[Federal Register Volume 61, Number 162 (Tuesday, August 20, 1996)]
[Rules and Regulations]
[Pages 42965-42970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21144]
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Rules and Regulations
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Federal Register / Vol. 61, No. 162 / Tuesday, August 20, 1996 /
Rules and Regulations
[[Page 42965]]
OFFICE OF GOVERNMENT ETHICS
5 CFR Part 2635
RIN 3209-AA04
Widely Attended Gatherings Gifts Exception Under the Standards of
Ethical Conduct for Employees of the Executive Branch
AGENCY: Office of Government Ethics (OGE).
ACTION: Final rule.
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SUMMARY: The Office of Government Ethics is issuing a final rule
revising the gift exception contained in the Standards of Ethical
Conduct for Employees of the Executive Branch to permit employees to
accept invitations to certain widely attended gatherings from persons
other than the sponsors of those events, subject to appropriate
limitations, and to clarify that only those events attended by a large
number of persons qualify as widely attended gatherings. The rule also
permits agency authorization for a guest, other than the employee's
spouse, to accompany the employee to a widely attended gathering or to
a conference or other event at which the employee is assigned to
participate as a speaker, panel participant, or other presenter of
information.
EFFECTIVE DATE: September 19, 1996.
FOR FURTHER INFORMATION CONTACT: William E. Gressman or Vincent J.
Salamone, Office of Government Ethics, Suite 500, 1201 New York Avenue,
NW., Washington, DC 20005-3917; telephone: 202-208-8000; FAX: 202-208-
8037.
SUPPLEMENTARY INFORMATION:
I. Background
On June 15, 1995, the Office of Government Ethics published a
proposed amendment to the Standards of Ethical Conduct for Employees of
the Executive Branch (Standards), as codified at 5 CFR part 2635, that
would allow acceptance by agency employees of certain invitations of
free attendance at widely attended gatherings from persons (individuals
or organizations) other than sponsors of the events and to otherwise
modify the gifts exception for such gatherings. See 60 FR 31415-31418,
which provided for a 60-day public comment period. The Office of
Government Ethics received eleven comment letters on the proposed rule
from eight executive agencies, two agency employees and one private
organization, as well as a few telephonic comments. In this rulemaking
document, OGE is finalizing the proposed amendment, with certain
changes (noted below) mostly in response to certain of the comments
received.
The section of the Standards subject to this rulemaking is 5 CFR
2634.204(g), one provision of subpart B of the Standards which
implements the outside source gift restrictions contained in 5 U.S.C.
7353 and section 101(d) of Executive Order 12674, as modified by
Executive Order 12731. In accordance with those authorities,
Sec. 2635.204 sets forth exceptions to the primary constraint at
Sec. 2635.202(a), which provides that, in the absence of an exception,
an employee shall not directly or indirectly solicit or accept a gift
from a prohibited source or a gift that is given because of the
employee's official position.
Section 2635.204(g)(2), as it has been in effect for the past three
and a half years, provides that an agency employee may accept an
unsolicited gift of free attendance at all or part of a widely attended
gathering from the sponsor of the event, subject to a determination of
agency interest. Unlike the de minimis exception at Sec. 2635.204(a)
for unsolicited gifts having a market value of $20 or less per occasion
(with a calendar year aggregate limit of $50), Sec. 2635.204(g)(2)
imposes no limitation on the market value of the gifts of free
attendance that may be accepted. While the tickets or other fees for
attendance at such gatherings ordinarily cost much less, this exception
would permit acceptance of free attendance at events for which the
ticket price exceeds even $1,000. In part to ensure that prohibited
sources do not use this exception to provide lavish entertainment to
employees of the agencies with which they do business or otherwise
interact, Sec. 2635.204(g)(2) has to date specified that an invitation
to a widely attended gathering can be accepted only if it is from the
sponsor of the event.
On March 9, 1993, shortly after the Standards first took effect,
the White House declared a six-month suspension of application, with
respect to attendance at press dinners, of that portion of
Sec. 2635.204(g)(2) that has limited acceptance of invitations of free
attendance at widely attended gatherings to those issued by the sponsor
of the event. Thus, during that six- month period, executive branch
officials were authorized to attend press dinners as guests of
individuals or organizations other than the event's sponsor, if the
event otherwise met the conditions of the widely attended gathering
exception. On December 21, 1993, with another round of press
association events in the offing, the White House issued another
memorandum to all agency heads once again temporarily suspending
administrative enforcement of that portion of the rule affecting widely
attended gatherings solely as it relates to dinners sponsored by news
associations for which admission for executive branch officials is paid
by news organizations.
In a December 21, 1993 letter addressed to OGE, the White House
asked OGE to consider a revision to Sec. 2635.204(g)(2) of the
Standards to provide that an employee may accept an invitation received
directly from a news organization to attend a widely attended gathering
sponsored by a news association where there has been a determination
that the employee's attendance is in the interest of the agency. In the
alternative, the White House suggested that OGE might wish to consider
revising Sec. 2635.204(g)(2) to provide an exception for invitations to
a broader range of widely attended gatherings from persons other than
the sponsors of those events. Both in the rule as proposed and as being
finally adopted here, OGE has opted for this alternative approach. The
White House specified in its above-referenced December 1993 memorandum
that the suspension as to press dinners was to extend until August 1,
1994, or until such later date as OGE responded to its request for
revision of Sec. 2635.204(g)(2).
[[Page 42966]]
Therefore, as noted in the preamble to the proposed rule, the White
House suspension as to press dinners has remained in effect. However,
when this final rule takes effect on September 19, 1996, that
suspension will be superseded by the broader ``nonsponsor'' free
attendance gift provisions of Sec. 2635.204(g) as amended in this
rulemaking document.
II. Analysis of Comments
As noted, the Office of Government Ethics has carefully considered
the comments submitted on last year's proposed rule and, as discussed
below, is modifying a few portions of the rule as proposed in adopting
it as final. The discussion below is focused on the major areas of
comment regarding the proposed rule changes.
Clarification of Widely Attended Gatherings Definition/A Large Number
of Persons
Several agencies commented on the proposed addition of an express
clause requiring attendance by ``a large number of persons'' to the
definition of a widely attended gathering in Sec. 2635.204(g)(2). One
commenter asked that the term be eliminated altogether from the final
rule. Four agencies questioned why the proposed change to the rule did
not require that a specific minimum number of persons be expected to
attend a gathering for it to be considered attended by a ``large number
of persons.'' One of these agencies commented that such a minimum
number designation would assist program administration by helping to
reduce the number of employee inquiries on this matter. However, three
agencies wanted ethics officials to be able to focus more on factors
other than the size of the event, such as the nature of the gathering
itself and the event's overall importance to the agency's programs and
operations when making a determination about a widely attended
gathering under Sec. 2635.204(g)(3). One agency suggested that OGE
might be able to avoid the limitations of setting a minimum number by
providing instead for an acceptable range of numbers. Further, two
commenters suggested that OGE could assist agencies more by providing
agencies with a list of factors that the agencies could apply to
determine if an event qualified as widely attended.
After carefully reviewing these recommendations, including the
alternative approaches suggested, OGE has decided not to change the
proposed addition of the ``large number of persons'' clause, other than
to add the clarification that attendance by such a number is
``expected.'' While a specific minimum number or a range of numbers
might, in some ways, facilitate agency administration of the rule and
even possibly reduce employee inquiries, OGE believes that setting such
numbers for sponsor gifts would unduly limit the flexibility that
agencies require to administer this rule effectively. (The newly
revised rule does require a minimum number of attendees as to
nonsponsor gifts of free attendance, which are subject to additional
safeguards (see the discussion below).)
It is OGE's belief that executive agencies are in the best position
to determine when unsolicited gifts of free attendance offered by
sponsors of widely attended gatherings (or nonsponsors) should be
permitted based on a balancing of the event's value in facilitating
administration of agency programs/operations versus any appearance
concerns. As stated in the proposed rule, agencies should apply the
normal meaning of the phrase ``widely attended'' as encompassing those
events that are attended by many persons and excluding those events
attended by only a few. Additionally, ethics officials should note that
the rule requires more than a ``large number'' of attendees--the
gathering itself must be of mutual interest to those in attendance. See
OGE Informal Advisory Letters 93 x 15, 93 x 18 and 94 x 2, as published
in ``The Informal Advisory Letters and Memoranda and Formal Opinions of
the United States Office of Government Ethics,'' which is available
from the U.S. Government Printing Office and is on OGE's electronic
bulletin board TEBBS (``The Ethics Bulletin Board System'').
In sum, the determination of whether an event is widely attended
requires ethics officials to carefully examine the particular
circumstances of each event in light of all the regulatory factors.
Even if an event is expected to be attended by a large number of
persons and to have present a diversity of views or interests (see
discussion below), agency ethics officials must still make a finding
that the agency's interest in the employee's participation in the event
outweighs any concern that the acceptance of the gift of free
attendance may or may appear to improperly influence the employee in
the performance of his or her official duties. We believe that these
requirements will help preserve the Government's valid interest in
ensuring that employees are free from improper influences and that the
acceptance of any gift of free attendance from an outside source will
not create the appearance of partiality.
Furthermore, one commentator asked if the term ``a large number of
persons'' would include any accompanying spouse or other guest of each
invitee. The Office of Government Ethics believes that accompanying
spouses and guests can be counted, both for determining whether a large
number of persons is expected to attend an event and for purposes of
the 100-person threshold applicable to acceptance of gifts of free
attendance from nonsponsors.
A few agencies pointed out that an ambiguity in the definition of a
widely attended gathering was created by the use of the term ``for
example'' in the second sentence of proposed Sec. 2635.204(g)(2). In
response to these concerns, OGE is changing the wording of the passage
in Sec. 2635.204(g)(2) of this final rule, by adding the words
``persons with a diversity of views or interests'' before the ``for
example'' phrase, to clarify that the types of events which are widely
attended are those at which a ``large number of persons'' is expected
to attend and at which persons having a diversity of viewpoints or
interests are expected to be present. The latter factor can be
satisfied if the event is open to members from throughout a given
industry or profession, if persons in attendance represent a range of
persons interested in a given matter, or if there is otherwise a
diversity of views or interests present. Agencies should consider both
factors in determining whether an event is ``widely attended''--the
number of persons attending the event and the breadth of the views and
interests presented by the group itself.
Several agencies expressed specific concerns with proposed new
Example 3 following the regulatory text of Sec. 2635.204(g), focusing
on the proposed disqualification of a 20-person dinner party as not
meeting the ``large number of persons'' test. Some comments noted that
the example might well be overly restrictive in the context of smaller
agencies. The desirability of agency discretion in setting a lower
limit for sponsor events was also stressed. One agency recommended that
Example 3 be revised so that reference to the number of persons in
attendance at the dinner party of the major utility be removed from the
example and that the event be merely referred to as a small dinner
party. In this way, the point would be made that agency officials
should consider the size of a gathering as part of their analysis on
whether an event was a widely attended gathering. The Office of
Government Ethics has rewritten Example 3 to try to clarify the main
point intended that a small dinner
[[Page 42967]]
party is not a widely attended gathering. Further, OGE has reworked the
comment at the end of the example about the additional requirement that
a range of persons interested in a given matter be present at any
qualified widely attended gathering. This passage has been broken out
into a separate sentence and the hypothetical facts have been modified,
to reference a larger company ``banquet'' as still not widely attended,
in order to emphasize that attendance by persons with a diverse set of
views or interests is an additional, separate requirement for finding
that a gathering is ``widely attended.''
Sponsor/Nonsponsor Distinction
Although there was general support for the proposed new exception
to allow employees to accept an invitation of free attendance to a
larger widely attended gathering from a source other than the sponsor
in appropriate cases, two agencies and a private organization
questioned the need for any distinction between such gifts from the
sponsor and from others. After carefully reviewing this matter, OGE has
decided to maintain the additional standards imposed as to
``nonsponsor'' gifts. The Office of Government Ethics believes that
there is an important distinction between situations in which gifts of
free attendance are offered by sponsors of widely attended gatherings,
as opposed to those circumstances where gifts of free attendance are
tendered by nonsponsors. When a sponsor invites an individual to attend
an event, the sponsor is presumably doing so for the benefit of all
those in attendance. The sponsor's attention is also not focused solely
upon the invitee at the event. Thus, the invitee does have more of an
opportunity to meet and mingle with a wider number of people in
attendance. This supports more fully the agency's interest in his or
her attendance at the event. When a nonsponsor invites an individual to
attend an event, however, the attention of the nonsponsor host is more
focused upon the employee. The 100-person threshold provides an
additional measure of public and press scrutiny of that relationship.
In addition, the $250 ceiling on nonsponsor donor gifts constitutes an
important further safeguard against more lavish entertainment, which a
nonsponsor might be able to afford in a one-on-one situation, but the
sponsor could not in any significant numbers. The dollar ceiling also
protects against excess in the case of fundraising events that are not
lavish, but exclusive because of cost of attendance. Finally, OGE
stresses that both nonsponsor and sponsor gifts must still be screened
by agencies for any appearance of conflict in accordance with
Sec. 2635.204(g)(3) of the Standards. Together, these protections will
help ensure that any gifts of free attendance accepted are in the best
interests of the agency concerned and do not involve an appearance of
undue influence or loss of impartiality.
Press Dinners
One agency suggested that OGE might consider adopting an exception
that applies to press dinners, because of the uniqueness of press
organizations, rather than carving out a broader sponsor/nonsponsor
distinction. Another commenter suggested an alternative approach in
which OGE would determine that journalist members of the press groups
were themselves ``individual sponsors'' of a dinner. As stated above
and in the preamble to the proposed rule, OGE earlier considered and
rejected the option of singling out the press under the widely attended
gatherings exception. The Office of Government Ethics does not believe
that the press should be treated differently than any other private
entities that deal with the Government. Thus, in liberalizing this
provision, with appropriate safeguards, OGE believes that there is no
reason to limit nonsponsor gifts to press entities.
The 100 Person Attendee Threshold for Nonsponsor Gifts
Four commenters recommended that OGE drop the proposed requirement
that 100 persons be in attendance at a widely attended gathering before
a gift of free attendance can be accepted from a nonsponsor. The
general consensus among these four commenters was that this number
should be left to the judgment of agency ethics officials and that it
would unduly restrict agency discretionary authority in those
situations where gifts of free attendance are offered by nonsponsors of
widely attended gatherings. An agency and one individual commenting
thought that the proposed 100-person threshold would not be fair to
smaller agencies or smaller industry groups. The agency indicated that,
particularly in the scientific and technical communities, an agency's
interest might be advanced by having a representative attend a public
meeting at which fewer than 100 persons are expected to disseminate
information about its agency functions and policies. Additionally, one
agency was concerned that a prohibited source could circumvent the rule
by ensuring that a sufficient number of persons were invited to an
event at the appropriate cost. One agency, however, favored the use of
specific numbers, stating that this would facilitate the administration
of the rule.
After reviewing these comments, OGE has decided to maintain the
proposed 100-person threshold in the final rule. The Office of
Government Ethics recognizes that it may be in the agency's interest,
in some cases, to have an employee attend a nonconflicting event where
less than 100 persons are expected if it would assist the agency in the
accomplishment of its mission. In that regard, OGE notes that the new
rule's specific 100-person threshold only applies to nonsponsor gifts.
Thus a sponsor's offer of free attendance to an otherwise qualified
widely attended gathering (including attendance by ``a large number of
persons'') could be accepted, if there were an agency interest
determination under Sec. 2635.204(g)(3), even though fewer than 100
persons were expected to attend. Furthermore, if permissible in terms
of appropriations principles, the agency could consider paying for the
employee's attendance at smaller events. The employee could also pay
his or her own way. Finally, as to other events involving fewer than
100 expected attendees, certain separate authorities, such as the
Government employees training statute, the law permitting agencies to
accept certain travel payments from non-Federal sources, or other
agency statutory authority might permit the acceptance of free
attendance. See 5 U.S.C. 4111 and 31 U.S.C. 1353, as well as the
respective implementing regulations of the Office of Personnel
Management, at subpart G of 5 CFR part 410, and the General Services
Administration, at 41 CFR part 304-1; see also the note following
Sec. 2635.204(g)(4) of the Standards.
The rationale for the 100-person threshold as to nonsponsor gifts
of free attendance is that the larger, generally more public events are
subject to greater potential press and public scrutiny, which will
serve as additional protection against any apparent conflict situation.
In combination with the $250 free attendance gift value limitation
(discussed below), these two requirements will protect against the
possibility that this new exception might result in the provision to
Government employees by a nonsponsor donor of lavish entertainment or
an opportunity to attend an event made highly exclusive by virtue of
the admission price.
One agency suggested that OGE provide agency designees with the
authority to except a nonsponsor offer of free attendance from the 100-
person
[[Page 42968]]
requirement in appropriate circumstances. However, OGE believes that
there should be a uniform threshold for nonsponsor gifts and has not
accepted that suggestion.
Another agency asked for additional clarification on whether
accompanying spouses and other guests are to be counted for purposes of
the 100-person requirement. In response, OGE notes that spouses and
guests, who often form an integral part of widely attended gatherings,
may be counted for purposes of determining whether the 100-person
requirement is met for a particular event.
The $250 Ceiling on Nonsponsor Gifts of Free Attendance
One agency comment indicated that having the $250 cap on nonsponsor
gifts would facilitate administration of the regulation. However,
another agency thought that the amount should be lowered, but that the
rule should provide an exemption for charitable events where the face
value of the ticket primarily reflects a charitable contribution and
not a benefit to the employee. The Office of Government Ethics is
concerned that providing for any such exemption would unnecessarily
complicate the rule and detract from the uniformity to be accorded as
to nonsponsor free attendance offers. Furthermore, the opportunity to
attend, free of charge, an event where the ticket prices include a
sizable donation, and thus make the event more exclusive, can also be
viewed as a benefit to the employee. On the other hand, one agency and
a private organization believed that the $250 numerical limitation for
free attendance in the case of a nonsponsor was too low. The Office of
Government Ethics has neither raised nor lowered the $250 ceiling
amount, because we believe that $250 is the right amount, permitting
reasonable application of the new authority as to nonsponsor gifts
while protecting against lavish entertainment by prohibited sources.
A few commentators suggested that provision be made for periodic
reevaluation of the ceiling amount. A commenting organization noted
that most hotels that accommodate many widely attended gatherings have
an escalation factor built into their contracts with private
organizations and that some sort of mechanism was needed to keep up
with rising costs. The Office of Government Ethics notes that the $250
ceiling on the value of free attendance that may be accepted from a
person other than the event's sponsor coincides generally with the
legislative and OGE consensus that gifts of lesser amount do not need
to be subjected to public or confidential financial reporting under the
Ethics in Government Act, 5 U.S.C. app., sections 102(a)(2) and 107, or
OGE's 5 CFR part 2634 regulation thereunder. Considering that the $250
ceiling is imposed only in those situations where the gift of free
attendance is coming from a nonsponsor, OGE believes it is a reasonable
limitation to protect Government employees and their agencies from the
possible appearance of favoritism or undue influence. The Office of
Government Ethics notes that it will periodically review the
appropriateness of the $250 ceiling in the future. If any adjustment to
that dollar amount appears appropriate, OGE will initiate a rulemaking
action to change it.
Accompanying Guest Authority
Two commenters supported the proposed revision of
Sec. 2635.204(g)(6) to permit acceptance of an offer of free attendance
to a widely attended gathering extended, by the same donor, to an
accompanying guest of an employee whether or not the guest is the
employee's spouse (that provision has been limited to an accompanying
spouse). One commenter opposed the proposed change. In this final rule,
OGE has decided to retain the change as proposed. The expansion of
acceptance authority to another guest, when appropriate, will provide
additional flexibility in cases where the agency has determined that
acceptance of the gift of free attendance for an accompanying guest, in
addition to the employee, at a widely attended gathering of mutual
interest to a number of parties will further agency programs and
operations. In addition to addressing the fact that many employees are
not married, the expanded rule would apply to situations in which a
spouse is unable or does not wish to attend an event, but another
family member, a colleague or another appropriate guest could attend.
The Office of Government Ethics notes that the offer of free attendance
for the guest must be from the same person offering to pay for the
employee's attendance. Further, only one guest of an employee maybe
authorized to accept an offer of free attendance to accompany the
employee to an event at which the employee himself or herself is
authorized by the employing agency to accept a gift of free attendance.
Moreover, in such cases, the value of the guest's free attendance must
be aggregated with that of the employee's in applying $250 ceiling for
nonsponsor gifts (see Sec. 2635.204(g)(6) and Example 2, the wording of
both of which has been slightly revised to reflect their application to
an accompanying guest's free attendance).
Miscellaneous
Finally, OGE is making a couple of minor clarifications to the rule
as proposed in adopting it as final.
III. Matters of Regulatory Procedure
Executive Order 12866
In promulgating this final rule, the Office of Government Ethics
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 amendatory regulation has also
been reviewed by the Office of Management and Budget (OMB) under that
Executive order.
Regulatory Flexibility Act
As the Deputy General Counsel of OGE, I certify under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) that this amendatory
rule will not have a significant economic impact on a substantial
number of small entities because it primarily affects Federal executive
branch employees and their agencies.
Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
to this amendatory regulation because it does not contain information
collection requirements that require OMB approval.
List of Subjects in 5 CFR Part 2635
Conflict of interests, Executive branch standards of ethical
conduct, Government employees.
Approved: August 14, 1996.
Marilyn L. Glynn,
Deputy General Counsel, Office of Government Ethics.
Accordingly, for the reasons set forth in the preamble, the Office
of Government Ethics is amending part 2635 of chapter XVI of title 5 of
the Code of Federal Regulations as follows:
PART 2635--[AMENDED]
1. The authority citation for part 2635 continues to read as
follows:
Authority: 5 U.S.C. 7351, 7353; 5 U.S.C. App. (Ethics in
Government Act of 1978); 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.
Subpart B--Gifts From Outside Sources
2. Section 2635.204 is amended as set forth below:
[[Page 42969]]
A. Revising paragraphs (g)(2) through (g)(5);
B. Revising the text of paragraph (g)(6) preceding Example 1 and
C. Redesignating Examples 2, 3 and 4 of paragraph (g)(6) as
Examples 4, 5 and 6, respectively; and
D. Adding new Examples 2 and 3 to paragraph (g)(6). The revisions,
and additions read as follows:
Sec. 2635.204 Exceptions.
* * * * *
(g) * * *
(2) Widely attended gatherings. When there has been a determination
that his attendance is in the interest of the agency it will further
agency programs and operations, an employee may accept an unsolicited
gift of free attendance at all or appropriate parts of a widely
attended gathering of mutual interest to a number of parties from the
sponsor of the event or, if more than 100 persons are expected to
attend the event and the gift of free attendance has a market value of
$250 or less, from a person other than the sponsor of the event. A
gathering is widely attended if it is expected that a large number of
persons will attend and that persons with a diversity of views or
interests will be present, for example, if it is open to members from
throughout the interested industry or profession or if those in
attendance represent a range of persons interested in a given matter.
For employees subject to a leave system, attendance at the event shall
be on the employee's own time or, if authorized by the employee's
agency, on excused absence pursuant to applicable guidelines for
granting such absence, or otherwise without charge to the employee's
leave account.
(3) Determination of agency interest. The determination of agency
interest required by paragraph (g)(2) of this section shall be made
orally or in writing by the agency designee.
(i) If the person who has extended the invitation has interests
that may be substantially affected by the performance or nonperformance
of an employee's official duties or is an association or organization
the majority of whose members have such interests, the employee's
participation may be determined to be in the interest of the agency
only where there is a written finding by the agency designee that the
agency's interest in the employee's participation in the event
outweighs the concern that acceptance of the gift of free attendance
may or may appear to improperly influence the employee in the
performance of his official duties. Relevant factors that should be
considered by the agency designee include the importance of the event
to the agency, the nature and sensitivity of any pending matter
affecting the interests of the person who has extended the invitation,
the significance of the employee's role in any such matter, the purpose
of the event, the identity of other expected participants and the
market value of the gift of free attendance.
(ii) A blanket determination of agency interest may be issued to
cover all or any category of invitees other than those as to whom the
finding is required by paragraph (g)(3)(i) of this section. Where a
finding under paragraph (g)(3)(i) of this section is required, a
written determination of agency interest, including the necessary
finding, may be issued to cover two or more employees whose duties
similarly affect the interests of the person who has extended the
invitation or, where that person is an association or organization, of
its members.
(4) Free attendance. For purposes of paragraphs (g)(1) and (g)(2)
of this section, free attendance may include waiver of all or part of a
conference or other fee or the provision of food, refreshments,
entertainment, instruction and materials furnished to all attendees as
an integral part of the event. It does not include travel expenses,
lodgings, entertainment collateral to the event, or meals taken other
than in a group setting with all other attendees. Where the invitation
has been extended to an accompanying spouse or other guest (see
paragraph (g)(6) of this section), the market value of the gift of free
attendance includes the market value of free attendance by the spouse
or other guest as well as the market value of the employee's own
attendance.
Note: There are statutory authorities implemented other than by
part 2635 under which an agency or an employee may be able to accept
free attendance or other items not included in the definition of
free attendance, such as travel expenses.
(5) Cost provided by sponsor of event. The cost of the employee's
attendance will not be considered to be provided by the sponsor, and
the invitation is not considered to be from the sponsor of the event,
where a person other than the sponsor designates the employee to be
invited and bears the cost of the employee's attendance through a
contribution or other payment intended to facilitate that employee's
attendance. Payment of dues or a similar assessment to a sponsoring
organization does not constitute a payment intended to facilitate a
particular employee's attendance.
(6) Accompanying spouse or other guest. When others in attendance
will generally be accompanied by a spouse or other guest, and where the
invitation is from the same person who has invited the employee, the
agency designee may authorize an employee to accept an unsolicited
invitation of free attendance to an accompanying spouse or to another
accompanying guest to participate in all or a portion of the event at
which the employee's free attendance is permitted under paragraph
(g)(1) or (g)(2) of this section. The authorization required by this
paragraph may be provided orally or in writing.
Example 1: An aerospace industry association that is a prohibited
source sponsors an industrywide, two-day seminar for which it charges a
fee of $400 and anticipates attendance of approximately 400. An Air
Force contractor pays $2,000 to the association so that the association
can extend free invitations to five Air Force officials designated by
the contractor. The Air Force officials may not accept the gifts of
free attendance. Because the contractor specified the invitees and bore
the cost of their attendance, the gift of free attendance is considered
to be provided by the company and not by the sponsoring association.
Had the contractor paid $2,000 to the association in order that the
association might invite any five Federal employees, an Air Force
official to whom the sponsoring association extended one of the five
invitations could attend if his participation were determined to be in
the interest of the agency. The Air Force official could not in any
case accept an invitation directly from the nonsponsor contractor
because the market value of the gift exceeds $250.
Example 2: An employee of the Department of Transportation is
invited by a news organization to an annual press dinner sponsored by
an association of press organizations. Tickets for the event cost $250
per person and attendance is limited to 400 representatives of press
organizations and their guests. If the employee's attendance is
determined to be in the interest of the agency, she may accept the
invitation from the news organization because more than 100 persons
will attend and the cost of the ticket does not exceed $250. However,
if the invitation were extended to the employee and an accompanying
guest, her guest could not be authorized to attend for free since the
market value of the gift of free attendance would be $500 and the
invitation is from a person other than the sponsor of the event.
Example 3: An employee of the Department of Energy (DOE) and his
wife have been invited by a major utility
[[Page 42970]]
executive to a small dinner party. A few other officials of the utility
and their spouses or other guests are also invited, as is a
representative of a consumer group concerned with utility rates and her
husband. The DOE official believes the dinner party will provide him an
opportunity to socialize with and get to know those in attendance. The
employee may not accept the free invitation under this exception, even
if his attendance could be determined to be in the interest of the
agency. The small dinner party is not a widely attended gathering. Nor
could the employee be authorized to accept even if the event were
instead a corporate banquet to which forty company officials and their
spouses or other guests were invited. In this second case,
notwithstanding the larger number of persons expected (as opposed to
the small dinner party just noted) and despite the presence of the
consumer group representative and her husband who are not officials of
the utility, those in attendance would still not represent a diversity
of views or interests. Thus, the company banquet would not qualify as a
widely attended gathering under those circumstances either.
* * * * *
[FR Doc. 96-21144 Filed 8-19-96; 8:45 am]
BILLING CODE 6345-01-P
