In 1989, the President’s Commission on Federal Ethics Law Reform recommended that individual agency standards of conduct be replaced with a single regulation applicable to all employees of the executive branch. Acting upon that recommendation, President Bush signed Executive Order 12674 on April 12, 1989. That Executive Order (as modified by Executive Order 12731) set out fourteen basic principles of ethical conduct for executive branch personnel and directed OGE to establish a single, comprehensive, and clear set of executive branch standards of ethical conduct. OGE published the Standards of Ethical Conduct for Employees of the Executive Branch on August 7, 1992. The regulation became effective on February 3, 1993, and was codified in 5 C.F.R. part 2635. Part 2635 has been amended several times. Review the rulemaking history of 5 C.F.R. part 2635.
Note: Some agencies have published agency supplemental regulations that modify or supplement 5 C.F.R. part 2635.
Subpart A establishes the framework for the rest of the regulation. It includes definitions, provides authority for supplementation of the regulation when necessary by individual agencies, and encourages employees to seek advice from agency ethics officials. It also:
Subpart B prohibits employees from soliciting or accepting gifts from prohibited sources or gifts given because of their official position. The term “prohibited source” includes anyone seeking business with or official action by an employee’s agency and anyone substantially affected by the performance of the employee’s duties. For example, a company bidding for an agency contract or a person seeking an agency grant would be a prohibited source of gifts to employees of that agency.
The term “gift” is defined to include nearly anything of market value. However, it does not include items that clearly are not gifts, such as publicly available discounts and commercial loans and it does not include certain inconsequential items, such as coffee, donuts, greeting cards, and certificates.
There are several exceptions to the prohibitions against gifts from outside sources. For example, with some limitations, employees may accept:
The subpart also contains guidance on returning or paying for gifts that cannot be accepted.
Subpart C prohibits employees from:
The following are among the exceptions to these prohibitions:
Subpart D contains two provisions designed to deal with financial interests that conflict with employees’ official duties.
The first provision, entitled “Disqualifying financial interests,” prohibits an employee from participating in an official government capacity in a matter in which he has a financial interest or in which his spouse, minor child, employer, or any one of several other specified persons has a financial interest. For example, an agency purchasing agent could not place an agency order for computer software with a company owned by his wife. The provision includes alternatives to nonparticipation, which may involve selling or giving up the conflicting interest or obtaining a statutory waiver that will permit the employee to continue to perform specific official duties.
The second provision, entitled “Prohibited financial interests,” contains authority by which agencies may prohibit employee from acquiring or retaining certain financial interests.
Employees required by Subpart D to sell financial interests may be eligible to defer the tax consequences of that divestiture.
There may be circumstances other than those covered by Subpart D in which employees should not perform official duties in order to avoid an appearance of loss of impartiality. Subpart E contains two disqualification provisions addressing those appearance issues.
The first provision, entitle “Personal and business relationships,” states that employees should obtain specific authorization before participating in certain Government matters where their impartiality is likely to be questioned. The matters specifically covered by this standard include those:
There are procedures by which employees may be authorized to participate in such matters when it serves the employing agency’s interests. The process set out in Subpart E should be used to address any matter in which an employee’s impartiality is likely to be questioned.
The second provision, entitled “Extraordinary payments from former employers,” restricts employees’ participation in certain matters involving former employers. If a former employer gave an employee an “extraordinary payment” in excess of $10,000 prior to entering Federal service, it bars the employee from participating for two years in matters in which that former employer is a party or represents a party. A $25,000 payment voted on an ad hoc basis by a board of directors would be an “extraordinary payment.” A routine severance payment made under an established employee benefit plan would not.
Subpart F prohibits an employee from participating in their official capacities in particular matters that have a direct and predictable effect on the financial interests of person with whom they are “seeking employment” or with whom they have an arrangement concerning future employment.
The term “seeking employment” encompasses actual employment negotiations as well as more preliminary efforts to obtain employment, such as sending an unsolicited resume. It does not include:
An employee generally continues to be “seeking employment” until the employee or the prospective employer rejects the possibility of employment and all discussions end. However, an employee is no longer “seeking employment” with the recipient of an unsolicited resume after two months have passed with no response.
Subpart G contains four provisions designed to ensure that employee do not misuse their official positions. These include:
Subpart H contains provisions governing employees’ involvement in outside activities including outside employment. These provisions are in addition to the provisions set out in other parts of the regulation. The provisions in Subpart H include:
Subpart I lists references to other statutes which relate to employee conduct.