Department of Agriculture (Department or USDA).
Final rule.
The Department of Agriculture (Department or USDA), with the concurrence of the Office of Government Ethics (OGE), is issuing final regulations for Department employees that supplement the Standards of Ethical Conduct for Employees of the Executive Branch (Standards), as issued by OGE. The final rule, effective upon publication, sets forth as final both a general requirement for certain Department employees to obtain prior approval before engaging in outside employment and separate, more-extensive prior approval requirements for employees of the USDA Farm Service Agency (FSA), Food Safety and Inspection Service (FSIS), Office of the General Counsel (OGC), and Office of Inspector General (OIG). The final rule also contains certain restrictions on financial interests applicable to FSA employees.
These regulations are effective October 2, 2000.
John C. Surina, Director, Office of Ethics, U.S. Department of Agriculture, Room 348–W—Stop 0122, 1400 Independence Avenue, S.W., Washington, D.C. 20250–0122, telephone (202) 720–2251.
On March 24, 2000, with the concurrence and co-signature of OGE, USDA published for comment an interim final rule, with a request for comments, establishing supplemental standards of ethical conduct for employees of USDA (65 FR 15825–15830). The interim rule was issued to supplement the Standards of Ethical Conduct for Employees of the Executive branch published by OGE on August 7, 1992, and effective on February 3, 1993 (57 FR 35006–35067, as corrected at 57 FR 48557 and 57 FR 52583). The Standards, as corrected and amended, are codified at 5 CFR part 2635. On October 3, 1997, the Department's Employee Conduct and Responsibilities regulations were removed.
The interim rule was issued pursuant to 5 CFR 2635.105, which authorizes agencies, with the concurrence of OGE, to publish agency-specific supplemental regulations that are necessary to implement their respective ethics programs. The Department, with OGE concurrence, determined that the supplemental rules for codification in new chapter LXXII of 5 CFR, consisting of part 8301, were necessary to the success of its ethics program.
The interim rule prescribed a 30-day comment period and invited comments from all interested parties. USDA received ten timely comments and one late comment and, after careful consideration of each comment, has made appropriate modifications to the rule. The Department, with OGE's concurrence, is now publishing as a final rule the Supplemental Standards of Ethical Conduct for Employees of the Department of Agriculture, for codification in part 8301 title 5 of the Code of Federal Regulations.
As noted, the Department received a total of eleven comments (ten were timely; one was late), all by electronic mail. Seven comments were received from employees of the Office of the General Counsel (OGC), USDA; one from an employee of Departmental Administration, USDA; one from an employee of the Farm Service Agency (FSA), USDA; one from a non-employee farmer; and one from a person whose affiliation, if any, could not be determined. Except for the comments of the farmer and the FSA employee, all comments concerned either the general requirement for prior approval for outside employment or the additional requirement for prior approval by OGC of outside practice of law by OGC attorneys not already covered under the general requirement. The FSA employee was complimentary in assessing the interim rule and wanted to expand the coverage of prohibited transactions with regard to FSA employees. The non-employee farmer inquired as to the rationale for limiting the prohibited transactions provisions only to FSA Federal employees, rather than also including FSA county employees.
All but one of the comments concerning the requirement to obtain approval before engaging in outside employment came from OGC attorneys and most of those comments addressed, concurrently, both the general requirement applicable to financial disclosure report filers and the special requirement for non filing attorneys within OGC found in § 8301.105. Accordingly, to the extent that these comments relate to both sections, they will be addressed in connection with the general requirement.
Four comments were received which asserted that the requirement for seeking prior approval for outside employment was unnecessary. Three commenters believed themselves capable of independently judging whether an outside activity would be in conflict with their official responsibilities. Two other commenters were inclined in that direction, adding that the presupposed ethical dangers that justify the requirement could be addressed more effectively through law enforcement and more ethics training to help employees identify conflicts. Two other commenters pointed to the fact that the interim language does not attempt to identify the potential conflicts that are of concern and went on to state that since the conflicts of concern were already prohibited, there was no need for the prior approval requirement. One commenter criticized the requirement on the basis that it presumes that USDA employees are engaged in unethical behavior. Finally, one commenter noted that the same goal already was achieved by way of confidential financial disclosure.
Notwithstanding the concerns of the commenters, the Department still sees a
The Department believes that the general prior approval requirement is not overly burdensome or unnecessarily intrusive. First, persons not obliged to file financial disclosure reports are exempt from this requirement. Moreover, paragraph (e) of § 8301.102 provides agencies and components with the authority, through internal agency procedures, to specify broad categories of outside employment that presumptively present no conflict of interest concerns. Leaving the determination of exempt categories of employment to the individual agencies and components accords those entities greater flexibility in developing and modifying lists of exempted occupational categories since they are not subject to a cumbersome rulemaking process.
Three comments viewed the regulation as possibly constituting a prior restraint on First Amendment rights. One commenter expressed this point in terms of the outside practice of law; a second commenter in terms of uncompensated teaching, speaking, or writing that relates to one's official duties. The Department is not insensitive to the intrusiveness of any conflict of interest regulations as they necessarily cover personal financial holdings and activities away from one's job. On the other hand, the courts have acknowledged the justification for narrowly tailored prophylactic measures to protect the public interest from the reality and appearance of the corrosive impact of conflicting private interests. In this respect, it must be pointed out that the prior approval requirement does not prohibit any form of expression or association. In
At the same time, one commenter pointed to the recent ruling in
One commenter asserted that the definition of “employment,” in paragraph (b), is overly broad in that it would include providing uncompensated personal services in managing an educational trust for one's children, or in serving as a trustee or agent for a family estate, or serving as executor of a will. Conversely, the commenter points out that, under paragraph (b)(3)(i), an employee could manage a religious endowment fund, social investment club, fraternal organization, or the assets of a recreational group.
The Department finds the comment to be valid in cases where the fiduciary duties (guardian, executor, administrator, trustee, or personal fiduciary) relate solely to services provided to, or in conjunction with, individuals. From a practical standpoint, requiring prior approval to perform these family tasks on behalf of individuals is an unnecessary burden. On the other hand, the Department does not concur in the comment to the extent that such services are provided to, or in conjunction with, a for-profit entity. In the estimation of USDA, there is a significantly greater likelihood that outside employment with for-profit entities may raise conflict of interest and ethical concerns than in the case of fiduciary services provided to individuals. Accordingly, the Department sees justification for requiring prior approval for such services. Therefore, the Department amends redesignated paragraph (b)(2) of the interim rule by inserting prior to the word “entity”, comma following by “for-profit.”
One commenter questioned both the necessity of requiring the employee to provide the estimated total time to be devoted to outside employment [paragraph (c)(5)] and a statement as to whether the work can be performed entirely outside of the employee's regular duty hours [paragraph (c)(6)]. The Department has amended the interim rule by: (1) Deleting paragraphs (c)(5) and (c)(6); and (2) redesignating paragraphs (c)(7) through (c)(10) as paragraphs (c)(5) through (c)(8).
Several comments sought greater clarification and specificity on both the standards to be employed in evaluating outside employment requests and on the procedures to be employed. Specifically, three commenters expressed a wish to see a set time from by which management must act on a request, so that failure to act on the request within the required time frame would constitute de facto approval of the request. Three commenters suggested that the regulation contain some avenue of appeal from a negative determination. Two commenters wanted specificity as to how often their approved requests needed to be updated. Two other commenters wanted greater specificity as to the specific standards employed by USDA to gauge whether a given outside activity presents an unacceptable conflict. One commenter wanted greater clarification of what was meant by the term “reasonable time” in paragraph (c). Finally, another commenter wanted a requirement for the agency to provide written notification of its determination.
While the Department sees that such process considerations are valid, the regulations accord each specific USDA agency and component broad authority to fashion a prior approval policy that best fits its particular needs. Thus, the Department does not adopt these comments; rather they are left to be addressed through the implementing procedures within each agency and component. As to the standards employed to gauge whether a given outside activity presents an unacceptable conflict, the Department believes that sufficient specificity is provided in this regulation through reference to the relevant part of the Code of Federal Regulations. Greater
The Department, in conforming to its intent to provide broad authority to its separate agencies and components to fashion prior approval requirement procedures specifically tailored to their needs, is amending the interim rule by: (1) Deleting the words “[T]he DAEO or, with the concurrence of the DAEO,” in paragraph (e), and replacing those words with “The agency designee for;” and (2) deleting from paragraph (d) the words “(or the DAEO, when there is not an agency designee).”
As stated, the Department received two comments related to the provision prohibiting certain financial transactions involving Farm Service Agency (FSA) employees. The FSA employee wanted the Department to apply the prohibitions to “members of the employees [sic] household,” rather than to “employee, spouse, or minor child,” as was used in the regulation. The commenter questioned the justification in the interim rule for acting to address abuses and conflicts involving the financial interests of employees, spouses, and minor children, while leaving unaddressed the similar abuses and conflicts involving the financial interests of cohabitation partners and children who have reached majority. While the commenters' concerns are appreciated, the provisions of subpart D of the branchwide Standards do not extend beyond the limitations contained in the basic financial conflict of interest statute, 18 U.S.C. 208. That statute prohibits a Federal officer or employee from participating officially in any particular matter in which the officer or employee has a financial interest. For purposes of that statute, financial interests owned by the employee's spouse or minor child are deemed to be the financial interests of the employee. Accordingly, the Department did not have the authority to extend this prohibition beyond the bounds of that statute.
The non-employee commenter questioned why the interim rule did not apply to FSA county employees and why employees were still eligible to obtain guaranteed loans. The conflict of interest statutes and the Standards are limited in their application to Federal employees. FSA County committee personnel and county office employees are not Federal employees for purposes of these statutes.
Two of the comments contended that both the general promulgation of the rules, as well as imposition of the additional prior approval requirement under § 8301.105, were subject to negotiations under the collective bargaining process. The Department disagrees with the notion that the promulgation and enforcement of regulations are subject to collective bargaining negotiations under the Federal Service Labor-Management Relations Act. The promulgation of regulations is fully within the broad authorities accorded to Federal agencies. More specifically, however, not only does this regulation implement a Govermentwide regulation (5 CFR part 2635), but the Department also has established a compelling need for its agency-specific rules and has made a determination that they are essential to the missions of the USDA agencies for which they have been adopted.
Two commenters addressed the fact that almost all State bars have rules proscribing conflicts of interest by attorneys. This, they contended, made the prior approval requirement redundant in terms of limiting outside practice or law. One of the two asserted that, generally, standards imposed by the bars were more stringent and more easily enforced than the regime set out in the supplement. The other commenter proposed that, should a dispute arise between an attorney and his or her supervisor over whether an outside activity conflicted with his or her official duties, the issue could be presented for resolution to the bar to which the attorney belongs. If the bar sided with the Government, but the employee proceeded with the outside activity nonetheless, then the Government could file a bar complaint. (Presumably, if the bar sided with the employee, the Government would be powerless to take action against the employee.)
The subject matter at issue is not proper for determination or interpretation by State bar associations. The Federal Government cannot abdicate a core management function, such as staff supervision, to an outside party. At the same time, the suggestion misses the entire point of requiring prior approval for certain types of outside employment, which is to prevent an employee from violating a Federal criminal statute or ethical conduct rule, rather than having to take disciplinary action after the fact.
One commenter noted, in reference to § 8301.105, that the additional requirements for requesting prior approval for outside employment provide that requests are processed in accordance with the procedures in paragraph (c) of § 8301.102, but do not specify whether such requests will be determined on the standard for approval set forth in paragraph (d) of § 8301.102. The Department agrees with this comment. Accordingly, the Department will specify in all additional prior approval requirements, that the request shall be determined based on the standard for approval set forth in paragraph (d) of § 8301.102.
The Department has found that this rulemaking is not a rule as defined in 5 U.S.C. 804, and, thus, does not require review by Congress. This rulemaking is related to Department personnel.
Since this rule relates to Department personnel, it is exempt from the provisions of Executive Orders Nos. 12866 and 12988.
The Department has determined under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this regulation will not have a significant economic impact on a substantial number of small entities because it affects only Department employees.
The Department has determined 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.
This decision will not have a significant impact upon the quality of the human environment or the conservation of energy resources.
Conflict of interests, Executive branch standards of conduct, Government employees.
5 U.S.C. 301, 7301; 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; 5 CFR 2635.105, 2635.403(a), 2635.803.
(a) In accordance with 5 CFR 2635.105, the regulations in this part apply to employees of the Department of Agriculture (Department or USDA) and supplement the Standards of Ethical Conduct for Employees of the Executive Branch contained in 5 CFR part 2635.
(b) In addition to 5 CFR part 2635 and this part, employees also are required to comply with the executive branch financial disclosure regulations at 5 CFR part 2634, the regulations on responsibilities and conduct contained in 5 CFR part 735, and Department guidance and procedures established pursuant to paragraph (c) of this section.
(c) With the concurrence of the Designated Agency Ethics Official (DAEO), agencies and components of the Department may, in accordance with 5 CFR 2635.105(c), issue explanatory guidance for their employees and establish procedures necessary to implement this part and part 2635 of this title. The Deputy Ethics Official for each agency or component shall retain copies of all such guidance issued by that agency or component.
(a)
(b)
(1) Providing personal services as a consultant or professional, including service as an expert witness or as an attorney; and
(2) Providing personal services to a for-profit entity as an officer, director, employee, agent, attorney, consultant, contractor, general partner, or trustee, which involves decision making or policymaking for the non-Federal entity, or the provision of advice or counsel.
(c)
(1) The employee's name, organizational location, occupational title, grade, and salary;
(2) The nature of the proposed outside employment, including a full description of the specific duties or services to be performed;
(3) A description of the employee's official duties that relate in any way to the proposed employment;
(4) The name and address of the person or organization for whom or with which the employee is to be employed, including the location where the services will be performed;
(5) The method or basis of any compensation (
(6) A statement as to whether the compensation is derived from a USDA grant, contract, cooperative agreement, or other source of USDA funding;
(7) For employment involving the provision of consultative or professional services, a statement indicating whether the client, employer, or other person on whose behalf the services are performed is receiving, or intends to seek, a USDA grant, contract, cooperative agreement, or other funding relationship; and
(8) For employment involving teaching, speaking, writing or editing, the proposed text of any disclaimer required by 5 CFR 2635.807(b).
(d)
(e)
(2) Department components may specify internal procedures governing the submission of prior approval requests, including but not limited to: timely submission requirements; determination deadlines; appeals or reviews; and requirements for updating requests. Internal procedures also should designate appropriate officials to act on such requests. The instructions or manual issuances may include examples of outside employment that are permissible or impermissible consistent with 5 CFR part 2635 and this part. With respect to employment involving teaching, speaking or writing, the instructions or manual issuances may specify pre-clearance procedures and/or require disclaimers indicating that the views expressed do not necessarily represent the views of the agency, USDA or the United States.
(3) The officials within the respective USDA agencies or components responsible for the administrative aspects of these regulations and the maintenance of records shall make provisions for the filing and retention of requests for approval of outside employment and copies of the notification of approval or disapproval.
(a)
(b)
(c)
(2) Nothing in this section bars an FSA employee, or spouse or minor child of an FSA employee, from retaining a direct loan secured prior to March 24, 2000, or, if subsequent to March 24, 2000, such direct loan is secured prior to the FSA employee being appointed to, or nominated for, appointment to an FSA position. Any FSA employee who either personally has such a pre-existing loan, or whose spouse or minor child has such a pre-existing loan, must submit a written disqualification from taking any official action on any such loan. Other than through the application of normal FSA loan servicing options set forth under FSA regulations, the terms of any such pre-existing loans shall remain fixed and shall not be subject to renegotiation or renewal unless pursuant to policy decision(s) made by the USDA Secretary or the FSA Administrator.
(3)
(i) The applicant is a current FSA State Committee member or the spouse or minor child of a current FSA State Committee member;
(ii) The applicant meets the statutory qualification requirements for obtaining direct loan; and
(iii) A waiver is not inconsistent with part 2635 of this title nor 7 U.S.C. 1986 nor otherwise prohibited by law, and that, under the particular circumstances, application of the prohibition is not necessary to avoid the appearance of misuse of position, including the appearance of misuse of non public information, or loss of impartiality, or otherwise to ensure confidence in the impartiality and objectivity with which agency programs are administered.
(d)
(2)
(e)
(2)
(i) A sale, lease, or purchase of personal property, if it involves:
(A) Goods available to the general public at posted prices that are customary and usual within the community; or
(B) Property obtained pursuant to public auction; or
(ii) Transactions listed in (e)(1) of this section determined in advance by the appropriate FSA State Executive Director, after consulting with the FSA Headquarters ethics advisor, to be consistent with part 2635 of this title and otherwise not prohibited by law.
(f)
(1) Whom the FSA employee knows, or reasonably should know, is an FSA program participant; and
(2) Who is directly affected by decisions made by the particular FSA office in which the FSA employee serves.
Any employee of the Food Safety and Inspection Service not otherwise required to obtain approval for outside employment under § 8301.102, shall, before engaging in any form of outside employment, obtain written approval in accordance with the procedures and standards set forth in paragraphs (c) and (d) of § 8301.102
Any attorney serving within the Office of the General Counsel, not otherwise required to obtain approval for outside employment under § 8301.102, shall obtain written approval, in accordance with the
Any employee of the Office of Inspector General, not otherwise required to obtain approval for outside employment under § 8301.102, shall obtain written approval, in accordance with the procedures and standards set forth in paragraphs (c) and (d) of § 8301.102, before engaging in any form of outside employment that involves the following:
(a) Law enforcement, investigation, security, firearms training, defensive tactics training, and protective services;
(b) Auditing, accounting, bookkeeping, tax preparation, and other services involving the analysis, use, or interpretation of financial records;
(c) The practice of law, whether compensated or not; or
(d) Employment involving personnel, procurement, budget, computer, or equal employment opportunity services.