[Federal Register Volume 60, Number 112 (Monday, June 12, 1995)]
[Rules and Regulations]
[Pages 30773-30778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14215]
========================================================================
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. 60, No. 112 / Monday, June 12, 1995 / Rules
and Regulations
[[Page 30773]]
FARM CREDIT SYSTEM INSURANCE CORPORATION
5 CFR Part 4001
12 CFR Part 1401
RIN 3055-AA03, 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
Farm Credit System Insurance Corporation
AGENCY: Farm Credit System Insurance Corporation (Corporation).
ACTION: Interim rule; request for comments.
-----------------------------------------------------------------------
SUMMARY: The Farm Credit System Insurance Corporation, with the
concurrence of the Office of Government Ethics (OGE), is issuing as an
interim rule regulations for the officers and employees of the
Corporation that supplement the Standards of Ethical Conduct for
Employees of the Executive Branch (Executive Branch-wide Standards)
issued by OGE. The interim rule is a necessary supplement to the
Executive Branch-wide Standards because it addresses ethical issues
unique to Corporation programs and operations. Prior to the issuance of
the interim rule, the Corporation had administratively adopted the Farm
Credit Administration (FCA) standards of conduct regulations. The FCA,
however, is issuing supplemental regulations to the Executive Branch-
wide Standards that, when effective, will remove its conduct
regulations except for a residual cross-reference. This Corporation
interim rule establishes regulations imposing prohibitions on the
ownership of certain financial interests; prohibitions on certain forms
of borrowing and extensions of credit; limitations on purchases of
assets owned by Farm Credit System (System) institutions,
conservatorship or receivership assets, or certain assets held by the
Corporation; restrictions arising from the employment of relatives; a
prohibition against involvement in Farm Credit System board member
elections; and restrictions on outside employment and business
activities. In addition to this interim rule, the Corporation will be
issuing a single section in its regulations that provides cross-
references to the Executive Branch-wide Standards and financial
disclosure regulations, as well as these new supplemental regulations.
DATES: This interim rule is effective July 12, 1995. Notice of
effective date will be published in the Federal Register. Comments must
be submitted on or before July 12, 1995.
ADDRESSES: Comments should be mailed or delivered (in triplicate) to
Mary A. Creedon, Chief Operating Officer, in care of Cindy Nicholson,
Farm Credit System Insurance Corporation, McLean, Virginia 22102-0826.
Copies of all comments will be available for examination by interested
parties in the offices of the Farm Credit System Insurance Corporation.
FOR FURTHER INFORMATION CONTACT:
Eric Howard, Policy Analyst, Farm Credit System Insurance Corporation,
McLean, VA 22102-0826, (703) 883-4498,
or
Wendy R. Laguarda, Senior Attorney and Deputy Ethics Official, Farm
Credit System Insurance Corporation, McLean, VA 22102-0826, (703) 883-
4234, TDD (703) 883-4444.
SUPPLEMENTARY INFORMATION:
I. Background
On August 7, 1992, OGE published Executive Branch-wide Standards
for employees of the executive branch. See 57 FR 35006-35067, as
corrected at 57 FR 48557 and FR 52583, with additional grace period
extensions at 59 FR 4779-4780 and 60 FR 6390-6391. The Executive
Branch-wide Standards are codified at 5 CFR part 2635. Effective
February 3, 1993, they established uniform ethical conduct standards
applicable to all executive branch personnel.
With the concurrence of OGE, 5 CFR 2635.105 authorizes executive
branch agencies to publish agency-specific supplemental regulations
necessary to implement their respective ethics programs. The
Corporation, with OGE's concurrence, has determined, in light of the
Corporation's specialized functions as insurer, conservator, and
receiver for Corporation-insured System institutions, that the
following supplemental regulations being codified in new chapter XXX,
consisting of part 4001, of title 5 of the Code of Federal Regulations,
are necessary to implement the Corporation's ethics program
successfully.
II. Analysis of the Regulations
Section 4001.101--General
Section 4001.101 explains that the regulations contained in the
interim rule apply to Corporation employees and supplement the
Executive Branch-wide Standards. Corporation employees must comply with
the Executive Branch-wide Standards, the supplemental regulations in
this interim rule, and Corporation guidance and procedures issued
pursuant to the Executive Branch-wide Standards and these supplemental
regulations.
Section 4001.102--Definitions
Section 4001.102 identifies and defines the unique terms used in
the supplemental regulations. The term ``covered employee'' is intended
to include all examiners of System institutions who perform work for
the Corporation and any other employee specified as such by Corporation
directive whose duties and responsibilities require application of
these supplemental regulations to ensure public confidence that the
Corporation's programs are conducted impartially and objectively. The
Corporation Designated Agency Ethics Official (DAEO) or his or her
designee, in consultation with the Chief Operating Officer, will
determine which employees are covered for purposes of this regulation.
The term ``related entity'' is intended to be broadly interpreted
and includes agricultural mortgage marketing facilities established by
System institutions, affiliates of the Federal Agricultural Mortgage
Corporation, service organizations established by the System banks, and
all other entities owned or controlled by one or more System
institutions that are not chartered by the FCA.
The term ``System institution'' refers to all institutions
chartered and regulated by the FCA, and also includes
[[Page 30774]] the Federal Farm Credit Banks Funding Corporation and
the Federal Agricultural Mortgage Corporation.
Section 4001.103--Prohibited Financial Interests
(a) Prohibition. Section 4001.103(a) prohibits a covered employee,
or a spouse or minor child of a covered employee, from owning
securities issued by a System institution or related entity.
The Corporation has determined, in accordance with 5 CFR
2635.403(a), that this restriction is necessary, in light of its
multifaceted responsibilities, to maintain public confidence in the
impartiality and objectivity with which the Corporation executes its
functions. The restriction will eliminate any reason for regulated
entities to be concerned that sensitive information provided to the
Corporation might be misused for private gain and will avoid widespread
disqualification of employees from official matters, which might result
in the Corporation's inability to fulfill its mission.
(b) Definition of Securities. Section 4001.103(b) contains a
definition of the term ``securities'' to be applied to Sec. 4001.103.
It includes any ``interest in debt or equity instruments'' such as, for
example, stocks, bonds, and commercial paper.
(c) Exceptions. Section 4001.103(c) includes several exceptions to
the prohibition in Sec. 4001.103(a) against owning securities issued by
System institutions or related entities. The exceptions are intended to
permit ownership of interests of a character unlikely to raise
questions regarding the objective and impartial performance of
Corporation employees' official duties or the possible misuse of their
positions.
Section 4001.103(c) (1) and (2) permit employees to retain System
securities in certain funds or plans, the assets of which are managed
by an independent third party and are not concentrated in System
securities. Such funds may include a publicly traded or publicly
available investment fund or an employee's interest in a qualified
profit sharing, retirement, or similar plan.
Section 4001.103(c)(3) permits employees to retain securities of
System institutions held, in accordance with Sec. 4001.104(b), as a
result of pre-existing credit. This exception is necessary because the
System institutions are borrower-owned institutions that require
eligible borrowers to purchase a minimum amount of an institution's
stock as a condition of obtaining a loan. Thus, if an employee has pre-
existing credit from a System institution, he or she also will own
stock in the institution, which is generally not retired until after
the loan is paid off.
Section 4001.103(c)(4) is included as a specific cross-reference to
the waiver authority at Sec. 4001.109 which is to be used on a case-by-
case basis.
Section 4001.104--Prohibited Borrowing
(a) Prohibition on Employee Borrowing. Section 4001.104(a)
prohibits a covered employee, or a spouse or minor child of a covered
employee, from seeking or obtaining a loan or extension of credit from
a System institution or an officer, director, employee, or related
entity of a System institution.
Imposed pursuant to 5 CFR 2635.403(a), this prohibition on
borrowing is necessary for several reasons. First, it is necessary to
prevent covered employees from obtaining or appearing to obtain loans
or extensions of credit on preferential terms, or from benefiting or
appearing to benefit from their official positions through possible
forbearance by the lender in collecting on the indebtedness. Public
confidence in the impartiality and objectivity with which Corporation
programs are administered will be strengthened by prohibiting
Corporation employees from engaging in financial transactions with
institutions insured by the Corporation. The borrowing prohibition also
will help to ensure that System institutions and their examiners do not
violate the prohibitions in 18 U.S.C. 212 and 213 against the offer and
acceptance of certain loans. Finally, limitations on Corporation
employees borrowing from regulated institutions will result in fewer
employee disqualifications from official matters, thereby avoiding a
situation that would have a detrimental effect on the Corporation's
ability to carry out its mission.
(b) Exception. Section 4001.104(b) serves to clarify that
Sec. 4001.104(a) only prohibits covered employees and their spouses and
minor children from seeking or obtaining loans or extensions of credit.
Thus, a covered employee, or a spouse or minor child of a covered
employee, is not prohibited from retaining a loan from a System
institution on its original terms if the loan was obtained prior to
appointment to a covered employee position at the Corporation. The
renewal or renegotiation of a pre-existing loan or extension of credit,
however, will be treated as a new loan subject to the prohibition in
Sec. 4001.104(a), but an employee may request, pursuant to the waiver
provision in Sec. 4001.109, that an exception be made. Employees who
retain pre-existing credit, by virtue of their own credit or the credit
of a spouse or minor child, will be required to disqualify themselves
from participation in the regulation, supervision, examination, audit,
visitation, review, investigation, or other particular matter involving
the System institution providing the retained credit.
Section 4001.105--Purchase of System Institution Assets
(a) Prohibition on Purchasing Assets Owned by a System Institution.
Section 4001.105(a) prohibits all Corporation employees, or a spouse or
minor child of an employee, from purchasing assets from a System
institution or related entity, regardless of how the asset is sold.
(b) Assets Held or Managed by the Farm Credit System Insurance
Corporation or a Receiver or Conservator. Section 4001.105(b)(1)
prohibits all Corporation employees, or a spouse or minor child of an
employee, from purchasing assets held or managed by a receiver or
conservator for a System institution or by the Corporation as a result
of its provision of open bank assistance to troubled System banks,
regardless of how the asset is sold. This section prohibits the
purchase of such assets held by a receiver or conservator appointed by
the FCA prior to January 1, 1993, as well as assets held by the
Corporation, which is the only entity FCA may appoint as receiver or
conservator of troubled System institutions starting January 1, 1993.
Section 4001.105(b)(2) requires a Corporation employee who is
involved in the disposition of receivership or conservatorship assets
to disqualify himself from a sales transaction when the employee
becomes aware that anyone with whom he holds a covered relationship, as
defined in Sec. 2635.502(b)(1) of the Executive Branch-wide Standards,
is or will be attempting to acquire receivership or conservatorship
assets.
The prohibitions in Sec. 4001.105 are intended to supplement the
provisions of 5 CFR 2635.702 regarding use of public office for private
gain and to preserve public confidence in the impartiality and
objectivity with which Corporation programs and operations are
administered. They are necessary to prevent employees from purchasing
or appearing to purchase assets on preferential terms, or from
benefiting or appearing to benefit from their official positions by
purchasing assets based on information obtained in the course of the
employees' performance of their official duties. And because the
Corporation, acting through its receivership powers, exercises broad
powers to seize, hold, and forfeit private [[Page 30775]] property, the
prohibitions will help to preserve the public's confidence that these
powers will not be misused to benefit the private interests of a
Corporation employee.
Section 4001.106--Restrictions Arising From the Employment of Relatives
Section 4001.106 requires a covered employee to file a report of
family member employment with his or her immediate supervisor, the
ethics liaison in the office, and the DAEO if the covered employee's
spouse or a relative who is dependent on or resides with the covered
employee is employed with an entity specified in Sec. 4001.108(a). The
employee would be disqualified from participating in any matter
involving the employee's spouse or relative, or the employing entity,
unless the employee received the appropriate authorization pursuant to
the standard in Sec. 2635.502(d) of the Executive Branch-wide
Standards.
In effect, Sec. 4001.106 supplements Sec. 2635.502 of the Executive
Branch-wide Standards, relating to impartial performance of official
duties, and is necessary to ensure that the employment of a close
family member by System institutions or related entities does not
interfere with the objective and impartial execution of a covered
employee's official duties. The requirements of Sec. 4001.106 will help
to ensure public confidence in the Corporation's execution of its
mission.
Section 4001.107--Involvement in System Institution Board Member
Elections
Section 4001.107 prohibits those covered employees who own stock in
a System institution, by virtue of retaining a pre-existing loan or
extension of credit from a System institution in accordance with
Sec. 4001.104(b), from participating in a stockholder nomination or
election of a System institution's board members, other than by
exercising their right to vote. In addition, this section prohibits
covered employees from making any oral or written statements that could
be reasonably construed as an attempt to influence a nomination or
election.
Section 4001.107 supplements Sec. 2635.702 of the Executive Branch-
wide Standards by prohibiting conduct that, given the broad power of
the Corporation over System institutions, is likely to give rise to an
appearance of misuse of official authority.
Section 4001.108--Outside Employment and Business Activity
(a) Prohibition. Section 4001.108(a) supplements Sec. 2635.802 of
the Executive Branch-wide Standards by prohibiting covered employees
from engaging in specified outside employment and activities. Covered
employees are prohibited from performing paid or unpaid services for
any System institution or related entity, or any officer, director,
employee, or person connected with a System institution or related
entity. This regulation is based, in part, on 18 U.S.C. 1909, which
prohibits an examiner of a System institution from performing any
service for compensation for any System institution or for any person
connected therewith, such as persons working on a contract basis for a
System institution. It is expanded to cover persons other than
examiners in order to ensure that covered employees do not engage in
outside activities that are likely to appear to interfere with the
objective and impartial performance of their official duties.
(b) General Requirement for Prior Approval. Pursuant to
Sec. 2635.803 of the Executive Branch-wide Standards, agencies may, by
supplemental regulation, require employees to obtain prior approval
before engaging in outside employment or activities. Under 12 CFR
601.101, which has been administratively adopted by the Corporation,
the Corporation has required employees who engage in outside employment
to seek prior approval. Based on its finding that this requirement has
helped ensure that employees' outside activities conform to applicable
statutes and regulations, the Corporation has determined that
continuing this requirement is necessary for the purposes of its ethics
program. Thus, Sec. 4001.108(b) requires all employees to obtain
written approval from the DAEO before engaging in any outside
employment, with or without compensation. This section also provides
that approval shall be granted only upon a determination that the
outside employment is not expected to involve conduct prohibited by
statute or Federal regulation, including 5 CFR part 2635 and these
supplemental regulations.
(c) Definition. The term ``employment'' is broadly defined at
Sec. 4001.108(c) to cover any form of non-Federal employment or
business relationship involving the provision of personal services,
including writing when done under an arrangement with another person
for production or publication of the written product. It does not,
however, include participation in the activities of nonprofit
charitable, religious, professional, social, fraternal, and similar
organizations for which no compensation is received other than
reimbursement for necessary expenses.
Section 4001.109--Waivers
Section 4001.109 gives the DAEO authority to grant a written waiver
of any provision in part 4001 based upon a determination that the
waiver is not inconsistent with law and the Executive Branch-wide
Standards, and meets the waiver standard established in Sec. 4001.109.
An employee may be required under the waiver to disqualify himself or
herself from a particular matter or take other appropriate action.
The waiver provision is intended, in appropriate cases, to ease the
burden that the supplemental regulations may impose on the private
lives of Corporation employees, while ensuring that employees do not
engage in actions that may interfere with the objective and impartial
execution of their official duties or raise questions about possible
misuse of their official positions.
III. Addition of Corporation Employee Responsibilities and Conduct
Regulations
On the effective date of the FCA's interim rule, the FCA's
regulations on Employee Responsibilities and Conduct, 12 CFR part 601,
which had been administratively adopted by the Corporation, will be
amended by the FCA to remove Secs. 601.100 through 601.102 and to add a
residual cross-reference. On the effective date of the Corporation's
own interim rule, the Corporation will issue new regulations on
Employee Responsibilities and Conduct in 12 CFR part 1401, to provide a
cross-reference to the Corporation's own supplemental ethical conduct
regulation, to be codified at 5 CFR part 4001, and to the Executive
Branch-wide financial disclosure and standards of ethical conduct
regulations at 5 CFR parts 2634 and 2635.
IV. Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to 5 U.S.C. 553 (b) and (d), the Corporation finds good
cause exists for waiving the general notice of proposed rulemaking and
30-day delay in effectiveness as to this interim final rule. The notice
and delayed effective date are being waived because these supplemental
regulations for Corporation employees and their families concern
matters of Corporation organization, practice and procedure and because
it is in the public interest that these supplemental regulations be
effective as soon as possible. The Corporation is, however, issuing
these regulations as an interim rule, with a request for comments, and
will consider any comments received when adopting the regulations in
final form.
[[Page 30776]]
Executive Order 12866
In promulgating these interim supplemental regulations, the
Corporation 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 deals with
Corporation organization, management, and personnel matters and is,
therefore, not deemed ``significant'' under Executive Order 12866.
Regulatory Flexibility Act
It is hereby certified that this interim rule will not have
significant economic impact on a substantial number of small entities.
This rule affects only Federal employees and their immediate families.
Paperwork Reduction Act
It is hereby certified that the Paperwork Reduction Act (44 U.S.C.
chapter 35) does not apply because this regulation does not contain any
information collection requirements that require the approval of the
Office of Management and Budget.
List of Subjects
5 CFR Part 4001
Conflicts of interest, Government employees.
12 CFR Part 1401
Conflicts of interest.
Dated: May 10, 1995.
Floyd Fithian,
Secretary, Farm Credit System Insurance Corporation.
Approved: May 30, 1995.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the Farm Credit System
Insurance Corporation, with the concurrence of the Office of Government
Ethics, is amending title 5 and adding a new part 1401 to chapter XIV,
title 12 of the Code of Federal Regulations to read as follows:
TITLE 5--[AMENDED]
1. A new chapter XXX, consisting of part 4001, is added to title 5
of the Code of Federal Regulations to read as follows:
CHAPTER XXX--FARM CREDIT SYSTEM INSURANCE CORPORATION
PART 4001--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE FARM CREDIT SYSTEM INSURANCE CORPORATION
Sec.
4001.101 General.
4001.102 Definitions.
4001.103 Prohibited financial interests.
4001.104 Prohibited borrowing.
4001.105 Purchase of System institution assets.
4001.106 Restrictions arising from the employment of relatives.
4001.107 Involvement in System institution board member elections.
4001.108 Outside employment and business activity.
4001.109 Waivers.
Authority: 5 U.S.C. 7301, 7353; 5 U.S.C. App. (Ethics in
Government Act of 1978); 12 U.S.C. 2277a-7, 2277a-8; E.O. 12674, 3
CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 3 CFR, 1990
Comp., p. 306; 5 CFR 2635.105, 2635.403(a), 2635.502, 2635.702,
2635.802(a), 2635.803.
Sec. 4001.101 General.
In accordance with 5 CFR 2635.105, the regulations in this part
apply to Farm Credit System Insurance Corporation (Corporation)
employees and supplement the Standards of Ethical Conduct for Employees
of the executive branch contained in 5 CFR part 2635. Employees are
required to comply with 5 CFR part 2635, this part, and Corporation
guidance and procedures established pursuant to 5 CFR 2635.105.
Sec. 4001.102 Definitions.
For purposes of this part:
(a) Covered employee means:
(1) All examiners who perform work for the Corporation; and
(2) Any other employee specified by Corporation directive whose
duties and responsibilities require application of these supplemental
regulations to ensure public confidence that the Corporation's programs
are conducted impartially and objectively. The Corporation Designated
Agency Ethics Official (DAEO) or his or her designee, in consultation
with the Chief Operating Officer, will determine which employees are
covered for the purpose of this part.
(b) Related entity means:
(1) Affiliates defined in section 8.5(e) of the Farm Credit Act of
1971, as amended (Act), 12 U.S.C. 2001 et seq., 12 U.S.C. 2279aa-5;
(2) Affiliates defined in section 8.11(e) of the Act, 12 U.S.C.
2279aa-11;
(3) Service organizations authorized by section 4.25 of the Act, 12
U.S.C. 2211; and
(4) Any other entity owned or controlled by one or more Farm Credit
System (System) institution that is not chartered by the Farm Credit
Administration (FCA).
(c) System institution refers to:
(1) All institutions chartered and regulated by the FCA as
described in section 1.2 of the Act, 12 U.S.C. 2002;
(2) The Federal Farm Credit Banks Funding Corporation, established
pursuant to section 4.9 of the Act, 12 U.S.C. 2160; and
(3) The Federal Agricultural Mortgage Corporation, established
pursuant to section 8.1 of the Act, 12 U.S.C. 2279aa-1.
Sec. 4001.103 Prohibited financial interests.
(a) Prohibition. Except as provided in paragraph (c) of this
section and Sec. 4001.109, no covered employee, or spouse or minor
child of a covered employee, shall own, directly or indirectly,
securities issued by a System institution or related entity.
(b) Definition of securities. For purposes of this section, the
term ``securities'' includes all interests in debt or equity
instruments. The term includes, without limitation, secured and
unsecured bonds, debentures, notes, securitized assets and commercial
paper, as well as all types of preferred and common stock. The term
encompasses both current and contingent ownership interests, including
any beneficial or legal interest derived from a trust. It extends to
any right to acquire or dispose of any long and short position in such
securities and includes, without limitation, interests convertible into
such securities, as well as options, rights, warrants, puts, calls, and
straddles relating to such securities.
(c) Exceptions. Nothing in this section prohibits a covered
employee, or spouse or minor child of a covered employee, from:
(1) Investing in a publicly traded or publicly available investment
fund which, in its prospectus, does not indicate the objective or
practice of concentrating its investments in the securities of System
institutions or related entities, if the employee neither exercises
control over nor has the ability to exercise control over the financial
interests held in the fund;
(2) Having a legal or beneficial interest in a qualified profit
sharing, retirement, or similar plan, provided that the plan does not
invest more than 25 percent of its funds in securities of System
institutions or related entities, [[Page 30777]] and the employee
neither exercises control over nor has the ability to exercise control
over the financial interests held in the plan;
(3) Owning securities of System institutions held as a result of
pre-existing credit, as specified in Sec. 4001.104(b); or
(4) Owning any security pursuant to a waiver granted under
Sec. 4001.109.
Sec. 4001.104 Prohibited borrowing.
(a) Prohibition on employee borrowing. Except as provided in
paragraph (b) of this section, no covered employee, or spouse or minor
child of a covered employee, shall seek or obtain any loan or extension
of credit from a System institution or from an officer, director,
employee, or related entity of a System institution.
(b) Exception. This section does not prohibit a covered employee,
or spouse or minor child of a covered employee, from retaining a loan
from a System institution on its original terms if the loan was
obtained prior to appointment to a covered employee position. For loans
retained pursuant to this paragraph, a covered employee shall submit to
his or her immediate supervisor, the ethics liaison in his or her
office, and the DAEO, a written disqualification from examining,
auditing, visiting, reviewing, investigating, or otherwise
participating in the regulation or supervision of the System
institution that is providing the retained credit. Written
disqualification shall be made within 30 days of appointment to a
covered employee position on a form prescribed by the DAEO. Any renewal
or renegotiation of a pre-existing loan or extension of credit will be
treated as a new loan subject to the prohibition in paragraph (a) of
this section.
Sec. 4001.105 Purchase of System institution assets.
(a) Prohibition on purchasing assets owned by a System institution.
No employee, or spouse or minor child of an employee, shall purchase,
directly or indirectly, an asset (such as real property, vehicles,
furniture, or similar items) from a System institution or related
entity, regardless of how the asset is sold.
(b) Assets held or managed by the Corporation or a receiver or
conservator--(1) Prohibition on purchase. No employee, or spouse or
minor child of an employee, shall purchase, directly or indirectly, an
asset (such as real property, vehicles, furniture, or similar items)
that is held or managed by a receiver or conservator for a System
institution or that is held by the Corporation as a result of its
provision of open bank assistance to troubled System banks, regardless
of how the asset is sold.
(2) Disqualification. An employee who is involved in the
disposition of receivership or conservatorship assets, or assets
acquired by the Corporation as a result of its provision of open bank
assistance to troubled System banks, shall disqualify himself or
herself from participation in the disposition of such assets when the
employee becomes aware that anyone with whom the employee has a covered
relationship, as defined in Sec. 2635.502(b)(1) of the Executive
Branch-wide Standards, is or will be attempting to acquire such assets.
The employee shall provide written notification of the disqualification
to his or her immediate supervisor, the ethics liaison in his or her
office, and the DAEO.
Sec. 4001.106 Restrictions arising from the employment of relatives.
When the spouse of a covered employee, or other relative who is
dependent on or resides with a covered employee, is employed in a
position that the employee would be prohibited from occupying by
Sec. 4001.108(a), the employee shall file a report of family member
employment with his or her immediate supervisor, the ethics liaison in
his or her office, and the DAEO on a form prescribed by the DAEO.
Notice shall be made as soon as possible after learning about
employment already in existence or in advance of known prospective
employment. The employee shall be disqualified from participation in
any matter involving the employee's spouse or relative, or the
employing entity, unless the DAEO authorizes the employee to
participate in the matter using the standard in Sec. 2635.502(d) of the
Executive Branch-wide Standards.
Sec. 4001.107 Involvement in System institution board member
elections.
No covered employee who is able to participate in a System
institution board election because of System securities owned by virtue
of retaining a pre-existing loan or extension of credit from a System
institution in accordance with Sec. 4001.104(b) shall take any part,
directly or indirectly, in the nomination or election of a board member
of a System institution, other than by exercising the right to vote. In
addition, a covered employee shall not make any oral or written
statement that may be reasonably construed as intending to influence
any vote in such nominations or elections.
Sec. 4001.108 Outside employment and business activity.
(a) Prohibition. No covered employee shall perform services, either
on a paid or unpaid basis, for any System institution or related
entity, or any officer, director, employee, or person connected with a
System institution or related entity. Nothing in this section would
prohibit covered employees from providing any service that is a part of
their official duties.
(b) General requirement for prior approval. All employees shall
obtain prior written approval before engaging in any outside employment
or business activity, with or without compensation, unless the outside
activity is exempt from the definition of ``employment'' as set forth
in paragraph (c) of this section. An employee proposing to engage in
outside employment and business activities is required, prior to
commencement, to send a written notice of the proposed employment or
activity to the DAEO on a form prescribed by the DAEO. Approval shall
be granted only upon a determination that the employment or activity is
not expected to involve conduct prohibited by statute, part 2635 of
this title, or paragraph (a) of this section.
(c) Definition. For purposes of this section, ``employment'' means
any form of non-Federal employment, business relationship or activity
involving the provision of personal services by the employee, whether
or not for compensation. It includes, but is not limited to, personal
services as an officer, director, employee, agent, attorney,
consultant, contractor, general partner, trustee, teacher, or speaker.
It includes writing when done under an arrangement with another person
for production or publication of the written product. It does not,
however, include participation in the activities of a nonprofit
charitable, religious, professional, social, fraternal, educational,
recreational, public service, or civic organization for which no
compensation is received other than reimbursement for necessary
expenses.
Sec. 4001.109 Waivers.
The DAEO may grant a written waiver from any provision of this part
based on a determination that the waiver is not inconsistent with part
2635 of this title or otherwise prohibited by law and that, under the
particular circumstances, application of the provision is not necessary
to avoid the appearance of misuse of position or loss of impartiality,
or otherwise to ensure confidence in the impartiality and objectivity
with which Corporation programs are administered. A waiver
[[Page 30778]] under this paragraph may impose appropriate conditions,
such as requiring execution of a written disqualification.
12 CFR CHAPTER XIV--FARM CREDIT SYSTEM INSURANCE CORPORATION
2. Part 1401.1 is added to read as follows:
PART 1401--EMPLOYEE RESPONSIBILITIES AND CONDUCT
Authority: 5 U.S.C. 7301; 12 U.S.C. 2277a-7.
Sec. 1401.1 Cross-references to employee ethical conduct standards and
financial disclosure regulations.
Board members, officers, and other employees of the Farm Credit
System Insurance Corporation are subject to the Standards of Ethical
Conduct for Employees of the Executive Branch at 5 CFR part 2635, the
Farm Credit System Insurance Corporation regulation at 5 CFR part 4001,
which supplements the Executive Branch-wide Standards, and the
executive branch-wide financial disclosure regulations at 5 CFR part
2634.
[FR Doc. 95-14215 Filed 6-9-95; 8:45 am]
BILLING CODE 6710-01-P
