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USDA Ethics Issuances

06-1 An Ethics Guide for Officers and Board Members of the Federal Crop Insurance Corporation

U.S. DEPARTMENT OF AGRICULTURE - OFFICE OF ETHICS

ETHICS ISSUANCE: Number 06-1 - DATE: June 7, 2006 (Updated November 2017)

SUBJECT: AN ETHICS GUIDE FOR OFFICERS AND BOARD MEMBERS OF THE FEDERAL CROP INSURANCE CORPORATION

INTRODUCTION

The Federal Crop Insurance Corporation ("FCIC") is a wholly owned government corporation within the U.S. Department of Agriculture ("USDA") that is authorized to carry out all actions and programs authorized by the Federal Crop Insurance Act, 7 U.S.C. § 1501, et seq.(Act). The Risk Management Agency ("RMA") has been delegated authority to act on the behalf of the FCIC to deliver and administer all Federal crop insurance programs. Management of the FCIC is vested in the FCIC Board of Directors ("Board") under the supervision of the Secretary of Agriculture.

This guide is designed to provide a basic ethics primer for FCIC Officers and Board Members concerning some of the restrictions most likely to impact them in the performance of their official duties, and focusing specifically upon restrictions that may 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. Not all ethics issues discussed herein are treated in depth. Some common issues, discussed under "Other Ethical Concerns" and "Miscellaneous Restrictions and Obligations," are treated generally. For information on any ethics-related restriction, including training modules that address most common ethics issues, see the Office of Ethics website at www.usda.gov/ethics.

DEFINITIONS

  • "FCIC Board," for purposes of this guide, refers solely to the six voting non-Federal members on the Board provided for at 7 U.S.C. 1505(a)(2). All references to "Board Members" will refer solely to these individuals.
  • "FCIC Employee," for purposes of this guide, includes all FCIC Officers and Board Members;
  • "FCIC Manager" means the Administrator of RMA. The FCIC Manager also serves as a non-voting Federal member of the FCIC Board;
  • "FCIC Officer," for purposes of this guide, refers to the following employees:
    • FCIC Manager, a non-career Senior Executive Service ("SES-N") employee;
    • Deputy Manager and Executive Secretary, SES-N employees;
    • Deputy Executive Secretary, a career GS-15 ("GS") employee;
    • RMA Chief Financial Officer, a career GS-15 employee; and
    • Three voting Federal members of the Board to include:
      • Under Secretary of Farm and Foreign Agricultural Services ("FFAS"), a Presidential Appointee with Senate Confirmation ("PAS") employee;
      • Another USDA Under Secretary (PAS), and
      • USDA Chief Economist, a career Senior Executive Service ("SES-C") employee.

APPLICATION

The ethics statutes and rules discussed in this guide apply to all FCIC employees; however the manner in which the rules apply vary according to the nature of the individual's Federal appointment.

  • FCIC Officers. As noted above, FCIC Officers serve under three types of appointments: PAS, SES (to include both SES-C and SES-N employees), and GS. The ethics statutes and rules apply equally and in full force to all FCIC Officers with the following notable exceptions:

    • Outside Earned Income Bans. PAS and SES-N employees face restrictions on acceptance of outside earned income during their tenure in such positions. PAS officials are subject to a total prohibition on the receipt of outside earned income. See section 102 of Executive Order 12674, as amended; 5 CFR 2636.302. SES-N employees are restricted to outside earned income of no more than 15% of the basic pay for Executive Level II. See 5 CFR 2626.304. Moreover, non-career SES employees are barred from receiving any compensation for practicing a profession, affiliating with a firm providing professional services involving such a relationship, or permitting their names to be used by such an entity. See 5 CFR 2636.305.

    • Post-employment Restrictions.
      • PAS and most SES employees (both N and C) are subject to a 1-year "cooling off" ban on representing others before USDA after leaving their senior positions at USDA.

    • Partisan Political Activity.
      • PAS Officials have broad freedom to participate in partisan political activity, even while on official duty;

      • SES-N and GS employees have broad freedom to participate in partisan political activity while on their own time;

      • SES-C employees are very limited in the degree to which they may participate in partisan political activity.

  • FCIC Board Members. FCIC Board members are special Government employees ("SGEs") and, thus, while subject to the laws regarding conflicts of interest; they are subject to such laws to a more limited extent. Of note for FCIC Board members are the following differences:

    • Representation Before the Federal Government. The prohibitions on representing apply: (1) only on the days on which the SGE is in a Federal status or performs Federal duties; and (2) to a more-limited set of matters;

    • Serving as an Expert Witness. Restrictions on serving as an expert witness apply only if the SGE participated in the proceeding or matter as an employee;

    • Teaching, speaking and writing. SGEs may receive compensation for teaching, speaking, and writing about agency policies, programs, and operations, so long as they were not assigned to those matters during the previous year; and

    • Partisan Political Activity. The rules apply to SGEs only on those days when they are in Federal status or are performing Federal duties.

LAWS AND REGULATIONS

I. BRIBERY -- 18 U.S.C. 201. -- As a Federal employee you may not give/receive/ request/offer anything of value to influence an official act of a government employee, or to be influenced in performing your official duties.

Application:

  • This criminal statute applies equally to FCIC Officers and Board Members. Conviction for bribery requires proof of corrupt intent and a quid pro quo (something given or offered for a specific official action to be taken or not taken). Absence of corrupt intent or quid pro quo may still violate 18 U.S.C. 209 (below), or be prohibited under the rules concerning Gifts From Outside Sources, 5 CFR Part 2635, subpart B.
  • The prohibition applies whether one is on official duty or on personal time.

II. CONFLICTS OUTSIDE OF OFFICIAL DUTIES.

Representation before the Federal Government. 18 U.S.C. 203 & 205.

General: Two very similar criminal statutes govern whether you may interact with the Federal Government on behalf of non-Federal entities during your Federal employment, 18 U.S.C. 203 and 205.

  • Section 203 - Compensation to Members of Congress, Officers, and Others in Matters Affecting the Government. During your Federal appointment and except in the discharge of official duty, you may not seek, agree to receive, receive, or solicit compensation for representational services provided personally or by another before the Executive or Judicial branches of the Federal Government.

  • Section 205 - Activities of Officers and Employees in Claims Against and Other Matters Affecting the Government. During your Federal appointment and except in the discharge of official duties you are prohibited from engaging in the following, with or without compensation:
    • prosecuting any claim against the U.S., or receiving any gratuity, or share or interest in a claim for assisting in prosecution of the claim, or

    • representing another before the Executive or Judicial Branches of the Federal government.

Definitions:

  • Representational services means any actions undertaken in direct and knowing support of a representation. This could involve drafting documents, proposals and bids, and other support activities short of actual representation.

  • Representing means acting as agent or attorney for another person by communicating with (either orally or in writing) or appearing before, the Executive or Judicial Branches of the Federal government.

Application: Prohibitions apply as follows:

  • FCIC Officers: To any particular matter in which the US is a party or has a direct and significant interest.

  • FCIC Board Members: Only to the following:
    • Any particular matter involving a specific party or parties (e.g., a contract, loan, grant, claim, law suit, etc.) in which you participated personally and substantially while a Federal employee; and
    • If you served more than 60 days during the preceding 365-day period, any particular matter (this would include the above matters, as well as most policies, programs, and initiatives) pending before USDA (including any agency, office, or component thereof). (NOTE: Most FCIC Board members will serve more than 60 days in a 365-day period)

Exceptions: You may however:

  • Represent yourself; however, this exemption does not cover your acting on behalf of your personal or family corporation.

  • Represent your parents, spouse, child, or person/estate for whom you are serving as personal fiduciary with1 or without compensation, so long as you did not take official action on the matter or so long as the matter is not subject to your official responsibility.

  • Give testimony under oath.

  • [Board Members only] Represent others on work done under a grant or contract with the U.S. or one that benefits the U.S., if the USDA certifies in the Federal Register that it is in the national interest.

  • Where not inconsistent with one's official duties, and without compensation, represent one who is subject to disciplinary, loyalty, or other personnel administrative proceedings; and

  • To the extent permitted under 5 C.F.R Part 251, represent an organization comprised primarily of Federal employees in certain dealings with the agency concerning employment issues.

Examples2:

    An FCIC Official:
  • Could not represent his spouse's company, either in person, by phone, or in writing, to or before the Department of Interior concerning her company's application for a Special Use Permit on a National Park; however, he could represent her, if without compensation, on an application which she submitted on her personal behalf.
  • Could file a tort claim on his personal behalf, or on behalf of his parents, if without compensation, against the USDA for damage to family properties caused by negligence of USDA employees in the scope of their employment.
  • Who is a GS or SES employee, could not, were he to practice law outside of USDA, represent or receive legal fees for behind-the-scenes representational services he provided related to another's representation of a non-family member in their claim against a Federal agency, or in a Federal court action on such a claim.
  • Could not represent his incorporated farm on an application to the Farm Services Agency for an Operating Loan.
  • Who is a GS or SES employee, could not, as a partner in an outside business concern, receive compensation for work that he did in support of the company's representational efforts to obtain a Department of Defense contract; however, if he did not work on the contract effort, he could receive partnership shares related to the increased company profits derived from the contract (NOTE: An SES-N also would be limited by the 15% cap on outside earned income).
  • Could, without compensation, represent or provide representational services in support of a friend who is facing disciplinary proceedings before FSIS and regarding matters in which her agency has no interest.
  • Could not represent his outside company, or be compensated for services in support of another's representations before the FCIC Board regarding the company's position on FCIC proposed changes in policy, such as the renegotiation of the Standard Reinsurance Agreement.
    An FCIC Board Member:
  • Could, while on personal time, represent and/or be compensated for providing representational services related to a matter before the U.S. Food and Drug Administration.
  • Could not perform such duties while on official time (e.g., on any day that she performs services of any significant nature as an FCIC Board Member). For purposes of this rule, where on official travel, official time would cover the entire time that she is engaged in official travel, or in a Federal pay status, not just the time actually spent performing FCIC duties.
  • Who served less than 60 days during the past 365 calendar days, could, on her personal time, represent her company, or receive compensation for services in support of another's representation of her company in connection with an application that her company has pending before the Farm Services Agency if that application has nothing to do with matters that would come before her as a member of the FCIC Board.
    • However, if she served more than 60 days during the past 365 calendar days, then she would not be able to engage in representational activities of any sort regarding any matters pending before any part of USDA.
    • Irrespective of length of SGE service, an FCIC Board member may neither represent another before the FCIC Board, nor assist another in their representations before the FCIC Board. This is based, not on the foregoing representation statutes, but upon the prohibition against misusing one's official title and position on behalf of another. See III.A., below.

III. CONFLICTS IN THE PERFORMANCE OF OFFICIAL DUTIES

A. Financial Conflicts of Interest, Loss of Impartiality & Favoritism

General: At the core of Federal ethics laws and regulations is the concept that official duties shall be performed based upon what is in the best interests of the public, vice what is specifically in your interest or specifically in the interests of those close to you. This concept is covered by three separate provisions: First, by the criminal financial conflict of interest statute, 18 U.S.C. 208; second, by the administrative rules against loss of impartiality, 5 CFR 2635.502, which expand upon the criminal statute; and third, the administrative rules against misusing your official position for the specific benefit of you or anyone else, 5 CFR 2635.702(d). While the administrative rules are not criminal in nature, violation can result in discipline, even dismissal.

  • 18 U.S.C. 208 - Acts Affecting a Personal Financial Interest. During your appointment, you may not participate personally and substantially (i.e., recommend, influence, or decide) in any particular matter in which:
    • you
    • your spouse;
    • minor child;
    • general partner;
    • organization in which you serve as officer, director, trustee, general partner or employee; or
    • any person or organization with whom you are negotiating or have an arrangement concerning prospective employment,

    has a financial interest if that official action will have a direct and predictable impact upon the financial interest.

  • 5 CFR 2635.502 - Impartiality in Performing Official Duties. Even if not prohibited by the statute, unless a waiver is granted, you also may not participate personally and substantially in any particular matter involving specific parties which you know:
    • Is likely to have a direct and predictable impact on the financial interests of a member of your household; or
    • A person with whom you have a covered relationship is or represents a party to that matter, IF

    a reasonable person would question your impartiality.

  • 5 CFR 2635.702(d) - Performance of Official Duties Affecting a Private Interest. If performance of your official duties would affect the financial interests of a friend, relative or person with whom you are affiliated in a nongovernmental capacity and who would not be covered either under the statute or rules concerning impartiality, you still should follow the impartiality rules.

Definitions:

  • Covered relationships include the following:
    • Anyone, other than a prospective employer, whom you have or seek to have a business, contractual or other financial relationship involving other than a routine consumer transaction;
    • Members of your household and relatives with whom you have a close personal relationship;
    • Individuals with whom your spouse, dependent child or parent serves or seeks to serve as an officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee;
    • Any person for whom you have within the last year served as officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee; or
    • Any organization, other than a political party, in which you are an active participant (e.g. committee chair, fundraiser, adviser, manager, etc.).

  • Participating personally and substantially means participating directly (or through a subordinate at your direction) and in a manner of significance to the outcome. One can meet this requirement through participation in the decision-making or deliberative process, not just through participation in or making the ultimate decision.

  • Particular matter is a matter that involves deliberation, decision, or action that is focused upon the interests of specific persons, or a discrete and identifiable class of persons. It includes not only particular matters that involve specific parties (see below), but also matters such as legislation or policy-making that are narrowly focused on the interests of such a discrete and identifiable class of persons. Examples of particular matters before FCIC would include the following:
    • Judicial Proceedings: Litigation brought by insurance companies challenging an FCIC rulemaking for alleged violations of the Administrative Procedure Act.
    • Applications: A specific application submitted to RMA to enter into a risk management research partnership.
    • Contracts: FCIC enters into a contract to perform evaluations of its pilot programs.
    • Claims: An insurance company owing money to FCIC is placed in liquidation, making FCIC a creditor in the State proceeding.
    • Controversies: A dispute over whether a non-profit association is eligible to apply for an award under the Community Outreach and Assistance Partnership Program.
    • Policymaking: Renegotiation of the Standard Reinsurance Agreement.
    • Policymaking: Development of regulations insuring growers of wild rice in Minnesota.
    • Policymaking. Deliberations over a proposal to request applications for RMA research partnerships.

  • Particular matter involving specific parties means a subset of particular matters in which there are formal parties identified to the matter - persons or entities with legal rights and obligations at issue. This would include judicial proceedings and litigation, applications, requests for rulings and determinations, contracts and grants, claims, charges and accusations, and investigations (see examples under particular matter, above). However, the term would not include legislation or policymaking (see examples, above) unless the legislation or policymaking is related to one or a few specified parties (e.g., a private relief bill).

    The following are examples that show the difference between particular matters and particular matters involving specific parties:

    • Deliberations over, or issuance of, a proposal to request applications for RMA research partnerships would be a particular matter, but would not be a particular matter that involves specific parties; however, .an application that is submitted to RMA by a company to enter into a risk management research partnership under that proposal would be a particular matter that involves specific parties.
    • The decision to include a type of organization as eligible to apply for an award under the Community Outreach and Assistance Partnership Program would be a particular matter, but would not involve specific parties; however, a challenge raised by a rejected applicant would be a particular matter involving a specific party.

  • Direct and predictable impact. If a particular matter is involved, for the prohibition to apply, the official action also must have a direct and predictable impact upon the financial interest at issue - this means a real, rather than speculative impact.

Application: The application of the statute and regulations to FCIC must be considered in light of the fact that Congress, by statute, has deemed it necessary to place upon the Board persons who otherwise would have a natural conflict of interest in so serving. Accordingly, for the purposes of FCIC, the Office of the General Counsel has set forth the following guidelines as to what would and would not constitute a direct and predictable impact on a Board Member's financial interests:

  • Not direct and predictable: Actions, including deliberations and voting on matters–
    • Generally applying equally to all active farmer policyholders;
    • Generally applying equally to a given industry, such as crop insurance industry;
    • Involving a specific commodity with national or regional application or impact.

  • Direct and predictable: Actions including deliberations and voting on matters–
    • Relating to a county where a Board member has farming interests at issue;
    • Relating to a specific farm or company owned by a Board member;
    • Relating to interests held by a friend, family member, or business associate or client;
    • Relating to the interests of direct competitors of a Board member.

  • The statute and regulations apply equally to FCIC Officers and FCIC Board Members. Recusal from participation in a matter in which you have a financial interest effectively resolves the conflict; however, recusal must be from all significant involvement in the decision-making process concerning the matter, NOT just the final decision.

Exceptions: You may still participate if the conflict is subject to one of the following waivers:

If a conflict of interest:

  • Individual Waiver. 18 U.S.C. 208(b)(1). You may request a waiver if you advise the person who appointed you of the official matter at issue and your conflicting interest and receive in advance a written determination by that official that the interest is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from you;

  • Regulatory Waiver. 18 U.S.C. 208(b)(2) & 5 CFR Part 2640, Covers situations where the conflicting financial interest is comprised of assets in diversified where the conflicting financial interest is comprised of assets in diversified mutual funds, unit investment trusts, some Sector mutual funds, Government pension plans; diversified employee benefit plans and publicly-traded securities.

  • Tribal Interest Waiver. 18 U.S.C. 208(b)(4). Covers situations where the conflicting financial interest results solely from interests in birthrights in an Federally-recognized Indian tribe [or Alaska Native village corporation], Indian allotment, or Indian claims fund.

In cases of a loss of impartiality and misuse of position:

  • Consideration of appearances by the employee. 5 CFR 2635.502(a) and (c). If you see that there is the potential for your participation in an FCIC matter to raise reasonable concerns as to your impartiality and objectivity, you should inform the FCIC Manager or Executive Secretary of the appearance and not participate in the matter until you receive authorization from that official based on a determination made in writing, made in light of all relevant circumstances, that the interest of the Government in the employee's participation outweighs the concern that a reasonable person may question the integrity of the agency's programs and operations.

Examples:

    An FCIC Officer or Board Member:
  • Whose spouse owns a cotton farm would not violate the criminal statute by participating in the consideration of agency policies that would affect cotton growers nationally; but would do so in participating in the consideration of the spouse's application for a written agreement to insure unclassified land.
  • Whose spouse is an employee of a cotton farm, would not violate the criminal statute by participating in the consideration of the above application, but would violate the impartiality rules and could face disciplinary action.
  • Who has an inactive crop insurance business during tenure as a Federal employee, could participate in matters involving crop insurance which apply to the conduct of crop insurance nationwide if these policies have no effect upon her business that are different from the effects upon other similarly-situated persons, agencies, and insurance companies. There is no direct and predictable impact of such policies upon the employee's financial interests.
  • Whose farm partnership leases farm property, would violate the criminal statute by participating in the deliberations over a compliance investigation regarding her general partner; if the application were from her lessee, she would not violate the criminal statute, but would violate the rules against loss of impartiality.
  • Whose minor son has stock in a crop insurance company with an with a 508(h) submission before FCIC, would face a criminal conflict by participating in the matter; if the son were of majority age, there would not be a criminal conflict, but would be a loss of impartiality issue (even if the son moves out of the house, he is a close, personal relative).
  • Who has had conversations with the president of a reinsurance company about the possibility of post-Government employment with that company, would violate the criminal statute if she participated in any official actions relating not only to a matter directly affecting that company (e.g., a 508(h) submission by the company), but also as to a matter affecting FCIC policy relating to the reinsurance industry (e.g., renegotiation of the Standard Reinsurance Agreement). [NOTE: Once she leaves FCIC, however, post-employment restrictions would only preclude her from improper representations made in reference to the 508(h) submission; not as to the Standard Reinsurance Agreement].


    An FCIC Board Member: (In light of the statutory resolution of conflicts for Board Members):
  • A private Board member would:
    • Be able to maintain her involvement in the crop insurance industry while on the Board;
    • Be able to participate in matters involving crop insurance which apply to the conduct of crop insurance nationwide AND which have no effects upon her business that are different from the effects upon other similarly-situated persons, agencies, and insurance companies;
    • Not be able to participate in deliberations or voting on matters that directly affect her company's interests, such as whether to require companies reinsured by FCIC themselves to perform actuarial services that they currently contract out, or to require them to contract out services currently within their capabilities;
    • Not be able to participate in deliberations or voting on matters that directly specifically affect the interests of her direct competitors in the crop insurance business.
    • As discussed in the examples under II, above, irrespective of length of SGE service, an FCIC Board member would likely be seen as misusing his or her official position where either representing another before the FCIC Board, or assisting another in their representations before the FCIC Board. It is unlikely that a reasonable person possessing all relevant facts would see other members of the FCIC Board as not being influenced by the official status of a Board member acting in this fashion before the Board. Moreover, the potential that the Board member would have access to, and make personal use of, nonpublic FCIC information could undermine the public's faith in the integrityand fairness of Board operations and programs.

B. Dual Compensation. 18 U.S.C. 209.

General: During your tenure as a Federal employee, you should not receive or agree to receive any salary or compensation from a non-Federal source for performing your official duties. As all FCIC employees receive Federal compensation for their services, this statute applies to them equally.3

Examples:

  • A producers association could reimburse the Agency, under 31 U.S.C. 1353, for the cost of sending a FCIC Officer or Board Member to address association members on various issues concerning FCIC; however, the Officer or Board Member could not accept an honorarium from the association because the speech is part of the Officer or Board Member's official duties.

  • A local civic association wants to present an FCIC Officer with an award honoring her public service in that role. So long as the award is an established award program for public service, the Officer can accept; not so, if the award is ad hoc, or given based on a decision made by the Officer that specifically benefited the awarding group or association.

IV. POST-EMPLOYMENT CONFLICTS

General: Upon completion of your Federal service, you will be required to comply with certain post-employment prohibitions that primarily deal with representation of others back before the Federal government. There are five criminal provisions under 18 U.S.C. 207 and one civil restriction under 41 U.S.C. 423:

A. 18 U.S.C. 207(a)(1).-- Permanent Restriction. You may not knowingly represent any other person (other than the U.S.) before the Executive or Judicial Branches of the Federal government with the intent to influence the government's actions in a particular matter involving specific parties (i.e., a contract, grant, application or claim) in which you participated personally and substantially for the government at any time in your Federal career. (As with other ethics violations, for a violation to occur, the U.S. must be a party or have a direct and substantial interest in the matter.)

Definitions:

  • Representing. See definition, above.
  • Particular matter involving specific parties. See definition, above.
  • Participating personally and substantially. See definition, above.

Application:

  • Applies to FCIC Officers and Board Members alike.
  • This statute does not prohibit you from representing yourself.
  • The statute also does not prohibit you from working behind-the-scenes in assisting another in the actual representation (compare this with the rules on representation while you are an employee).
  • You may avoid being covered under this provision by recusing yourself from all participation in a covered matter.
  • Usually this provision applies to "hands-on" participation, but may include brief but significant involvement such as approving a matter. Participation in this manner occurs not merely at the decision level, but anywhere within the deliberative, or decision-making process.
  • While the provision applies to matters that you participated in at any time in your Federal career, the application may be limited where a significant period of time has elapsed between your current representation of a party before the government and your official participation in it as a Federal employee. The issue is whether the matter has changed significantly enough that it is still the same matter.

B. 18 U.S.C. 207(a)(2) --Two-Year Restriction. You may not knowingly represent any other person (except the U.S.) before the Executive or Judicial Branches of the Federal government, with the intent to influence the government in a particular matter involving specific parties which you knew or should have known was actually pending under your official responsibility within a period of one year before the date of the termination of your Federal employment.

Definitions:

  • Representation and Particular matter involving specific parties.
  • Actually pending under your official responsibilities means that the matter actually was received by FCIC, was a matter over which you had responsibility, and was available for action during your last year of Federal service.

Application:

  • See first three application notes under 207(a)(1), above.
  • Unlike section 207(a)(1), above, if the matter is under your official responsibility, a recusal does not preclude application of this provision.
  • This often is the "supervisory" bar. The provision contemplates managers and superiors whose offices and organizations have the matter for action, even if they do nothing on the matter during the former employee's last year of Federal service.

C. 18 U.S.C. 207(c) -- One-Year Senior "Cooling Off" Restriction. A former USDA Senior Employee, may not knowingly represent any other party before the Department in connection with any matter on which the former employee seeks official action by the Department for a period of one year after that employee's official service in such position ends.

Definitions:

  • Senior Employee means FCIC Officers who:
    • Terminated service prior to 11/23/2003.
      • All Executive Level (EL) officials.
      • Senior Executive Service employees at pay levels ES 5 and 6.
    • Terminated service between 11/23/2003 and 01/10/2004.
      • Any Federal employee who, as of 11/23/2003, was paid at the above levels.
    • Terminated on or after 01/10/2004.
      • All Executive Level (EL) officials.
      • All employees paid at a rate of basic pay that exceeds 86.5 percent of the rate of basic pay for Level II of the Executive Schedule (ES II). This effectively includes all employees who, under the former SES pay scheme, would have been paid at SES levels ES 2-6, as well as all SES employees in San Francisco.

  • Any matter includes all matters under consideration by USDA. This would include not only particular matters, whether or not specific parties are involved, but also matters of broad general legislation and policy-making. It also applies across USDA, not just to matters involving FCIC, RMA, or FFAS.

Application:

  • As FCIC Board Members are compensated at levels below 86.5% of base pay for level II of the Executive Schedule, this provision applies only to FCIC Officers paid above that level.

Exceptions: The one-year bar does not apply to the following:

  • Acts done in carrying out official duties on behalf of the U.S. as a State or local government elected official;
  • Representation, aid or advice to an international organization in which the U.S. participates;
  • Testimony unless it would violate 207(a)(1);
  • Representation by a candidate for elected office.

D. 18 U.S.C. 207(f).-- One-Year Senior Foreign Entity Restriction. A Senior Employee, for a period of one year after terminating such official service, also may not represent, aid or advise a foreign entity before any officer of any agency or department of the United States with the intent to influence such officer in the performance of their official duty.

Definitions:

  • Senior Employee. See above.
  • Foreign entity means a foreign government, corporation, or political party.

Application:

  • Unlike 207(c), this statute is government-wide.
  • Unlike the other post-employment statutes, in addition to representation, the statute prohibits "behind the scenes" efforts in support of representations.

E. 41 U.S.C. 423 -- One-Year Restriction on Procurement Matters. If you played a significant role in a Federal procurement action worth more than $10 million during the last year of your Federal service, you may be precluded from receiving any form of compensation from the winning bidder for a period of one year from your last involvement in that procurement. Please contact the Office of Ethics for guidance on any procurement exceeding $10 million.

Application:

  • This provision would probably only apply to the Chief Economist and the Deputy Manager for FCIC. It would not apply to FCIC Board Members.

POST-EMPLOYMENT EXAMPLES:

  • A former Board member who was a member during renegotiation of the Standard Reinsurance Agreement (SRA) and participated in meetings during which renegotiation progress and strategy were discussed, could represent his company before the Government concerning the SRA because the SRA, while a particular matter, does not involve specific parties; the same result would hold true, under the same facts, for an FCIC Officer who was not a "Senior employee;" however an FCIC Officer who was a Senior Employee could not represent another before the Government on the SRA for one year after leaving his Senior Employee position because the 1-year bar under 18 U.S.C. 207(c) covers all matters before USDA. After the 1-year bar expires, however, the FCIC Officer could then represent another on the SRA.

  • A former Board member who was a member during consideration of an application from a non-profit association for an award under the Commodity Partnerships Program and who participated in the consideration of the application but recused himself from the final decision, would be barred under 18 U.S.C. 207(a)(1) from ever representing any party before the Government concerning that application. The application is a particular matter involving specific parties and the former member participated personally and substantially in that matter. Had he recused himself from any participation in the consideration of the application, he would still be barred from such representation, but only for 2 years under 18 U.S.C. 207(a)(2) if the matter still was pending before the Board during his last year as a Board Member. The same result would hold true for all FCIC Officers.

  • A former FCIC Board Member would be able to represent a trade association before the Deputy Administrator of the Food Safety Inspection Service on matters that did not relate to her official duties on the FCIC Board; however, an FCIC Officer who was a Senior Employee could not do so for a period of one year after leaving such position.

  • A former FCIC Officer who would otherwise be barred from representing another before the Federal Government could be paid for her services in assisting a party in who is challenging an award made by the FCIC Board on which she participated while a Board Member so long as she remained completely behind the scenes (e.g., did not attend any meetings, sign any documents for submission to the Government, or contact a Federal officer or employee in support of the challenge.

V. OTHER ETHICAL CONCERNS

A. Gifts From Outside Sources. 5 CFR 2635.201-205.

General: You may not solicit or accept gifts directly or indirectly from anyone either (1) given because of your official position; or (2) given by a prohibited source.

Definitions:

  • Prohibited source means anyone who (1) seeks official action from USDA; (2) does business or seeks to do business with USDA; (3) conducts activities regulated by USDA; (4) has interests that you could affect in your official capacity; and (5) any organization with a majority of members who meet the above descriptions.

  • Gifts include any tangible or intangible item, favor, gratuity, loan or forbearance, discount, entertainment, hospitality, travel, or travel-related expense obtained for less than market value.

Application:

  • As with Bribes, this prohibition applies whether you are on or off duty.

Exceptions: Below are brief synopses of the various exclusions to this rule. If you have questions, contact the Mission Area Ethics Advisor for FFAS or the Office of Ethics:

  • Gifts of $20 or less,
  • Gifts based on a personal relationship;
  • Discounts to all Federal employees;
  • Bona fide awards and honorary degrees;
  • Gifts based on outside business or employment relationships;
  • Gifts in connection with political activities under the Hatch Act Reform Amendments;
  • Free attendance at an event where you are speaking in official capacity; and
  • Free attendance at widely-attended gatherings of interest to the Agency.

    "PRUDENCE RULE": Even where a gift may be accepted, if there are matters coming before FCIC, or that reasonably could come before the FCIC, that involve the donor, or if there are other factors that would appear questionable in the eyes of the public [e.g., donor is in litigation with USDA, or participation has been suspended for cause], the employee should exercise prudence and either decline the gift, or pay market value for the gift.

Examples:

  • Gifts of $20 or less. If a prohibited source offers to take you to lunch, you may accept the free lunch if it is worth $20 or less; if more than $20, you must pay the full price of the meal or decline the offer. Also, if the meal is worth less than $20, but acceptance of this meal would mean that you have accepted more than $50 in gifts from this source within the year, you either must pay the full price of the meal, or decline.
  • Gifts based on a personal relationship. If your brother is in the crop insurance business and has interests that are affected by FCIC, if he comes to town and offers to take you to lunch, you can accept no matter what the value of the meal is. However, with gifts from close friends and relatives:
    • The gift must be from (i.e., paid for by) the friend or relative; NOT by his or her company.
    • If there are specific matters before FCIC, consider the "Prudence Rule," above.
  • Gifts based on outside business or employment relationships. If you receive free tickets to a ball game from a partner or client of your outside business, or from your spouse's employer irrespective of the value, you may accept the tickets IF it is clear that there is no likelihood that the gift is being given to curry favor with you based upon your position as FCIC Board member. Again, consider the "Prudence Rule," above.

B. Gifts Between Employees. 5 CFR 2635.301-304.

General: You may not:

  • Give gifts to your official superior;
  • Accept gifts from your subordinates;
  • Solicit a contribution from another employee for a gift to an official superior; either your supervisor or the other employee's; or
  • Coerce the offering of a gift.

Definition:

  • Official superior means your immediate supervisor and other officials who can affect your performance appraisal, awards, or job assignments.

Exceptions:

  • Non-cash items of $10 or less on an occasional basis;
  • Refreshments shared in the office;
  • Hospitality offered at home; and
  • Gifts given on special infrequent occasions of either personal significance (birth, weddings, etc.), or that terminate a supervisor/subordinate relationship.

C. Misuse of Title, Position & Endorsements. 5 CFR 2635.701-705.

General: You may not use your official position, title or authority on behalf of anyone other than the public. See III.A., above, especially the last example.

  • Official Title: Use of your official title when representing the USDA is obviously expected. This may be on written documents or in verbal introduction. However, you may not use your USDA title where unrelated to your official duties or for personal gain or the gain of anyone else.

  • Endorsements: In your official capacity, unless authorized by statute or regulation, you may not endorse: the products or processes of manufacturers; or the services of commercial firms for advertising publicity or sales purposes.

  • Nonpublic Information: You may not: engage in a financial transaction using nonpublic information; allow the improper use of nonpublic information to further your interest or anyone else's interest; or make any unauthorized disclosure of such information.

    Nonpublic information means information gained through Federal employment which has not been made available to the general public. It includes agency plans, policies, reports, studies, financial plans, or internal data protected by the Privacy Act or the Freedom of Information Act.

  • Agency Time and Property: You have a duty to protect and conserve government time and property, and use them economically and for official purposes. It is not unusual for individuals in both the public and private sector to monitor the activities of Federal employees. Public perception is important.

D. Teaching, Speaking & Writing. 5 CFR 2635.807

General: As a Federal employee, you may not accept compensation from any non-Federal source for teaching, speaking, or writing that relates to your official duties. Teaching, speaking or writing relates to your official duties if:

  • The activity is undertaken as part of your official duties;
  • The invitation to engage in the activity was extended primarily because of your official position rather than your expertise in the subject matter;
  • The invitation or offer of compensation was extended by someone with interests that may be affected substantially by your official duties;
  • The information conveyed through the activity drawn substantially on nonpublic information obtained through your government service; or
  • In the case of an SES-N employee, the subject of the activity deals in significant part with the general subject matter area, industry, or economic sector primarily affected by the programs and operations of that employee's agency.

Application:

  • SES-N FCIC Officers. FCIC Officers who are SES-N employees must (1) receive specific advance authority by the Designated Agency Ethics Official (Deputy Assistant Secretary for Administration) before receiving compensation for teaching; and (2) are subject to outside earned income limitations found in 5 CFR part 2635, subpart C.

  • FCIC Board Members. As applied to SGEs, this prohibition is limited to the following conditions:
    • If you have served or are expected to serve more than 60 days during your first year of an appointment, or during any subsequent one year period of that appointment, the prohibition applies to matters to which: (1) you are presently assigned; or (2) you were assigned during the previous one-year period if part of your current appointment; or
    • If you have not served or are not expected to serve more than 60 days during your first year of an appointment, or during any subsequent one year period of that appointment, the prohibition applies to particular matters (i.e., contract, claim, grant application) involving specific parties in which you participated or are participating personally and substantially (e.g., by advising, recommending, or influencing a government decision).

Exceptions: This restriction does not apply to:

  • Accepting travel expenses;
  • Communicating programs or general subject areas of the USDA; or
  • Teaching a regularly established course at an institution of higher learning, an elementary or secondary school, or a program sponsored and funded by the Federal, State, or local government.

E. Fundraising. 5 CFR 2635.808.

General: You may engage in fundraising in a personal capacity provided you do not solicit funds from subordinates and from anyone you know having interests that could be substantially affected by the performance or nonperformance of your government duties. You must also avoid using your official title or any authority associated with your government position to further the fundraising effort. Generally, the only authorized official participation in fundraising efforts is through the Combined Federal Campaign.

F. Expert Witness Testimony. 5 CFR 2635.805.

General: Unless officially authorized, you may not participate as an expert witness, with or without compensation, other than on behalf of the U.S., in any proceeding before a Federal court or agency in which the U.S. is a party or has a direct and substantial interest where you participated in the particular proceeding or in the particular matter that is the subject of the proceeding as a Federal employee or SGE [5 CFR § 2635.805(a)]. Also, if you were appointed by the President, serve on a statutory commission, or expect to serve more than 60 days in a period of 365 consecutive days, you shall not serve as an expert witness, with or without compensation in any proceeding in which USDA is a party or has a direct and substantial interest in the matter [5 CFR § 2635.805(b)].

G. Partisan Political Activity. 5 CFR Part 734.

General: All Federal employees are subject to rules limiting their ability to participate in partisan political activity.

Application:

  • FCIC Officers may participate in partisan politics to the extent permitted based upon the nature of their Federal appointment. For purposes of FCIC, there are three sets of limitations for FCIC Employees: (1) PAS officers; (2) SES-C employees; and (3) Others (including SES-N, Schedule C, and GS employees.
    • PAS Officers. Both Undersecretaries who sit on the FCIC Board are PAS Officers. These officers have broad authority to participate in partisan political activity and may do so on official time and using Federal office spaces. As with other Federal employees, however, they may not run for partisan office, nor may they participate in partisan fundraising efforts. Also, while they may mix official and political travel, they must ensure that public monies are not spent in order to accomplish partisan political purposes. Moreover, while they may engage in partisan political activity on official time and in Federal work spaces, they must avoid employing the services of non-PAS subordinates in support of these efforts.

    • SES-C Employees. The USDA Chief Economist is the only SES-C serving as either an FCIC Officer or Board Member. These employees are highly restricted in terms of their ability to participate in partisan political activities. Under the rules, they may do the following, and only on their personal time:
      • Vote as individuals;
      • Express opinions on political subjects and candidates;
      • Serve as candidates for election in non-partisan elections;
      • Participate in non-partisan "Get Out the Vote" drives;
      • Contribute money to political organizations; and
      • Attend, but not be an active participant at, political events and functions.

    • All Others. With the Hatch Act Reform Amendments of 1993 (Amendments), all other employees were accorded greater freedom to participate in partisan political activities, but only on their personal time. In addition to the activities permitted to SES-C employees, employees governed by the Amendments may engage such partisan political activities as:
      • Campaigning;
      • Distributing campaign literature;
      • Making campaign speeches;
      • Writing or signing letters for publication soliciting votes;
      • Registering voters for a party;
      • Driving voters to the polls in partisan "get-out-to-vote" efforts;
      • Acting for a political party at a polling place;
      • Organizing, managing, or holding office in campaign organizations;
      • Being active at political rallies and meetings;
      • Taking a prominent part in primary meetings or caucuses;
      • Serving as delegates to party conventions;
      • Initiating or signing nominating petitions;
      • Holding office in partisan political clubs or parties.

        However, as set forth previously, they may not engage in partisan political activity while:

      • On duty;
      • On government-paid travel;
      • In any room or building used in the conduct of government business;
      • Wearing a uniform or official insignia identifying the office or position of the employee; or
      • Using any vehicle owned or leased by the government.

        Moreover, they may not engage, at any time, in the following:

      • Partisan in political fundraising (soliciting, accepting, or receiving contributions), except in the context of a Federal labor organization multi-candidate political committee (seek further ethics advice before engaging in this activity);
      • Running for a partisan political office;
      • Soliciting or discouraging the partisan activity by any person who: (1) has any application pending before USDA; or (2) is a subject or participant in an ongoing audit, investigation, or enforcement action being carried out by USDA; and
      • Using official authority or influence to interfere with or affect the result of an election.


    • FCIC Board Members are bound by the Amendments; however, the rules only apply to on the days (or portions of days) on which they perform official duties on behalf of the Agency:

Examples:

  • An FCIC Officer generally could not run for a seat as State Senator, even on her own personal time, nor could she participate in fundraising efforts on behalf of another for such seat; an FCIC Board Member, however, could do both so long as she does not engage in such activities, in any way, on those days that she performs any amount of official duty on behalf of, or related to, FCIC.
  • An FCIC Board Member who is in official travel status could not participate in partisan political activity at any time during the period of official travel, even if all FCIC business has been completed.
  • An FCIC Officer or Board Member could be appointed to fill a public office normally filled through a partisan election without violating the Hatch Reforms. Being appointed to a post is not the same as seeking nomination or election. However, the FCIC Officer or Board Member would have to avoid conflicts and appearance (including representation) issues flowing from such appointment; FCIC officers would have to consider outside earned income limitations; and both would have to follow agency rules concerning requesting prior approval for outside employment.

VI. MISCELLANEOUS RESTRICTIONS AND OBLIGATIONS

A. Augmentation of Appropriated Funds

General. Unless specifically authorized by statute, Federal employees may neither solicit, nor accept, donations from private entities either to Federal entities or for use in accomplishing Federal Agency programs [7 U.S.C. § 2269, as implemented by DR 5200-1].

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B. Emoluments Clause of the Constitution of the United States

General. During your appointment you may not accept any employment with a foreign government or the political subdivision of a foreign government, including a public university or commercial enterprise owned or operated by a foreign government.

Exception. Foreign Gifts and Decorations Act (5 U.S.C. 7342). Under a statutory exception to the Emoluments Clause, you may accept a gift with a retail value of $285 or less from a foreign government or an international organization. Gifts valued in excess of $285 should be politely declined except in those instances where your refusal would likely cause offense or embarrassment or otherwise adversely affect the foreign relations of the United States. In such instances these gifts may be accepted on behalf of the United States and, upon acceptance, become the property of the United States. This restriction extends to your spouse and dependents. Exceptions to the $285 threshold are gifts in the nature of educational scholarships or medical treatment. Also, gifts of travel and related expenses may be accepted when such travel takes place entirely outside the United States.

C. 18 U.S.C. 219 - Foreign Agents

General. You may not act as an agent of a foreign principal registered under the Foreign Agents Registration Act unless USDA certifies that this employment is in the national interest.

D. 18 U.S.C. 1913 -- Lobbying with Appropriated Funds

General. No employee may use appropriated funds to lobby (contact) any member of Congress on matters of a personal interest. For example, do not use government resources to present matters of concern to any outside organization of which you are a member or officer. Lobbying on matters of official interest must be conducted through officially established channels. This does not preclude you, on your own time and at your own expense, from contacting your congressional representative or Senator as a private citizen.

VII. FINANCIAL DISCLOSURE

Application.

  • Non-Federal Board Members. Each non-Federal FCIC Board Member is required to submit a new entrant Executive Branch Confidential Financial Disclosure Report (OGE Form 450), within 30 days of appointment and annually, thereafter, with each reappointment. Non-Federal FCIC Board Members, as SGEs, must always complete the OGE Form 450, and are prohibited from using the OGE Optional Form 450-A, Confidential Certificate of No New Interests.
  • Federal Board Members and FCIC Officers. All FCIC Board Members who currently serve as Federal employees and all FCIC Officers already submit financial disclosure reports based upon the nature of their Federal appointments. No separate filing requirement is imposed based solely upon their status as FCIC officers. The reporting requirements are set forth below:

    BOARD MEMBERS: Appointment Filing Status Form
    FFAS Under Secretary PAS Public OGE Form 278e
    Other Under Secretary PAS Public OGE 278e
    USDA Chief Economist SES-C Public OGE 278e
    RMA Administrator SES-N Public OGE 278e
    Four active producers who
    are also policymakers    		 SGE Confidential OGE Form 450
    Person experienced in the
    crop insurance business    		 SGE Confidential OGE Form 450
    Person experienced in reinsurance
    or the regulation of insurance    		 SGE Confidential OGE Form 450
     
    OFFICERS:  
    President [Under Secretary, FFAS, see above.]
    Manager/CEO [RMA Administrator, see above.]
    Executive Secretary SES-N Public OGE Form 278e
    Deputy Executive Secretary GS-15, Career Confidential OGE Form 450
    Chief Financial Officer GS-15, Career Confidential OGE Form 450
    Deputy Manager SES-N Public OGE Form 278e

1Again, PAS officers and SES-N employees are subject to additional outside earned income restrictions. Moreover, even where within the 15% limitations, an SES-N would also be restricted from accepting any income due to the fiduciary nature of the activity.

2Reference to a particular governmental agency is for instructional purposes only and would include all Executive Branch agencies or departments.

3The statute does not apply to SGEs, or other officers or employees, who serve without compensation.