[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Rules and Regulations]
[Pages 39901-39904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19493]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
5 CFR Chapter L
49 CFR Part 99
RIN 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
Department of Transportation
AGENCY: Office of the Secretary, DOT.
ACTION: Final rule.
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SUMMARY: The Department of Transportation, with the concurrence of the
Office of Government Ethics (OGE), is issuing regulations for DOT
employees that supplement the Standards of Ethical Conduct for
Employees of the Executive Branch (Standards) issued by OGE. These
regulations are a necessary supplement to the executive branch-wide
Standards because they address ethics matters unique to DOT. In
particular, they specify agency designees authorized to make
determinations and grant approvals under the Standards, designate DOT
components as separate agencies for purposes, in part, of the gift
rules contained in the Standards, and prohibit employees of the Federal
Railroad Administration and the Federal Aviation Administration, which
are two administrations within DOT, from having certain financial
interests.
EFFECTIVE DATE: These rules become effective: August 30, 1996.
FOR FURTHER INFORMATION CONTACT: William R. Register, Office of the
General Counsel (C-10), Department of Transportation, 400 7th Street,
S.W., Room 10102, Washington, D.C. 20590, (202) 366-9154.
SUPPLEMENTARY INFORMATION:
I. Background
On August 7, 1992, OGE published the Standards of Ethical Conduct
for Employees of the Executive Branch. See 57 FR 35006-35067, as
corrected at 57 FR 48557, 57 FR 52583 and 60 FR 51667, with additional
grace period extensions at 59 FR 4779-4780, 60 FR 6390-6391 and 60 FR
66857-66858. The executive branch-wide Standards are now codified at 5
CFR part 2635. Effective February 3, 1993, they established uniform
ethical conduct standards applicable to all executive branch personnel.
Also, effective February 3, 1993, DOT canceled most of the
regulations on Employee Responsibilities and Conduct in 49 CFR part 99
which apply to DOT employees. See 58 FR 7993-7995. The remaining DOT
regulations, which include post-employment guidance and regulatory
conflict of interest waivers under 18 U.S.C. 208(b)(2), continue in
effect pending issuance of superseding OGE regulations.
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 Department
of Transportation, with OGE's concurrence, has determined that the
supplemental regulations in this rulemaking are necessary to the
ongoing implementation of DOT's ethics program.
II. Analysis of the Regulations
Section 6001.101 General
Section 6001.101 explains that the regulations contained in the
final rules apply to DOT employees and are supplemental to the
executive branch-wide standards. Employees of DOT are also subject to
the Standards of Ethical Conduct for Employees of the Executive Branch
at 5 CFR part 2635 and the executive branch financial disclosure
regulations at 5 CFR part 2634.
[[Page 39902]]
Section 6001.102 Agency Designees
Section 6001.102 explains that, within DOT, the ``agency
designees'' are the Department's Designated Agency Ethics Official, the
Alternate Agency Ethics Official, the Deputy Ethics Officials, and
legal counsel in regional and other offices as designated by Deputy
Ethics Officials. As defined in 5 CFR 2635.102(b), ``agency designees''
are employees having delegated authority to make determinations, give
approvals, and take other action required or permitted by 5 CFR part
2635.
Section 6001.103 Designation of Separate Agency Components
5 CFR 2035.202(a) prohibits, inter alia, an employee from
soliciting or accepting a gift from a prohibited source. A prohibited
source is defined by 5 CFR 2635.203(d) to include a person who has a
specific relationship with an employee's agency. For purposes of
identifying an employee's agency, 5 CFR 2635.203(a) authorizes an
executive department, by supplemental regulation, to designate as a
separate agency a component of the department that exercises distinct
and separate functions. Designations made pursuant to Sec. 2635.203(a)
are used also for purposes of applying the prohibition in 5 CFR
2635.807(a) against the receipt of compensation for teaching, speaking,
or writing related to an employee's duties.
Section 6001.103(a) designates eight administrations in the
Department of Transportation as separate agency components. These
designated agency components are the Federal Aviation Administration
(FAA), Federal Highway Administration, Federal Railroad Administration
(FRA), Federal Transit Administration, Maritime Administration,
National Highway Traffic Safety Administration, Saint Lawrence Seaway
Development Corporation, and United States Coast Guard. These
designated agency components are generally recognized as separate
agencies within DOT because they exercise separate and distinct
functions. As further amplified in Sec. 6001.103(b), DOT employees not
employed in one of these eight designated agency components are deemed
to be employees of an agency that consists of all parts of the
Department, other than the eight designated agency components, and that
is separate and distinct from each of those agency components.
Pursuant to the designations in Sec. 6001.103, an aircraft
manufacturer, for example, would be a prohibited source for employees
of the Federal Aviation Administration, but not for employees of the
National Highway Traffic Safety Administration. Neither would the
aircraft manufacturer be a prohibited source for employees in the
Office of the Secretary, the Research and Special Programs
Administration, or the Bureau of Transportation Statistics unless the
manufacturer was seeking official action by one of those components, or
otherwise had a matter pending before those components or had interests
substantially affected by official duties of employees of those
components.
Section 6001.104 Prohibited Financial Interests
To assure public confidence in the integrity of the programs and
operations of the FAA and FRA, both of these administrations have
prohibited their employees, their spouses, and dependents, as matters
of longstanding policy and practice, from having financial interests in
entities subject to or substantially affected by regulations issued by
those administrations. Pursuant to the Standards, at 5 CFR 2635.403(a),
the supplemental regulations in Sec. 6001.104 continue in effect these
longstanding prohibitions.
The Standards, at 5 CFR 2635.403(a), provide that an individual
agency may, by supplemental regulation, prohibit or restrict the
acquisition or holding of a financial interest or a class of financial
interests by its employees, and by the spouses and minor children of
those employees, based on the agency's determination that the
acquisition or holding of such financial interests would cause a
reasonable person to question the impartiality and objectivity with
which agency programs are administered. The FRA and FAA have made such
determinations with respect to continuing in effect the above
prohibitions. Also, determinations have been made, with respect to the
spouses and minor children of FRA and FAA employees, that there
continues to be a direct and appropriate nexus between the above
prohibition as applied to spouses and minor children and the efficiency
of the services provided by the FRA and FAA.
The above prohibitions, as codified in section 6001.104, provide as
follows:
Section 6001.104(a)(1) prohibits FRA employees from owning stock or
any other financial interest in a railroad company subject to FRA
regulation.
Section 6001.104(a)(2) prohibits FRA employees hired after December
1991 from holding reemployment rights with a railroad company regulated
by the FRA after their first year of employment. However, this
prohibition does not extend to employees hired before January 1992.
Most employees hired before January 1992 do not hold employment rights
with former employers, except certain employees who have been allowed
to retain those rights pursuant to judicial orders issued in American
Federation of Government Employees, Local 2814 v. Andrew Card,
Secretary of Transportation and Gilbert Carmichael, Administrator,
Federal Railroad Administration, Civil Action No. 92-1853 (D.D.C. Oct.
1, 1992).
Section 6001.104(a)(3) prohibits the spouse or minor children of an
FRA employee from holding stock or other securities interest in a
railroad company subject to FRA regulation.
Section 6001.104(b) prohibits FAA employees from holding stock or
any other securities interest in an airline or aircraft manufacturing
company, or in a supplier of components or parts to an airline or
aircraft manufacturing company.
Prohibiting the financial interests described in sections
6001.104(a) and 6001.104(b) will maintain the FRA's and FAA's
appearance of impartiality and objectivity in the execution of their
regulatory functions; and will avoid inopportune disqualification of
employees from official matters, resulting in an inability of the FRA
and FAA to fulfill their regulatory functions.
Section 6001.104(c) provides that the prohibitions in Sec. 6001.104
(a)(1) and (b) against holding certain financial interests do not apply
to financial interests held in a publicly traded or publicly available
investment fund provided that, at the time of the employee's
appointment or upon initial investment in the fund, whichever occurs
later, the fund does not have invested more than 30 percent of its
assets in a particular transportation or geographic sector and the
employee neither exercises control or has the ability to exercise
control over the financial interests held in the fund.
Section 6001.104(d) provides that an employee, spouse, or minor
child who acquires a financial interest that is subject to
Sec. 6001.104, through gift, marriage, or inheritance, must divest the
interest within a period set by the agency designee.
III. Amendment of Employee Responsibilities and Conduct Regulations
To ensure that employees are on notice of the ethical standards to
which they are subject, DOT is amending its remaining standards of
conduct regulations at 49 CFR part 99 to include a provision that cross
references 5 CFR parts 2634 and 2635 and the Department
[[Page 39903]]
of Transportation supplemental regulations at 5 CFR part 6001.
IV. Matters of Regulatory Procedure
Administrative Procedure Act
The Department of Transportation has found that good cause exists
under 5 U.S.C. 553 for waiving, as unnecessary and contrary to the
public interest, the general requirements for a general notice of
proposed rulemaking. As noted above, these supplemental rules are a
restatement of current and longstanding policy and practices, and their
continued effectiveness under OGE's rules is essential to the
effectiveness of DOT's ethics program. In addition, these rules relate
to agency organization, procedure, and practice, and to matters of
agency management and personnel.
Executive Order 12866
In promulgating this final regulation, the Department of
Transportation 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 final rule has not
been reviewed by the Office of Management and Budget under that
Executive order.
Regulatory Flexibility Act
The Department of Transportation has determined under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) that these regulations
will not have a significant economic impact on a substantial number of
small entities because they effect only DOT employees.
Paperwork Reduction Act
These supplemental rules do not contain any information collection
requirements that require the approval of the Office of Management and
Budget pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et.
seq.).
DOT Regulatory Policies and Procedures
These supplemental rules are not significant under DOT Regulatory
Policy and Procedures, 44 FR 11040, and their economic impact will be
minimal. For this reason, further regulatory evaluation is not
necessary.
Federalism Assessment: Executive Order 12012
These rules have been analyzed in accordance with the principles
and criteria contained in Executive Order 12012, and it has been
determined that they do not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment. This is because the
rules have no effect on State and local governments since they only
apply to Federal employees. Furthermore, there are no reporting or
recordkeeping requirements associated with this rulemaking.
List of Subjects
5 CFR Part 6001
Conflict of interests, Government employees.
49 CFR Part 99
Conflict of interests.
Dated: July 8, 1996.
Federico Pena,
Secretary of Transportation.
Approved: July 16, 1996.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the Department of
Transportation, with the concurrence of the Office of Government
Ethics, is amending title 5 of the Code of Federal Regulations and
title 49, subtitle A, of the Code of Federal Regulations as follows:
TITLE 5--[AMENDED]
1. A new Chapter L, consisting of part 6001, is added to title 5 of
the Code of Federal Regulations to read as follows:
Chapter L--Department of Transportation
PART 6001--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE DEPARTMENT OF TRANSPORTATION
6001.101 General.
6001.102 Agency designees.
6001.103 Designation of separate agency components.
6001.104 Prohibited financial interests.
Authority: 5 U.S.C. 301, 7301; 5 U.S.C. App. (Ethics in
Government Act of 1978); 49 U.S.C. 322; E.O. 12674, 54 FR 15159, 3
CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3
CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.203(a), 2635.403(a),
2635.807.
Sec. 6001.101 General.
In accordance with 5 CFR 2635.105, the regulations in this part
apply to employees of the Department of Transportation and supplement
the Standards of Ethical Conduct for Employees of the Executive Branch
contained in 5 CFR part 2635. In addition to the standards in 5 CFR
part 2635, employees are subject to the executive branch financial
disclosure regulations contained in 5 CFR part 2634.
Sec. 6001.102 Agency designees.
For purposes of 5 CFR part 2635, the following Department of
Transportation officials are agency designees within the meaning of 5
CFR 2635.102(b):
(a) The Designated Agency Ethics Official;
(b) The Alternate Agency Ethics Official;
(c) The Deputy Ethics Officials; and
(d) As designated by Deputy Ethics Officials, legal counsel in
regional and other offices.
Sec. 6001.103 Designation of separate agency components.
(a) Pursuant to 5 CFR 2635.203(a), each of the following components
of the Department of Transportation is designated as a separate agency
for purpose of the regulations in subpart B of 5 CFR part 2635
governing gifts from outside sources and Sec. 2635.807 of this title
governing teaching, speaking, or writing:
(1) Federal Aviation Administration;
(2) Federal Highway Administration;
(3) Federal Railroad Administration;
(4) Federal Transit Administration;
(5) Maritime Administration;
(6) National Highway Traffic Safety Administration;
(7) Saint Lawrence Seaway Development Corporation; and
(8) United States Coast Guard.
(b) Employees of Department of Transportation components not
designated as separate agencies, including employees of the Office of
the Secretary of Transportation, the Research and Special Programs
Administration, and the Bureau of Transportation Statistics, will be
treated as employees of DOT which shall be treated as a single agency
that is separate from the above listed agencies for purposes of
determining whether the donor of a gift is a prohibited source under 5
CFR 2635.203(d) and for identifying the DOT employee's agency under 5
CFR 2635.807 governing teaching, speaking, and writing.
Sec. 6001.104 Prohibited financial interests.
(a) Federal Railroad Administration (FRA). (1) Except as provided
in paragraph (c) of this section, no FRA employee shall hold stock or
have any other financial interest, including outside employment, in a
railroad company subject to FRA regulation.
(2) No FRA employee appointed after December 1991 shall hold
reemployment rights with a railroad company subject to FRA regulation
after his or her first year of employment.
(3) No spouse or minor child of an FRA employee shall hold stock or
any other securities interest in a railroad company subject to FRA
regulation.
[[Page 39904]]
(b) Federal Aviation Administration (FAA). Except as provided in
paragraph (c) of this section, no FAA employee, or spouse or minor
child of the employee, may hold stock or have any other securities
interest in an airline or aircraft manufacturing company, or in a
supplier of components or parts to an airline or aircraft manufacturing
company.
(c) Exception. The prohibitions in paragraphs (a)(1) and (b) of
this section do not apply to a financial interest in a publicly traded
or publicly available investment fund, provided that, at the time of
the employee's appointment or upon initial investment in the fund,
whichever occurs later, the fund does not have invested, or indicate in
its prospectus the intent to invest more than 30 percent of its assets
in a particular transportation or geographic sector and the employee
neither exercises control nor has the ability to exercise control over
the financial interests held in the fund.
(d) Period to divest. An individual subject to this section who
acquires a financial interest subject to this section, as a result of
gift, inheritance, or marriage, shall divest the interest within a
period set by the agency designee. Until divestiture, the
disqualification requirements of 5 CFR 2635.402 and 2635.502 remain in
effect.
TITLE 49--[AMENDED]
Subtitle A--Office of the Secretary of Transportation
PART 99--EMPLOYEE RESPONSIBILITIES AND CONDUCT
2. The authority citation for part 99 is revised to read as
follows:
Authority: 49 U.S.C. 322; E.O. 12674, 54 FR 15159, 3 CFR, 1989
Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990
Comp., p. 306.
3. A new subpart A, consisting of Sec. 99.735-1, is added to read
as follows:
Subpart A--General
Sec. 99.735-1 Cross-reference to ethical conduct standards and
financial disclosure regulations.
Employees of the Department of Transportation are subject to the
executive branch-wide Standards of Ethical Conduct at 5 CFR part 2635,
the Department of Transportation regulations at 5 CFR part 6001 which
supplement the executive branch-wide standards and the executive
branch-wide financial disclosure regulations at 5 CFR part 2634.
[FR Doc. 96-19493 Filed 7-30-96; 8:45 am]
BILLING CODE 4910-62-P
