January 4, 1996
DO-96-001
MEMORANDUM
TO: Heads of Agencies, Designated Agency Ethics Officials
and Inspectors General
FROM: Stephen D. Potts
Director
SUBJECT: Short-Term Waiver Under 18 U.S.C. § 207(c)(2)(C)
On December 28, 1995, the President signed Executive Order
12984 which provided for a pay raise for the Senior Executive
Service. That pay raise will become effective as early as
January 7, 1996. As explained in my DAEOgram of December 19, 1995,
one effect of the pay raise will be to make the basic rate of pay
for Senior Executive Service (SES) level 4 greater than the rate of
basic pay for level V of the Executive Schedule. Thus, employees
at SES level 4 will become "senior employees" for purposes of
section 207 of title 18 of the United States Code and will be
subject to additional post-employment restrictions at 18 U.S.C.
§ 207(c) and (f). (See 18 U.S.C § 207(c)(2)(A)(ii)).
Historically, new post-employment restrictions have not taken
effect without some notice to employees so that they could make any
career adjustments they felt necessary and so that agencies could
plan for personnel changes that occurred as a result. Further, the
scheme underlying the post-employment restrictions is premised on
the theory that the more severe restrictions should apply to
individuals who have the most senior career and political
appointments. Accordingly, the definition of "senior employee" was
tied to the rate of basic pay for a position (EL-V) at a time when
there was no artificial ceiling at the top of the pay scale.
In this instance, there has been no notice to affected
employees. The very limited amount of notice time actually
available has been exacerbated by the furlough of a significant
number of Federal employees. And although the post-employment
restriction at 18 U.S.C. § 207(c) may be waived by my Office, the
furlough has also prevented agencies from developing the
information necessary to request waivers under 18 U.S.C. § 207 and
for the Office of Government Ethics (OGE) to consider such
requests.
Moreover, a substantial percentage of individuals in the SES
will become senior employees without any accretion of duties or
responsibilities. The change has occurred simply because Congress,
for totally unrelated purposes, froze the rate of basic pay for the
level of position to which this senior employee status is tied.
Thus, rate of basic pay at the higher levels is no longer a true
indication of level of position in the Government hierarchy. In
effect, the pay raise unexpectedly puts the traditional and
significantly large journeyman level of the SES into the "senior
employee" category for reasons unrelated to the purposes
underpinning the senior employee post-employment restrictions.
Consequently, I have concluded that, under the circumstances,
it is reasonable for me to determine that the sudden imposition of
the restrictions of 18 U.S.C. § 207(c) and (f) and the substantial
uncertainty it will cause at this time, will create an undue
hardship in departments and agencies in obtaining qualified
personnel to fill the affected positions, at least in the near
term. I therefore grant a waiver under 18 U.S.C. § 207(c)(2)(C) to
the individuals described below for the period of time indicated.
I further determine that granting this waiver would not create the
potential for use of undue influence or unfair advantage.
This waiver will give employees some fair notice, will allow
agencies to develop individual waiver requests where appropriate
and will allow OGE to discuss with Congress any possible changes to
18 U.S.C. § 207 that will take into consideration the effect of pay
compression on the applicability of post-employment restrictions.
The following individuals will have the benefit of this waiver
until the date specified:
All employees whose basic rate of pay on December 28, 1995 was
less than that of the rate of basic pay payable for level V of the
Executive Schedule and as a direct result of Executive Order 12984
(or any other Executive order or statute the terms of which are
tied to the pay raise effected through Executive Order 12984) would
have their basic rate of pay increased to an amount equal to or
greater than the rate of basic pay for level V of the Executive
Schedule and whose position would then be described in 18 U.S.C.
§ 207(c)(2)(ii).
This waiver is effective until June 30, 1996.