April 8, 1998
DO-98-013
MEMORANDUM
TO: Designated Agency Ethics Officials
FROM: Stephen D. Potts
Director
SUBJECT: Timeliness of Nominee Public Financial Disclosure
Reports and Related Certificate of Divestiture Issues
The U.S. Office of Government Ethics (OGE) recently has
reviewed its policy with respect to the filing of nominee public
financial disclosure reports (SF 278). In cases involving nominees
requiring Senate confirmation, the prospective agency of employment
is required to submit to this Office a nominee package which
includes an opinion letter from the agency, the financial
disclosure report of the nominee, and any supplemental material
such as an ethics agreement. This Office reviews the package and
then forwards it to the appropriate Senate committee along with our
opinion letter. (See 5 C.F.R. § 2634.605(c).)
In most cases, by the time a nomination has been announced the
nominee's draft financial disclosure report already has been
reviewed by and discussed among OGE, agency and White House
reviewers. Such reports are not considered to have been "filed"
for purposes of the Ethics in Government Act, however, and
circulated copies are designated to be drafts of the nominee's
report. This review process often begins several months before an
individual is nominated, and is finalized only at the time that the
report (without a draft designation) is formally transmitted to
this Office. As a result, this Office accepts a report that may
have been signed and dated by the nominee up to six months prior to
its transmittal to the Senate.
Note, however, that the Ethics in Government Act generally
requires the reports of nominees to be current to fewer than
31 days of the date on which the report is filed, except for some
data which is required to be current as of the date of filing. See
5 U.S.C. app. § 102(b)(1). Accordingly, it has always been OGE's
policy that the material in the report be made current by the filer
or the agency reviewer (pursuant to specific authorization from the
filer) prior to submitting the report to this Office in final form.
Most agencies have adopted this practice. This action serves to
protect the nominee from possible conflicts and appearance issues
that may have arisen during the period between the date he signed
the report and submission of the report to the Senate. This
practice fulfills the statutory requirements concerning timeliness
arising under section 102(b)(1) of the Ethics in Government Act.
To ensure that all agency reviewers consistently adhere to
this practice and that there are not ambiguities in particular
cases, OGE is now requesting that all agency reviewers note on the
cover sheet of the disclosure form that the report is current in
accordance with statutory requirements. This statement must then
be followed with the date and signature of the agency reviewer.
For nominees, this documents that the report is filed at the agency
within five days of his nomination by the President, and that the
information contained in the report is current in accordance with
reporting periods required for each schedule. (Note that the
reporting periods have been reproduced on the cover sheet of the
public financial disclosure report.) For purposes of meeting this
requirement, we suggest that agency reviewers write on the cover
sheet of the report:
The filer has been contacted and confirms that
the information contained in the report is
current per required reporting periods to
within five days of his nomination. [signature
of agency reviewer and date]
A related matter arises from the commitments of nominees in
their ethics agreements to divest certain assets identified either
specifically or by category. It is generally understood that this
Office does not accept an ethics agreement that makes the
divestiture of prohibited or problematic holdings contingent upon
receiving a Certificate of Divestiture (CD). We also wish to
clarify that in the case of a confirmed nominee, we do not consider
assets eligible for CD certification (except under unusual and
extraordinary circumstances) unless they are prohibited or
otherwise problematic assets which --
(i) were disclosed in the financial disclosure report
transmitted to the Senate, and
(ii) were held by the filer at the earlier of --
(A) the date the employee was counseled by his
ethics official, or
(B) the date noted on the financial disclosure
report by the agency reviewer under the
procedure specified in the preceding
paragraph.
For purposes of this principle, unusual and extraordinary
circumstances do not include inadvertent omissions, mistakes of
fact, the acceptance of gifts, or the lack of actual knowledge due
to acquisitions of assets through the use of agents or fiduciaries
acting under discretionary powers. Such circumstances do include
inheritances of attributable property in which a beneficial
interest was not previously held.