Section

[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR2635.204]

[Page 548-554]

TITLE 5--ADMINISTRATIVE PERSONNEL

CHAPTER XVI--OFFICE OF GOVERNMENT ETHICS

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

Subpart B--Gifts From Outside Sources

Sec. 2635.204 Exceptions.

The prohibitions set forth in Sec. 2635.202(a) do not apply to a
gift accepted under the circumstances described in paragraphs (a)
through (l) of this section, and an employee's acceptance of a gift in
accordance with one of those paragraphs will be deemed not to violate
the principles set forth in Sec. 2635.101(b), including appearances.
Even though acceptance of a gift may be permitted by one of the
exceptions contained in paragraphs (a) through (l) of this section, it
is never inappropriate and frequently prudent for an employee to decline
a gift offered by a prohibited source or because of his official
position.
(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 shall 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: An employee of the Securities and Exchange Commission and
his spouse have been invited by a representative of a regulated entity
to a Broadway play, 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: An employee of the Defense Mapping Agency has been
invited by an association of cartographers to speak about his agency's
role in the evolution of missile technology. At the conclusion of his
speech, the association presents the employee a framed map with a market
value of $18 and a book about the history of cartography with a market
value of $15. The employee may accept the map or the book, but not both,
since the aggregate value of these two tangible items exceeds $20.
Example 3: On four occasions during the calendar year, an employee
of the Defense Logistics Agency 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

[[Page 549]]

he can accept the birthday present under the exception at
Sec. 2635.204(b) for gifts based on a personal relationship.
Example 4: 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 has accepted an association's gift of travel expenses and
conference fees for an employee of its Office of Radiation Programs to
attend an international conference on ``The Chernobyl Experience.''
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 only authority under which an agency may accept gifts
from certain non-Federal sources in connection with its employees'
attendance at such functions, a gift of $20 or less accepted under
Sec. 2635.204(a) is a gift to the employee rather than to his employing
agency.
Example 5: 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 a $15 computer program disk at X Company's
booth, a $12 appointments calendar 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.

(b) Gifts based on a personal relationship. An employee may accept a
gift given 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 such a
determination include the history of the relationship and whether the
family member or friend personally pays for the gift.
Example 1: An employee of the Federal Deposit Insurance Corporation
has been dating a secretary employed by a member bank. For Secretary's
Week, the bank has given each secretary 2 tickets to an off-Broadway
musical review 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 his girlfriend's invitation to the theater. Even
though the tickets were initially purchased by the member bank, they
were given without reservation to the secretary to use as she wished,
and her invitation to the employee was motivated by their personal
friendship.
Example 2: Three partners in a law firm that handles corporate
mergers have invited an employee of the Federal Trade Commission 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.

(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) Reduced 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 and
commercial discounts 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; provided, however, that
(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.
Example 1: An employee of the Consumer Product Safety Commission 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

[[Page 550]]

the safety of microwave ovens, the $50 discount is a standard offer that
the manufacturer has made broadly available through a number of similar
organizations to large segments of the public.
Example 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.
Example 3: The administrative officer for a district office of the
Immigration and Naturalization Service has signed an INS 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 INS funds, the
administrative officer cannot keep the briefcase which, if claimed and
received, is Government property.
(d) Awards and honorary degrees. (1) An employee may accept gifts,
other than cash or an investment interest, with an aggregate market
value of $200 or less if such gifts are a bona fide award or incident to
a bona fide award that is given for meritorious public service or
achievement by a person who does not have interests that may be
substantially affected by the performance or nonperformance of the
employee's official duties or by an association or other organization
the majority of whose members do not have such interests. Gifts with an
aggregate market value in excess of $200 and awards of cash or
investment interests offered by such persons as awards or incidents of
awards that are given for these purposes may be accepted upon a written
determination by an agency ethics official that the award is made as
part of an established program of recognition:
(i) Under which awards have been made on a regular basis or which is
funded, wholly or in part, to ensure its continuation on a regular
basis; and
(ii) Under which selection of award recipients is made pursuant to
written standards.
(2) An employee may accept an honorary degree from an institution of
higher education as defined at 20 U.S.C. 1141(a) 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.
(3) An employee who may accept an award or honorary degree pursuant
to paragraph (d)(1) or (2) of this section may also accept meals and
entertainment given to him and to members of his family at the event at
which the presentation takes place.
Example 1: Based on a determination by an agency ethics official
that the prize meets the criteria set forth in Sec. 2635.204(d)(1), an
employee of the National Institutes of Health 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: Prestigious University 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.
Example 3: An ambassador selected by a nonprofit organization as
recipient of its annual award for distinguished service in the interest
of world peace may, together with his wife, 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.
(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: A Department of Agriculture employee whose husband is a
computer programmer employed by an Agriculture Department 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 husband's employer.

[[Page 551]]

Example 2: Where the spouses of other clerical personnel have not
been invited, an employee of the Defense Contract Audit Agency whose
wife 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 wife received a special
invitation for herself and her spouse.
(2) Resulting from his outside business or employment activities
when it is clear that such benefits have not been offered or enhanced
because of his official status; or
Example 1: The members of an Army Corps of Engineers environmental
advisory committee that meets 6 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 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.
Example 1: 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) For purposes of paragraphs (e)(1) through (3) of this section,
employment shall have the meaning set forth in Sec. 2635.603(a).
(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, 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 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: The Secretary of the Department of Health and Human
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) Widely attended gatherings and other events--(1) Speaking and
similar engagements. When an employee is assigned to participate as a
speaker or panel participant or otherwise to present information on
behalf of the agency at a conference or other event, his acceptance of
an offer of free attendance at the event on the day of his presentation
is permissible when provided by the sponsor of the event. The employee's
participation in the event on that day is viewed as a customary and
necessary part of his performance of the assignment and does not involve
a gift to him or to the agency.
(2) Widely attended gatherings. When there has been a determination
that his attendance is in the interest of the agency because it will
further agency programs and operations, an employee may accept an
unsolicited gift of free attendance at all or appropriate parts of a
widely attended gathering of mutual interest to a number of parties from
the sponsor of the event or, if more than 100 persons are expected to
attend the event and the gift of free attendance has a market value of
$260 or less, from a person other than the sponsor of the event. A
gathering is widely attended if it is expected that a large number of
persons will attend and 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.
For employees subject to a leave system, attendance at the event shall
be on the employee's own time or, if authorized by the employee's
agency, on excused absence pursuant to applicable guidelines for

[[Page 552]]

granting such absence, or otherwise without charge to the employee's
leave account.
(3) Determination of agency interest. The determination of agency
interest required by paragraph (g)(2) of this section shall be made
orally or in writing by the agency designee.
(i) If the person who has extended the invitation has interests that
may be substantially affected by the performance or nonperformance of an
employee's official duties or is an association or organization the
majority of whose members have such interests, the employee's
participation may be determined to be in the interest of the agency only
where there is a written finding by the agency designee that the
agency's interest in the employee's participation in the event outweighs
the concern that acceptance of the gift of free attendance may or may
appear to improperly influence the employee in the performance of his
official duties. Relevant factors that should be considered by the
agency designee include the importance of the event to the agency, the
nature and sensitivity of any pending matter affecting the interests of
the person who has extended the invitation, the significance of the
employee's role in any such matter, the purpose of the event, the
identity of other expected participants and the market value of the gift
of free attendance.
(ii) A blanket determination of agency interest may be issued to
cover all or any category of invitees other than those as to whom the
finding is required by paragraph (g)(3)(i) of this section. Where a
finding under paragraph (g)(3)(i) of this section is required, a written
determination of agency interest, including the necessary finding, may
be issued to cover two or more employees whose duties similarly affect
the interests of the person who has extended the invitation or, where
that person is an association or organization, of its members.
(4) Free attendance. For purposes of paragraphs (g)(1) and (g)(2) of
this section, free attendance may include waiver of all or part of a
conference or other fee or the provision of food, refreshments,
entertainment, instruction and materials furnished to all attendees as
an integral part of the event. It does not include travel expenses,
lodgings, entertainment collateral to the event, or meals taken other
than in a group setting with all other attendees. Where the invitation
has been extended to an accompanying spouse or other guest (see
paragraph (g)(6) of this section), the market value of the gift of free
attendance includes the market value of free attendance by the spouse or
other guest as well as the market value of the employee's own
attendance.
Note: There are statutory authorities implemented other than by part
2635 under which an agency or an employee may be able to accept free
attendance or other items not included in the definition of free
attendance, such as travel expenses.
(5) Cost provided by sponsor of event. The cost of the employee's
attendance will not be considered to be provided by the sponsor, and the
invitation is not considered to be from the sponsor of the event, where
a person other than the sponsor designates the employee to be invited
and bears the cost of the employee's attendance through a contribution
or other payment intended to facilitate that 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 to another
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)
or (g)(2) of this section. The authorization required by this paragraph
may be provided orally or in writing.
Example 1: An aerospace industry association that is a prohibited
source sponsors an industrywide, two-day seminar for which it charges a
fee of $400 and anticipates attendance of approximately 400. An Air
Force contractor pays $2,000 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

[[Page 553]]

accept the gifts of free attendance. Because the contractor specified
the invitees and bore the cost of their attendance, the gift of free
attendance is considered to be provided by the company and not by the
sponsoring association. Had the contractor paid $2,000 to the
association in order that the association might invite any five Federal
employees, an Air Force official to whom the sponsoring association
extended one of the five invitations could attend if his participation
were determined to be in the interest of the agency. The Air Force
official could not in any case accept an invitation directly from the
nonsponsor contractor because the market value of the gift exceeds $260.
Example 2: 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 $260 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, 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 $260. However, if the
invitation were extended to the employee and an accompanying guest, her
guest could not be authorized to attend for free since the market value
of the gift of free attendance would be $520 and the invitation is from
a person other than the sponsor of the event.
Example 3: An employee of the Department of Energy (DOE) and his
wife 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 husband. 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 husband who
are not officials of the utility, those in attendance would still not
represent a diversity of views or interests. Thus, the company banquet
would not qualify as a widely attended gathering under those
circumstances either.
Example 4: An employee of the Department of the Treasury authorized
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), he may accept a
token of appreciation for his speech having a market value of $20 or
less.
Example 5: 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 de minimis exception at Sec. 2635.204(a).
Example 6: 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. If the conference is widely attended, he may be
authorized, based on a determination that his attendance is in the
agency's interest, to accept the sponsor's offer to waive the attendance
fee for the remainder of the conference.
(h) Social invitations from persons other than prohibited sources.
An employee may accept food, refreshments and entertainment, not
including travel or lodgings, at a social event attended by several
persons where:
(1) The invitation is from a person who is not a prohibited source;
and
(2) No fee is charged to any person in attendance.
Example 1: Along with several other Government officials and a
number of individuals from the private sector, the Administrator of the
Environmental Protection Agency has been invited to the premier showing
of a new adventure movie about industrial espionage. The producer is
paying all costs of the showing. The Administrator may accept the
invitation since the producer is not a prohibited source and no
attendance fee is being charged to anyone who has been invited.
Example 2: An employee of the White House Press Office has been
invited to a cocktail party given by a noted Washington hostess who is
not a prohibited source. The employee may attend even though he has only
recently been introduced to the hostess and suspects that he may have
been invited because of his 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 301-7.3(c) may accept food, refreshments or
entertainment in the course

[[Page 554]]

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 from the Superintendent of Documents, U.S.
Government Printing Office, Washington, DC 20402;
(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: A number of local businessmen in a developing country are
anxious 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 businessmen 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 own behalf or on behalf of any family member,
provided that such acceptance does not violate Sec. 2635.202(c) (1) or
(2), 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 the acceptance of which is specifically authorized
by a supplemental agency regulation.
(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, receipt of which is specifically
authorized by statute. Gifts which may be received 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 from an organization with tax-exempt status under 26
U.S.C. 501(c)(3) or from a person to whom the prohibitions in 18 U.S.C.
209 do not apply. The employee's acceptance must be approved by the
agency in accordance with part 410 of this title; or
Note: 26 U.S.C. 501(c)(3) is authority for tax-exempt treatment of a
limited class of nonprofit organizations, including those organized and
operated for charitable, religious or educational purposes. Many
nonprofit organizations are not exempt from taxation under this section.
(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.

[57 FR 35041, Aug. 7, 1992; 57 FR 48557, Oct. 27, 1992; 61 FR 42969,
Aug. 20, 1996; 61 FR 48733, Sept. 16, 1996; 61 FR 50691, Sept. 27, 1996;
62 FR 48747, Sept. 17, 1997; 63 FR 69993, 69994, Dec. 18, 1998; 65 FR
69657, Nov. 20, 2000]