U.S. Office of Government Ethics
1201 New York Ave., NW
Suite 500
Washington, DC 20005-3917

	
	
	
	                                       January 19, 2006
	                                       DO-06-002

MEMORANDUM

TO:	  Designated Agency Ethics Officials, General Counsels
	  and Inspectors General

FROM:	  Marilyn L. Glynn General Counsel

SUBJECT:  Office of Legal Counsel Opinion on 18 U.S.C. § 208

	
	The Office of Legal Counsel (OLC), Department of Justice,
issued an opinion last week concerning the application of
18 U.S.C. § 208, the financial conflict of interest statute.
Memorandum of Steven G. Bradbury, Acting Assistant Attorney
General, OLC, for Marilyn L. Glynn, General Counsel, Office of
Government Ethics, January 11, 2006, available on the OLC
website at http://www.usdoj.gov/olc/11106nonprofitboards.pdf.
The opinion was issued in response to a request from the
Office of Government Ethics for guidance concerning the
question of whether a nonprofit organization has a financial
interest in a particular policy matter because the
organization spends money on advocacy in connection with the
particular matter.

	OLC concluded that a nonprofit organization does not have a
financial interest in a particular matter on which it spends
funds to advocate its policy position, solely by virtue of
such expenditures.  Consequently, Federal employees who serve
as officers or directors of such organizations are not
disqualified, under 18 U.S.C. § 208, from participating in
particular matters with respect to which those organizations
are spending funds on advocacy.  The OLC opinion supersedes
any suggestion in OGE Informal Advisory Letter 97 x 2 that a
nonprofit organization has a financial interest in a
particular matter, under section 208, whenever that matter
would prompt the organization to expend resources on advocacy.

	The opinion does, however, contain certain caveats.  First,
the opinion expressly does not apply to for-profit entities
that engage in advocacy on behalf of themselves or their
clients.  Id. at 3 n.3.  Similarly, the opinion expressly does
not apply to any entity (whether for-profit or nonprofit) that
receives or expects to receive payment specifically for its
advocacy.  Id.  Thus, for example, the opinion is not intended
to address the possible financial interests of law firms or
lobbying firms in particular matters about which the firms are
engaged in advocacy.  Furthermore, the opinion recognizes that
a nonprofit organization can have a financial interest in a
particular matter if the organization "formally intervenes to
assert the financial interests of its members," i.e., "with
the organization standing in the shoes of the members" whose
financial interests are affected.  Id. at 15.

	Finally, the opinion points out that agencies and employees
need to take into account any potential "appearance" concerns, even if
the criminal conflict of interest statute does not apply.  This
includes a consideration of possible appearances that an employee may
be violating the duty to act impartially and not give preferential
treatment to a private organization, which is a basic principle in 5
C.F.R. § 2635.101(b)(8), implemented more specifically by 5 C.F.R. §
2635.502.  The OLC opinion observes, consistent with past OGE
guidance, that such appearance problems generally are best left to the
agency and the employee, based on the particular facts.  The opinion
does note certain factors that may have a bearing on these appearance
questions: whether the particular matter is identified as a
significant priority by the organization; whether the organization is
devoting significant resources to advocacy with respect to the matter;
whether the organization is communicating directly with Federal
agencies; and the importance of the particular employee's role in the
matter.  OGE also would advise agencies to consider any other relevant
factors set out in 5 C.F.R. § 2635.502(d) to determine whether the
Government's interest in an employee's participation in a matter
outweighs any impartiality concerns.