[Federal Register Volume 61, Number 63 (Monday, April 1, 1996)]
[Rules and Regulations]
[Pages 14448-14453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7921]
[[Page 14447]]
_______________________________________________________________________
Part XI
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Parts 4 and 12
Office of the Secretary--Prohibition of Advance Disclosure of Funding;
Accountability in the Provision of HUD Assistance; Final Rule
Federal Register / Vol. 61, No. 63 / Monday, April 1, 1996 / Rules
and Regulations
[[Page 14448]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
24 CFR Parts 4 and 12
[Docket No. FR-3954-F-01]
RIN 2501-AC04
Prohibition of Advance Disclosure of Funding; Accountability in
the Provision of HUD Assistance
AGENCY: Office of the Secretary, HUD.
ACTION: Final rule.
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SUMMARY: This rule streamlines 24 CFR parts 4, regarding prohibition of
advance disclosure of funding decisions, and 12, regarding
accountability in the provision of HUD assistance, in the context of
HUD's regulatory reinvention process by combining them into a single,
revised part 4 and removing unnecessary and repetitious language.
EFFECTIVE DATE: May 1, 1996.
FOR FURTHER INFORMATION CONTACT: Aaron Santa Anna, Assistant General
Counsel, Ethics Law Division, at (202) 708-3815, or Sam E. Hutchinson,
Associate General Counsel, Office of Human Resources Law, (202) 708-
2947; 451 Seventh Street, SW., Washington, DC 20810. Hearing or speech-
impaired individuals may call HUD's TDD number (202) 708-3259.
(Telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Paperwork Reduction Act Statement
The information collection requirements contained in Secs. 4.7 and
4.9 have been approved by the Office of Management and Budget in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520), and assigned OMB control number 2510-0011. An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection displays a valid
control number.
II. Background--Regulatory Reinvention
Consistent with Executive Order 12866 and President Clinton's
memorandum of March 4, 1995 to all Federal Departments and Agencies on
regulatory reinvention, HUD has reviewed all its regulations to
determine whether certain regulations can be eliminated, streamlined,
or consolidated with other regulations. In keeping with the President's
mandate to reinvent and reform regulations, the Department is
streamlining parts 4 and 12. These parts have been re-drafted to
eliminate text that only repeats statutory language, or provisions that
are advisory or non-exclusive, such as lists of examples.
One goal of reinventing regulations is to remove rule text that
repeats statutory language. Besides resulting in considerable
streamlining of regulations, such a practice will remove the problems
that result when a rule that repeats the language of a statute becomes
inconsistent with new statutory amendments. The final rule promulgated
here does not, therefore, repeat any statutory language; it contains
only those provisions that are necessary for clarification of the
statutory procedures, or provisions that address those areas that give
the Secretary discretion to act.
The remaining regulatory text is further pruned to eliminate
provisions that are advisory or non-exclusive. For example, the term
``assistance'' in Sec. 4.5, Definitions, of the current rule, includes
a long list of programs that provide for the competitive distribution
of assistance. Since such a list is subject to change, it is not likely
to remain current and is therefore being removed from the rule.
The same procedures described above (the removal of: statutory
language, lists subject to change, and text that is only advisory) are
applied to part 12, leaving a streamlined rule that retains only the
regulatory provisions that do not repeat the statutory requirements,
which remain in effect.
Both parts 4 and 12 are substantially restructured by this rule.
All of the subparts in the current versions of both parts are
eliminated, and the remaining provisions of part 4 are designated as
subpart B of the revised part 4. The remaining provisions of part 12
are redesignated as subpart A of part 4, and part 12 is removed. Each
subpart cites the statutory provision being interpreted and under which
it is authorized (subpart A of part 4 under section 102 of the
Department of Housing and Urban Development Reform Act of 1989 [HUD
Reform Act]; subpart B of part 4 under section 103 of the HUD Reform
Act). However, the changes made by this rule are only structural and
not substantive; the implementation of the HUD Reform Act remains
consistent with its implementation before the changes made by this
rule.
III. Findings and Certifications
Justification for Final Rulemaking
The Department has determined that this rule should be adopted
without the delay occasioned by requiring prior notice and comment.
This final rule only makes a number of streamlining changes to existing
provisions, as discussed above in section II. of this preamble. As
such, prior notice and comment are unnecessary under 24 CFR Part 10.
Environmental Impact
This rulemaking does not have an environmental impact. This
rulemaking simply amends an existing regulation by consolidating and
streamlining provisions and does not alter the environmental effect of
the regulations being amended.
Regulatory Flexibility Act
The Secretary, in accordance with provisions of the Regulatory
Flexibility Act (5 U.S.C. 605(b)), has reviewed this rule before
publication and by approving it certifies that it will not have a
significant economic impact on a substantial number of small entities
because the parts amended by this rule are streamlined but not
substantively changed.
Executive Order 12612, Federalism
HUD has determined, in accordance with Executive Order 12612,
Federalism, that this rule will not have a substantial, direct effect
on the States or on the relationship between the Federal government and
the States, or on the distribution of power or responsibilities among
the various levels of government, since the rule merely streamlines the
affected parts without substantively changing them.
Executive Order 12606, The Family
HUD has determined that this rule will not have a significant
impact on family formation, maintenance, and general well-being within
the meaning of Executive Order 12606, The Family, because no
significant change in existing HUD policies or programs will result
from promulgation of this rule, as those policies and programs relate
to family concerns.
List of Subjects
24 CFR Part 4
Administrative practice and procedure; Government employees, Grant
programs--housing and community development, Investigations, Loan
programs--housing and community development, Penalties, Reporting and
recordkeeping requirements.
24 CFR Part 12
Administrative practice and procedure, Grant programs--housing and
community development, Loan programs--housing and community
[[Page 14449]]
development, Reporting and recordkeeping requirements.
Accordingly, under the authority of 42 U.S.C. 3535(d), for the
reasons stated in the preamble, 24 CFR subtitle A is amended as
follows:
1. Part 4 is revised to read as follows:
PART 4--HUD REFORM ACT
Subpart A--Accountability in the Provision of HUD Assistance
Sec.
4.1 Purpose.
4.3 Definitions.
4.5 Notice and documentation of assistance subject to Section
102(a).
4.7 Notice of funding decisions.
4.9 Disclosure requirements for assistance subject to Section
102(b).
4.11 Updating of disclosure.
4.13 Limitation of assistance subject to Section 102(d).
Subpart B--Prohibition of Advance Disclosure of Funding Decisions
4.20 Purpose.
4.22 Definitions.
4.24 Scope.
4.26 Permissible and impermissible disclosures.
4.28 Civil penalties.
4.30 Procedure upon discovery of a violation.
4.32 Investigation by Office of Inspector General.
4.34 Review of Inspector General's report by the Ethics Law
Division.
4.36 Action by the Ethics Law Division.
4.38 Administrative remedies.
Authority: 42 U.S.C. 3535(d), 3537a, 3545.
Subpart A--Accountability in the Provision of HUD Assistance
Sec. 4.1 Purpose.
The provisions of this subpart A are authorized under section 102
of the Department of Housing and Urban Development Reform Act of 1989
(Pub. L. 101-235, approved December 15, 1989) (42 U.S.C. 3537a)
(hereinafter, Section 102). Both the provisions of Section 102 and this
subpart A apply for the purposes of Section 102. Section 102 contains a
number of provisions designed to ensure greater accountability and
integrity in the way in which the Department makes assistance available
under certain of its programs.
Sec. 4.3 Definitions.
Applicant includes a person whose application for assistance must
be submitted to HUD for any purpose including approval, environmental
review, or rent determination.
Assistance under any program or discretionary fund administered by
the Secretary is subject to Section 102(a), and means any assistance,
under any program administered by the Department, that provides by
statute, regulation or otherwise for the competitive distribution of
funding.
Assistance within the jurisdiction of the Department is subject to
Section 102(b), and means any contract, grant, loan, cooperative
agreement, or other form of assistance, including the insurance or
guarantee of a loan or mortgage, that is provided with respect to a
specific project or activity under a program administered by the
Department, whether or not it is awarded through a competitive process.
Assistance within the jurisdiction of the Department to any housing
project is subject to Section 102(d), and means:
(1) Assistance which is provided directly by HUD to any person or
entity, but not to subrecipients. It includes assistance for the
acquisition, rehabilitation, operation conversion, modernization,
renovation, or demolition of any property containing five or more
dwelling units that is to be used primarily for residential purposes.
It includes assistance to independent group residences, board and care
facilities, group homes and transitional housing but does not include
primarily nonresidential facilities such as intermediate care
facilities, nursing homes and hospitals. It also includes any change
requested by a recipient in the amount of assistance previously
provided, except changes resulting from annual adjustments in Section 8
rents under Section 8(c)(2)(A) of the United States Housing Act of 1937
(42 U.S.C. 1437f);
(2) Assistance to residential rental property receiving a tax
credit under Federal, State or local law.
(3) For purposes of this definition, assistance includes assistance
resulting from annual adjustments in Section 8 rents under Section
8(c)(2)(A) of the United States Housing Act of 1937, unless the initial
assistance was made available before April 15, 1991, and no other
assistance subject to this subpart A was made available on or after
that date.
Housing project means:
(1) Property containing five or more dwelling units that is to be
used for primarily residential purposes, including (but not limited to)
living arrangements such as independent group residences, board and
care facilities, group homes, and transitional housing, but excluding
facilities that provide primarily non-residential services, such as
intermediate care facilities, nursing homes, and hospitals.
(2) Residential rental property receiving a tax credit under
Federal, State, or local law.
Interested party means any person involved in the application for
assistance, or in the planning, development or implementation of the
project or activity for which assistance is sought and any other person
who has a pecuniary interest exceeding the lower of $50,000 or 10
percent in the project or activity for which assistance is sought.
Selection criteria includes, in addition to any objective measures
of housing and other need, project merit, or efficient use of
resources, the weight or relative importance of each published
selection criterion as well as any other factors that may affect the
selection of recipients.
Sec. 4.5 Notice and documentation of assistance subject to Section
102(a).
(a) Notice. Before the Department solicits an application for
assistance subject to Section 102(a), it will publish a Notice in the
Federal Register describing application procedures. Not less than 30
calendar days before the deadline by which applications must be
submitted, the Department will publish selection criteria in the
Federal Register.
(b) Documentation of decisions. HUD will make available for public
inspection, for at least five (5) years, and beginning not less than 30
calendars days after it provides the assistance, all documentation and
other information regarding the basis for the funding decision with
respect to each application submitted to HUD for assistance. HUD will
also make available any written indication of support that it received
from any applicant. Recipients of HUD assistance must ensure, in
accordance with HUD guidance, the public availability of similar
information submitted by subrecipients of HUD assistance.
Sec. 4.7 Notice of funding decisions.
HUD will publish a Notice in the Federal Register at least
quarterly to notify the public of all decisions made by the Department
to provide:
(a) Assistance subject to Section 102(a); and
(b) Assistance that is provided through grants or cooperative
agreements on a discretionary (non-formula, non-demand) basis, but that
is not provided on the basis of a competition.
Sec. 4.9 Disclosure requirements for assistance subject to Section
102(b).
(a) Receipt and reasonable expectation of receipt. (1) In
determining the threshold of applicability of Section 102(b), an
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applicant will be deemed to have received or to have a reasonable
expectation of receiving:
(i) The total amount of assistance received during the Federal
fiscal year during which the application was submitted;
(ii) The total amount of assistance requested for the fiscal year
in which any pending application, including the current application,
was submitted; and
(iii) For the fiscal year described in paragraph (a)(1)(ii) of this
section, the total amount of assistance from the Department or any
other entity that is likely to be made available on a formula basis or
in the form of program income as defined in 24 CFR part 85.
(2) In the case of assistance that will be provided pursuant to
contract over a period of time (such as project-based assistance under
Section 8 of the United States Housing Act of 1937), all amounts that
are to be provided over the term of the contract, irrespective of when
they are to be received.
(b) Content of disclosure. Applicants that receive or can
reasonably be expected to receive, as defined in paragraph (a) of this
section, an aggregate amount of assistance that is in excess of
$200,000 must disclose the following information:
(1) Other governmental assistance that is or is expected to be made
available, based upon a reasonable assessment of the circumstances,
with respect to the project or activities for which the assistance is
sought;
(2) The name and pecuniary interest of any interested party; and
(3) A report of the expected sources and uses of funds for the
project or activity which is the subject of the application, including
governmental and non-governmental sources of funds and private capital
resulting from tax benefits.
(c) In the case of mortgage insurance under 24 CFR subtitle B,
chapter II, the mortgagor is responsible for making the disclosures
required under Section 102(b) and this section, and the mortgagee is
responsible for furnishing the mortgagor's disclosures to the
Department.
(Approved by the Office of Management and Budget under control
number 2510-0011.)
Sec. 4.11 Updating of disclosure.
(a) During the period in which an application for assistance
covered under Section 102(b) is pending, or in which such assistance is
being provided, the applicant must report to the Department, or to the
State or unit of general local government, as appropriate:
(1) Any information referred to in Section 102(b) that the
applicant should have disclosed with respect to the application, but
did not disclose;
(2) Any information referred to in Section 102(b) that initially
arose after the time for making disclosures under that subsection,
including the name and pecuniary interest of any person who did not
have a pecuniary interest in the project or activity that exceeded the
threshold in Section 102(b) at the time of the application, but that
subsequently exceeded the threshold.
(b) With regard to changes in information that was disclosed under
Sections 102(b) or 102(c):
(1) For programs administered by the Assistant Secretary for
Community Planning and Development:
(i) Any change in other government assistance covered by Section
102(b) that exceeds the amount of all assistance that was previously
disclosed by the lesser of $250,000 or 10 percent of the assistance;
(ii) Any change in the expected sources or uses of funds that
exceed the amount of all previously disclosed sources or uses by the
lesser of $250,000 or 10 percent of previously disclosed sources;
(2) For all other programs:
(i) Any change in other government assistance under Section
102(b)(1) that exceeds the amount of assistance that was previously
disclosed;
(ii) Any change in the pecuniary interest of any person under
Section 102(b)(2) that exceeds the amount of all previously disclosed
interests by the lesser of $50,000 or 10 percent of such interest;
(iii) For all projects receiving a tax credit under Federal, Sate
or local law, any change in the expected sources or uses of funds that
were previously disclosed;
(iv) For all other projects:
(A) Any change in the expected source of funds from a single source
that exceeds the lesser of the amount previously disclosed for that
source of funds by $250,000 or 10 percent of the funds previously
disclosed for that source;
(B) Any change in the expected sources of funds from all sources
previously disclosed that exceeds the lesser of $250,000 or 10 percent
of the amounts previously disclosed from all sources of funds;
(C) Any change in a single expected use of funds that exceeds the
lesser of $250,000 or 10 percent of the previously disclosed use;
(D) Any change in the use of all funds that exceeds the lesser of
$250,000 or 10 percent of the previously disclosed uses for all funds.
(c) Period of coverage. For purposes of updating of Section 102(c),
an application for assistance will be considered to be pending from the
time the application is submitted until the Department communicates its
decision with respect to the selection of the applicant.
(Approved by the Office of Management and Budget under control
number 2510-0011.)
Sec. 4.13 Limitation of assistance subject to Section 102(d).
(a) In making the certification for assistance subject to Section
102(d), the Secretary will consider the aggregate amount of assistance
from the Department and from other sources that is necessary to ensure
the feasibility of the assisted activity. The Secretary will take into
account all factors relevant to feasibility, which may include, but are
not limited to, past rates of returns for owners, sponsors, and
investors; the long-term needs of the project and its tenants; and the
usual and customary fees charged in carrying out the assisted activity.
(b) If the Department determines that the aggregate of assistance
within the jurisdiction of the Department to a housing project from the
Department and from other governmental sources exceeds the amount that
the Secretary determines is necessary to make the assisted activity
feasible, the Department will consider all options available to enable
it to make the required certification, including reductions in the
amount of Section 8 subsidies. The Department also may impose a dollar-
for-dollar, or equivalent, reduction in the amount of HUD assistance to
offset the amount of other government assistance. In grant programs,
this could result in a reduction of any grant amounts not yet drawn
down. The Department may make these adjustments immediately, or in
conjunction with servicing actions anticipated to occur in the near
future (e.g., in conjunction with the next annual adjustment of Section
8 rents).
(c) If an applicant does not meet the $200,000 disclosure
requirement in Sec. 4.7(b), an applicant must certify whether there is,
or is expected to be made, available with respect to the housing
project any other governmental assistance. The Department may also
require any applicant subject to this subpart A to submit such a
certification in conjunction with the Department's processing of any
subsequent servicing action on that project. If there is other
government assistance for purposes of the two preceding sentences, the
[[Page 14451]]
applicant must submit such information as the Department deems
necessary to make the certification and subsequent adjustments under
Section 102(d).
(d) The certification under Section 102(d) shall be retained in the
official file for the housing project.
Subpart B--Prohibition of Advance Disclosure of Funding Decisions
Sec. 4.20 Purpose.
The provisions of this subpart B are authorized under section 103
of the Department of Housing and Urban Development Reform Act of 1989
(Pub. L. 101-235, approved December 15, 1989) (42 U.S.C. 3537a)
(hereinafter, Section 103). Both the provisions of Section 103 and this
subpart B apply for the purposes of Section 103. Section 103 proscribes
direct or indirect communication of certain information during the
selection process by HUD employees to persons within or outside of the
Department who are not authorized to receive that information. The
purpose of the proscription is to preclude giving an unfair advantage
to applicants who would receive information not available to other
applicants or to the public. Section 103 also authorizes the Department
to impose a civil money penalty on a HUD employee who knowingly
discloses protected information, if such a violation of Section 103 is
material, and authorizes the Department to sanction the person who
received information improperly by, among other things, denying
assistance to that person.
Sec. 4.22 Definitions.
Application means a written request for assistance regardless of
whether the request is in proper form or format.
Assistance does not include any contract (e.g., a procurement
contract) that is subject to the Federal Acquisition Regulation (FAR)
(48 CFR ch. 1).
Disclose means providing information directly or indirectly to a
person through any means of communication.
Employee includes persons employed on a full-time, part-time, or
temporary basis, and special government employees as defined in 18
U.S.C. 202. The term applies whether or not the employee is denoted as
an officer of the Department. ``Employee'' is to be construed broadly
to include persons who are retained on a contractual or consultative
basis under an Office of Human Resources appointment. However,
``employee'' does not include an independent contractor, e.g., a firm
or individual working under the authority of a procurement contract.
Material or materially means in some influential or substantial
respect or having to do more with substance than with form.
Person means an individual, corporation, company, association,
authority, firm, partnership, society, State, local government, or any
other organization or group of people.
Selection process means the period with respect to a selection for
assistance that begins when the HUD official responsible for awarding
the assistance involved, or his or her designee, makes a written
request (which includes the selection criteria to be used in providing
the assistance) to the Office of General Counsel (OGC) to prepare the
NOFA, solicitation, or request for applications for assistance for
publication in the Federal Register. The period includes the evaluation
of applications, and concludes with the announcement of the selection
of recipients of assistance.
Sec. 4.24 Scope.
(a) Coverage. The prohibitions against improper disclosure of
covered selection information apply to any person who is an employee of
the Department. In addition, the Department will require any other
person who participates at the invitation of the Department in the
selection process to sign a certification that he or she will be bound
by the provisions of this part.
(b) Applicability. The prohibitions contained in this part apply to
conduct occurring on or after June 12, 1991.
Sec. 4.26 Permissible and impermissible disclosures.
(a) Notwithstanding the provisions of Section 103, an employee is
permitted to disclose information during the selection process with
respect to:
(1) The requirements of a HUD program or programs, including
unpublished policy statements and the provision of technical assistance
concerning program requirements, provided that the requirements or
statements are disclosed on a uniform basis to any applicant or
potential applicant. For purposes of this part, the term ``technical
assistance'' includes such activities as explaining and responding to
questions about program regulations, defining terms in an application
package, and providing other forms of technical guidance that may be
described in a NOFA. The term ``technical assistance'' also includes
identification of those parts of an application that need substantive
improvement, but this term does not include advising the applicant how
to make those improvements.
(2) The dates by which particular decisions in the selection
process will be made;
(3) Any information which has been published in the Federal
Register in a NOFA or otherwise;
(4) Any information which has been made public through means other
than the Federal Register;
(5) An official audit, inquiry or investigation, if the disclosure
is made to an auditor or investigator authorized by the HUD Inspector
General to conduct the audit or investigation;
(6) Legal activities, including litigation, if the disclosure is
made to an attorney who is representing or is otherwise responsible to
the Department in connection with the activities; or
(7) Procedures that are required to be performed to process an
application, e.g., environmental or budget reviews, and technical
assistance from experts in fields who are regularly employed by other
government agencies, provided that the agency with which the expert is
employed or associated is not an applicant for HUD assistance during
the pending funding cycle.
(b) An authorized employee, during the selection process, may
contact an applicant for the purpose of:
(1) Communication of the applicant's failure to qualify, after a
preliminary review for eligibility and completeness with respect to his
or her application, and the reasons for the failure to qualify, or the
fact of the applicant's failure to be determined to be technically
acceptable after a full review; or
(2) Clarification of the terms of the applicant's application. A
clarification, for the purpose of this paragraph (b), may include a
request for additional information consistent with regulatory
requirements.
(c) Prohibition of advance disclosure of funding decisions. During
the selection process an employee shall not knowingly disclose any
covered selection information regarding the selection process to any
person other than an employee authorized to receive that information.
(1) The following disclosures of information are, at any time
during the selection process, a violation of Section 103:
(i) Information regarding any applicant's relative standing;
(ii) The amount of assistance requested by any applicant;
(iii) Any information contained in an application;
(2) The following disclosures of information, before the deadline
for the submission of applications, shall be a violation of Section
103:
(i) The identity of any applicant; and
[[Page 14452]]
(ii) The number of applicants.
Sec. 4.28 Civil penalties.
Whenever any employee knowingly and materially violates the
prohibition in Section 103, the Department may impose a civil money
penalty on the employee in accordance with the provisions of 24 CFR
part 30.
Sec. 4.30 Procedure upon discovery of a violation.
(a) In general. When an alleged violation of Section 103 or this
subpart B comes to the attention of any person, including an employee,
he or she may either:
(1) Contact the HUD Ethics Law Division to provide information
about the alleged violation; or
(2) Contact the HUD Office of Inspector General to request an
inquiry or investigation into the matter.
(b) Ethics Law Division. When the Ethics Law Division receives
information concerning an alleged violation of Section 103, it shall
refer the matter to the Inspector General stating the facts of the
alleged violation and requesting that the Inspector General make an
inquiry or investigation into the matter.
(c) Inspector General. When the Inspector General receives
information concerning an alleged violation of Section 103 or this
subpart B, he or she shall notify the Ethics Law Division when the
Inspector General begins an inquiry or investigation into the matter.
(d) Protection of employee complainants. (1) No official of the
Ethics Law Division, after receipt of information from an employee
stating the facts of an alleged violation of this part, shall disclose
the identity of the employee without the consent of that employee. The
Inspector General, after receipt of information stating the facts of an
alleged violation of this part, shall not disclose the identity of the
employee who provided the information without the consent of that
employee, unless the Inspector General determines that disclosure of
the employee's identity is unavoidable during the course of an
investigation. However, any employee who knowingly reports a false
alleged violation of this part is not so protected and may be subject
to disciplinary action.
(2) Any employee who has authority to take, direct others to take,
recommend or approve a personnel action is prohibited from threatening,
taking, failing to take, recommending, or approving any personnel
action as reprisal against another employee for providing information
to investigating officials.
Sec. 4.32 Investigation by Office of Inspector General.
The Office of Inspector General shall review every alleged
violation of Section 103. If after a review the Office of Inspector
General determines that further investigation is not warranted, it
shall notify the Ethics Law Division of that determination. If, after a
review, the Office of Inspector General determines that additional
investigation is warranted, it shall conduct the investigation and upon
completion issue a report of the investigation to the Ethics Law
Division as to each alleged violation.
Sec. 4.34 Review of Inspector General's report by the Ethics Law
Division.
After receipt of the Inspector General's report, the Ethics Law
Division shall review the facts and circumstances of the alleged
violations. In addition, the Ethics Law Division may:
(a) Return the report to the Inspector General with a request for
further investigation;
(b) Discuss the violation with the employee alleged to have
committed the violation; or
(c) Interview any other person, including employees who it believes
will be helpful in furnishing information relevant to the inquiry.
Sec. 4.36 Action by the Ethics Law Division.
(a) After review of the Inspector General's report, the Ethics Law
Division shall determine whether or not there is sufficient information
providing a reasonable basis to believe that a violation of Section 103
or this subpart B has occurred.
(b) If the Ethics Law Division determines that there is no
reasonable basis to believe that a violation of Section 103 or this
subpart B has occurred, it shall close the matter and send its
determination to the Office of Inspector General.
(c) If the Ethics Law Division determines that there is sufficient
information to provide a reasonable basis to believe that a violation
of Section 103 or this subpart B has occurred, it shall:
(1) Send its determination to the Office of Inspector General; and
(2) Refer the matter to the appropriate official for review as to
whether to impose a civil money penalty in accordance with 24 CFR part
30; provided, however, that the Ethics Law Division shall not make a
civil money penalty recommendation unless it finds the violation to
have been knowing and material. The decision to impose a civil money
penalty in a particular matter may be made only upon referral from the
Ethics Law Division.
(d) In determining whether a violation is material, the Ethics Law
Division shall consider the following factors, as applicable:
(1) The content of the disclosure and its significance to the
person to whom the disclosure was made;
(2) The time during the selection process when the disclosure was
made;
(3) The person to whom the disclosure was made;
(4) The dollar amount of assistance requested by the person to whom
the disclosure was made;
(5) The dollar amount of assistance available for a given
competition or program;
(6) The benefit, if any, received or expected by the employee, the
employee's relatives or friends, or any other person with whom the
employee is affiliated;
(7) The potential injury to the Department.
(e) If the Ethics Law Division determines that there is sufficient
information to provide a reasonable basis to believe that a violation
of Section 103 or this subpart B has occurred, it may, in addition to
referring the matter under 24 CFR part 30, refer the matter to an
appropriate HUD official for consideration of any other available
disciplinary action. Any referral authorized by this paragraph (e)
shall be reported to the Inspector General and may be reported to the
employee's supervisor.
Sec. 4.38 Administrative remedies.
(a) If the Department receives or obtains information providing a
reasonable basis to believe that a violation of Section 103 has
occurred, the Department may impose a sanction, as determined to be
appropriate, upon an applicant for or a recipient of assistance who has
received covered selection information.
(b) In determining whether a sanction is appropriate and if so
which sanction or sanctions should be sought, the Secretary shall give
consideration to the applicant's conduct with respect to the violation.
In so doing, the Secretary shall consider the factors listed at
Sec. 4.36(d), as well as any history of prior violations in any HUD
program, the benefits received or expected, deterrence of future
violations and the extent of any complicity in the violation.
(c) The Secretary may impose a sanction authorized by this section
whether or not the Ethics Law Division refers a case under 24 CFR part
30, and
[[Page 14453]]
whether or not a civil money penalty is imposed.
PART 12--[REMOVED]
2. Part 12 is removed.
Dated: March 27, 1996.
Henry G. Cisneros,
Secretary.
[FR Doc. 96-7921 Filed 3-29-96; 8:45 am]
BILLING CODE 4210-32-P
