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Issuance and Revocation of Temporary Post-Employment Waiver

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Information about this document as published in the Federal Register.

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Office of Government Ethics (OGE).


Notice; revocation of waiver.


The Office of Government Ethics is giving notice of the termination, effective in 90 days, of a short-term post-Government employment waiver of certain “senior employee” restrictions, which OGE is granting today to a class of employee positions at the Securities and Exchange Commission (SEC).


October 29, 2002.

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Richard M. Thomas, Associate General Counsel, Office of Government Ethics, Suite 500, 1201 New York Avenue, NW., Washington, DC 20005-3917; telephone: 202-208-8000, extension 1152; TDD: 202-208-8025; FAX: 202-208-8037.

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Pursuant to its authority under 18 U.S.C. 207(c)(2)(C), the Office of Government Ethics today is granting a temporary waiver, effective until November 29, 2002, from the senior employee” post-Government employment restrictions of 18 U.S.C. 207(c), and consequently also section 207(f), with respect to a class of positions at the SEC. Under 5 CFR 2641.201(d) of OGE's executive branch post-employment regulations, the waiver determination is not required to be published in the Federal Register. However, § 2641.201(d)(4) of OGE's regulations does require that OGE publish a notice of revocation in the Federal Register at least 90 days prior to the effective date of the termination of any such waiver, which is the purpose of this notice.

The waiver was requested by the designated agency ethics official of the SEC. The waiver pertains to all positions at the Securities and Exchange Commission for which the rate of basic pay, immediately prior to May 19, 2002, had been less than the rate of basic pay payable for level 5 of the Senior Executive Service (SES). On May 19, 2002, the SEC instituted a new “pay parity plan.” Such a plan was authorized by Congress in January of 2002, pursuant to Pub. L. 107-123, but was not funded by appropriations until some time later. The new pay plan eliminated the SES at SEC and placed all former SES employees, including many who were below level 5 of the SES, in new pay grades all of which have rates of basic pay greater than that payable for SES level 5. Consequently, a number of employees who had not been “senior employees” under section 207(c) immediately became subject to the restrictions of that provision, pursuant to 18 U.S.C. 207(c)(2)(ii). According to information provided by the SEC, this change in rate of basic pay occurred without any change in the duties of the affected employees. Furthermore, the SEC indicated that notice of many of the most important details of the new plan (e.g., amounts of pay) was not provided to affected employees until May 17, 2002, so that employees were not able to plan for any post-employment consequences.

The Securities and Exchange Commission requested a temporary waiver to allow a fair amount of time for new senior employees to make plans and to allow the agency the time to Start Printed Page 55845identify any specific positions for which it may believe that a permanent waiver would be appropriate in the future. The Securities and Exchange Commission cited as precedent the decision of OGE in 1996 to grant a temporary waiver under 18 U.S.C. 207(c)(2)(C) covering all SES level 4 employees in the executive branch who were unexpectedly placed in “senior employee” status, without any change in the duties of their positions, under the version of section 207(c)(2)(A)(ii) as then worded, as a result of a pay raise under Executive Order 12984. See DO-96-001 (January 4, 1996) (original six month waiver); 61 FR 14326-14328 (April 1, 1996) (notice of forthcoming termination of original six month waiver); DO-96-030 (June 6, 1996) (three month extension of waiver); 61 FR 28908-28910 (June 6, 1996) (notice of extension and revocation of waiver after period of extension); all of which are available on OGE's Web site at

The Office of Government Ethics agreed that the information provided by the SEC satisfied the two-part test for granting waivers under section 207(c)(2)(C). In order to grant a waiver, the Director of OGE must determine both that the imposition of the restrictions of section 207(c) “would create an undue hardship on the department or agency in obtaining qualified personnel to fill such position or positions” and that “granting the waiver would not create the potential for use of undue influence or unfair advantage.” 18 U.S.C. 207(c)(2)(C)(i) and (ii). The Office of Government Ethics found the hardship requirement to be satisfied because the information provided by the SEC indicated that the very purpose of the new Congressionally authorized pay plan was to reverse that agency's historical difficulties in recruiting and retaining qualified experts in fields related to the mission of the agency. As OGE provides in its implementing regulations, hardship may be shown by the “payment of a special rate of pay to the incumbent of the position pursuant to specific statutory authority.” 5 CFR 2641.201(d)(5)(ii)(A). The Office of Government Ethics also found that the granting of a waiver would not create the potential for undue influence or unfair advantage: the new increase in pay is not accompanied by “any accretion of duties or responsibilities,” DO-96-001, and there is no reason to expect that the incumbents at the present time would have any more potential for influence or advantage than they had immediately prior to the pay increase.

Pursuant to 5 CFR 2641.201(d)(4), the effective date of the waiver is the “date of the Director's written response to the designated agency ethics official indicating that the request for exemption has been granted.” 5 CFR 2641.201(d)(4). That written response is being issued today. The regulations also specifically state that any waiver “shall not benefit individuals who terminated senior service prior to the effective date of the exemption.” Id. Consequently, the benefit of the waiver does not extend to any individuals who terminated senior service prior to the date of waiver.

Finally, although the SEC requested that the waiver be effective only until November 19, 2002, OGE is granting a waiver that will extend until November 29, 2002. Under 5 CFR 2641.201(d)(4), the revocation of a waiver cannot be effective until 90 days after the publication in the Federal Register of a notice of revocation.

Therefore, pursuant to 5 CFR 2641.201(d)(4), OGE hereby gives notice that the above-referenced post-employment waiver, granted on August 30, 2002, will expire and is revoked effective on November 29, 2002.

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Approved: August 26, 2002.

Amy L. Comstock,

Director, Office of Government Ethics.

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[FR Doc. 02-22204 Filed 8-29-02; 8:45 am]