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Ethical Standards: Finances and Time

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The following standards, while especially prepared for USA government services, are also, in most cases, useful in other settings.

Source of the following standards: http://www.ethicsburg.gov/EL/ELGateway?page=/training/default.tpl

1. Gifts

Gifts From Outside Sources
 
General standards.

    (a) General prohibitions. Except as provided in this subpart, an
employee shall not, directly or indirectly, solicit or accept a gift:
    (1) From a prohibited source; or
    (2) Given because of the employee's official position.
    (b) Relationship to illegal gratuities statute. Unless accepted in
violation of paragraph (c)(1) of this section, a gift accepted under the
standards set forth in this subpart shall not constitute an illegal
gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B).
    (c) Limitations on use of exceptions. Notwithstanding any exception
provided in this subpart, other than Sec.  2635.204(j), an employee
shall not:
    (1) Accept a gift in return for being influenced in the performance
of an official act;
    (2) Solicit or coerce the offering of a gift;
    (3) Accept gifts from the same or different sources on a basis so
frequent that a reasonable person would be led to believe the employee
is using his public office for private gain;

    Example 1: A purchasing agent for a Veterans Administration hospital
routinely deals with representatives of pharmaceutical manufacturers who
provide information about new company products. Because of his crowded
calendar, the purchasing agent has offered to meet with manufacturer
representatives during his lunch hours Tuesdays through Thursdays and
the representatives routinely arrive at the employee's office bringing a
sandwich and a soft drink for the employee. Even though the market value
of each of the lunches is less than $6 and the aggregate value from any
one manufacturer does not exceed the $50 aggregate limitation in Sec. 
2635.204(a) on de minimis gifts of $20 or less, the practice of
accepting even these modest gifts on a recurring basis is improper.

    (4) Accept a gift in violation of any statute. Relevant statutes
applicable to all employees include:
    (i) 18 U.S.C. 201(b), which prohibits a public official from
seeking, accepting, or agreeing to receive or accept anything of value in return for being
influenced in the performance of an official act or for being induced to
take or omit to take any action in violation of his official duty. As
used in 18 U.S.C. 201(b), the term ``public official'' is broadly
construed and includes regular and special Government employees as well
as all other Government officials; and
    (ii) 18 U.S.C. 209, which prohibits an employee, other than a
special Government employee, from receiving any salary or any
contribution to or supplementation of salary from any source other than
the United States as compensation for services as a Government employee.
The statute contains several specific exceptions to this general
prohibition, including an exception for contributions made from the
treasury of a State, county, or municipality; or
    (5) Accept vendor promotional training contrary to applicable
regulations, policies or guidance relating to the procurement of
supplies and services for the Government, except pursuant to Sec. 
2635.204(l).

 

Subpart B_Gifts From Outside Sources
 
Sec.  2635.202  General standards.

    (a) General prohibitions. Except as provided in this subpart, an
employee shall not, directly or indirectly, solicit or accept a gift:
    (1) From a prohibited source; or
    (2) Given because of the employee's official position.
    (b) Relationship to illegal gratuities statute. Unless accepted in
violation of paragraph (c)(1) of this section, a gift accepted under the
standards set forth in this subpart shall not constitute an illegal
gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B).
    (c) Limitations on use of exceptions. Notwithstanding any exception
provided in this subpart, other than Sec.  2635.204(j), an employee
shall not:
    (1) Accept a gift in return for being influenced in the performance
of an official act;
    (2) Solicit or coerce the offering of a gift;
    (3) Accept gifts from the same or different sources on a basis so
frequent that a reasonable person would be led to believe the employee
is using his public office for private gain;

    Example 1: A purchasing agent for a Veterans Administration hospital
routinely deals with representatives of pharmaceutical manufacturers who
provide information about new company products. Because of his crowded
calendar, the purchasing agent has offered to meet with manufacturer
representatives during his lunch hours Tuesdays through Thursdays and
the representatives routinely arrive at the employee's office bringing a
sandwich and a soft drink for the employee. Even though the market value
of each of the lunches is less than $6 and the aggregate value from any
one manufacturer does not exceed the $50 aggregate limitation in Sec. 
2635.204(a) on de minimis gifts of $20 or less, the practice of
accepting even these modest gifts on a recurring basis is improper.

    (4) Accept a gift in violation of any statute. Relevant statutes
applicable to all employees include:
    (i) 18 U.S.C. 201(b), which prohibits a public official from
seeking, accepting, or agreeing to receive or accept anything of value in return for being
influenced in the performance of an official act or for being induced to
take or omit to take any action in violation of his official duty. As
used in 18 U.S.C. 201(b), the term ``public official'' is broadly
construed and includes regular and special Government employees as well
as all other Government officials; and
    (ii) 18 U.S.C. 209, which prohibits an employee, other than a
special Government employee, from receiving any salary or any
contribution to or supplementation of salary from any source other than
the United States as compensation for services as a Government employee.
The statute contains several specific exceptions to this general
prohibition, including an exception for contributions made from the
treasury of a State, county, or municipality; or
    (5) Accept vendor promotional training contrary to applicable
regulations, policies or guidance relating to the procurement of
supplies and services for the Government, except pursuant to Sec. 
2635.204(l).


 

2. Finances

Subpart D_Conflicting Financial Interests
 
Disqualifying financial interests.

    (a) Statutory prohibition. An employee is prohibited by criminal
statute, 18 U.S.C. 208(a), from participating personally and
substantially in an official capacity in any particular matter in which,
to his knowledge, he or any person whose interests are imputed to him
under this statute has a financial interest, if the particular matter
will have a direct and predictable effect on that interest.
    Note: Standards applicable when seeking non-Federal employment are
contained in subpart F of this part and, if followed, will ensure that
an employee does not violate 18 U.S.C. 208(a) or this section when he is
negotiating for or has an arrangement concerning future employment. In
all other cases where the employee's participation would violate
18 U.S.C. 208(a), an employee shall disqualify himself from
participation in the matter in accordance with paragraph (c) of this
section or obtain a waiver or determine that an exemption applies, as
described in paragraph (d) of this section.
    (b) Definitions. For purposes of this section, the following
definitions shall apply:
    (1) Direct and predictable effect. (i) A particular matter will have
a direct effect on a financial interest if there is a close causal link
between any decision or action to be taken in the matter and any
expected effect of the matter on the financial interest. An effect may
be direct even though it does not occur immediately. A particular matter
will not have a direct effect on a financial interest, however, if the
chain of causation is attenuated or is contingent upon the occurrence of
events that are speculative or that are independent of, and unrelated
to, the matter. A particular matter that has an effect on a financial
interest only as a consequence of its effects on the general economy
does not have a direct effect within the meaning of this subpart.
    (ii) A particular matter will have a predictable effect if there is
a real, as opposed to a speculative possibility that the matter will
affect the financial interest. It is not necessary, however, that the
magnitude of the gain or loss be known, and the dollar amount of the
gain or loss is immaterial.

    Note: If a particular matter involves a specific party or parties,
generally the matter will at most only have a direct and predictable
effect, for purposes of this subpart, on a financial interest of the
employee in or with a party, such as the employee's interest by virtue
of owning stock. There may, however, be some situations in which, under
the above standards, a particular matter will have a direct and
predictable effect on an employee's financial interests in or with a
nonparty. For example, if a party is a corporation, a particular matter
may also have a direct and predictable effect on an employee's financial
interests through ownership of stock in an affiliate, parent, or
subsidiary of that party. Similarly, the disposition of a protest
against the award of a contract to a particular company may also have a
direct and predictable effect on an employee's financial interest in
another company listed as a subcontractor in the proposal of one of the
competing offerors.

    Example 1: An employee of the National Library of Medicine at the
National Institutes of Health has just been asked to serve on the
technical evaluation panel to review proposals for a new library
computer search system. DEF Computer Corporation, a closely held company
in which he and his wife own a majority of the stock, has submitted a
proposal. Because award of the systems contract to DEF or to any other
offeror will have a direct and predictable effect on both his and his
wife's financial interests, the employee cannot participate on the
technical evaluation team unless his disqualification has been waived.
    Example 2: Upon assignment to the technical evaluation panel, the
employee in the preceding example finds that DEF Computer Corporation
has not submitted a proposal. Rather, LMN Corp., with which DEF competes
for private sector business, is one of the six offerors. The employee is
not disqualified from serving on the technical evaluation panel. Any
effect on the employee's financial interests as a result of the agency's
decision to award or not award the systems contract to LMN would be at
most indirect and speculative.

    (2) Imputed interests. For purposes of 18 U.S.C. 208(a) and this
subpart, the financial interests of the following persons will serve to
disqualify an employee to the same extent as if they were the employee's
own interests:
    (i) The employee's spouse;
    (ii) The employee's minor child;
    (iii) The employee's general partner;
    (iv) An organization or entity which the employee serves as officer,
director, trustee, general partner or employee; and
    (v) A person with whom the employee is negotiating for or has an
arrangement concerning prospective employment. (Employees who are
seeking other employment should refer to and comply with the standards
in subpart F of this part).

    Example 1: An employee of the Department of Education serves without
compensation on the board of directors of Kinder World, Inc., a
nonprofit corporation that engages in good works. Even though her
personal financial interests will not be affected, the employee must
disqualify herself from participating in the review of a grant
application submitted by Kinder World. Award or denial of the grant will
affect the financial interests of Kinder World and its financial
interests are imputed to her as a member of its board of directors.
    Example 2: The spouse of an employee of the Food and Drug
Administration has obtained a position with a well established
biomedical research company. The company has developed an artificial limb f
or which it is seeking FDA approval and the employee would ordinarily be asked to
participate in the FDA's review and approval process. The spouse is a salaried
employee of the company and has no direct ownership interest in the company.
Nor does she have an indirect ownership interest, as would be the case, for
example, if she were participating in a pension plan that held stock in
the company. Her position with the company is such that the granting or
withholding of FDA approval will not have a direct and predictable
effect on her salary or on her continued employment with the company.
Since the FDA approval process will not affect his spouse's financial
interests, the employee is not disqualified under Sec.  2635.402 from
participating in that process. Nevertheless, the financial interests of
the spouse's employer may be disqualifying under the impartiality
principle, as implemented at Sec.  2635.502.

    (3) Particular matter. The term particular matter encompasses only
matters that involve deliberation, decision, or action that is focused
upon the interests of specific persons, or a discrete and identifiable
class of persons. Such a matter is covered by this subpart even if it
does not involve formal parties and may include governmental action such
as legislation or policy-making that is narrowly focused on the
interests of such a discrete and identifiable class of persons. The term
particular matter, however, does not extend to the consideration or
adoption of broad policy options that are directed to the interests of a
large and diverse group of persons. The particular matters covered by
this subpart include a judicial or other proceeding, application,
request for a ruling or other determination, contract, claim,
controversy, charge, accusation or arrest.

    Example 1: The Internal Revenue Service's amendment of its
regulations to change the manner in which depreciation is calculated is
not a particular matter, nor is the Social Security Administration's
consideration of changes to its appeal procedures for disability
claimants.
    Example 2: Consideration by the Interstate Commerce Commission of
regulations establishing safety standards for trucks on interstate
highways involves a particular matter.

    (4) Personal and substantial. To participate personally means to
participate directly. It includes the direct and active supervision of
the participation of a subordinate in the matter. To participate
substantially means that the employee's involvement is of significance
to the matter. Participation may be substantial even though it is not
determinative of the outcome of a particular matter. However, it
requires more than official responsibility, knowledge, perfunctory
involvement, or involvement on an administrative or peripheral issue. A
finding of substantiality should be based not only on the effort devoted
to a matter, but also on the importance of the effort. While a series of
peripheral involvements may be insubstantial, the single act of
approving or participating in a critical step may be substantial.
Personal and substantial participation may occur when, for example, an
employee participates through decision, approval, disapproval,
recommendation, investigation or the rendering of advice in a particular
matter.
    (c) Disqualification. Unless the employee is authorized to
participate in the particular matter by virtue of a waiver or exemption
described in paragraph (d) of this section or because the interest has
been divested in accordance with paragraph (e) of this section, an
employee shall disqualify himself from participating in a particular
matter in which, to his knowledge, he or a person whose interests are
imputed to him has a financial interest, if the particular matter will
have a direct and predictable effect on that interest. Disqualification
is accomplished by not participating in the particular matter.
    (1) Notification. An employee who becomes aware of the need to
disqualify himself from participation in a particular matter to which he
has been assigned should notify the person responsible for his
assignment. An employee who is responsible for his own assignment should
take whatever steps are necessary to ensure that he does not participate
in the matter from which he is disqualified. Appropriate oral or written
notification of the employee's disqualification may be made to coworkers
by the employee or a supervisor to ensure that the employee is not
involved in a matter from which he is disqualified.
    (2) Documentation. An employee need not file a written
disqualification statement unless he is required by part 2634 of this chapter to file
written evidence of compliance with an ethics agreement with the Office
of Government Ethics or is asked by an agency ethics official or the
person responsible for his assignment to file a written disqualification
statement. However, an employee may elect to create a record of his
actions by providing written notice to a supervisor or other appropriate
official.

    Example 1: An Assistant Secretary of the Department of the Interior
owns recreational property that borders on land which is being
considered for annexation to a national park. Annexation would directly
and predictably increase the value of her vacation property and, thus,
she is disqualified from participating in any way in the Department's
deliberations or decisions regarding the annexation. Because she is
responsible for determining which matters she will work on, she may
accomplish her disqualification merely by ensuring that she does not
participate in the matter. Because of the level of her position,
however, the Assistant Secretary might be wise to establish a record
that she has acted properly by providing a written disqualification
statement to an official superior and by providing written notification
of the disqualification to subordinates to ensure that they do not raise
or discuss with her any issues related to the annexation.

    (d) Waiver of or exemptions from disqualification. An employee who
would otherwise be disqualified by 18 U.S.C. 208(a) may be permitted to
participate in a particular matter where the otherwise disqualifying
financial interest is the subject of a regulatory exemption or
individual waiver described in this paragraph, or results from certain
Indian birthrights as described in 18 U.S.C. 208(b)(4).
    (1) Regulatory exemptions. Under 18 U.S.C. 208(b)(2), regulatory
exemptions of general applicability have been issued by the Office of
Government Ethics, based on its determination that particular interests
are too remote or too inconsequential to affect the integrity of the
services of employees to whom those exemptions apply. See the
regulations in subpart B of part 2640 of this chapter, which supersede
any preexisting agency regulatory exemptions.
    (2) Individual waivers. An individual waiver enabling the employee
to participate in one or more particular matters may be issued under 18
U.S.C. 208(b)(1) if, in advance of the employee's participation:
    (i) The employee:
    (A) Advises the Government official responsible for the employee's
appointment (or other Government official to whom authority to issue
such a waiver for the employee has been delegated) about the nature and
circumstances of the particular matter or matters; and
    (B) Makes full disclosure to such official of the nature and extent
of the disqualifying financial interest; and
    (ii) Such official determines, in writing, that the employee's
financial interest in the particular matter or matters is not so
substantial as to be deemed likely to affect the integrity of the
services which the Government may expect from such employee. See also
subpart C of part 2640 of this chapter, for additional guidance.
    (3) Federal advisory committee member waivers. An individual waiver
may be issued under 18 U.S.C. 208(b)(3) to a special Government employee
serving on, or under consideration for appointment to, an advisory
committee within the meaning of the Federal Advisory Committee Act if
the Government official responsible for the employee's appointment (or
other Government official to whom authority to issue such a waiver for
the employee has been delegated):
    (i) Reviews the financial disclosure report filed by the special
Government employee pursuant to the Ethics in Government Act of 1978;
and
    (ii) Certifies in writing that the need for the individual's
services outweighs the potential for a conflict of interest created by
the otherwise disqualifying financial interest. See also subpart C of
part 2640 of this chapter, for additional guidance.
    (4) Consultation and notification regarding waivers. When
practicable, an official is required to consult formally or informally
with the Office of Government Ethics prior to granting a waiver referred
to in paragraph (d)(2) or (3) of this section. A copy of each such
waiver is to be forwarded to the Director of the Office of Government
Ethics.
    (e) Divestiture of a disqualifying financial interest. Upon sale or
other divestiture of the asset or other interest that causes his disqualification  
from participation in a particular matter,
18 U.S.C. 208(a) and paragraph (c) of this section will no longer
prohibit the employee's participation in the matter.
    (1) Voluntary divestiture. An employee who would otherwise be
disqualified from participation in a particular matter may voluntarily
sell or otherwise divest himself of the interest that causes the
disqualification.
    (2) Directed divestiture. An employee may be required to sell or
otherwise divest himself of the disqualifying financial interest if his
continued holding of that interest is prohibited by statute or by agency
supplemental regulation issued in accordance with Sec.  2635.403(a), or
if the agency determines in accordance with Sec.  2635.403(b) that a
substantial conflict exists between the financial interest and the
employee's duties or accomplishment of the agency's mission.
    (3) Eligibility for special tax treatment. An employee who is
directed to divest an interest may be eligible to defer the tax
consequences of divestiture under subpart J of part 2634 of this
chapter. An employee who divests before obtaining a certificate of
divestiture will not be eligible for this special tax treatment.
    (f) Official duties that give rise to potential conflicts. Where an
employee's official duties create a substantial likelihood that the
employee may be assigned to a particular matter from which he is
disqualified, the employee should advise his supervisor or other person
responsible for his assignments of that potential so that conflicting
assignments can be avoided, consistent with the agency's needs.

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48747, Sept. 17, 1997]


 

3. Misuse of Time

Use of official time.

    (a) Use of an employee's own time. Unless authorized in accordance
with law or regulations to use such time for other purposes, an employee
shall use official time in an honest effort to perform official duties.
An employee not under a leave system, including a Presidential appointee
exempted under 5 U.S.C. 6301(2), has an obligation to expend an honest
effort and a reasonable proportion of his time in the performance of
official duties.

    Example 1: An employee of the Social Security Administration may use
official time to engage in certain representational activities on behalf
of the employee union of which she is a member. Under 5 U.S.C. 7131,
this is a proper use of her official time even though it does not
involve performance of her assigned duties as a disability claims
examiner.
    Example 2: A pharmacist employed by the Department of Veterans
Affairs has been granted excused absence to participate as a speaker in
a conference on drug abuse sponsored by the professional association to
which he belongs. Although excused absence granted by an agency in
accordance with guidance in chapter 630 of the Federal Personnel Manual
allows an employee to be absent from his official duties without charge
to his annual leave account, such absence is not on official time.

    (b) Use of a subordinate's time. An employee shall not encourage,
direct, coerce, or request a subordinate to use official time to perform
activities other than those required in the performance of official
duties or authorized in accordance with law or regulation.

    Example 1: An employee of the Department of Housing and Urban
Development may not ask his secretary to type his personal
correspondence during duty hours. Further, directing or coercing a
subordinate to perform such activities during nonduty hours constitutes
an improper use of public office for private gain in violation of Sec. 
2635.702(a). Where the arrangement is entirely voluntary and appropriate
compensation is paid, the secretary may type the correspondence at home
on her own time. Where the compensation is not adequate, however, the
arrangement would involve a gift to the superior in violation of the
standards in subpart C of this part.



4. Outside Activities

Subpart H_Outside Activities
 
Sec.  2635.802  Conflicting outside employment and activities.

    An employee shall not engage in outside employment or any other
outside activity that conflicts with his official duties. An activity
conflicts with an employee's official duties:
    (a) If it is prohibited by statute or by an agency supplemental
regulation; or
    (b) If, under the standards set forth in Sec. Sec.  2635.402 and
2635.502, it would require the employee's disqualification from matters
so central or critical to the performance of his official duties that
the employee's ability to perform the duties of his position would be
materially impaired.
    Employees are cautioned that even though an outside activity may not
be prohibited under this section, it may violate other principles or
standards set forth in this part or require the employee to disqualify
himself from participation in certain particular matters under either
subpart D or subpart E of this part.

    Example 1: An employee of the Environmental Protection Agency has
just been promoted. His principal duty in his new position is to write
regulations relating to the disposal of hazardous waste. The employee
may not continue to serve as president of a nonprofit environmental
organization that routinely submits comments on such regulations. His
service as an officer would require his disqualification from duties
critical to the performance of his official duties on a basis so
frequent as to materially impair his ability to perform the duties of
his position.
    Example 2: An employee of the Occupational Safety and Health
Administration who was and is expected again to be instrumental in
formulating new OSHA safety standards applicable to manufacturers that
use chemical solvents has been offered a consulting contract to provide
advice to an affected company in restructuring its manufacturing
operations to comply with the OSHA standards. The employee should not
enter into the consulting arrangement even though he is not currently
working on OSHA standards affecting this industry and his consulting
contract can be expected to be completed before he again works on such
standards. Even though the consulting arrangement would not be a
conflicting activity within the meaning of Sec.  2635.802, it would
create an appearance that the employee had used his official position to
obtain the compensated outside business opportunity and it would create
the further appearance of using his public office for the private gain
of the manufacturer.

5. General Standards

TEST