[Federal Register Volume 63, Number 61 (Tuesday, March 31, 1998)]
[Rules and Regulations]
[Pages 15273-15274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8312]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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Federal Register / Vol. 63, No. 61 / Tuesday, March 31, 1998 / Rules
and Regulations
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OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2634
RIN 3209-AA00
Amendment to Clarify Regulatory Intent on Finality of Review for
Complaints Regarding Designation of Positions for Employee Confidential
Financial Disclosure Reporting
AGENCY: Office of Government Ethics (OGE).
ACTION: Final rule; clarifying amendment.
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SUMMARY: The Office of Government Ethics is amending the executive
branchwide financial disclosure regulation to clarify its original
intent that the review provided for therein by an agency head (or his
designee) is final for all purposes regarding employee complaints about
designation of positions for confidential financial disclosure
reporting, and that it constitutes the sole and exclusive means of such
review.
EFFECTIVE DATE: March 31, 1998.
ADDRESSES: Office of Government Ethics, Suite 500, 1201 New York
Avenue, NW., Washington, DC 20005-3917, Attn.: Mr. G. Sid Smith.
FOR FURTHER INFORMATION CONTACT: G. Sid Smith, Senior Associate General
Counsel, Office of Government Ethics, telephone: 202-208-8000; TDD:
202-208-8025; FAX: 202-208-8037.
SUPPLEMENTARY INFORMATION: Six years ago, the Office of Government
Ethics issued a regulation at subpart I of 5 CFR part 2634 (under its
authority at 5 U.S.C. appendix, section 107(a) and section 201(d) of
Executive Order 12674) to govern the confidential financial disclosure
reporting system for executive branch employees, effective October 5,
1992. Pursuant to the provisions therein at Secs. 2634.904 and
2634.905, each executive branch department and agency designates which
positions will require employees to file confidential disclosure
reports (primarily OGE Form 450), based on criteria in the regulation.
Section 2634.906 established the executive branch procedures for
handling employees' complaints about an agency's designation of their
positions, whereby review and decision of the agency head or his
designee shall be final.
The purpose of this finality, without additional appeals or
complaints, is to avoid protracted review of filer designations, which
could seriously undermine the effectiveness and orderly administration
of the executive branch confidential financial disclosure system. While
an agency's decision to require confidential reports by employees in
designated positions affects the privacy of employees, there are
sufficient safeguards built into the system to adequately minimize
privacy intrusions, such that the need for nonpublic financial
disclosure clearly outweighs privacy concerns. Therefore, prompt and
final decisions about who must file these reports are necessary and
appropriate.
The bases for the confidential financial disclosure system and the
safeguards that have been built in are described at 5 CFR 2634.901.
Specifically, the confidential disclosure system serves the necessary
purposes of assisting in the prevention of employee conflicts of
interest and maintaining ethical integrity in agency programmatic
functions. These reports are strictly confidential, not available to
the public under the Freedom of Information Act (5 U.S.C. 552,
exemptions (b)(3), (b)(4) and (b)(6)) or otherwise, and protected under
the Privacy Act (5 U.S.C. 552a), section 107(a) of the Ethics in
Government Act (5 U.S.C. appendix, Sec. 107(a)), and section 201(d) of
Executive Order 12674. Additionally, only certain types of positions
may be designated, applying the criteria provided, and employees may
seek review by the agency head (or designee) of an agency decision to
designate their positions for filing, in accordance with the procedure
prescribed in Sec. 2634.906.
Given the importance of the confidential reporting system and these
built-in protections for employees, OGE determined that it was
necessary and appropriate to reach finality as promptly as possible
when handling filer designation complaints. That was and continues to
be the basis for the statement in the regulatory text at 5 CFR 2634.906
that the decision of the agency head or his designee is final. Because
OGE considered the finality language of the regulation to be clear and
unambiguous, its meaning was not discussed in the preamble to that
regulatory promulgation at 57 Federal Register 11800-11830 (April 7,
1992).
It has become apparent, however, that some may be interpreting this
finality as limited to the agency's internal decisional mechanism for
review, leaving open the possibility of negotiated grievance and
arbitration procedures, or other remedies within or outside the agency.
See, for example, the Federal Labor Relations Authority's decision in
American Federation of Government Employees, Local 3258 (Union) and
U.S. Department of Housing and Urban Development, Boston, Massachusetts
(Agency), 0-AR-2734 (FLRA, Feb. 19, 1998).
In order to clarify the original intent of the regulation in that
regard, OGE is issuing this minor clarifying regulatory amendment,
which will state more emphatically that the agency head's (or his
designee's) decision upon review of complaints regarding the
designation of an employee's position for filing confidential financial
disclosure reports is final and conclusive for all purposes,
notwithstanding any other provision of law or regulation. Specifically,
the amendment to the regulation re-emphasizes, by expressly stating,
that this procedure is the sole and exclusive means of seeking such
review, and that the final decision by the agency head or designee is
intended to preclude administrative or negotiated grievances,
arbitration procedures, and any other review or appeal, either within
or outside the agency.
Administrative Procedure Act
Pursuant to 5 U.S.C. 553 (b) and (d), as Director of the Office of
Government Ethics, I find good cause exists for waiving the general
notice of proposed rulemaking, public comment procedures and 30-day
delay in effectiveness as to this revision. The notice, comment and
delayed effective date are being waived because this minor amendment to
OGE financial disclosure regulations concerns a matter of agency
[[Page 15274]]
organization, practice and procedure. Furthermore, it is in the public
interest that this amendment become effective immediately, in order to
preserve the orderly administration of the confidential financial
disclosure system. The amendment's sole purpose is to clarify the
original intent of the financial disclosure regulation on a discrete
matter which has been the subject of recent question.
Executive Order 12866
In promulgating this minor amendment to its regulation, OGE 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 amendment has not been reviewed by the Office
of Management and Budget under that Executive order, as it is not
deemed ``significant'' thereunder.
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 rulemaking
will not have a significant economic impact on a substantial number of
small entities because it primarily affects Federal executive branch
agencies and their employees.
Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply,
because this rulemaking does not create any additional information
collection requirements, but simply clarifies the finality of a
procedure for determining which positions require employees to file
confidential financial disclosure reports (OGE Form 450), involving an
information collection procedure previously approved in February 1996
by the Office of Management and Budget (OMB Control No. 3209-0006).
List of Subjects in 5 CFR Part 2634
Administrative practice and procedure, Certificates of divestiture,
Conflict of interests, Financial disclosure, Government employees,
Penalties, Privacy, Reporting and recordkeeping requirements, Trusts
and trustees.
Approved: March 17, 1998.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the Office of Government
Ethics is amending part 2634 of chapter XVI of 5 CFR as follows:
PART 2634--[AMENDED]
1. The authority citation for part 2634 continues to read as
follows:
Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 26
U.S.C. 1043; 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.
2. Section 2634.906 is amended by revising the second sentence and
adding a new final sentence and a note at the end to read as follows:
Sec. 2634.906 Review of confidential filer status.
* * * A decision by the agency head or designee regarding the
complaint shall be final and conclusive for all purposes,
notwithstanding any other provision of law or regulation. This
procedure is the sole and exclusive means of seeking review of an
agency's decision to designate positions and the employees therein for
filing confidential financial disclosure reports.
Note: The provision in this section for a final decision by the
agency head or designee is intended to preclude administrative or
negotiated grievances, arbitration procedures, and any other review
or appeal, either within or outside the agency. This finality of the
agency head's (or designee's) decision is necessary in order to
maintain the prompt and orderly administration of the executive
branch confidential financial disclosure system.
[FR Doc. 98-8312 Filed 3-30-98; 8:45 am]
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