Standards of Ethical Conduct for Employees of the Executive Branch; Proposed Amendments To Clarify the Coverage of Detailees to an Agency Under the Intergovernmental Personnel Act, 27427-27429 [E6-7222]

Agencies

• Office of Government Ethics
• Government Ethics Office

[Federal Register Volume 71, Number 91 (Thursday, May 11, 2006)]
[Proposed Rules]
[Pages 27427-27429]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-7222]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 71, No. 91 / Thursday, May 11, 2006 / 
Proposed Rules

[[Page 27427]]



OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2635

RIN 3209-AA04


Standards of Ethical Conduct for Employees of the Executive 
Branch; Proposed Amendments To Clarify the Coverage of Detailees to an 
Agency Under the Intergovernmental Personnel Act

AGENCY: Office of Government Ethics (OGE).

ACTION: Proposed rule; amendments.

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SUMMARY: The Office of Government Ethics is proposing amendments to the 
regulation governing standards of ethical conduct for executive branch 
employees of the Federal Government, to clarify the coverage of 
employees of State or local governments or other organizations detailed 
to an agency under the Intergovernmental Personnel Act.

DATES: Written comments are invited and must be received before July 
10, 2006.

ADDRESSES: You may submit comments in writing to OGE on this proposed 
rule by any of the following methods:
     E-Mail: usoge@oge.gov. Include the reference ``Proposed 
Amendments to Part 2635'' in the subject line of the message.
     Fax: (202) 482-9237.
     Mail/Hand Delivery/Courier: Office of Government Ethics, 
Suite 500, 1201 New York Avenue, NW., Washington, DC 20005-3917, 
Attention: Richard M. Thomas, Associate General Counsel.
    Instructions: All submissions must include OGE's agency name and 
the Regulation Identifier Number (RIN), 3209-AA04, for this proposed 
rulemaking.

FOR FURTHER INFORMATION CONTACT: Richard M. Thomas, Associate General 
Counsel, Office of Government Ethics; telephone: (202) 482-9300; TDD: 
(202) 482-9293; FAX: (202) 482-9237.

SUPPLEMENTARY INFORMATION:

I. Background

    The Intergovernmental Personnel Act (IPA), 5 U.S.C. 3371, et seq., 
provides two distinct mechanisms for assigning employees of State or 
local governments or other organizations to a Federal agency. Such IPA 
assignees may either be ``appointed'' in the Federal agency or 
``detailed'' to the Federal agency. 5 U.S.C. 3374(a). An IPA appointee 
generally is ``deemed an employee of the Federal agency for all 
purposes'', with certain exceptions that are not relevant to Federal 
ethics requirements. 5 U.S.C. 3374(b). Consequently, it always has been 
clear that IPA appointees are subject to the same ethical requirements 
as other executive branch employees, including the standards of ethical 
conduct provisions in 5 CFR part 2635 and any supplemental agency 
standards of conduct.
    IPA detailees, on the other hand, are deemed Federal employees only 
for those purposes specifically enumerated in the statute. 5 U.S.C. 
3374(c)(2). Until the IPA was amended in 2001, IPA detailees were not 
deemed Federal employees for purposes of the Ethics in Government Act 
of 1978 (except for the provisions in title V, which simply amended 18 
U.S.C. 207), although they were deemed employees for purposes of the 
criminal conflict of interest statutes (18 U.S.C. 203, 205, 207, 208, 
and 209), as well as chapter 73 of title 5 of the U.S. Code, which 
includes certain restrictions on gifts from outside sources and gifts 
between employees (5 U.S.C. 7353 and 7351). See OGE Informal Advisory 
Letter 79 x 1, which is available on OGE's Web site (https://
www.usoge.gov). The 2001 amendments to the IPA, however, added the 
Ethics in Government Act of 1978 to the list of authorities with 
respect to which IPA detailees are deemed Federal employees. National 
Defense Authorization Act for Fiscal Year 2002, Public Law 101-107, 
section 1117, December 28, 2001; 5 U.S.C. 3374(c)(2).
    The Office of Government Ethics issued its final rule establishing 
the ``Standards of Ethical Conduct for Employees of the Executive 
Branch'' in 1992, effective February 3, 1993. 57 FR 35006 (August 7, 
1992). These regulations (the Standards), codified at 5 CFR part 2635, 
do not expressly address the status or conduct of IPA detailees. More 
important, on various occasions after the Standards were promulgated, 
OGE advised agency ethics officials that many of the requirements of 
part 2635 did not apply to IPA detailees because the scope of OGE's 
authority to regulate their conduct was unclear. For one thing, the 
Ethics in Government Act, which is OGE's organic Act and most general 
authority for rulemaking, did not apply to IPA detailees at the time 
that the Standards were promulgated.\1\ Additionally, the Office of 
Personnel Management, not OGE, had specific authority to issue 
regulations governing IPA detailees. See Executive Order 11589, April 
1, 1971, 36 FR 6343, 3 CFR, 1971-1975 Comp., p. 557, as amended by 
Executive Order 12107, December 28, 1978, 44 FR 1055, 3 CFR, 1978 
Comp., p. 264 (delegating Presidential authority to OPM to issue IPA 
regulations).
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    \1\ In this regard, the historical status of IPA detailees has 
been more uncertain than that of detailees under the recently 
established Federal Information Technology Exchange Program (IT 
Exchange Program). The IT Exchange Program was created under a 2002 
law that, from the inception, treated detailees from certain for-
profit business entities as agency ``employees'' for purposes of the 
Ethics in Government Act of 1978, among other things. See 5 U.S.C. 
3701, et seq.; 70 FR 47711 (August 15, 2005) (final rule 
implementing provisions of the E-Government Act of 2002). OGE 
believes it is clear that detailees under the IT Exchange Program 
are covered ``employees'' under the OGE Standards in part 2635 and 
any supplemental agency regulations issued under Sec.  2635.105 
thereof.
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    OGE has advised agencies that IPA detailees may be subject to 
certain provisions of part 2635 that implement statutory requirements 
applicable to detailees under 5 U.S.C. 3374(c)(2). For example, many of 
the gift provisions in subparts B and C of part 2635 implement parts of 
chapter 73 of title 5, U.S. Code, for purposes of which IPA detailees 
were deemed Federal employees when the Standards were promulgated. OGE 
has also advised that agencies could require detailees to agree to 
follow the requirements of part 2635, by including such provisions in 
their IPA agreements (or related documents), pursuant to 5 U.S.C. 
3374(c). However, this approach creates the potential for an uneven or 
incomplete application of part 2635, which would not further the 
fundamental purpose of establishing ``a single, comprehensive, and 
clear set of executive-branch standards of conduct.'' Executive Order 
12674, section 201(a), 54 FR 15159, 3 CFR, 1989 Comp., p.

[[Page 27428]]

215, as modified by Executive Order 12731, section 201(a), 55 FR 42547, 
3 CFR, 1990 Comp., p. 306.
    Now that the IPA has been amended to make detailees ``employees'' 
for purposes of the Ethics in Government Act, there is no further doubt 
as to OGE's authority to cover IPA detailees under the Standards. 
Therefore, consistent with the goal of maintaining a single, 
comprehensive and clear set of Standards, OGE is proposing to amend 
part 2635 to make clear that all IPA detailees are subject to the 
Standards, as described below.

II. Proposed Amendments to the Standards

A. Definition of Employee

    OGE proposes to amend the definition of ``employee,'' at 5 CFR 
2635.102(h) of the Standards, to indicate that the term includes IPA 
detailees. This would resolve any doubts concerning the application of 
the Standards to IPA detailees.

B. Supplemental Agency Regulations

     OGE also is proposing to amend 5 CFR 2635.105 of the Standards, 
the provision concerning supplemental agency standards of conduct 
regulations. This provision permits an agency, with the concurrence of 
OGE, to promulgate regulations in addition to the uniform, executive 
branchwide requirements of part 2635, to address circumstances specific 
to the particular agency, in view of its programs and operations. The 
proposed amendment would authorize an agency to apply all or portions 
of its supplemental requirements to its IPA detailees, by express 
provision in the supplemental regulations.
    OGE has advised agency ethics officials that supplemental 
requirements generally are not applicable to IPA detailees, for the 
same reasons discussed above with respect to part 2635. Thus, agency 
officials have drafted certain supplemental restrictions, such as 
divestiture or outside activity rules, with the understanding that they 
would not apply to IPA detailees. As a result, some existing agency 
supplemental rules might not be viewed as necessary or appropriate for 
IPA detailees, particularly those detailees who are expected to serve 
on relatively short-term assignments. For example, an agency might not 
find it necessary or reasonable to impose certain divesture 
requirements on detailees who are expected to serve in an agency only 
for a year. In this connection, it also may be relevant that IPA 
detailees are not eligible for certificates of divestiture, which is a 
tax benefit provided by Congress to mitigate some of the financial 
burden of complying with divestiture requirements. (Section 1043 of the 
Internal Revenue Code, 26 U.S.C. 1043, which is the authority for 
granting certificates of divestiture, is not included among the 
provisions of law in 5 U.S.C. 3374(c)(2) for purposes of which IPA 
detailees are deemed employees of an agency.)
    It also is important to remember that supplemental agency 
requirements, by definition, are an exception to the general 
requirement of executive branch uniformity for standards of ethical 
conduct. See Executive Order 12674, section 301(a), 54 FR 15159, 3 CFR, 
1989 Comp., p. 215, as modified by Executive Order 12731, section 
301(a), 55 FR 42547, 3 CFR, 1990 Comp., p. 306. Therefore, OGE is less 
concerned about ensuring that all IPA detailees are subject to agency 
supplemental requirements.
    At the same time, OGE also is aware that some agency ethics 
officials believe that certain agency supplemental restrictions are 
appropriate for IPA detailees. In some cases, for example, we 
understand that agencies have required IPA detailees to agree to follow 
not only the Standards in part 2635 but also supplemental agency 
standards. Therefore, in order to accommodate the needs of different 
agencies, OGE is proposing to amend Sec.  2635.105 by adding a new 
paragraph (d), which would provide that IPA detailees are subject to 
supplemental agency requirements to the extent expressly provided in 
supplemental agency regulations.
    Under this proposal, agencies that wish to subject IPA detailees to 
supplemental requirements would need to amend their supplemental 
regulations to state this intent. The proposed amendment uses the term 
``requirements'' intentionally, because some supplemental agency 
regulations include provisions that do not impose additional 
requirements but actually relieve certain restrictions in part 2635, 
such as provisions that divide the agency into separate components for 
purposes of certain restrictions in 5 CFR 2635.202 and 2635.807. It is 
OGE's intent that IPA detailees would still benefit from any such 
provisions in supplemental agency regulations that do not add 
additional requirements or restrictions, without the need for an 
amendment to the supplemental regulations. Additionally, agencies would 
have the discretion, provided that the general requirements of Sec.  
2635.105 are met, to make appropriate adjustments to any supplemental 
regulations to account for any unique circumstances related to the use 
of IPA detailees in the agency's programs and operations.
    Agencies that already have required IPA detailees, by agreement, to 
abide by any supplemental regulations could continue to recognize any 
agreements in force as of the effective date of the future final rule 
amending Sec.  2635.105. Additionally, agencies that wished to amend 
their supplemental regulations expressly to cover IPA detailees could 
continue to use IPA agreements to obtain commitments to follow current 
supplemental regulations, pending the promulgation of amendments, for a 
reasonable period determined in consultation with OGE.

III. Matters of Regulatory Procedure

Administrative Procedure Act

    Interested persons are invited to submit written comments on this 
proposed amendatory rulemaking, to be received by July 10, 2006. The 
comments will be carefully considered and any appropriate changes will 
be made before a final rule is adopted and published in the Federal 
Register by OGE.

Regulatory Flexibility Act

    As Acting Director of OGE, I certify under the Regulatory 
Flexibility Act (5 U.S.C. chapter 6) that this proposed rule will not 
have a significant economic impact on a substantial number of small 
entities because it primarily affects Federal employees.

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply 
to this proposed rule because it does not contain an information 
collection requirement that requires the 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 proposed amendatory 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.

Congressional Review Act

    The Office of Government Ethics has determined that this proposed 
rulemaking involves a nonmajor rule under the Congressional Review Act 
(5 U.S.C. chapter 8) and will, before the

[[Page 27429]]

future final rule takes effect, submit a report thereon to the U.S. 
Senate, House of Representatives and General Accounting Office in 
accordance with that law.

Executive Order 12866

    In promulgating this proposed rule, OGE has adhered to the 
regulatory philosophy and the applicable principles of regulation set 
forth in section 1 of Executive Order 12866, Regulatory Planning and 
Review. This proposed rule has not been reviewed by the Office of 
Management and Budget under that Executive order, since it deals with 
agency organization, management and personnel matters, and is not 
deemed to be ``significant'' thereunder.

Executive Order 12988

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

List of Subjects in 5 CFR Part 2635

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

    Approved: May 5, 2006.
Marilyn L. Glynn,
Acting Director, Office of Government Ethics.
    Accordingly, for the reasons set forth in the preamble, the Office 
of Government Ethics is proposing to amend part 2635 of subchapter B of 
chapter XVI of title 5 of the Code of Federal Regulations, as follows:

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

    1. The authority citation for part 2635 continues to read as 
follows:

    Authority: 5 U.S.C. 7301, 7351, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., 
p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., 
p. 306.

Subpart A--General Provisions

    2. Section 2635.102 is amended by adding a new sentence after the 
second sentence of paragraph (h) to read as follows:


Sec.  2635.102  Definitions.

* * * * *
    (h) * * * It includes 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. * * *
* * * * *
    3. Section 2635.105 is amended by adding a new paragraph (d) to 
read as follows:


Sec.  2635.105  Supplemental agency regulations.

* * * * *
    (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.

 [FR Doc. E6-7222 Filed 5-10-06; 8:45 am]
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