Standards of Ethical Conduct for Employees of the Executive Branch; Amendments to the Seeking Other Employment Rules, 48687-48693 [2016-17553]
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48687
Rules and Regulations
Federal Register
Vol. 81, No. 143
Tuesday, July 26, 2016
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2635
RIN 3209–AA04
Standards of Ethical Conduct for
Employees of the Executive Branch;
Amendments to the Seeking Other
Employment Rules
AGENCY:
Office of Government Ethics
(OGE).
ACTION:
Final rule.
The U.S. Office of
Government Ethics is issuing a final rule
amending portions of the Standards of
Ethical Conduct for Employees of the
Executive Branch regarding seeking
other employment. The final rule
incorporates past interpretive advice,
updates examples, improves clarity, and
makes technical corrections. In
addition, the final rule implements the
statutory notification requirements that
apply to individuals required to file
public financial disclosure reports
under section 101 of the Ethics in
Government Act of 1978 when they
negotiate for or have an agreement of
future employment or compensation.
DATES: This final rule is effective August
25, 2016.
FOR FURTHER INFORMATION CONTACT:
Elaine Newton, Associate Counsel, or
Rachel Dowell, Assistant Counsel,
Office of Government Ethics, Suite 500,
1201 New York Avenue NW.,
Washington, DC 20005–3917;
Telephone: (202) 482–9300; TTY: (800)
877–8339; FAX: (202) 482–9237.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
I. Background
On February 17, 2016, the U.S. Office
of Government Ethics (OGE) published
a proposed rule in the Federal Register,
81 FR 8008, Feb. 17, 2016, proposing to
amend subpart F of the Standards of
Ethical Conduct for Employees of the
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Executive Branch regarding seeking
other employment. These regulations
combine the standards imposed by a
criminal statute, 18 U.S.C. 208(a), with
the standards imposed by Executive
Order 12674, as modified by Executive
Order 12731. Section 208(a) of Title 18
requires an employee to recuse from
participating 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. Beyond this
statutory requirement, subpart F
incorporates the standards imposed by
the Executive Order, addressing issues
of lack of impartiality that require
recusal from any particular matter that
affects the financial interests of a
prospective employer, even where the
employee’s actions in seeking
employment may fall short of
negotiating for employment. The final
rule also implements the notification
requirements under section 17 of the
Stop Trading on Congressional
Knowledge Act of 2012 (STOCK Act),
Public Law 112–105, 126 Stat. 303, 5
U.S.C. app. 101 note, which apply to
employees who file public financial
disclosure reports.
II. Comments
The proposed rule was published on
February 17, 2016. It provided a 60-day
comment period, which ended on April
18, 2016. OGE did not receive any
comments. The rationale for the
proposed rule, which OGE is now
adopting as final, is explained in the
preamble at: https://www.gpo.gov/fdsys/
pkg/FR-2016-02-17/pdf/2016-03214.pdf.
OGE has made nine technical changes
in the final rule. First, OGE added the
phrase ‘‘personally and substantially’’ in
several places within the regulation.
This phrase is consistent with the
statutory language at 18 U.S.C. 208(a)
and is parallel to the language that is
currently within the regulation. Second,
in 5 CFR 2635.602, Example 1 to
paragraph (a), OGE removed the phrase
‘‘who is not a public filer’’ to better
clarify the example. Third, OGE
clarified in 5 CFR 2635.602, Example 2
to paragraph (a) that the employee is not
currently participating in any particular
matters affecting the University of
Maryland. OGE further clarified that, if
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the employee is assigned to participate
in a particular matter affecting the
University of Maryland while she is
seeking employment with the
University, she must take whatever
steps are necessary to avoid working on
the grant, in accordance with
§ 2635.604. This revised language
corresponds with 5 CFR 2635.602(a) in
the proposed rule. Fourth, OGE added
the citation for the Foreign Gifts and
Decorations Act, 5 U.S.C. 7342, to 5 CFR
2635.602(b)(3). Fifth, OGE replaced the
terms ‘‘person’’ and ‘‘potential
employer’’ with the term ‘‘prospective
employer’’ in 5 CFR 2635.603, Example
4 to paragraph (b) to use consistent
defined terms. Sixth, OGE added the
following to 5 CFR 2635.603, Example
10 to paragraph (b): Provided she 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. In
addition, the clause ‘‘with a response
indicating an interest in employment
discussions’’ was added to 5 CFR
2635.604(a)(ii). This language parallels
the discussion in the definition section
of the previous regulation and
corresponds with 5 CFR 2635.604,
Example 3 to paragraph (a) in the
proposed rule. Seventh, OGE made a
grammatical correction in 5 CFR
2635.603, Example 2 to paragraph (c),
replacing the word ‘‘they’’ with ‘‘it.’’
Eighth, OGE clarified in 5 CFR
2635.604, Example 2 to paragraph (b)
that the employee is reviewing an
application from the same
pharmaceutical company, which is
seeking FDA approval for a new drug
product. This language parallels the
discussion in the recusal section of the
previous regulation and corresponds
with 5 CFR 2635.604(b) in the proposed
rule. Finally, OGE replaced the word
‘‘should’’ with the word ‘‘must’’ in 5
CFR 2635.604, Example 2 to paragraph
(b): 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. This
language corresponds with 5 CFR
2635.604(b) in the proposed rule.
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Approved: July 20, 2016.
Walter M. Shaub, Jr.,
Director, Office of Government Ethics.
III. Matters of Regulatory Procedure
Regulatory Flexibility Act
As Director of the Office of
Government Ethics, I certify under the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) that this final rule would not
have a significant economic impact on
a substantial number of small entities
because it primarily affects current
Federal executive branch employees.
Paperwork Reduction Act
Accordingly, the Office of
Government Ethics is amending 5 CFR
part 2635 as set forth below:
PART 2635—STANDARDS OF
ETHICAL CONDUCT FOR EMPLOYEES
OF THE EXECUTIVE BRANCH
1. The authority citation for part 2635
continues to read as follows:
■
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.
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.
Unfunded Mandates Reform Act
Subpart F—Seeking Other Employment
Sec.
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.
For purposes of the Unfunded
Mandates Reform Act of 1995 (2 U.S.C.
chapter 5, subchapter II), this final rule
would not significantly or uniquely
affect small governments and will not
result in increased expenditures by
State, local, and tribal governments, in
the aggregate, or by the private sector, of
$100 million or more (as adjusted for
inflation) in any one year.
Executive Order 13563 and Executive
Order 12866
Executive Orders 13563 and 12866
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select the regulatory
approaches that maximize net benefits
(including economic, environmental,
public health and safety effects,
distributive impacts, and equity).
Executive Order 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This rulemaking has been
designated as a ‘‘significant regulatory
action’’ although not economically
significant, under section 3(f) of
Executive Order 12866. Accordingly,
this rule has been reviewed by the
Office of Management and Budget.
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Executive Order 12988
As Director of the Office of
Government Ethics, I have reviewed this
final rule in light of section 3 of
Executive Order 12988, Civil Justice
Reform, and certify that it meets the
applicable standards provided therein.
List of Subjects in 5 CFR Part 2635
Conflict of interests, Executive Branch
standards of ethical conduct,
Government employees.
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2. Subpart F of part 2635 is revised to
read as follows:
■
Subpart F—Seeking Other
Employment
§ 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 § 2635.402 and
§ 2640.103 of this chapter. Beyond this
statutory requirement, 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,
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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 Stop Trading on Congressional
Knowledge Act of 2012 (STOCK Act),
Public Law 112–105, 126 Stat. 303, 5
U.S.C. app. 101 note, 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.
§ 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 § 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
§§ 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
§ 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 § 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 § 2635.607.
An employee may, however, be subject
to other statutes that impose
requirements on employment contacts
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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.
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Example 1 to paragraph (a): Recently, an
employee of the Department of Education
submitted her resume to the University of
Delaware for a job opening that she heard
about through a friend. The employee has
begun seeking employment. However,
because she is not participating in any
particular matters affecting the University of
Delaware, she is not required to notify
anyone that she has begun seeking
employment.
Example 2 to paragraph (a): The employee
in the preceding example has been
approached about an employment
opportunity at the University of Maryland.
Because the University of Maryland has
applied for grants on which she has been
assigned to work in the past, she wants to
make certain that she does not violate the
ethics rules. The employee contacts her
ethics official to discuss the matter. The
employee informs the ethics official that she
is not currently participating in any
particular matters affecting the University of
Maryland. As a result, the ethics official
advises the employee that she 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 she is seeking
employment with the University, she must
take whatever steps are necessary to avoid
working on the grant, in accordance with
§ 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
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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.
Where a prospective employer who is a
prohibited source as defined in
§ 2635.203(d) offers to reimburse an
employee’s travel expenses, or provide
other reasonable amenities incident to
employment discussions, the employee
may accept such amenities in
accordance with § 2635.204(e)(3). Where
a prospective employer is a foreign
government or international
organization, the employee must also
ensure that he or she is in compliance
with the Foreign Gifts and Decorations
Act, 5 U.S.C. 7342.
§ 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 her 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 his 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
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48689
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 these
purposes, 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 definition, 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 his third
year of law school. During a discussion with
his neighbor, who is a partner in a large law
firm in the community, the neighbor invited
him to visit her law firm. The paralegal took
her up on the offer and met with an associate
at the firm. The associate shared with the
paralegal her experiences looking for a legal
position, discussed what she does in her
position at the law firm, and explained why
she chose her current law firm. There was no
discussion of possible employment with the
firm. The Army paralegal is not seeking
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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
his 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 he made
a response other than a rejection to the
communication regarding possible
employment with the Army contractor,
although he has not yet begun negotiating for
employment.
Example 3 to paragraph (b): The DCAA
employee and the head of the contractor’s
accounting division in the previous example
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 his
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 the previous example was
recently notified that a representative of a
university has viewed his 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 he makes a response
other than rejection. At this point, the
employee has begun seeking employment
with the university until he rejects the
possibility of employment and all
discussions of possible employment have
terminated.
Example 6 to paragraph (b): The DOE
employee in the previous two examples
receives emails from various companies in
response to his online profile. He does not
respond. The employee has not begun
seeking employment with the companies
because he has not made a response.
Example 7 to paragraph (b): An employee
of the Centers for Medicare & Medicaid
Services (CMS) is complimented on her work
by an official of a State Health Department
who asks her to call if she is ever interested
in leaving Federal service. The employee
explains to the State official that she is very
happy with her job at CMS and is not
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interested in another job. She thanks him for
his compliment regarding her work and adds
that she’ll remember his interest if she ever
decides 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 preceding example responds by stating
that she cannot discuss future employment
while she is 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, she
has 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 her 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 she 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 she withdraws her
application or is notified within the twomonth period that her resume has been
rejected, she will no longer be seeking
employment with the oil company as of the
date she makes such withdrawal or receives
such notification.
(c) Prospective employer means any
person with whom the employee is
seeking employment. Where 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 her find another job. The search
firm has just reported to the FAA employee
that it has given her resume to and had
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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 her prospective
employer. She began seeking employment
with each airport authority upon learning its
identity and that it has been given her
resume.
Example 2 to paragraph (c): An employee
pays for an online resume distribution
service, which sends her resume to recruiters
that specialize in her field. The online
service has just notified her that it sent her
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 her prospective employer. She began
seeking employment with each company
upon learning from the online service that
Software Company A and Software Company
B had been given her resume by the
intermediary.
(d) Direct and predictable effect,
particular matter, and personal and
substantial have the respective
meanings set forth in § 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
§ 2634.202 of this chapter.
§ 2635.604 Recusal while seeking
employment.
(a) Obligation to recuse. (1) Except as
provided in paragraph (a)(2) of this
section or where the employee’s
participation has been authorized in
accordance with § 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 § 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
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employee to serve on a panel that reviews
grant applications to fund research relating to
deterioration of the ozone layer. She 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 she 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. She begins
discussing possible employment with a
pharmaceutical company. The employee may
not participate personally and substantially
in the development of the regulation because
she has 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 applicable to all
member banks. She mails an unsolicited
letter to a member bank offering her services
as a contract consultant. Although the
employee is seeking employment, the
employee may participate in this particular
matter of general applicability until she
receives some response indicating an interest
in discussing her 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
he sent an unsolicited resume. The employee
may not participate personally and
substantially in the inspection because he is
seeking employment and the inspection is a
particular matter involving specific parties
that will affect the textile company.
under the VA contract, the employee should
recuse from participation in the audit. Since
he cannot withdraw from participation in the
contract audit without the approval of his
supervisor, he should notify his supervisor of
his need to recuse for ethics reasons so that
appropriate adjustments in his 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.
Where he has authority to ask his colleague
to assume his reviewing responsibilities, he
may accomplish his recusal by transferring
the work to the employee designated to cover
for him. However, to ensure that his
colleague and others with whom he had been
working on the review do not seek his advice
regarding the review of the application or
otherwise involve him in the matter, it may
be necessary for him to advise those
individuals of his recusal.
(b) Notification. An employee who
becomes aware of the need to recuse
from participation in a particular matter
to which the employee has been
assigned must take whatever steps are
necessary to ensure that the employee
does not participate in the matter.
Appropriate oral or written notification
of the employee’s recusal may be made
to an agency ethics official, coworkers,
or a supervisor to document and help
effectuate the employee’s recusal. Public
filers must comply with additional
notification requirements set forth in
§ 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, he can,
in fact, accomplish his 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, he would benefit from
filing a written recusal statement with an
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
his resume to a lab which is a subcontractor
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(c) Documentation. An employee,
other than a public filer, need not file
a written recusal statement unless the
employee is 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 is
specifically directed by an agency ethics
official or the person responsible for the
employee’s assignment to file a written
recusal statement. However, it is often
prudent for an employee to create a
record of his or her 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 § 2635.607.
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48691
agency ethics official or the Commissioners
of the regulatory agency and providing his
subordinates with written notification of his
recusal. He 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, he must comply with the
documentation requirements set forth in
§ 2635.607.
(d) Agency determination of
substantial conflict. Where the agency
determines that the employee’s action in
seeking employment with a particular
person will require the employee’s
recusal 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.
§ 2635.605 Waiver or authorization
permitting participation while seeking
employment.
(a) Waiver. Where, as defined in
§ 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
where 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
§ 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 § 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
§ 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), she 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.
Where an employee is seeking employment
within the meaning of § 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
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employee may participate in such matters
only where the agency designee has
authorized in writing the employee’s
participation in accordance with the
standards set forth in § 2635.502(d).
Example 1 to paragraph (b): Within the
past month, an employee of the Department
of Education mailed her resume to a
university. She is thus seeking employment
with the university within the meaning of
§ 2635.603(b)(1)(ii). In the absence of specific
authorization by the agency designee in
accordance with § 2635.502(d), she may not
participate personally and substantially in an
assignment to review a grant application
submitted by the university.
§ 2635.606 Recusal based on an
arrangement concerning prospective
employment or otherwise after
negotiations.
rmajette on DSK2TPTVN1PROD with RULES
(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 he or she is employed or with
whom he or she 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 § 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 his
retirement from military service. During the
period that he remains with the Government,
the officer may not participate personally and
substantially in the administration of a
contract with that particular defense
contractor unless he has received a written
waiver 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. Her
private employer, a large corporation,
believes the job will enhance her skills and
has agreed to give her a two-year unpaid
leave of absence at the end of which she has
agreed to return to work for the corporation.
During the two-year period that she is to be
an OCC employee, the accountant will have
an arrangement concerning future
employment with the corporation that will
require her recusal from participation
personally and substantially in any particular
matter that, to her 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
§ 2635.502(c) may, in an appropriate
case, determine that an employee not
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13:45 Jul 25, 2016
Jkt 238001
covered by the preceding paragraph
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
§ 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 her the partnership position she
sought. Even though she is no longer seeking
employment with the firm, she 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, she could act impartially in the
matter outweighs the Government’s interest
in her participation.
§ 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
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Fmt 4700
Sfmt 4700
to his Government service. He receives a
telephone call from a partner in a law firm
who inquires as to whether he would be
interested in returning to private practice.
During this initial telephone call with the
law firm partner, the employee indicates that
he is interested in resuming private practice.
They 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, he must file
written notification of the negotiations with
his agency ethics official.
Example 2 to paragraph (a): The employee
in the previous example also negotiates a
possible contract with a publisher to begin
writing a textbook after he leaves
Government service. Within three business
days after commencing negotiations, the
employee must file written notification with
his agency ethics official documenting that
he is engaged 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 nonFederal 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 § 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
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
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Federal Register / Vol. 81, No. 143 / Tuesday, July 26, 2016 / Rules and Regulations
advance filing does not violate this
subpart or the principles of ethical
conduct contained in § 2635.101(b).
DEPARTMENT OF TRANSPORTATION
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 he
began negotiating for future employment
with the law firm, he was not participating
personally and substantially in a particular
matter that, to his 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 he 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 he files 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.
14 CFR Parts 25, 121, and 129
Federal Aviation Administration
rmajette on DSK2TPTVN1PROD with RULES
(d) Agreement of future employment
or compensation for the purposes of
§ 2635.607 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.
[FR Doc. 2016–17553 Filed 7–25–16; 8:45 am]
BILLING CODE 6345–03–P
VerDate Sep<11>2014
13:45 Jul 25, 2016
[Docket No.: FAA–2014–0500; Amdt. Nos.
25–143, 121–375, and 129–52]
RIN 2120–AK30
Fuel Tank Vent Fire Protection;
Correction
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule; correction.
AGENCY:
The FAA is correcting a final
rule published in the Federal Register
on June 24, 2016 (81 FR 41200). In that
final rule, the FAA amended certain
airworthiness regulations for transport
category airplanes to require fuel tank
designs that prevent a fuel tank
explosion caused by the propagation of
flames, from external fires, through the
fuel tank vents. The final rule requires
a delay of two minutes and thirty
seconds between exposure of external
fuel tank vents to ignition sources and
explosions caused by propagation of
flames into the fuel tank, thus
increasing the time available for
passenger evacuation and emergency
response. The amendments apply to
applications for new type certificates
and certain applications for amended or
supplemental type certificates. The
amendments also require certain
airplanes produced in the future and
operated by air carriers to meet the new
standards.
However, in that document, the
amendment numbers for the final rules
were incorrect, and an airplane model
number in a footnote was incorrect. This
document now posts the correct
amendment numbers and airplane
model number in the footnote.
DATES: This correction is effective on
July 26, 2016.
FOR FURTHER INFORMATION CONTACT: For
technical questions concerning this
action, contact Mike Dostert, Propulsion
and Mechanical Systems Branch, ANM–
112, Transport Airplane Directorate,
Aircraft Certification Service, Federal
Aviation Administration, 1601 Lind
Ave. SW., Renton, WA 98057–3356;
telephone (425) 227–2132; facsimile
(425) 227 1149; email Mike.Dostert@
faa.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
On June 24, 2016, the FAA published
a final rule titled, ‘‘Fuel Tank Vent Fire
Protection’’ in the Federal Register (81
FR 41200).
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48693
The intent of that rule is to prevent
fuel tank explosions caused by ignition
from external ignition sources of fuel
vapor either contained in vapor spaces 1
or exiting from vapor spaces through the
fuel tank vent outlets. Potential external
ignition sources include, but are not
limited to, ground handling equipment,
fuel fires that result from refueling
spills, or ground fires that follow a
survivable crash landing in which the
fuel tank and the vent system remain
intact. Means to prevent or delay the
propagation of flame 2 from external
sources into the fuel tank through the
fuel tank vent system 3 would also
prevent or delay fuel tank explosions
following certain accidents. These
means include flame arrestors or fuel
tank inerting. This prevention or delay
would provide additional time for the
safe evacuation of passengers from the
airplane and for emergency personnel to
provide assistance.
The rule applies to applications for
new type certificates and applications
for amended or supplemental type
certificates on significant product-level
change projects in which title 14, Code
of Federal Regulations (14 CFR) 25.975,
‘‘Fuel tank vents and carburetor vapor
vents,’’ is applicable to a changed area.
Additionally, a new operating
requirement in both 14 CFR part 121,
‘‘Operating Requirements: Domestic,
Flag, and Supplemental Operations,’’
and 14 CFR part 129, ‘‘Operations:
Foreign Air Carriers and Foreign
Operators of U.S.-Registered Aircraft
Engaged in Common Carriage,’’ applies
to airplanes that are issued an original
airworthiness certificate after a specified
date.
However, the rule published with
incorrect amendment numbers, ‘‘25–
142, 21–376, and 129–53.’’ Amendment
number 25–142 is the same amendment
number as the rule titled
‘‘Harmonization of Airworthiness
Standards—Fire Extinguishers and Class
B and F Cargo Compartments,’’ which
published in the Federal Register on
February 16, 2016 (81 FR 7698).
Amendment numbers 21–376 and 129–
53 are incorrect designations. The
correct amendment numbers for this
rule are ‘‘25–143, 121–375, and 129–
52.’’
1 A vapor space is any portion of the airplane fuel
tanks and the fuel tank vent system that, if such
tanks and system held any fuel, could contain fuel
vapor.
2 Flame propagation is the spread of a flame in
a combustible environment outward from the point
at which the combustion started.
3 A fuel tank vent system is a system that
ventilates fuel vapor from the airplane fuel tanks to
the atmosphere. A fuel tank vent system ensures
that the air and fuel pressure within the fuel tank
stay within structural limits required by § 25.975(a).
E:\FR\FM\26JYR1.SGM
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Agencies
[Federal Register Volume 81, Number 143 (Tuesday, July 26, 2016)]
[Rules and Regulations]
[Pages 48687-48693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17553]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 81, No. 143 / Tuesday, July 26, 2016 / Rules
and Regulations
[[Page 48687]]
OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2635
RIN 3209-AA04
Standards of Ethical Conduct for Employees of the Executive
Branch; Amendments to the Seeking Other Employment Rules
AGENCY: Office of Government Ethics (OGE).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Office of Government Ethics is issuing a final rule
amending portions of the Standards of Ethical Conduct for Employees of
the Executive Branch regarding seeking other employment. The final rule
incorporates past interpretive advice, updates examples, improves
clarity, and makes technical corrections. In addition, the final rule
implements the statutory notification requirements that apply to
individuals required to file public financial disclosure reports under
section 101 of the Ethics in Government Act of 1978 when they negotiate
for or have an agreement of future employment or compensation.
DATES: This final rule is effective August 25, 2016.
FOR FURTHER INFORMATION CONTACT: Elaine Newton, Associate Counsel, or
Rachel Dowell, Assistant Counsel, Office of Government Ethics, Suite
500, 1201 New York Avenue NW., Washington, DC 20005-3917; Telephone:
(202) 482-9300; TTY: (800) 877-8339; FAX: (202) 482-9237.
SUPPLEMENTARY INFORMATION:
I. Background
On February 17, 2016, the U.S. Office of Government Ethics (OGE)
published a proposed rule in the Federal Register, 81 FR 8008, Feb. 17,
2016, proposing to amend subpart F of the Standards of Ethical Conduct
for Employees of the Executive Branch regarding seeking other
employment. These regulations combine the standards imposed by a
criminal statute, 18 U.S.C. 208(a), with the standards imposed by
Executive Order 12674, as modified by Executive Order 12731. Section
208(a) of Title 18 requires an employee to recuse from participating
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. Beyond this
statutory requirement, subpart F incorporates the standards imposed by
the Executive Order, addressing issues of lack of impartiality that
require recusal from any particular matter that affects the financial
interests of a prospective employer, even where the employee's actions
in seeking employment may fall short of negotiating for employment. The
final rule also implements the notification requirements under section
17 of the Stop Trading on Congressional Knowledge Act of 2012 (STOCK
Act), Public Law 112-105, 126 Stat. 303, 5 U.S.C. app. 101 note, which
apply to employees who file public financial disclosure reports.
II. Comments
The proposed rule was published on February 17, 2016. It provided a
60-day comment period, which ended on April 18, 2016. OGE did not
receive any comments. The rationale for the proposed rule, which OGE is
now adopting as final, is explained in the preamble at: https://www.gpo.gov/fdsys/pkg/FR-2016-02-17/pdf/2016-03214.pdf.
OGE has made nine technical changes in the final rule. First, OGE
added the phrase ``personally and substantially'' in several places
within the regulation. This phrase is consistent with the statutory
language at 18 U.S.C. 208(a) and is parallel to the language that is
currently within the regulation. Second, in 5 CFR 2635.602, Example 1
to paragraph (a), OGE removed the phrase ``who is not a public filer''
to better clarify the example. Third, OGE clarified in 5 CFR 2635.602,
Example 2 to paragraph (a) that the employee is not currently
participating in any particular matters affecting the University of
Maryland. OGE further clarified that, if the employee is assigned to
participate in a particular matter affecting the University of Maryland
while she is seeking employment with the University, she must take
whatever steps are necessary to avoid working on the grant, in
accordance with Sec. 2635.604. This revised language corresponds with
5 CFR 2635.602(a) in the proposed rule. Fourth, OGE added the citation
for the Foreign Gifts and Decorations Act, 5 U.S.C. 7342, to 5 CFR
2635.602(b)(3). Fifth, OGE replaced the terms ``person'' and
``potential employer'' with the term ``prospective employer'' in 5 CFR
2635.603, Example 4 to paragraph (b) to use consistent defined terms.
Sixth, OGE added the following to 5 CFR 2635.603, Example 10 to
paragraph (b): Provided she 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. In addition, the clause ``with a response indicating an
interest in employment discussions'' was added to 5 CFR
2635.604(a)(ii). This language parallels the discussion in the
definition section of the previous regulation and corresponds with 5
CFR 2635.604, Example 3 to paragraph (a) in the proposed rule. Seventh,
OGE made a grammatical correction in 5 CFR 2635.603, Example 2 to
paragraph (c), replacing the word ``they'' with ``it.'' Eighth, OGE
clarified in 5 CFR 2635.604, Example 2 to paragraph (b) that the
employee is reviewing an application from the same pharmaceutical
company, which is seeking FDA approval for a new drug product. This
language parallels the discussion in the recusal section of the
previous regulation and corresponds with 5 CFR 2635.604(b) in the
proposed rule. Finally, OGE replaced the word ``should'' with the word
``must'' in 5 CFR 2635.604, Example 2 to paragraph (b): 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. This
language corresponds with 5 CFR 2635.604(b) in the proposed rule.
[[Page 48688]]
III. Matters of Regulatory Procedure
Regulatory Flexibility Act
As Director of the Office of Government Ethics, I certify under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) that this final rule
would not have a significant economic impact on a substantial number of
small entities because it primarily affects current Federal executive
branch employees.
Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
because this regulation does not contain information collection
requirements that require approval of the Office of Management and
Budget.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
chapter 5, subchapter II), this final rule would not significantly or
uniquely affect small governments and will not result in increased
expenditures by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more (as adjusted for
inflation) in any one year.
Executive Order 13563 and Executive Order 12866
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select the regulatory approaches that
maximize net benefits (including economic, environmental, public health
and safety effects, distributive impacts, and equity). Executive Order
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This rulemaking has been designated as a ``significant regulatory
action'' although not economically significant, under section 3(f) of
Executive Order 12866. Accordingly, this rule has been reviewed by the
Office of Management and Budget.
Executive Order 12988
As Director of the Office of Government Ethics, I have reviewed
this final rule in light of section 3 of Executive Order 12988, Civil
Justice Reform, and certify that it meets the applicable standards
provided therein.
List of Subjects in 5 CFR Part 2635
Conflict of interests, Executive Branch standards of ethical
conduct, Government employees.
Approved: July 20, 2016.
Walter M. Shaub, Jr.,
Director, Office of Government Ethics.
Accordingly, the Office of Government Ethics is amending 5 CFR part
2635 as set forth below:
PART 2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE
EXECUTIVE BRANCH
0
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.
0
2. Subpart F of part 2635 is revised to read as follows:
Subpart F--Seeking Other Employment
Sec.
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 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 this statutory requirement, 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 Stop Trading on Congressional Knowledge Act of 2012 (STOCK
Act), Public Law 112-105, 126 Stat. 303, 5 U.S.C. app. 101 note, 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
[[Page 48689]]
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 her resume to the University of
Delaware for a job opening that she heard about through a friend.
The employee has begun seeking employment. However, because she is
not participating in any particular matters affecting the University
of Delaware, she is not required to notify anyone that she has begun
seeking employment.
Example 2 to paragraph (a): The employee in the preceding
example has been approached about an employment opportunity at the
University of Maryland. Because the University of Maryland has
applied for grants on which she has been assigned to work in the
past, she wants to make certain that she does not violate the ethics
rules. The employee contacts her ethics official to discuss the
matter. The employee informs the ethics official that she is not
currently participating in any particular matters affecting the
University of Maryland. As a result, the ethics official advises the
employee that she 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 she is seeking employment
with the University, she 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. Where a prospective employer
who is a prohibited source as defined in Sec. 2635.203(d) offers to
reimburse an 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). Where a
prospective employer is a foreign government or international
organization, the employee must also ensure that he or she is in
compliance 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 her 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 his 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
these purposes, 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 definition, 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 his third year of law school. During a discussion with
his neighbor, who is a partner in a large law firm in the community,
the neighbor invited him to visit her law firm. The paralegal took
her up on the offer and met with an associate at the firm. The
associate shared with the paralegal her experiences looking for a
legal position, discussed what she does in her position at the law
firm, and explained why she chose her current law firm. There was no
discussion of possible employment with the firm. The Army paralegal
is not seeking
[[Page 48690]]
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 his
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 he made a response other than a
rejection to the communication regarding possible employment with
the Army contractor, although he has not yet begun negotiating for
employment.
Example 3 to paragraph (b): The DCAA employee and the head of
the contractor's accounting division in the previous example 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 his 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 the previous
example was recently notified that a representative of a university
has viewed his 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 he makes a response other than rejection. At
this point, the employee has begun seeking employment with the
university until he rejects the possibility of employment and all
discussions of possible employment have terminated.
Example 6 to paragraph (b): The DOE employee in the previous two
examples receives emails from various companies in response to his
online profile. He does not respond. The employee has not begun
seeking employment with the companies because he has not made a
response.
Example 7 to paragraph (b): An employee of the Centers for
Medicare & Medicaid Services (CMS) is complimented on her work by an
official of a State Health Department who asks her to call if she is
ever interested in leaving Federal service. The employee explains to
the State official that she is very happy with her job at CMS and is
not interested in another job. She thanks him for his compliment
regarding her work and adds that she'll remember his interest if she
ever decides 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 preceding
example responds by stating that she cannot discuss future
employment while she is 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, she
has 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 her 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 she 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 she withdraws her application or is
notified within the two-month period that her resume has been
rejected, she will no longer be seeking employment with the oil
company as of the date she makes such withdrawal or receives such
notification.
(c) Prospective employer means any person with whom the employee is
seeking employment. Where 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
her find another job. The search firm has just reported to the FAA
employee that it has given her 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 her prospective employer. She began
seeking employment with each airport authority upon learning its
identity and that it has been given her resume.
Example 2 to paragraph (c): An employee pays for an online
resume distribution service, which sends her resume to recruiters
that specialize in her field. The online service has just notified
her that it sent her 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
her prospective employer. She began seeking employment with each
company upon learning from the online service that Software Company
A and Software Company B had been given her 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 where 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
[[Page 48691]]
employee to serve on a panel that reviews grant applications to fund
research relating to deterioration of the ozone layer. She 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 she 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. She begins discussing possible
employment with a pharmaceutical company. The employee may not
participate personally and substantially in the development of the
regulation because she has 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 applicable to all member banks. She mails an
unsolicited letter to a member bank offering her services as a
contract consultant. Although the employee is seeking employment,
the employee may participate in this particular matter of general
applicability until she receives some response indicating an
interest in discussing her 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 he sent an unsolicited resume.
The employee may not participate personally and substantially in the
inspection because he is seeking employment and the inspection is a
particular matter involving specific parties that will affect the
textile company.
(b) Notification. An employee who becomes aware of the need to
recuse from participation in a particular matter to which the employee
has been assigned must take whatever steps are necessary to ensure that
the employee does not participate in the matter. Appropriate oral or
written notification of the employee's recusal may be made to an agency
ethics official, coworkers, or a supervisor to document and help
effectuate the employee's 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 his resume to a lab
which is a subcontractor under the VA contract, the employee should
recuse from participation in the audit. Since he cannot withdraw
from participation in the contract audit without the approval of his
supervisor, he should notify his supervisor of his need to recuse
for ethics reasons so that appropriate adjustments in his 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. Where he has authority to ask his colleague to assume
his reviewing responsibilities, he may accomplish his recusal by
transferring the work to the employee designated to cover for him.
However, to ensure that his colleague and others with whom he had
been working on the review do not seek his advice regarding the
review of the application or otherwise involve him in the matter, it
may be necessary for him to advise those individuals of his recusal.
(c) Documentation. An employee, other than a public filer, need not
file a written recusal statement unless the employee is 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 is specifically directed by an
agency ethics official or the person responsible for the employee's
assignment to file a written recusal statement. However, it is often
prudent for an employee to create a record of his or her 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, he can, in fact, accomplish his 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, he would benefit from filing a
written recusal statement with an agency ethics official or the
Commissioners of the regulatory agency and providing his
subordinates with written notification of his recusal. He 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, he must comply with the documentation
requirements set forth in Sec. 2635.607.
(d) Agency determination of substantial conflict. Where the agency
determines that the employee's action in seeking employment with a
particular person will require the employee's recusal 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. Where, 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
where 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),
she 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. Where 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
[[Page 48692]]
employee may participate in such matters only where the agency
designee has authorized in writing the employee's participation in
accordance 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 her resume to a university.
She 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), she 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 he or she is employed
or with whom he or she 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 his
retirement from military service. During the period that he remains
with the Government, the officer may not participate personally and
substantially in the administration of a contract with that
particular defense contractor unless he has received a written
waiver 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. Her private employer, a
large corporation, believes the job will enhance her skills and has
agreed to give her a two-year unpaid leave of absence at the end of
which she has agreed to return to work for the corporation. During
the two-year period that she is to be an OCC employee, the
accountant will have an arrangement concerning future employment
with the corporation that will require her recusal from
participation personally and substantially in any particular matter
that, to her 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 the preceding paragraph 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 her the partnership position she sought. Even though she
is no longer seeking employment with the firm, she 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, she could act impartially in the matter
outweighs the Government's interest in her 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 his Government service. He receives a telephone call from a
partner in a law firm who inquires as to whether he would be
interested in returning to private practice. During this initial
telephone call with the law firm partner, the employee indicates
that he is interested in resuming private practice. They 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, he must file written notification
of the negotiations with his agency ethics official.
Example 2 to paragraph (a): The employee in the previous example
also negotiates a possible contract with a publisher to begin
writing a textbook after he leaves Government service. Within three
business days after commencing negotiations, the employee must file
written notification with his agency ethics official documenting
that he is engaged 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
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
[[Page 48693]]
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 he began negotiating
for future employment with the law firm, he was not participating
personally and substantially in a particular matter that, to his
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 he 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 he files 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) Agreement of future employment or compensation for the purposes
of Sec. 2635.607 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.
[FR Doc. 2016-17553 Filed 7-25-16; 8:45 am]
BILLING CODE 6345-03-P