September 7, 1999
                                  DO-99-033

MEMORANDUM

TO:       Designated Agency Ethics Officials

FROM:     Stephen D. Potts
          Director

SUBJECT:  Inflation Adjustments of Civil Monetary Penalties under
          the Ethics in Government Act


     The Office of Government Ethics (OGE) and the Department of
Justice (Justice) have issued coordinated rulemakings to increase
by 10% the maximum civil monetary penalties that may be imposed for
certain violations of the Ethics in Government Act.  The increases
adjust for inflation, as prescribed under the 1996 Debt Collection
Improvement Act amendments to the 1990 Federal Civil Penalties
Inflation Adjustment Act (28 U.S.C. § 2461 note).  See OGE's final
rule amendments at 64 Federal Register 47095-47097 (8/30/99) and
Justice's final rule amendments at 64 Federal Register 47099-47104
(8/30/99), both of which become effective on September 29, 1999.

     OGE's amendments affect our executive branchwide financial
disclosure and outside employment regulations at 5 C.F.R.
parts 2634 and 2636.  Four of the Ethics Act civil monetary
penalties (CMPs) which are being adjusted, from a maximum of
$10,000 to a maximum of $11,000, are those for: (1) knowing and
willful falsification of, failure to file, or failure to report
required information on, an SF 278 public financial disclosure
report (5 C.F.R. § 2634.701(b); 5 U.S.C. app., § 104(a));
(2) knowing and willful breach of a qualified trust by trust
fiduciaries and interested parties (5 C.F.R. § 2634.702(a);
5 U.S.C. app., § 102(f)(6)(C)(i)); (3) misuse of an SF 278 public
report (5 C.F.R. § 2634.703; 5 U.S.C. app., § 105(c)(2)); and
(4) violation of the outside earned income, employment and
affiliations provisions for covered noncareer employees (5 C.F.R.
§ 2636.104(a); 5 U.S.C. app., § 504(a)).  In the case of the fourth
listed CMP and the one under 18 U.S.C. § 216(b) that is noted in
the next paragraph of this memorandum, there is an alternative
penalty (if greater), which is not being adjusted, of the amount of
any compensation received (or, under the § 216(b) provision,
offered) for the prohibited conduct.  In addition, a fifth Ethics
Act CMP, for negligent breach of a qualified trust by trust
fiduciaries and interested parties (5 C.F.R. § 2634.702(b);
5 U.S.C. app., § 102(f)(6)(C)(ii)), is being adjusted from a
maximum of $5,000 to a maximum of $5,500.  After consultation with
the Justice Department, we determined that the late filing fee for
public reports is not a civil monetary penalty as defined under the
Federal Civil Penalties Inflation Adjustment Act, as amended. 
Thus, that fee will remain at $200 (5 C.F.R. § 2634.704; 5 U.S.C.
app., § 104(d) (not § 105(d) as inadvertently miscited in the
preamble to the OGE rulemaking)).

     The Justice Department amendments add a new part 85 to their
28 C.F.R. regulations to adjust the same Ethics Act CMPs by the
same amount, as enforced in district court actions brought by the
Civil Division.  In addition, Justice is adjusting, from $50,000 to
$55,000, the maximum CMP that may be imposed under 18 U.S.C.
§ 216(b) for violation of various conflicts laws.

     Under the amended Federal civil monetary penalties inflation
law, OGE and Justice will henceforth adjust the same Ethics Act
CMPs at least once every four years.