[Federal Register Volume 60, Number 112 (Monday, June 12, 1995)]
[Rules and Regulations]
[Pages 30778-30783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14216]
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FARM CREDIT ADMINISTRATION
5 CFR Part 4101
12 CFR Part 601
RIN 3052-AB50, 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
Farm Credit Administration
AGENCY: Farm Credit Administration (FCA or Agency).
ACTION: Interim rule; request for comments.
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SUMMARY: The Farm Credit Administration, with the concurrence of the
Office of Government Ethics (OGE), is issuing as an interim rule
regulations for the officers and employees of the FCA 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 FCA programs and operations. The
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
Farm Credit System Insurance Corporation (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. The FCA is
also repealing its current regulations on these subjects and replacing
them with a single section 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 upon the expiration of 30 days
after publication in the Federal Register during which either or both
Houses of Congress are in session. 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
Patricia W. DiMuzio, Associate Director, Regulation Development, Office
of Examination, Farm Credit Administration, McLean, Virginia 22102-
5090. Copies of all comments will be available for examination by
interested parties in Regulation Development, Office of Examination,
Farm Credit Administration.
FOR FURTHER INFORMATION CONTACT:
Eric Howard, Policy Analyst, Regulation Development, Office of
Examination, Farm Credit Administration, McLean, VA 22102-5090, (703)
883-4498,
or
Wendy R. Laguarda, Senior Attorney and Deputy Ethics Official, Office
of General Counsel, Farm Credit Administration, McLean, VA 22102-5090,
(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 FCA, with
OGE's concurrence, has determined, in light of the FCA's unique
programs and operations, that the following supplemental regulations,
being codified in new chapter XXXI, consisting of part 4101, of 5 CFR,
are necessary to implement the Agency's ethics program successfully.
II. Analysis of the Regulations
Section 4101.101--General
Section 4101.101 explains that the regulations contained in the
interim rule apply to FCA employees and supplement the Executive
Branch-wide Standards. Farm Credit Administration employees must comply
with the Executive Branch-wide Standards, the supplemental regulations
in this interim rule, and FCA guidance and procedures issued pursuant
to the Executive Branch-wide Standards and these supplemental
regulations.
Section 4101.102--Definitions
Section 4101.102 identifies and defines the unique terms used in
the supplemental regulations. The term ``covered employee'' is intended
to include all FCA examiners and any other employee specified as such
by FCA directive whose duties and responsibilities require application
of these supplemental regulations to ensure public confidence that the
FCA's programs are conducted impartially and objectively. The FCA
Designated Agency Ethics Official (DAEO) or his or her designee, in
consultation with the Office Directors, 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 the Federal Farm
Credit Banks Funding Corporation and the Federal Agricultural Mortgage
Corporation.
Section 4101.103--Prohibited Financial Interests
(a) Prohibition. Section 4101.103(a) prohibits a covered employee,
or a [[Page 30779]] spouse or minor child of a covered employee, from
owning securities issued by a System institution or related entity.
The FCA has determined, in accordance with 5 CFR 2635.403(a), that
this restriction is necessary, in light of the Agency's sensitive
regulatory, supervisory, examination, and enforcement functions, to
maintain public confidence in the impartiality and objectivity with
which the FCA executes its functions. The restriction will eliminate
any reason for regulated entities to be concerned that sensitive
information provided to the FCA might be misused for private gain and
will avoid widespread disqualification of employees from official
matters, which might result in the FCA's inability to fulfill its
mission.
(b) Definition of Securities. Section 4101.103(b) contains a
definition of the term ``securities'' to be applied to Sec. 4101.103.
It includes any ``interest in debt or equity instruments'' such as, for
example, stocks, bonds, and commercial paper.
(c) Exceptions. Section 4101.103(c) includes several exceptions to
the prohibition in Sec. 4101.103(a) against owning securities issued by
System institutions or related entities. The exceptions are intended to
permit ownership interests of a character unlikely to raise questions
regarding the objective and impartial performance of FCA employees'
official duties or the possible misuse of their positions.
Section 4101.103(c) (1) and (2) permits employees to retain System
securities that are 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 4101.103(c)(3) permits employees to retain securities of
System institutions held, in accordance with Sec. 4101.104(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 4101.103(c)(4) is included as a specific cross-reference to
the waiver authority at Sec. 4101.109 which is to be used on a case-by-
case basis.
Section 4101.104--Prohibited Borrowing
(a) Prohibition on Employee Borrowing. Section 4101.104(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 FCA programs
are administered will be strengthened by prohibiting FCA employees from
engaging in financial transactions with institutions regulated by the
Agency. The borrowing prohibition also will help to ensure that FCA
examiners and regulated institutions do not violate the prohibitions in
18 U.S.C. 212 and 213 against the offer and acceptance of certain
loans. Finally, limitations on FCA 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 FCA's ability to carry out its mission.
(b) Exception. Section 4101.104(b) serves to clarify that
Sec. 4101.104(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 FCA. 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. 4101.104(a), but an employee may request, pursuant to the waiver
provision in Sec. 4101.109, that an exception be made. Employees who
retain pre-existing credit, by virtue of their own credit or 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 4101.105--Purchase of System Institution Assets
(a) Prohibition on Purchasing Assets Owned by a System Institution.
Section 4101.105(a) prohibits a covered employee, or a spouse or minor
child of a covered employee, from purchasing assets from a System
institution or related entity. Assets sold by public auction or by a
method that ensures that the asset is sold at its fair market value are
exempt from this prohibition. Covered employees are required to obtain
concurrence from the DAEO, however, about the applicability of this
exemption.
(b) Assets Held or Managed by the Farm Credit System Insurance
Corporation or a Receiver or Conservator. Section 4101.105(b)(1)
prohibits a covered employee, or a spouse or minor child of a covered
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 4101.105(b)(2) requires a covered 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. 4101.105 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 FCA 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. [[Page 30780]]
Section 4101.106--Restrictions Arising From the Employment of Relatives
Section 4101.106 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. 4101.108(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. 4101.106 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. 4101.106 will help
to ensure public confidence in the FCA's execution of its mission.
Section 4101.107--Involvement in System Institution Board Member
Elections
Section 4101.107 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. 4101.104(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 4101.107 supplements Sec. 2635.702 of the Executive Branch-
wide Standards by prohibiting conduct that, given the broad power of
the Agency over System institutions, is likely to give rise to an
appearance of misuse of official authority.
Section 4101.108--Outside Employment and Business Activity
(a) Prohibition. Section 4101.108(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 FCA examiner 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, FCA 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, FCA has determined that continuing this
requirement is necessary for the purposes of its ethics program. Thus,
Sec. 4101.108(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. 4101.108(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 4101.109--Waivers
Section 4101.109 gives the DAEO authority to grant a written waiver
of any provision in part 4101 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. 4101.109.
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 FCA 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. Repeal of FCA Employee Responsibilities and Conduct Regulations
On the effective date of the interim rule, the FCA's regulations on
Employee Responsibilities and Conduct, 12 CFR part 601, will be amended
to remove Secs. 601.100-601.102. A new Sec. 601.100 will be added to
provide a cross-reference to FCA's supplemental ethical conduct
regulation, to be codified at 5 CFR part 4101, and to the Executive
Branch-wide financial disclosure and standards of ethical conduct
regulations at 5 CFR parts 2634 and 2635. Most sections of 12 CFR part
601 were removed and certain sections reserved by action of the FCA
Board, dated January 25, 1993, 58 FR 5919.
IV. Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to 5 U.S.C. 553 (b) and (d), the FCA 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 FCA employees and their families concern matters of
Agency organization, practice and procedure and because it is in the
public interest that these supplemental regulations be effective as
soon as possible. The FCA 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.
Executive Order 12866
In promulgating these interim supplemental regulations, the FCA 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 Agency organization,
management, and personnel matters and [[Page 30781]] 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 4101
Conflicts of interests, Government employees.
12 CFR Part 601
Conflict of interests.
Dated: May 10, 1995.
Floyd Fithian,
Secretary, Farm Credit Administration.
Approved: May 30, 1995.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the Farm Credit
Administration, with the concurrence of the Office of Government
Ethics, is amending title 5 of the Code of Federal Regulations and part
601 of chapter VI, title 12, of the Code of Federal Regulations to read
as follows:
Title 5--[Amended]
1. A new chapter XXXI, consisting of part 4101, is added to title 5
of the Code of Federal Regulations to read as follows:
CHAPTER XXXI--FARM CREDIT ADMINISTRATION
PART 4101--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE FARM CREDIT ADMINISTRATION
Sec.
4101.101 General.
4101.102 Definitions.
4101.103 Prohibited financial interests.
4101.104 Prohibited borrowing.
4101.105 Purchase of System institution assets.
4101.106 Restrictions arising from the employment of relatives.
4101.107 Involvement in System institution board member elections.
4101.108 Outside employment and business activity.
4101.109 Waivers.
Authority: 5 U.S.C. 7301, 7353; 5 U.S.C. App. (Ethics in
Government Act of 1978); 12 U.S.C. 2245(c)(2)(C), 2252; 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. 4101.101 General.
In accordance with 5 CFR 2635.105, the regulations in this part
apply to Farm Credit Administration (FCA) 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 Agency guidance and procedures
established pursuant to 5 CFR 2635.105.
Sec. 4101.102 Definitions.
For purposes of this part:
(a) Covered employee means:
(1) Examiners; and
(2) Any other employee specified by FCA directive whose duties and
responsibilities require application of these supplemental regulations
to ensure public confidence that the FCA's programs are conducted
impartially and objectively. The FCA Designated Agency Ethics Official
(DAEO) or his or her designee, in consultation with the Office
Directors, 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 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. 4101.103 Prohibited financial interests.
(a) Prohibition. Except as provided in paragraph (c) of this
section and Sec. 4101.109, 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, and 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, 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. 4101.104(b); or
(4) Owning any security pursuant to a waiver granted under
Sec. 4101.109.
Sec. 4101.104 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 [[Page 30782]] 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 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. 4101.105 Purchase of System institution assets.
(a) Prohibition on purchasing assets owned by a System institution.
No covered employee, or spouse or minor child of a covered employee,
shall purchase, directly or indirectly, an asset (such as real
property, vehicles, furniture, or similar items) from a System
institution or related entity, unless it is sold at a public auction or
by other means which assure that the selling price is the asset's fair
market value. A covered employee shall obtain concurrence from the DAEO
about whether a proposed purchase of a System institution asset is
proper.
(b) Assets held or managed by the Farm Credit System Insurance
Corporation or a receiver or conservator--(1) Prohibition on purchase.
No covered employee, or spouse or minor child of a covered 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 Farm Credit System Insurance Corporation (Corporation)
as a result of its provision of open bank assistance to troubled System
banks regardless of how the asset is sold.
(2) Disqualification. A covered 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. 4101.106 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. 4101.108(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. 4101.107 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. 4101.104(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. 4101.108 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. 4101.109 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 Agency programs are administered. A waiver under this
paragraph may impose appropriate conditions, such as requiring
execution of a written disqualification.
12 CFR CHAPTER VI--FARM CREDIT ADMINISTRATION
2. Part 601 is revised to read as follows:
PART 601--EMPLOYEE RESPONSIBILITIES AND CONDUCT
Authority: 5 U.S.C. 7301; 12 U.S.C. 2243, 2252.
Sec. 601.100 Cross-references to employee ethical conduct standards
and financial disclosure regulations.
Board members, officers, and other employees of the Farm Credit
Administration are subject to the [[Page 30783]] Standards of Ethical
Conduct for Employees of the Executive Branch at 5 CFR part 2635, the
Farm Credit Administration regulation at 5 CFR part 4101, which
supplements the Executive Branch-wide Standards, and the executive
branch-wide financial disclosure regulations at 5 CFR part 2634.
[FR Doc. 95-14216 Filed 6-9-95; 8:45 am]
BILLING CODE 6705-01-P
