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April 8, 2013

NOTES -- DEC/EC Meeting
Monday, April 8, 2013

1. Introduction of New Ethics Staff:

  • Janis Mullaney appointed as NCATS DEC
  • Ellen Rolfes appointed as NHGRI DEC
  • Leonard Ross joins NHGRI as EC
  • Mandy Stoneberger joins CC as EC
  • Kent Walker and Shari Wahlert join NHLBI as ECs

Items for Discussion/Presentations:

2. Gifts from Foreign Government Entities

Facts:

  • Senior employee was selected to receive an award that is given to an individual who has made the most outstanding professional contributions to public health.
     
  • The award sponsor is a foreign governmental entity.
     
  • The gifts associated with the award include a cash prize, which the employee opted to decline, and a medallion. The medallion was valued at ~$300 USD.
     
  • The award was to be presented in a foreign country by the President of that country, and the employee’s father was to attend the award ceremony in her stead.
     
  • There was discussion of a reception being held immediately following the award ceremony.

Questions/Considerations:

  • Could the employee accept the honor and medallion pursuant to the Foreign Gifts and Decorations Act (FGDA)?
  • If the reception were being held, could the father attend? Would it be considered a gift – to him or to the employee? What clearance would be needed?

Analysis:

Honor & Medallion

The FGDA, acting as an exception to the Emoluments Clause’s prohibition against gifts from a foreign governmental entity, states, “The Congress consents to the accepting, retaining, and wearing by an employee of a decoration tendered in recognition of active field service in time of combat operations or awarded for other outstanding or unusually meritorious performance, subject to the approval of the employing agency of such employee.” Thus, the FGDA permits the employee to accept the medallion and honor of the award.

Free Attendance to Reception

FGDA defines “employee” as “an individual employed by or occupying an office or position in the government of the United States…, [and] the spouse of an employee, or a dependent of such an individual.”  So, the FGDA does not apply to gifts to a parent.

The WAG exception under 2635.204(g)(2) can be used to accept the gift of attendance for a guest, including a parent.  However, in this case, the WAG exception would not apply to the gift of the attendance at this reception because this gift was being offered from a foreign governmental entity, and the only applicable exception to the Emoluments Clause is the FGDA.  Note:  Emoluments Clause says that Congress must consent to exceptions to the Clause’s prohibitions, and the government-wide standards were issued by OGE, not Congress, so the standards are not Congressional consent.

So if the father were to attend the reception, he is permitted to do so and no further action is needed by the ethics office. 

3. STOCK Act Update

NAPA recommended permanent suspension of online posting requirement for 278 and 278-T reports.  Congress needs to act on the recommendation.  Previous suspension ends April 15, 2013.  If no Congressional action, possible judicial action could extend stay of posting requirement.

4. Reconciling 278-T Transactions with Annual 278 Schedule B Transactions

  • Information reported on 278-T reports during 2012 must be re-entered by the filer on the Annual 278 Schedule B (due May 2013). 
     
  • Annual 278 reviewing officials must reconcile the information submitted on the 278-Ts with the Annual 278 Schedule B.
     
  • For transaction information that was reported on an 278-T report but not reported on Annual 278 Schedule B, the missing information should be added to the Annual 278 Schedule B with a note in the Annual 278 comment box “asset that was inadvertently omitted from this report has been added.”
     
  • For transaction information reported on Annual 278 Schedule B but not reported on a 278-T or no 278-T was filed for the relevant reporting period, the omission of the transaction on the 278-T or the missing 278-T would be noted on the Annual 278 comment box:  “certain transactions reported herein inadvertently omitted from 2012 278-T submitted or due during the period of the transaction.”

5. Official Participation in Outside Organization, Section 208 Exemption Regulation

OGE issued a regulatory exemption from section 208’s prohibition to allow federal employees to participate in particular matters affecting the financial interests of nonprofit organizations in which they serve as an officer, director or trustee.  Regulation took effect April 5, 2013.  Likely, NIH’s policy regarding such official participation will include limitations that will restrict employees from engaging in lobbying, fundraising and personnel matters.  Treasurer position is likely to be problematic.  Employees interested in serving as an officer or director of an outside organization in their official capacity should have an initial conversation with the organization to confirm with the organization that it is willing to have the Federal Government participate in its organization at that level.  More guidance is expected from OGE and OGC. 

6. Equal Classification Determinations Reminder

The requirement to file a 278 report for statutory filers (SES, CC Flag officers (0-7 and above)) is vested in the person, i.e., the filer.  Regardless of the position the statutory filer encumbers, the person still files a 278 report.

The requirement to file a 278 report with respect to Equally Classified positions (those positions determined by OGE to be of an equal classification to SES positions) is vested in the position. Whoever is in that equally classified position will be required to file a 278 report.

The 14 categories of positions (see below) that have been equally classified by OGE (e.g., IC Director and Deputy Director, EO, and lab chiefs) are for ease of future determinations.  They do not mean that a newly created position within the IC is automatically classified as a 278 position.   When a new position that falls within one of these categories is created, you must request an Equal Classification Determination from OGE through OGC.

When there are staffing changes affecting 278 filers or 278 filing positions, please communicate with NEO and other affected ICs, if any.  A best practice is to give your senior managers (EO, SD, CD and senior extramural official) a list of the 278 filers and the 278 filing positions within the IC so they are aware when they should contact ethics of changes affecting these filers or positions.  NOTE:  There is usually a domino effect when a vacancy occurs.  Typically, one vacancy (a retirement) creates another vacancy (through the appointment of an Acting official).  So ask yourself:  who is coming into the first vacant position, either on a permanent or acting basis, and did s/he leave another 278 position vacant? 

For example, your IC’s EO is leaving to fill an EO vacancy in another IC (because of retirement) and the Deputy EO is assigned as Acting EO.  This scenario requires a termination 278 report from the retiring EO; a pre-clearance of the transferring EO (using an updated version of a previously filed 278 report); and a pre-clearance of the Acting EO (using an updated version of the previously filed 450 report.  A new entrant report may also be needed after 60 days.) 

If you have submitted a request to remove a previously classified position from your 278 filing list, grant at least the first 45 day extension for the 2013 incumbent report. See if the determination is made by that time so the filer could file an incumbent termination report instead of both the incumbent and termination reports.

7. Holding Companies:  208 Analysis vs. Disclosure Requirement

For disclosure purposes, a holding company may be treated as an EIF, so no underlying holdings (ULHs) need to be reported.  Berkshire Hathaway is a good example of a holding company that is an EIF.  However, for section 208 purposes, the ULHs will need to be reviewed and analyzed.  If the ULHs include wholly-owned subsidiaries or major owned companies (50% or more ownership), then conduct a section 208 analysis on the ULHs. 

8. Case Study

An IC Director’s brother is the Chair of a Department at a grantee institution.  Does the Director need to recuse from grants submitted from that institution?

The IC Director has a covered relationship with his brother, a relative with whom the employee has a close personal relationship.  5 CFR 2635.502(b)(1)(ii).  Under 2635.502(a), an employee cannot participate without authorization in a specific party matter in which a person with whom he has a covered relationship is or represents a party to that matter. 

A Department Chair does not represent the university with respect to a grant; a university administrator would.  Likewise, the PI does not represent the university with respect to the grant, so no 502 issue if the brother was the PI on the grant.  And last, if the brother was the PI, the PI is not a party to the matter; the university and the NIH are the parties to the matter (the grant).  So, in this scenario, the brother is not a party to matter nor does he represent a party to the matter.

However, out of an abundance of caution and to avoid the appearance of a conflict, the IC Director should not participate in grants submitted by the university if;  1) the brother is listed as the PI; or 2) if submitted by an investigator within the brother’s Department, i.e., a subordinate of the brother.  The IC Director may participate in all other grants submitted from elsewhere in the university. 

 

 

Posted 4/23/13