January 11, 1996
                                    DO-96-002


MEMORANDUM

TO:       Designated Agency Ethics Officials

FROM:     Stephen D. Potts
          Director

SUBJECT:  The post-employment pledge required by E.O. 12834


     In my DAEOgram of December 19, 1995 (DO-95-045), I stated that
this Office would notify you of any information we received from
the White House concerning the application of the requirements of
Executive Order 12834 to non-career SES appointees not previously
subject to the Executive order.  As you know, by virtue of
Executive Order 12984 (December 28, 1995), the rate of pay of an
employee at SES level 4 has now risen to an amount in excess of the
rate of pay for an Executive Level V position, thereby raising the
question of whether an employee at SES level 4 would be subject to
the post employment-requirements of Executive Order 12834.   
     
     Attached for your information is a copy of a Memorandum that
the White House has sent to all heads of agencies and Inspectors
General regarding this subject.  They asked that we send a copy to
all Designated Agency Ethics Officials.  The memorandum states that
"Executive Order 12834 does not, and never will, apply to employees
paid at level 4 of the SES."

     Please make sure that the non-career SES level 4 appointees
(or their equivalent in other SES type systems) understand the
difference to them of the application of the post-employment
restrictions in the pledge and the application of the criminal
post-employment restrictions of 18 U.S.C. § 207.  To that end, we
remind you of the time-limited waiver of the application of certain
provisions of 18 U.S.C. § 207 to these same individuals set forth
in our DAEOgram issued January 4, 1996 (DO-96-001).  

Attachment

_______________________________________________________________________

                              THE WHITE HOUSE

                                WASHINGTON
                              January 5, 1996


MEMORANDUM FOR HEADS OF AGENCIES
            DESIGNATED AGENCY ETHICS OFFICIALS
            INSPECTORS GENERAL

FROM:       JACK QUINN
            COUNSEL TO THE PRESIDENT

SUBJECT:    Interpretation of Executive Order 12834

     Consistent with guidance articulated in DAEOgram DO-96-001 issued
by the Office of Government Ethics (OGE) regarding 18 U.S.C.  207(c)
and (f), the President has directed me to issue this interpretation of
the provisions of Executive Order 12834 as they apply to employees
paid at level 4 of the Senior Executive Service (SES).

     As explained in OGE's recent guidance, Executive Order 12984,
signed by President Clinton on December 28, 1995, provided for a pay
raise for the SES that will become effective as early as January 7,
1996.  Without the action implemented by this memorandum, one effect
of the pay raise would be to make the basic rate of pay for SES level
4 greater than the basic rate of pay for level V of the Executive
Schedule.  As such, employees at SES level 4 would become "senior
appointees" for purposes of Executive Order 12834.  This result is
not, however, one that was intended when the President issued
Executive Order 12834.

     As OGE has indicated, the post employment restrictions are
premised on the theory that more severe restrictions should apply to
individuals who have the most senior career and political appointments.
As such, and consistent with the definition of "senior employee" in
18 U.S.C.  207, the definition of "senior appointee" in the Executive
Order was tied to the rate of basic pay for a position (EL-V), not a
particular salary figure.  The level of responsibility of particular
positions, not the rate of pay, justifies the imposition of
post-employment restrictions.

     Without the interpretation set forth here, however, a substantial
number of individuals in the SES would become "senior employees" without
any accretion of duties or responsibilities.  This anomaly would occur
simply because Congress, for totally unrelated reasons, froze the rate
of basic pay for the level of position to which this senior employee
status was meant to be tied at the same time that the rate of pay for
the subordinates of senior employees was increased.

     In view of the foregoing, the President has directed me to confirm
that Executive Order 12834 does not, and never will, apply to employees
paid at level 4 of the SES.