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





                                   May 27, 2004
                                   DO-04-011


MEMORANDUM

TO:       Designated Agency Ethics Officials

FROM:     Marilyn L. Glynn
          Acting Director

SUBJECT:  Awards and Outside Consulting Activities


     Attached is a statement that I delivered on May 18, 2004,
before the Subcommittee on Oversight and Investigations of the
House Committee on Energy and Commerce.  The statement contains a
discussion of the Office of Government Ethics (OGE) awards rule,
5 C.F.R. § 2635.204(d), as well as a discussion of various rules
governing outside consulting activities.  I am providing you with
a copy of this statement because it sets out guidance on the
subjects of awards and consulting that may be useful to ethics
officials generally.

     With respect to awards, the attached statement provides
specific guidance on two issues.  First, the statement addresses
what constitutes an impermissible source for an award for
meritorious public service or achievement.  The specific question
addressed is whether and under what circumstances the head of an
agency or large agency component may accept an award from a source
doing any business anywhere in that agency or office.  In this
connection, the statement does not provide a bright line test, but
rather provides a list of factors for agency officials to consider
in determining whether it is reasonable to assume that the office
head may become involved in matters substantially affecting the
interests of the particular source.  Second, the statement
addresses the subject of "lecture awards" and the distinction
between a true award and a speaker's fee.  As noted in the
statement, this is an important distinction because the acceptance
of bona fide awards is subject to different standards than the
receipt of compensation or earned income for speaking activities. 
The statement sets out several criteria to assist agency officials
in determining whether the primary purpose of the payment is to
honor the employee for meritorious public service or achievement,
or to compensate the employee for services as a speaker.

     With respect to outside activities, the statement discusses
the criteria that agencies should use in determining whether a
proposed consulting arrangement is consistent with ethical
requirements.  In addition to the requirements in 5 C.F.R.
§ 2635.802(a), sections 2635.801(c) and 2635.802(b) require
agencies to determine whether a proposed outside activity is
consistent with other provisions in the Standards of Ethical
Conduct for Employees of the Executive Branch (Standards),
including the prohibition in 5 C.F.R. § 2635.702 against using
public office for private gain.  The statement sets out certain
considerations that ethics officials should take into account when
assessing outside consulting arrangements for potential appearances
of using public office for private gain.  We note that there is no
specific rule on consulting in the Standards, although example 2
following section 2635.802 provides some guidance on consulting
activities that involve the use of public office for private gain. 
See also 57 Federal Register 35006, 35040 (August 7, 1992)(many of
same considerations applicable to teaching, speaking and writing
apply to consulting activities).  However, OGE is looking at the
Governmentwide rules on outside activities to determine whether any
changes are needed.

     Finally, in light of certain reports in the media concerning
other statements made at the recent House hearing, we want to take
this opportunity to address the question of an ethics official's
duty to handle so-called "appearance" questions.  Accounts of
certain statements made at the hearing have suggested that there is
a distinction between "law" and Government "ethics," or between the
provision of strictly legal advice and the provision of advice
about appearances.  What OGE fears may become lost in this
discussion is the fundamental fact that Federal ethics regulations
actually make appearance considerations part of the "law" and,
therefore, the responsibility of every Federal employee and agency
ethics official.  See 5 C.F.R. § 2635.101(b)(14).

Attachment:  http://www.usoge.gov/daeograms/dgr_files/2004/do04011a.txt