Standards of Ethical Conduct for Employees of the Executive Branch; Amendment to the Standards Governing Solicitation and Acceptance of Gifts from Outside Sources, 81641-81657 [2016-27036]

Agencies

• Office of Government Ethics

[Federal Register Volume 81, Number 223 (Friday, November 18, 2016)]
[Rules and Regulations]
[Pages 81641-81657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27036]



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Federal Register / Vol. 81, No. 223 / Friday, November 18, 2016 / 
Rules and Regulations

[[Page 81641]]



OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2635

RIN 3209-AA04


Standards of Ethical Conduct for Employees of the Executive 
Branch; Amendment to the Standards Governing Solicitation and 
Acceptance of Gifts from Outside Sources

AGENCY: Office of Government Ethics (OGE).

ACTION: Final rule.

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

SUMMARY: The U.S. Office of Government Ethics is issuing a final rule 
revising the portions of the Standards of Ethical Conduct for Executive 
Branch Employees that govern the solicitation and acceptance of gifts 
from outside sources. The final rule modifies the existing regulations 
to more effectively advance public confidence in the integrity of 
Federal officials. The final rule also incorporates past interpretive 
guidance, adds and updates regulatory examples, improves clarity, 
updates citations, and makes technical corrections.

DATES: This final rule is effective January 1, 2017.

FOR FURTHER INFORMATION CONTACT: Leigh J. Francis, Assistant Counsel, 
or Christopher J. Swartz, 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. Rulemaking History

    On November 27, 2015, the U.S. Office of Government Ethics (OGE) 
published for public comment a proposed rule setting forth 
comprehensive revisions to subpart B of the Standards of Ethical 
Conduct for Employees of the Executive Branch (Standards of Ethical 
Conduct), 5 CFR part 2635. 80 FR 74004 (Nov. 27, 2015). Subpart B of 
part 2635 contains the regulations governing the solicitation and 
acceptance of gifts from outside sources by officers and employees of 
the Executive Branch. These regulations implement the gift restrictions 
set forth in 5 U.S.C. 7353 and section 101(d) of Executive Order 12674, 
as modified by Executive Order 12731. The proposed rule was issued 
following OGE's retrospective review of the regulations found in 
subpart B, pursuant to section 402(b)(12) of the Ethics in Government 
Act of 1978, Public Law 95-521, codified at 5 U.S.C. Appendix IV, sec. 
402(b)(12). Prior to publishing the proposed rule, OGE consulted with 
the Office of Personnel Management and the Department of Justice in 
accordance with section 402(b) of the Ethics in Government Act and 
section 201(a) of Executive Order 12674, as modified by Executive Order 
12731, and with other officials throughout the Federal Government.
    The proposed rule provided a 60-day comment period, which ended on 
January 26, 2016. OGE received ten timely and responsive comments, 
which were submitted by four individuals, three professional 
associations, two Federal agencies, and a law firm. After carefully 
considering all comments and making appropriate modifications, and for 
the reasons set forth below and in the preamble to the proposed rule at 
https://www.gpo.gov/fdsys/pkg/FR-2015-11-27/pdf/2015-29208.pdf, OGE is 
publishing this final rule.

II. Summary of Comments and Changes to Proposed Rule

General Comments

    OGE received one comment from an individual observing that various 
references to spousal and dating relationships in the examples used 
dual-gendered relationships and gender-specific pronouns. The commenter 
expressed concern that such examples could be read as excluding same-
sex marriages or relationships. OGE treats same-sex spouses the same as 
opposite-sex spouses for the purposes of all of its regulations. OGE 
Legal Advisory LA-13-10 (Aug. 19, 2013). OGE has therefore reviewed the 
examples highlighted by the commenter and has replaced the terms 
``husband'' and ``wife'' with the gender-neutral term ``spouse.''
    Various commenters suggested that one or more of the proposed 
amendments to the rule might negatively impact the ability of the 
public to interact with Federal employees. These commenters pointed out 
the beneficial impact of this interaction and encouraged OGE to 
consider this equity in drafting gift regulations. As a general matter, 
OGE agrees with the commenters' proposition that communication between 
the Government and the public is vital to ensuring that Government 
decisions are responsive to citizen needs. Public interaction done in a 
non-preferential manner may: (1) Provide executive branch 
decisionmakers with information and data they may not otherwise 
possess; (2) identify policy options and alternatives that may not have 
been raised internally; and (3) produce better and more thoughtful 
decisions. These interactions must, however, occur in an environment 
that promotes the public's confidence in the integrity of Government 
decisionmaking. When Federal employees accept or solicit gifts from 
members of the public who have interests that are affected by the 
employee's agency, the public's confidence can be eroded as ``[s]uch 
gifts may well provide a source of illicit influence over the 
government official; in any case they create a suspicious and unhealthy 
appearance.'' The Association of the Bar of the City of New York, 
Conflict of Interest and Federal Service 219 (1960). When drafting this 
final rule, OGE has carefully considered the commenters' concerns in 
light of the important objective of promoting the public's confidence 
in the impartial administration of the Government.

Sec.  2635.201 Overview and Considerations for Declining Otherwise 
Permissible Gifts

    OGE received comments from three sources on proposed Sec.  
2635.201(b)(1). Section 2635.201(b)(1) establishes a non-binding 
standard that can assist employees in considering whether to decline an 
otherwise permissible gift. The standard encourages employees to 
consider whether their acceptance of a gift that would otherwise be 
permissible to accept would nonetheless create the appearance that 
their integrity or ability

[[Page 81642]]

to act impartially may be compromised. The duty to avoid such 
appearances is a responsibility of all executive branch employees. See 
5 CFR 2635.101(b)(1); (14).
    Based on past experience with executive branch agencies applying 
subpart B of part 2635, OGE is concerned that employees and ethics 
officials may not be sufficiently analyzing appearance concerns and, 
instead, may be focusing exclusively on whether a gift can be accepted 
under a regulatory gift exception. This kind of analysis may 
unintentionally overlook other important considerations, such as 
``whether acceptance of the gift could affect the perceived integrity 
of the employee or the credibility and legitimacy of [an] agency's 
programs.'' 80 FR 74004, 74004 (Nov. 27, 2015). The non-binding 
standard in Sec.  2635.201(b)(1) was explicitly included in subpart B 
to correct for this tendency and to enhance the overall quality of 
employees' ethical decisionmaking.
    Commenters on this section raised concerns with the new standard 
and the factors for applying the standard. OGE appreciates the concerns 
raised by commenters, which are examined in detail below. OGE has 
addressed these concerns by making appropriate adjustments to the 
standard, rather than adopting some of the commenters' requests for the 
outright removal of this section. The changes make the standard easier 
for employees to understand and apply.
    A few commenters suggested that ethics training would be more 
effective than a regulatory change in ensuring that employees consider 
appearance issues before accepting gifts. OGE fully agrees with the 
commenters' suggestions that ethics education is important. Without 
this amendment of the regulation, however, there would not be a uniform 
standard upon which to base ethics training regarding appearance issues 
in connection with gifts. Prior to this amendment, the regulation 
cautioned only that ``it is never inappropriate and frequently prudent 
for an employee to decline a gift,'' but the regulation did not 
articulate an applicable standard or any factors for employees to use 
in identifying the frequently arising circumstances when it would be 
prudent to decline a gift. OGE believes it is imperative that the 
regulatory framework itself enable and encourage employees to 
meaningfully consider the appearances of accepting gifts. By 
articulating the standard and relevant factors, the amended Sec.  
2635.201(b)(1) will increase the value and uniformity of agency ethics 
training because that standard and those factors will become a focus of 
ethics training.
    One commenter believed that the proposed standard creates confusion 
because it moves away from the previous system of bright-line rules 
regarding gift acceptance. Specifically, the commenter requested that 
OGE amend the regulation in a way that sets out definitive rules as to 
whether ``a gift is simply permissible or impermissible, without 
further parsing the permissible gifts into additional categories, i.e., 
technically permissible and actually permissible.'' OGE does not 
believe that the non-binding standard will create confusion because OGE 
has maintained the clear, uniform, and objective rules that are found 
in the current regulation. Section 2635.201(b)(1) augments those rules 
by encouraging employees to consider the appearances of their actions. 
The posited distinction between ``technically permissible'' and 
``actually permissible'' is inaccurate because an employee will not 
face disciplinary action in the event that someone later subjectively 
disagrees with the employee's analysis. The bright-line rules provide a 
floor for ethical behavior, and the appearance analysis under Sec.  
2635.201(b) provides a mechanism with which to reach for a stronger, 
values-based ethical culture. This framework provides the certainty and 
uniformity of the existing rules, while furthering the underlying 
objective of increasing public trust by improving the ethical 
decisionmaking of employees.
    The commenters also suggested that employees will feel compelled by 
this non-binding standard to always decline legally permissible gifts. 
OGE does not agree that the standard creates a presumption that all 
legally permissible gifts should be declined. Although some employees 
will decline legally permissible gifts after carefully analyzing them 
under the standard that Sec.  2635.201(b)(1) establishes, the standard 
does not change the fact that the determination as to whether a legally 
permissible gift should be accepted is the employee's to make. Section 
2635.201(b)(1) is designed to increase uniformity and promote public 
trust by articulating factors, which are informed by the ethical values 
consistent with the executive branch's Principles of Ethical Conduct, 
in order to guide the employee's decisionmaking process. This section 
provides employees an effective means of adequately assessing whether, 
notwithstanding a gift exception, the specific factual circumstances 
may raise appearance concerns weighing against acceptance of a gift.
    In light of the comments referenced above, however, OGE has 
streamlined the language of Sec.  2635.201(b). OGE has also clarified 
the overarching objective of that provision by placing the emphasis in 
Sec.  2635.201(b)(1) on an assessment as to whether ``a reasonable 
person with knowledge of the relevant facts would question the 
employee's integrity or impartiality.'' In the proposed rule, 
substantially similar language appeared in the list of factors in Sec.  
2635.201(b)(2). Because this language articulates the standard to be 
applied, however, it is more appropriately included in paragraph 
(b)(1), which establishes the standard, than in paragraph (b)(2), which 
provides factors for determining whether the standard has been met. 
Using this ``reasonable person'' language in the articulated standard 
has the added benefit of addressing a commenter's concern regarding the 
potential for confusion, as executive branch employees have extensive 
experience applying this particular standard, which has long been used 
to address appearance concerns under Sec.  2635.502. At the end of 
Sec.  2635.201(b)(1), OGE has also added ``as a result of accepting the 
gift'' in order to tie the appearance concerns to the specific action 
giving rise to them.
    As a final note, one commenter was concerned that the application 
of the reasonable person standard could vary, resulting in the 
``unequal application'' of the standard. Reliance on a reasonable 
person standard, however, is not a novel approach in Government ethics. 
The Standards of Ethical Conduct at part 2635 have successfully 
employed the reasonable person standard for over two decades. See 5 CFR 
2635.101(b)(14); 2635.502(a); cf. 2635.702(b) (``that could reasonably 
be construed''). In fact, when OGE first proposed the Standards of 
Ethical Conduct in 1991, OGE noted that the use of the reasonable 
person standard reflected both ``case law and longstanding practice,'' 
which ``temper the appearance standard by reference to the perspective 
of a reasonable person with knowledge of the relevant facts.'' 56 FR 
33778, 33779 (July 23, 1991). OGE explained that the use of the 
reasonable person standard ``is intended to ensure that the conduct of 
employees is judged by a standard of reasonableness.'' Id. That 
reasoning continues to hold today.

Factors for Applying the Sec.  2635.201(b)(1) Standard

    Two commenters requested that OGE remove Sec.  2635.201(b)(2), 
which sets out factors that employees may consider when determining 
whether to decline

[[Page 81643]]

an otherwise permissible gift. These commenters requested the factors 
be removed because of their concern that the factors listed in Sec.  
2635.201(b)(2) are too complex and confusing, and will inevitably lead 
employees to decline permissible gifts. OGE is sensitive to these 
concerns and has revised the language to address them.
    OGE reviewed each of the proposed factors closely to determine 
whether any could be removed, streamlined, or changed to eliminate 
unnecessary complexity or confusion. OGE removed several factors that 
appeared in the proposed rule on the basis that clarification of the 
reasonable person standard in Sec.  2635.201(b)(1) in the final rule 
has rendered them unnecessary:
     Whether acceptance of the gift would lead the employee to 
feel a sense of obligation to the donor;
     Whether acceptance of the gift would cause a reasonable 
person to question the employee's ability to act impartially; and
     Whether acceptance of the gift would interfere with the 
employee's conscientious performance of official duties.
    See 80 FR 74004, 74010 (Nov. 27, 2015). At the same time, OGE has 
added a straightforward factor focusing on whether ``[t]he timing of 
the gift creates the appearance that the donor is seeking to influence 
an official action,'' in order to provide a concrete example intended 
to remind employees that the timing of a gift can create the appearance 
that a person is seeking to influence the decisionmaking process.
    OGE has also revised the factor articulated at Sec.  
2635.201(b)(2)(iv). The proposed language read: ``Whether acceptance of 
the gift would reasonably create an appearance that the employee is 
providing the donor with preferential treatment or access to the 
Government.'' OGE's intent was that the word ``preferential'' would be 
read to modify both ``treatment'' and ``access.'' In light of concerns 
the commenters expressed regarding the clarity of Sec.  2635.201(b)(2) 
generally, OGE has determined that the proposed language could have 
been clearer in this respect. In reviewing this language, OGE also 
noted that the phrase ``preferential treatment'' is redundant of the 
phrase ``preferential . . . access to the Government,'' in that the 
specific preferential treatment at issue is the preferential access 
that the donor may be perceived as having received. The concern is that 
a donor may offer a gift that, by its nature, would provide the donor 
with significantly disproportionate access to the employee. This 
concern can arise in connection with gifts such as frequent lunches, 
trips, social invitations, free attendance at widely attended 
gatherings, and other items. If such gifts were to result in an 
employee spending considerable time with a donor, the donor may appear 
to have inordinate opportunities to discuss matters of interest to the 
donor and, thereby, unduly influence the employee. Accordingly, OGE has 
simplified this language and made it more specific. The language at 
Sec.  2635.201(b)(2)(iv) now reads: ``Acceptance of the gift would 
provide the donor with significantly disproportionate access.'' This 
language should not be read as discouraging employees from attending 
events merely because they present opportunities to discuss official 
business. There is no requirement to provide exact parity in all cases 
with regard to the level of access afforded to those with competing 
viewpoints, but there is a value in guarding against any person, or 
multiple persons with a common interest or viewpoint, from enjoying 
significantly disproportionate access as a result of having given gifts 
to employees. An employee who is concerned about the level of access 
provided to those with a particular viewpoint may choose to decline the 
offered gifts or may take steps to ensure that those with different 
viewpoints are able to communicate with the employee, such as by taking 
their telephone calls, agreeing to meet with them in the employee's 
office, or convening a public forum.
    OGE has also removed the following two factors:
     With regard to a gift of free attendance at an event, 
whether the Government is also providing persons with views or 
interests that differ from those of the donor with access to the 
Government;
     With regard to a gift of free attendance at an event, 
whether the event is open to interested members of the public or 
representatives of the news media.

80 FR 74004, 74010 (Nov. 27, 2015). Although OGE continues to believe 
these factors are important when an employee considers any gift of free 
attendance, their inclusion in Sec.  2635.201(b)(2) is unnecessary 
given their more limited application. Furthermore, these factors often 
are most relevant to free attendance at widely attended gatherings 
under Sec.  2635.204(g), where similar factors already exist.

    OGE believes that these changes to Sec.  2635.201(b)(2) diminish 
the potential for confusion created by the longer list of factors 
included in the proposed rule while continuing to provide guidance as 
to how employees should apply the standard in Sec.  2635.201(b)(1) in 
the areas that OGE believes raise the greatest potential for appearance 
problems.

Receipt of Independent Advice From an Ethics Official Under Sec.  
2635.201(b)(4)

    One commenter raised a concern about the language OGE used in Sec.  
2635.201(b)(4), which reminds employees to contact an appropriate 
agency ethics official if they have questions regarding whether 
acceptance of a gift is permissible and advisable. The commenter was 
concerned that the statement ``[e]mployees who have questions regarding 
. . . whether the employee should decline a gift that would otherwise 
be permitted under an exception [emphasis in original],'' seemed to 
indicate that there are ``right and wrong'' conclusions. OGE has not 
deleted the reference to advice from an ethics official because the 
regulation is sufficiently clear that the decision to decline or accept 
an otherwise permissible gift is the employee's to make. Although 
consulting an ethics official may assist the employee in making that 
decision, the regulation does not require such consultation. Section 
2635.201(b)(3) explicitly states that an employee who does not decline 
a permissible gift under Sec.  2635.201(b) has not violated the 
Standards of Ethical Conduct. At the same time, OGE believes that the 
reminder as to the availability of ethics advice will prove helpful to 
employees. Ethics officials can provide employees with valuable 
insights and guidance in assessing the reasonable person standard in 
individual cases because they possess experience in Government ethics, 
awareness as to how the Standards of Ethical Conduct are applied across 
the agency and across the executive branch, and knowledge of 
circumstances relevant to evaluating the effect on the public's trust 
of accepting certain gifts.
    Nevertheless, to partly address the commenter's concern, OGE has 
deleted the reference to Sec.  2635.107(b) at the end of Sec.  
2635.201(b)(4). After considering the commenter's concern, OGE 
recognized that the reference to Sec.  2635.107(b) was potentially 
confusing because that section provides a safe harbor against 
disciplinary action in certain circumstances when an employee has 
consulted an agency ethics official. As Sec.  2635.201(b)(3) makes 
clear, however, employees may not be disciplined under this provision 
and have no need for the safe harbor provision in connection with the 
appearance analysis under Sec.  2635.201(b).

[[Page 81644]]

Examples to Sec.  2635.201(b)

    One commenter suggested that OGE should add examples to the 
regulation to indicate how to apply new Sec.  2635.201(b). OGE has 
added Example 1 to paragraph (b) in order to illustrate how an employee 
may use the standard and factors found in Sec.  2635.201(b). The same 
commenter also suggested that OGE provide additional guidance documents 
to further assist agency officials and employees in understanding how 
to apply the standard found in Sec.  2635.201(b). OGE intends to 
provide additional guidance and training as needed on an ongoing basis.

5 CFR 2635.202 General Prohibition on Solicitation or Acceptance of 
Gifts

    OGE received no comments on Sec.  2635.202. OGE is adopting the 
amendments to this section as proposed for the reasons described in the 
preamble to the proposed rule. A small change to Example 1 to paragraph 
(c) was made after the Supreme Court's recent decision in McDonnell v. 
United States, 579 U.S. __ 195 L. Ed. 2d 639 (2016), which limited the 
scope of the term ``official act'' as used in 18 U.S.C. 201(a)(3).

5 CFR 2635.203 Definitions

    OGE received a number of comments on the definitions of the terms 
``gift,'' ``market value,'' ``indirectly solicited or accepted,'' and 
``free attendance.'' In regard to the definition of ``gift,'' all 
comments focused on the exclusions to the definition. The comments for 
these terms are separately addressed in greater detail below.

Definition of ``Gift'': Exclusion for Modest Items of Food and 
Refreshment

    OGE received three comments on proposed Example 1 to Sec.  
2635.203(b)(1). Section 2635.203(b)(1) explains that the definition of 
``gift'' for purposes of subpart B excludes ``[m]odest items of food 
and refreshments, such as soft drinks, coffee and donuts, offered other 
than as part of a meal.'' Proposed Example 1 to paragraph (b)(1) was 
included for the purpose of making explicit OGE's longstanding 
interpretation that alcohol is not a modest item of refreshment under 
Sec.  2635.203(b)(1). Because none of the beverages currently listed in 
the regulation are alcoholic and the exclusion specifically refers to 
``soft,'' meaning non-alcoholic drinks, OGE has long treated alcoholic 
beverages as not being part of the class of modest refreshments covered 
by the exclusion.
    All three of the commenters were concerned that the example seemed 
to indicate that attendance at an event where alcohol is served is per 
se ``improper.'' To address this concern, OGE has removed the example 
altogether and amended the regulatory text of Sec.  2635.203(b)(1) to 
exclude from the definition of ``gift'' ``[m]odest items of food and 
non-alcoholic refreshments, such as soft drinks, coffee and donuts, 
offered other than as part of a meal.'' This amendment codifies the 
interpretation that was previously set out in the proposed example. 
Although the carve-out from the definition of ``gift'' at Sec.  
2635.203(b)(1) for modest refreshments is limited to non-alcoholic 
beverages, this limitation does not impact the gift exceptions at 5 CFR 
2635.204.

Definition of ``Gift'': Exclusion for Greeting Cards and Presentation 
Items With Little Intrinsic Value

    OGE received two comments on the proposed revisions to Sec.  
2635.203(b)(2). The first comment, from a professional association, was 
in favor of the proposal to modify the exclusion for presentation 
items. The second comment, from an individual, requested that OGE 
further amend the regulation to state that ``items with little 
intrinsic value . . . intended primarily for presentation'' are 
excluded from the definition of ``gift'' only if they ``do not have 
significant independent use.'' The individual noted that OGE used this 
phrase in proposed Example 2 to paragraph (b)(2) when explaining why a 
$25 portable music player would not be excluded from the definition of 
``gift'' under this provision. OGE has decided not to adopt this 
change. As evidenced by the example, the fact that an item lacks other 
uses is a legitimate consideration in support of a finding that the 
item is intended ``primarily for presentation.'' The regulation does 
not, however, require that an item lack any potential other use in 
order to qualify as an item intended ``primarily for presentation.''

Definition of ``Gift'': Exclusion for Items Purchased by the Government 
or Secured Under Government Contract

    OGE received one comment on the proposed example to Sec.  
2635.203(b)(7), which states that Federal employees may retain certain 
``travel promotional items, such as frequent flyer miles, received as a 
result of [] official travel, if done in accordance with 5 U.S.C. 5702, 
note, and 41 CFR part 301-53.'' The commenter explained: (1) That 
employees who receive such frequent flyer miles should be encouraged to 
use such frequent flyer miles for subsequent official travel; and (2) 
that no personal use should be allowed for employees of the Federal 
Aviation Administration. OGE has not changed the substance of this 
example. As explained in the example, Congress passed a statute 
specifically permitting employees to accept these types of travel-
related benefits. The General Services Administration (GSA) has primary 
authority for implementing that statute, and has done so through 
regulations found at 41 CFR part 301-53. To partly address the 
commenter's concern, however, OGE revised the language ``if done in 
accordance with 5 U.S.C. 5702, note, and 41 CFR part 301-53,'' to read 
``to the extent permitted by 5 U.S.C. 5702, note, and 41 CFR part 301-
53,'' in order to clarify that OGE's regulation does not create any new 
authority for accepting these travel related benefits beyond what 
Congress and GSA provided for in the statute and the regulation.

Definition of ``Gift'': Exclusion for Free Attendance Provided to 
Employees Speaking in Their Official Capacity and Extension to Personal 
Capacity Speaking Events

    One commenter requested that OGE expand Sec.  2635.203(b)(8) to 
exclude from the definition of ``gift'' free attendance at events where 
employees are speaking in their personal capacity on matters that are 
unrelated to their duties. The commenter noted that Sec.  
2635.203(b)(8) excludes free attendance in connection with official 
speaking engagements and requested a parallel exclusion for personal 
speaking engagements. OGE has not adopted this change. Normally, the 
Standards of Ethical Conduct would not prohibit an employee from 
accepting free attendance at an event at which the employee has a bona 
fide arrangement to speak in a personal capacity. This subject is 
addressed in Sec.  2635.807(a)(2)(iii)(B), which permits employees to 
accept a waiver of attendance fees for speeches related to their 
official duties, and OGE has traditionally applied Sec.  2635.202 
consistently with that provision of Sec.  2635.807 for speeches 
unrelated to official duties.

Definition of ``Market Value''

    OGE received two comments on the proposed amendments to the 
definition of ``market value,'' as used throughout the regulation, as 
well as the examples following the definition. OGE proposed to amend 
``market value'' to mean ``the cost that a member of the general public 
would reasonably expect to incur to purchase the gift.'' One commenter 
was generally in favor of the amendment, as well as the examples 
illustrating how the definition would be applied in

[[Page 81645]]

various circumstances. The other commenter noted that Example 4 to 
paragraph (c) did not explicitly state that the tickets offered to the 
employee lacked a face value. OGE has amended Example 4 to indicate 
that the tickets provided to the employee in the example do not have a 
face value, and therefore the general rule used for calculating the 
market value of a ticket would not apply. OGE also amended Example 4 to 
further clarify the method of calculating the market value of such 
tickets.

Definition of ``Indirectly Solicited or Accepted''

    OGE received one comment on Sec.  2635.203(f), which establishes 
when a gift will be deemed to have been accepted or solicited 
indirectly. The commenter was in favor of OGE's amendment at Sec.  
2635.203(f)(2). OGE has adopted the language as proposed for the 
reasons set forth in the preamble to the proposed rule.

Definition of ``Free Attendance''

    OGE received two comments in favor of the proposed subpart-wide 
definition of ``free attendance'' at Sec.  2635.203(g). Both commenters 
supported OGE's amendment allowing employees who are presenting at an 
event to accept attendance at ``speakers' meals'' provided by the 
sponsor of the event. OGE has adopted the language as proposed for the 
reasons set forth in the preamble to the proposed rule.

Sec.  2635.204 Exceptions to the Prohibition for the Acceptance of 
Certain Gifts

    Although OGE did not receive a specific comment on the title of the 
regulation, OGE has made a technical change to the title of this 
section for clarity and to more closely track the substance of the 
regulation.
    OGE has also revised the introductory text to remind employees to 
consider the standard found in Sec.  2635.201(b) when determining 
whether to rely on an exception. The revised language is modeled on the 
introductory text found in the current version of Sec.  2635.204, but 
cross-references Sec.  2635.201(b).

Gifts of $20 or Less

    OGE received two comments requesting that OGE raise the regulatory 
dollar thresholds found in the gift exception at Sec.  2635.204(a). 
Pursuant to Sec.  2635.204(a), an employee may accept otherwise 
prohibited gifts not exceeding $20 per occasion so long as he or she 
does not accept more than $50 worth of gifts from the same person per 
year. In support of this request, one commenter pointed out the effect 
that inflation has had on the value of this de minimis threshold.
    OGE carefully considered these commenters' suggestions. As OGE 
explained when it issued the final gift regulations, the de minimis 
exception was included to remove the need for a ``laundry list of 
exceptions for small, unobjectionable gifts.'' 57 FR 35006, 35016 (Aug. 
7, 1992). The de minimis exception was intended to provide a uniform 
means for employees to accept only inexpensive and innocuous gifts on 
an infrequent basis. Id. OGE believes that the current dollar threshold 
continues to meet that narrow objective. OGE is concerned that raising 
the de minimis would encourage employees to accept, and private 
citizens to give, more expensive and more frequent gifts than employees 
are currently able to accept. Although some gifts that once fell at the 
higher end of the spectrum may now be precluded, OGE believes that the 
$20 threshold continues to be workable, permitting employees to accept 
on an infrequent basis most of the types of items that can be 
characterized as inexpensive and innocuous. In addition, the existing 
exclusions and exceptions from the gift rules permit employees to 
accept targeted items that are over $20 in carefully restricted 
circumstances (e.g., a gift from an employee's spouse). See 5 CFR 
2635.204(b). Although $20 may not buy the sort of lunch that it bought 
in 1992 when the regulation was issued, no compelling argument has been 
made to support a conclusion that raising the cap on the blanket de 
minimis exception, in order to allow employees to accept more expensive 
and more frequent gifts, would strengthen the integrity of the 
executive branch's operations. Accordingly, OGE has decided not to 
adopt the commenters' suggestions to increase the cap.

Gifts Based on a Personal Relationship

    OGE received one comment in support of the new Example 3 to Sec.  
2635.204(b), which provides guidance on assessing whether a gift 
provided by a social media contact falls within the bounds of the gift 
exception. OGE has adopted the text of Sec.  2635.204(b) substantially 
as proposed for the reasons set forth in the preamble to the proposed 
rule.

Awards and Honorary Degrees

    OGE did not make changes based on comments received from two 
individuals on proposed Sec.  2635.204(d). Section 2635.204(d) permits 
employees to accept gifts of certain awards and honorary degrees, 
including items incident to such awards and degrees. The first 
commenter suggested that OGE relocate the two examples following 
paragraph (d)(1) so that they would appear after paragraph (d)(2). OGE 
has not adopted the suggestion. These examples address paragraph 
(d)(1), which establishes the several requirements for accepting 
awards, and do not specifically address paragraph (d)(2), which defines 
the term ``established program of recognition.''
    The second commenter addressed the acceptance of qualifying 
honorary degrees from certain ``foreign institution[s] of higher 
education.'' See 80 FR 74004, 74007 (Nov. 27, 2015). The commenter 
suggested that OGE clarify the basis of the Government's concerns 
regarding the acceptance of emoluments from foreign governments. OGE 
has not adopted this change because the prohibition stems from the 
Emoluments Clause of the United States Constitution. See U.S. Const., 
art. 1, sec. 9, cl. 8. OGE is not the appropriate authority to 
delineate the basis for specific provisions of the Constitution.

Gifts Based on Outside Business or Employment Relationships

    OGE received one comment on the proposed amendments to Sec.  
2635.204(e), which sets forth various exceptions to the general 
prohibitions on accepting and soliciting gifts when such gifts are 
offered as a result of an outside business or employment relationship. 
The commenter was generally in favor of the amendments. OGE has 
retained the exception as proposed for the reasons set out in the 
preamble to the proposed rule.

Gifts of Free Attendance to Widely Attended Gatherings

    OGE received a number of comments related to the exception at Sec.  
2635.204(g), permitting employees to accept offers of free attendance 
to widely attended gatherings (WAGs) if certain criteria are met. In 
the proposed rule, OGE presented a number of amendments to the WAG, 
including changes to: (1) Make it clear that an event does not qualify 
as a WAG if it does not present ``an opportunity to exchange ideas and 
views among invited persons''; (2) require employees to obtain written 
authorizations before accepting gifts of free attendance at WAGs; and 
(3) require agency designees to weigh the agency's interest in 
employees' attendance at WAGs against the possibility that acceptance 
of gifts of free attendance will influence their decisionmaking or 
create the appearance that they will be influenced in their 
decisionmaking.

[[Page 81646]]

    One commenter expressed concern about the proposed amendment to the 
definition of ``widely attended gatherings.'' The proposed language 
clarifies that events do not qualify as WAGs unless there is ``an 
opportunity to exchange ideas and views among invited persons.'' The 
commenter suggested that this language would narrow the rule to apply 
to only ``panel or roundtable events.'' OGE believes that this is a 
mischaracterization of the regulatory amendment. Nothing in the 
amendment would narrow the definition exclusively to roundtable or 
panel events. The amendment reflects only OGE's longstanding 
interpretation that the event must present an opportunity for an 
``exchange'' or ``interchange'' of ideas among attendees. See OGE 
Informal Advisory Opinion 07 x 14 (Dec. 5, 2007).
    Several commenters objected to the change requiring written 
authorizations because it might increase the workload of ethics 
officials. Three commenters raised workload concerns in connection with 
the requirement that an employee obtain a written authorization from an 
agency designee prior to accepting free attendance to a WAG, though one 
commenter acknowledged that a requirement to obtain written 
authorization ``protects both the employee and the private sector 
sponsors.'' OGE has not eliminated the requirement to obtain written 
authorization before an employee attends a WAG. Any additional burden 
on ethics officials will not be so substantial as to outweigh the 
potential benefits of recording WAG authorizations. In this regard, it 
is worth noting that agency ethics officials have long been required to 
make several of the findings required by Sec.  2635.204(g)(3), as 
proposed. In addition, some agencies have already adopted the practice 
of recording all WAG authorizations in writing. In any case, most of 
the work required of ethics officials under the amended regulation will 
stem from the requirement to make a number of determinations that have 
always been required under the regulation. After making these 
determinations, ethics officials have discretion to determine the level 
of detail to include in the written authorization. The amended 
regulation does not, however, require a ``formal written opinion'' as 
one commenter suggested.
    One commenter noted that the amended rule requires agencies to 
determine in all cases whether ``[t]he agency's interest in the 
employee's attendance outweighs the concern that the employee may be, 
or may appear to be, improperly influenced in the performance of [his 
or her] official duties.'' The regulation did not previously require 
this determination in every case, but agency officials have always been 
charged with evaluating ``all the relevant circumstances of any 
proposed WAG before an employee is authorized to accept free 
attendance.'' OGE Informal Advisory Opinion 07 x 14 (Dec. 5, 2007). The 
determination now required in all cases is consistent with this 
preexisting requirement, inasmuch as improper influence, or the 
appearance of improper influence, would necessarily have been a 
relevant circumstance to be analyzed under the regulation even prior to 
the current amendment.
    Two commenters expressed concern that ethics officials will approve 
attendance at fewer events for substantive reasons. However, the new 
regulation does not significantly change the substantive analysis, 
which remains focused, as it always has been, on the potential for 
improper influence and the appearance of improper influence. 
Disapproval of a gift of free attendance, when an agency has determined 
that an employee's acceptance of the gift would result in improper 
influence or the appearance of improper influence, is a proper outcome 
under any responsible ethics regime.
    OGE received two additional comments related to Sec.  2635.204(g). 
One commenter posited a hypothetical case under Sec.  2635.204(g)(1). 
OGE is not in a position to assess the interests of a hypothetical 
agency or other relevant factual circumstances not specified in the 
commenter's hypothetical. At the request of the other commenter, 
however, OGE has inserted a reference to the written determination 
requirement in proposed Example 4 to paragraph (g).

Social Invitations

    OGE received one comment from an agency on proposed Sec.  
2635.204(h), which permits an employee and accompanying guests to 
accept certain benefits that are provided at a ``social event'' so long 
as the person extending the invitation is not a prohibited source. The 
proposed rule added a requirement that employees receive a written 
determination that such attendance would not cause a reasonable person 
to question the employee's integrity if the event is sponsored by, or 
the invitation is from, an organization. The commenting agency 
questioned the purpose of this amendment and suggested that it could 
increase the workload of agency ethics officials.
    Although OGE understands the programmatic consideration raised by 
the commenter, OGE does not believe that those concerns weigh 
significantly against the written determination requirement. In many 
cases, OGE believes that the analysis as to whether a reasonable person 
would question the employee's integrity or impartiality in attending 
will be relatively easy to assess, particularly given that the offeror 
cannot be a prohibited source. Likewise, the standard should be easier 
to meet if the circumstances indicate that the event is for purely 
social reasons or is open to a wide variety of attendees. Moreover, 
ethics officials have discretion to determine the level of detail to 
include in the written authorization and to choose an appropriate 
means, such as email, for transmitting the authorization. OGE does not, 
therefore, believe that the amended regulation will substantially 
increase the burden on ethics officials. At the same time, there is a 
heightened risk for, at a minimum, an appearance that the motivation 
for the gift is to advance a business objective when the sponsor of the 
event, or offeror of the invitation, is an organization. For this 
reason, OGE believes that the additional requirement with regard to 
organizations is warranted.
    OGE has made three technical changes to the language of this 
exception for consistency with other sections and for clarity. First, 
OGE added the phrase ``with knowledge of the relevant facts'' to the 
language in Sec.  2635.204(h)(3), which establishes a reasonable person 
standard for consistency with the wording of the reasonable person 
standard in Sec.  2635.201(b) and elsewhere in the Standards of Ethical 
Conduct. See 5 CFR 2635.101(b)(14); 2635.501; 2635.502(a); 2635.502(c). 
Second, OGE changed ``makes'' to ``has made'' in Sec.  2635.204(h)(3) 
in order to clarify that the determination to allow an employee to 
attend the social event must be made before the employee actually 
attends the event. Third, OGE replaced the legal citation to Sec.  
2635.201(b) at the end of the social invitations exception with the 
following plain language phrase: ``consistent with Sec.  2635.201(b).'' 
None of these three technical changes alters what OGE intended to be 
the substantive meaning of the regulation.

Gifts Accepted Under Specific Statutory Authority

    OGE has made a technical correction to Sec.  2635.204(l)(1) so that 
the language tracks the interpreting regulation for 5 U.S.C. 4111 at 
part 410 of this title.

[[Page 81647]]

Informational Materials

    Two professional associations and an individual commented on the 
new exception at Sec.  2635.204(m). The exception permits employees to 
accept qualifying gifts of informational materials. The exception also 
sets out certain procedural safeguards and defines what constitutes 
``informational materials'' for the purposes of this provision.
    One professional association welcomed the addition of the new 
exception on the basis that it will allow a flow of useful information 
to employees. The second professional association also supported the 
new exception, but requested that OGE amend the rule in two ways: (1) 
Clarify that the rule would permit the acceptance of ``marketing and 
promotional materials''; and (2) clarify that when a gift of 
informational materials exceeds $100, an agency may authorize the 
employee to accept the gift on behalf of the agency if the agency has 
separate statutory authority. OGE has decided not to revise the 
proposed exception to include ``marketing and promotional materials'' 
as a specific category of acceptable informational materials. Whether 
an item qualifies for the exception will depend on whether the factual 
circumstances support a determination that the item offered meets the 
specific criteria set forth in Sec.  2635.204(m). OGE has likewise 
decided not to amend the regulatory text to clarify that agencies may 
accept gifts of informational materials when the gift exceeds $100. 
Agencies with gift acceptance authorities have established their own 
procedures and policies regarding the acceptance of such gifts 
consistent with their interpretations of those authorities, and OGE is 
not in a position to direct another agency on the use of its gift 
acceptance authority.
    Another commenter raised two general concerns with the regulatory 
exception. The first concern is that employees who accept informational 
materials might sell them. Although it might prove somewhat difficult 
to sell used informational materials, OGE is generally sensitive to the 
underlying concern expressed by the commenter. To address this concern, 
OGE has amended the regulation to add an additional limitation on the 
use of this exception. As revised, the exception will now require 
employees to obtain written authorization from the agency designee 
before accepting informational materials from a single person that in 
the aggregate exceed $100 in a calendar year. The commenter's other 
concern is that gifts relating to an employee's official duties, the 
agency's mission, or a subject matter of interest to the agency ``ought 
to be a gift to the Agency.'' The commenter questions whether such 
gifts might be construed as augmenting an agency's appropriations. Such 
gifts would not implicate augmentation concerns, however, because, as 
with all of OGE's regulatory gift exceptions, the items accepted are 
for personal use, not the agency's use.
    Following careful review of the regulation, OGE has also 
reorganized Sec.  2635.204(m) to move the limitations on what 
constitutes permissible ``informational materials'' to Sec.  
2635.204(m)(2), which contains the definition of ``informational 
materials.'' OGE refined the language indicating that, to qualify as 
``informational material,'' an item must be ``primarily provided for 
educational or instructive purposes,'' changing it to state more 
clearly that the item must be ``educational or instructive in nature.'' 
As previously written, the regulation could have been misconstrued as 
requiring employees to ascertain the donor's intent in offering an 
item. As modified, the regulation now makes clear that the focus is on 
the objective nature of the gift, and not the subjective intent of the 
donor. A corresponding change replaces ``not including,'' with ``Are 
not primarily,'' at the beginning of the phrase ``Are not primarily 
created for entertainment, display, or decoration.'' This change is 
intended to avoid excluding items that are clearly educational or 
instructive in nature but may have some tangential or incidental 
qualities that could arguably be characterized as entertaining or 
visually attractive. OGE believes this modification will make the rule 
easier to understand and apply.
    OGE further reorganized the exception to reduce its structural 
complexity. As proposed, Sec.  2635.204(m) had several tiers, 
including: a first tier denoted by numbers, such as the number ``(2)''; 
a second tier denoted by lowercase roman numerals, such as the numeral 
``(ii)''; a third tier denoted by capital letters, such as the letter 
``(B)''; and a fourth tier denoted again by numbers, such as the number 
``(2).'' By reorganizing the language of this section, OGE was able to 
eliminate the fourth tier.
    OGE has made four other technical changes for consistency and 
clarity. First, OGE used the word ``person'' in paragraphs (m)(1)(i) 
and (ii) to be consistent with the language in Sec.  2635.204(a), when 
aggregating gifts. Second, OGE changed the language ``an agency 
designee makes a written determination that,'' at Sec.  
2635.204(m)(1)(ii)(B) of the proposed rule, to ``an agency designee has 
made a written determination after finding that,'' now at Sec.  
2635.204(m)(1)(ii). The change makes the language of this paragraph 
consistent with the language used in Sec.  2635.204(g)(3) and Sec.  
2635.204(h)(3). Third, OGE has added ``provided that'' to the opening 
language of Sec.  2635.204(m)(1) in order to clarify that the $100 
limit in Sec.  2635.204(m)(1)(i) applies in every case unless an 
employee first obtains a written determination under Sec.  
2635.204(m)(1)(ii). Fourth, OGE has revised the reference to ``programs 
and operations'' of the agency so that it reads ``programs or 
operations'' of the agency. It was not OGE's intention to require that 
the subject matter relate to both a program and an operation, or to 
require that employees somehow distinguish ``programs'' from 
``operations.''

5 CFR 2635.205 Limitations on Use of Exceptions

    OGE received no comments on Sec.  2635.205. OGE is adopting the 
amendments to this section as proposed for the reasons set forth in the 
preamble to the proposed rule. OGE, however, has replaced the period 
with a semi-colon in the phrase: ``Accept a gift in violation of any 
statute; relevant statutes applicable to all employees include, but are 
not limited to,'' found at Sec.  2635.205(d). OGE has made this change 
for clarity because paragraph (d) in that section is part of a longer 
list that is connected by a semi-colon and the word ``or'' after 
paragraph (e) in that same section. By eliminating the period, OGE 
seeks to ensure that the period is not misconstrued as invalidating 
paragraphs (e) and (f) in the remainder of that list.

5 CFR 2635.206 Proper Disposition of Prohibited Gifts

    OGE received four comments on Sec.  2635.206, which explains what 
steps an employee must take to properly dispose of a prohibited gift. 
OGE amended this section to provide additional guidance on what steps 
are required to comply with the disposition authorities. One commenter 
was generally supportive of the additional guidance provided by OGE. 
Three commenters expressed concern that OGE's amendment of Sec.  
2635.206(a)(1) to allow employees to destroy prohibited tangible gifts 
worth $100 or less was wasteful. These three commenters also 
recommended that OGE amend Sec.  2635.206(a)(1) to permit employees to 
donate prohibited tangible gifts worth $100 or less to charity.

[[Page 81648]]

    For the following reasons, OGE has not accepted the commenters' 
suggestions. Allowing the destruction of relatively low-value, tangible 
gifts provides useful flexibility, while continuing to prohibit 
employees from retaining impermissible gifts. Setting the value 
threshold at $100 establishes a reasonable range that imposes minimal 
administrative burden in determining whether most low value items 
qualify for destruction. Setting the threshold far below that level 
would increase transaction costs because official time would 
necessarily have to be expended researching the precise market value of 
inexpensive items in order to determine whether they could be 
destroyed. It bears noting that, as is explained in Sec.  2635.206(a), 
an employee is not required to destroy prohibited gifts; destruction is 
only one of several authorized options for disposition. Other options 
include returning the gift to the donor, paying the donor the gift's 
market value, or not accepting the gift in the first instance. Whenever 
the value of an item approaches the higher end of the $100 range, 
employees and agency ethics officials may be disinclined to destroy the 
item; in fact, the administrative burden of researching the item's 
precise market value in order to avoid exceeding the permissible value 
threshold creates a natural incentive to choose another option for 
disposition of more expensive items.
    Authorizing donations to charity in lieu of destruction would 
present other problems. OGE has considered and rejected this option in 
the past. See 57 FR 35006, 35015 (Aug. 7, 1992). Allowing an employee 
to direct that a gift be donated to a charity of the employee's 
choosing would be tantamount to permitting constructive receipt of the 
gift by the employee. OGE is concerned that employees may be able to 
claim tax deductions under the Internal Revenue Code for gifts donated 
to charity, in essence receiving the ``gift'' of a tax deduction in 
lieu of the original gift. OGE has also explained in the past that 
permitting donations ``would create an incentive for donors to offer 
employees items they cannot accept and, in the case of highly visible 
employees, might result in their favorite charities profiting from 
their official positions.'' Id. OGE remains concerned that authorizing 
donations to charity as a means to dispose of impermissible gifts could 
incentivize some employees to intentionally accept impermissible gifts 
for the purpose of donating them to their favorite charities.
    OGE has, however, revised Sec.  2635.206(a)(1) for clarity. In the 
proposed regulation, the first sentence read: ``The employee must 
promptly return any tangible item to the donor, or pay the donor its 
market value, or, in the case that the tangible item has a market value 
not in excess of $100, the employee may destroy the item.'' In the 
final regulation, that sentence now reads: ``The employee must promptly 
return any tangible item to the donor or pay the donor its market 
value; or, in the case of a tangible item with a market value of $100 
or less, the employee may destroy the item.'' The meaning of the 
sentence is unchanged, but the revised sentence is easier to 
understand. In addition, OGE has removed the legal citation at the end 
of that paragraph, which referred to the definition of ``market value'' 
at Sec.  2635.203(c), because the cross reference was unnecessary and 
potentially confusing to the reader.

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 rule 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: November 3, 2016.
Walter M. Shaub, Jr.,
Director, Office of Government Ethics.

    Accordingly, for the reasons set forth in the preamble, 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. Revise subpart B of part 2635 to read as follows:
Subpart B--Gifts From Outside Sources
Sec.
2635.201 Overview and considerations for declining otherwise 
permissible gifts.
2635.202 General prohibition on solicitation or acceptance of gifts.
2635.203 Definitions.
2635.204 Exceptions to the prohibition for acceptance of certain 
gifts.
2635.205 Limitations on use of exceptions.
2635.206 Proper disposition of prohibited gifts.

Subpart B--Gifts From Outside Sources


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

    (a) Overview. This subpart contains standards that prohibit an 
employee from soliciting or accepting any gift from a prohibited source 
or any gift given because of the employee's official position, unless 
the item is excluded from the definition of a gift or falls within one 
of the exceptions set forth in this subpart.
    (b) Considerations for declining otherwise permissible gifts. (1) 
Every

[[Page 81649]]

employee has a fundamental responsibility to the United States and its 
citizens to place loyalty to the Constitution, laws, and ethical 
principles above private gain. An employee's actions should promote the 
public's trust that this responsibility is being met. For this reason, 
employees should consider declining otherwise permissible gifts if they 
believe that a reasonable person with knowledge of the relevant facts 
would question the employee's integrity or impartiality as a result of 
accepting the gift.
    (2) An employee who is considering whether acceptance of a gift 
would lead a reasonable person with knowledge of the relevant facts to 
question his or her integrity or impartiality may consider, among other 
relevant factors, whether:
    (i) The gift has a high market value;
    (ii) The timing of the gift creates the appearance that the donor 
is seeking to influence an official action;
    (iii) The gift was provided by a person who has interests that may 
be substantially affected by the performance or nonperformance of the 
employee's official duties; and
    (iv) Acceptance of the gift would provide the donor with 
significantly disproportionate access.
    (3) Notwithstanding paragraph (b)(1) of this section, an employee 
who accepts a gift that qualifies for an exception under Sec.  2635.204 
does not violate this subpart or the Principles of Ethical Conduct set 
forth in Sec.  2635.101(b).
    (4) Employees who have questions regarding this subpart, including 
whether the employee should decline a gift that would otherwise be 
permitted under an exception found in Sec.  2635.204, should seek 
advice from an agency ethics official.

    Example 1 to paragraph (b):  An employee of the Peace Corps is 
in charge of making routine purchases of office supplies. After a 
promotional presentation to highlight several new products, a vendor 
offers to buy the employee lunch, which costs less than $20. The 
employee is concerned that a reasonable person may question her 
impartiality in accepting the free lunch, as the timing of the offer 
indicates that the donor may be seeking to influence an official 
action and the company has interests that may be substantially 
affected by the performance or nonperformance of the employee's 
duties. As such, although acceptance of the gift may be permissible 
under Sec.  2635.204(a), the employee decides to decline the gift.


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

    (a) Prohibition on soliciting gifts. Except as provided in this 
subpart, an employee may not, directly or indirectly:
    (1) Solicit a gift from a prohibited source; or
    (2) Solicit a gift to be given because of the employee's official 
position.
    (b) Prohibition on accepting gifts. Except as provided in this 
subpart, an employee may not, directly or indirectly:
    (1) Accept a gift from a prohibited source; or
    (2) Accept a gift given because of the employee's official 
position.
    (c) Relationship to illegal gratuities statute. A gift accepted 
pursuant to an exception found in this subpart will not constitute an 
illegal gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B), unless 
it is accepted in return for being influenced in the performance of an 
official act. As more fully described in Sec.  2635.205(d)(1), an 
employee may not solicit or accept a gift if to do so would be 
prohibited by the Federal bribery statute, 18 U.S.C. 201(b).

    Example 1 to paragraph (c): A Government contractor who 
specializes in information technology software has offered an 
employee of the Department of Energy's information technology 
acquisition division a $15 gift card to a local restaurant if the 
employee will recommend to the agency's contracting officer that she 
select the contractor's products during the next acquisition. Even 
though the gift card is less than $20, the employee may not accept 
the gift under Sec.  2635.204(a) because it is conditional upon 
official action by the employee. Pursuant to Sec. Sec.  2635.202(c) 
and 2635.205(a), notwithstanding any exception to the rule, an 
employee may not accept a gift in return for being influenced in the 
performance of an official act.


Sec.  2635.203   Definitions.

    For purposes of this subpart, the following definitions apply:
    (a) Agency has the meaning set forth in Sec.  2635.102(a). However, 
for purposes of this subpart, an executive department, as defined in 5 
U.S.C. 101, may, by supplemental agency regulation, designate as a 
separate agency any component of that department which the department 
determines exercises distinct and separate functions.
    (b) Gift includes any gratuity, favor, discount, entertainment, 
hospitality, loan, forbearance, or other item having monetary value. It 
includes services as well as gifts of training, transportation, local 
travel, lodgings and meals, whether provided in-kind, by purchase of a 
ticket, payment in advance, or reimbursement after the expense has been 
incurred. The term excludes the following:
    (1) Modest items of food and non-alcoholic refreshments, such as 
soft drinks, coffee and donuts, offered other than as part of a meal;
    (2) Greeting cards and items with little intrinsic value, such as 
plaques, certificates, and trophies, which are intended primarily for 
presentation;

    Example 1 to paragraph (b)(2):  After giving a speech at the 
facility of a pharmaceutical company, a Government employee is 
presented with a glass paperweight in the shape of a pill capsule 
with the name of the company's latest drug and the date of the 
speech imprinted on the side. The employee may accept the 
paperweight because it is an item with little intrinsic value which 
is intended primarily for presentation.
    Example 2 to paragraph (b)(2):  After participating in a panel 
discussion hosted by an international media company, a Government 
employee is presented with an inexpensive portable music player 
emblazoned with the media company's logo. The portable music player 
has a market value of $25. The employee may not accept the portable 
music player as it has a significant independent use as a music 
player rather than being intended primarily for presentation.
    Example 3 to paragraph (b)(2):  After giving a speech at a 
conference held by a national association of miners, a Department of 
Commerce employee is presented with a block of granite that is 
engraved with the association's logo, a picture of the Appalachian 
Mountains, the date of the speech, and the employee's name. The 
employee may accept this item because it is similar to a plaque, is 
designed primarily for presentation, and has little intrinsic value.

    (3) Loans from banks and other financial institutions on terms 
generally available to the public;
    (4) Opportunities and benefits, including favorable rates and 
commercial discounts, available to the public or to a class consisting 
of all Government employees or all uniformed military personnel, 
whether or not restricted on the basis of geographic considerations;
    (5) Rewards and prizes given to competitors in contests or events, 
including random drawings, open to the public unless the employee's 
entry into the contest or event is required as part of the employee's 
official duties;

    Example 1 to paragraph (b)(5):  A Government employee is 
attending a free trade show on official time. The trade show is held 
in a public shopping area adjacent to the employee's office 
building. The employee voluntarily enters a drawing at an individual 
vendor's booth which is open to the public. She fills in an entry 
form on the vendor's display table and drops it into the contest 
box. The employee may accept the resulting prize because entry into 
the contest was not required by or related to her official duties.
    Example 2 to paragraph (b)(5):  Attendees at a conference, which 
is not open to the public, are entered in a drawing for a weekend 
getaway to Bermuda as a result of being registered for the 
conference. A Government employee who attends the

[[Page 81650]]

conference in his official capacity could not accept the prize under 
paragraph (b)(5) of this section, as the event is not open to the 
public.

    (6) Pension and other benefits resulting from continued 
participation in an employee welfare and benefits plan maintained by a 
current or former employer;
    (7) Anything which is paid for by the Government or secured by the 
Government under Government contract;

    Example 1 to paragraph (b)(7):  An employee at the Occupational 
Safety and Health Administration is assigned to travel away from her 
duty station to conduct an investigation of a collapse at a 
construction site. The employee's agency is paying for her travel 
expenses, including her airfare. The employee may accept and retain 
travel promotional items, such as frequent flyer miles, received as 
a result of her official travel, to the extent permitted by 5 U.S.C. 
5702, note, and 41 CFR part 301-53.

    (8) Free attendance to an event provided by the sponsor of the 
event to:
    (i) An employee who is assigned to present information on behalf of 
the agency at the event on any day when the employee is presenting;
    (ii) An employee whose presence on any day of the event is deemed 
to be essential by the agency to the presenting employee's 
participation in the event, provided that the employee is accompanying 
the presenting employee; and
    (iii) The spouse or one other guest of the presenting employee on 
any day when the employee is presenting, provided that others in 
attendance will generally be accompanied by a spouse or other guest, 
the offer of free attendance for the spouse or other guest is 
unsolicited, and the agency designee, orally or in writing, has 
authorized the presenting employee to accept;

    Example 1 to paragraph (b)(8):  An employee of the Department of 
the Treasury who is assigned to participate in a panel discussion of 
economic issues as part of a one-day conference may accept the 
sponsor's waiver of the conference fee. Under the separate authority 
of Sec.  2635.204(a), the employee may accept a token of 
appreciation that has a market value of $20 or less.
    Example 2 to paragraph (b)(8):  An employee of the Securities 
and Exchange Commission is assigned to present the agency's views at 
a roundtable discussion of an ongoing working group. The employee 
may accept free attendance to the meeting under paragraph (b)(8) of 
this section because the employee has been assigned to present 
information at the meeting on behalf of the agency. If it is 
determined by the agency that it is essential that another employee 
accompany the presenting employee to the roundtable discussion, the 
accompanying employee may also accept free attendance to the meeting 
under paragraph (b)(8)(ii) of this section.
    Example 3 to paragraph (b)(8):  An employee of the United States 
Trade and Development Agency is invited to attend a cocktail party 
hosted by a prohibited source. The employee believes that he will 
have an opportunity to discuss official matters with other attendees 
while at the event. Although the employee may voluntarily discuss 
official matters with other attendees, the employee has not been 
assigned to present information on behalf of the agency. The 
employee may not accept free attendance to the event under paragraph 
(b)(8) of this section.

    (9) Any gift accepted by the Government under specific statutory 
authority, including:
    (i) Travel, subsistence, and related expenses accepted by an agency 
under the authority of 31 U.S.C. 1353 in connection with an employee's 
attendance at a meeting or similar function relating to the employee's 
official duties which take place away from the employee's duty station, 
provided that the agency's acceptance is in accordance with the 
implementing regulations at 41 CFR chapter 304; and
    (ii) Other gifts provided in-kind which have been accepted by an 
agency under its agency gift acceptance statute; and
    (10) Anything for which market value is paid by the employee.
    (c) Market value means the cost that a member of the general public 
would reasonably expect to incur to purchase the gift. An employee who 
cannot ascertain the market value of a gift may estimate its market 
value by reference to the retail cost of similar items of like quality. 
The market value of a gift of a ticket entitling the holder to food, 
refreshments, entertainment, or any other benefit is deemed to be the 
face value of the ticket.

    Example 1 to paragraph (c):  An employee who has been given a 
watch inscribed with the corporate logo of a prohibited source may 
determine its market value based on her observation that a 
comparable watch, not inscribed with a logo, generally sells for 
about $50.
    Example 2 to paragraph (c):  During an official visit to a 
factory operated by a well-known athletic footwear manufacturer, an 
employee of the Department of Labor is offered a commemorative pair 
of athletic shoes manufactured at the factory. Although the cost 
incurred by the donor to manufacture the shoes was $17, the market 
value of the shoes would be the $100 that the employee would have to 
pay for the shoes on the open market.
    Example 3 to paragraph (c):  A prohibited source has offered a 
Government employee a ticket to a charitable event consisting of a 
cocktail reception to be followed by an evening of chamber music. 
Even though the food, refreshments, and entertainment provided at 
the event may be worth only $20, the market value of the ticket is 
its $250 face value.
    Example 4 to paragraph (c):  A company offers an employee of the 
Federal Communication Commission (FCC) free attendance for two to a 
private skybox at a ballpark to watch a major league baseball game. 
The skybox is leased annually by the company, which has business 
pending before the FCC. The skybox tickets provided to the employee 
do not have a face value. To determine the market value of the 
tickets, the employee must add the face value of two of the most 
expensive publicly available tickets to the game and the market 
value of any food, parking or other tangible benefits provided in 
connection with the gift of attendance that are not already included 
in the cost of the most expensive publicly available tickets.
    Example 5 to paragraph (c):  An employee of the Department of 
Agriculture is invited to a reception held by a prohibited source. 
There is no entrance fee to the reception event or to the venue. To 
determine the market value of the gift, the employee must add the 
market value of any entertainment, food, beverages, or other 
tangible benefit provided to attendees in connection with the 
reception, but need not consider the cost incurred by the sponsor to 
rent or maintain the venue where the event is held. The employee may 
rely on a per-person cost estimate provided by the sponsor of the 
event, unless the employee or an agency designee has determined that 
a reasonable person would find that the estimate is clearly 
implausible.

    (d) Prohibited source means any person who:
    (1) Is seeking official action by the employee's agency;
    (2) Does business or seeks to do business with the employee's 
agency;
    (3) Conducts activities regulated by the employee's agency;
    (4) Has interests that may be substantially affected by the 
performance or nonperformance of the employee's official duties; or
    (5) Is an organization a majority of whose members are described in 
paragraphs (d)(1) through (4) of this section.
    (e) Given because of the employee's official position. A gift is 
given because of the employee's official position if the gift is from a 
person other than an employee and would not have been given had the 
employee not held the status, authority, or duties associated with the 
employee's Federal position.

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

    Example 1 to paragraph (e):  Where free season tickets are 
offered by an opera guild to all members of the Cabinet, the gift is 
offered because of their official positions.
    Example 2 to paragraph (e):  Employees at a regional office of 
the Department of Justice (DOJ) work in Government-leased space at a 
private office building, along with various

[[Page 81651]]

private business tenants. A major fire in the building during normal 
office hours causes a traumatic experience for all occupants of the 
building in making their escape, and it is the subject of widespread 
news coverage. A corporate hotel chain, which does not meet the 
definition of a prohibited source for DOJ, seizes the moment and 
announces that it will give a free night's lodging to all building 
occupants and their families, as a public goodwill gesture. 
Employees of DOJ may accept, as this gift is not being given because 
of their Government positions. The donor's motivation for offering 
this gift is unrelated to the DOJ employees' status, authority, or 
duties associated with their Federal position, but instead is based 
on their mere presence in the building as occupants at the time of 
the fire.

    (f) Indirectly solicited or accepted. A gift which is solicited or 
accepted indirectly includes a gift:
    (1) Given with the employee's knowledge and acquiescence to the 
employee's parent, sibling, spouse, child, dependent relative, or a 
member of the employee's household because of that person's 
relationship to the employee; or
    (2) Given to any other person, including any charitable 
organization, on the basis of designation, recommendation, or other 
specification by the employee, except the employee has not indirectly 
solicited or accepted a gift by the raising of funds or other support 
for a charitable organization if done in accordance with Sec.  
2635.808.

    Example 1 to paragraph (f)(2):  An employee who must decline a 
gift of a personal computer pursuant to this subpart may not suggest 
that the gift be given instead to one of five charitable 
organizations whose names are provided by the employee.

    (g) Free attendance includes waiver of all or part of the fee for 
an event or the provision of food, refreshments, entertainment, 
instruction or materials furnished to all attendees as an integral part 
of the event. It does not include travel expenses, lodgings, or 
entertainment collateral to the event. It does not include meals taken 
other than in a group setting with all other attendees, unless the 
employee is a presenter at the event and is invited to a separate meal 
for participating presenters that is hosted by the sponsor of the 
event. Where the offer of free attendance has been extended to an 
accompanying spouse or other guest, the market value of the gift of 
free attendance includes the market value of free attendance by both 
the employee and the spouse or other guest.


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

    Subject to the limitations in Sec.  2635.205, this section 
establishes exceptions to the prohibitions set forth in Sec.  
2635.202(a) and (b). Even though acceptance of a gift may be permitted 
by one of the exceptions contained in this section, it is never 
inappropriate and frequently prudent for an employee to decline a gift 
if acceptance would cause a reasonable person to question the 
employee's integrity or impartiality. Section 2635.201(b) identifies 
considerations for declining otherwise permissible gifts.
    (a) Gifts of $20 or less. An employee may accept unsolicited gifts 
having an aggregate market value of $20 or less per source per 
occasion, provided that the aggregate market value of individual gifts 
received from any one person under the authority of this paragraph (a) 
does not exceed $50 in a calendar year. This exception does not apply 
to gifts of cash or of investment interests such as stock, bonds, or 
certificates of deposit. Where the market value of a gift or the 
aggregate market value of gifts offered on any single occasion exceeds 
$20, the employee may not pay the excess value over $20 in order to 
accept that portion of the gift or those gifts worth $20. Where the 
aggregate value of tangible items offered on a single occasion exceeds 
$20, the employee may decline any distinct and separate item in order 
to accept those items aggregating $20 or less.

    Example 1 to paragraph (a):  An employee of the Securities and 
Exchange Commission and his spouse have been invited by a 
representative of a regulated entity to a community theater 
production, tickets to which have a face value of $30 each. The 
aggregate market value of the gifts offered on this single occasion 
is $60, $40 more than the $20 amount that may be accepted for a 
single event or presentation. The employee may not accept the gift 
of the evening of entertainment. He and his spouse may attend the 
play only if he pays the full $60 value of the two tickets.
    Example 2 to paragraph (a):  An employee of the National 
Geospatial-Intelligence Agency has been invited by an association of 
cartographers to speak about her agency's role in the evolution of 
missile technology. At the conclusion of her speech, the association 
presents the employee a framed map with a market value of $18 and a 
ceramic mug that has a market value of $15. The employee may accept 
the map or the mug, but not both, because the aggregate value of 
these two tangible items exceeds $20.
    Example 3 to paragraph (a):  On four occasions during the 
calendar year, an employee of the Defense Logistics Agency (DLA) was 
given gifts worth $10 each by four employees of a corporation that 
is a DLA contractor. For purposes of applying the yearly $50 
limitation on gifts of $20 or less from any one person, the four 
gifts must be aggregated because a person is defined at Sec.  
2635.102(k) to mean not only the corporate entity, but its officers 
and employees as well. However, for purposes of applying the $50 
aggregate limitation, the employee would not have to include the 
value of a birthday present received from his cousin, who is 
employed by the same corporation, if he can accept the birthday 
present under the exception at paragraph (b) of this section for 
gifts based on a personal relationship.
    Example 4 to paragraph (a):  Under the authority of 31 U.S.C. 
1353 for agencies to accept payments from non-Federal sources in 
connection with attendance at certain meetings or similar functions, 
the Environmental Protection Agency (EPA) has accepted an 
association's gift of travel expenses and conference fees for an 
employee to attend a conference on the long-term effect of radon 
exposure. While at the conference, the employee may accept a gift of 
$20 or less from the association or from another person attending 
the conference even though it was not approved in advance by the 
EPA. Although 31 U.S.C. 1353 is the authority under which the EPA 
accepted the gift to the agency of travel expenses and conference 
fees, a gift of $20 or less accepted under paragraph (a) of this 
section is a gift to the employee rather than to her employing 
agency.
    Example 5 to paragraph (a):  During off-duty time, an employee 
of the Department of Defense (DoD) attends a trade show involving 
companies that are DoD contractors. He is offered software worth $15 
at X Company's booth, a calendar worth $12 at Y Company's booth, and 
a deli lunch worth $8 from Z Company. The employee may accept all 
three of these items because they do not exceed $20 per source, even 
though they total more than $20 at this single occasion.
    Example 6 to paragraph (a):  An employee of the Department of 
Defense (DoD) is being promoted to a higher level position in 
another DoD office. Six individuals, each employed by a different 
defense contractor, who have worked with the DoD employee over the 
years, decide to act in concert to pool their resources to buy her a 
nicer gift than each could buy her separately. Each defense 
contractor employee contributes $20 to buy a desk clock for the DoD 
employee that has a market value of $120. Although each of the 
contributions does not exceed the $20 limit, the employee may not 
accept the $120 gift because it is a single gift that has a market 
value in excess of $20.
    Example 7 to paragraph (a):  During a holiday party, an employee 
of the Department of State is given a $15 store gift card to a 
national coffee chain by an agency contractor. The employee may 
accept the card as the market value is less than $20. The employee 
could not, however, accept a gift card that is issued by a credit 
card company or other financial institution, because such a card is 
equivalent to a gift of cash.

    (b) Gifts based on a personal relationship. An employee may accept 
a gift given by an individual under circumstances which make it clear 
that the gift is motivated by a family relationship or personal 
friendship rather than the position of the employee. Relevant factors 
in making

[[Page 81652]]

such a determination include the history and nature of the relationship 
and whether the family member or friend personally pays for the gift.

    Example 1 to paragraph (b):  An employee of the Federal Deposit 
Insurance Corporation (FDIC) has been dating an accountant employed 
by a member bank. As part of its ``Work-Life Balance'' program, the 
bank has given each employee in the accountant's division two 
tickets to a professional basketball game and has urged each to 
invite a family member or friend to share the evening of 
entertainment. Under the circumstances, the FDIC employee may accept 
the invitation to attend the game. Even though the tickets were 
initially purchased by the member bank, they were given without 
reservation to the accountant to use as she wished, and her 
invitation to the employee was motivated by their personal 
friendship.
    Example 2 to paragraph (b):  Three partners in a law firm that 
handles corporate mergers have invited an employee of the Federal 
Trade Commission (FTC) to join them in a golf tournament at a 
private club at the firm's expense. The entry fee is $500 per 
foursome. The employee cannot accept the gift of one-quarter of the 
entry fee even though he and the three partners have developed an 
amicable relationship as a result of the firm's dealings with the 
FTC. As evidenced in part by the fact that the fees are to be paid 
by the firm, it is not a personal friendship but a business 
relationship that is the motivation behind the partners' gift.
    Example 3 to paragraph (b):  A Peace Corps employee enjoys using 
a social media site on the internet in his personal capacity outside 
of work. He has used the site to keep in touch with friends, 
neighbors, coworkers, professional contacts, and other individuals 
he has met over the years through both work and personal activities. 
One of these individuals works for a contractor that provides 
language services to the Peace Corps. The employee was acting in his 
official capacity when he met the individual at a meeting to discuss 
a matter related to the contract between their respective employers. 
Thereafter, the two communicated occasionally regarding contract 
matters. They later also granted one another access to join their 
social media networks through their respective social media 
accounts. However, they did not communicate further in their 
personal capacities, carry on extensive personal interactions, or 
meet socially outside of work. One day, the individual, whose 
employer continues to serve as a Peace Corps contractor, contacts 
the employee to offer him a pair of concert tickets worth $30 
apiece. Although the employee and the individual are connected 
through social media, the circumstances do not demonstrate that the 
gift was clearly motivated by a personal relationship, rather than 
the position of the employee, and therefore the employee may not 
accept the gift pursuant to paragraph (b) of this section.

    (c) Discounts and similar benefits. In addition to those 
opportunities and benefits excluded from the definition of a gift by 
Sec.  2635.203(b)(4), an employee may accept:
    (1) A reduction or waiver of the fees for membership or other fees 
for participation in organization activities offered to all Government 
employees or all uniformed military personnel by professional 
organizations if the only restrictions on membership relate to 
professional qualifications; and
    (2) Opportunities and benefits, including favorable rates, 
commercial discounts, and free attendance or participation not 
precluded by paragraph (c)(3) of this section:
    (i) Offered to members of a group or class in which membership is 
unrelated to Government employment;
    (ii) Offered to members of an organization, such as an employees' 
association or agency credit union, in which membership is related to 
Government employment if the same offer is broadly available to large 
segments of the public through organizations of similar size; or
    (iii) Offered by a person who is not a prohibited source to any 
group or class that is not defined in a manner that specifically 
discriminates among Government employees on the basis of type of 
official responsibility or on a basis that favors those of higher rank 
or rate of pay.

    Example 1 to paragraph (c)(2):  A computer company offers a 
discount on the purchase of computer equipment to all public and 
private sector computer procurement officials who work in 
organizations with over 300 employees. An employee who works as the 
computer procurement official for a Government agency could not 
accept the discount to purchase the personal computer under the 
exception in paragraph (c)(2)(i) of this section. Her membership in 
the group to which the discount is offered is related to Government 
employment because her membership is based on her status as a 
procurement official with the Government.
    Example 2 to paragraph (c)(2):  An employee of the Consumer 
Product Safety Commission (CPSC) may accept a discount of $50 on a 
microwave oven offered by the manufacturer to all members of the 
CPSC employees' association. Even though the CPSC is currently 
conducting studies on the safety of microwave ovens, the $50 
discount is a standard offer that the manufacturer has made broadly 
available through a number of employee associations and similar 
organizations to large segments of the public.
    Example 3 to paragraph (c)(2):  An Assistant Secretary may not 
accept a local country club's offer of membership to all members of 
Department Secretariats which includes a waiver of its $5,000 
membership initiation fee. Even though the country club is not a 
prohibited source, the offer discriminates in favor of higher 
ranking officials.

    (3) An employee may not accept for personal use any benefit to 
which the Government is entitled as the result of an expenditure of 
Government funds, unless authorized by statute or regulation (e.g., 5 
U.S.C. 5702, note, regarding frequent flyer miles).

    Example 1 to paragraph (c)(3):  The administrative officer for a 
field office of U.S. Immigration and Customs Enforcement (ICE) has 
signed an order to purchase 50 boxes of photocopy paper from a 
supplier whose literature advertises that it will give a free 
briefcase to anyone who purchases 50 or more boxes. Because the 
paper was purchased with ICE funds, the administrative officer 
cannot keep the briefcase which, if claimed and received, is 
Government property.

    (d) Awards and honorary degrees--(1) Awards. An employee may accept 
a bona fide award for meritorious public service or achievement and any 
item incident to the award, provided that:
    (i) The award and any item incident to the award are not from a 
person who has interests that may be substantially affected by the 
performance or nonperformance of the employee's official duties, or 
from an association or other organization if a majority of its members 
have such interests; and
    (ii) If the award or any item incident to the award is in the form 
of cash or an investment interest, or if the aggregate value of the 
award and any item incident to the award, other than free attendance to 
the event provided to the employee and to members of the employee's 
family by the sponsor of the event, exceeds $200, the agency ethics 
official has made a written determination that the award is made as 
part of an established program of recognition.

    Example 1 to paragraph (d)(1):  Based on a written determination 
by an agency ethics official that the prize meets the criteria set 
forth in paragraph (d)(2) of this section, an employee of the 
National Institutes of Health (NIH) may accept the Nobel Prize for 
Medicine, including the cash award which accompanies the prize, even 
though the prize was conferred on the basis of laboratory work 
performed at NIH.
    Example 2 to paragraph (d)(1):  A defense contractor, ABC 
Systems, has an annual award program for the outstanding public 
employee of the year. The award includes a cash payment of $1,000. 
The award program is wholly funded to ensure its continuation on a 
regular basis for the next twenty years and selection of award 
recipients is made pursuant to written standards. An employee of the 
Department of the Air Force, who has duties that include overseeing 
contract performance by ABC Systems, is selected to receive the 
award. The employee may not accept the cash award because ABC 
Systems has interests that may be substantially affected by the 
performance or

[[Page 81653]]

nonperformance of the employee's official duties.
    Example 3 to paragraph (d)(1):  An ambassador selected by a 
nonprofit organization as a recipient of its annual award for 
distinguished service in the interest of world peace may, together 
with his spouse and children, attend the awards ceremony dinner and 
accept a crystal bowl worth $200 presented during the ceremony. 
However, where the organization has also offered airline tickets for 
the ambassador and his family to travel to the city where the awards 
ceremony is to be held, the aggregate value of the tickets and the 
crystal bowl exceeds $200, and he may accept only upon a written 
determination by the agency ethics official that the award is made 
as part of an established program of recognition.

    (2) Established program of recognition. An award and an item 
incident to the award are made pursuant to an established program of 
recognition if:
    (i) Awards have been made on a regular basis or, if the program is 
new, there is a reasonable basis for concluding that awards will be 
made on a regular basis based on funding or funding commitments; and
    (ii) Selection of award recipients is made pursuant to written 
standards.
    (3) Honorary degrees. An employee may accept an honorary degree 
from an institution of higher education, as defined at 20 U.S.C. 1001, 
or from a similar foreign institution of higher education, based on a 
written determination by an agency ethics official that the timing of 
the award of the degree would not cause a reasonable person to question 
the employee's impartiality in a matter affecting the institution.

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

    Example 1 to paragraph (d)(3):  A well-known university located 
in the United States wishes to give an honorary degree to the 
Secretary of Labor. The Secretary may accept the honorary degree 
only if an agency ethics official determines in writing that the 
timing of the award of the degree would not cause a reasonable 
person to question the Secretary's impartiality in a matter 
affecting the university.

    (4) Presentation events. An employee who may accept an award or 
honorary degree pursuant to paragraph (d)(1) or (3) of this section may 
also accept free attendance to the event provided to the employee and 
to members of the employee's family by the sponsor of an event. In 
addition, the employee may also accept unsolicited offers of travel to 
and from the event provided to the employee and to members of the 
employee's family by the sponsor of the event. Travel expenses accepted 
under this paragraph (d)(4) must be added to the value of the award for 
purposes of determining whether the aggregate value of the award 
exceeds $200.
    (e) Gifts based on outside business or employment relationships. An 
employee may accept meals, lodgings, transportation and other benefits:
    (1) Resulting from the business or employment activities of an 
employee's spouse when it is clear that such benefits have not been 
offered or enhanced because of the employee's official position;

    Example 1 to paragraph (e)(1):  A Department of Agriculture 
employee whose spouse is a computer programmer employed by a 
Department of Agriculture contractor may attend the company's annual 
retreat for all of its employees and their families held at a resort 
facility. However, under Sec.  2635.502, the employee may be 
disqualified from performing official duties affecting her spouse's 
employer.
    Example 2 to paragraph (e)(1):  Where the spouses of other 
clerical personnel have not been invited, an employee of the Defense 
Contract Audit Agency whose spouse is a clerical worker at a defense 
contractor may not attend the contractor's annual retreat in Hawaii 
for corporate officers and members of the board of directors, even 
though his spouse received a special invitation for herself and the 
employee.

    (2) Resulting from the employee's outside business or employment 
activities when it is clear that such benefits are based on the outside 
business or employment activities and have not been offered or enhanced 
because of the employee's official status;

    Example 1 to paragraph (e)(2):  The members of an Army Corps of 
Engineers environmental advisory committee that meets six times per 
year are special Government employees. A member who has a consulting 
business may accept an invitation to a $50 dinner from her corporate 
client, an Army construction contractor, unless, for example, the 
invitation was extended in order to discuss the activities of the 
advisory committee.

    (3) Customarily provided by a prospective employer in connection 
with bona fide employment discussions. If the prospective employer has 
interests that could be affected by performance or nonperformance of 
the employee's duties, acceptance is permitted only if the employee 
first has complied with the disqualification requirements of subpart F 
of this part applicable when seeking employment; or

    Example 1 to paragraph (e)(3):  An employee of the Federal 
Communications Commission with responsibility for drafting 
regulations affecting all cable television companies wishes to apply 
for a job opening with a cable television holding company. Once she 
has properly disqualified herself from further work on the 
regulations as required by subpart F of this part, she may enter 
into employment discussions with the company and may accept the 
company's offer to pay for her airfare, hotel, and meals in 
connection with an interview trip.

    (4) Provided by a former employer to attend a reception or similar 
event when other former employees have been invited to attend, the 
invitation and benefits are based on the former employment 
relationship, and it is clear that such benefits have not been offered 
or enhanced because of the employee's official position.

    Example 1 to paragraph (e)(4):  An employee of the Department of 
the Army is invited by her former employer, an Army contractor, to 
attend its annual holiday dinner party. The former employer 
traditionally invites both its current and former employees to the 
holiday dinner regardless of their current employment activities. 
Under these circumstances, the employee may attend the dinner 
because the dinner invitation is a result of the employee's former 
outside employment activities, other former employees have been 
asked to attend, and the gift is not offered because of the 
employee's official position.

    (5) For purposes of paragraphs (e)(1) through (4) of this section, 
``employment'' means any form of non-Federal employment or business 
relationship involving the provision of personal services.
    (f) Gifts in connection with political activities permitted by the 
Hatch Act Reform Amendments. An employee who, in accordance with the 
Hatch Act Reform Amendments of 1993, at 5 U.S.C. 7323, may take an 
active part in political management or in political campaigns, may 
accept meals, lodgings, transportation, and other benefits, including 
free attendance at events, for the employee and an accompanying spouse 
or other guests, when provided, in connection with such active 
participation, by a political organization described in 26 U.S.C. 
527(e). Any other employee, such as a security officer, whose official 
duties require him or her to accompany an employee to a political 
event, may accept meals, free attendance, and entertainment provided at 
the event by such an organization.

    Example 1 to paragraph (f):  The Secretary of the Department of 
Health and Human

[[Page 81654]]

Services may accept an airline ticket and hotel accommodations 
furnished by the campaign committee of a candidate for the United 
States Senate in order to give a speech in support of the candidate.

    (g) Gifts of free attendance at widely attended gatherings--(1) 
Authorization. When authorized in writing by the agency designee 
pursuant to paragraph (g)(3) of this section, an employee may accept an 
unsolicited gift of free attendance at all or appropriate parts of a 
widely attended gathering. For an employee who is subject to a leave 
system, attendance at the event will be on the employee's own time or, 
if authorized by the employee's agency, on excused absence pursuant to 
applicable guidelines for granting such absence, or otherwise without 
charge to the employee's leave account.
    (2) Widely attended gatherings. A gathering is widely attended if 
it is expected that a large number of persons will attend, that persons 
with a diversity of views or interests will be present, for example, if 
it is open to members from throughout the interested industry or 
profession or if those in attendance represent a range of persons 
interested in a given matter, and that there will be an opportunity to 
exchange ideas and views among invited persons.
    (3) Written authorization by the agency designee. The agency 
designee may authorize an employee or employees to accept a gift of 
free attendance at all or appropriate parts of a widely attended 
gathering only if the agency designee issues a written determination 
after finding that:
    (i) The event is a widely attended gathering, as set forth in 
paragraph (g)(2) of this section;
    (ii) The employee's attendance at the event is in the agency's 
interest because it will further agency programs or operations;
    (iii) The agency's interest in the employee's attendance outweighs 
the concern that the employee may be, or may appear to be, improperly 
influenced in the performance of official duties; and
    (iv) If a person other than the sponsor of the event invites or 
designates the employee as the recipient of the gift of free attendance 
and bears the cost of that gift, the event is expected to be attended 
by more than 100 persons and the value of the gift of free attendance 
does not exceed $375.
    (4) Determination of agency interest. In determining whether the 
agency's interest in the employee's attendance outweighs the concern 
that the employee may be, or may appear to be, improperly influenced in 
the performance of official duties, the agency designee may consider 
relevant factors including:
    (i) The importance of the event to the agency;
    (ii) The nature and sensitivity of any pending matter affecting the 
interests of the person who extended the invitation and the 
significance of the employee's role in any such matter;
    (iii) The purpose of the event;
    (iv) The identity of other expected participants;
    (v) Whether acceptance would reasonably create the appearance that 
the donor is receiving preferential treatment;
    (vi) Whether the Government is also providing persons with views or 
interests that differ from those of the donor with access to the 
Government; and
    (vii) The market value of the gift of free attendance.
    (5) Cost provided by person other than the sponsor of the event. 
The cost of the employee's attendance will be considered to be provided 
by a person other than the sponsor of the event where such person 
designates the employee to be invited and bears the cost of the 
employee's attendance through a contribution or other payment intended 
to facilitate the employee's attendance. Payment of dues or a similar 
assessment to a sponsoring organization does not constitute a payment 
intended to facilitate a particular employee's attendance.
    (6) Accompanying spouse or other guest. When others in attendance 
will generally be accompanied by a spouse or other guest, and where the 
invitation is from the same person who has invited the employee, the 
agency designee may authorize an employee to accept an unsolicited 
invitation of free attendance to an accompanying spouse or one other 
accompanying guest to participate in all or a portion of the event at 
which the employee's free attendance is permitted under paragraph 
(g)(1) this section. The authorization required by this paragraph 
(g)(6) must be provided in writing.

    Example 1 to paragraph (g):  An aerospace industry association 
that is a prohibited source sponsors an industry-wide, two-day 
seminar for which it charges a fee of $800 and anticipates 
attendance of approximately 400. An Air Force contractor pays $4,000 
to the association so that the association can extend free 
invitations to five Air Force officials designated by the 
contractor. The Air Force officials may not accept the gifts of free 
attendance because (a) the contractor, rather than the association, 
provided the cost of their attendance; (b) the contractor designated 
the specific employees to receive the gift of free attendance; and 
(c) the value of the gift exceeds $375 per employee.
    Example 2 to paragraph (g):  An aerospace industry association 
that is a prohibited source sponsors an industry-wide, two-day 
seminar for which it charges a fee of $25 and anticipates attendance 
of approximately 50. An Air Force contractor pays $125 to the 
association so that the association can extend free invitations to 
five Air Force officials designated by the contractor. The Air Force 
officials may not accept the gifts of free attendance because (a) 
the contractor, rather than the association, provided the cost of 
their attendance; (b) the contractor designated the specific 
employees to receive the gift of free attendance; and (c) the event 
was not expected to be attended by more than 100 persons.
    Example 3 to paragraph (g):  An aerospace industry association 
that is a prohibited source sponsors an industry-wide, two-day 
seminar for which it charges a fee of $800 and anticipates 
attendance of approximately 400. An Air Force contractor pays $4,000 
in order that the association might invite any five Federal 
employees. An Air Force official to whom the sponsoring association, 
rather than the contractor, extended one of the five invitations 
could attend if the employee's participation were determined to be 
in the interest of the agency and he received a written 
authorization.
    Example 4 to paragraph (g):  An employee of the Department of 
Transportation is invited by a news organization to an annual press 
dinner sponsored by an association of press organizations. Tickets 
for the event cost $375 per person and attendance is limited to 400 
representatives of press organizations and their guests. If the 
employee's attendance is determined to be in the interest of the 
agency and she receives a written authorization from the agency 
designee, she may accept the invitation from the news organization 
because more than 100 persons will attend and the cost of the ticket 
does not exceed $375. However, if the invitation were extended to 
the employee and an accompanying guest, the employee's guest could 
not be authorized to attend for free because the market value of the 
gift of free attendance would exceed $375.
    Example 5 to paragraph (g):  An employee of the Department of 
Energy (DOE) and his spouse have been invited by a major utility 
executive to a small dinner party. A few other officials of the 
utility and their spouses or other guests are also invited, as is a 
representative of a consumer group concerned with utility rates and 
her spouse. The DOE official believes the dinner party will provide 
him an opportunity to socialize with and get to know those in 
attendance. The employee may not accept the free invitation under 
this exception, even if his attendance could be determined to be in 
the interest of the agency. The small dinner party is not a widely 
attended gathering. Nor could the employee be authorized to accept 
even if the event were instead a corporate banquet to which forty 
company officials and their spouses or other guests were invited. In 
this second case, notwithstanding the larger number of persons 
expected (as opposed to the small dinner party just noted) and 
despite the presence of the consumer group representative and her 
spouse who are not officials of the utility, those in attendance 
would still not represent a diversity of views

[[Page 81655]]

or interests. Thus, the company banquet would not qualify as a 
widely attended gathering under those circumstances either.
    Example 6 to paragraph (g):  An Assistant U.S. Attorney is 
invited to attend a luncheon meeting of a local bar association to 
hear a distinguished judge lecture on cross-examining expert 
witnesses. Although members of the bar association are assessed a 
$15 fee for the meeting, the Assistant U.S. Attorney may accept the 
bar association's offer to attend for free, even without a 
determination of agency interest. The gift can be accepted under the 
$20 gift exception at paragraph (a) of this section.
    Example 7 to paragraph (g):  An employee of the Department of 
the Interior authorized to speak on the first day of a four-day 
conference on endangered species may accept the sponsor's waiver of 
the conference fee for the first day of the conference under Sec.  
2635.203(b)(8). If the conference is widely attended, the employee 
may be authorized to accept the sponsor's offer to waive the 
attendance fee for the remainder of the conference if the agency 
designee has made a written determination that attendance is in the 
agency's interest.
    Example 8 to paragraph (g):  A military officer has been 
approved to attend a widely attended gathering, pursuant to 
paragraph (g) of this section, that will be held in the same city as 
the officer's duty station. The defense contractor sponsoring the 
event has offered to transport the officer in a limousine to the 
event. The officer may not accept the offer of transportation 
because the definition of ``free attendance'' set forth in Sec.  
2635.203(g) excludes travel, and the market value of the 
transportation would exceed $20.

    (h) Social invitations. An employee may accept food, refreshments, 
and entertainment, not including travel or lodgings, for the employee 
and an accompanying spouse or other guests, at a social event attended 
by several persons if:
    (1) The invitation is unsolicited and is from a person who is not a 
prohibited source;
    (2) No fee is charged to any person in attendance; and
    (3) If either the sponsor of the event or the person extending the 
invitation to the employee is not an individual, the agency designee 
has made a written determination after finding that the employee's 
attendance would not cause a reasonable person with knowledge of the 
relevant facts to question the employee's integrity or impartiality, 
consistent with Sec.  2635.201(b).

    Example 1 to paragraph (h):  An employee of the White House 
Press Office has been invited to a social dinner for current and 
former White House Press Officers at the home of an individual who 
is not a prohibited source. The employee may attend even if she is 
being invited because of her official position.

    (i) Meals, refreshments, and entertainment in foreign areas. An 
employee assigned to duty in, or on official travel to, a foreign area 
as defined in 41 CFR 300-3.1 may accept unsolicited food, refreshments, 
or entertainment in the course of a breakfast, luncheon, dinner, or 
other meeting or event provided:
    (1) The market value in the foreign area of the food, refreshments 
or entertainment provided at the meeting or event, as converted to U.S. 
dollars, does not exceed the per diem rate for the foreign area 
specified in the U.S. Department of State's Maximum Per Diem Allowances 
for Foreign Areas, Per Diem Supplement Section 925 to the Standardized 
Regulations (GC-FA), available on the Internet at www.state.gov;
    (2) There is participation in the meeting or event by non-U.S. 
citizens or by representatives of foreign governments or other foreign 
entities;
    (3) Attendance at the meeting or event is part of the employee's 
official duties to obtain information, disseminate information, promote 
the export of U.S. goods and services, represent the United States, or 
otherwise further programs or operations of the agency or the U.S. 
mission in the foreign area; and
    (4) The gift of meals, refreshments, or entertainment is from a 
person other than a foreign government as defined in 5 U.S.C. 
7342(a)(2).

    Example 1 to paragraph (i):  A number of local business owners 
in a developing country are eager for a U.S. company to locate a 
manufacturing facility in their province. An official of the 
Overseas Private Investment Corporation may accompany the visiting 
vice president of the U.S. company to a dinner meeting hosted by the 
business owners at a province restaurant where the market value of 
the food and refreshments does not exceed the per diem rate for that 
country.

    (j) Gifts to the President or Vice President. Because of 
considerations relating to the conduct of their offices, including 
those of protocol and etiquette, the President or the Vice President 
may accept any gift on his or her own behalf or on behalf of any family 
member, provided that such acceptance does not violate Sec.  
2635.205(a) or (b), 18 U.S.C. 201(b) or 201(c)(3), or the Constitution 
of the United States.
    (k) Gifts authorized by supplemental agency regulation. An employee 
may accept any gift when acceptance of the gift is specifically 
authorized by a supplemental agency regulation issued with the 
concurrence of the Office of Government Ethics, pursuant to Sec.  
2635.105.
    (l) Gifts accepted under specific statutory authority. The 
prohibitions on acceptance of gifts from outside sources contained in 
this subpart do not apply to any item which a statute specifically 
authorizes an employee to accept. Gifts which may be accepted by an 
employee under the authority of specific statutes include, but are not 
limited to:
    (1) Free attendance, course or meeting materials, transportation, 
lodgings, food and refreshments or reimbursements therefor incident to 
training or meetings when accepted by the employee under the authority 
of 5 U.S.C. 4111. The employee's acceptance must be approved by the 
agency in accordance with part 410 of this title; or
    (2) Gifts from a foreign government or international or 
multinational organization, or its representative, when accepted by the 
employee under the authority of the Foreign Gifts and Decorations Act, 
5 U.S.C. 7342. As a condition of acceptance, an employee must comply 
with requirements imposed by the agency's regulations or procedures 
implementing that Act.
    (m) Gifts of informational materials. (1) An employee may accept 
unsolicited gifts of informational materials, provided that:
    (i) The aggregate market value of all informational materials 
received from any one person does not exceed $100 in a calendar year; 
or
    (ii) If the aggregate market value of all informational materials 
from the same person exceeds $100 in a calendar year, an agency 
designee has made a written determination after finding that acceptance 
by the employee would not be inconsistent with the standard set forth 
in Sec.  2635.201(b).
    (2) Informational materials are writings, recordings, documents, 
records, or other items that:
    (i) Are educational or instructive in nature;
    (ii) Are not primarily created for entertainment, display, or 
decoration; and
    (iii) Contain information that relates in whole or in part to the 
following categories:
    (A) The employee's official duties or position, profession, or 
field of study;
    (B) A general subject matter area, industry, or economic sector 
affected by or involved in the programs or operations of the agency; or
    (C) Another topic of interest to the agency or its mission.

    Example 1 to paragraph (m):  An analyst at the Agricultural 
Research Service receives an edition of an agricultural research 
journal in the mail from a consortium of private farming operations 
concerned with soil toxicity. The journal edition has a market value 
of $75. The analyst may accept the gift.
    Example 2 to paragraph (m):  An inspector at the Mine Safety and 
Health Administration

[[Page 81656]]

receives a popular novel with a market value of $25 from a mine 
operator. Because the novel is primarily for entertainment purposes, 
the inspector may not accept the gift.
    Example 3 to paragraph (m):  An employee at the Department of 
the Army is offered an encyclopedia on cyberwarfare from a 
prohibited source. The cost of the encyclopedia is far in excess of 
$100. The agency designee determines that acceptance of the gift 
would be inconsistent with the standard set out in Sec.  
2635.201(b). The employee may not accept the gift under paragraph 
(m) of this section.


Sec.  2635.205   Limitations on use of exceptions.

    Notwithstanding any exception provided in this subpart, other than 
Sec.  2635.204(j), an employee may not:
    (a) Accept a gift in return for being influenced in the performance 
of an official act;
    (b) Use, or permit the use of, the employee's Government position, 
or any authority associated with public office, to solicit or coerce 
the offering of a gift;
    (c) Accept gifts from the same or different sources on a basis so 
frequent that a reasonable person would be led to believe the employee 
is using the employee's public office for private gain;

    Example 1 to paragraph (c):  A purchasing agent for a Department 
of Veterans Affairs medical center routinely deals with 
representatives of pharmaceutical manufacturers who provide 
information about new company products. Because of his crowded 
calendar, the purchasing agent has offered to meet with manufacturer 
representatives during his lunch hours Tuesdays through Thursdays, 
and the representatives routinely arrive at the employee's office 
bringing a sandwich and a soft drink for the employee. Even though 
the market value of each of the lunches is less than $6 and the 
aggregate value from any one manufacturer does not exceed the $50 
aggregate limitation in Sec.  2635.204(a) on gifts of $20 or less, 
the practice of accepting even these modest gifts on a recurring 
basis is improper.

    (d) Accept a gift in violation of any statute; relevant statutes 
applicable to all employees include, but are not limited to:
    (1) 18 U.S.C. 201(b), which prohibits a public official from, 
directly or indirectly, corruptly demanding, seeking, receiving, 
accepting, or agreeing to receive or accept anything of value 
personally or for any other person or entity in return for being 
influenced in the performance of an official act; being influenced to 
commit or aid in committing, or to collude in, or allow, any fraud, or 
make opportunity for the commission of any fraud, on the United States; 
or for being induced to do or omit to do any action in violation of his 
or her official duty. As used in 18 U.S.C. 201(b), the term ``public 
official'' is broadly construed and includes regular and special 
Government employees as well as all other Government officials; and
    (2) 18 U.S.C. 209, which prohibits an employee, other than a 
special Government employee, from receiving any salary or any 
contribution to or supplementation of salary from any source other than 
the United States as compensation for services as a Government 
employee. The statute contains several specific exceptions to this 
general prohibition, including an exception for contributions made from 
the treasury of a State, county, or municipality;
    (e) Accept a gift in violation of any Executive Order; or
    (f) Accept any gift when acceptance of the gift is specifically 
prohibited by a supplemental agency regulation issued with the 
concurrence of the Office of Government Ethics, pursuant to Sec.  
2635.105.


Sec.  2635.206   Proper disposition of prohibited gifts.

    (a) Unless a gift is accepted by an agency acting under specific 
statutory authority, an employee who has received a gift that cannot be 
accepted under this subpart must dispose of the gift in accordance with 
the procedures set forth in this section. The employee must promptly 
complete the authorized disposition of the gift. The obligation to 
dispose of a gift that cannot be accepted under this subpart is 
independent of an agency's decision regarding corrective or 
disciplinary action under Sec.  2635.106.
    (1) Gifts of tangible items. The employee must promptly return any 
tangible item to the donor or pay the donor its market value; or, in 
the case of a tangible item with a market value of $100 or less, the 
employee may destroy the item. An employee who cannot ascertain the 
actual market value of an item may estimate its market value by 
reference to the retail cost of similar items of like quality.

    Example 1 to paragraph (a)(1):  A Department of Commerce 
employee received a $25 T-shirt from a prohibited source after 
providing training at a conference. Because the gift would not be 
permissible under an exception to this subpart, the employee must 
either return or destroy the T-shirt or promptly reimburse the donor 
$25. Destruction may be carried out by physical destruction or by 
permanently discarding the T-shirt by placing it in the trash.
    Example 2 to paragraph (a)(1):  To avoid public embarrassment to 
the seminar sponsor, an employee of the National Park Service did 
not decline a barometer worth $200 given at the conclusion of his 
speech on Federal lands policy. To comply with this section, the 
employee must either promptly return the barometer or pay the donor 
the market value of the gift. Alternatively, the National Park 
Service may choose to accept the gift if permitted under specific 
statutory gift acceptance authority. The employee may not destroy 
this gift, as the market value is in excess of $100.

    (2) Gifts of perishable items. When it is not practical to return a 
tangible item in accordance with paragraph (a)(1) of this section 
because the item is perishable, the employee may, at the discretion of 
the employee's supervisor or the agency designee, give the item to an 
appropriate charity, share the item within the recipient's office, or 
destroy the item.

    Example 1 to paragraph (a)(2):  With approval by the recipient's 
supervisor, a floral arrangement sent by a disability claimant to a 
helpful employee of the Social Security Administration may be placed 
in the office's reception area.

    (3) Gifts of intangibles. The employee must promptly reimburse the 
donor the market value for any entertainment, favor, service, benefit 
or other intangible. Subsequent reciprocation by the employee does not 
constitute reimbursement.

    Example 1 to paragraph (a)(3):  A Department of Defense employee 
wishes to attend a charitable event to which he has been offered a 
$300 ticket by a prohibited source. Although his attendance is not 
in the interest of the agency under Sec.  2635.204(g), he may attend 
if he reimburses the donor the $300 face value of the ticket.

    (4) Gifts from foreign governments or international organizations. 
The employee must dispose of gifts from foreign governments or 
international organizations in accordance with 41 CFR part 102-42.
    (b) An agency may authorize disposition or return of gifts at 
Government expense. Employees may use penalty mail to forward 
reimbursements required or permitted by this section.
    (c) An employee who, on his or her own initiative, promptly 
complies with the requirements of this section will not be deemed to 
have improperly accepted an unsolicited gift. An employee who promptly 
consults his or her agency ethics official to determine whether 
acceptance of an unsolicited gift is proper and who, upon the advice of 
the ethics official, returns the gift or otherwise disposes of the gift 
in accordance with this section, will be considered to have complied 
with the requirements of this section on the employee's own initiative.
    (d) Employees are encouraged to record any actions they have taken 
to

[[Page 81657]]

properly dispose of gifts that cannot be accepted under this subpart, 
such as by sending an electronic mail message to the appropriate agency 
ethics official or the employee's supervisor.

[FR Doc. 2016-27036 Filed 11-17-16; 8:45 am]
 BILLING CODE 6345-03-P