[Federal Register: May 5, 2003 (Volume 68, Number 86)]
[Proposed Rules]
[Page 23875-23883]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05my03-47]
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Part VII
Office of Government Ethics
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5 CFR Part 2601
Implementation of Office of Government Ethics Statutory Gift Acceptance
Authority; Proposed Rule
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OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2601
RIN 3209-AA21
Implementation of Office of Government Ethics Statutory Gift
Acceptance Authority
AGENCY: Office of Government Ethics (OGE).
ACTION: Proposed rule with request for comments.
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SUMMARY: The Office of Government Ethics is issuing a proposed
regulation that would implement the agency gift acceptance authority
contained in section 2 of the Office of Government Ethics Authorization
Act of 1996, which authorizes OGE to accept gifts and certain other
items for the purpose of aiding or facilitating the work of the agency
and which requires the Director of OGE to issue regulations
establishing criteria for determining whether the exercise of this gift
acceptance authority is appropriate. The proposed rule would state the
policy regarding the use of this authority, provide definitions of key
terms, establish guidelines for the solicitation and acceptance of
gifts, state certain conditions for acceptance and use of gifts, and
establish accounting requirements.
DATES: Written comments by executive branch agencies and other
interested persons are invited and are due on or before August 4, 2003.
ADDRESSES: Office of Government Ethics, Suite 500, 1201 New York Avenue
NW., Washington, DC 20005-3917, Attention: Ms. Allison C. George.
Comments also may be sent electronically to OGE's Internet E-mail
address at usoge@oge.gov. For E-mail messages, the subject line should
include the following reference--``Comments Regarding Proposed Gift
Acceptance Authority Regulations.''
FOR FURTHER INFORMATION CONTACT: Allison C. George, Associate General
Counsel, Office of Government Ethics, Telephone: 202-208-8000; TDD:
202-208-8025; FAX 202-208-8037.
SUPPLEMENTARY INFORMATION:
I. Background
This proposed rule, to be codified once finalized in a new part
2601 of 5 CFR, would implement section 2 of the Office of Government
Ethics Authorization Act of 1996 (the 1996 Reauthorization Act), Pub.
L. 104-179, 110 Stat. 1566, which amended the Ethics in Government Act
of 1978 (the Ethics Act), as codified at 5 U.S.C. app. Sec. 403(b).
Section 403(b)(1) of the Ethics Act as amended authorizes the
Director of OGE to accept and utilize on behalf of the United States,
any gift, donation, bequest or devise of money, use of facilities,
personal property, or services, for the purpose of aiding or
facilitating the work of OGE.
Section 403(b)(2) of the Ethics Act as amended prohibits the
acceptance of any gift that attaches conditions inconsistent with
applicable laws or regulations. It also prohibits acceptance of any
gift that is conditioned upon or will require the expenditure of
appropriated funds that are not available to OGE.
Section 403(b)(3) of the Ethics Act as amended requires the
Director of OGE to establish written rules that set forth criteria for
determining whether the acceptance of a particular gift is appropriate.
The statutory standard for this determination is whether acceptance
would ``reflect unfavorably upon the ability of the Office of
Government Ethics, or any employee of such Office, to carry out its
responsibilities or official duties in a fair and objective manner, or
would compromise the integrity or the appearance of the integrity of
its programs or any official involved in those programs.''
The legislative history of the 1996 Reauthorization Act indicates
that OGE sought this authority only ``to support OGE's education and
training program in carrying out its training mission.'' H.R. Rep. No.
104-595 at 7 (1996) (House Report). See also S. Rep. No. 104-244 at 5
(1996) (Senate Report). However, by its terms the law confers broad
gift acceptance authority--similar to that bestowed upon other
executive branch agencies--that may be used for any activity that
furthers the work of the Office. The 1996 Reauthorization Act requires
the Director to promulgate implementing regulations in order to ensure
that this grant of broad authority is not used in a manner that would
compromise the integrity of OGE or its employees. The House Report
states:
It is the intention of the Committee that these rules will
safeguard against not only conflicts of interest, but any appearance
of a conflict of interest in the acceptance of gifts by OGE.
House Report at 7. See also Senate Report at 5.
The legislative history further notes that many executive branch
agencies and departments that have statutory gift acceptance authority
are not required to prescribe rules governing its use:
Moreover, those agencies and departments that have gift
acceptance authority are not required to prescribe regulations
governing its use. While other agencies will not be required to
follow the example of OGE's regulations in making determinations
about their gift acceptance authority, OGE believes that its
regulations will provide useful guidance to agencies.
House Report at 7-8. See also Senate Report at 6.
Finally, in the discussion of this legislation on the Senate floor,
Senator William Cohen, a sponsor of the Senate bill, noted:
Currently, other agencies that have gift acceptance authority do
not have to prescribe regulations governing its use. While other
agencies would not be required to follow the example of OGE's
regulations in making their own determinations about their gift
authority, OGE's regulations would provide useful guidance to other
agencies.
142 Congressional Record S8739, July 24, 1996.
Executive branch agency gift authorities differ widely in their
terms. In some cases the authority may be agencywide, while in others
it may be limited to a particular component or activity. Some agency
authorities permit the acceptance of virtually any kind of gift; others
limit gifts to a particular type. Some authorities permit the use of
gifts for a broad range of purposes; others limit use of gifts to some
particular purpose. The practice with regard to implementing
regulations also differs widely among executive branch agencies. Some
agencies have comprehensive directives, orders, or policy statements
regarding the use of their gift acceptance authority. Other agencies
have no written guidelines and make agency gift acceptance
determinations on a case-by-case basis.
Although this proposed rule would implement authority that is
specific to OGE, it addresses several agency gift acceptance issues of
general concern to executive branch agencies. Therefore, it could
provide guidance to other agencies in administering their gift
authority. In order to develop a final rule that would have the
greatest degree of utility in this regard, OGE invites comments by
executive branch agencies and other interested persons on this proposed
rule, in particular with respect to these issues of more general
concern.
As noted above, however, there is great variation among existing
agency gift acceptance authorities. Agencies also differ in terms of
the frequency and amount of gifts they receive. Agencies also may have
gift issues that are unique to their programs and missions. Thus, an
agency that wishes to use the OGE rule as a model may need to modify
the rule as proposed to meet its particular needs and circumstances.
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II. Section-By-Section Analysis
The following section-by-section analysis discusses each section of
the new proposed part 2601 regulation.
A. General Provisions
1. Proposed Sec. 2601.101 would set forth the legal authority
under section 2 of the Office of Government Ethics Authorization Act of
1996 for the promulgation of this rule.
2. Proposed Sec. 2601.102 would state that the purpose of this
rule is to establish written guidelines regarding OGE's implementation
of its statutory gift authority.
3. Proposed Sec. 2601.103 would set forth the policies that would
guide OGE's interpretation and use of its gift authority. These
policies deal with the scope of OGE's gift acceptance authority,
permitted uses of gifts, sources of gifts, endorsement issues arising
from the agency's acceptance of a gift, and types of gifts.
Proposed Sec. 2601.103(a) would reflect OGE's interpretation that
its statutory authority to ``accept and utilize'' gifts embraces the
authority to accept, receive, hold, retain, utilize, use, administer,
manage, sell, spend, liquidate, and dispose of a gift. It also includes
the authority to destroy a gift, provided that such action is otherwise
in accordance with Federal regulations, as for example, Federal
property management regulations contained in chapters 101 and 102 of 41
CFR.
OGE also interprets the ``accept and utilize'' language as
embracing the authority to invest or reinvest gifts. A number of
agencies have express statutory language authorizing the agency to
invest or reinvest gifts. However, even in the absence of such express
language, the authority to ``utilize'' gifts includes the authority to
properly manage property obtained by gift. In the case of monetary
gifts or the proceeds of the sale of tangible gifts, this would include
prudent investment or reinvestment. OGE will invest any available gift
funds in interest bearing securities of the United States, as is the
customary practice of executive branch agencies.
In addition, OGE interprets the authority to ``accept and utilize''
gifts as encompassing the authority to exchange one tangible gift for
another. At least one agency has express statutory authority to ``deal
with'' gifts. OGE might, for example, exchange or trade in donated
equipment for other more useful equipment. Or, for example, if OGE were
given a gift of common stock in a publicly traded company, it could
convert that gift of stock to Government securities. OGE believes that
such trading or exchange of gifts would be rare. Other Federal entities
might have more occasion to exchange or trade gifts. For example, an
agency authorized to accept real property might exchange a particular
parcel of donated land for another parcel that abuts other land for
which the agency is responsible. Or a Federal museum that received
gifts of art objects, gems or other items for its collections, or a
Federal visitors center that had exhibits, might apply its authority to
utilize gifts to trade or exchange a gift for another item that was
more appropriate or relevant to its collection.
The authority to ``accept and utilize'' gifts also encompasses the
authority to solicit gifts. The legislative history indicates that a
primary purpose for granting this authority was to further OGE's
training activities. In order to utilize effectively this authority for
this purpose, it would be necessary for authorized employees to be able
to contact persons who may be able to provide training facilities and
services. OGE may also use this authority, e.g., to seek gifts of
transportation and travel-related expenses. However, under the
regulations as proposed, an employee would not be permitted to engage
in an official capacity in activities on behalf of a private entity, to
raise funds for future donation to the Office of Government Ethics.
Proposed Sec. 2601.103(b) would state the purposes or activities
for which gifts may be used. The statute authorizes OGE to use gifts
``for the purpose of aiding or facilitating the work of the Office of
Government Ethics.'' Although support of training activities is
expected to be one of the most common uses, OGE envisions that this
authority may be used for other activities as well. This is consistent
with the broad language of section 403(b)(1) of the Ethics Act.
Although the gift statutes of other agencies use somewhat different
language, the various agency authorities describe a link to, or
connection with, the work of an agency, its programs, activities or
functions. Similarly, OGE interprets the language of ``aiding or
facilitating the work of'' OGE to mean that gifts may be utilized to
further any activity that has a relationship to the programs, functions
or activities of OGE.
Gifts may be used by or for the benefit of OGE employees, provided
that such use is otherwise permitted. For example, gifts may be used in
accordance with this part as proposed to enhance employee morale or to
recruit new employees.
Gifts may also be used for official travel other than travel that
is covered by section 1353 of title 31, United States Code. For
example, when an OGE employee is engaged in carrying out a core agency
function that is outside the scope of section 1353, OGE's statutory
authority could be used. See, for example, OGE Informal Advisory Letter
98 x 8 (dealing with acceptance of a gift of ground transportation),
which is included in The Informal Advisory Letters and Memoranda and
Formal Opinions of the United States Office of Government Ethics, as
published by the U.S. Government Printing Office, and is also available
in the Advisory Opinions section of OGE's Web site at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.usoge.gov
.
Proposed Sec. 2601.103(c) would state OGE policy with regard to
the sources from which gifts may be accepted. The Ethics Act does not
impose any restriction with regard to any particular source of a gift.
The main concern with regard to the source of a gift is raised by a
source that would be a ``prohibited source'' for the purpose of gifts
to an agency employee. As defined by the statute on gifts to Federal
employees, at 5 U.S.C. 7353(a), and OGE's regulation implementing the
Standards of Ethical Conduct for executive branch employees, at 5 CFR
2635.203(d), a prohibited source is any person who is seeking official
action from, doing business with (or, under the Standards, seeking to
do business with), or conducting activities regulated by, the
employee's agency, or any person whose interests may be substantially
affected by the performance or nonperformance of the employee's
official duties. The Standards of Ethical Conduct further clarify that
an organization made up of a majority of prohibited sources is itself a
prohibited source of gifts. See 5 CFR 2635.203(d)(5). Some agencies do
bar the acceptance of a gift to the agency from donors who would be
considered prohibited sources for gifts to its employees. OGE, however,
has determined that barring the acceptance of a gift from a prohibited
source or from any other particular class of donors would be unduly
restrictive. When a gift is from a prohibited source, there are
different considerations if the gift is made to an agency rather than
to an individual employee. Accordingly, the identity of the source is
evaluated as one key factor in applying the conflict of interest
standard to determine whether acceptance of a gift is appropriate.
Although the proposed rule would not preclude OGE's acceptance of gifts
from prohibited sources, such gifts would be scrutinized to try to
ensure that their acceptance would not reflect unfavorably upon OGE or
its employees.
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Other kinds of sources may also raise special concerns. For
example, gifts from intermediaries, including foundations and other
organizations, may require additional analysis and evaluation. Although
gifts generally should be made directly to OGE, the proposed rule would
not preclude gifts from intermediaries. However, where a gift is made
through an intermediary, it is relevant to the conflict analysis to
consider both the intermediary and the ultimate source of the gift. In
addition, the intermediary, such as a foundation or association, may
itself be a prohibited source, as noted above, and call for the same
degree of scrutiny. Gifts from intermediaries should also be examined
in terms of the nature of the conditions that may be attached to the
gift. However, rather than bar any source as a class, the proposed rule
would resolve these special issues through application of the conflict
of interest analysis.
Proposed Sec. 2601.103(d) would state that acceptance of a gift
should not in any way be construed to be an endorsement of the donor or
the donor's products, services, activities or policies.
Proposed Sec. 2601.103(e) would state that, with the exception of
gifts of actual currency, OGE will not preclude the solicitation or
acceptance of any kind of gift that is within its authority.
Although OGE's statutory authority does not bar gifts of currency,
OGE believes that it is prudent to decline a gift in the form of actual
currency. This approach is consistent with that taken by many agencies
that have addressed the question in their policy guidelines. The
reasons for this self-limitation are the greater risks that currency
presents in terms of appearance problems and in terms of accountability
of funds. Generally, there should be sufficient time to advise a donor
to provide a gift by some alternative to currency, such as by check, by
reimbursement of expenses, or by an in-kind gift. This should not
unduly limit the use of this authority and will provide greater
protection for OGE.
4. Proposed Sec. 2601.104 would set forth the relationship of the
authority implemented by this subpart to other authorities that provide
for the acceptance of gifts either by OGE or by an OGE employee. The
authority that would be implemented by this proposed regulation is
general authority for OGE to accept gifts. There are other authorities
that are more specific and that provide for the acceptance of gifts by
either the agency or by an individual employee in a personal capacity.
In some cases, an authority, by law, is the exclusive authority for
agency acceptance of a gift. In such a case, that authority would be
the exclusive authority for acceptance by the agency. In other cases, a
particular authority does not expressly state that it is exclusive. As
a matter of policy, however, OGE will utilize the more specific
authority for situations in which it is applicable. This would not,
however, preclude use of OGE's authority for activities or purposes
that are collateral to, or occur in conjunction with, but are not
expressly covered by some specific authority.
Proposed Sec. 2601.104(a)(1) would state the relationship of OGE's
gift authority to the authority to accept payments made to the agency
pursuant to 31 U.S.C. 1353. As mentioned, section 1353 is the exclusive
authority by which executive branch agencies can accept certain travel
reimbursements relating to an activity that is covered by that statute.
Section 1353 applies to any payment ``from non-Federal sources for
travel, subsistence, and related expenses with respect to attendance of
the employee (or the spouse of such employee) at any meeting or similar
function relating to the official duties of the employee.'' 31 U.S.C.
1353(a). Implementing regulations of the General Services
Administration define the term ``meeting or similar function'' as ``a
conference, seminar, speaking engagement, symposium, training course,
or similar event that takes place away from the employee's official
station, and is sponsored or cosponsored by a non-Federal source.'' 41
CFR 304-1.2(c)(3).
Where section 1353 is applicable, that statute preempts the use of
agency gift acceptance authority. This is made clear by the rules
implementing section 1353 at 41 CFR 304-1.8(a), which state that an
agency ``may not accept, under an agency gift statute or other similar
authority, payment for travel, subsistence, and related expenses
incurred by an employee and/or accompanying spouse to attend a meeting
or similar function.'' In other words, OGE's gift authority could not
be used to accept payments in connection with attendance at a meeting
or similar function that is within the scope of section 1353. However,
using OGE gift acceptance authority would not be precluded in
situations that are not covered by section 1353 that might occur in
conjunction with a section 1353 event. Section 1353 does not apply to
certain peripheral activities that may occur in connection with a
section 1353 activity. Use of OGE gift acceptance authority may be
appropriate in such cases, provided there is a connection to some
official activity.
Section 1353 does not cover a meeting or other event required to
carry out the agency's statutory or regulatory functions. OGE could use
its own gift authority to cover transportation and travel related
expenses connected with carrying out such core functions. For example,
OGE could use its gift authority in conducting a regional ethics
training event which would be in furtherance of one of OGE's core
functions. Section 1353 also does not cover gifts of transportation
when the employee is not in a travel status. OGE could use its
authority to accept local transportation for an employee on official
duty.
Proposed Sec. 2601.104(a)(2) would state the relationship of this
authority to the receipt of gifts of volunteer service accepted by the
agency pursuant to 5 U.S.C. 3111. Section 3111 provides for an
exception from the prohibition on acceptance of voluntary services
contained in 31 U.S.C. 1342. It permits the acceptance of the services
of student volunteers who are participating in an agency program
established for the purpose of providing educational experiences for
the student. The statute and its implementing regulations at 5 CFR part
308 contain criteria that must be met in order to accept student
volunteer services.
Proposed Sec. 2601.104(a)(2) provides that the acceptance of
services by student volunteers that comes within the authority of 5
U.S.C. 3111 shall be accepted by the agency under that authority.
Unlike section 1353, section 3111 does not expressly state that it is
the exclusive authority for the acceptance of student volunteer
services. However, OGE will use that authority for student volunteer
services that are covered by the terms of that statute. On the other
hand, OGE authority may be used in cases where the services to be
volunteered by a student do not meet the terms of section 3111. For
example, a person with more than a five-month interim between school
years who would not qualify under the student volunteer program could
provide volunteer services under the OGE gift acceptance authority.
More importantly, the OGE authority would be available for acceptance
of a broad array of other volunteer services that are not covered by
the limited scope of section 3111.
There are also a number of authorities under which employees as
individuals may accept gifts, such as gifts of training, gifts received
from certain foreign governmental entities, and gifts that may be
accepted in accordance with the provisions in the Standards of Ethical
Conduct. In some cases, a gift
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might be accepted either by an individual employee or by the agency. A
choice of authorities would then be available.
Proposed Sec. 2601.104(b)(1) would state the relationship of this
authority to gifts of training, expenses for training and other
benefits made to an employee pursuant to 5 U.S.C. 4111. Section 4111
permits employees to accept payments from certain qualifying
organizations without regard to the supplementation of salary
restrictions contained in 18 U.S.C. 209. Regulations implementing the
statute are found at 5 CFR 410.501-410.503. The regulation at 5 CFR
410.501(b) provides that:
This subpart does not limit the authority of an agency head to
establish procedures on the acceptance of contributions, awards, and
payments in connection with any training and meetings that are
outside the scope of this subpart in accordance with laws and
regulations governing Government ethics and governing acceptance of
travel reimbursements from non-Federal sources.
Thus, in a case where the payment qualifies under section 4111 and
is made to an individual employee, OGE's agency gift authority and this
proposed regulation would not apply because they concern gifts to the
agency. See also the gift exception in the Standards of Ethical
Conduct, at 5 CFR 2635.204(l)(1), for such gifts. However, section 4111
would not preclude OGE, as an agency, from accepting gifts of training
for its employees that were outside the scope of that provision. Where
such a gift is made to the agency, this proposed part would apply. Or
OGE may elect to use this authority in instances where a gift could not
be accepted by an employee because it is outside the scope of section
4111. For example, section 4111 applies only if the source is a tax
exempt organization described in section 501(c)(3) of title 26 of the
United States Code; other tax exempt organizations (described in other
subparagraphs of 26 U.S.C. 501) are not within the scope of section
4111. Moreover, OGE's authority could be used in conjunction with, or
as a supplement to, the payments to individual OGE employees for
training.
Proposed Sec. 2601.104(b)(2) would state the relationship of this
authority to gifts to an agency employee made by a foreign government
or organization, or representative thereof, and accepted in accordance
with the Foreign Gifts and Decorations Act, 5 U.S.C. 7342. Section 7342
provides an exception by consent of Congress which permits employees to
accept certain gifts that would otherwise be barred by the Emoluments
Clause of the Constitution (Article I, Section 9, Clause 8). This
agency gift acceptance authority would not alter the authority
conferred by section 7342; see also the gift exception in the Standards
of Ethical Conduct, at 5 CFR 2635.204(l)(2), for such gifts.
Proposed Sec. 2601.104(b)(3) would state the relationship of this
authority to gifts made to an employee in accordance with the Hatch
Act, as revised, in subchapter III of 5 U.S.C. chapter 73. Gifts of
meals, lodging, transportation, attendance at events, and other
benefits given to an employee who is permitted to accept them under the
Hatch Act are accepted by the employee in a personal capacity. This
authority would not alter the authority of the Hatch Act; see also the
gift exception in the Standards of Ethical Conduct, at 5 CFR
2635.204(f), for such gifts.
Proposed Sec. 2601.104(b)(4) would state the relationship of this
authority to gifts made to an employee personally that may be accepted
under the gift rules of the Standards of Ethical Conduct, as codified
at subparts B and C of 5 CFR part 2635. Whenever a gift is accepted by
an employee personally pursuant to any particular gift exception, this
part does not apply. There may be situations where alternatively the
gift could be made to the agency; in such a case, the OGE gift
authority might apply. For example, the sponsor of a conference at
which an OGE employee is a speaker might give the OGE employee a book
about ethics in government (with a market value of $20 or less), which
the OGE employee could accept under the gift exception in the Standards
of Ethical Conduct, at 5 CFR 2635.204(a), for such gifts.
Alternatively, the sponsor of the conference might give the book to
OGE, for OGE to place in its library.
5. Proposed Sec. 2601.105 would set forth definitions applicable
to this part.
Proposed Sec. 2601.105 would define the term ``Administration
Division'' to mean the Administration Division of the Office of
Government Ethics.
Proposed Sec. 2601.105 would define the term ``agency'' to mean
the Office of Government Ethics (OGE).
Proposed Sec. 2601.105 would define the term ``authorized agency
official'' to mean the Director or the Director's delegatee.
Proposed Sec. 2601.105 would define the terms ``Director'' to mean
the Director of OGE, and the term ``employee'' to mean an employee of
OGE.
Proposed Sec. 2601.105 would define the term ``gift.'' The
definition would follow the definition set forth in the Act. Particular
categories of gifts referenced in the definition in the Act are
proposed to be further defined.
Proposed Sec. 2601.105 would define ``money'' to include currency,
checks, money orders or other forms of negotiable instruments. Note
that although the Act authorizes the acceptance of money without
limitation, as a matter of policy as set forth in proposed Sec.
2601.103(e), OGE would not accept gifts of currency.
Proposed Sec. 2601.105 would define ``personal property.'' The
definition of personal property is intended to cover all forms of
personal property. It would include both tangible and intangible
property. Some of the types of tangible personal property that might be
accepted by OGE would include books, videotapes, training media,
electronic training games and other educational materials, office and
other supplies, as well as equipment such as computers, printing and
copying equipment, cameras and recording equipment, visual and graphics
materials, and exhibits. The definition would also cover tangible gifts
of consumable or perishable products. The definition would also cover
all forms of intangible property, including securities, options and
warrants. It would also cover, for example, permission to use
copyrighted material without payment of a fee. An example of such use
would be use of music or visual material in the production of ethics
training videos.
Proposed Sec. 2601.105 would define ``prohibited source'' by
referencing the definition contained in the Standards of Ethical
Conduct, at 5 CFR 2635.203(d).
Proposed Sec. 2601.105 would define ``services'' to cover
virtually any type of personal service. Some typical types of services
that OGE might expect to accept and use as furthering the work of the
agency would include communication-related services to conduct
training. These might include broadcast studio services, technicians,
and global uplink technicians in connection with training via satellite
broadcasts. Training might also call for audio visual services, design
and graphics services, and planning services. For retreats, this
authority could be used to accept gifts of the services such as
motivational speakers or management consultants. Other professional
services such as instructional, consulting and advisory services might
also be accepted. In connection with a conference, there might be a
gift of food and catering services.
Proposed Sec. 2601.105 would also define ``use of facilities'' to
encompass every type of use of facility. It would cover, for example,
the use of space such as a hotel ballroom or lodging, conference
center, retreat center,
[[Page 23880]]
conference room, auditorium, seminar or classroom, banquet room or
other meeting or training space. It would also include the use of
exhibit space, storage facilities, and broadcast or production studios.
Use of facilities would also encompass use of the equipment associated
with the facility, such as video production equipment and satellite
broadcasting equipment.
B. Guidelines for Acceptance
1. Proposed Sec. 2601.201 would provide for delegation of the OGE
Director's general authority to solicit, accept, and utilize gifts.
2. Proposed Sec. 2601.202 would set forth the procedures for
handling gift offers.
Proposed Sec. 2601.202(a) would provide that only an authorized
agency official shall have the authority to solicit, accept, refuse,
return or negotiate the terms of a gift.
Proposed Sec. 2601.202(b) would provide that OGE employees who are
not authorized to accept a gift are to forward all gift offers to an
authorized agency official. Agency employees could respond to potential
donors and inform them of OGE's gift authority but they should not
engage in further discussions of the possibility of a gift without
direction from an authorized agency official. OGE employees may also
put a potential donor in touch with an authorized agency official. In
any event, employees must not make any commitments to extend
preferential treatment to any potential donor in connection with a gift
offer.
Proposed Sec. 2601.202(c) would provide that while gifts generally
may be solicited or accepted only after an evaluation has been made
under the conflict of interest standard of Sec. 2601.203 as proposed,
in exceptional circumstances, a gift in-kind could be accepted prior to
an evaluation under the conflict standard. An example of such a
situation might be an employee on official travel in a remote location
who is offered a gift of local transportation. Although it would be
preferable to anticipate such situations and make appropriate
arrangements in advance, exceptional circumstances may warrant
subsequent authorization. If subsequent authorization is determined not
to be appropriate, then it may be necessary to return the gift, or make
reimbursement to the donor.
Proposed Sec. 2601.202(d) would provide that gifts may be
acknowledged in writing in the form of a letter of acknowledgment, and
describes the contents of such a letter to a donor or an intermediary.
Gifts to the agency are considered gifts to the United States for the
purposes of Federal tax laws. Sections 170(c)(1), 2055, and 2522,
respectively, of title 26 of the United States Code establish the
status of such gifts for purposes of Federal income, gift, and estate
taxes. The tax consequences or implications of any gift transaction are
the responsibility of the donor. Therefore, donors should consult their
own tax professionals for specific advice on permissible deductions.
OGE will not estimate or place any value on a nonmonetary gift, for tax
purposes.
Proposed Sec. 2601.202(e) would provide that gifts may be declined
orally or in writing. Donors generally may be advised of the reason for
declining the gift but a gift may be declined solely as a matter of
discretion.
Proposed Sec. 2601.202(f) would provide that gifts of money (other
than currency) and proceeds shall be placed in an OGE trust fund
account. The Act does not specify where funds should be held when they
are not being utilized. But following the practice of other executive
branch agencies, OGE would establish the trust fund account through the
Department of the Treasury. Disbursements would be available from the
account upon order of OGE without fiscal year limitations.
3. Proposed Sec. 2601.203 would set forth the analysis to be used
for making the determination required by the Act as to whether the
solicitation or acceptance of a gift would reflect unfavorably upon the
ability of the Office of Government Ethics, or any employee of such
Office, to carry out its responsibilities or official duties in a fair
and objective manner, or would compromise the integrity or the
appearance of the integrity of its programs or any official involved in
those programs.
Proposed Sec. 2601.203(a) would restate the language of the Act
that sets forth the standard for determining whether it is appropriate
for OGE to solicit or accept a gift.
Proposed Sec. 2601.203(b) would provide a list of factors to be
considered in making the determination as to whether solicitation or
acceptance of a gift would be appropriate under this standard. The
first of these factors, at proposed Sec. 2601.203(b)(1), would require
an evaluation of the identity of the source of the gift. As noted
above, the proposed rule does not prohibit the solicitation or
acceptance of gifts from any particular type of source, including
persons who would be considered ``prohibited sources'' of gifts to
agency employees. Evaluation of the source of the gift nonetheless is a
critical element in the analysis of whether a gift may be solicited or
accepted.
The second factor, in proposed Sec. 2601.203(b)(2), would require
an evaluation of the estimated market value or cost to the donor of a
gift, or the amount if it is a gift of money.
The third factor, in proposed Sec. 2601.203(b)(3), would require
an evaluation of the donor's stated purpose of the gift.
The fourth factor, in proposed Sec. 2601.203(b)(4), would require
an evaluation of any other expected recipients of the gift on the same
occasion. This may be particularly relevant in activities with a number
of sponsors. Identifying other recipients can avoid situations that
might reflect unfavorably upon the agency.
The fifth factor, in proposed Sec. 2601.203(b)(5), would require
an evaluation of the timing of the gift, to avoid situations that might
reflect unfavorably upon OGE. Evaluation of timing is also necessary in
order to avoid any impression that the agency is pressuring a potential
donor to make a gift.
The sixth factor, in proposed Sec. 2601.203(b)(6), would require
an evaluation of any matter pending at OGE that might affect the
interests of the donor. In addition to actual pending matters, it is
relevant to consider any anticipated dealings between the agency and
the donor and the significance of those dealings to a potential donor's
revenues or business.
The seventh factor, in proposed Sec. 2601.203(b)(7), would require
an evaluation of the significance of an individual employee's role in
any matter affecting the donor, if benefits of the gift will accrue to
that employee.
The eighth factor, in proposed Sec. 2601.203(b)(8), would require
an evaluation of the nature or character of a gift. If it is a gift in-
kind, then the nature of the gift must be evaluated. Because this part
as proposed would not prohibit any particular type of gift (other than
gifts of currency), evaluation of the nature of the gift is important.
The ninth factor, in proposed Sec. 2601.203(b)(9), would require
an evaluation of the frequency of gifts from the same source. Frequent
gifts could create an appearance of a relationship between the agency
and the donor as part of which favors might be granted.
The tenth factor, in proposed Sec. 2601.203(b)(10), would require
an evaluation of whether the purpose of the gift aids or facilitates
the work of OGE, consistent with the terms of the statutory authority
for OGE to accept gifts.
Proposed Sec. 2601.203(c) would note that the agency may request
additional information from the donor to assist in
[[Page 23881]]
determining whether acceptance is appropriate.
4. Proposed Sec. 2601.204 would set forth the conditions for
acceptance of gifts.
Proposed Sec. 2601.204(a)(1) would restate the language of the Act
that provides that no gift may be accepted that attaches conditions
inconsistent with applicable laws or regulations. This prohibition
would not bar acceptance of a gift that was donated for a specific
purpose as, for example, to support OGE training. Nor would the fact
that a donor expressed some nonbinding preference as to how the donor
wished a gift be used preclude acceptance.
Proposed Sec. 2601.204(a)(2) would restate the language of the Act
that provides that no gift may be accepted that is conditioned upon or
will require the expenditure of appropriated funds that are not
available to OGE.
Proposed Sec. 2601.204(a)(3) would bar acceptance of a gift that
is given in exchange or return for some privilege, concession or other
present or future benefit. Such an exchange could imply that the gift
would compromise the integrity of the agency's programs.
Proposed Sec. 2601.204(a)(4) would bar acceptance of a gift that
would require OGE to adhere to particular requirements as to deposit,
investment, or management of funds donated.
Proposed Sec. 2601.204(a)(5) would bar acceptance of a gift that
would require OGE to undertake activities that are not related to the
agency's mission, programs or statutory authority.
Proposed Sec. 2601.204(a)(6) would bar acceptance of a gift that
would reflect unfavorably upon the ability of the agency, or any of its
employees, to carry out its responsibilities or official duties in a
fair and objective manner, or would compromise the integrity or the
appearance of the integrity of its programs or any official involved in
those programs.
C. Accounting Requirements
Proposed Sec. 2601.301 would set forth guidance for the accounting
of gifts. Accounting requirements may help ensure that OGE's gift
acceptance authority is used in a way that does not reflect unfavorably
on OGE or its employees.
Proposed Sec. 2601.301(a) would provide for the regular accounting
of gifts received. Money gifts must be accounted for under the same
standards as are applicable to appropriated funds.
Proposed Sec. 2601.301(b) would require OGE to maintain an
inventory of donated personal property valued at over $500.
Proposed Sec. 2601.301(c) would require OGE to maintain a log of
accepted gifts valued at over $500.
The proposed rule does not expressly provide for any type of
regular audit of gift funds. Some agencies provide for audits at such
intervals as the Comptroller General, in his discretion, deems to be
appropriate. Given the size of OGE and the expected relatively low
volume of gifts, it is not believed that it is necessary to provide for
any regular audit. Such audits could, however, be done as appropriate.
Matters of Regulatory Procedure
Administrative Procedure Act
Interested persons are invited to submit written comments to OGE on
this proposed regulation, to be received on or before August 4, 2003.
The Office of Government Ethics will review all comments received and
consider any modifications to this proposal which appear warranted in
issuing its final rule.
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 the approval of the Office of Management and
Budget.
Congressional Review Act
The Office of Government Ethics has determined that this proposed
rulemaking involves a nonmajor rule under the Congressional Review Act
(5 U.S.C. chapter 8) and will, before the future final rule takes
effect, submit a report thereon to the U.S. Senate, House of
Representatives and General Accounting Office in accordance with that
law.
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 regulation
will not have a significant economic impact on a substantial number of
small entities because it primarily affects OGE itself and OGE
employees.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
chapter 25, subchapter II), the proposed rule would not significantly
or uniquely affect small governments and would 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 12866
In issuing this proposed regulation, the Office of Government
Ethics has adhered to the regulatory philosophy and the applicable
principles of regulation as set forth in section 1 of Executive Order
12866, Regulatory Planning and Review. This proposed rule has not been
reviewed by the Office of Management and Budget under that Executive
order since it is not a significant regulatory action within the
meaning of the Executive order.
Executive Order 12988
As Director of the Office of Government Ethics, I have reviewed
this proposed regulation 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 2601
Conflict of interests, Government employees, Government property.
Approved: April 28, 2003.
Amy L. Comstock,
Director, Office of Government Ethics.
Accordingly, for the reasons set forth in the preamble, the Office
of Government Ethics proposes to add a new part 2601 to 5 CFR to read
as follows:
PART 2601--IMPLEMENTATION OF OFFICE OF GOVERNMENT ETHICS STATUTORY
GIFT ACCEPTANCE AUTHORITY
Subpart A--General Provisions
Sec.
2601.101 Authority.
2601.102 Purpose.
2601.103 Policy.
2601.104 Relationship to other authorities.
2601.105 Definitions.
Subpart B--Guidelines for Solicitation and Acceptance of Gifts
2601.201 Delegation.
2601.202 Procedure.
2601.203 Conflict of interest analysis.
2601.204 Conditions for acceptance.
Subpart C--Accounting Requirements
2601.301 Accounting of gifts.
Authority: 5 U.S.C. App. (Ethics in Government Act of 1978).
Subpart A--General Provisions
Sec. 2601.101 Authority.
Section 2 of the Office of Government Ethics Authorization Act of
1996, amending the Ethics in Government Act of 1978, as codified at 5
U.S.C. app. Sec. 403(b), authorizes the Office of Government Ethics
(OGE) to accept and utilize gifts for the purpose of aiding or
facilitating the work of OGE.
[[Page 23882]]
Sec. 2601.102 Purpose.
The purpose of this part is to establish guidelines governing the
implementation of OGE's gift authority by defining its scope and
application, by prescribing the policies, standards and procedures that
govern the solicitation, acceptance and use of gifts, and by setting
forth accounting requirements related to the use of this authority.
Sec. 2601.103 Policy.
(a) Scope. The Office of Government Ethics may use its statutory
authority to solicit, accept and utilize gifts to the agency that aid
or facilitate the agency's work. The authority to solicit, accept and
utilize gifts includes the authority to receive, administer, spend,
invest and dispose of gifts. Gifts to the agency from individuals or
organizations can be a useful adjunct to appropriated funds and may
enhance the agency's ability to fulfill its mission, as well as further
mutually beneficial public/private partnerships, or other useful
arrangements or relationships. Such uses of this authority are
appropriate provided that solicitation or acceptance of a gift does not
compromise the integrity of OGE, its programs or employees.
(b) Use of gifts. Gifts to OGE may be used to carry out any
activity that furthers the mission, programs, responsibilities,
functions or activities of the agency. Gifts may be used to carry out
program functions whether or not appropriated funds are available for
that purpose, provided that such expenditures are not barred by law or
regulation. Gifts may also be used for official travel by employees to
events or activities required to carry out the agency's statutory or
regulatory functions. Gifts to the agency may also be used for the
travel expenses of spouses accompanying employees on official travel,
if such travel could be paid for by appropriated funds.
(c) Sources. Generally, gifts may be solicited or accepted from any
source, including a prohibited source, provided that the standards of
this part are met. Gifts generally should be made directly to the
agency and not through intermediaries. However, where a gift is offered
by an intermediary, both the intermediary and the ultimate source of
the gift should be analyzed to determine whether acceptance would be
appropriate.
(d) Endorsement. Acceptance of a gift pursuant to this part shall
not in any way be deemed to be an endorsement of the donor, or the
donor's products, services, activities, or policies. Letters to a donor
expressing appreciation of a gift are permitted.
(e) Type of gift. The agency may solicit or accept any gift that is
within its statutory authority. However, as a matter of policy, OGE
will not solicit or accept gifts of currency pursuant to this part.
Donors who offer currency should be advised that the gift may be made
by check or money order payable to the U.S. Office of Government
Ethics.
Sec. 2601.104 Relationship to other authorities.
(a) This part does not apply to gifts to the agency of:
(1) Travel and travel-related expenses made pursuant to the
authority set forth in 31 U.S.C. 1353; or
(2) Volunteer services made pursuant to the authority set forth in
5 U.S.C. 3111.
(b) This part does not apply to gifts to an individual agency
employee, including:
(1) Gifts of contributions, awards or other expenses for training
made pursuant to the authority set forth in the Government Employees
Training Act, 5 U.S.C. 4111;
(2) Gifts made by a foreign government or organization, or
representative thereof, pursuant to the authority set forth in 5 U.S.C.
7342;
(3) Gifts made by a political organization that may be accepted by
an agency employee who, in accordance with the terms of 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; or
(4) Gifts made directly or indirectly that an employee may accept
in a personal capacity pursuant to the authority set forth in 5 CFR
part 2635, subpart B or subpart C.
Sec. 2601.105 Definitions.
For the purposes of this part:
Administration Division means the Administration Division of the
Office of Government Ethics.
Agency means the Office of Government Ethics (OGE).
Authorized agency official means the Director of the Office of
Government Ethics or the Director's delegatee.
Director means the Director of the Office of Government Ethics.
Employee means an employee of the Office of Government Ethics.
Gift means any gift, donation, bequest or devise of money, use of
facilities, personal property, or services and may include travel
reimbursements or payments for attendance at or participation in
meetings or events.
Money means currency, checks, money orders or other forms of
negotiable instruments.
Personal property means all property, tangible or intangible, not
defined as real property, and includes stocks and bonds.
Prohibited source means any source described in 5 CFR 2635.203(d).
Services means all forms of voluntary and uncompensated personal
services.
Use of facilities means use of space, equipment and all other
facilities.
Subpart B--Guidelines for Acceptance
Sec. 2601.201 Delegation.
(a) The authority to solicit, accept, and utilize gifts in
accordance with this part resides with the Director.
(b) The Director may delegate this authority.
(c) Authorities delegated in accordance with paragraph (b) of this
section may be redelegated only through a written delegation
authorizing an agency employee to solicit or accept specific types of
gifts, or a gift for a specific purpose, function, or event.
Sec. 2601.202 Procedure.
(a) The authorized agency official shall have the authority to
solicit, accept, refuse, return, or negotiate the terms of acceptance
of a gift.
(b) An employee, other than an authorized agency official, shall
immediately forward all offers of gifts covered by this part regardless
of value to an authorized agency official for consideration and shall
provide a description of the gift offered. An employee shall also
inform an authorized agency official of all discussions of the
possibility of a gift. An employee shall not provide a donor with any
commitment, privilege, concession or other present or future benefit
(other than an appropriate acknowledgment) in return for a gift.
(c) Only an authorized agency official may solicit, accept or
decline a gift after making the determination required under the
conflict of interest standard in Sec. 2601.203. An authorized agency
official may find that, while acceptance of an offered gift is
permissible, it is in the interest of the agency to qualify acceptance
by, for example, limiting the gift in some way. Approval of acceptance
of a gift in-kind after receipt of the gift may be granted as deemed
appropriate by the authorized agency official.
(d) Gifts may be acknowledged in writing in the form of a letter of
acceptance to the donor. The amount of a monetary gift shall be
specified. In the case of nonmonetary gifts, the letter shall not make
reference to the value of the gift. Valuation of nonmonetary gifts is
the responsibility of the donor. Letters
[[Page 23883]]
of acceptance shall not include any statement regarding the tax
implications of a gift, which remain the responsibility of the donor.
No statement of endorsement should appear in a letter of acceptance to
the donor.
(e) A gift may be declined by an authorized official orally or in
writing. A donor may be advised of the reason why the gift has been
declined. A gift may be declined solely as a matter of agency
discretion, even though acceptance would not be precluded under the
conflict of interest standard in Sec. 2601.203.
(f) A gift of money or the proceeds of a gift shall be deposited in
an appropriately documented agency fund. A check or money order should
be made payable to the ``U.S. Office of Government Ethics.''
Sec. 2601.203 Conflict of interest analysis.
(a) A gift shall not be solicited or accepted if the authorized
agency official determines that such solicitation or acceptance of the
gift would reflect unfavorably upon the ability of the agency, or any
employee of the agency, to carry out OGE responsibilities or official
duties in a fair and objective manner, or would compromise the
integrity or the appearance of the integrity of its programs or any
official involved in those programs.
(b) In making the determination required under paragraph (a) of
this section, an authorized agency official may be guided by all
relevant considerations, including, but not limited to the following:
(1) The identity of the donor;
(2) The monetary or estimated market value or the cost to the
donor;
(3) The purpose of the gift as described in any written statement
or oral proposal by the donor;
(4) The identity of any other expected recipients of the gift on
the same occasion, if any;
(5) The timing of the gift;
(6) The nature and sensitivity of any matter pending at the agency
affecting the interests of the donor;
(7) The significance of an individual employee's role in any matter
affecting the donor, if benefits of the gift will accrue to the
employee;
(8) The nature of the gift offered;
(9) The frequency of other gifts received from the same donor; and
(10) The agency activity, purpose or need that the gift will aid or
facilitate.
(c) An authorized agency official may ask the donor to provide in
writing any additional information needed to assist in making the
determination under this section. Such information may include a
description of the donor's business or organizational affiliation and
any matters that are pending or are expected to be pending before the
agency.
Sec. 2601.204 Conditions for acceptance.
(a) No gift may be accepted that:
(1) Attaches conditions inconsistent with applicable laws or
regulations;
(2) Is conditioned upon or will require the expenditure of
appropriated funds that are not available to the agency;
(3) Requires the agency to provide the donor with some privilege,
concession or other present or future benefit in return for the gift;
(4) Requires the agency to adhere to particular requirements as to
deposit, investment, or management of funds donated;
(5) Requires the agency to undertake or engage in activities that
are not related to the agency's mission, programs or statutory
authorities; or
(6) Would reflect unfavorably upon the ability of the agency, or
any of its employees, to carry out its responsibilities or official
duties in a fair and objective manner, or would compromise or appear to
compromise the integrity or the appearance of the integrity of its
programs or any official involved in those programs.
Note to Sec. 2601.204: Nothing in this part shall prohibit the
agency from offering or providing the donor an appropriate
acknowledgment of its gift in a publication, speech or other medium.
Subpart C--Accounting Requirements
Sec. 2601.301 Accounting of gifts.
(a) The Administration Division shall ensure that gifts are
properly accounted for by following appropriate internal controls and
accounting procedures.
(b) The Administration Division shall maintain an inventory of
donated personal property valued at over $500. The inventory shall be
updated each time an item is sold, excessed, destroyed or otherwise
disposed of or discarded.
(c) The Administration Division shall maintain a log of all gifts
valued at over $500 accepted pursuant to this part. The log shall
include, to the extent known:
(1) The name and address of the donor;
(2) A description of the gift; and
(3) The date the gift is accepted.
[FR Doc. 03-11043 Filed 5-2-03; 8:45 am]
BILLING CODE 6345-02-P