Complete Home & Office Legal Guide/Complete Home and Office Legal Guide (Chestnut) (1993).ISO/stat/fed/cfr2636.asc

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PART 2636 -- LIMITATIONS ON OUTSIDE EMPLOYMENT AND PROHIBITION OF
HONORARIA; CONFIDENTIAL REPORTING OF PAYMENTS TO CHARITIES IN
LIEU OF HONORARIA

Subpart A -- General Provisions

Sec.

2636.101 Purpose.

2636.102 Definitions.

2636.103 Advisory opinions.

2636.104 Civil, disciplinary and other action.

Subpart B -- The Honorarium Prohibition; Confidential Reporting
of Payments to Charities in Lieu of Honoraria

2636.201 General Standard.

2636.202 Relationship to other laws and regulations.

2636.203 Definitions.

2636.204 Payments to charitable organizations in lieu of
honoraria.

2636.205 Reporting payments to charitable organizations in lieu
of honoraria.


Subpart C -- Outside Earned Income Limitation and Employment and
Affiliation Restrictions Applicable to Certain Noncareer
Employees

2636.301 General standards.

2636.302 Relationship to other laws and regulations.

2636.303 Definitions.

2636.304 The 15 percent limitation on outside earned income.

2636.305 Compensation and other restrictions relating to
professions involving a fiduciary relationship.

2636.306 Compensation restriction applicable to service as an
officer or member of a board.

2636.307 Requirement for advance authorization to engage in
teaching for compensation.

 Authority: 5 U.S.C. App. (Ethics in Government Act of

1978, sections 102(a)(1)(A), 402, 404 and 501 - 505); 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.

Source: 56 FR 1723, Jan. 17, 1991, unless otherwise noted.

Subpart A -- General Provisions

2636.101 Purpose.

 This part is issued under authority contained in titles
II and VI of the Ethics Reform Act of 1989 (Pub. L. 101 - 194, as
amended), amending the Ethics in Government Act of 1978, and
contains regulations that implement the following:

 (a) The prohibition at 5 U.S.C. app. 501(b) against
receipt of honoraria and the provisions of 5 U.S.C. app. 501(c)
whereby payments may be made to charitable organizations in lieu
of honoraria;

 (b) The confidential reporting requirement at 5 U.S.C.
app.  102(a)(1)(A) applicable to payments made to charitable
organizations in lieu of honoraria; and

 (c) The 15 percent outside earned income limitation at 5
U.S.C.  app. 501(a) and the limitations at 5 U.S.C. app. 502 on
outside employment and affiliation applicable to certain
noncareer employees.

2636.102 Definitions.

 The definitions listed below are of general applicability
to this part. Additional definitions of narrower applicability
appear in the subparts or sections of subparts to which they
apply. For purposes of this part:

 (a) Agency ethics official refers to the designated agency
ethics official and to any deputy ethics official described in
2638.204 of this subchapter to whom authority to issue advisory
opinions under 2636.103 of this part or to receive and review
reports of honoraria recipients under 2636.204 of this part has
been delegated by the designated agency ethics official.

 (b) Designated agency ethics official refers to the
official described in 2638.201 of this subchapter.

 (c) Employee means any officer or employee of the
executive branch, other than a special Government employee as
defined in 18 U.S.C. 202. It includes officers but not enlisted
members of the uniformed services as defined in 5 U.S.C. 2101(3).
It does not include the President or Vice President.

 (d) Executive branch includes each executive agency as
defined in 5 U.S.C. 105 and any other entity or administrative
unit in the executive branch. However, it does not include any
agency that is defined by 5 U.S.C.  app. 109(11) as within the
legislative branch.

 (e) The terms he, his, and him include ``she,'' ``hers''
and ``her.''
2636.103 Advisory opinions.

 (a) Request for an advisory opinion. (1) An employee may
request an advisory opinion from an agency ethics official as to
whether specific conduct which has not yet occurred would violate
any provision contained in this part.

 (2) An advisory opinion may not be obtained for the
purpose of establishing:

 (i) Whether a particular entity qualifies as a charitable
organization to which an honorarium may be paid pursuant to
2636.204 of this part; or

 (ii) Whether a noncareer employee who is subject to the
restrictions in subpart C of this part may receive compensation
for teaching.  An advisory opinion issued under this section may
not be substituted for the advance written approval required by
2636.307 of this part.

 (3) The employee's request for an advisory opinion shall
be submitted in writing, shall be dated and signed, and shall
include all information reasonably available to the employee that
is relevant to the inquiry. Where, in the opinion of the agency
ethics official, complete information has not been provided, that
official may request the employee to furnish additional
information necessary to issue an opinion.

 (b) Issuance of advisory opinion. As soon as practicable
after receipt of all necessary information, the agency ethics
official shall issue a written opinion as to whether the conduct
in issue would violate any provision contained in this part.
Where conduct which would not violate this part would violate
another statute relating to conflicts of interest or applicable
standards of conduct, the advisory opinion shall so state and
shall caution the employee against engaging in the conduct.

 (1) For the purpose of issuing an advisory opinion, the
agency ethics official may request additional information from
agency sources, including the requesting employee's supervisor,
and may rely upon the accuracy of information furnished by the
requester or any agency source unless he has reason to believe
that the information is fraudulent, misleading or otherwise
incorrect.

 (2) A copy of the request and advisory opinion shall be
retained for a period of 6 years.

 (c) Good faith reliance on an advisory opinion. An
employee who engages in conduct in good faith reliance upon an
advisory opinion issued to him under this section shall not be
subject to civil or disciplinary action for having violated this
part. Where an employee engages in conduct in good faith reliance
upon an advisory opinion issued by an ethics official of his
agency to another, neither the Office of Government Ethics nor
the employing agency shall initiate civil or disciplinary action
under this part for conduct that is indistinguishable in all
material aspects from the conduct described in the advisory
opinion. However, an advisory opinion issued under this section
shall not insulate the employee from other civil or disciplinary
action if his conduct violates any other laws, rule, regulation
or lawful management policy or directive. Where an employee has
actual knowledge or reason to believe that the opinion is based
on fraudulent, misleading, or otherwise incorrect information,
the employee's reliance on the opinion will not be deemed to be
in good faith.

 (d) Revision of an ethics opinion. Nothing in this section
prohibits an agency ethics official from revising an ethics
opinion on a prospective basis where he determines that the
ethics opinion previously issued is incorrect, either as a matter
of law or because it is based on erroneous information.

2636.104 Civil, disciplinary and other action.

 (a) Civil action. Except when the employee engages in
conduct in good faith reliance upon an advisory opinion issued
under 2636.103 of this subpart, an employee who accepts an
honorarium or engages in any other conduct in violation of the
prohibitions, limitations and restrictions contained in this part
may be subject to civil action under 5 U.S.C. app.  504(a) and a
civil penalty of not more than $10,000 or the amount of
compensation the individual received for the prohibited conduct,
whichever is greater. Knowing and willful failure to file the
report required by 2636.205 of this part or falsification of
information thereon may subject an employee to a civil penalty of
not more than $10,000 under 5 U.S.C. app.  104(a).

 (b) Disciplinary and corrective action. An agency may
initiate disciplinary or corrective action against an employee
who violates any provision of this part, which may be in addition
to any civil penalty prescribed by law. When an employee engages
in conduct in good faith reliance upon an advisory opinion issued
under 2636.103 of this subpart, an agency may not initiate
disciplinary or corrective action for violation of this part.
Disciplinary action includes reprimand, suspension, demotion and
removal. Corrective action includes any action necessary to
remedy a past violation or prevent a continuing violation of this
part, including but not limited to restitution or termination of
an activity. It is the responsibility of the employing agency to
initiate disciplinary or corrective action in appropriate cases.
However, the Director of the Office of Government Ethics may
order corrective action or recommend disciplinary action under
the procedures at part 2638 of this subchapter. The imposition of
disciplinary action is at the discretion of the employing agency.

 (c) Late Filing Fee. An employee may be assessed a late
filing fee of $200 under 5 U.S.C. app. 104(d) for any report of
payments to charitable organizations in lieu of honoraria
required by 2636.205 of this part that is filed more than 30 days
after the date the report is due.

 (d) Criminal penalties. An employee who knowingly and
willfully falsifies information on a report of payments to
charitable organizations in lieu of honoraria required by
2636.205 of this part may be subject to criminal prosecution and
sentencing under 18 U.S.C. 1001 and 3571.

Subpart B -- The Honorarium Prohibition; Confidential Reporting
of Payments to Charities in Lieu of Honoraria
2636.201 General standard.

 An individual may not receive any honorarium while that
individual is an employee.

2636.202 Relationship to other laws and regulations.

 The honorarium prohibition described in this subpart is
in addition to any restriction on appearances, speaking or
writing or the receipt of compensation therefor to which an
employee is subject under applicable standards of conduct or by
reason of any statute or regulation relating to conflicts of
interests. Even though compensation for an activity is not
prohibited by this subpart, an employee should accept
compensation, including travel expenses, or engage in the
activity for which compensation is offered, only after
determining that it is not prohibited by the following:

 (a) An employee is prohibited by criminal statute and by
the standards of conduct at part 735 of this title and agency
implementing regulations from accepting compensation for an
appearance or speech made or an article written in his official
capacity or as part of his official duties. Unless specifically
authorized by a statute, such as 5 U.S.C. 4111, 5 U.S.C. 7342, or
31 U.S.C. 1353, this prohibition applies to the acceptance of
travel expenses paid other than by the United States Government.

 (b) An employee is prohibited by the standards of conduct
from receiving compensation, including travel expenses, for
speaking or writing on subject matter that focuses specifically
on his official duties or on the responsibilities, policies and
programs of his employing agency.

 (c) As described in subpart C of this part, certain
noncareer employees are subject to limitations on their receipt
of outside earned income and may not engage in compensated
teaching activities without advance approval under 2636.307 of
that subpart.

2636.203 Definitions.

 For purposes of this subpart:

 (a) Honorarium means a payment of money or anything of
value for an appearance, speech or article. The term does not
include:

 (1) Items that may be accepted under applicable standards
of conduct gift regulations if they were offered by a prohibited
source;

 (2) Meals or other incidents of attendance, such as waiver
of attendance fees or course materials furnished as part of the
event at which an appearance or speech is made;

 (3) Copies of publication containing articles, reprints of
articles, tapes of appearances or speeches, and similar items
that provide a record of the appearance, speech or article;

 (4) Actual and necessary travel expenses for the employee
and one relative incurred in connection with an appearance or
speech or the writing or publication of an article. Such travel
expenses, when paid, reimbursed or provided in kind by another,
shall not be counted as part of an honorarium.  Where such
expenses are not paid or reimbursed, the amount of an honorarium
shall be determined by subtracting the actual and necessary
travel expenses incurred in connection with the appearance or
speech or the writing or publication of the article;

 (5) Actual expenses in the nature of typing, editing and
reproduction costs incurred in connection with the making of an
appearance or speech or the writing or publication of an article,
when paid or reimbursed by another;

 (6) Compensation for goods or services other than
appearing, speaking or writing, even though making an appearance
or speech or writing an article may be an incidental task
associated with provision of the goods or services;

 (7) Salary, wages and other compensation pursuant to an
employer's usual employee compensation plan when paid by the
employer for services on a continuing basis that involve
appearing, speaking or writing. For these purposes, the term
``employment'' refers to services rendered in the context of an
employer-employee relationship. It does not include any
arrangement entered into by the employee or another as an
independent contractor or with an agent, speakers bureau or
similar entity that facilitates appearances or speaking or
writing opportunities;

 (8) Compensation for teaching a course involving multiple
presentations by the employee offered as part of a program of
education or training sponsored and funded by the Federal
government or by a state or local government;

 (9) Compensation for teaching a course involving multiple
presentations by the employee offered as part of the regularly
established curriculum of an institution of higher education as
defined at 20 U.S.C.  1141(a);

 (10) An award for artistic, literary or oratorical
achievement made on a competitive basis under established
criteria;

 (11) Witness fees credited under 5 U.S.C. 5515 against
compensation payable by the United States; or

 (12) Compensation received for any appearance or speech
made or article accepted for publication prior to January 1,
1991, or for any appearance or speech made or article written in
satisfaction of the employee's obligation under a contract
entered into prior to January 1, 1991.

 (13) Payment for a series of three or more different but
related appearances, speeches or articles, provided that the
subject matter is not directly related to the employee's official
duties and that the payment is not made because of the employee's
status with the Government.

 Example 1. An employee of the Department of Agriculture
has entered into a contract to develop a complex software package
for a private company.  The contract, which is for a single fee
for all work to be provided under the contract, requires the
employee to provide 2 hours of oral instruction on use of the
program. He may accept the entire fee for performance under the
contract. No part of the fee is an honorarium since the 2 hours
of instruction is only incidental to his development and delivery
of the software package. He could not, however, receive a fee
specifically for 2 hours of oral instruction on the use of a
program he had earlier provided under a contract that required
only his development of a program.

 Example 2. A management trainee employed by the Bureau of
Indian Affairs is employed two nights a week as a reporter on a
local newspaper. He may receive a salary for his continuing
employment even though it is in a profession characterized by the
writing of articles. He may not, however, accept compensation for
newspaper or magazine articles written on a freelance basis or
pursuant to a contract to furnish 5 articles over a one year
period.

 Example 3. An economist employed by the Department of the
Treasury has entered into an agreement with a speakers bureau to
give 10 unrelated after-dinner speeches to be arranged by the
speakers bureau with various organizations over a six-month
period. The employee may not receive the contract fee of $10,000.
The 10 speeches do not constitute a series of speeches, but 10
individual speeches.

 Example 4. An attorney employed by the Department of the
Air Force may not accept compensation for teaching a two-day
seminar on Federal procurement law presented by a publishing
company under the sponsorship of an accredited law school. He
may, however, accept compensation for teaching procurement law as
part of the law school's regular curriculum of courses.

 Example 5. An air traffic controller employed by the
Federal Aviation Administration has entered into a contract with
a magazine publisher to write an article on sheep ranching in New
Zealand. In addition to a fee of $500 for the article, the
contract provides that the publisher will provide expenses for
the employee to travel to New Zealand to conduct research on
sheep ranching. The employee may accept the travel expenses, but
not the $500 fee. In lieu of the $500 fee, he could not accept
expenses to travel to and stay for a weekend in Sydney, Australia
after the completion of his research.

 Example 6. An employee of the National Aeronautics and
Space Administration may accept compensation for a series of
three articles on white collar crime she has agreed to write for
a local newspaper. While she could not accept compensation for
just two articles on white collar crime, she could accept a
national journalism award for two articles she had written on an
uncompensated basis.

 Example 7. A physicist employed by the Department of
Energy to conduct research on laser technology may not accept a
contract fee for a series of three lectures on lasers where one
of the lectures is to focus on the research he is conducting for
DOE.

 (b) Appearance means attendance at a public or private
conference, convention, meeting, hearing, event or other
gathering and the incidental conversation or remarks made at that
time. Unless the opportunity was extended to the employee wholly
or in part because of his official position, the term does not
include performances using an artistic, athletic or other such
skill or talent or primarily for the purpose of demonstration or
display.

 Example 1. Because the fee is for an ``appearance'', an
employee of the Securities and Exchange Commission who was
responsible for a major securities fraud investigation may not
accept a fee for standing in the reception line at the premier of
a movie entitled ``Junk Bond Scandal.''

 Example 2. A staff member of the National Security
Council does not make an ``appearance'' by playing the piano and
singing at a wedding reception and may accept a fee for his
performance.

 Example 3. An employee of the Forest Service does not
make an ``appearance'' by modeling in a fashion show and may
accept a modeling fee.

 (c) Speech means an address, oration, or other form of
oral presentation, whether made in person, recorded or broadcast.
Unless the opportunity was extended to the employee wholly or in
part because of his official position, the term does not include
the recitation of scripted material, as for a live or recorded
theatrical production, or any oral presentation that is an
incident of any performance that is excluded from the definition
of an appearance in paragraph (b) of this section. It does not
include the conduct of worship services or religious ceremonies.

 Example 1. An attorney employed by the Department of
Justice may not receive a $50 honorarium for her informal talk to
a local gardening club on how to design and grow a Victorian rose
garden. Her talk, though informal, is a ``speech.''

 Example 2. A nutritionist employed by the National
Institutes of Health who is a stand-up comedian by avocation may
accept a fee for performing a comedy routine at a dinner theater.
His oral remarks do not constitute a speech because they are an
incident of his performance using his talent as a comedian. He
could not, however, accept compensation for a speech simply
because he tells an introductory joke or otherwise amuses his
audience.

 Example 3. A statistician employed by the Department of
Labor who is a lay minister may accept a gratuitous payment of
$50 for performing a funeral service since it involves his
conduct of a religious ceremony.  However, he may not accept a
payment for a talk on theology given to other ministers, for
offering a prayer at the opening of a convention or for
delivering a sermon during a worship service conducted by another
minister.  He could accept payment for his own conduct of worship
services.

 Example 4. A price analyst employed by the Defense Fuel
Supply Agency may accept a fee of $100 for writing a speech to be
delivered by another. The term ``speech'' includes only oral
presentations and does not include writing a speech to be
delivered by someone other than the employee.  Moreover, the text
of a speech is not an article.

 Example 5. The stage portrayal of Hamlet by an employee
of the Department of State does not involve the making of a
``speech.'' He may be paid for his role in the Shakespearean
production.

 (d) Article means a writing, other than a book or a
chapter of a book, which has been or is intended to be published
or republished in a journal, newspaper, magazine or similar
collection of writings. The term does not include works of
fiction, poetry, lyrics, or script.

 Example 1. An employee of the Office of Personnel
Management who has reviewed a new book about the New York Yankees
may not accept a $50 honorarium from the publisher of a sports
magazine. The book review is an ``article.''

 Example 2. The lyrics and music for a college song
written by two Department of the Navy attorneys does not
constitute an ``article.'' The attorneys could each accept a
gratuitous payment of $50 if the song were selected by their alma
mater for publication in its compendium of college songs.

 Example 3. An engineer employed by the National
Aeronautics and Space Administration has entered into a contract
with an association of electrical component manufacturers to
proofread and edit articles submitted by members of the
association for publication in its monthly newsletter. The
employee may accept the contract fee since the compensation is
not for the writing of articles.

 Example 4. An accountant employed by the Federal Deposit
Insurance Corporation may accept compensation for writing a
chapter of a textbook on corporate accounting. A chapter of a
book is not an ``article.''

 (e) Receive means that there is actual or constructive
receipt of the honorarium by the employee so that the employee
has a right to exercise dominion and control over the honorarium
and direct its subsequent use. For purposes of this subpart, an
honorarium is received while an employee if it is for an
appearance or speech made or any article submitted for
publication by that individual while he was an employee. Except
when it is paid to a charitable organization in accordance with
2636.204 of this subpart, an honorarium is received by an
employee:

 (1) If it is paid to another person on

the basis of designation, recommendation or other specification
by the employee; or

 (2) If, with the employee's knowledge and acquiescence, it
is paid to his parent, sibling, spouse, child or dependent
relative.

 Example 1. At the suggestion of the Army officer who
authored an article selected for publication in a popular
magazine, the publisher paid the amount of its usual honorarium
to the officer's husband. The officer has ``received'' an
honorarium.

 Example 2. An employee of the Department of Housing and
Urban Development has been offered a $500 honorarium for a speech
to be given during the week before his scheduled date of
retirement from Federal service.  Since it is for a speech to be
made while he is an employee, he will have ``received'' the
offered honorarium while an employee even though actual payment
may not occur until after his retirement.

 (f) Charitable organization means an organization which is
qualified with respect to deductible charitable contributions
under 26 U.S.C.  170(c) because it is organized or operated
exclusively for religious, charitable, scientific, literary,
educational or another specified purpose.  It includes, but is
not limited to, an organization exempt from Federal taxation
under the authority of 26 U.S.C. 501(c)(3).

 (g) Travel expenses means the actual and necessary cost of
transportation, lodging and meals incurred while away from the
employee's residence or principal place of employment in
connection with an appearance, speech or article. Where the
lodgings and meals portion of travel expenses are paid or
reimbursed by another in the form of a per diem or subsistence
expense allowance, that allowance shall be treated as actual and
necessary travel expenses if the allowance is no more than that
customarily paid by the payor to its own officers or employees,
provided the employee in fact incurs costs for commercial meals
and lodgings on each day for which the allowance is received.

[56 FR 1723, Jan. 17, 1991, as amended at 57 FR 602, Jan. 8,
1992]

2636.204 Payment to charitable organizations in lieu of
honoraria.

 (a) Effect of payment to a charitable organization. An
honorarium which, but for this subpart, could be paid to an
employee but is paid instead on behalf of the employee to a
charitable organization is deemed not to be received by the
employee. An employee may suggest that an honorarium that he is
prohibited from receiving solely by application of this subpart
be paid in his name to a charitable organization. An honorarium
received and later donated to a charitable organization by the
employee does not qualify as a payment to a charitable
organization in lieu of an honorarium made in accordance with
this section.

 Note: An employee on whose behalf a payment in lieu of an
honorarium has been made to a charitable organization may not
take a tax deduction on account of the payment under any
provision of the Internal Revenue Code or under any tax law of a
State or political subdivision thereof.

 (b) Nonqualifying payments to charitable organizations. No
payment may be made to a charitable organization pursuant to this
section:

 (1) If the employee would be prohibited from receiving and
retaining the honorarium by any conflict of interest statute or
regulation or applicable standards of conduct other than this
subpart. Honoraria that the employee is prohibited from receiving
and retaining would include, for example, any honorarium that is
for:

 (i) An appearance or speech made or article written by the
employee in an official capacity or as part of his official
duties; or

 (ii) A speech or article, the subject matter of which
focuses specifically on agency responsibilities, policies or
programs.

 (2) In an amount in excess of $2,000 per appearance,
speech, or article; or

 (3) If the employee, the employee's parent, sibling,
spouse, child, or dependent relative derives any direct financial
benefit from the charitable organization that is separate from
and beyond any general benefit conferred by the organization's
activities.

 Example 1. An Assistant U.S. Attorney who has
successfully prosecuted an espionage case may not suggest that an
honorarium offered for his speech about the prosecution be given
to his law school. Because the topic of the speech relates to his
official duties, he is prohibited from accepting any compensation
by applicable standards of conduct. He could, however, suggest
that an honorarium offered for his speech on training sheepdogs,
be paid to his school.

 Example 2. A personnel specialist employed by the
Department of Labor whose spouse is employed by the Red Cross may
not suggest that an honorarium for his speech about his vacation
spent bicycling through China be donated in his name to the Red
Cross.

 Example 3. A claims examiner employed by the Department
of Veterans Affairs whose mother suffers from Parkinson's Disease
may suggest that an honorarium for her article on historic
preservation be donated to a charitable organization that funds
research seeking a cure for Parkinson's Disease. She may not
suggest, however, that it be donated to a charitable organization
that provides her mother with in-home nursing services.

2636.205 Reporting payments to charitable organizations in lieu
of honoraria.

 (a) Who must file. A current or former employee, other
than a new entrant, who is required to file a financial
disclosure report, either on a confidential or public basis,
shall at the same time file a confidential report of payments to
charitable organizations in lieu of honoraria if:

 (1) Payments in lieu of honoraria aggregating more than
$200 were made on his behalf by any one source to one or more
charitable organizations during the reporting period covered by
the financial disclosure statement; or

 (2) In the case of an individual filing a termination
report, there is an understanding between the reporting
individual and any other person that payments in lieu of
honoraria will be made on his behalf for an appearance or speech
made or article submitted for publication while the individual
was a Government employee which, together with any payments in
lieu of honoraria made by that source during the reporting
period, will aggregate more than $200.

This reporting requirement is in addition to any other
requirement to disclose on a public or confidential financial
disclosure report the source, date and amount of an honorarium
paid to a charitable organization on the employee's behalf. It
does not apply to any payment in lieu of an honorarium made to a
charitable organization on behalf of the current or former
employee's spouse or dependent child.

 (b) Where and when to file. The report required by this
section shall be filed with the agency ethics official by the
date the current or former employee is required to file a
confidential or public financial disclosure report. Any grant of
an extension to file a financial disclosure report shall
automatically extend the date for filing the report of payments
to charitable organizations in lieu of honoraria and the agency
ethics official may, for good cause shown by the employee, grant
a separate extension of the date for filing the report required
by this section. The total of all extensions for filing the
report required by this section shall not exceed 90 days.

 (c) Reporting period. The report of payments to charitable
organizations in lieu of honoraria shall cover the same period
that applies to the confidential or public financial disclosure
report the individual is required to file. For employees filing
annual financial disclosure reports, the reporting period is the
preceding calendar year or, if the employee commenced Government
service during that year, the portion of the preceding calendar
year beginning with the date the employee entered on duty. For
those filing termination reports, the reporting period is the
portion of the calendar year in which he terminated Government
service up to the date of termination and, if he has not yet
filed an annual financial disclosure report covering that period,
the preceding calendar year or other period required for the
annual report.

 (d) What to report. Each report shall be filed on the
standard form prescribed by the Office of Government Ethics and
made available through the General Services Administration. Each
report filed shall include the following information for each
payment to a charitable organization in lieu of an honorarium,
regardless of amount, made on the employee's behalf by any source
from whom such payments made during the reporting period
aggregate more than $200:

 (1) The date of the payment (if payment has been made);

 (2) The date of the appearance or speech for which the
honorarium was paid or, where the honorarium is for an article,
the date the article was submitted by the employee for
publication;

 (3) The name of the person or entity making the payment to
the charitable organization;

 (4) The name and the tax status of charitable purpose of
the recipient;

 (5) The subject matter of the speech or article or, where
the honorarium is for an appearance, the reason for the
appearance; and

 (6) The amount of the payment;

An individual filing a termination report who is reporting with
respect to payments which have not yet been made should write
``Not Applicable'' in the space provided for the date of payment
and should provide the remainder of the information required on
the basis of his best knowledge and belief as to payments which
he understands will be made to charitable organizations on his
behalf.

 (e) Effect of signing the form. By signing the form the
employee certifies that the information he has reported is true,
complete and correct to the best of his knowledge and that
neither he nor his parent, sibling, spouse, child or dependent
relative receives from the recipient charitable organization a
benefit that is separate and distinct from any general benefit
conferred by the organization's activities.

 (f) Review of reports. Within 60 days after receipt, the
agency ethics official shall review each report of payments to
charitable organizations in lieu of honoraria to determine that
the reporting requirements of this section have been met and that
each payment reported meets the standards at 2636.204 of this
subpart.

 (1) The agency ethics official need not audit the report
to ascertain whether the disclosures are correct; disclosures are
to be taken at face value unless there is a patent omission or
ambiguity or the official has independent knowledge of matters
outside the report.

 (2) If the agency ethics official determines that the
report is complete and that each payment is proper, he shall sign
and date the report.

 (3) If the agency ethics official determines that the form
is not complete, he shall request that the employee complete the
form by a specific date and annotate each addition or change with
the employee's signature and the date the annotation was made.
The 60 day period for review shall run from the date the
completed form is filed.

 (4) If the agency ethics official determines that
additional information is needed to determine whether a payment
to a charitable organization meets the standards at 2636.204 of
this subpart, he shall request that the employee furnish such
information by a specific date and shall date and append to the
report any information obtained in writing or annotate the report
to reflect any information obtained other than in writing and the
date it was furnished. The 60 day period for review shall run
from the date the additional information is furnished.

 (5) If the agency ethics official determines that the
employee has failed to file a report or a complete report or has
received an honorarium in violation of 2636.201 of this subpart
because a reported payment does not meet the standards at
2636.204 of this subpart, he shall give the individual written
notice of the deficiency and 10 days in which to submit a written
response and, therafter, shall refer the case for appropriate
action as described in 2636.104 of this subpart and annotate the
report to reflect that referral.

 (g) Filing of reports with the Office of Government
Ethics. On August 15 of each year, the designated agency ethics
official shall forward to the Office of Government Ethics all
reports reviewed within his agency during the preceding one-year
period.

 (h) Review of reports by the Office of Government Ethics.
Within 60 days after receiving the reports forwarded under
paragraph (g) of this section, reports of payments to charitable
organizations in lieu of honoraria filed by individuals whose
public financial disclosure reports are required to be filed with
the Director of the Office of Government shall be reviewed and
signed by the Director.

 (i) Retention of reports. Reports of payments to
charitable organizations in lieu of honoraria shall be retained
by the Office of Government Ethics for a period of 6 years.
Unless needed in an ongoing investigation, the reports shall be
destroyed after 6 years.

 (j) Confidentiality of reports. Reports of payments to
charitable organization in lieu of honoraria filed pursuant to
this section are not available to members of the public and are
to be treated with the confidentiality afforded confidential
financial disclosure reports.

[56 FR 1723, Jan. 17, 1991, as amended at 56 FR 21589, May 10,
1991; 56 FR 51319, Oct. 11, 1991]

Subpart C -- Outside Earned Income Limitation and Employment and
Affiliation Restrictions Applicable to Certain Noncareer
Employees

2636.301 General standards.

 A covered noncareer employee shall not:

 (a) Receive outside earned income in excess of the 15
percent limitation described in 2636.304 of this subpart;

 (b) Receive compensation or allow the use of his name in
violation of the restrictions relating to professions involving a
fiduciary relationship described in 2636.305 of this subpart;

 (c) Receive compensation for serving as an officer or
board member in violation of the restriction described in
2636.306 of this subpart; or

 (d) Receive compensation for teaching without having first
obtained advance authorization as required by 2636.307 of this
subpart.

2636.302 Relationship to other laws and regulations.

 The limitations and restrictions contained in this
section are in addition to any limitations and restrictions
imposed upon an employee by applicable standards of conduct or by
reason of any statute or regulation relating to conflicts of
interest. Even though conduct or the receipt of compensation is
not prohibited by this subpart, an employee should accept
compensation or engage in the activity for which compensation is
offered only after determining that it is otherwise permissible.
In particular, a covered noncareer employee should accept
compensation only after determining that its receipt does not
violate the following prohibitions:

 (a) A covered noncareer employee who is a Presidential
appointee to a full-time noncareer position is prohibited by
section 102 of Executive Order 12674, as amended, from receiving
any outside earned income for outside employment or any other
activity performed during that Presidential appointment.

 (b) An individual is prohibited from receiving any
honorarium while he is an employee. The honoraria prohibition,
described in subpart B of this part, applies to any compensation
for an appearance or speech made or article submitted for
publication while the individual is an employee.

2636.303 Definitions.

 For purposes of this section:

 (a) Covered noncareer employee means an employee, other
than a special Government employee as defined in 18 U.S.C. 202,
whose rate of basic pay is equal to or greater than the annual
rate of basic pay in effect for GS
- 16, step 1 of the General Schedule under 5 U.S.C. 5332 and who
is:

 (1) Appointed by the President to a position described in
the Executive Schedule, 5 U.S.C. 5312 through 5317, or to a
position that, by statute or as a matter of practice, is filled
by Presidential appointment, other than:

 (i) A position within the uniformed services; or

 (ii) A position within the foreign service below the
level of Assistant Secretary or Chief of Mission;

 (2) A noncareer member of the Senior Executive Service or
of another SES-type system, such as the Senior Foreign Service;

 (3) Appointed to a Schedule C position or to a position
under an agency-specific statute that establishes appointment
criteria essentially the same as those set forth in 213.3301 of
this title for Schedule C positions; or

 (4) Appointed to a noncareer executive assignment position
or to a position under an agency-specific statute that
establishes appointment criteria essentially the same as those
set forth in 305.601 of this title for noncareer executive
assignment positions.

For purposes of applying this definition to an individual who
holds a General Schedule or other position that provides several
rates of pay or steps per grade, his rate of basic pay shall be
the rate of pay for the lowest step of the grade at which he is
employed.

 Example 1. A Schedule C appointee to a position with the
United States Information Agency who holds a GS - 15 position and
who is compensated at the rate for GS - 15, Step 9 is not a
covered noncareer employee even though the pay he receives in a
calendar year exceeds the annual pay for GS
- 16, Step 1. Notwithstanding that he is compensated at Step 9,
the basic rate of pay for the GS - 15 position he holds is the
rate in effect for GS - 15, Step 1 of the General Schedule, which
is lower than the rate for GS - 16, Step 1.

 Example 2. An employee of the Environmental Protection
Agency who has been a career GS - 15 employee for 10 years and
who is offered a non-career SES position with the Federal
Aviation Administration will, if he accepts the offer, become a
covered noncareer employee by reason of that appointment,
regardless of his former status.

 Example 3. A Department of Justice employee who holds a
Schedule A appointment is not a covered noncareer employee even
though he does not have competitive status within the meaning of
212.301 of this title.

 (b) Outside earned income and compensation both mean
wages, salaries, honoraria, commissions, professional fees and
any other form of compensation for services other than salary,
benefits and allowances paid by the United States Government.
Neither term includes:

 (1) Items that may be accepted under applicable standards
of conduct gift regulations if they were offered by a prohibited
source;

 (2) Income attributable to service with the military
reserves or national guard;

 (3) Income from pensions and other continuing benefits
attributable to previous employment or services;

 (4) Income from investment activities where the
individual's services are not a material factor in the production
of income;

 (5) Copyright royalties, fees, and their functional
equivalent, from the use or sale of copyright, patent and similar
forms of intellectual property rights, when received from
established users or purchasers of those rights;

 (6) Actual and necessary expenses incurred by the employee
in connection with an outside activity. Where such expenses are
paid or reimbursed by another person, the amount of any such
payment shall not be counted as compensation or outside earned
income. Where such expenses are not paid or reimbursed, the
amount of compensation or earned income shall be determined by
subtracting the actual and necessary expenses incurred by the
employee from any payment received for the activity;

 (7) An honorarium paid to a charitable organization
pursuant to 2636.204 of this part; or

 (8) Compensation for:

 (i) Services rendered prior to January 1, 1991, or prior
to becoming a covered noncareer employee;

 (ii) Services rendered in satisfaction of a covered
noncareer employee's obligation under a contract entered into
prior to January 1, 1991; or
 (iii) Services which the covered noncareer employee first
undertook to provide prior to January 1, 1991, where the
standards of the applicable profession require the employee to
complete the case or other undertaking.

 Example 1. A covered noncareer employee is a limited
partner in a partnership that invests in commercial real estate.
Because he does not take an active role in the management of the
partnership, his share of the partnership income is neither
``outside earned income'' nor ``compensation.''

 Example 2. A covered noncareer employee of the Civil
Rights Commission serves without compensation as a member of the
Board of Visitors for a university. The roundtrip airfare and
hotel expenses paid by the university to permit him to attend
quarterly meetings of the Board are neither ``outside earned
income'' or ``compensation.''

 Example 3. Where a covered noncareer employee pays for
transcripts of a hearing in which he is providing pro bono legal
representation, reimbursements for those expenses by a legal aid
organization are neither ``outside earned income'' nor
``compensation.''

 Example 4. During the term of his appointment, a Deputy
Assistant Secretary of Labor enters into a contract to write a
book of fictional short stories. Royalties based on actual sales
of the book after publication are investment income attributable
to the property interest he retains in the book and, as such, are
neither ``outside earned income'' nor ``compensation.''

 (c) Receive means that the employee has the right to
exercise dominion and control over the compensation or outside
earned income and direct its subsequent use. Compensation or
outside earned income is received by an employee if it is for his
conduct and:

 (1) If it is paid to any other person on the basis of
designation, recommendaiton or other specification by the
employee; or

 (2) If, with the employee's knowledge and acquiescence, it
is paid to his parent, sibling, spouse, child or dependent
relative.

 Compensation that is prohibited by 2636.305 through
2636.307 of this subpart is received while an individual is an
employee if it is for conduct by him that occurs while an
employee, even though actual payment may be deferred until after
Federal employment has terminated. Payments made to charitable
organizations in lieu of honoraria under 2636.204 of this part
are not compensation or outside earned income and thus are not
received in violation of any of the limitations contained in his
subpart. However, other compensation or outside earned income
donated to a charitable organization is received by the employee.

2636.304 The 15 percent limitation on outside earned income.

 (a) Limitation applicable to individuals who are covered
noncareer employees on January 1 of any calendar year. A covered
noncareer employee may not, in any calendar year, receive outside
earned income attributable to that calendar year which exceeds 15
percent of the annual rate of basic pay for level II of the
Executive Schedule under 5 U.S.C. 5313, as in effect on January 1
of such calendar year. The effective date of a change in the rate
for level II of the Executive Schedule shall be the date on which
a new rate of basic pay for level II first becomes applicable to
any level II position.

 Note: Notwithstanding the 15 percent limitation described
in this section, a covered noncareer employee who is a
Presidential appointee to a full-time noncareer position is
prohibited by section 102 of Executive Order 12674, as amended,
from receiving any outside earned income for outside employment
or any other activity performed during that Presidential
appointment.

 Example 1. Notwithstanding that the compensation he will
receive would not exceed 15 percent of the rate for level II of
the Executive Schedule, a covered noncareer employee of the
Department of Energy may not receive any compensation for
teaching a university course unless he first receives the
authorization required by 2636.307 of this subpart.

 (b) Limitation applicable to individuals who become
covered noncareer employees after January 1 of any calendar year.
The outside earned income limitation that applies to an
individual who becomes a covered noncareer employee during a
calendar year shall be determined on a pro rata basis. His
outside earned income while so employed in that calendar year
shall not exceed 15 percent of the annual rate of basic pay for
level II of the Executive Schedule in effect on January 1 of the
calendar year divided by 365 and multiplied by the number of days
during that calendar year that he holds the covered noncareer
position.

 Example 1. A former college professor received an
appointment to a noncareer Senior Executive Service position on
November 1, 1991. The rate of basic pay in effect for Executive
Level II on January 1, 1991 was $125,100.  For the 61 day period
from November 1, 1991 through December 31, 1991, the amount of
outside income he may earn is limited to $3,129. That amount is
determined as follows:

 Step 1. The rate of basic pay for Executive Level II as
in effect on January 1 of that year ($125,100) is divided by 365.
That quotient is $342;

 Step 2. The dollar amount determined by Step 1 ($342) is
then multiplied by the 61 days the employee held the covered
noncareer position.  That product is $20,862;

 Step 3. The dollar amount determined by Step 2 ($20,862)
is multiplied by .15 or 15 percent. The product ($3,129) is the
maximum outside earned income the employee may have in the
particular year attributable to the period of his service in a
covered noncareer position.

 (c) Computation principle. For purposes of any computation
required by this section, any amount of $.50 or more shall be
rounded up to the next full dollar and any amount less than $.50
shall be rounded down to the next full dollar.

 (d) Year to which outside earned income is attributable.
Regardless of when it is paid, outside earned income is
attributable to the calendar year in which the services for which
it is paid were provided.

2636.305 Compensation and other restrictions relating to
professions involving a fiduciary relationship.

 (a) Applicable restrictions. A covered noncareer employee
shall not:

 (1) Receive compensation for:

 (i) Practicing a profession which involves a fiduciary
relationship; or

 (ii) Affiliating with or being employed to perform
professional duties by a firm, partnership, association,
corporation, or other entity which provides professional services
involving a fiduciary relationship; or

 (2) Permit his name to be used by any firm, partnership,
association, corporation, or other entity which provides
professional services involving a fiduciary relationship.

 Example 1. A covered noncareer employee of the White
House Office who is an attorney may not receive compensation for
drafting a will for her friend. She may, however, participate in
her bar association's pro bono program by providing free legal
services for the elderly, provided her participation in the
program is otherwise proper. For example, 18 U.S.C. 205 would
prohibit her from representing her pro bono client in a hearing
before the Social Security Administration.

 Example 2. An accountant named C.B. Debit who is offered
a covered noncareer appointment must terminate his partnership in
the accounting firm of Delight, Waterhose and Debit upon
appointment. Because his deceased father, J.R. Debit, was the
founding partner for whom the firm is named, the name Debit need
not be deleted from the firm's name. However, the name C.B.
Debit may not appear on the firm's letterhead after the
individual enters on duty as a covered noncareer employee.

 (b) Definitons. For purposes of this section:

 (1) Profession means a calling requiring specalized
knowledge and often long and intensive preparation including
instruction in skills and methods as well as in the scientific,
historical or scholarly principles underlying such skills and
methods. It is characteristic of a profession that those in the
profession, through force of organization or concerted opinion,
establish and maintain high standards of achievement and conduct,
and commit its practitioners to continued study of the field.
Consulting and advising with respect to subject matter that is
generally regarded as the province of practitioners of a
profession shall be considered a profession.

 (2) Profession which involves a fiduciary relationship
means a profession in which the nature of the services provided
causes the recipient of those services to place a substantial
degree of trust and confidence in the integrity, fidelity and
specalized knowledge of the practitioner. Such professions are
not limited to those whose practitioners are legally defined as
fiduciaries and include practitioners in such areas as law,
insurance, medicine, architecture, financial services and
accounting. A covered noncareer employee who is uncertain whether
a particular field of endeavor is a profession which involves a
fiduciary relationship may request an advisory opinion under
2636.103.

 Example 1. In view of the standards of the profession
which require a licensed real estate broker to act in the best
interests of his clients, the selling of real estate by a
licensed broker involves the practice of a profession involving a
fiduciary relationship.

 Example 2. A covered noncareer employee may receive the
customary fee for serving as the executor of his mother's estate,
provided he does not violate the applicable limitation on the
amount of outside earned income he may receive. Although the
executor of an estate has fiduciary obligations, serving as an
executor in these circumstances does not involve the practice of
a profession and, therefore, is not prohibited. He could not,
however, serve for compensation as attorney for the estate.

2636.306 Compensation restriction applicable to service as an
officer or member of a board.

 (a) Applicable restriction.  A covered noncareer employee
shall not receive compensation for serving as an officer or
member of the board of any association, corporation or other
entity. Nothing in this section prohibits uncompensated service
with any entity.

 (b) Definition. For purposes of this section, the phrase
``association, corporation or other entity'' is not limited to
for-profit entities, but includes nonprofit entities, such as
charitable organizations and professional associations, as well
as any unit of state or local government.

 Example 1. A covered noncareer employee of the
Environmental Protection Agency may not serve with compensation
on the board of directors of his sister's closely-held computer
software corporation.

 Example 2. A covered noncareer employee of the Department
of the Navy may serve without compensation as an officer of a
charitable organization that operates a hospice.

 Example 3. A covered noncareer employee of the Coast
Guard appointed to serve as a member of the board of education of
the county in which she is a resident may not receive
compensation for that service.

2636.307 Requirement for advance authorization to engage in
teaching for compensation.

 (a) Authorization requirement. A covered noncareer
employee may receive compensation for teaching only when
specifically authorized in advance by the designated agency
ethics official.

 (b) Definition. For purposes of this section ``teaching''
means any activity that involves oral presentation or personal
interaction, the primary function of which is to instruct or
otherwise impart knowledge or skill. It is not limited to
teaching that occurs in a formal setting, such as a classroom,
but extends to instruction on an individual basis or in an
informal setting.

 (c) Request for authorization. An employee may request
authorization to engage in compensated teaching activities by
forwarding a written request to the designated agency ethics
official. The request shall describe the employee's official
duties, the subject matter of the teaching activity, the entity
sponsoring the course, and the student, class or audience to be
taught. In addition, it shall set forth the terms of the
compensation arrangement and identify the source of the payment.
The request shall be accompanied by any contract or employment
agreement and any literature describing, publicizing or otherwise
promoting the class, classes or course.

 (d) Standard for authorization. Compensated teaching may
be approved by the designated agency ethics official only when:

 (1) The teaching will not interfere with the performance
of the employee's official duties or give rise to an appearance
that the teaching opportunity was extended to the employee
principally because of his official position;

 (2) The employee's receipt of compensation does not
violate any of the limitations and prohibitions on honoraria,
compensation or outside earned income contained in this part; and

 (3) Neither the teaching activity nor the employee's
receipt of compensation therefor will violate applicable
standards of conduct or any statute or regulation related to
conflicts of interests.

 (e) Determination and authorization. The determination by
the designated agency ethics official to grant or deny
authorization to engage in teaching for compensation shall be in
writing and shall be final. The authority of the designated
agency ethics official to authorize compensated teaching may not
be delegated to any person other than the alternate designated
agency ethics official described in 2638.202(b).