Waivers and Authorizations
Waivers and authorizations are mechanisms used to resolve real or apparent conflicts of interest. Both are written documents which identify the conflict and permit the employee to participate despite the conflict (or appearance of a conflict).
A waiver is a written mechanism used to resolve an actual conflict of interest, and there are two types: Statutory and Regulatory.
Statutory: Certain criminal statutes governing the conduct of Federal employees allow the use of a waiver to avoid the terms of the statute under specific circumstances. The statutory waiver allows an employee with a real conflict of interest to continue performing official duties despite the actual conflicting interests.
Example: An employee working on a Cooperative Research and Development Agreement (CRADA) must obtain a waiver under 18 USC Section 208 before the employee may negotiate for employment with that specific outside collaborator. The waiver thus allows that employee to have an actual conflict of interest (both official relationship on the CRADA and outside financial interest in his employment negotiation at the same time) yet remain working on the CRADA.
Waivers may be granted only by the Appointing Authority. At NIH, the Appointing Authority is the NIH Director. All requests for waivers must follow the HHS Waiver Policy (pdf, 4 pages, dated January 16, 2009), and be approved by the HHS DAEO prior to signature by the NIH Director.
Regulatory: There are some financial interests that are so small or insignificant that the Office of Government Ethics (OGE) has "exempted" them from the criminal conflict of interest law with a regulatory exemption. By regulation, then, those financial interests do not cause a conflict for the employee, permitting the employee to participate in official particular matters involving specific parties or or matters of general applicability. Employees may hold any one or all of the financial interests and still participate in official decisions affecting the outside organization. This is a summary; more details and additional exemptions are explained in the Exemptions document on this web site. In all cases, use the full language in the regulation (5 CFR 2640) for analysis and determination.
- Diversified Mutual Funds: An employee may participate in matters which affect the holdings of these funds.
- Sector Mutual Funds: There are de minimis values below which no conflict exists.
- Up to $15,000 of publicly traded stock (the de minimis level): Employees may participate in matters which affect a company in which they own up to $15,000 of stock. Those holdings include the aggregated amount of the employee's own holdings and those of the spouse and minor children. To maintain the exemption, employees are encouraged to require their brokers to sell any amount over the $15,000 aggregate.
- Leave of absence from a university: An employee may participate in general matters which affect universities, such as grant application procedures, but that same employee may not participate in any particular matter affecting the university from which he/she is on leave, for example, participation in the review of an application from that particular university is prohibited.
Example 1: An extramural employee on leave of absence from a university may participate in discussions and policy making regarding issues of application procedures and requirements since that affects the class of all universities/potential applicants. The employee may not participate in the review of an application from that particular university nor be involved in any funding decision.
Example 2: An intramural employee holds $14,500 worth of stock in a pharmaceutical company [total value of own stock, spouse's stock, and dependent child(ren)'s stock]. That employee MAY conduct research using drugs or other devices from that same pharmaceutical company because the total value is less than $15,000. If the stock increases in value to more than $15,000, the excess over the $15,000 level must be sold or the employee may no longer use products from that company in his/her official research.
An authorization is a written mechanism to resolve an apparent conflict of interest as identified according to 5 CFR 2635.502 (the "Standards of Ethical Conduct for Employees of the Executive Branch"). An authorization permits the employee to continue a particular official duty activity concerning an outside organization despite the appearance of a conflict of interest with that outside organization. An appearance of a conflict of interest arises where an employee is involved in an official duty matter with specific outside parties and there are circumstances that would cause a reasonable person with knowledge of the relevant facts to question the employee's impartiality in the official matter. Circumstances that could cause an appearance include the financial interests of family and others, as outlined in the regulation (5 CFR 2635.502). Note that the authorization is for appearances of conflict only, a waiver must be used for actual conflicts under the statute. The authorization, which is approved by the IC Deputy Ethics Counselor, must indicate that, in light of all relevant circumstances, the Government's interest in the employee's participation outweighs the concern that a reasonable person may question the integrity of the agency's programs and operations.
Example: An employee's brother is employed at a local university. The employee is responsible for application review and management of a grant portfolio which contains a grant to that university. This presents the appearance of a conflict for that employee. There is no financial interest for the employee. In this case, the DEC can "authorize" the employee to continue his/her official duties regarding that university using the authorization mechanism if the DEC determines that a reasonable person with knowledge of the relevant facts would not question the integrity of the agency's programs nor question that employee's impartiality.
For additional information, contact your IC's Ethics Officials (see links below).