Proposed Revisions to the Public Financial Disclosure Gifts Waiver Provision

[Federal Register Volume 64, Number 92 (Thursday, May 13, 1999)]
[Proposed Rules]
[Pages 25849-25851]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12047]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 64, No. 92 / Thursday, May 13, 1999 / 
Proposed Rules

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OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2634

RIN 3209-AA00


Proposed Revisions to the Public Financial Disclosure Gifts 
Waiver Provision

AGENCY: Office of Government Ethics.

ACTION: Proposed rule amendments.

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SUMMARY: The Office of Government Ethics (OGE) is proposing to amend 
the regulation which authorizes the Director of OGE to grant a waiver 
of certain gift disclosure requirements for filers of the public 
financial disclosure report form, SF 278. The proposed amendments would 
permit the grant of a waiver, in appropriate cases, if the basis of the 
relationship between the grantor and grantee of a gift and the 
motivation behind a gift are personal. The proposed changes also would 
clarify that the cover letter requesting a waiver will be publicly 
available if the Director of OGE approves the waiver request, either in 
whole or in part. Additionally, the proposed amendments would expressly 
require that a description of the gift and its value be included in a 
waiver request. Finally, the proposed changes would explicitly require 
that when a gift has multiple donors, the information required to be in 
a waiver request pertaining to the donor must include the necessary 
information for each donor.

DATES: Comments are invited and must be received on or before July 12, 
1999.

ADDRESSES: Send comments to the Office of Government Ethics, Suite 500, 
1201 New York Avenue, NW., Washington, DC 20005-3917. Attention: Judy 
H. Mann. Comments may also be sent electronically to OGE's Internet E-
mail address: usoge@oge.gov. For E-mail messages, the subject line 
should include the following reference--``Proposed revisions to the 
public financial disclosure gifts waiver provision.''

FOR FURTHER INFORMATION CONTACT: Judy H. Mann, Attorney-Advisor, or 
Norman B. Smith, Senior Associate General Counsel, Office of Government 
Ethics; telephone: 202-208-8000; TDD: 202-208-8025; FAX: 202-208-8037.

SUPPLEMENTARY INFORMATION: The Office of Government Ethics is proposing 
to amend the executive branch regulation which requires the disclosure 
of certain gifts received by the filers of the Standard Form (SF) 278 
Public Financial Disclosure Report forms, their spouses, and their 
dependent children. Title I of the Ethics in Government Act of 1978 
(the Ethics Act), 5 U.S.C. appendix, title I, sets forth the 
requirements which govern the reporting of gifts on the public 
financial disclosure reports (SF 278). Specifically, 5 U.S.C. app., 
section 102(a)(2) requires the reporting of gifts on public financial 
disclosure report forms but also includes, at paragraph (a)(2)(C), 
authority for granting a waiver which permits the nondisclosure of 
certain gifts on the SF 278. The Office of Government Ethics has issued 
regulations at 5 CFR 2634.304 that establish guidelines clarifying the 
gift reporting requirements set forth in the Ethics Act. Section 
2634.304(f) includes the procedures for requesting a waiver of 
reporting for executive branch filers and the factors which the 
Director of OGE considers in determining whether to issue a waiver.
    Under 5 CFR 2634.304, a person who files an SF 278 is required to 
report certain gifts that he, his spouse, or his dependent child 
receives. Section 2634.304 permits a filer not to disclose certain 
gifts if the filer receives a waiver. The filer must submit a written 
request for a waiver through his agency to the Director of the Office 
of Government Ethics, who determines whether to issue the waiver. If 
the OGE Director issues the waiver, the filer is not required to 
disclose the gift or gifts for which he receives the waiver on his SF 
278, nor is he required to aggregate those gifts for reporting 
purposes. However, the request cover letter is publicly available.
    Currently, in order to grant a waiver under Sec. 2634.304(f)(1), 
the Director must determine that both the basis of the relationship 
between the grantor and the grantee and the motivation behind the gift 
are entirely personal and that no countervailing public purpose 
requires public disclosure of the nature, source, and value of the 
gift. One of the proposed amendments would address the requirement that 
the basis of the relationship between the grantor and the grantee and 
the motivation behind the gift be ``entirely personal.'' The experience 
of OGE over the years has demonstrated that in some situations, a filer 
has a predominantly social relationship with a grantor of a gift, but 
has met the grantor through a business relationship, often in 
connection with a spouse's business activities. Requests for waivers in 
these circumstances most often occur when the filer receives a gift for 
a wedding or other similar social occasion. However, these 
circumstances might be construed as not ``entirely personal'' under 
Sec. 2634.304(f)(1)(i). The proposed rule would permit the Director to 
grant a waiver of reporting if he determines that the basis of the 
relationship between the grantor and the grantee and the motivation 
behind the gift are ``personal,'' rather than ``entirely personal,'' 
provided that no countervailing public purpose requires public 
reporting. Thus, in the situation described above, the Director could 
grant a waiver because the relationship between the grantor and grantee 
and the motivation behind the gift may be construed as personal. The 
proposed rule would give OGE some flexibility in granting waivers in 
such appropriate cases.
    In the legislative history of the Ethics Act, the Senate Committee 
on Governmental Affairs described its intention that waivers be used 
infrequently. S. Rep. No. 95-170 at 116 (1977). The proposed rule would 
remain consistent with the Committee's intent. The Office of Government 
Ethics has received a small number of waiver requests each year and 
does not expect that there will be an overall increase in the number of 
requests received, or much of an increase in waivers granted, as a 
result of the proposed rule.
    Under Sec. 2634.304(f)(2), members of the public can access the 
cover letter requesting a waiver if the Director of OGE approves the 
waiver request. Public availability of the cover letter is subject to 
the public disclosure requirements in 5 CFR 2634.603. The Office of 
Government Ethics proposes to amend Sec. 2634.304(f)(2) by adding 
language to clarify that the cover letter of a waiver request will be 
publicly available when the Director of OGE has granted either a 
partial or complete approval of the waiver request. In such

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cases, an item or items contained in the waiver request for which the 
waiver was granted will not appear on the SF 278. Any item or items 
contained in the request for which the Director of OGE did not grant a 
waiver will be listed on the SF 278. If the Director of OGE denies the 
complete request, the item or items for which the waiver was requested 
will be contained in the SF 278, and the cover letter requesting the 
waiver will not be publicly available. This proposed amendment does not 
alter OGE's current practice regarding the disclosure of the cover 
letter requesting a waiver; it simply will clarify that the public can 
access the cover letter of waiver requests for which the Director of 
OGE has granted either full or partial approval.
    The proposed rule would also amend Sec. 2634.304(f)(3) to expressly 
require a filer to describe the gift for which he is seeking a waiver. 
Section 2634.304(f)(3) sets forth specific requirements for the 
contents of a waiver request by the filer, as submitted through his 
agency to OGE. The filer must include in a waiver request the identity 
and occupation of the donor, in addition to a statement concerning the 
relationship between the donor and the filer, as described above. The 
request also must contain a statement concerning any involvement of the 
donor with the filer's agency. The current regulation does not 
expressly require the filer to describe the gift or list its value in 
the waiver request. Although most filers do include a description of 
the gift and its value in their waiver requests, in order to eliminate 
any ambiguity concerning whether this basic information is required, we 
are proposing to add a new paragraph (f)(3)(ii)(D) to explicitly 
require that the filer include both a description of the gift and its 
value in the waiver request. The proposed rule would be consistent with 
the general requirement under Sec. 2634.304 that an SF 278 filer report 
a description, as well as the value, of certain gifts. Moreover, 
knowing the nature and value of the gift will assist OGE in determining 
whether there is a countervailing public purpose requiring public 
disclosure.
    Under Sec. 2634.304(f)(3), a filer who requests a waiver of 
reporting certain gifts must provide specified information about the 
donor of each gift for which a waiver is requested. Included in the 
proposed revisions to Sec. 2634.304(f)(3) is a new paragraph 
(f)(3)(iii), which would explicitly require that when a gift for which 
a waiver is requested has more than one donor, a filer must provide the 
required information with respect to each donor of the gift. This is 
not a new requirement. The proposed rule merely serves as a technical 
clarification of an existing requirement under the current rule.
    The proposed revisions to Sec. 2634.304(f)(3) also include a 
restructuring of that provision and the correction of a typographical 
error.

Matters of Regulatory Procedure

Administrative Procedure Act

    Interested persons are invited to submit written comments to OGE on 
this proposed regulation, to be received on or before July 12, 1999. 
The Office of Government Ethics will review all comments received and 
consider any modifications to this rule as proposed which appear 
warranted before adopting the final rule on this matter.

Executive Order 12866

    In promulgating this proposed rule, the Office of Government Ethics 
has adhered to the regulatory philosophy and the applicable principles 
of regulation set forth in section 1 of Executive Order 12866, 
Regulatory Planning and Review. These proposed amendments have not been 
reviewed by the Office of Management and Budget under that Executive 
order, since they are not deemed ``significant'' thereunder.

Regulatory Flexibility Act

    As Director of the Office of Government Ethics, I certify under the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) that this rulemaking 
will not have a significant economic impact on a substantial number of 
small entities because it primarily affects Federal executive branch 
departments and agencies and certain of their employees who file SF 278 
reports.

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply 
to these proposed amendments because they do not contain information 
collection requirements that require approval of the Office of 
Management and Budget.

List of Subjects in 5 CFR Part 2634

    Certificates of divestiture, Conflict of interests, Government 
employees, Penalties, Reporting and recordkeeping requirements, Trusts 
and trustees.

    Approved: May 6, 1999.
Stephen D. Potts,
Director, Office of Government Ethics.

    Accordingly, for the reasons set forth in the preamble, the Office 
of Government Ethics proposes to amend part 2634 of subchapter B of 
chapter XVI of title 5 of the Code of Federal Regulations as follows:

PART 2634--[AMENDED]

    1. The authority citation for part 2634 continues to read as 
follows:

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 26 
U.S.C. 1043; 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.

    2. Section 2634.304 is amended by:
    a. Revising paragraph (f)(1)(i);
    b. Adding an Example after paragraph (f)(1)(ii);
    c. Revising paragraph (f)(2); and
    d. Revising paragraph (f)(3).
    The revisions and addition read as follows:


Sec. 2634.304  Gifts and reimbursements.

* * * * *
    (f) * * * (1) * * *
    (i) Both the basis of the relationship between the grantor and the 
grantee and the motivation behind the gift are personal; and
    (ii) * * *

    Example to paragraph (f)(1). i. The Secretary of Education and 
her spouse receive the following two wedding gifts:
    A. Gift 1--A crystal decanter valued at $285 from the 
Secretary's former college roommate and lifelong friend, who is a 
real estate broker in Wyoming.
    B. Gift 2--A gift of a print valued at $300 from a business 
partner of the spouse, who owns a catering company.
    ii. Under these circumstances, the Director of OGE will consider 
a request for a waiver of reporting for each of these gifts.

    (2) Public disclosure of waiver request. If approved in whole or in 
part, the cover letter requesting the waiver shall be subject to the 
public disclosure requirements in Sec. 2634.603 of this part.
    (3) Procedure. (i) A public filer seeking a waiver under this 
paragraph (f) shall submit a request to the Office of Government 
Ethics, through his agency. The request shall be made by a cover letter 
which identifies the filer and his position and which states that a 
waiver is requested under this section.
    (ii) On an enclosure to the cover letter, the filer shall set 
forth:
    (A) The identity and occupation of the donor;
    (B) A statement that the relationship between the donor and the 
filer is personal in nature;
    (C) A statement that neither the donor nor any person or 
organization who employs the donor or whom the donor represents, 
conducts or seeks business with, engages in activities regulated by, or 
is directly affected by action taken by, the agency employing the 
filer. If the preceding statement cannot be made without qualification, 
the filer shall indicate those qualifications, along with

[[Page 25851]]

a statement demonstrating that he plays no role in any official action 
which might directly affect the donor or any organization for which the 
donor works or serves as a representative; and
    (D) A brief description of the gift and the value of the gift.
    (iii) With respect to the information required in paragraph 
(f)(3)(ii) of this section, if a gift has more than one donor, the 
filer shall provide the necessary information for each donor.

[FR Doc. 99-12047 Filed 5-12-99; 8:45 am]
BILLING CODE 6345-01-U