U.S. DEPARTMENT OF AGRICULTURE - OFFICE OF ETHICS
ETHICS ISSUANCE: Number 03-1 - DATE: February 4, 2003 (Updated November 2017)
SUBJECT: ETHICS CONCERNS FOR RURAL DEVELOPMENT STATE DIRECTORS
The Rural Development Mission Area (RD ) serves a vital role in delivering a wide array of government services to rural America. The agency is a prominent source of Federal funding and assistance to rural communities. Given the important role played by RD in terms of the financial health of rural communities, maintaining high ethical standards is essential. In a worst-case scenario, failure to follow the ethics statutes and regulations can lead to administrative discipline, or even criminal prosecution of the individual. Even where no adverse action is taken or contemplated against an employee, ignoring ethics rules can quickly lead to an appearance of losing impartiality in dealing with RD clients, or of misusing one’s official position. In either case, the failure to follow ethical guidelines serves to undermine the agency’s credibility with its clients. Given the need for RD State Directors (SDs) to interact and work closely with their client communities in accomplishing the mission of the agency, SDs must maintain a clear focus on the dividing line between their Federal role and their private interests.
This issuance is designed to provide practical guidance to SDs concerning some of the ethics restrictions most likely to impact them in their dealings with non-Federal clients during their Federal tenure, and focusing specifically upon the restrictions that have unexpected applications. In this regard, the issuance is designed to be a quick-reference compendium of pertinent rules taken from other, more specific, statutory and regulatory sources that are cited in each section. In addressing actual ethics questions, reference should always be made to the statutes and regulations themselves, particularly to the Standards of Ethical Conduct for Employees of the Executive Branch (Standards), 5 C.F.R. Part 2635.
Note: Not all ethics issues are treated herein. Some common issues that are not of increased concern for SDs in the performance of their official duties were omitted. For example, rules concerning solicitation and acceptance of gifts, whether from outside sources or from fellow employees, are best-addressed in the Standards (see 5 C.F.R. Part 2635, Subparts B and C, respectively). Some other issues not addressed include acceptance of travel costs from non-Federal sources (5 U.S.C. § 1353); teaching, speaking, and writing (5 C.F.R. § 2635.807); acceptance of bribes (18 U.S.C. § 201); post-employment restrictions (18 U.S.C. § 207); negotiating for non-Federal employment (18 U.S.C. § 208); and dual compensation (18 U.S.C. § 209). For information on any ethics-related restriction, including training modules that address most common ethics issues, see the Office of Ethics website at https://www.usda.gov/ethics.
2. Controlling Statutes and Regulations
18 U.S.C. § 203 - Compensation to Members of Congress, officers, and others in matters affecting the Government.
18 U.S.C. § 205 - Activities of officers and employees in claims against and other matters affecting the Government.
18 U.S.C. § 208 - Acts affecting a personal financial interests.
18 U.S.C. § 1913 - Lobbying with appropriated moneys.
5 C.F.R. Part 734 - Political Activities of Federal Employees.
5 C.F.R. Part
2635 - Standards of Ethical Conduct for Employees of the Executive
Branch, and specifically:
Subpart E - Impartiality in Performing Official Duties.
Subpart G - Misuse of Position.
Subpart H - Outside Activities.
Active participant - As defined at 5 C.F.R. 2635.502(b)(1)(v), and as used in this guidance, it is one who serves with a non-Federal (also referred to as “outside”) organization or association (e.g., a trade association such as the National Association of Realtors or an organization like the Rural Housing Coalition) as an official, committee or subcommittee chairperson, spokesperson, attorney, agent, contractor, or who participates in directing the activities of the non-Federal organization or association. Undertaking a fiduciary responsibility (see definition, below) for a non-Federal organization or association would make one an “active participant,” as would devoting significant time to promoting specific programs of the non-Federal organization or association (e.g., fundraising efforts). Membership by itself, payment of dues, or donation to the outside organization or association would not constitute “active” participation.
Advisory/liaison/consultative role - This refers to service as an agency representative for the purpose of exchanging comments, views, or official opinions with a non-Federal organization on substantive matters of mutual concern to the non-Federal organization and to the Department of Agriculture (USDA) or RD.
Covered relationship- As defined at 5 C.F.R. 2635.502(b)(1), you have a covered relationship with:
Fiduciary responsibility - For purposes of this issuance, this means service as an officer (e.g., president, vice-president, secretary, treasurer), or in the role of a member of the board of directors or trustees (which includes voting authority for organization matters) of a non-Federal entity, such as an organization, non-profit, or business entity. Normally, this will involve a non-Federal entity that is recognized in law (e.g., a corporation or partnership, etc.). It would not involve informally-organized groups or teams of individuals. It does not include committee chair positions unless the individual also serves in one of the previously-mentioned roles contained within this definition. One who exercises “fiduciary responsibility” for a non-Federal organization also would be an active participant (see definition above).
Prohibited Source - As defined at 5 C.F.R. § 2635.203(d) and as applied to USDA, a “prohibited source” is any person who:
Represent on behalf of another - This means to knowingly make with intent to influence, any communication to or appearance before any officer or employee of the Federal Government on behalf of a third party in connection with a matter of interest to the Federal government. The term does not include the communication of technical information.
4.1. Conflicting Financial Interests. 18 U.S.C. § 208. Financial interests owned or imputed to you1 can affect your ability to do your Federal job and, depending upon the circumstances, may lead to criminal prosecution or administrative discipline. You may not participate in any fashion in a matter that affects your financial interests, unless you first obtain a written waiver, or qualify for a regulatory exemption. Examples of financial interests that can conflict with official duties include:
4.2. Other Conflicting Relationships. 5 C.F.R. § 2635.502. Even where not prohibited as a conflicting financial interest, certain other interests and relationships can affect your ability to do your job and may lead to the appearance of a loss of impartiality which, depending upon the circumstances, can result in administrative discipline. Absent authorization to do so, you may not participate in any fashion in a matter that affects the financial interests of a member of your household, or in which any other person with whom you have a covered relationship is, or represents a party to that matter. An appearance of a loss of impartiality could occur should you participate in official actions involving the following persons/entities with whom you have a covered relationship:
4.3. Misuse of Official Position. 5 C.F.R. § 2635.701. Even where a matter does not involve a member of your household, or any other person with whom you have a covered relationship, your ability to do your job may be affected if it appears that you misused your official position, either to benefit yourself in some non-financial fashion, or to benefit anyone else (e.g., a friend). This provision also may come into play, in addition to other Federal laws, in cases where a supervisor gives preferential treatment to a subordinate. Depending upon the circumstances, such misuse can result in administrative discipline.
5. Representation of Others before the Federal Government. 18 U.S.C. §§ 203 & 205. Given your position as SD, you may be asked by private parties to intervene on their behalf with other Federal officials on matters that are not directly part of your official duties. Also, many SDs come to the positions possessing managerial- or fiduciary-level affiliations with non-Federal organizations that are seeking relationships with agencies or departments of Federal Government (e.g., loans, grants, contracts, administrative decisions, etc.) During your tenure as a Federal officer, you are subject to the following limitations upon your ability, as a private person, to interact with the Executive and Judicial Branches of the Federal Government:
Note: This does not bar you from representing yourself as a private individual, or as a sole proprietor should your business be so configured (e.g., you would not be prohibited from engaging in such representation if the farm is not incorporated or, even if incorporated, you could have another member of the corporation who is not a Federal employee submit the application). Also, under limited circumstances, you may be able to represent family members and some private organizations seeking certain Federal actions (e.g., representing a parent submitting a benefits claim to the Veterans Administration; representing a fellow employee in a administrative disciplinary action). Check with your agency ethics official for further information. Also, since this prohibition is limited to representations before the Executive or Judicial Branches, it does not prohibit communications with Congress. However, see Part 8, below.
6. Use of Government Equipment, Space, Time, Personnel, or Information. 5 C.F.R. Part 2635, Subpart G. In furtherance of any outside business interests that you may have, you are prohibited from using:
7.1. Official Participation on National Rural Development Coordinating Committees and State Rural Development Councils. Pursuant to section 6021 of the Farm Security and Rural Investment Act of 2002, Pub. L. No., 107-171, RD State Directors, other USDA employees, and employees of other agencies involved in rural issues are required to serve as full voting members on both the National Rural Development Coordinating Committee and State Rural Development Councils and may participate free of concerns over conflict of interest statutes. (Prior to the statute, service on these boards in an official capacity could’ve resulted in violations of 18 U.S.C. 208 & 205, see 7.2, below).
7.2. Official Participation in Other Non-Federal Organizations.Unless specifically required by Federal statute, or unless you receive a written waiver in advance, you may not serve as a director, officer, trustee, general partner, or employee of any other non-Federal organization in your official capacity. You are deemed to be serving in your official capacity if:
7.3. Personal Participation in Non-Federal Organizations. As a private citizen, you are free to participate in a non-Federal organization in any manner at whatever level you choose. For example, you may participate in an unofficial capacity in the administrative functions of the organization and exercise fiduciary responsibility on behalf of the organization. The Department, however, may not pay for travel, expenses, official time, supplies and equipment use that is for the business purposes of the organization as that could make the participation official. Also, your personal participation is subject to the following guidance:
Note: Should you choose to remain a member of the organization, you still must avoid taking official actions that give the appearance that you are using your official position for the benefit of that organization. However, there is not the immediate presumption of a real or potential conflict as there is with service in a fiduciary capacity or as an active participant.
7.4. Conflicting Personal Participation in Certain Non-Federal Entities. While you may participate in any lawful capacity in non-Federal organizations in your personal capacity, given your position within your State and the involvement of the following in Federal programs, it is likely that your participation in the following entities in any significant manner (e.g., in a fiduciary or active participant capacity) will raise ethical concerns, whether real or apparent:
Note: The dangers inherent in service with non-profit industry, trade, and lobbying organizations, generally would not be found in service on boards of non-profit, charitable organizations (e.g., food banks, Goodwill Industries, etc.).
8. Lobbying with Appropriated Funds. 18 U.S.C. § 1913. Federal employees must avoid using appropriated funds to lobby (e.g., lobbying on official time, or in official capacity, etc.). In your personal capacity, however, you may promote policy positions, including those on behalf of another (e.g., a non-Federal organization) to the Congress provided:
9. Fundraising. While an employee who is a member of a non-Federal charitable organization may participate in fundraising on behalf of the organization, limits exist in terms of the extent of such participation.
9.1. Fundraising in Your Official Capacity. Under 5 C.F.R. Part 950, the Combined Federal Campaign (CFC) generally is the only authorized fundraising permitted in the Federal workplace. Thus, other than as part of CFC, you may not engage in fundraising for a non-Federal charitable organization as part of your Federal job. See also, 5 C.F.R. § 2635.808(b).
9.2. Fundraising in Your Personal Capacity. Under 5 C.F.R. § 2635.808(c), you may participate in fundraising efforts except where solicitations come into contact with the Federal workplace. Specifically, you may not:
10.1. Political Activities in Your Official Capacity. Pursuant to the Hatch Act, as amended, you may not participate in any partisan political activity in your official capacity.2 This means that, in your official capacity, you could greet and tour a visiting Senator or congressman through your State to show him or her what RD programs are accomplishing. You could not, in your official capacity, attend a political rally, or fundraiser for the Senator or congressman.
10.2. Political Activities in Your Personal Capacity. Given your position within your State, you will likely find it difficult to clearly demonstrate to your critics and political opponents that your political participation is in your personal capacity. However, unless you are a career Senior Executive Service employee, you retain the right to participate in partisan political activities while in your personal capacity (i.e., on your own time and dime and with no reference to your official position or authority). The main restrictions on this ability are that you may not do the following:
11. Outside Employment. 4 As SD, you are subject to the OGE 278 – Public Financial Disclosure reporting requirements. Pursuant to USDA supplemental regulations (at 5 CFR § 8301.102(a)), all public filers are required to obtain prior written approval from their agency and the USDA Office of Ethics before engaging in any form of employment with outside (non-Federal) organizations. Report positions you hold in a personal capacity with outside organizations in Part I of the OGE 278e (Positions Held Outside U.S. Government). Report the source and amount of income from outside employment that exceeds $200, e.g., fees, salary, honoraria, in Part 2 (Filer’s Employment Assets, Income and Retirement Accounts). Please consult the Office of Ethics before seeking to engage in outside employment, or any form of commercial activity, located within the State that you serve as SD which involves the following:
Outside employment is also subject to the prior approval requirements if it is with or for a person whom the RD employee knows, or reasonably should know, is both: (i) An RD program participant; and(ii) Directly affected by decisions made by the particular RD office in which the RD employee serves.
12. Compensated Teaching, Speaking, and Writing Activities. You may not receive compensation for outside teaching, speaking, or writing activities that relate to your official duties. Your teaching, speaking, or writing relates to your official duties if:
If your activities have nothing to do with your official duties, there are no ethical restrictions.
1The financial interests of the following persons are imputed to you (treated as if you owned them yourself):
2 Although the Hatch Act prohibits participation by most Federal officials in partisan political activity while in their official capacity, it does not prohibit official participation in non-partisan political activity. However, an employee participating in such activity in official capacity (other than as specified in 11.1, above) could be subjected to discipline for misuse of official position.
3 A political office is partisan if any candidate for that office represents a party that received a vote for elector in the most recent Presidential election. This covers just about every political party in the U.S.
4 “[E]mployment” means any form of non-Federal employment or business relationship or activity involving the provision of personal services by the employee for direct, indirect, or deferred compensation other than reimbursement of actual and necessary expenses. It also includes, irrespective of compensation, the following outside activities: (1) Providing personal services as a consultant or professional, including service as an expert witness or as an attorney; and(2) Providing personal services to a for-profit entity as an officer, director, employee, agent, attorney, consultant, contractor, general partner, or trustee, which involves decision making or policymaking for the non-Federal entity, or the provision of advice or counsel (5 CFR § 8301.102(b)(1)-(2)). See also 5 CFR § 8301.107 – Additional rules for RD employees.