[Federal Register Volume 61, Number 213 (Friday, November 1, 1996)]
[Rules and Regulations]
[Pages 56399-56403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27967]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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Federal Register / Vol. 61, No. 213 / Friday, November 1, 1996 /
Rules and Regulations
[[Page 56399]]
GENERAL SERVICES ADMINISTRATION
5 CFR Chapter LVII
41 CFR Part 105-735
RIN 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
General Services Administration
AGENCY: General Services Administration (GSA).
ACTION: Final rule.
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SUMMARY: The General Services Administration, with the concurrence of
the Office of Government Ethics (OGE), is issuing a regulation for GSA
employees that supplements the Standards of Ethical Conduct for
Employees of the Executive Branch. The supplemental regulation
generally, with certain exceptions, prohibits solicited sales to
subordinates by GSA employees; prohibits the purchase of property sold
by GSA; prohibits the purchase of real estate by certain GSA employees;
prohibits the taking and disposal of Government property; requires
employees to obtain approval before engaging in certain outside
employment; and identifies appropriate officials to whom waste, fraud,
abuse and corruption are to be reported. The General Services
Administration (GSA) is also removing its old standards of conduct
regulations from the Code of Federal Regulations (certain provisions
which have not been superseded are being reissued in an internal GSA
order) and inserting in their place a cross-reference to the new
provisions and to applicable executive branch-wide standards of ethical
conduct, as well as to applicable financial disclosure regulations.
EFFECTIVE DATE: November 1, 1996.
FOR FURTHER INFORMATION CONTACT: Ms. Eugenia D. Ellison or Mr. Dan
Ross, General Services Administration, Office of General Counsel,
Ethics Law Staff, 18th & F Streets, NW., Room 5135, Washington, DC
20405; telephone: (202) 501-0765, FAX: (202) 501-6347.
SUPPLEMENTARY INFORMATION:
I. Background
On August 7, 1992, the Office of Government Ethics (OGE) published
a final rule entitled Standards of Ethical Conduct for Employees of the
Executive Branch (Standards). See 57 FR 35006-35067, as corrected at 57
FR 48557, 57 FR 52583, and 60 FR 51667, with additional grace period
extensions at 59 FR 4779-4780, 60 FR 6390-6391, 60 FR 66857-66858, and
61 FR 40950-40952. The Standards, codified at 5 CFR part 2635 and made
effective February 3, 1993, establish uniform standards of ethical
conduct that are applicable to all executive branch employees.
With the concurrence of OGE, 5 CFR 2635.105 authorizes executive
branch agencies to publish agency-specific regulations supplementing 5
CFR Part 2635 that are necessary to implement their respective ethics
programs. With OGE's concurrence, GSA has determined that the following
supplemental regulations, being codified in new 5 CFR chapter LVII,
consisting of part 6701, are necessary for successful implementation of
GSA's ethics program, in light of GSA's unique programs and operations.
II. Analysis of the New Regulations
Section 6701.101 General
Section 6701.101 of the final rule explains that the regulations
apply to all GSA employees and supplement the executive branch-wide
Standards at 5 CFR part 2635. It also notes that employees are subject
to 5 CFR part 2635 and the executive branch financial disclosure
regulations at 5 CFR part 2634.
Section 6701.102 Prohibition on Solicited Sales to Subordinates
5 CFR part 2635 prohibits an employee from using public office for
private gain, but contains no specific prohibition on sales to
subordinate personnel where the sale price is fair and does not result
in a gift to the superior. Likewise, any item for which fair market
value is paid by the recipient would not be a gift for purposes of the
gifts to superiors provisions in subpart C of the Standards. Under
GSA's old standards of conduct regulation at 41 CFR 105-735.202(d)(6),
which is simultaneously being removed in this rulemaking document, a
prohibition on sales to subordinates was included. Section 6701.102 of
this new supplemental regulation is a restatement with minor
modifications of that prohibition. It has been GSA's experience that
such an additional prohibition is necessary to eliminate coercion,
intimidation, or pressure, or the appearance thereof, that employees
could be subjected to by official superiors in this regard.
Section 6701.102 generally prohibits GSA employees in supervisory
positions from soliciting or making solicited sales to GSA employees
who are under their supervision at any level, regardless of whether the
solicited sale takes place on or off duty. Section 6701.102 extends the
prohibition against commercial solicitation by official superiors that
was in 41 CFR 105-735.202(d)(6) to part-time employees and special
Government employees who have employees under their supervision,
consistent with GSA's determination that hours of work are not a
sufficient basis for distinguishing those supervisors from other
supervisors for the purpose of furthering the interests served by the
prohibition.
The section specifically permits the one-time sale by an official
superior to a subordinate of his own personal property or privately
owned dwelling. It also permits the off duty sales by an employee
during outside employment for a retail establishment or under other
circumstances not involving solicited sales.
Section 6701.103 Prohibited Purchases of Property Sold by GSA
Section 6701.103 supplements the prohibition on the use of public
office for private gain at 5 CFR 2635.702, and the prohibition on the
use of nonpublic information at 5 CFR 2635.703. It prohibits GSA
employees from purchasing for themselves or others any personal or real
property being sold by GSA. An employee may not purchase such property
directly or indirectly. GSA has broad authority to dispose of surplus
Government property through public sales. It is therefore important to
preserve the public's confidence that these powers will not be misused
to
[[Page 56400]]
benefit the private interests of a GSA employee. Prohibiting employees
from engaging in certain purchases that may appear improper is
essential to achieve this objective.
This prohibition is similar to the prohibition in the old GSA
standards of conduct at 41 CFR Sec. 105-735.217, which is
simultaneously being removed in this rulemaking document. However, the
exception in the old rule for items sold by GSA-operated stores is not
being preserved because GSA no longer operates such stores. Also,
unlike the GSA standards of conduct, the prohibition only applies to
the employee, his spouse and minor children, but does not apply to any
other members of the employee's household.
This prohibition is not intended to apply to property under the
control of and sold by an agency other than GSA. The purchase of assets
sold by other agencies would be subject to the regulations of the
agency controlling or disposing of the assets, and not subject to GSA's
regulations.
Section 6701.103(b) excepts from the prohibition in
Sec. 6701.103(a) foreign gifts purchased pursuant to 41 CFR part 101-
49. Further, Sec. 6701.103(c) authorizes the Administrator or his
designee to grant a written waiver of the prohibition in
Sec. 6701.103(a) based upon a determination that the waiver is lawful,
and meets the waiver standard established in that subsection. The
waiver provision is intended, in appropriate cases, to ease the burden
that the supplemental regulation may impose on the private lives of GSA
employees, while ensuring that employees do not engage in action that
may interfere with the objective and impartial performance of their
official duties or raise questions about possible misuse of Government
position. The general prohibition and waiver provisions included in
Sec. 6701.105 would also apply to all GSA employees.
Section 6701.104 Prohibited Purchases of Real Estate by Certain GSA
Employees Involved in the Acquisition or Disposal of Real Estate
Section 6701.104(a) supplements the prohibition on the use of
public office for private gain at 5 CFR 2635.702, and the prohibition
on the use of nonpublic information at 5 CFR 2635.703. Through its
Public Buildings Service, GSA exercises broad authority to acquire and
dispose of real estate for the Government. This section generally
prohibits GSA employees who personally and substantially participate in
or have official responsibility for the acquisition or disposal of real
estate or interests therein from purchasing any real estate or interest
therein. It is similar to the prohibition in the GSA standards of
conduct at 41 CFR
105-735.218, which is simultaneously being removed in this rulemaking
document, dealing with the purchase of real estate. Unlike the GSA
standards of conduct, however, Sec. 6701.104(a) does not apply to all
GSA employees whose official duties are in any way related to the
acquisition or disposal of real estate or interests therein, or to the
maintenance or improvement of real estate. Section 6701.104 limits the
scope of coverage to employees who participate personally and
substantially or have official responsibility over the acquisition or
disposal of real estate or interests therein as part of their official
duties.
The general restriction in Sec. 6701.104(a) prohibits an employee
from purchasing such property directly or indirectly. This provision
ensures that employees do not engage in actions that may interfere with
the objective and impartial execution of their official duties or raise
questions about possible misuse of their official positions. So as not
to interfere unduly with employees' private lives, an exception in
paragraph (b) of this section provides that the prohibition does not
apply to an employee's purchase of a personal residence or other
residential property, such as a vacation home.
Section 6701.104(c) authorizes the employee's immediate supervisor
to grant a written waiver of the prohibition in Sec. 6701.104(a), based
upon a determination that the waiver is lawful and meets the waiver
standard established in that subsection. This waiver standard is the
same as that established in Sec. 6701.103(c) for the purchase of
property sold by GSA. The waiver provision is intended, in appropriate
cases, to ease the burden that the supplemental regulation may impose
on the private lives of GSA employees, while ensuring that employees do
not engage in action that may interfere with the objective and
impartial performance of their official duties or raise questions about
possible misuse of their Government positions or nonpublic information.
Section 6701.105 Taking or Disposing of Government Property
Section 6701.105 supplements the prohibitions on misuse of position
in subpart G of the Standards, by specifically adding a prohibition on
the taking or disposing of Government property. It continues the
longstanding prohibition in GSA's regulations at 41 CFR 105-735.206,
which is simultaneously being removed in this rulemaking document, that
Government property can only be disposed of as authorized. Under
Sec. 6701.105, a GSA employee may not, directly or indirectly, take or
dispose of, or allow the taking or disposal of, Government property,
unless authorized to do so. This provision is necessary for inclusion
in GSA's supplemental regulation because of GSA's broad
responsibilities regarding the disposal of surplus Government property,
and is intended to ensure that GSA employees do not misuse information
and resources to which they have access because of their official
responsibilities.
Section 6701.106 Prior Approval for Outside Employment
Under 5 CFR 2635.803 an agency that determines it is necessary or
desirable for the purpose of administering its ethics program may, by
supplemental regulation, require employees to obtain prior written
approval before engaging in outside employment. The GSA standards of
conduct regulation at 41 CFR 105-735.204 (which is now being repealed),
requires prior notification of and administrative concurrence in
proposed outside employment, and is in essence a prior approval
requirement that has remained in effect under the note following 5 CFR
2635.803, as extended at 59 FR 4779-4780, 60 FR 6390-6391, 60 FR 66857-
66858, and 61 FR 40950-40952 (see also appendixes A-C to 5 CFR part
2635). This requirement has been in effect for many years and has
served GSA well in ensuring that its employees avoid violations of the
standards of conduct and conflict of interest statutes.
Therefore, Sec. 6701.106(a) of this final supplemental rule
requires that a GSA employee who wishes to engage in outside employment
with a prohibited source must obtain prior written approval from his or
her immediate supervisor before engaging in such outside employment.
This prior approval requirement applies without regard to whether the
employment is to be undertaken with or without compensation. It does
not apply, however, to special Government employees. Section 6701.106
will help to ensure that the outside employment activities of GSA
employees are not prohibited by statute or Federal regulation,
including the executive branch-wide Standards in 5 CFR part 2635, and
these supplemental regulations.
Section 6701.106(b) sets forth requirements for information to be
provided in the employee's request for prior approval. To ensure that
[[Page 56401]]
Sec. 6701.106 is not itself construed as authority to deny permission
to engage in outside employment, paragraph (c) states that approval
shall be granted unless a determination is made that the outside
employment is expected to involve conduct prohibited by statute or
regulations, including 5 CFR part 2635 and these supplemental
regulations.
At Sec. 6701.106(d)(1), ``employment'' is broadly defined to cover
any form of non-Federal employment or business relationship involving
the provision of personal services, including writing when done under
an arrangement with another person for production or publication of the
written product. It does not, however, include participation in the
activities of nonprofit charitable, religious, professional, social,
fraternal and similar organizations, unless such activities involve the
provision of professional services or advice and are for compensation
other than reimbursement of expenses. Although it is simply a
restatement of the definition at 5 CFR 2635.203(d), paragraph (d)(2) of
Sec. 6701.106 sets forth for ease of reference the definition of
``prohibited source'' that is essential to the determination of when
prior approval is required by Sec. 6701.106.
Section 6701.107 Reporting Waste, Fraud, Abuse and Corruption
Section 6701.107 assists employees in adhering to the general
principle of ethical conduct at 5 CFR 2635.101(b)(11), under which an
employee shall disclose waste, fraud, abuse, and corruption to
appropriate authorities. It also identifies GSA's Office of the
Inspector General as an authority to which it would be appropriate for
an employee to disclose waste, fraud, abuse and corruption. This new
provision is similar to the old standards of conduct provision at 41
CFR 105-735.216, which is simultaneously being removed in this
rulemaking document, but no longer specifies the Assistant Inspector
General for Investigations in the Central Office or the appropriate
Special Agent in charge in the regions as the only appropriate
authorities to whom such matters must be reported.
III. Removal of GSA's Old Standards of Conduct Provisions and
Reissuance of Certain Nonsuperseded Provisions in an Internal Order
Because GSA's old standards of conduct have been largely superseded
by the new executive branch financial disclosure regulations at 5 CFR
part 2634 and the new executive branch-wide Standards at 5 CFR part
2635, as supplemented by the regulations contained in GSA's new 5 CFR
part 6701, GSA is simultaneously removing from the CFR its old
standards of conduct, which have been codified at 41 CFR part 105-735,
and is replacing those provisions superseded by 5 CFR parts 2634 and
2635 with a section that provides cross-references to those parts and
to GSA's new supplemental regulations. Moreover, in accordance with 5
CFR 2635.105(c)(3), GSA is reissuing in an internal GSA Order (ADM
7900.9A) those sections of 41 part 105-735 which are not contained in
the Standards or GSA's supplemental regulation, and which GSA has
authority, independent of 5 CFR parts 2634 and 2635, to issue. A copy
of GSA Order ADM 7900.9A will be given to all GSA employees and is
available from GSA's Office of General Counsel.
IV. Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to 5 U.S.C. 553 (b) and (d), the GSA finds good cause not
to seek public comment on this rule nor to provide for a 30-day delayed
effective date. Such comment and delayed effective date are unnecessary
because the GSA is essentially restating existing regulations in a
different form. Moreover, to complete the transition from GSA's prior
ethics rules to the new Government-wide standards of ethical conduct
regulations, these rulemaking actions should take place as soon as
possible. This final rule will become effective as soon as published in
the Federal Register.
E.O. 12866, Regulatory Planning and Review
GSA has determined this proposal is not subject to the Office of
Management and Budget review under Executive Order 12866.
Regulatory Flexibility Act
GSA has determined under the Regulatory Flexibility Act (5 U.S.C.
601-611) that this rule will not have significant economic impact on a
substantial number of small entities because it affects only GSA
employees. Therefore, a Regulatory Flexibility Statement and Analysis
has not been prepared.
Paperwork Reduction Act
GSA has determined that the Paperwork Reduction Act (44 U.S.C.
chapter 35) does not apply because this regulation does not contain any
information collection requirements that require the approval of the
Office of Management and Budget.
Environmental Impact
The publication of this rule will not have a significant impact
upon the quality of the human environment or the conservation of energy
resources.
List of Subjects
5 CFR Part 6701
Conflict of interests, Ethical standards, Executive branch
standards of ethical conduct, Government employees.
41 CFR Part 105-735
Conflict of interests, Ethical standards, Executive branch
standards of conduct, Government employees.
Dated: October 25, 1996.
Martha N. Johnson,
Chief of Staff, General Services Administration.
Approved: October 28, 1996.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the General Services
Administration, with the concurrence of the Office of Government
Ethics, is amending title 5 of the Code of Federal Regulations, and
title 41, chapter 105, of the Code of Federal Regulations, as follows:
TITLE 5--[AMENDED]
1. A new chapter LVII, consisting of part 6701, is added to title 5
of the Code of Federal Regulations to read as follows:
CHAPTER LVII--GENERAL SERVICES ADMINISTRATION
PART 6701--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE GENERAL SERVICES ADMINISTRATION
Sec.
6701.101 General.
6701.102 Prohibition on solicited sales to subordinates.
6701.103 Prohibited purchases of property sold by GSA.
6701.104 Prohibited purchases of real estate by certain GSA
employees involved in the acquisition or disposal of real estate.
6701.105 Taking or disposing of Government property.
6701.106 Prior approval for outside employment.
6701.107 Reporting waste, fraud, abuse and corruption.
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government
Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5
CFR 2635.105, 2635.702, 2635.703, 2635.802, 2635.803.
[[Page 56402]]
Sec. 6701.101 General.
In accordance with 5 CFR 2635.105, the regulations in this part
apply to employees of the General Services Administration (GSA) and
supplement the Standards of Ethical Conduct for Employees of the
Executive Branch (Standards) contained in 5 CFR part 2635. In addition
to the executive branch-wide Standards in 5 CFR part 2635 and this
part, GSA employees are subject to the executive branch financial
disclosure regulations contained in 5 CFR part 2634.
Sec. 6701.102 Prohibition on solicited sales to subordinates.
A GSA employee shall not engage in solicitation of sales, on or off
duty, to any GSA employee under his supervision, at any level. This
prohibition applies, but is not limited to, solicitation for the sale
of insurance, stock, mutual funds, real estate, computer equipment and
any other commodities, goods or services except:
(a) The one-time sale of the employee's personal property or
privately owned dwelling; or
(b) Sales made in the course of outside employment of GSA employees
in retail stores and under other circumstances not involving
solicitation.
Sec. 6701.103 Prohibited purchases of property sold by GSA.
(a) General prohibition. Except as provided in paragraphs (b) and
(c) of this section, no GSA employee, or spouse or minor child of a GSA
employee, shall purchase, directly or indirectly Government property,
real or personal, being sold by GSA.
(b) Exception. The prohibition in paragraph (a) of this section
does not apply to the purchase of foreign gifts deposited with the
agency pursuant to 5 U.S.C. 7342, that an employee may purchase
pursuant to 41 CFR part 101-49.
(c) Waiver. An employee may make a purchase otherwise prohibited by
paragraph (a) of this section where a written waiver of the prohibition
has been given to the employee by the Administrator of GSA or his
designee. Such a waiver may be granted only upon a determination that
the waiver is not otherwise prohibited by law and that, in the mind of
a reasonable person with knowledge of the particular circumstances, the
purchase of the property will not raise a question as to whether the
employee has used his official position or nonpublic information to
obtain an advantageous purchase or create an appearance of loss of
impartiality in the performance of the employee's duties.
Sec. 6701.104 Prohibited purchases of real estate by certain GSA
employees involved in the acquisition or disposal of real estate.
(a) General prohibition. Except as provided in paragraphs (b) and
(c) of this section, employees who personally and substantially
participate in or have official responsibility for the acquisition or
disposal of real estate or interests therein, shall not directly or
indirectly purchase or participate as an agent or otherwise in the
purchase of any real estate or interest therein.
(b) Exception. The prohibition in paragraph (a) of this section
does not apply to an employee's purchase of real estate for use as his
personal or other residential property, such as a vacation home.
(c) Waiver. An employee may make a purchase otherwise prohibited by
this section where a written waiver of the prohibition has been given
to the employee by the employee's immediate supervisor, with the advice
of a Deputy Standards of Conduct Counsellor or the Designated Agency
Ethics Official. Such a waiver may be granted only if a determination
is made that the waiver is not otherwise prohibited by law or
regulation, and that in the mind of a reasonable person with knowledge
of the particular circumstances, the purchase of such real estate or
interest therein will not raise a question as to whether the employee
will use his official position or nonpublic information to obtain an
advantageous purchase or create an appearance of loss of impartiality
in the performance of the employee's duties.
Sec. 6701.105 Taking or disposing of Government property.
An employee shall not, directly or indirectly, take or dispose of,
or allow the taking or disposal of, Government property, unless
authorized to do so. For purposes of this section, property remains
Government property until disposed of in accordance with applicable
rules and regulations.
Sec. 6701.106 Prior approval for outside employment.
(a) Approval requirement. A GSA employee, other than a special
Government employee, shall obtain written approval from his immediate
supervisor prior to engaging in outside employment with a prohibited
source, with or without compensation.
(b) Form of request for approval. A request for approval of outside
employment shall include, at a minimum, the following:
(1) The employee's name, location and occupational title;
(2) A brief description of the employee's official duties;
(3) The nature of the outside employment, including a full
description of the specific duties or services to be performed;
(4) The name and address of the prospective outside employer for
which work will be done; and
(5) A statement that the employee currently has no official duties
involving a matter that affects the outside employer and will
disqualify himself from future participation in matters that could
directly affect the outside employer.
(c) Standard for approval. Approval shall be granted unless a
determination is made that the outside employment is expected to
involve conduct prohibited by statute or regulation, including 5 CFR
part 2635 and this part.
(d) Definitions. For purposes of this section:
(1) Employment means any form of non-Federal employment or business
relationship involving the provision of personal services by the
employee. It includes but is not limited to personal services as an
officer, director, employee, agent, attorney, consultant, contractor,
general partner, trustee, teacher, or speaker. It includes writing done
under an arrangement with another person for production or publication
of the written product. It does not, however, include participation in
the activities of a nonprofit charitable, religious, professional,
social, fraternal, educational, recreational, public service, or civic
organization, unless the participation involves the provision of
professional services or advice for compensation other than
reimbursement for actual expenses.
(2) Prohibited source has the meaning in 5 CFR 2635.203(d), and
includes any person who:
(i) Is seeking official action by GSA;
(ii) Does business or seeks to do business with GSA;
(iii) Conducts activities regulated by GSA;
(iv) Has interests that may be substantially affected by
performance or nonperformance of the employee's official duties; or
(v) Is an organization a majority of whose members are described in
paragraphs (d)(2)(i) through (iv) of this section.
Note to Sec. 6701.106: An employee may obtain advice from an
agency ethics official as to whether a potential employer is a
prohibited source.
[[Page 56403]]
Sec. 6701.107 Reporting waste, fraud, abuse and corruption.
GSA employees shall disclose immediately any waste, fraud, abuse,
and corruption to appropriate authorities, such as the Office of
Inspector General.
TITLE 41--[AMENDED]
CHAPTER 105--GENERAL SERVICES ADMINISTRATION
2. Part 105-735 of 41 CFR chapter 105 is revised to read as
follows:
PART 105-735--STANDARDS OF CONDUCT
Sec. 105-735.1 Cross-references to employee ethical conduct standards,
financial disclosure regulations, and other regulations.
Employees of the General Services Administration are subject to the
executive branch-wide standards of ethical conduct at 5 CFR part 2635,
GSA's regulations at 5 CFR part 6701 which supplement the executive
branch-wide standards, the regulations on employee responsibilities and
conduct at 5 CFR part 735, and the executive branch financial
disclosure regulations contained in 5 CFR part 2634, and GSA Order ADM
7900.9A, which can be obtained from the GSA Office of General Counsel.
Authority: 5 U.S.C. 7301.
[FR Doc. 96-27967 Filed 10-31-96; 8:45 am]
BILLING CODE 6820-34-P
