[Federal Register Volume 62, Number 48 (Wednesday, March 12, 1997)]
[Rules and Regulations]
[Pages 11307-11314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6160]
========================================================================
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
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 /
Rules and Regulations
[[Page 11307]]
OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2638
RIN 3209-AA07
Executive Agency Ethics Training Program Regulation Amendments
AGENCY: Office of Government Ethics (OGE).
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This interim rule amends the OGE executive branchwide
regulation on ``Executive Agency Ethics Training Programs'' to enable
agencies to better focus their training resources on training employees
in sensitive positions while ensuring that all executive branch
employees receive sufficient training to enable them to understand the
ethical responsibilities concomitant with their Government positions.
While the current OGE regulation generally requires agencies to provide
annual ``verbal'' ethics briefings to covered employees, the interim
rule, once effective, will permit agencies to fulfill this requirement
for most covered employees by means of a written briefing, provided
generally that the employees receive verbal briefings at least once
every three calendar years. Annual ethics briefings for employees who
file public financial disclosure forms, however, will generally still
have to be verbal and, starting next year (1998), will additionally be
subject to a further requirement that a qualified individual be present
during and after the briefings. This will focus agency ethics training
resources upon employees in sensitive positions, while simultaneously
freeing significant resources for use in other parts of the agency's
ethics training program. Because this rule is being published as an
interim rule, agencies will be able to take advantage of this
flexibility in conducting their annual ethics briefings for part of the
current 1997 training year as well as in future years. As noted, the
provision requiring qualified individual personal presence for public
filer briefings will not take effect until 1998.
DATES: This interim regulation is effective May 12, 1997, except for
Sec. 2638.704(d)(2)(ii) and Examples 1 through 3 following that
paragraph, which will become effective on January 1, 1998. Comments by
agencies and the public are invited and are due on or before April 11,
1997.
ADDRESSES: Office of Government Ethics, Suite 500, 1201 New York
Avenue, NW., Washington, DC 20005-3917, Attention: John C. Condray.
Comments may also be sent electronically to OGE's Internet E-mail
address at usoge@oge.gov (for E-mail messages, the subject line should
include the following reference--``Comments on interim training
regulation amendments''). Copies of the two OGE memorandums discussed
in the Supplementary Information section may be obtained, without
charge, by contacting Mr. Condray at OGE.
Those documents are also available on OGE's electronic bulletin board
TEBBS (''The Ethics Bulletin Board Service''). Information about TEBBS
may also be obtained from Mr. Condray. Information concerning this
interim rule, the OGE memorandums and other OGE regulations and
publications, is also available on OGE's World Wide Web site at http://
www.access.gpo.gov/usoge.
FOR FURTHER INFORMATION CONTACT: John C. Condray, Office of the General
Counsel and Legal Policy, Office of Government Ethics; telephone: 202-
208-8000, extension 1152; TDD: 202-208-8025; FAX: 202-208-8037.
SUPPLEMENTARY INFORMATION:
A. Background and Analysis of Interim Rule Changes
Section 301 of Executive Order 12674 on Principles of Ethical
Conduct, as modified by Executive Order 12731 (hereinafter referred to
as Executive Order 12674), requires all executive branch agencies to
ensure that all of their employees review the regulations that govern
their conduct. Section 301 also requires agencies to provide mandatory
annual briefings on ethics and standards of conduct for all employees
appointed by the President, all employees in the Executive Office of
the President, all officials required to file public or confidential
financial disclosure reports, all employees who are contracting
officers and procurement officials, and any other employees designated
by the agency head. Agencies are also required to coordinate with the
Office of Government Ethics (OGE) in developing annual ethics training
plans. In accordance with these requirements, and consistent with its
authority under the Ethics in Government Act of 1978, as amended, 5
U.S.C. appendix, OGE promulgated a final rule implementing these
requirements on April 7, 1992. See 57 FR 11886-11891, as corrected at
57 FR 15219 (April 27, 1992). The current version of this rule is
codified at subpart G of 5 CFR part 2638, entitled ``Executive Agency
Ethics Training Programs'' (the ``Training Regulation'').
In the nearly five years since the Training Regulation became
effective, OGE has received a number of comments from ethics officials
at the agency level. Partly in response to these comments, OGE has
twice revised portions of the regulation. See 57 FR 58399-58400
(December 10, 1992), as corrected at 57 FR 61612 (December 28, 1992),
and 59 FR 12145-12149 (March 16, 1994).
While the basic structure of the Training Regulation as currently
in effect is regarded as sound, some agencies have voiced concerns over
the requirement that all employees covered by the annual training
requirement (a total of approximately 387,000 executive branch
employees) receive annual verbal briefings. These commenters indicated
that providing the resources to meet this requirement prevents their
agencies from devoting resources to other desirable ethics training
goals. These include: developing specific programs for employees who
occupy sensitive positions and face more difficult conflicts issues;
providing resources to increase the effectiveness of the initial ethics
orientation received by all employees; and providing update training
for those employees who are not required to receive annual briefings.
The latter category is particularly troublesome, as agencies pointed
out that under the Training Regulation an employee could receive an
initial ethics orientation and then no other ethics information during
the rest of his or her
[[Page 11308]]
Government career. Of course, the Training Regulation is a minimum
standard, and agencies are encouraged to go beyond the minimum standard
when feasible. But OGE is sensitive to the concern that the Training
Regulation might be preventing agencies from developing programs to
address these concerns by dictating too strictly the use of scarce
agency resources.
Because of the need to provide agencies with the ability to more
efficiently use their resources as soon as possible, and in particular
because of the need to provide this relief for agencies during the 1997
calendar year training cycle, OGE is making these interim rule
amendments effective 90 days after the publication of this rule, on May
12, 1997, except for the ``personal presence'' requirement for public
filer briefings which, as noted above, will take effect on January 1,
1998. This course of action should allow agencies adequate time to
prepare for the new, amended regulatory provisions and, once they
become effective, to conduct a good portion of their 1997 ethics
training in accordance with the various more flexible requirements.
Thus, agencies will have greater flexibility in allocating their
training resources while still ensuring that the requirements of
Executive Order 12674 are met.
Annual Ethics Briefings
The most significant changes made in the interim rule will affect
the requirement that agencies provide certain ``covered employees,'' as
specified in section 301 of E.O. 12674 and restated at Sec. 2638.704(b)
of the Training Regulation, with annual ethics training. The interim
rule will divide covered employees into two categories: (1) those who
are ``covered employees'' because they file public financial disclosure
reports (SF 278s); and (2) all other covered employees. While agencies
will still be required to provide all covered employees with annual
ethics training, now to be called ``briefings,'' the presentation
requirements for the briefing will vary depending on which of the two
categories of ``covered employee'' an employee falls under. Under the
interim rule, public SF 278 filers will generally have to receive a
verbal ethics briefing every year (as is the case under the current
version of the Training Regulation). In addition, starting in calendar
year 1998, the annual briefings for public filers will have to be
offered with the presence of a qualified individual able to answer
questions. All other covered employees will generally only have to
receive a verbal ethics briefing at least once every three calendar
years, with no requirement that a qualified individual be present.
Written ethics briefings will be required for those calendar years
where such employees do not receive a verbal ethics briefing.
The Office of Government Ethics has decided to distinguish between
the level of annual ethics training provided for public financial
disclosure filers and all other covered employees for the following
reasons. Public filers occupy positions that involve policy-making.
Congress has made the determination that individuals occupying these
positions should disclose their financial interests on reports that are
publicly available in order to promote public confidence in the
integrity of the policy-making process. The Office of Government Ethics
believes that the sensitivity and authority of these positions justify
the heightened standard for annual ethics briefings as well. Not only
does the authority concomitant with their positions create increased
risks from a conflicts perspective, but the sensitivity and visibility
of their positions increase the consequences of any real or apparent
violation of ethics laws and regulations. From a practical standpoint,
these individuals are easily identifiable. Agencies should be tracking
the numbers and locations of employees in these positions as part of
the management of their public financial disclosure systems. Although
OGE believes that only public filers need receive the heightened
briefings, comment is invited on this issue.
These interim rule amendments also retain the feature that allows
an agency to count time spent in a verbal ethics briefing provided to
the employee in accordance with new Sec. 2638.704(d)(2) or (d)(3)(ii)
against the requirement that an agency provide the employee with one
hour of official duty time for the initial ethics orientation, if the
briefing and orientation occur in the same calendar year. This provides
an agency with an incentive to provide an incoming employee with a
verbal ethics briefing early in the employee's Government service. The
term ``verbal'' will also be added to Sec. 2638.703(a)(3) on ethics
orientation in the interim rule to avoid any confusion on this point.
Providing such verbal training quickly is also helpful to new
employees, because it will enable them to understand and apply the
rules that govern their conduct to the activities they undertake as
part of their everyday official duties.
In contrast, time spent in a written annual ethics briefing will
not count against the time requirement for an initial ethics
orientation taking place in the same year. A written annual ethics
briefing need only include a brief reminder of the restrictions
contained in the Standards of Ethical Conduct, and then can move on to
focus on other specialized ethics topics (for example, post-employment
restrictions). Thus, it may not provide a comprehensive summary of the
Standards as is contemplated for the initial ethics orientation.
Agencies should note, however, that if an initial ethics orientation
were also to meet the content requirements for a written annual ethics
briefing due in the same calendar year, it could serve as both the
initial ethics training and as the written annual ethics briefing for
covered employees receiving their annual ethics briefing in accordance
with Sec. 2638.704(d)(2)(iii)(A)(2), (d)(2)(iii)(B), (d)(3)(i) or
(d)(3)(iii) of the interim rule (see the discussion below). This
interrelationship between the initial ethics orientation and annual
ethics briefing requirements will enable agencies to make the best use
of agency resources and employee time by combining initial and annual
ethics briefings where such a combination is feasible.
Annual Ethics Briefings for Public Filers
As with the current Training Regulation, Sec. 2638.704(d)(2)(i) of
the interim rule states that agencies must supply employees who file
Standard Form 278 Executive Branch Personnel Public Financial
Disclosure Reports (SF 278s) with an annual verbal ethics briefing that
is a minimum of one hour of official duty time in duration. Beginning
next year, the interim rule amendments will require executive agencies
to take the extra step of providing the personal presence of a
``qualified individual,'' as defined at redesignated paragraph (b) of
Sec. 2638.702 in the interim rule, during and immediately following the
briefing in order to respond to questions or concerns on the part of
public filers receiving the briefing. Note that the qualified
individual will not have to be physically present to fulfill this
forthcoming requirement. The key is that those covered employees
receiving the training have immediate and direct access to the
qualified individual so that they may raise and resolve questions that
arise during the briefing. The examples used in the regulation text,
e.g., an ethics briefing provided through means of video conferencing
where the qualified individual can respond to employee questions
directly as part of the training even though the qualified individual
is not physically present at
[[Page 11309]]
the training site, illustrate this point. This increased level of
training will be required, starting in 1998, for the approximately
21,000 executive branch employees who file public financial disclosure
reports. These employees constitute approximately 5.4 percent of the
nearly 387,000 employees currently receiving annual ethics briefings,
based on agency responses to OGE's 1995 ethics program questionnaires.
The qualified individual provision is similar to the requirement
initially imposed when the Training Regulation was first promulgated in
1992, though that requirement entailed physical presence and was much
broader in scope since it applied to all employees covered by the
annual training requirement. As we indicated in the preamble to the
publication of the April 1992 final rule document, OGE believes that
the presence of an individual qualified to answer questions at the
annual ethics briefing is the best way to address employee questions
and concerns raised by the training. See 57 FR 11886, 11889 (April 7,
1992). Concerns over the ability of agencies to meet this requirement
for all annual ethics briefings provided to the large number of
employees subject to the annual briefing requirement, however, led OGE
to conclude that while having a qualified individual present is often
the most effective means of providing training, providing the most
effective training was not a realistic minimum standard for all
agencies to provide to all covered employees. The Office of Government
Ethics accordingly dropped this requirement in a set of 1994 interim
amendments to the Training Regulation in favor of requiring ``verbal''
training, either in person or by telecommunications, computer-based
methods or recorded means. See 59 FR 12145, 12146-12147 (March 16,
1994).
This interim rule strikes a new balance between feasibility
concerns and the desirability of having a qualified individual able to
respond immediately to questions raised during the ethics briefing.
These interim rule amendments will thus only require that a qualified
individual be present during and immediately following the annual
ethics briefings provided to those covered employees who hold the most
senior and responsible positions, i.e., public SF 278 filers. The
delayed effective date of January 1, 1998 for this requirement will
allow agencies sufficient time to prepare for its imposition. The
limited nature of the class affected (public SF 278 filers only)
significantly offsets the feasibility concerns that led to the 1994
amendments that deleted the original across-the-board in-person
requirement. These concerns are further addressed in this interim rule
by providing agencies with the option of conducting the required annual
ethics briefing for the vast majority of covered employees who are not
SF 278 filers through the use of a written ethics briefing for up to
two out of every three years.
Moreover, the interim rule will retain the exception permitting
agencies to provide the annual ethics training by a verbal briefing to
public filers without the presence of a qualified individual (even when
that new requirement becomes effective next year) or by written means
(starting once the new rule becomes effective May 12, 1997. The basic
exception is found at 5 CFR 2638.704(d)(2)(i) of the current rule and
Sec. 2638.704(d)(2)(iii)(A) of this interim rule. Pursuant to the
interim rule exception, the Designated Agency Ethics Official or his or
her designee can make a written determination that circumstances make
it impractical to provide the required verbal briefing to a particular
public SF 278 filer employee or a group of such employees in accordance
with paragraphs (d)(2)(i) and (d)(2)(ii) of the new rule. In those
cases, the annual ethics briefing could be provided, without the
presence of a qualified individual, by telecommunications, computer-
based methods or recorded means or by written means, provided that a
minimum of one hour of official duty time is set aside for employees to
attend the presentation or review the written materials.
5 CFR 2638.704(d)(2)(ii) of the current Training Regulation allows
agencies to provide the annual ethics training to covered employees who
are special Government employees by means of written briefings or other
means at the agency's discretion. The interim rule includes an
equivalent section, at Sec. 2638.704(d)(2)(iii)(B), for special
Government employees who are public SF 278 filers. Agencies should note
that public filer special Government employees receiving their annual
ethics training under this exception must receive a minimum of one hour
of official duty time for their written briefings. As with the current
Training Regulation, special Government employees who are expected to
work fewer than 60 days in a calendar year would not generally be
subject to this one-hour minimum requirement, as they are usually not
required to file public financial disclosure reports.
Annual Ethics Briefings for Other Covered Employees
As noted, agencies currently must generally provide all covered
employees with a one-hour verbal briefing every calendar year. The
interim rule amendments will provide significant new flexibility to
agencies in training covered employees who do not file public financial
disclosure reports. Under new Sec. 2638.704(d)(3), agencies will be
able to meet the annual briefing requirement for such employees by
providing them with written ethics briefings on an annual basis for up
to two out of every three calendar years. Unlike the written briefings
to be allowed in circumstances qualifying for an exception for public
filers under the interim rule, there will be no minimum official duty
time requirement for written ethics briefings provided under this
section. The Office of Government Ethics believes that imposing a one-
hour written briefing requirement for covered employees who are not SF
278 filers would be too burdensome for agencies administratively. Given
the large number of employees eligible to receive written briefings,
OGE believes that it would be very difficult for agencies to keep track
of the time each affected individual employee spends reviewing the
written ethics briefing materials. Nonetheless, agencies will still be
required to provide such employees with sufficient official time to
review the written materials provided. Moreover, at least once every
three years, unless excepted, such covered employees would have to
receive a verbal ethics briefing of one hour in duration. However, the
verbal briefings provided to such employees will not require the
personal presence of a qualified individual during and immediately
following the briefing.
The interim rule amendments retain, as to the once-every-three-
years verbal briefing requirement for certain nonpublic filer covered
employees, the exceptions currently found at Sec. 2638.704(d)(2) of the
Training Regulation. These exceptions will permit agencies, at their
discretion, to fulfill the annual briefing requirement through the use
of written materials every year where: (1) there is a written
determination by the DesignatedAgency Ethics Official, or his or her
designee, that circumstances make it impractical to provide a verbal
briefing once every three years for a particular employee or group of
employees; or (2) for special Government employees expected to work
fewer than 60 days in a calendar year as well as uniformed service
officers who serve on active duty for 30
[[Page 11310]]
or fewer consecutive days. See Sec. 2638.704(d)(3)(iii)(A),
(d)(3)(iii)(B) and (d)(3)(iii)(C). As to the second exception listed,
OGE is not currently aware of any situation where a special Government
employee subject thereto would receive an appointment greater than two
years in duration, thus requiring a verbal ethics briefing under the
general rule of the interim amendments. This particular exception may
therefore be unnecessary. Although retained in the interim amendments,
OGE requests that any agencies that have covered special Government
employees meeting the definition in this exception notify us during the
comment period.
The interim rule amendments, at new Sec. 2638.704(d)(3)(iii)(D),
provide that agencies may also provide written briefings only for
employees who are ``covered'' by the annual training requirement solely
because of discretionary designation by their agencies pursuant to
renumbered Sec. 2638.704(b)(6), including any such discretionarily
designated micro-purchasers. See the discussion below.
The interim rule, consistent with OGE practice to date in
administering the Training Regulation, will not require agencies to use
a particular system to track which method of training (written or
verbal) has been provided to such covered employees. The Office of
Government Ethics will instead continue the practice of allowing
agencies to adopt their own means of tracking, both for the agencies'
own records and for OGE oversight purposes.
Annual Ethics Briefings for ``Contracting Officers''; Separate Category
for Prior ``Procurement Officials'' Dropped
Numerous statutory and regulatory changes have occurred recently in
the area of Federal acquisition requirements, including procurement
integrity provisions. Of particular significance to the Training
Regulation was the enactment last year of a complete revision to the
procurement integrity law at 41 U.S.C. 423 and the issuance in early
January of this year of final implementing Federal Acquisition
Regulation (FAR) provisions thereunder. See section 4304(a) of the
National Defense Authorization Act for Fiscal Year 1996, Pub. L. No.
104-106, and 62 FR 226-233 (January 2, 1997). The amended procurement
law sets forth revised restrictions applicable to certain agency
officials involved in the contracting process and also revises the
related definitions, including those directly relevant to the Training
Regulation.
In accordance with section 301(c) of Executive Order 12674 (issued
in 1989 and modified in 1990 by E.O. 12731), the Training Regulation
has specified two categories of contracting personnel who are ``covered
employees'' subject to the annual ethics training requirement--
``contracting officers'' and ``procurement officials.'' See current 5
CFR 2638.704(b)(5) and (b)(6). This interim rulemaking will update the
Training Regulation provisions regarding annual training of agency
officials involved in contracting functions in light of the procurement
changes.
First, the old term ``procurement official'' (prior 41 U.S.C.
423(p)(3)), as referenced in E.O. 12674, is no longer found or defined
in the amended procurement integrity statute nor the above-cited
implementing FAR rule. There is only a reference to ``procurement
officers'' [emphasis added] in the heading of one of the procurement
integrity statutory restrictions, at amended paragraph (c) of 41 U.S.C.
423 regarding actions required of certain agency officials when
contacted by offerors regarding non-Federal employment. That amended
provision indicates that a ``procurement officer'' is an agency
official who is participating personally and substantially in a Federal
agency procurement for a contract in excess of the simplified
acquisition threshold. The simplified acquisition threshold is defined
in 48 CFR 2.101, as revised, as $100,000, except for certain limited
contracts outside the United States, where the threshold is $200,000.
For purposes of the demanding annual ethics briefing requirement under
theTraining Regulation, OGE has decided that the residual, informal
reference to ``procurement officers'' [emphasis added] in section
423(c) of the amended procurement integrity statute is, thus far, too
uncertain a concept, particularly when coupled with the removal of the
``Procurement Integrity Certification for Procurement Officials''
(Optional Form 333) requirement in the above-cited FAR final rulemaking
under the amended procurement integrity law.
Therefore, OGE has decided to remove the separate covered employee
category for ``procurement officials'' from Sec. 2638.704(b). The
Office of Government Ethics notes that many agency employees involved
in contracts over the simplified acquisition threshold will be
otherwise covered as contracting officers or confidential financial
disclosure report filers. Agencies may also discretionarily designate
certain of them to receive annual briefings if they deem it
appropriate. See Sec. 2638.704(b)(4), (b)(5) and (b)(6) of this interim
rule.
In contrast, the new procurement integrity definition of
``contracting officer'' in amended 41 U.S.C. 423(f)(5) is similar to
the old definition at prior section 423(p)(4) of the law. The specific
category for annual training of ``contracting officers,'' at
Sec. 2638.704(b)(5) of the Training Regulation, will therefore be
retained with a reference to the new procurement law provision. There
is one related important development brought about by the passage of
the Federal Acquisition Streamlining Act of 1994 (FASA), Pub. L. No.
103-355. Among the steps taken by FASA to simplify acquisition
procedures was the creation of simplified procedures for ``micro-
purchases,'' defined as those acquisitions of supplies or services
(except construction), the aggregate amount of which does not exceed
$2,500 ($2,000 for construction). An interim rule implementing this
portion of FASA was published as Federal Acquisition Circular (FAC) 90-
24, 59 FR 64784-64788 (December 15, 1994), with the Federal Acquisition
Regulatory Council adopting a final rule, with changes to the interim
rule, as published as part of FAC 90-40, 61 FR 39189-39199 (July 26,
1996). See 41 U.S.C. 428(f) and 48 CFR 2.101, as revised. To maximize
the benefit of these simplified procedures, agency heads are encouraged
to delegate micro-purchase authority to individuals who will be using
the supplies or services being purchased. See 48 CFR 1.603(b), as
revised. Under the July 1996 final rule in FAC 90-40, individuals
delegated micro-purchase authority are now not required to be
``contracting officers'' for the purposes of the Federal Acquisition
Regulation. See 48 CFR 1.603(b), as revised. (Under the prior, interim
FAR rule, micro-purchase authority holders were deemed contracting
officers (see 48 CFR 13.601(d) (1996 edition), now removed).)
In order to harmonize the Training Regulation with the goals of
FASA which encourages agencies to delegate micro-purchase authority
widely, OGE will not require agencies to provide annual briefings to
micro-purchasers who are not contracting officers. (Of course,
contracting officers who are also ``micro-purchasers'' will still need
to receive annual training based on their contracting officer status.)
Individual agencies may, if they deem it appropriate based on conflict
of interest concerns, discretionarily designate some or all of their
micro-purchasers who are not contracting officers (or otherwise in a
specifically covered category of
[[Page 11311]]
employees, see Sec. 2638.704(b)) as covered employees subject to annual
briefings under the discretionary designation provision at renumbered
and revised Sec. 2638.704(b)(6) (old 5 CFR 2638.704(b)(7)). In such
cases, the interim rule at new Sec. 2638.704(d)(3)(iii)(D) will permit
agencies to provide annual briefings for any such discretionarily
designated non-``contracting officer'' micro-purchasers solely through
distribution of written materials (without the requirement for verbal
briefings at least once every three years). This exception for written
briefings will likewise apply to any other employees who are ``covered
employees'' for annual ethics training purposes solely because of
discretionary designation by their agencies pursuant to new
Sec. 2638.704(b)(6).
Other Issues
The Office of Government Ethics is also amending 5 CFR 2638.701.
This change will add language explicitly including the Standards of
Ethical Conduct for Employees of the Executive Branch, 5 CFR part 2635
(``Standards''), and any agency supplemental regulation thereto, as
items that employees must be made aware of through agency ethics
training programs. The interim rule will also explicitly reference the
conflict of interest statutes, 18 U.S.C. chapter 11. These interim rule
changes will not substantively change the requirements of subpart G; an
agency meeting the requirements of 5 CFR 2638.703 and 2638.704 will
continue to fulfill the general requirement of Sec. 2638.701. Reference
to the Standards and supplemental regulations thereto were left out of
Sec. 2638.701, when it was originally published in the Federal Register
in April 1992, because they had not been published at that time. The
change in the interim rule will update the Sec. 2638.701 reference.
The interim rule amendments will also make certain other, minor
changes to the Training Regulation. Executive Order 12674 requires
agencies to coordinate with OGE in developing annual agency ethics
training plans. The current Training Regulation, at 5 CFR
2638.702(a)(3), provides that agencies are to file this written plan
for annual ethics training with OGE by August 31 of each calendar year.
The interim rule, at revised and redesignated Sec. 2638.702(c), will
formally eliminate the requirement that agencies file their plans with
OGE on an annual basis. While the filing requirement was useful during
the initial stage of the implementation of the Training Regulation, the
utility of the measure has declined as agencies have become proficient
in planning and providing the required ethics training. For this
reason, OGE sent a memorandum to Designated Agency Ethics Officials
(DAEO) on July 6, 1995 (DO-95-028), indicating that agencies should
continue to develop written plans for annual ethics training,
coordinating with OGE where necessary, but should maintain the plans at
the agency rather than filing them each year with OGE. As noted in that
memorandum, such coordination can include: consulting with OGE
concerning upcoming OGE training materials, including videotapes, that
may be useful in administering an agency's training program; contacting
OGE's Ethics Information Center to obtain training materials from other
executive branch agencies that may be adapted to the agency's needs; or
consulting with OGE concerning other issues or problems an agency is
facing in providing ethics training. The interim rule will codify that
change in policy.
Even though agencies will no longer be required to file their
annual ethics training plans with OGE, agencies remain subject to the
requirement of Executive Order 12674 and the Training Regulation that
they develop annual agency ethics training plans. See the OGE
memorandum to DAEOs of January 6, 1997 (DO-97-002). The Office of
Government Ethics will include the plans as a program element subject
to the periodic agency ethics program reviews that OGE conducts. The
plans should be completed by January 1 of the calendar year that they
cover. The interim rule will slightly adjust the information required
in the plan to conform to the changes in the structure of the annual
ethics briefing and will require agencies to include a brief narrative
description of the agency's annual ethics briefings. The Office of
Government Ethics anticipates that a typical narrative will be only one
or two paragraphs in length, and will include information concerning
the projected content of the briefings, the method of presentation to
be used, and the anticipated number of employees who will receive
different types of presentations if the agency plans to use a number of
different methods.
Since these interim rule amendments to the Training Regulation take
effect on May 12, 1997, except for Sec. 2638.704(d)(2)(ii) and Examples
1 through 3 following that section, which will take effect on January
1, 1998, OGE will allow agencies to count any 1997 calendar year
training already completed under the current version of the Training
Regulation before the effective date of these interim rule amendments.
Thus, agencies will not have to redo any 1997 ethics training properly
conducted under the 5 CFR part 2638, subpart G training requirements
effective at the time of training. The new, generally liberalized
training requirements should be followed for the remainder of 1997.
While the interim rule amendments will substantially alter
Sec. 2638.704, on annual agency ethics training (designated as ``annual
ethics briefings'' under the interim revision), they will not
significantly alter Sec. 2638.703, initial agency ethics orientation.
Some commenters have indicated a desire that OGE amend the Training
Regulation to require that the initial ethics orientation be verbal
instead of allowing the use of written materials. The Office of
Government Ethics encourages agencies to strengthen the initial ethics
orientation, and believes that verbal training is generally more
effective than using written materials. However, OGE believes that the
current fiscal situation makes it unreasonable to require agencies to
provide employees receiving their initial ethics orientation with
verbal training. Such a requirement will be particularly difficult for
those agencies with widely scattered facilities. The other changes to
subpart G contained in the interim rule should provide agencies with
the ability to shift some of their ethics training resources to provide
a more comprehensive initial ethics orientation for their new
employees. The Office of Government Ethics notes that many agencies
have already made some effort to expand the scope of their initial
ethics orientations.
The most recent results available from OGE's Annual Agency Ethics
Program Questionnaire (for CY 1995) showed that only 24 of 125
responding agencies provided their employees with nothing more than a
copy of the Standards and an hour of official duty time for their
ethics orientation. In addition to the potential for providing a more
comprehensive initial ethics orientation, the changes made by the
interim rule amendments will also place agencies in a better position
to provide those employees who do not receive annual ethics briefings
with periodic ethics-related updates or training to ensure that all
employees better understand the statutes and regulations that govern
their conduct.
For these reasons, the interim rule only makes minor changes to
Sec. 2638.703. The interim rule will amend Sec. 2638.703(a)(3) to
reflect changes to the annual ethics training requirement. The interim
rule will also amend Sec. 2638.703(b)(2), substituting ``each
employee'' for ``employees'' to bring the
[[Page 11312]]
section into conformity with the language used in other parts of the
section. The interim rule will add agency supplemental regulations to
those materials that must be included with a copy of the Standards
furnished for purposes of review only in accordance with
Sec. 2638.703(b)(1), as well as requiring that any agency supplemental
ethics regulations be included in a summary provided to employees under
Sec. 2638.703(b)(2). Each of these subsections is also being amended to
include the relevant agency supplemental regulations among the
materials whose complete text must be retained and readily accessible
in an employee's immediate office area for an agency to use these
exceptions to Sec. 2638.703(a)(1).
In addition to the above changes, the interim rule amendments also
substitute the term ``ethics briefing'' for the term ``ethics
training'' in Sec. 2638.704 and in cross-references throughout subpart
G. The new language parallels the language used in E.O. 12674, but does
not represent a substantive change in the regulation.
As stated earlier, the goal of these interim rule amendments is to
enable agencies to more efficiently use the resources that are
currently available to the ethics training programs. Should these
changes result in a diminishing level of resources for ethics training,
OGE of course might have to seek to further amend the Training
Regulation to reimpose the current across-the-board verbal briefing
requirement.
B. Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to sections 553 (b) and (d) of title 5 of the United
States Code, I find good cause for waiving the general notice of
proposed rulemaking. Because the changes made by these interim rule
amendments to the Training Regulation will enable agencies to more
efficiently use their resources to provide required Government ethics
orientation and annual briefings to their employees, it is essential to
the administration of the executive branch ethics program that the
changes made by this interim rule become effective in time for agencies
to implement them during the course of their calendar year 1997
training cycle. However, this is an interim rule which will generally
become effective on May 12, 1997, with a delayed effective date of
January 1, 1998 for new Sec. 2638.704(d)(2)(ii) and Examples 1 through
3 following that section. Moreover, this rule provides for a 30-day
comment period. All interested persons are invited to submit written
comments to OGE on these interim rule amendments, to be received on or
before April 11, 1997. The Office of Government Ethics will review all
comments received and consider any modifications which appear warranted
to these amendments in adopting a final rule in this matter.
Executive Order 12866
In promulgating these interim amendments to the executive
branchwide Government ethics training regulation, the Office of
Government Ethics has adhered to the regulatory philosophy and the
applicable principles of regulation set forth in section 1 of Executive
Order 12866, Regulatory Planning and Review. This interim rule has also
been reviewed by the Office of Management and Budget under that
Executive Order.
Regulatory Flexibility Act
As Director of the Office of Government Ethics, I certify under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) that this interim rule
will not have a significant economic impact on a substantial number of
small entities because it affects only Federal executive branch
agencies and their employees.
Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
to this interim rule because it does not contain information collection
requirements that require the approval of the Office of Management and
Budget.
List of Subjects in 5 CFR Part 2638
Administrative practice and procedure, Conflict of interests,
Government employees, Reporting and recordkeeping requirements.
Approved: February 4, 1997.
Stephen D. Potts,
Director, Office of Government Ethics.
Accordingly, for the reasons set forth in the preamble, the Office
of Government Ethics is amending subpart G of part 2638 of chapter XVI
of title 5 of the Code of Federal Regulations as follows:
PART 2638--[AMENDED]
1. The authority citation for part 2638 continues to read as
follows:
Authority: 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.
Subpart G--Executive Agency Ethics Training Programs
2. Section 2638.701 is revised to read as follows:
Sec. 2638.701 Executive agency ethics training programs; generally.
Each executive branch agency shall maintain a program of ethics
training designed to ensure that all of its employees are aware of: the
Federal conflict of interest statutes, located at chapter 11 of title
18 of the United States Code; the Principles of Ethical Conduct, found
in part I of Executive Order 12674, as modified; the Standards of
Ethical Conduct for Employees of the Executive Branch, codified at 5
CFR part 2635, and any agency supplemental regulation thereto; and how
to contact agency ethics officials when the employee needs advice
concerning ethics issues. As a minimum, each agency program shall
consist of the initial ethics orientation required by Sec. 2638.703 of
this subpart and the annual ethics briefing required by Sec. 2638.704
of this subpart. For purposes of this subpart, the term ``employee''
shall include special Government employees (as defined in 18 U.S.C.
202(a)) and officers of the uniformed services.
3. Section 2638.702 is amended by removing paragraph (b), removing
the paragraph designation (a), and redesignating paragraphs (a)(1),
(a)(2) and (a)(3) as new paragraphs (a), (b), and (c), respectively;
further redesignating in newly designated paragraph (b), paragraphs (i)
through (v) as paragraphs (b) (1) through (5), respectively; removing
the word ``training'' and adding the word ``briefing'' in newly
designated paragraphs (b) introductory text and (b)(5); and revising
newly redesignated paragraph (c) to read as follows:
Sec. 2638.702 Responsibilities of the designated agency ethics
official; review by the Office of Government Ethics.
* * * * *
(c) Develop each year a written plan for annual ethics training to
be conducted by the agency. The written plan for annual ethics training
shall be completed by the beginning of the calendar year covered by the
plan. In developing their written plans for annual ethics training,
agencies shall coordinate with OGE where necessary. The plan shall
contain a brief narrative description of the agency's annual ethics
training, and shall also include:
(1) An estimate of the total number of agency employees who will be
provided annual ethics briefings, including:
[[Page 11313]]
(i) An estimate of the number of public filers described in
Sec. 2638.704(b)(3) of this subpart who must be provided annual ethics
briefings, including:
(A) An estimate of the number of public filers to whom annual
ethics briefings will be presented verbally with a qualified individual
present in accordance with Sec. 2638.704(d)(2)(ii) of this subpart;
(B) An estimate of the number of public filers to whom annual
ethics briefings will be presented under the exception provided at
2638.704(d)(2)(iii)(A) of this subpart; and
(C) An estimate of the number of special Government employees who
are public filers to whom the annual ethics briefing will be presented
in accordance with the exception provided at 2638.704(d)(2)(iii)(B) of
this subpart; and
(ii) An estimate of the number of covered employees other than
public filers described in Sec. 2638.704(b)(3) of this subpart who must
be provided annual ethics briefings, including:
(A) An estimate of the number of covered employees who will receive
a verbal annual ethics briefing in accordance with 2638.704(d)(3)(ii)
of this subpart;
(B) An estimate of the number of covered employees who will receive
a written ethics briefing in accordance with 2638.704(d)(3)(i) of this
subpart;
(C) An estimate of the number of covered employees who will receive
a written ethics briefing in accordance with the exception provided at
Sec. 2638.704(d)(3)(iii)(A) of this subpart;
(D) An estimate of the number of special Government employees and
the number of officers in the uniformed services who will receive a
written ethics briefing in accordance with the exceptions provided at
Sec. 2638.704 (d)(3)(iii)(B) and (d)(3)(iii)(C) of this subpart; and
(E) An estimate of the number of covered employees who will receive
a written ethics briefing in accordance with the exception provided at
Sec. 2638.704(d)(3)(iii)(D) of this subpart; and
(2) Any other information that the designated agency ethics
official believes will facilitate OGE's review of the agency's ethics
training program.
4. Section 2638.703 is amended by revising the second sentence of
paragraph (a)(3) and revising paragraphs (b)(1) and (b)(2) to read as
follows:
Sec. 2638.703 Initial agency ethics orientation.
(a) * * *
(3) * * * If the agency provides verbal ethics training during
official duty time, including a verbal ethics briefing provided in
accordance with Sec. 2638.704(d) of this subpart, or a nominee or other
new entrant receives verbal ethics training provided by the Office of
Government Ethics or the White House Office, the period of official
duty time set aside for individual review may be reduced by the time
spent in such training.
(b) * * *
(1) Furnishing each employee a copy of the Standards of Ethical
Conduct for Employees of the Executive Branch at part 2635 of this
chapter, and any supplemental regulation of the concerned agency, for
the purposes of review only, provided that copies of the complete text
of part 2635 and any supplemental regulation of the concerned agency
are retained and readily accessible in the employee's immediate office
for use by several employees; or
(2) Providing each employee with materials that summarize part I of
Executive Order 12674, as modified by Executive Order 12731, 3 CFR,
1990 Comp., p. 306, the Standards of Ethical Conduct for Employees of
the Executive Branch at part 2635 of this chapter, and any supplemental
regulation of the concerned agency. To ensure that all employees have
access to all of the information contained in these documents, an
agency using this alternative must ensure that copies of the complete
text of part 2635 and the agency's supplemental regulation thereto (if
any) are retained and readily accessible in the employees' immediate
office area.
5. Section 2638.704 is amended by removing the word ``training''
and adding the word ``briefings'' in its place in paragraph (b)(4),
revising the section heading and paragraphs (a), (b)(5) and (d),
removing paragraph (b)(6), redesignating paragraph (b)(7) as new
paragraph (b)(6) and revising the text thereof, and revising the
introductory text of paragraph (c), to read as follows:
Sec. 2638.704 Annual ethics briefings.
(a) Annual ethics briefings. Executive branch agencies must provide
each employee identified in paragraph (b) of this section with an
ethics briefing every calendar year. This briefing must meet the
content requirements contained in paragraph (c) of this section and the
presentation requirements contained in paragraph (d) of this section.
(b) * * *
(5) Contracting officers within the meaning of 41 U.S.C. 423(f)(5);
and
(6) Other agency employees designated by the head of the agency or
his or her designee based on a determination that such briefings are
desirable in view of their particular official duties.
(c) Content. Agencies are encouraged to vary the emphasis and
content of annual agency ethics briefings from year to year as
necessary within the context of their ethics programs. The emphasis and
content are generally a matter of each agency's sole discretion.
However, each briefing must include, as a minimum:
* * * * *
(d) Presentation. The annual ethics briefing shall be presented in
accordance with the following requirements:
(1) A qualified individual, as defined in Sec. 2638.702(b) of this
subpart, shall:
(i) Present the briefing, if the briefing is presented in person;
(ii) Prepare the recorded materials or presentation, if the
briefing is presented by telecommunications, computer-based methods or
recorded means; or
(iii) Prepare the written ethics briefing, if the annual ethics
briefing requirement is satisfied through the use of a written ethics
briefing in accordance with paragraphs (d)(2)(iii)(A)(2),
(d)(2)(iii)(B), (d)(3)(i) or (d)(3)(iii) of this section.
(2) Annual briefings for filers of public financial disclosure
reports. (i) The annual ethics briefings for covered employees
described at paragraph (b)(3) of this section shall be verbal, either
in person or by telecommunications, computer-based methods or recorded
means. Employees must be provided a minimum of one hour of official
duty time for this briefing.
(ii) A qualified individual, as defined in Sec. 2638.702(b) of this
subpart, shall be present during and immediately following the
presentation. The qualified individual need not be physically present
at the training site to meet this requirement. To meet the ``presence''
requirement, the covered employees receiving the briefing must have
direct and immediate access to the qualified individual.
Example 1 to paragraph (d)(2)(ii): An agency provides annual ethics
briefings for public filers in a regional office by establishing a
video conference link between a qualified individual in the
headquarters office and the regional office. Because the link provides
for direct and immediate communication between the qualified individual
and the employees receiving the briefing, this arrangement meets the
presence requirement even though the qualified
[[Page 11314]]
individual is not physically located in the room where the briefing is
received.
Example 2 to paragraph (d)(2)(ii): The agency described in the
preceding example provides a briefing through a videotaped briefing
instead of through a video conference link. The employees viewing the
videotape are provided with a telephone at the training site and the
telephone number of a qualified individual who is standing by during
and immediately following the training to answer any questions. The
briefing fulfills the physical presence requirement because the
employees receiving the briefing have direct and immediate access to a
qualified individual.
Example 3 to paragraph (d)(2)(ii): The physical presence
requirement would not be met if the facts of Example 2 were varied so
that the employees receiving the briefing did not have immediate access
to the qualified individual, either because there was no phone provided
at the training site or because the qualified individual was not
standing by to respond to any questions raised. Merely providing the
phone number of the qualified individual, without providing access to
that individual who is standing by to answer questions raised during
the briefing, does not provide the employees receiving the training
with the direct and immediate access to the qualified individual
necessary to satisfy the presence requirement.
(iii) Exceptions. An agency may provide the annual ethics briefing
for employees described in paragraph (b)(3) of this section by means
other than as specified in paragraphs (d)(2)(i) and (d)(2)(ii) of this
section only under the following circumstances:
(A) Where the Designated Agency Ethics Official, or his or her
designee, has made a written determination that circumstances make it
impractical to provide the annual verbal ethics briefing with a
qualified individual present, to a particular employee or group of
employees in accordance with paragraphs (d)(2)(i) and (d)(2)(ii) of
this section. In such cases, the annual ethics briefing may be provided
without the presence of a qualified individual, provided that a minimum
of one hour of official duty time is set aside for employees to attend
the presentation or review the written materials, either by:
(1) Telecommunications, computer-based methods or recorded means;
or
(2) Written means.
Example 1 to paragraph (d)(2)(iii)(A): The State Department has one
public filer (the Ambassador) in the American Embassy in Ulan Bator,
Mongolia. Because of the difference in time zones and the uncertainty
of an ambassador's schedule, the designated agency ethics official for
the State Department is justified in making a written determination
that circumstances make it impractical to provide the annual ethics
training as a verbal briefing, either with or without the presence of a
qualified individual. The required annual ethics briefing can therefore
be provided by written means in accordance with
Sec. 2638.704(d)(2)(iii)(A)(2). Note that an initial ethics orientation
provided in the same calendar year in accordance with Sec. 2638.703 of
this subpart will meet this annual written ethics briefing requirement,
provided the materials meet the content requirements stated at
paragraph (c) of this section.
(B) In the case of special Government employees who are covered
employees under paragraph (b)(3) of this section, an agency may
(without the presence of a qualified individual) provide the annual
ethics briefing by written or other means at the agency's discretion,
provided that a minimum of one hour of official duty time is set aside
for employees to attend the presentation or review the written
materials.
(3) Annual ethics briefings for all other covered employees. (i) An
agency may satisfy the annual ethics briefing requirement for covered
employees other than those described at paragraph (b)(3) of this
section for up to two out of every three calendar years through the
distribution of a written ethics briefing to those employees. In such
case, while not required to provide a minimum of one hour of official
duty time, an agency must provide employees receiving their annual
ethics briefings under this paragraph with sufficient official duty
time to review the written materials provided. Note that an initial
ethics orientation provided in the same calendar year in accordance
with Sec. 2638.703 of this subpart will meet this annual ethics
briefing requirement (as well as that of Sec. 2638.704(d)(3)(iii) of
this section), provided the materials meet the content requirements
stated at paragraph (c) of this section.
(ii) Except as permitted under paragraph (d)(3)(iii) of this
section, the ethics briefing for covered employees other than those
described at paragraph (b)(3) of this section shall be presented
verbally at least once every three years, either in person or by
telecommunications, computer-based methods or recorded means. Employees
must be provided a minimum of one hour of official duty time for this
verbal briefing. Unlike the annual ethics briefing described at
paragraph (d)(2) of this section, for covered employees described at
paragraph (b)(3) of this section, a qualified individual need not be
present during and immediately following the verbal presentation
provided under this paragraph.
(iii) Exceptions. An agency can provide covered employees receiving
their annual ethics briefings under this paragraph (d)(3) with written
briefings only, in accordance with paragraph (d)(3)(i) of this section,
every year without the verbal ethics briefing as described at paragraph
(d)(3)(ii) of this section at least once in any three calendar year
period, under the following circumstances:
(A) Where the Designated Agency Ethics Official, or his or her
designee, has made a written determination that circumstances make it
impractical to provide an ethics briefing verbally once every three
calendar years to a particular employee or group of employees in
accordance with paragraph (d)(3)(ii) of this section;
(B) In the case of special Government employees who are expected to
work fewer than 60 days in a calendar year;
(C) In the case of officers in the uniformed services who serve on
active duty for 30 or fewer consecutive days; or
(D) Where a particular employee or group of employees are covered
employees solely because of agency discretionary designation pursuant
to paragraph (b)(6) of this section.
[FR Doc. 97-6160 Filed 3-11-97; 8:45 am]
BILLING CODE 6345-01-U
