April 26, 1999
DO-99-017
MEMORANDUM
TO: Designated Agency Ethics Officials
FROM: Stephen D. Potts
Director
SUBJECT: Prizes as gifts -- Guidance concerning the exclusion at
5 C.F.R. § 2635.203(b)(5)
The standards of ethical conduct for executive branch employees, as
promulgated by the Office of Government Ethics (OGE) in 1992, provide
several exclusions from the definition of "gift," for purposes of the
restrictions on receiving items of monetary value from certain outside
sources.(1) These gift exclusions, described at 5 C.F.R. §
2635.203(b), recognize trivial, customary, or common-sense situations
where items may be readily accepted by Government employees, without
regard to the source or the circumstances surrounding receipt.
The exclusion at § 2635.203(b)(5) has periodically raised questions of
interpretation and meaning with regard to various factual
circumstances. It provides that gifts do not include "rewards and
prizes given to competitors in contests or events, including random
drawings, open to the public unless the employee's entry into the
contest or event is required as part of his official duties." The
following discussion examines some commonly encountered factual
circumstances that arise under this gift exclusion, specifically
concerning prizes from drawings or contests (hereinafter, "contests")
entered while in an official duty status.
CONTEST ENTRY MUST BE OPEN TO THE PUBLIC
In order for a contest prize to qualify under this gift exclusion, the
first condition is that the contest must be open to the general
public. In the final rule preamble to the standards of conduct
regulation at 57 Fed. Reg. 35013 (August 7, 1992), OGE emphasized the
importance of this requirement: "Where a contest is open to the
public,(2) the danger is remote that a prohibited source will use the
contest as a means of giving something to an employee or that a
reasonable person would question the motive for any prize awarded.
Where the contest is not open to the public, appearance issues may
arise without regard to whether the contest is related or unrelated to
the employee's official duties."
Two examples where openness to the public may typically be an issue
are contests entered by an employee while officially attending a
conference or trade show and contests that occur in connection with
official travel:
1) If a conference or trade show is itself open to anyone without
qualification or fee, then a contest held at that event will be
considered open to the public. An employee could voluntarily enter a
drawing at an individual vendor's booth in his private capacity (see
the discussion below about entry related to duty) and keep a resulting
prize. If, however, a fee is charged to attend the conference or trade
show, or other factors effectively limit who can attend (such as
artificial constraints placed on the number of attendees, or
attendance restricted to those with certain requisite skills or work
assignments), then that event cannot be characterized as truly open to
the public. These circumstances effectively narrow the opportunity to
participate in the contest by limiting the pool of eligible
participants. Under these conditions, the opportunity to enter a
contest would have to be extended beyond the conference or trade show
participants to any other interested persons, in order to be
considered open to the general public. That might occur where a vendor
at a conference or trade show makes the opportunity to enter a drawing
reasonably available to anyone, such as by providing entry blanks to
the general public prior to conducting the drawing.
2) When a Government employee on official travel as an airline
passenger voluntarily enters a contest sponsored by the air carrier,
it will be viewed as open to the general public if entry blanks were
made available not only to ticketed passengers but also to anyone else
at no expense, by writing to the air carrier. This was the factual
basis in Comptroller General Opinion B-199656 of July 15, 1981, which
was cited in the preamble to the standards of conduct regulation at 57
Fed. Reg. 35013 (August 7, 1992) as a background reference. In
contrast, if the contest is limited to the airline's customers, it
cannot be considered open to the public.
CONTEST ENTRY MUST NOT BE RELATED TO OFFICIAL DUTY
In addition to the requirement that a contest be open to the public,
the gift exclusion at 5 C.F.R. § 2635.203(b)(5) specifically does not
include prizes where "the employee's entry into the contest or event
is required as part of his official duties." The language quoted
earlier from the preamble at 57 Fed. Reg. 35013 also suggests this
separate concern, but characterizes it as "whether the contest is
related or unrelated to the employee's official duties." Thus, the
term "required as part of his official duties" was not intended to be
restricted to circumstances that mandate participation, but also to
encompass other situations where the employee's participation is
related to official duties, as described below.
This limitation on the gift exclusion for prizes reflects a number of
ethical and legal principles. First, the executive branch standards of
conduct contain a fundamental principle at 5 C.F.R. § 2635.101(b)(7)
that employees shall not use public office for private gain.
Additionally, a criminal statute at 18 U.S.C. § 209 generally
prohibits supplementation of an employee's salary from any source
other than the United States as compensation for services as a
Government employee. Finally, fiscal law considerations, as
interpreted by opinions of the Office of Legal Counsel at the
Department of Justice and the Comptroller General of the United
States, and by regulations of the General Services Administration,
generally preclude an individual employee's acceptance of benefits
received in connection with the performance of official duty.
However, not all contests that are entered while on official
assignment will be deemed related to or required by duty. As OGE
concluded in the above-cited preamble text to the standards of conduct
regulation, "an employee may accept a prize in a contest or random
drawing open to the general public even though the opportunity to
enter the contest occurs while or because the employee is on official
duty." Thus, if a Government employee voluntarily enters a contest in
his personal capacity during an official assignment, he would not
ordinarily be precluded by reason of that duty assignment from
accepting a prize. On the other hand, if entry into the contest is
related to duty in any way other than the employee's mere presence and
opportunity to enter the contest, a resulting prize must be viewed as
property of the Government. The following examples illustrate these
principles:
1) If an employee on official assignment to attend a trade show or
conference voluntarily enters a drawing (open to the public) in his
personal capacity at an individual vendor's booth, his acceptance of a
resulting prize would not be precluded by his official status, as
entry into the contest was not required by or related to duty. If,
however, all attendees at a conference are automatically entered in a
drawing as a consequence of conference registration, the Government
employee who attends officially could not accept any resulting "door"
prize, because entry in the contest was required as part of his
official duties. Similarly, the employee could not accept a prize
received where entry into a drawing was restricted to those attendees
who completed a conference evaluation sheet, as the act of completing
that evaluation, even if optional, must be viewed as incident to the
performance of official duties.
2) In situations other than attending a conference or trade show, the
same rules obtain. For example, if a Government employee qualifies for
entry into a contest because she purchased a specified quantity of
supplies for her agency or planned an agency conference, a resulting
prize belongs to the Government, because entry into the contest was
related to official duties. Similarly, if members of a military drill
team were to officially enter a marching contest, a resulting prize
belongs to the Government, because entry into the contest was required
as part of their duties. In both of these instances, entry into the
contests did not occur through mere official presence and opportunity,
but as incident to official duty. These employees did not enter a
contest in their personal capacity, but as a requirement or
consequence of their official duties.
CONCLUSION
Notwithstanding the gift restrictions at subpart B of 5 C.F.R. part
2635, the gift exclusion at 5 C.F.R. § 2635.203(b)(5) may permit an
employee to accept a prize in a contest entered while on an official
duty assignment, using the guidance herein. If that exclusion does not
apply because the contest was not open to the general public or the
employee's entry into the contest was related to duty, then the prize
is not acceptable by the employee, unless he pays fair market value or
it falls within an exception such as that at 5 C.F.R. § 2635.204(a)
for gifts of $20 or less. Alternatively, an agency may determine that
it has authority to accept a prize in its own behalf, but that is an
issue beyond the scope of the standards of ethical conduct for
executive branch employees that this Office oversees.
____________________________
1. Under subpart B of 5 C.F.R. part 2635, gifts may not be accepted
from a "prohibited source" or if given "because of the employee's
official position," as those terms are defined therein, absent
circumstances described in one of the exceptions. If a prize is
neither from a prohibited source nor given because of official
position, its acceptance would not be barred by this regulation,
regardless of whether it is excludable from the definition of a gift.
2. As explained in the preamble, the term "public" means general
public, not just a broadly defined class of persons, as was first
proposed.