Modernization Updates to Standards of Ethical Conduct for Employees of the Executive Branch

<RULE> OFFICE OF GOVERNMENT ETHICS <CFR>5 CFR Part 2635</CFR> <RIN>RIN 3209-AA43</RIN> <SUBJECT>Modernization Updates to Standards of Ethical Conduct for Employees of the Executive Branch</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of Government Ethics. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The U.S. Office of Government Ethics (OGE) is issuing this final rule updating the Standards of Ethical Conduct for Employees of the Executive Branch (Standards). The final rule updates the Standards based on OGE's experience gained from application of the regulation since its inception. The final rule also incorporates past interpretive guidance, adds and updates regulatory examples, improves clarity, updates citations, and makes technical corrections. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective August 15, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Kimberly L. Sikora Panza, Senior Associate Counsel, or Christie Chung, Assistant Counsel, U.S. Office of Government Ethics, 250 E Street SW, Suite 750, Washington, DC 20024-3249; Telephone: 202-482-9300; TTY: 800-877-8339; FAX: 202-482-9237. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Rulemaking History</HD> Pursuant to a provision of the Ethics in Government Act of 1978, 5 U.S.C. 13122, the Director of the U.S. Office of Government Ethics (OGE) is responsible for periodically reviewing, evaluating, and updating the rules and regulations that pertain to ethics in the executive branch. On February 21, 2023 (88 FR 10774), OGE published for public comment a proposed rule setting forth various modernization updates to the Standards of Ethical Conduct for Employees of the Executive Branch (Standards), which serve as the primary regulatory guidance on the standards of ethical conduct for officers and employees of the executive branch of the Federal Government (Government). Prior to publishing the proposed rule, OGE consulted with the Department of Justice and the Office of Personnel Management pursuant to section 201(a) of Executive Order 12674, as modified by Executive Order 12731, and the authorities contained in 5 U.S.C. chapter 131, subchapter II. Additionally, OGE solicited and considered the views of executive branch agency ethics officials. OGE's proposed updates pertained only to subparts A through I of the Standards; separate from the present rulemaking, OGE engaged in a comprehensive rulemaking that added to the Standards new subpart J, which relates to the creation and operation of legal expense funds, and the acceptance of pro bono legal services for certain legal matters. See 88 FR 33799 (May 25, 2023). The proposed rule provided for a 60-day comment period, which ended on April 24, 2023. During this period, OGE received nineteen responsive comment submissions regarding the proposed rule: fourteen from the public and five from Federal agencies. OGE also received two comment submissions from the public that do not relate to the proposed rule and address unrelated matters. After carefully considering all comments and making appropriate modifications, and for the reasons set forth below and in the preamble to the proposed rule at <E T="03">https://www.govinfo.gov/content/pkg/FR-2023-02-21/pdf/2023-02440.pdf,</E> OGE is publishing this final rule. <HD SOURCE="HD1">II. Discussion of Comments and Changes to Proposed Rule</HD> The twenty-one comments that OGE received during the comment period are publicly accessible on OGE's website at this address: <E T="03">https://www.oge.gov/web/OGE.nsf/All+docs+By+Cat/08C3B547690B7675852589AA00556758.</E> OGE has reviewed and considered all comments submitted by each commenter. OGE is not addressing the two comments that pertain to matters unrelated to the rulemaking. The following discussion addresses all other comments in the context of the specific subparts or sections to which they relate. <HD SOURCE="HD2">A. General Provisions (Subpart A)</HD> OGE received nine comments from individuals who expressed concerns about the proposed revisions to §§ 2635.101(b)(13) and 2635.106. In §§ 2635.101(b)(13) and 2635.106, OGE proposed to add the words “(including pregnancy, gender identity, and sexual orientation)” after “sex” to reflect protected characteristics identified by the Equal Employment Opportunity Commission (EEOC) as covered by Federal employment discrimination laws. Towards this same end, OGE also proposed adding “genetic information” in these two sections and updating the word “handicap” to “disability.” These commenters specifically criticized the inclusion of “gender identity” and “sexual orientation” in §§ 2635.101(b)(13) and 2635.106; no commenter referenced or objected to the other updates to these provisions relating to pregnancy, genetic information, or disability. Commenters perceived that the inclusion of “gender identity” and “sexual orientation” would result in an expansion of civil rights, and objected to the revisions either categorically or without observance of appropriate protections for religious organizations and religious conscience. The revisions to §§ 2635.101(b)(13) and 2635.106 do not effectuate any expansion of, or other change to, civil rights laws. Significantly, OGE does not have the authority to promulgate regulations expounding on the scope of categories protected by equal employment laws and regulations, or other civil rights laws and regulations. The updated language merely modernizes the regulatory text to include characteristics that the EEOC already recognizes as protected under the laws enforced by the Commission. <E T="03">See, e.g., Employees & Applicants,</E> U.S. Equal Emp. Opportunity Comm'n, <E T="03">https://www.eeoc.gov/employees</E> (last visited May 17, 2023). It is both necessary and appropriate that provisions in the Standards that refer to “laws and regulations that provide equal opportunity” list the characteristics protected by Federal laws prohibiting employment discrimination and enforced by the EEOC. Additionally, OGE received one comment from an individual who expressed concern that the addition of “gender identity” and “sexual orientation” infringes on executive branch employees' First Amendment and other constitutional rights. As noted above, these revisions are merely technical updates referencing types of discrimination already recognized by the EEOC. Acknowledgement of the fact that sex-based discrimination includes gender identity and sexual orientation in §§ 2635.101(b)(13) and 2635.106 neither results in any change to existent equal opportunity laws or regulations, nor impacts the interaction between such laws and the constitutional rights of employees. For the above reasons and for the reasons stated in the preamble to the proposed rule, OGE therefore is adopting the proposed updates to subpart A without further revisions. <HD SOURCE="HD2">B. Gifts From Outside Sources (Subpart B)</HD> <HD SOURCE="HD3">Subpart B Examples</HD> OGE received four suggestions regarding additional examples or clarifications that could be made in subpart B. Specifically, one agency commenter suggested that OGE add an example of a “non-traditional” prohibited source, such as an entity that enters into a cooperative research and development agreement with a Federal agency, as well as an example involving a lottery ticket as a gift; the same agency suggested that OGE add an example to § 2635.204(d) involving a Department of Defense or other Federal school; and a member of the public suggested that OGE clarify gift acceptance limits and issues relating to entities like the Kennedy Center where events might be hosted by a corporate donor. The examples requested by these commenters involve illustration of fairly specific situations. It would not be feasible for OGE to provide examples addressing application of the regulation in all of the scenarios that may give rise to subpart B considerations. In light of the extensive revisions made to subpart B in 2016, which included modernization changes and examples, and OGE's determination that the current rule provides appropriate guidance, OGE declines these suggestions. <HD SOURCE="HD3">Gift Exclusion and Exception for “Opportunities and Benefits”</HD> One individual commenter requested that OGE reconcile the difference between the opportunities and benefits excluded from the definition of “gift” in § 2635.203(b)(4) and the opportunities and benefits excepted from the gift prohibitions by § 2635.204(c)(2). Specifically, the commenter noted that the opportunities and benefits excluded from the “gift” definition by § 2635.203(b)(4) include “favorable rates and commercial discounts,” while the opportunities and benefits excepted from the subpart B gift prohibitions by § 2635.204(c)(2) include “favorable rates, commercial discounts, and free attendance or participation.” The “free attendance or participation” language that distinguishes these two provisions was added to § 2635.204(c)(2) when OGE substantially revised subpart B in 2016. <E T="03">See</E> 81 FR 81641 (Nov. 18, 2016). OGE notes that the “opportunities and benefits” listed in the § 2635.203(b)(4) gift exclusion are preceded by the word “including,” indicating that the list is not intended to be exhaustive. As such, one could consider free attendance or participation under the gift exclusion, if the appropriate facts presented themselves. However, to clear up any confusion, OGE will add the words “free attendance or participation” to § 2635.203(b)(4) to harmonize the language in §§ 2635.203(b)(4) and 2635.204(c)(2). <HD SOURCE="HD3">Free Attendance Gift Exclusion</HD> Section 2635.203(b)(8) excludes from the definition of “gift” free attendance to an event provided by the sponsor of the event to certain individuals, including an employee ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 348k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━