authority, each airport 
authority is their prospective employer. The employee began seeking 
employment with each airport authority upon learning its identity and 
that it has been given their resume.
    Example 2 to paragraph (c): An employee pays for an online resume 
distribution service, which sends their resume to recruiters that 
specialize in their field. The online service has just notified the 
employee that it sent their resume to Software Company A and Software 
Company B. Even though the employee has not personally had employment 
discussions with either company, each software company is their 
prospective employer. The employee began seeking employment with each 
company upon learning from the online service that Software Company A 
and Software Company B had been given their resume by the intermediary.
    (d) Direct and predictable effect, particular matter, and personal 
and substantial have the respective meanings set forth in Sec.  
2635.402(b)(1), (3), and (4).
    (e) Public filer means a person required to file a public financial 
disclosure report as set forth in Sec.  2634.202 of this chapter.


Sec.  2635.604  Recusal while seeking employment.

    (a) Obligation to recuse. (1) Except as provided in paragraph 
(a)(2) of this section or when the employee's participation has been 
authorized in accordance with Sec.  2635.605, the employee may not 
participate personally and substantially in a particular matter that, 
to the employee's knowledge, has a direct and predictable effect on the 
financial interests of a prospective employer with whom the employee is 
seeking employment within the meaning of Sec.  2635.603(b). Recusal is 
accomplished by not participating in the particular matter.
    (2) The employee may participate in a particular matter under 
paragraph (a)(1) of this section when:
    (i) The employee's only communication with the prospective employer 
in connection with the search for employment is the submission of an 
unsolicited resume or other employment proposal;
    (ii) The prospective employer has not responded to the employee's 
unsolicited communication with a response indicating an interest in 
employment discussions; and
    (iii) The matter is not a particular matter involving specific 
parties.
    Example 1 to paragraph (a): A scientist is employed by the National 
Science Foundation (NSF) as a special Government employee to serve on a 
panel that reviews grant applications to fund research relating to 
deterioration of the ozone layer. The scientist is discussing possible 
employment with a university that received an NSF grant several years 
ago to study the effect of fluorocarbons but has no current grant 
applications pending before NSF. The employee is seeking employment, 
but does not need to recuse because there is no particular matter that 
would have a direct and predictable effect on the financial interests 
of the prospective employer. Recusal would be required if the 
university submits a new application for the panel's review.
    Example 2 to paragraph (a): An employee of the Food and Drug 
Administration is developing a regulation on research criteria for 
approving prescription drugs. They begin discussing possible employment 
with a pharmaceutical company. The employee may not participate 
personally and substantially in the development of the regulation 
because they have begun employment discussions with the pharmaceutical 
company and the regulation is a particular matter of general 
applicability which would have a direct and predictable effect on the 
financial interests of the pharmaceutical company.
    Example 3 to paragraph (a): A special Government employee of the 
Federal Deposit Insurance Corporation (FDIC) is assigned to advise the 
FDIC on rules

[[Page 43719]]

applicable to all member banks. The employee mails an unsolicited 
letter to a member bank offering services as a contract consultant. 
Although the employee is seeking employment, the employee may 
participate in this particular matter of general applicability until 
receipt of some response indicating an interest in discussing the 
employment proposal. A letter merely acknowledging receipt of the 
proposal is not an indication of interest in employment discussions.
    Example 4 to paragraph (a): An employee of the Occupational Safety 
and Health Administration is conducting an inspection of one of several 
textile companies to which they sent an unsolicited resume. The 
employee may not participate personally and substantially in the 
inspection because they are seeking employment and the inspection is a 
particular matter involving specific parties that will affect the 
textile company.
    (b) Notification. Employees who become aware of the need to recuse 
from participating in a particular matter to which they have been 
assigned must take whatever steps are necessary to ensure that they do 
not participate in the matter. Appropriate oral or written notification 
of their recusal may be made to an agency ethics official, coworkers, 
or a supervisor to document and help effectuate the recusal. Public 
filers must comply with additional notification requirements set forth 
in Sec.  2635.607.
    Example 1 to paragraph (b): An employee of the Department of 
Veterans Affairs (VA) is participating in the audit of a contract for 
laboratory support services. Before sending a resume to a lab which is 
a subcontractor under the VA contract, the employee should recuse from 
participating in the audit. Because the employee cannot withdraw from 
participating in the contract audit without supervisor approval, the 
employee should notify the supervisor of the need to recuse for ethics 
reasons so that appropriate adjustments in work assignments can be 
made.
    Example 2 to paragraph (b): An employee of the Food and Drug 
Administration (FDA) is contacted in writing by a pharmaceutical 
company concerning possible employment with the company. The employee 
is reviewing an application from the same pharmaceutical company, which 
is seeking FDA approval for a new drug product. Once the employee makes 
a response that is not a rejection to the company's communication 
concerning possible employment, the employee must recuse from further 
participation in the review of the application. When the employee has 
authority to ask a colleague to assume reviewing responsibilities, they 
may accomplish recusal by transferring the work to the colleague. 
However, to ensure that the colleague and others with whom they had 
been working on the review do not seek their advice regarding the 
review of the application or otherwise involve them in the matter, it 
may be necessary for the employee to advise those individuals of the 
recusal.
    (c) Documentation. Employees, other than public filers, need not 
file written recusal statements unless they are required by part 2634 
of this chapter to file written evidence of compliance with an ethics 
agreement with the Office of Government Ethics or a designated agency 
ethics official, or are specifically directed by an agency ethics 
official or the person responsible for their assignments to file 
written recusal statements. However, it is often prudent for employees 
to create a record of their actions by providing written notice to an 
agency ethics official, a supervisor, or other appropriate official. 
Public filers must comply with the documentation requirements set forth 
in Sec.  2635.607.
    Example 1 to paragraph (c): The General Counsel of a regulatory 
agency will be engaging in discussions regarding possible employment as 
corporate counsel of a regulated entity. Matters directly affecting the 
financial interests of the regulated entity are pending within the 
Office of General Counsel, but the General Counsel will not be called 
upon to act in any such matter because signature authority for that 
particular class of matters has been delegated to an Assistant General 
Counsel. Because the General Counsel is responsible for assigning work 
within the Office of General Counsel, they can, in fact, accomplish 
recusal by simply avoiding any involvement in matters affecting the 
regulated entity. However, because it is likely to be assumed by others 
that the General Counsel is involved in all matters within the 
cognizance of the Office of General Counsel, they would benefit from 
filing a written recusal statement with an agency ethics official or 
the Commissioners of the regulatory agency and providing their 
subordinates with written notification of the recusal. The General 
Counsel may also be specifically directed by an agency ethics official 
or the Commissioners to file a written recusal statement. If the 
General Counsel is a public filer, they must comply with the 
documentation requirements set forth in Sec.  2635.607.
    (d) Agency determination of substantial conflict. When the agency 
determines that the employee's action in seeking employment with a 
particular person will require the employee to recuse from matters so 
central or critical to the performance of the employee's official 
duties that the employee's ability to perform the duties of the 
employee's position would be materially impaired, the agency may allow 
the employee to take annual leave or leave without pay while seeking 
employment, or may take other appropriate action.


Sec.  2635.605  Waiver or authorization permitting participation while 
seeking employment.

    (a) Waiver. When, as defined in Sec.  2635.603(b)(1)(i), an 
employee is engaged in employment negotiations for purposes of 18 
U.S.C. 208(a), the employee may not participate personally and 
substantially in a particular matter that, to the employee's knowledge, 
has a direct and predictable effect on the financial interests of a 
prospective employer. The employee may participate in such matters only 
when the employee has received a written waiver issued under the 
authority of 18 U.S.C. 208(b)(1) or (3). These waivers are described in 
Sec.  2635.402(d) and part 2640, subpart C, of this chapter. For 
certain employees, a regulatory exemption under the authority of 18 
U.S.C. 208(b)(2) may also apply (see part 2640, subpart B, of this 
chapter, including Sec.  2640.203(g) and (i)).
    Example 1 to paragraph (a): An employee of the Department of 
Agriculture is negotiating for employment within the meaning of 18 
U.S.C. 208(a) and Sec.  2635.603(b)(1)(i) with an orange grower. In the 
absence of a written waiver issued under 18 U.S.C. 208(b)(1), the 
employee may not take official action on a complaint filed by a 
competitor alleging that the grower has shipped oranges in violation of 
applicable quotas.
    (b) Authorization by agency designee. When an employee is seeking 
employment within the meaning of Sec.  2635.603(b)(1)(ii) or (iii) and 
is not negotiating for employment, a reasonable person would be likely 
to question the employee's impartiality if the employee were to 
participate personally and substantially in a particular matter that, 
to the employee's knowledge, has a direct and predictable effect on the 
financial interests of any such prospective employer. The employee may 
participate in such matters only when the agency designee has 
authorized in writing the employee's participation in accordance

[[Page 43720]]

with the standards set forth in Sec.  2635.502(d).
    Example 1 to paragraph (b): Within the past month, an employee of 
the Department of Education mailed a resume to a university. The 
employee is thus seeking employment with the university within the 
meaning of Sec.  2635.603(b)(1)(ii). In the absence of specific 
authorization by the agency designee in accordance with Sec.  
2635.502(d), the employee may not participate personally and 
substantially in an assignment to review a grant application submitted 
by the university.


Sec.  2635.606  Recusal based on an arrangement concerning prospective 
employment or otherwise after negotiations.

    (a) Employment or arrangement concerning employment. An employee 
may not participate personally and substantially in a particular matter 
that, to the employee's knowledge, has a direct and predictable effect 
on the financial interests of the person by whom the employee is 
employed or with whom the employee has an arrangement concerning future 
employment, unless authorized to participate in the matter by a written 
waiver issued under the authority of 18 U.S.C. 208(b)(1) or (3), or by 
a regulatory exemption under the authority of 18 U.S.C. 208(b)(2). 
These waivers and exemptions are described in Sec.  2635.402(d) and 
part 2640, subparts B and C, of this chapter.
    Example 1 to paragraph (a): A military officer has accepted a job 
with a defense contractor that will begin six months after retirement 
from military service. During the remainder of Government employment, 
the officer may not participate personally and substantially in the 
administration of a contract with that particular defense contractor 
unless a written waiver is issued under the authority of 18 U.S.C. 
208(b)(1).
    Example 2 to paragraph (a): An accountant has just been offered a 
job with the Office of the Comptroller of the Currency (OCC) which 
involves a two-year limited appointment. The accountant's private 
employer, a large corporation, believes the job will enhance their 
skills and has agreed to give them a two-year unpaid leave of absence 
at the end of which they have agreed to return to work for the 
corporation. During the two-year period that the accountant is to be an 
OCC employee, they will have an arrangement concerning future 
employment with the corporation that will require recusal from 
participating personally and substantially in any particular matter 
that, to their knowledge, will have a direct and predictable effect on 
the corporation's financial interests.
    (b) Offer rejected or not made. The agency designee for the purpose 
of Sec.  2635.502(c) may, in an appropriate case, determine that an 
employee not covered by paragraph (a) of this section who has sought 
but is no longer seeking employment nevertheless will be subject to a 
period of recusal upon the conclusion of employment negotiations. Any 
such determination will be based on a consideration of all the relevant 
factors, including those listed in Sec.  2635.502(d), and a 
determination that the concern that a reasonable person may question 
the integrity of the agency's decision-making process outweighs the 
Government's interest in the employee's participation in the particular 
matter.
    Example 1 to paragraph (b): An employee of the Securities and 
Exchange Commission was relieved of responsibility for an investigation 
of a broker-dealer while seeking employment with the law firm 
representing the broker-dealer in that matter. The firm did not offer 
the partnership position the employee sought. Even though the employee 
is no longer seeking employment with the firm, they may continue to be 
recused from participating in the investigation based on a 
determination by the agency designee that the concern that a reasonable 
person might question whether, in view of the history of the employment 
negotiations, they could act impartially in the matter outweighs the 
Government's interest in their participation.


Sec.  2635.607  Notification requirements for public financial 
disclosure report filers regarding negotiations for or agreement of 
future employment or compensation.

    (a) Notification regarding negotiations for or agreement of future 
employment or compensation. A public filer who is negotiating for or 
has an agreement of future employment or compensation with a non-
Federal entity must file a statement notifying an agency ethics 
official of such negotiation or agreement within three business days 
after commencement of the negotiation or agreement. This notification 
statement must be in writing, must be signed by the public filer, and 
must include the name of the non-Federal entity involved in such 
negotiation or agreement and the date on which the negotiation or 
agreement commenced. When a public filer has previously complied with 
the notification requirement in this section regarding the commencement 
of negotiations, the filer need not file a separate notification 
statement when an agreement of future employment or compensation is 
reached with the previously identified non-Federal entity. There is 
also no requirement to file another notification when negotiations have 
been unsuccessful. However, employees may want to do so to facilitate 
the resumption of their duties.
    Example 1 to paragraph (a): An employee of the Merit Systems 
Protection Board who is a public filer was in private practice prior to 
Government service. The employee receives a telephone call from a 
partner in a law firm who inquires as to whether they would be 
interested in returning to private practice. During this initial 
telephone call with the law firm partner, the employee indicates that 
they are interested in resuming private practice. The partner and 
employee discuss generally the types of issues that would need to be 
agreed upon if the employee were to consider a possible offer to serve 
as ``of counsel'' with the firm, such as salary, benefits, and type of 
work the employee would perform. The employee has begun negotiating for 
future employment with the law firm. Within three business days after 
this initial telephone call, the employee must file written 
notification of the negotiations with the agency ethics official.
    Example 2 to paragraph (a): The employee in the example 1 to this 
paragraph (a) also negotiates a possible contract with a publisher to 
begin writing a textbook after leaving Government service. Within three 
business days after commencing negotiations, the employee must file 
written notification with the agency ethics official documenting this 
engagement in negotiations for future compensation with the book 
publisher.
    (b) Notification of recusal. A public filer who files a 
notification statement pursuant to paragraph (a) of this section must 
file with an agency ethics official a notification of recusal whenever 
there is a conflict of interest or appearance of a conflict of interest 
with the non-Federal entity identified in the notification statement. 
The notification statement and the recusal statement may be contained 
in a single document or in separate documents.
    (c) Advance filing of notification and recusal statements. When a 
public filer is seeking employment within the meaning of Sec.  
2635.603(b)(1)(ii) or (iii) or is considering seeking employment, the 
public filer may elect to file the notification statement pursuant to 
paragraph (a) of this section before negotiations have commenced and

[[Page 43721]]

before an agreement of future employment or compensation is reached. A 
public filer may also elect to file the recusal statement pursuant to 
paragraph (b) of this section before the public filer has a conflict of 
interest or appearance of a conflict of interest with the non-Federal 
entity identified in the notification statement. The public filer need 
not file the document again upon commencing negotiations or reaching an 
agreement of future employment or compensation. The advance filing of 
any such document is not construed as a statement that negotiations 
have or have not commenced or that a conflict of interest does or does 
not exist. Although the Office of Government Ethics encourages advance 
filing when a public filer anticipates a realistic possibility of 
negotiations or an agreement, the failure to make an advance filing 
does not violate this subpart or the principles of ethical conduct 
contained in Sec.  2635.101(b).
    Example 1 to paragraph (c): An employee of the Federal Labor 
Relations Authority who is a public filer began negotiating for future 
employment with a law firm. At the time the employee began negotiating 
for future employment with the law firm, they were not participating 
personally and substantially in a particular matter that, to their 
knowledge, had a direct and predictable effect on the financial 
interest of the law firm. Although the employee was not required to 
file a recusal statement because they did not have a conflict of 
interest or appearance of a conflict of interest with the law firm 
identified in the notification statement, the Office of Government 
Ethics encourages the employee to submit a notification of recusal at 
the same time that they file the notification statement regarding the 
negotiations for future employment in order to ensure that the 
requirement of paragraph (b) of this section is satisfied if a conflict 
of interest or an appearance of a conflict of interest later arises. 
The agency ethics official should counsel the employee on applicable 
requirements but is under no obligation to notify the employee's 
supervisor that the employee is negotiating for employment.
    Example 2 to paragraph (c): An employee of the General Services 
Administration is contacted by a prospective employer regarding 
scheduling an interview for the following week to begin discussing the 
possibility of future employment. The employee discusses the matter 
with the ethics official and chooses to file a notification and recusal 
statement prior to the interview. The notification and recusal 
statement contain the identity of the prospective employer and an 
estimated date of when the interview will occur. The employee has 
complied with the notification requirement of section 17 of the STOCK 
Act.
    (d) Definition of agreement of future employment or compensation. 
Agreement of future employment or compensation for the purposes of this 
section means any arrangement concerning employment that will commence 
after the termination of Government service. The term also means any 
arrangement to compensate in exchange for services that will commence 
after the termination of Government service. The term includes, among 
other things, an arrangement to compensate for teaching, speaking, or 
writing that will commence after the termination of Government service.

Subpart G--Misuse of Position


Sec.  2635.701  Overview.

    This subpart contains provisions relating to the proper use of 
official time and authority, and of information and resources to which 
employees have access because of their Federal employment. This subpart 
sets forth standards relating to:
    (a) Use of public office for private gain;
    (b) Use of nonpublic information;
    (c) Use of Government property; and
    (d) Use of official time.


Sec.  2635.702  Use of public office for private gain.

    An employee may not use their public office for their own private 
gain; for the endorsement of any product, service, or enterprise 
(except as otherwise permitted by this part or other applicable law or 
regulation); or for the private gain of friends, relatives, or persons 
with whom the employee is affiliated in a nongovernmental capacity, 
including nonprofit organizations of which the employee is an officer 
or member, and persons with whom the employee has or seeks employment 
or business relations. The specific prohibitions set forth in 
paragraphs (a) through (d) of this section apply this general standard, 
but are not intended to be exclusive or to limit the application of 
this section.
    (a) Inducement or coercion of benefits. Employees may not use or 
permit the use of their Government position or title, or any authority 
associated with their public office, in a manner that is intended to 
coerce or induce another person, including a subordinate, to provide 
any benefit, financial or otherwise, to the employee or to friends, 
relatives, or persons with whom the employee is affiliated in a 
nongovernmental capacity.
    Example 1 to paragraph (a): Offering to pursue a relative's 
consumer complaint over a household appliance, an employee of the 
Securities and Exchange Commission called the general counsel of the 
manufacturer and, in the course of discussing the problem, stated that 
they worked at the SEC and were responsible for reviewing the company's 
filings. The employee violated the prohibition against use of public 
office for private gain by invoking their official authority in an 
attempt to influence action to benefit the relative.
    Example 2 to paragraph (a): An employee of the Department of 
Commerce was asked by a friend to determine why another office within 
the Department of Commerce had not yet granted an export license to the 
friend's firm. At a department-level staff meeting, the employee raised 
as a matter for official inquiry the delay in approval of the 
particular license and asked that the particular license be expedited. 
The official used their public office in an attempt to benefit the 
friend and, in acting as the friend's agent for the purpose of pursuing 
the export license with the Department of Commerce, may also have 
violated 18 U.S.C. 205.
    (b) Appearance of governmental sanction. Except as otherwise 
provided in this part, employees may not use or permit the use of their 
Government position or title, or any authority associated with their 
public office, in a manner that could reasonably be construed to imply 
that their agency or the Government sanctions or endorses their 
personal activities or those of another. When teaching, speaking, or 
writing in a personal capacity, employees may refer to their official 
title or position only as permitted by Sec.  2635.807(b). When 
providing a verbal or written recommendation, employees may only use 
their official title in response to a request for a recommendation or 
character reference based upon personal knowledge of the ability or 
character of an individual with whom they have dealt in the course of 
Federal employment or whom they are recommending for Federal 
employment.
    Example 1 to paragraph (b): An employee of the Department of the 
Treasury who is asked to provide a letter of recommendation for a 
former subordinate or for an individual who worked for their team under 
a Government contract may provide the recommendation using official 
stationery and may sign the letter using their official title. If, 
however, the

[[Page 43722]]

request is for the recommendation of a personal friend with whom they 
have not dealt in the Government, the employee should not use official 
stationery or sign the letter of recommendation using their official 
title, unless the recommendation is for Federal employment. In writing 
the letter of recommendation for the personal friend, it may be 
appropriate for the employee to make a reference to their official 
position in the body of the letter.
    Example 2 to paragraph (b): An employee of the Environmental 
Protection Agency (EPA) has a personal social media account. Under 
``occupation,'' the employee writes ``Analyst at the Environmental 
Protection Agency.'' On the same social media account, the EPA employee 
occasionally discusses topics related to the environment, such as 
recycling, biking to work, and organic gardening. Even though the 
employee is discussing matters related to the EPA's mission and lists 
their position in the area designated for occupation, these facts alone 
would not reasonably be construed as implying governmental sanction or 
endorsement. The same employee may not, for example, redesign the 
social media account so that it prominently features the official EPA 
seal and make statements that either assert or imply that their 
opinions on environmental topics are sanctioned or endorsed by the 
Government.
    (c) Endorsements. Employees may not use or permit the use of their 
Government position or title or any authority associated with their 
public office to endorse any product, service, or enterprise except:
    (1) In furtherance of statutory authority to promote products, 
services, or enterprises; or
    (2) As a result of documentation of compliance with agency 
requirements or standards or as the result of recognition for 
achievement given under an agency program of recognition for 
accomplishment in support of the agency's mission.
    Example 1 to paragraph (c): A Commissioner of the Consumer Product 
Safety Commission (CPSC) may not appear in a television commercial and 
endorse an electrical appliance produced by a former employer, stating 
that it has been found by the CPSC to be safe for residential use.
    Example 2 to paragraph (c): A Foreign Commercial Service officer 
from the Department of Commerce is asked by a United States 
telecommunications company to meet with representatives of the 
government of Spain, which is in the process of procuring 
telecommunications services and equipment. The company is bidding 
against five European companies, and the statutory mission of the 
Department of Commerce includes assisting the export activities of U.S. 
companies. As part of official duty activities, the Foreign Commercial 
Service officer may meet with Spanish officials and explain the 
advantages of procurement from the United States company.
    Example 3 to paragraph (c): The Administrator of the Environmental 
Protection Agency may sign a letter to an oil company indicating that 
its refining operations are in compliance with Federal air quality 
standards even though the Administrator knows that the company has 
routinely displayed letters of this type in television commercials 
portraying it as a ``trustee of the environment for future 
generations.''
    Example 4 to paragraph (c): An Assistant Attorney General may not 
use their official title or refer to their Government position in a 
book jacket endorsement of a novel about organized crime written by an 
author whose work they admire. Nor may they do so in a book review 
published in a newspaper.
    (d) Performance of official duties affecting a private interest. To 
ensure that the performance of their official duties does not give rise 
to an appearance of use of public office for private gain or of giving 
preferential treatment, employees whose duties would affect the 
financial interests of a friend, relative, or person with whom they are 
affiliated in a nongovernmental capacity must comply with any 
applicable requirements of Sec.  2635.502.
    (e) Use of terms of address and ranks. Nothing in this section 
prohibits an employee who is ordinarily addressed using a general term 
of address, such as ``The Honorable'' or ``Judge,'' or a rank, such as 
a military or ambassadorial rank, from using that term of address or 
rank in connection with a personal activity.


Sec.  2635.703  Use of nonpublic information.

    (a) Prohibition. Employees may not engage in financial transactions 
using nonpublic information, nor allow the improper use of nonpublic 
information to further their own private interests or those of another, 
whether through advice or recommendation, or by knowing unauthorized 
disclosure.
    (b) Definition of nonpublic information. For purposes of this 
section, nonpublic information is information that the employee gains 
by reason of Federal employment and that the employee knows or 
reasonably should know has not been made available to the general 
public. It includes information that the employee knows or reasonably 
should know:
    (1) Is routinely exempt from disclosure under 5 U.S.C. 552 or 
otherwise protected from disclosure by statute, Executive order, or 
regulation;
    (2) Is designated as confidential by an agency; or
    (3) Has not actually been disseminated to the general public and is 
not authorized to be made available to the public on request.
    Example 1 to paragraph (b): A Navy employee learns in the course of 
official duties that a small corporation will be awarded a Navy 
contract for electrical test equipment. The employee may not take any 
action to purchase stock in the corporation or its suppliers, and may 
not advise friends or relatives to do so until after public 
announcement of the award. Such actions could violate Federal 
securities statutes as well as this section.
    Example 2 to paragraph (b): A General Services Administration 
employee involved in evaluating proposals for a construction contract 
cannot disclose the terms of a competing proposal to a friend employed 
by a company bidding on the work. Prior to award of the contract, bid 
or proposal information is nonpublic information specifically protected 
by 41 U.S.C. 2102.
    Example 3 to paragraph (b): An employee is a member of a source 
selection team assigned to review the proposals submitted by several 
companies in response to an Army solicitation for spare parts. As a 
member of the evaluation team, the employee has access to proprietary 
information regarding the production methods of Alpha Corporation, one 
of the competitors. The employee may not use that information to assist 
Beta Company in drafting a proposal to compete for a Navy spare parts 
contract. The Federal Acquisition Regulation in 48 CFR parts 3, 14, and 
15 restricts the release of information related to procurements and 
other contractor information that must be protected under 18 U.S.C. 
1905 and 41 U.S.C. 2102.
    Example 4 to paragraph (b): An employee of the Nuclear Regulatory 
Commission inadvertently includes a document that is exempt from 
disclosure with a group of documents released in response to a Freedom 
of Information Act request. Regardless of whether the document is used 
improperly, the employee's disclosure does not violate this section 
because it was not a knowing unauthorized disclosure made for the 
purpose of furthering a private interest.

[[Page 43723]]

    Example 5 to paragraph (b): An employee of the Army Corps of 
Engineers is actively involved in the activities of an organization 
whose goals relate to protection of the environment. The employee may 
not, other than as permitted by agency procedures, give the 
organization or a newspaper reporter nonpublic information about long-
range plans to build a particular dam.


Sec.  2635.704  Use of Government property.

    (a) Standard. Employees have a duty to protect and conserve 
Government property and may not use such property, or allow its use, 
for other than authorized purposes.
    (b) Definitions. For purposes of this section:
    (1) Government property includes any form of real or personal 
property in which the Government has an ownership, leasehold, or other 
property interest as well as any right or other intangible interest 
that is purchased with Government funds, including the services of 
contractor personnel. The term includes but is not limited to office 
supplies, telephone and other telecommunications equipment and 
services, Government mail, computers and other electronic devices, 
printing and reproduction facilities, Government records, Government 
email and social media accounts, and Government vehicles.
    (2) Authorized purposes are those purposes for which Government 
property is made available to members of the public or those purposes 
authorized in accordance with law or regulation. Authorized purposes 
include but are not limited to those uses of Government property that 
are in accordance with an agency's limited or de minimis personal use 
policy.
    Example 1 to paragraph (b): As permitted under their agency's de 
minimis personal use policy, an employee may send an email from a 
Government email account to a former college roommate to schedule lunch 
for the following day.
    Example 2 to paragraph (b): An employee of the Commodity Futures 
Trading Commission whose office computer provides access to a 
commercial service providing information for investors may not use that 
service for personal investment research.
    Example 3 to paragraph (b): In accordance with Office of Personnel 
Management regulations at part 251 of this title, an attorney employed 
by the Department of Justice may be permitted to use their office 
computer and agency photocopy equipment to prepare a paper to be 
presented at a conference sponsored by a professional association of 
which they are a member.


Sec.  2635.705  Use of official time.

    (a) Use of an employee's own time. Unless authorized in accordance 
with law or regulations to use such time for other purposes, employees 
must use official time in an honest effort to perform official duties. 
Employees not under a leave system, including Presidential appointees 
exempted under 5 U.S.C. 6301(2), have an obligation to expend an honest 
effort and a reasonable proportion of their time in the performance of 
official duties.
    Example 1 to paragraph (a): A disability claims examiner of the 
Social Security Administration may use official time to engage in 
certain representational activities on behalf of the employee union of 
which they are a member. Under 5 U.S.C. 7131, this is a proper use of 
official time even though it does not involve performance of assigned 
duties as a disability claims examiner.
    Example 2 to paragraph (a): A pharmacist employed by the Department 
of Veterans Affairs has been granted an excused absence to participate 
as a speaker in a conference on drug abuse sponsored by the 
professional association to which they belong. Even if an excused 
absence granted by an agency in accordance with Governmentwide 
personnel guidance would allow employees to be absent from their 
official duties without charge to their annual leave accounts, such 
absence would not be on official time.
    (b) Use of a subordinate's time. Employees may not encourage, 
direct, coerce, or request a subordinate to use official time to 
perform activities other than those required in the performance of 
official duties or authorized in accordance with law or regulation.
    Example 1 to paragraph (b): A supervisory employee of the 
Department of Housing and Urban Development may not ask an assistant to 
run personal errands for the employee during duty hours. Further, 
directing or coercing a subordinate to perform such activities during 
nonduty hours constitutes an improper use of public office for private 
gain in violation of Sec.  2635.702(a). However, when an arrangement is 
entirely voluntary and appropriate compensation is paid, a subordinate 
may provide services to the superior during nonduty hours. For example, 
a subordinate who enjoys calligraphy may prepare invitations for an 
upcoming party that the superior is organizing with friends and family 
at home on personal time for appropriate compensation. When the 
compensation is not adequate, however, the arrangement would involve a 
gift to the superior in violation of the standards in subpart C of this 
part.

Subpart H--Outside Activities


Sec.  2635.801  Overview.

    (a) This subpart contains provisions relating to outside 
employment, outside activities, and personal financial obligations of 
employees that are in addition to the principles and standards set 
forth in other subparts of this part. Several of the provisions in this 
subpart apply to uncompensated as well as to compensated outside 
activities.
    (b) Employees who wish to engage in outside employment or other 
outside activities must comply with all relevant provisions of this 
subpart, including, when applicable:
    (1) The prohibition on outside employment or any other outside 
activity that conflicts with the employee's official duties;
    (2) Any agency-specific requirement for prior approval of outside 
employment or activities;
    (3) The limitations on receipt of outside earned income by certain 
Presidential appointees and other noncareer employees;
    (4) The limitations on paid and unpaid service as an expert 
witness;
    (5) The limitations on paid and unpaid teaching, speaking, and 
writing; and
    (6) The limitations on fundraising activities.
    (c) Outside employment and other outside activities of an employee 
must also comply with applicable provisions set forth in other subparts 
of this part and in supplemental agency regulations. These include the 
principle that an employee must endeavor to avoid actions creating an 
appearance of violating any of the ethical standards in this part and 
the prohibition against use of official position for an employee's 
private gain or for the private gain of any person with whom the 
employee has employment or business relations or is otherwise 
affiliated in a nongovernmental capacity.
    Example 1 to paragraph (c): An employee of the Occupational Safety 
and Health Administration (OSHA) who was and is expected again to be 
instrumental in formulating new OSHA safety standards applicable to 
manufacturers that use chemical solvents has been offered a consulting 
contract to provide advice to an affected company in restructuring its 
manufacturing operations to comply with the OSHA standards. The

[[Page 43724]]

employee should not enter into the consulting arrangement even though 
they are not currently working on OSHA standards affecting this 
industry and the consulting contract can be expected to be completed 
before they again work on such standards. Even though the consulting 
arrangement would not be a conflicting activity within the meaning of 
Sec.  2635.802, it would create an appearance that the employee had 
used their official position to obtain the compensated outside business 
opportunity and it would create the further appearance of using public 
office for the private gain of the manufacturer.
    (d) In addition to the provisions of this subpart and other 
subparts of this part, an employee who wishes to engage in outside 
employment or other outside activities must comply with applicable 
statutes and regulations. Relevant provisions of law, many of which are 
listed in subpart I of this part, may include:
    (1) 18 U.S.C. 201(b), which prohibits a public official from 
seeking, accepting or agreeing to receive or accept anything of value 
in return for being influenced in the performance of an official act or 
for being induced to take or omit to take any action in violation of 
official duty;
    (2) 18 U.S.C. 201(c), which prohibits a public official, otherwise 
than as provided by law for the proper discharge of official duty, from 
seeking, accepting, or agreeing to receive or accept anything of value 
for or because of any official act;
    (3) 18 U.S.C. 203(a), which prohibits an individual from seeking, 
accepting, or agreeing to receive or accept compensation for any 
representational services, rendered personally or by another at a time 
when the individual is an employee, in relation to any particular 
matter in which the United States is a party or has a direct and 
substantial interest, before any department, agency, or other specified 
entity. This statute contains several exceptions, as well as standards 
for special Government employees that limit the scope of the 
restriction;
    (4) 18 U.S.C. 205, which prohibits an employee, whether or not for 
compensation, from acting as agent or attorney for anyone in a claim 
against the United States or from acting as agent or attorney for 
anyone, before any department, agency, or other specified entity, in 
any particular matter in which the United States is a party or has a 
direct and substantial interest. It also prohibits receipt of any 
gratuity, or any share of or interest in a claim against the United 
States, in consideration for assisting in the prosecution of such 
claim. This statute contains several exceptions, as well as standards 
for special Government employees that limit the scope of the 
restrictions;
    (5) 18 U.S.C. 209, which prohibits an employee, other than a 
special Government employee, from receiving any salary or any 
contribution to or supplementation of salary from any source other than 
the United States as compensation for services as a Government 
employee. The statute contains several exceptions that limit its 
applicability;
    (6) The Emoluments Clause of the United States Constitution, 
article I, section 9, clause 8, which prohibits anyone holding an 
office of profit or trust under the United States from accepting any 
gift, office, title, or emolument, including salary or compensation, 
from any foreign government except as authorized by Congress. In 
addition, 18 U.S.C. 219 generally prohibits any public official from 
being or acting as an agent of a foreign principal, including a foreign 
government, corporation, or person, if the employee would be required 
to register as a foreign agent under 22 U.S.C. 611 et seq.;
    (7) The Hatch Act Reform Amendments, 5 U.S.C. 7321 through 7326, 
which govern the political activities of executive branch employees; 
and
    (8) The Ethics in Government Act of 1978 limitations on outside 
employment, 5 U.S.C. chapter 131, subchapter III, which restrict the 
amount of outside earned income that a covered noncareer employee may 
receive, prohibit a covered noncareer employee from receiving 
compensation for specified activities, and provide that a covered 
noncareer employee may not allow their name to be used by any firm or 
other entity that provides professional services involving a fiduciary 
relationship. Implementing regulations are contained in Sec. Sec.  
2636.305 through 2636.307 of this chapter.


Sec.  2635.802  Conflicting outside employment and activities.

    (a) Employees may not engage in outside employment or any other 
outside activity that conflicts with their official duties. An activity 
conflicts with an employee's official duties:
    (1) If it is prohibited by statute or by an agency supplemental 
regulation; or
    (2) If, under the standards set forth in Sec. Sec.  2635.402 and 
2635.502, it would require the employee's recusal from matters so 
central or critical to the performance of their official duties that 
the employee's ability to perform the duties of the Government position 
would be materially impaired.
    (b) Employees are cautioned that even though an outside activity 
may not be prohibited under this section, it may violate other 
principles or standards set forth in this part or require the employee 
to recuse from participating in certain particular matters under either 
subpart D or E of this part.
    Example 1 to paragraph (b): A biochemist, who conducts research at 
the Environmental Protection Agency (EPA), has an outside consulting 
business providing technical guidance on the handling of hazardous 
materials. The biochemist would like to apply for a different EPA 
position, for which the principal duty would be writing regulations on 
the handling of hazardous materials. If the biochemist gets the 
position, the work would have a direct and predictable effect on the 
outside consulting business. Because the biochemist would be required 
to recuse from duties critical to the performance of official duties on 
a basis so frequent as to materially impair their ability to perform 
the duties of the position, they could not continue to operate the 
outside consulting business.
    Example 2 to paragraph (b): An employee of the Internal Revenue 
Service (IRS) reviews applications for recognition of tax-exempt 
status. Several years ago, the employee became involved with a 
neighborhood group that transports stray animals to nearby adoption 
centers. As its activities expanded, the group created a formal 
organization, and submitted an application for recognition of tax-
exempt status by the IRS. Under the circumstances, the employee should 
be recused from participating in any IRS determination regarding the 
tax-exempt status of this organization. However, the employee's 
involvement with the organization would not be prohibited by this 
section, because the outside activity would have a limited effect on 
official duties and would not require recusal from matters so central 
or critical to the performance of official duties that the ability to 
perform the duties of the position would be materially impaired.


Sec.  2635.803  Prior approval for outside employment and activities.

    When required by agency supplemental regulation, employees must 
obtain prior approval before engaging in outside employment or 
activities. When it is determined to be necessary or desirable for the 
purpose of administering its ethics program, an agency may, by 
supplemental regulation, require employees or any category of employees 
to obtain prior approval before engaging in specific types of outside 
activities, including

[[Page 43725]]

outside employment. Whether or not prior approval is required by agency 
supplemental regulations, employees have a continuing responsibility to 
ensure that their outside activities do not conflict with their 
official duties.


Sec.  2635.804  Outside earned income limitations applicable to certain 
Presidential appointees.

    This section implements the outside earned income limitations 
applicable to certain Presidential appointees. The outside earned 
income limitations applicable to covered noncareer employees, as 
defined in Sec.  2636.303(a) of this chapter, are implemented in 
Sec. Sec.  2636.301 through 2636.304 of this chapter.
    (a) Presidential appointees to full-time noncareer positions. A 
Presidential appointee to a full-time noncareer position may not 
receive any outside earned income for outside employment, or for any 
other outside activity, performed during that Presidential appointment.
    (b) Definitions. For purposes of this section:
    (1) Outside earned income has the meaning set forth in Sec.  
2636.303(b) of this chapter, except that Sec.  2636.303(b)(7) does not 
apply.
    (2) Presidential appointee to a full-time noncareer position means 
any employee who is appointed by the President to a full-time position 
described in 5 U.S.C. 5312 through 5317 or to a position that, by 
statute or as a matter of practice, is filled by Presidential 
appointment, other than:
    (i) A position filled under the authority of 3 U.S.C. 105 or 107(a) 
for which the rate of basic pay is less than that for GS-9, step 1 of 
the General Schedule;
    (ii) A position, within a White House operating unit, that is 
designated as not normally subject to change as a result of a 
Presidential transition;
    (iii) A position within the uniformed services; or
    (iv) A position in which a member of the Foreign Service is serving 
that does not require advice and consent of the Senate.
    Example 1 to paragraph (b)(2): A career Department of Justice 
employee who is detailed to a policy-making position in the White House 
Office that is ordinarily filled by a noncareer employee is not a 
Presidential appointee to a full-time noncareer position.
    Example 2 to paragraph (b)(2): A Department of Energy employee 
appointed under Sec.  213.3301 of this title to a Schedule C position 
is appointed by the agency and, thus, is not a Presidential appointee 
to a full-time noncareer position.


Sec.  2635.805  Service as an expert witness.

    (a) Restriction. Employees may not serve, other than on behalf of 
the United States, as an expert witness, with or without compensation, 
in any proceeding before a court or agency of the United States in 
which the United States is a party or has a direct and substantial 
interest, unless the employee's participation is authorized by the 
agency under paragraph (c) of this section. Except as provided in 
paragraph (b) of this section, the restriction in this paragraph (a) 
applies to special Government employees only if they have participated 
as an employee or special Government employee in the particular 
proceeding or in the particular matter that is the subject of the 
proceeding.
    (b) Additional restriction applicable to certain special Government 
employees. (1) In addition to the restriction described in paragraph 
(a) of this section, special Government employees described in 
paragraph (b)(2) of this section may not serve, other than on behalf of 
the United States, as an expert witness, with or without compensation, 
in any proceeding before a court or agency of the United States in 
which their employing agency is a party or has a direct and substantial 
interest, unless the employee's participation is authorized by the 
agency under paragraph (c) of this section.
    (2) The restriction in paragraph (b)(1) of this section applies to 
special Government employees who:
    (i) Are appointed by the President;
    (ii) Serve on a commission established by statute; or
    (iii) Have served or are expected to serve for more than 60 days in 
a period of 365 consecutive days.
    (c) Authorization to serve as an expert witness. Provided that the 
employee's testimony will not violate any of the principles or 
standards set forth in this part, authorization to provide expert 
witness service otherwise prohibited by paragraphs (a) and (b) of this 
section may be given by the designated agency ethics official of the 
agency in which the employee serves when:
    (1) After consultation with the agency representing the Government 
in the proceeding or, if the Government is not a party, with the 
Department of Justice and the agency with the most direct and 
substantial interest in the matter, the designated agency ethics 
official determines that the employee's service as an expert witness is 
in the interest of the Government; or
    (2) The designated agency ethics official determines that the 
subject matter of the testimony does not relate to the employee's 
official duties within the meaning of Sec.  2635.807(a)(2)(i).
    (d) Fact witness. Nothing in this section prohibits an employee 
from serving as a fact witness when subpoenaed by an appropriate 
authority.


Sec.  2635.806  [Reserved]


Sec.  2635.807  Teaching, speaking, and writing.

    (a) Compensation for teaching, speaking, or writing. Except for 
teaching certain courses as permitted by paragraph (a)(3) of this 
section, an employee, including a special Government employee, may not 
receive compensation from any source other than the Government for 
teaching, speaking, or writing that occurs while the person is a 
Government employee and that relates to the employee's official duties.
    (1) Relationship to other limitations on receipt of compensation. 
The compensation prohibition contained in this section is in addition 
to any other limitation on receipt of compensation set forth in this 
chapter, including:
    (i) The requirement contained in Sec.  2636.307 of this chapter 
that covered noncareer employees obtain advance authorization before 
engaging in teaching for compensation; and
    (ii) The prohibitions and limitations in Sec.  2635.804 and in 
Sec.  2636.304 of this chapter on receipt of outside earned income 
applicable to certain Presidential appointees and to other covered 
noncareer employees.
    (2) Definitions. For purposes of this paragraph (a):
    (i) Teaching, speaking, or writing relates to the employee's 
official duties if:
    (A) The activity is undertaken as part of the employee's official 
duties;
    (B) The circumstances indicate that the invitation to engage in the 
activity was extended to the employee primarily because of their 
official position rather than their expertise on the particular subject 
matter;
    (C) The invitation to engage in the activity or the offer of 
compensation for the activity was extended to the employee, directly or 
indirectly, by a person who has interests that may be affected 
substantially by performance or nonperformance of the employee's 
official duties;
    (D) The information conveyed through the activity draws 
substantially on ideas or official data that are nonpublic information 
as defined in Sec.  2635.703(b); or
    (E) Except as provided in paragraph (a)(2)(i)(E)(4) of this 
section, the subject of the activity deals in significant part with:

[[Page 43726]]

    (1) Any matter to which the employee presently is assigned or to 
which the employee had been assigned during the previous one-year 
period;
    (2) Any ongoing or announced policy, program, or operation of the 
agency; or
    (3) In the case of a noncareer employee as defined in Sec.  
2636.303(a) of this chapter, the general subject matter area, industry, 
or economic sector primarily affected by the programs and operations of 
the employee's agency.
    (4) The restrictions in paragraphs (a)(2)(i)(E)(2) and (3) of this 
section do not apply to a special Government employee. The restriction 
in paragraph (a)(2)(i)(E)(1) of this section applies only during the 
current appointment of a special Government employee; except that if 
the special Government employee has not served or is not expected to 
serve for more than 60 days during the first year or any subsequent 
one-year period of that appointment, the restriction applies only to 
particular matters involving specific parties in which the special 
Government employee has participated or is participating personally and 
substantially.

    Note 1 to paragraph (a)(2)(i):  Paragraph (a)(2)(i)(E) of this 
section does not preclude an employee, other than a covered 
noncareer employee, from receiving compensation for teaching, 
speaking, or writing on a subject within the employee's discipline 
or inherent area of expertise based on the employee's educational 
background or experience even though the teaching, speaking, or 
writing deals generally with a subject within the agency's areas of 
responsibility.

    Example 1 to paragraph (a)(2)(i): The Director of the Division of 
Enforcement at the Commodity Futures Trading Commission has a keen 
interest in stamp collecting and has spent years developing a personal 
collection as well as studying the field generally. The Director is 
asked by an international society of philatelists to give a series of 
four lectures on how to assess the value of American stamps. Because 
the subject does not relate to the Director's official duties, it is 
permissible for the Director to accept compensation for the lecture 
series. The Director could not, however, accept a similar invitation 
from a commodities broker.
    Example 2 to paragraph (a)(2)(i): A scientist at the National 
Institutes of Health (NIH), whose principal area of Government research 
is the molecular basis of the development of cancer, could not be 
compensated for writing a book which focuses specifically on the 
research conducted in this position at NIH, which thus relates to the 
scientist's official duties. However, the scientist could receive 
compensation for writing or editing a textbook on the treatment of all 
cancers, provided that the book does not focus on recent research at 
NIH, but rather conveys scientific knowledge gleaned from the 
scientific community as a whole. The book might include a chapter, 
among many other chapters, which discusses the molecular basis of 
cancer development. Additionally, the book could contain brief 
discussions of recent developments in cancer treatment, even though 
some of those developments are derived from NIH research, as long as it 
is available to the public.
    Example 3 to paragraph (a)(2)(i): On personal time, a National 
Highway Traffic Safety Administration (NHTSA) employee prepared a 
consumer's guide to purchasing a safe automobile that focuses on 
automobile crash worthiness statistics gathered and made public by 
NHTSA. The employee may not receive royalties or any other form of 
compensation for the guide. The guide deals in significant part with 
the programs or operations of NHTSA and, therefore, relates to the 
employee's official duties. On the other hand, the employee could 
receive royalties from the sale of a consumer's guide to values in used 
automobiles even though it contains a brief, incidental discussion of 
automobile safety standards developed by NHTSA.
    Example 4 to paragraph (a)(2)(i): An employee of the Securities and 
Exchange Commission (SEC) may not receive compensation for a book which 
focuses specifically on the regulation of the securities industry in 
the United States, because that subject concerns the regulatory 
programs or operations of the SEC. The employee may, however, write a 
book about the advantages of investing in various types of securities 
as long as the book contains only an incidental discussion of any 
program or operation of the SEC.
    Example 5 to paragraph (a)(2)(i): An employee of the Department of 
Commerce who works in the Department's employee relations office is an 
acknowledged expert in the field of Federal employee labor relations, 
and participates in Department negotiations with employee unions. The 
employee may receive compensation from a private training institute for 
a series of lectures which describe the decisions of the Federal Labor 
Relations Authority concerning unfair labor practices, provided that 
the lectures do not contain any significant discussion of labor 
relations cases handled at the Department of Commerce, or the 
Department's labor relations policies. Federal Labor Relations 
Authority decisions concerning Federal employee unfair labor practices 
are not a specific program or operation of the Department of Commerce 
and thus do not relate to the employee's official duties. However, an 
employee of the FLRA could not give the same presentations for 
compensation.
    Example 6 to paragraph (a)(2)(i): A program analyst employed at the 
Environmental Protection Agency (EPA) may receive royalties and other 
compensation for a book about the history of the environmental movement 
in the United States even though it contains brief references to the 
creation and responsibilities of the EPA. A covered noncareer employee 
of the EPA, however, could not receive compensation for writing the 
same book because it deals with the general subject matter area 
affected by EPA programs and operations. Neither employee could receive 
compensation for writing a book that focuses on specific EPA 
regulations or otherwise on its programs and operations.
    Example 7 to paragraph (a)(2)(i): An attorney in private practice 
has been given a one-year appointment as a special Government employee 
to serve on an advisory committee convened for the purpose of surveying 
and recommending modification of procurement regulations that deter 
small businesses from competing for Government contracts. Because 
service under this appointment is not expected to exceed 60 days, the 
attorney may accept compensation for an article about the 
anticompetitive effects of certain regulatory certification 
requirements even though those regulations are being reviewed by the 
advisory committee. The regulations which are the focus of the advisory 
committee deliberations are not a particular matter involving specific 
parties. Because the information is nonpublic, the attorney could not, 
however, accept compensation for an article which recounts advisory 
committee deliberations that took place in a meeting closed to the 
public in order to discuss proprietary information provided by a small 
business.
    Example 8 to paragraph (a)(2)(i): A biologist who is an expert in 
marine life is employed for more than 60 days in a year as a special 
Government employee by the National Science Foundation (NSF) to assist 
in developing a program of grants by the NSF for the study of coral 
reefs. The biologist may continue to receive compensation for speaking, 
teaching, and writing about marine life generally and coral reefs 
specifically. However, during the term of the appointment as a special 
Government employee, the biologist may not receive compensation for an 
article about the

[[Page 43727]]

NSF program being developed. Only the latter would concern a matter to 
which the special Government employee is assigned.
    Example 9 to paragraph (a)(2)(i): An expert on international 
banking transactions has been given a one-year appointment as a special 
Government employee to assist in analyzing evidence in the Government's 
fraud prosecution of owners of a failed savings and loan association. 
It is anticipated that the expert will serve fewer than 60 days under 
that appointment. Nevertheless, during this appointment, the expert may 
not accept compensation for an article about the fraud prosecution, 
even though the article does not reveal nonpublic information. The 
prosecution is a particular matter that involves specific parties.
    (ii) Agency has the meaning set forth in Sec.  2635.102(a), except 
that any component of a department designated as a separate agency 
under Sec.  2635.203(a) will be considered a separate agency.
    (iii) Compensation, for purposes of this paragraph (a):
    (A) Includes any form of consideration, remuneration, or income, 
including royalties, given for or in connection with the employee's 
teaching, speaking, or writing.
    (B) Compensation does not include:
    (1) Items offered by any source that could be accepted from a 
prohibited source under subpart B of this part;
    (2) Meals or other incidents of attendance such as waiver of 
attendance fees or course materials furnished as part of the event at 
which the teaching or speaking takes place;
    (3) Copies of books or of publications containing articles, 
reprints of articles, tapes of speeches, and similar items that provide 
a record of the teaching, speaking, or writing activity; or
    (4) Travel expenses for certain individuals as described in 
paragraph (a)(2)(iii)(C) of this section.
    (C) For employees other than covered noncareer employees as defined 
in Sec.  2636.303(a) of this chapter, compensation does not include 
travel expenses, consisting of transportation, lodging or meals, 
incurred in connection with the teaching, speaking, or writing 
activity. For covered noncareer employees as defined in Sec.  
2636.303(a) of this chapter, compensation does include transportation, 
lodging, and meals, whether provided in kind, by purchase of a ticket, 
by payment in advance, or by reimbursement after the expense has been 
incurred, unless such travel expenses are accepted under specific 
statutory authority, such as 31 U.S.C. 1353, 5 U.S.C. 4111, or 5 U.S.C. 
7342, or an agency gift acceptance statute.

    Note 2 to paragraph (a)(2)(iii)(C):  Independent of paragraph 
(a) of this section, other authorities, including but not limited to 
18 U.S.C. 209, in some circumstances may limit or entirely preclude 
an employee's acceptance of travel expenses. In addition, employees 
who file financial disclosure reports should be aware that, subject 
to applicable thresholds and exclusions, travel and travel 
reimbursements accepted from sources other than the United States 
Government must be reported on their financial disclosure reports.

    Example 1 to paragraph (a)(2)(iii): A GS-15 employee of the Forest 
Service has developed and marketed, in a private capacity, a speed-
reading technique for which popular demand is growing. The employee is 
invited to speak about the technique by a representative of an 
organization that will be substantially affected by a regulation on 
land management which the employee is in the process of drafting for 
the Forest Service. The representative offers to pay the employee a 
$200 speaker's fee and to reimburse all travel expenses. The employee 
may accept the travel reimbursements, but not the speaker's fee. The 
speaking activity is related to official duties under paragraph 
(a)(2)(i)(C) of this section and the fee is prohibited compensation for 
such speech; travel expenses incurred in connection with the speaking 
engagement, on the other hand, are not prohibited compensation for a 
GS-15 employee.
    Example 2 to paragraph (a)(2)(iii): Solely because of their recent 
appointment to a Cabinet-level position, a Government official is 
invited by the Chief Executive Officer of a major international 
corporation to attend, in their personal capacity, firm meetings to be 
held in Aspen for the purpose of addressing senior corporate managers 
on the importance of recreational activities to a balanced lifestyle. 
The firm offers to reimburse the official's travel expenses. The 
official may not accept the offer. The speaking activity is related to 
official duties under paragraph (a)(2)(i)(B) of this section and, 
because the official is a covered noncareer employee as defined in 
Sec.  2636.303(a) of this chapter, the travel expenses are prohibited 
compensation.
    Example 3 to paragraph (a)(2)(iii): A GS-14 attorney at the Federal 
Trade Commission (FTC) who played a lead role in a recently concluded 
merger case is invited to speak about the case, in a private capacity, 
at a conference in New York. The attorney has no public speaking 
responsibilities on behalf of the FTC apart from the judicial and 
administrative proceedings to which they are assigned. The sponsors of 
the conference offer to reimburse the attorney for expenses incurred in 
connection with the travel to New York. They also offer the attorney, 
as compensation for time and effort, a free trip to San Francisco. The 
attorney may accept the travel expenses to New York, but not the 
expenses to San Francisco. The lecture relates to official duties under 
paragraphs (a)(2)(i)(E)(1) and (2) of this section, but because the 
attorney is not a covered noncareer employee as defined in Sec.  
2636.303(a) of this chapter, the expenses associated with the travel to 
New York are not a prohibited form of compensation. The travel expenses 
to San Francisco, on the other hand, not incurred in connection with 
the speaking activity, are a prohibited form of compensation. If the 
attorney were a covered noncareer employee, the travel expenses to New 
York as well as the travel expenses to San Francisco would be barred.
    Example 4 to paragraph (a)(2)(iii): An advocacy group dedicated to 
improving treatments for severe pain asks the National Institutes of 
Health (NIH) to provide a conference speaker who can discuss recent 
advances in the agency's research on pain. The group also offers to pay 
the employee's travel expenses to attend the conference. After 
performing the required conflict of interest analysis, NIH authorizes 
acceptance of the travel expenses under 31 U.S.C. 1353 and the 
implementing General Services Administration regulation, as codified 
under 41 CFR chapter 304, and authorizes an employee to undertake the 
travel. At the conference the advocacy group, as agreed, pays the 
employee's hotel bill, and provides several of the employee's meals. 
Subsequently the group reimburses the agency for the cost of the 
employee's airfare and some additional meals. All of the payments by 
the advocacy group are permissible. Because the employee is speaking 
officially and the expense payments are accepted under 31 U.S.C. 1353, 
they are not prohibited compensation under paragraph (a)(2)(iii) of 
this section. The same result would obtain with respect to expense 
payments made by non-Government sources properly authorized under an 
agency gift acceptance statute, the Government Employees Training Act, 
5 U.S.C. 4111, or the Foreign Gifts and Decorations Act, 5 U.S.C. 7342.
    (iv) Receive means that there is actual or constructive receipt of 
the compensation by the employee so that the employee has the right to 
exercise dominion and control over the

[[Page 43728]]

compensation and to direct its subsequent use. Receipt of compensation 
is attributable to the time that the teaching, speaking, or writing 
occurs when there is actual or constructive receipt of the compensation 
by the employee. If the employee has an enforceable agreement to 
receive compensation for writing undertaken during Government service, 
then compensation is received while the individual is an employee even 
though actual payment may be deferred until after Government service. 
Compensation received by an employee includes compensation which is:
    (A) Paid to another person, including a charitable organization, on 
the basis of designation, recommendation, or other specification by the 
employee; or
    (B) Paid with the employee's knowledge and acquiescence to the 
employee's parent, sibling, spouse, child, or dependent relative.
    (v) Particular matter involving specific parties has the meaning 
set forth in Sec.  2640.102(l) of this chapter.
    (vi) Personal and substantial participation has the meaning set 
forth in Sec.  2635.402(b)(4).
    (3) Exception for teaching certain courses. Notwithstanding that 
the activity would relate to their official duties under paragraph 
(a)(2)(i)(B) or (E) of this section, employees may accept compensation 
for teaching a course requiring multiple presentations by the employee 
if the course is offered as part of:
    (i) The regularly established curriculum of:
    (A) An institution of higher education as defined at 20 U.S.C. 1001 
or from a similar foreign institution of higher education;

    Note 3 to paragraph (a)(3)(i)(A):  When the course is offered as 
part of the regularly established curriculum of a foreign 
institution of higher education, the agency may need to make a 
separate determination as to whether the institution of higher 
education is a foreign government for purposes of the Emoluments 
Clause of the U.S. Constitution (U.S. Const., art. I, sec. 9, cl. 
8), which forbids employees from accepting emoluments, presents, 
offices, or titles from foreign governments, without the consent of 
Congress.

    (B) An elementary school as defined at 20 U.S.C. 7801(19); or
    (C) A secondary school as defined at 20 U.S.C. 7801(45); or
    (ii) A program of education or training sponsored and funded by the 
Federal Government or by a State or local government which is not 
offered by an entity described in paragraph (a)(3)(i) of this section.
    Example 1 to paragraph (a)(3): An employee of the Cost Accounting 
Standards Board who teaches an advanced accounting course as part of 
the regular business school curriculum of an accredited university may 
receive compensation for teaching the course even though a substantial 
portion of the course deals with cost accounting principles applicable 
to contracts with the Government.
    Example 2 to paragraph (a)(3): An attorney employed by the Equal 
Employment Opportunity Commission (EEOC) may accept compensation for 
teaching a course at a state college on the subject of EEOC enforcement 
of Federal employment discrimination law. The attorney could not accept 
compensation for teaching the same seminar as part of a continuing 
education program sponsored by a bar association because the subject of 
the course is focused on the operations or programs of the EEOC, and 
the sponsor of the course is not an accredited educational institution.
    Example 3 to paragraph (a)(3): An employee of the National 
Endowment for the Humanities (NEH) is invited by a private university 
to teach a course that is a survey of Government policies in support of 
artists, poets, and writers. As part of official duty activities, the 
employee administers a grant that the university has received from the 
NEH. The employee may not accept compensation for teaching the course 
because the university has interests that may be substantially affected 
by the performance or nonperformance of the employee's duties. 
Likewise, an employee may not receive compensation for any teaching 
that is undertaken as part of official duties or that involves the use 
of nonpublic information.
    (b) Reference to official position. Employees who are engaged in 
teaching, speaking, or writing as outside employment or as an outside 
activity may not use or permit the use of their official title or 
position to identify themselves in connection with a teaching, 
speaking, or writing activity, or to promote any book, seminar, course, 
program, or similar undertaking, except that:
    (1) Employees may include or permit the inclusion of their title or 
position as one of several biographical details when such information 
is given to identify them in connection with their teaching, speaking, 
or writing, provided that their title or position is given no more 
prominence than other significant biographical details;
    (2) Employees may use or permit the use of their title or position 
in connection with an article published in a scientific or professional 
journal, provided that the title or position is accompanied by a 
reasonably prominent disclaimer satisfactory to the agency stating that 
the views expressed in the article do not necessarily represent the 
views of the agency or the United States; and
    (3) Employees who are ordinarily addressed using a general term of 
address, such as ``The Honorable'' or ``Judge,'' or a rank, such as a 
military or ambassadorial rank, may use or permit the use of that term 
of address or rank in connection with their teaching, speaking, or 
writing.

    Note 4 to paragraph (b):  Reference to official title and 
position other than in a teaching, speaking, or writing capacity may 
be made only as permitted by Sec.  2635.702(b). In addition, some 
agencies may have policies requiring advance agency review, 
clearance, or approval of certain speeches, books, articles, or 
similar products to determine whether the product contains an 
appropriate disclaimer, discloses nonpublic information, or 
otherwise complies with this section.

    Example 1 to paragraph (b): A meteorologist employed with the 
National Oceanic and Atmospheric Administration (NOAA) is asked by a 
local university to teach a graduate course on hurricanes. The 
university may include the meteorologist's Government title and 
position together with other information about the meteorologist's 
education and previous employment in course materials setting forth 
biographical data on all teachers involved in the graduate program. 
However, the meteorologist's title or position may not be used to 
promote the course, for example, by featuring the meteorologist's 
Government title, Senior Meteorologist, NOAA, in bold type under their 
name. In contrast, the meteorologist's title may be used in this manner 
when NOAA authorized speaking in an official capacity.
    Example 2 to paragraph (b): A doctor just employed by the Centers 
for Disease Control (CDC) has written a paper based on earlier 
independent research into cell structures. Incident to the paper's 
publication in the Journal of the American Medical Association, the 
doctor may be given credit for the paper, as Dr. M. Wellbeing, 
Associate Director, Centers for Disease Control, provided that the 
article also contains a disclaimer, concurred in by the CDC, indicating 
that the paper is the result of the doctor's independent research and 
does not represent the findings of the CDC.
    Example 3 to paragraph (b): An employee of the Federal Deposit 
Insurance Corporation (FDIC) has been asked to give a speech in a 
private capacity, without compensation, to the

[[Page 43729]]

annual meeting of a committee of the American Bankers Association on 
the need for banking reform. The employee may be described in an 
introduction at the meeting as an employee of the FDIC provided that 
other pertinent biographical details are mentioned as well.


Sec.  2635.808  Fundraising activities.

    Employees may engage in fundraising only in accordance with the 
restrictions in part 950 of this title on the conduct of charitable 
fundraising in the Federal workplace and in accordance with paragraphs 
(b) and (c) of this section. This section addresses fundraising as 
defined in paragraph (a)(1) of this section, and does not cover all 
scenarios in which an employee might seek to collect donations from a 
fellow employee. For example, employees of an office might decide to 
collect money for a coworker whose family was displaced by a flood; the 
permissibility of such collections should be analyzed under subpart C 
of this part, not this section.
    (a) Definitions. For purposes of this section:
    (1) Fundraising means the raising of funds for a nonprofit 
organization, other than a political organization as defined in 26 
U.S.C. 527(e), through:
    (i) Solicitation of funds or sale of items; or
    (ii) Participation in the conduct of an event by an employee when 
any portion of the cost of attendance or participation may be taken as 
a charitable tax deduction by a person incurring that cost.
    (2) Participation in the conduct of an event means active and 
visible participation in the promotion, production, or presentation of 
the event and includes serving as honorary chairperson, sitting at a 
head table during the event, and standing in a reception line. The term 
does not include mere attendance at an event provided that, to the 
employee's knowledge, the employee's attendance is not used by the 
nonprofit organization to promote the event. While the term generally 
includes any public speaking during the event, it does not include the 
delivery of an official speech as defined in paragraph (a)(3) of this 
section or any seating or other participation appropriate to the 
delivery of such a speech. Waiver of a fee for attendance at an event 
by a participant in the conduct of that event does not constitute a 
gift for purposes of subpart B of this part.
    Example 1 to paragraph (a)(2): The Secretary of Transportation has 
been asked to serve as master of ceremonies for an All-Star Gala. 
Tickets to the event cost $150 and are tax deductible as a charitable 
donation, with proceeds to be donated to a local hospital. By serving 
as master of ceremonies, the Secretary would be participating in 
fundraising.
    (3) Official speech means a speech given by an employee in an 
official capacity on a subject matter that relates to the employee's 
official duties, provided that the employee's agency has determined 
that the event at which the speech is to be given provides an 
appropriate forum for the dissemination of the information to be 
presented and provided that the employee does not request donations or 
other support for the nonprofit organization. Subject matter relates to 
an employee's official duties if it focuses specifically on the 
employee's official duties, on the responsibilities, programs, or 
operations of the employee's agency as described in Sec.  
2635.807(a)(2)(i)(E), or on matters of Administration policy on which 
the employee has been authorized to speak.
    Example 1 to paragraph (a)(3): The Secretary of Labor is invited to 
speak at a banquet honoring a distinguished labor leader, the proceeds 
of which will benefit a nonprofit organization that assists homeless 
families. The Secretary devotes a major portion of the speech to the 
Administration's Points of Light initiative, an effort to encourage 
citizens to volunteer their time to help solve serious social problems. 
Because the Secretary is authorized to speak on Administration policy, 
these remarks at the banquet are an official speech. However, the 
Secretary would be engaged in fundraising if the official speech 
concluded with a request for donations to the nonprofit organization.
    Example 2 to paragraph (a)(3): A charitable organization is 
sponsoring a two-day tennis tournament at a country club in the 
Washington, DC, area to raise funds for recreational programs for 
children with learning disabilities. The organization has invited the 
Secretary of Education to give a speech on federally funded special 
education programs at the awards dinner to be held at the conclusion of 
the tournament, and the agency has determined that the dinner is an 
appropriate forum for the particular speech. The Secretary may speak at 
the dinner and, under Sec.  2635.203(b)(8), may partake of the meal 
provided at the dinner.
    (4) Personally solicit means to request or otherwise encourage 
donations or other support either through person-to-person contact or 
through the use of one's name or identity in correspondence or by 
permitting its use by others. It does not include the solicitation of 
funds through the media or through either oral remarks, or the 
contemporaneous dispatch of like items of mass-produced correspondence, 
if such remarks or correspondence are addressed to a group consisting 
of many persons, unless it is known to the employee that the 
solicitation is targeted at subordinates or at persons who are 
prohibited sources within the meaning of Sec.  2635.203(d). It does not 
include behind-the-scenes assistance in the solicitation of funds, such 
as drafting correspondence, stuffing envelopes, or accounting for 
contributions.
    Example 1 to paragraph (a)(4): An employee of the Department of 
Energy (DOE) who signs a letter soliciting funds for a local private 
school does not ``personally solicit'' funds when 500 copies of the 
letter, which makes no mention of the employee's DOE position and 
title, are mailed to members of the local community, even though some 
individuals who are employed by DOE contractors may receive the letter.
    (b) Fundraising in an official capacity. Employees may participate 
in fundraising in an official capacity if, in accordance with a 
statute, Executive order, regulation, or otherwise as determined by the 
agency, they are authorized to engage in the fundraising activity as 
part of their official duties. When authorized to participate in an 
official capacity, employees may use their official title, position, 
and authority.
    Example 1 to paragraph (b): Because participation in an official 
capacity is authorized under part 950 of this title, the Secretary of 
the Army may sign a memorandum to all Army personnel encouraging them 
to donate to the Combined Federal Campaign.
    (c) Fundraising in a personal capacity. An employee may engage in 
fundraising in a personal capacity provided that the employee does not:
    (1) Personally solicit funds or other support from a subordinate or 
from any person:
    (i) Known to the employee, if the employee is other than a special 
Government employee, to be a prohibited source within the meaning of 
Sec.  2635.203(d), unless the circumstances make clear that the 
solicitation is motivated by a family relationship or personal 
friendship that would justify the solicitation; or
    (ii) Known to the employee, if the employee is a special Government 
employee, to be a prohibited source within the meaning of Sec.  
2635.203(d)(4) that is a person whose interests may be substantially 
affected by performance or nonperformance of the employee's official 
duties, unless the circumstances make clear that the solicitation is

[[Page 43730]]

motivated by a family relationship or personal friendship that would 
justify the solicitation;
    (2) Use or permit the use of the employee's official title, 
position, or any authority associated with the employee's public office 
to further the fundraising effort, except that an employee who is 
ordinarily addressed using a general term of address, such ``The 
Honorable,'' or a rank, such as a military or ambassadorial rank, may 
use or permit the use of that term of address or rank for such 
purposes; or
    (3) Engage in any action that would otherwise violate this part.

    Note 1 to paragraph (c):  This section does not prohibit 
fundraising for a political party, candidate for partisan political 
office, or partisan political group. However, there are statutory 
restrictions that apply to political fundraising. For example, under 
the Hatch Act Reform Amendments of 1993, at 5 U.S.C. 7323(a), 
employees may not knowingly solicit, accept, or receive a political 
contribution from any person, except under limited circumstances. In 
addition, employees are prohibited by 18 U.S.C. 607 from soliciting 
or receiving political contributions in Federal offices, and, except 
as permitted by the Hatch Act Reform Amendments, are prohibited by 
18 U.S.C. 602 from knowingly soliciting political contributions from 
other employees.

    Example 1 to paragraph (c): A nonprofit organization is sponsoring 
a golf tournament to raise funds for underprivileged children. The 
Secretary of the Navy may not enter the tournament with the 
understanding that the organization intends to attract participants by 
offering other entrants the opportunity, in exchange for a donation in 
the form of an entry fee, to spend the day playing 18 holes of golf in 
a foursome with the Secretary of the Navy.
    Example 2 to paragraph (c): An employee of the Merit Systems 
Protection Board may not use the agency's photocopier to reproduce 
fundraising literature for their child's private school. Such use of 
the photocopier would violate the standards at Sec.  2635.704 regarding 
use of Government property.
    Example 3 to paragraph (c): An Assistant Attorney General may not 
sign a letter soliciting funds for a homeless shelter as ``P.J. Doe, 
Assistant Attorney General.'' The Assistant Attorney General also may 
not sign a letter with just a ``P.J. Doe'' signature soliciting funds 
from a prohibited source, unless the letter is one of many identical, 
mass-produced letters addressed to a large group when the solicitation 
is not known to the Assistant Attorney General to be targeted at 
persons who are either prohibited sources or subordinates.
    Example 4 to paragraph (c): An employee of the Department of 
Commerce is running a half marathon to raise money for a nonprofit 
organization engaged in cancer research, and is looking for people to 
sponsor the race. The employee plans to target specific individuals 
they think will want to contribute, including a close friend with whom 
they regularly meet for dinner. Notwithstanding the fact that the 
friend is employed by a corporation that is a prohibited source, the 
employee may ask the friend to sponsor the race because the 
solicitation is motivated by a personal friendship that would justify 
the solicitation.
    Example 5 to paragraph (c): The employee in example 4 to this 
paragraph (c) knows that a subordinate employee has expressed an 
interest in this cause and sends the subordinate a direct link to the 
online sponsorship page. The employee has ``personally solicited'' a 
subordinate in violation of paragraph (c)(1) of this section.
    Example 6 to paragraph (c): The employee in example 4 to this 
paragraph (c) decides that rather than targeting specific individuals 
for contributions, it would be preferable to post a general request and 
a link to information about the race on their personal social media 
account. Because this request may be viewed by any person with whom the 
employee is connected through the social media network and does not 
reference or target any specific individual, it is not considered a 
personal solicitation of any subordinate or prohibited source that is 
connected to the employee.


Sec.  2635.809  Just financial obligations.

    Employees must satisfy in good faith their obligations as citizens, 
including all just financial obligations, especially those such as 
Federal, State, or local taxes that are imposed by law. For purposes of 
this section, a just financial obligation includes any financial 
obligation acknowledged by the employee or reduced to judgment by a 
court. In good faith means an honest intention to fulfill any just 
financial obligation in a timely manner. In the event of a dispute 
between an employee and an alleged creditor, this section does not 
require an agency to determine the validity or amount of the disputed 
debt or to collect a debt on the alleged creditor's behalf.

Subpart I--Related Statutory Authorities


Sec.  2635.901  General.

    In addition to the Standards of Ethical Conduct set forth in 
subparts A through H of this part, there are a number of statutes that 
establish standards to which an employee's conduct must conform. The 
list set forth in Sec.  2635.902 references some of the more 
significant of those statutes. It is not comprehensive and includes 
only references to statutes of general applicability. While it includes 
references to several of the basic conflict of interest statutes whose 
standards are explained in more detail throughout this part, it does 
not include references to statutes of more limited applicability, such 
as statutes that apply only to officers and employees of the Department 
of Defense.


Sec.  2635.902  Related statutes.

    (a) The prohibition against solicitation or receipt of bribes (18 
U.S.C. 201(b)).
    (b) The prohibition against solicitation or receipt of illegal 
gratuities (18 U.S.C. 201(c)).
    (c) The prohibition against seeking or receiving compensation for 
certain representational services before the Government (18 U.S.C. 
203).
    (d) The prohibition against assisting in the prosecution of claims 
against the Government or acting as agent or attorney before the 
Government (18 U.S.C. 205).
    (e) The post-employment restrictions applicable to former employees 
(18 U.S.C. 207 and the regulation at part 2641 of this chapter).
    (f) The prohibition on certain former agency officials' acceptance 
of compensation from a contractor (41 U.S.C. 2104).
    (g) The prohibition against participating in matters affecting an 
employee's own financial interests or the financial interests of other 
specified persons or organizations (18 U.S.C. 208 and the regulation at 
part 2640 of this chapter).
    (h) The actions required of certain agency officials when they 
contact, or are contacted by, offerors or bidders regarding non-Federal 
employment (41 U.S.C. 2103).
    (i) The prohibition against receiving salary or any contribution to 
or supplementation of salary as compensation for Government service 
from a source other than the United States (18 U.S.C. 209).
    (j) The prohibition against gifts to superiors (5 U.S.C. 7351).
    (k) The prohibition against solicitation or receipt of gifts from

[[Page 43731]]

specified prohibited sources (5 U.S.C. 7353).
    (l) The prohibition against fraudulent access and related activity 
in connection with computers (18 U.S.C. 1030).
    (m) The provisions governing receipt and disposition of foreign 
gifts and decorations (5 U.S.C. 7342).
    (n) [Reserved]
    (o) The prohibitions against certain political activities (5 U.S.C. 
7321 through 7326 and 18 U.S.C. 602, 603, 606, and 607).
    (p) The prohibitions against disloyalty and striking (5 U.S.C. 7311 
and 18 U.S.C. 1918).
    (q) The general prohibition (18 U.S.C. 219) against acting as the 
agent of a foreign principal required to register under the Foreign 
Agents Registration Act (22 U.S.C. 611 through 621).
    (r) The prohibition against employment of a person convicted of 
participating in or promoting a riot or civil disorder (5 U.S.C. 7313).
    (s) The prohibition against employment of an individual who 
habitually uses intoxicating beverages to excess (5 U.S.C. 7352).
    (t) The prohibition against misuse of a Government vehicle (31 
U.S.C. 1344).
    (u) The prohibition against misuse of the franking privilege (18 
U.S.C. 1719).
    (v) The prohibition against fraud or false statements in a 
Government matter (18 U.S.C. 1001).
    (w) The prohibition against concealing, mutilating, or destroying a 
public record (18 U.S.C. 2071).
    (x) The prohibition against counterfeiting or forging 
transportation requests (18 U.S.C. 508).
    (y) The restrictions on disclosure of certain sensitive Government 
information under the Freedom of Information Act and the Privacy Act (5 
U.S.C. 552 and 552a).
    (z) The prohibitions against disclosure of classified information 
(18 U.S.C. 798 and 50 U.S.C. 783(a)).
    (aa) The prohibition against disclosure of proprietary information 
and certain other information of a confidential nature (18 U.S.C. 
1905).
    (bb) The prohibitions on disclosing and obtaining certain 
procurement information (41 U.S.C. 2102).
    (cc) The prohibition against unauthorized use of documents relating 
to claims from or by the Government (18 U.S.C. 285).
    (dd) The prohibition against certain personnel practices (5 U.S.C. 
2302).
    (ee) The prohibition against interference with civil service 
examinations (18 U.S.C. 1917).
    (ff) The restrictions on use of public funds for lobbying (18 
U.S.C. 1913).
    (gg) The prohibition against participation in the appointment or 
promotion of relatives (5 U.S.C. 3110).
    (hh) The prohibition against solicitation or acceptance of anything 
of value to obtain public office for another (18 U.S.C. 211).
    (ii) The prohibition against conspiracy to commit an offense 
against or to defraud the United States (18 U.S.C. 371).
    (jj) The prohibition against embezzlement or conversion of 
Government money or property (18 U.S.C. 641).
    (kk) The prohibition against failing to account for public money 
(18 U.S.C. 643).
    (ll) The prohibition against embezzlement of the money or property 
of another person that is in the possession of an employee by reason of 
their employment (18 U.S.C. 654).

[FR Doc. 2024-10339 Filed 5-16-24; 8:45 am]
BILLING CODE 6345-03-P