[Federal Register Volume 60, Number 58 (Monday, March 27, 1995)]
[Proposed Rules]
[Pages 15700-15703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7469]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 60, No. 58 / Monday, March 27, 1995 /
Proposed Rules
[[Page 15700]]
POSTAL SERVICE
5 CFR Chapter LX
RIN 3209-AA04
Supplemental Standards of Ethical Conduct for Employees of the
United States Postal Service
AGENCY: Postal Service.
ACTION: Proposed rule.
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SUMMARY: The United States Postal Service, with the concurrence of the
Office of Government Ethics (OGE), proposes to issue regulations
applicable to employees of the Postal Service to supplement the
Standards of Ethical Conduct for Employees of the Executive Branch
issued by OGE. The proposed rule, which addresses ethical issues unique
to the Postal Service, would prohibit certain outside activities and
would require prior approval for employees to engage in other specified
outside employment or activities.
DATES: Comments must be received on or before May 26, 1995.
ADDRESSES: Send comments to Chief Counsel, Ethics and Information Law,
United States Postal Service, 475 L'Enfant Plaza, SW, Washington, DC
20260-1110. Copies of all written comments will be available for
inspection and photocopying between 9 a.m. and 4 p.m., Monday through
Friday, in Room 6427, at the above address.
FOR FURTHER INFORMATION CONTACT: Mitchell J. Benowitz, Ethics and
Information Law, Postal Service, (202) 268-2967.
SUPPLEMENTARY INFORMATION:
I. Background
On August 7, 1992, the Office of Government Ethics published new
Standards of Ethical Conduct for Employees of the Executive Branch
(Standards), now codified at 5 CFR part 2635. See 57 FR 35006-35067, as
corrected at 57 FR 48557 and 52583, with additional grace-period
extensions at 59 FR 4779-4780 and 60 FR 6390-6391. The Standards, which
became effective on February 3, 1993, set uniform ethical conduct
standards applicable to all executive branch personnel.
Under 5 CFR 2635.105, agencies may issue, with the concurrence of
OGE, agency-specific regulations supplementing 5 CFR part 2635 as
necessary to fulfill the purposes of that part in light of the agency's
particular programs and operations. The Postal Service, with OGE's
concurrence, has determined that the following proposed supplemental
regulations, to appear in new 5 CFR chapter LX, consisting of part
7001, are necessary to the successful implementation of its ethics
program.
The OGE regulations in 5 CFR part 2635 superseded many provisions
of the Code of Ethical Conduct for Postal Employees (Code), 39 CFR part
447, including many of its restrictions on outside employment at 39 CFR
447.23 that do not involve compensated outside employment
relationships. Certain other provisions of the Code that prohibited the
holding of specified financial interests, 39 CFR 447.22(b)(1)-(7), and
those provisions of 39 CFR 447.23 that involve compensated outside
employment relationships, remained temporarily in effect pursuant to
the note following 5 CFR 2635.403(a), as extended at 59 FR 4779-4780
and 60 FR 6390-6391.
The supplemental regulations will include restrictions on outside
employment similar to many of those that were or continue to be in
effect under 39 CFR 447.23. Upon further consideration of the
prohibited financial interest provisions of 39 CFR 447.22(b)(1)-(7) in
light of the uniform regulations concerning conflicting interests
codified in 5 CFR 2635.401-2635.403, and other provisions of part 2635,
the Postal Service has concluded that these financial interest
prohibitions should not be retained. These provisions will be repealed
in a separate document amending 39 CFR part 447 to remove outdated
provisions, which will be published concurrently with the final rule
adopting supplemental regulations.
II. Analysis of the Regulations
Section 7001.101 General
Section 7001.101 explains that the regulations contained in the
proposed rule apply to all employees of the Postal Service and are
supplemental to the uniform executive branch standards. Postal Service
employees also are subject to the Standards at 5 CFR part 2635, the
executive branch financial disclosure regulations at 5 CFR part 2634,
and additional rules of conduct published in Postal Service regulations
and manuals.
Section 7001.102 Restrictions on Outside Employment and Business
Activities
Under 5 CFR 2635.802(a), agencies are authorized to issue
supplemental regulations prohibiting employees from engaging in outside
employment or activities that conflict with their official duties.
Under 5 CFR 2635.803, agencies are authorized to issue supplemental
regulations requiring employees to obtain prior approval before they
engage in outside employment or other outside activities.
(a) Prohibited outside employment and business activities.
Under 39 CFR 447.23(a)(1), the Postal Service previously has
prohibited its employees from manufacturing or representing a
manufacturer of any product produced for exclusive use by the Postal
Service or required for use by its customers. Proposed
Sec. 7001.102(a)(1)(i) would refine and continue this prohibition,
adding an express reference to working for manufacturers of postal
employee uniforms. The involvement of Postal Service employees in such
activities could cause members of the public to question the
impartiality and objectivity with which Postal Service programs are
administered, because it could create the appearance that the
employees, or the persons they represent or with whom they otherwise
are affiliated, are in a position to benefit from knowledge or
influence gained by the employees through their official positions.
Under 39 CFR 447.23(a)(3), the Postal Service previously has
prohibited employees from engaging in employment that involves the
delivery of mail to the postal facility in which the employee works, or
to a facility within the delivery area of the post office in which the
employee works, if such employment required the employee to conduct
business with other employees performing the same type of duties. In
proposed Sec. 7001.102(a)(1)(ii), the rule would be revised to prohibit
any employment [[Page 15701]] involving the delivery of mail for a
postal contractor to the specified facilities, without regard to the
nature of the employee's duties. The revision is intended to simplify
the rule. Although the revision would create a somewhat broader
prohibition, the Postal Service has concluded that the involvement of
employees in the delivery of mail at or near their official workplace
might lead reasonable persons to be concerned that the employees'
outside employers are receiving preferential treatment from the Postal
Service.
Under 39 CFR 447.23(a)(4), the Postal Service previously has
prohibited employees from acting as ``consultants'' for current or
potential Postal Service contractors. Such activity could lead members
of the public to be concerned that the employees are using knowledge or
influence gained through their official positions to benefit their
outside employers. Proposed Sec. 7001.102(a)(1)(iii) would provide a
similar prohibition, but because the term ``consultants'' did not
clearly define the activity subject to the prohibition, the new section
would apply to ``consultation, advice, or any subcontracting service.''
In addition, proposed Sec. 7001.102(a)(1)(iii) would apply to such
services only when rendered ``with respect to the operations, programs,
or procedures of the Postal Service.'' This limitation has been
included to make clear that an employee would not be prohibited from
consulting with a business that happens to hold a Postal Service
contract when the employee's consulting work is not related to that
contract and does not have any other postal connection. Under such
circumstances the employee would not be expected to gain any personal
benefit, or to provide any benefit for the outside business, from
knowledge or influence arising from his or her official position. As
explained below, another proposed provision, Sec. 7001.102(b)(1), may
require the employee to obtain prior approval before engaging in any
employment, including consulting work, with a business that depends
heavily on postal contracts.
Under 39 CFR 447.23(g), the Postal Service previously has
prohibited employees from engaging in employment with a private
business that delivers mailable matter. Proposed
Sec. 7001.102(a)(1)(iv) would continue the prohibition, and also would
specify that working for a commercial mail receiving agency--an agency
registered under Domestic Mail Manual D042.2.5 to receive mail from the
Postal Service for delivery to others--would be included in this
prohibition. Unlike most Federal agencies, the Postal Service must
compete with certain private businesses. The new section would prohibit
employees from working for such businesses because the outside
employment might lead members of the public to question the employees'
loyalty to the Postal Service, thereby undermining public confidence in
the integrity of postal operations. This type of concern is not
presented by postal employees having outside employment delivering
daily newspapers, which is not prohibited.
Under 39 CFR 447.23(a)(5), the Postal Service previously has
prohibited employees from engaging in any sales activity while on duty,
in uniform, or in the office where the employee is stationed. Proposed
Sec. 7001.102(a)(2) would continue this prohibition, but would extend
it to cover sales activities at any postal facility. The prohibition is
intended to prevent employees from using influence derived from their
official positions as an aid to sales activities, and experience has
shown that employees may exert such influence at postal facilities
other than their own. Under 5 CFR 2635.702, employees must not use
public office for their own private gain or for the benefit of others
such as any business with which they are affiliated. The Postal Service
considers that a more explicit, supplemental rule is needed to deal
with sales activities in the workplace or in uniform, whether or not
the employee who would engage in the sales activity is on duty.
(b) Prior approval for outside employment and business activities.
Under 39 CFR 447.23(a)(2), the Postal Service previously has prohibited
employees from engaging in employment with persons with whom they have
dealings in their official capacities. Proposed Sec. 7001.102(b)(1)(i)
would instead require employees to obtain approval before engaging in
such employment or business activities. Although there are situations
in which outside activities involving such persons would raise issues
under 5 CFR part 2635, the duties of many Postal Service employees,
such as clerks and letter carriers, might bring them into limited
contact with a variety of outside businesses, including large,
diversified corporations. Prohibiting such employees from being
employed in any phase of a business, merely because the business's mail
touches their hands, would be unduly restrictive. Therefore, the Postal
Service considers a prior approval requirement more appropriate than a
prohibition for this type of outside employment and, under 5 CFR
2635.803, has proposed the prior approval requirement at
Sec. 7001.102(b)(1)(i). The review required by the approval process can
be expected to identify those employment relationships that would
present ethical conduct concerns under 5 CFR part 2635.
Under 39 CFR 447.23(a)(6), the Postal Service previously has
prohibited employees from engaging in outside employment with (1)
persons whose business interests are substantially dependent upon, or
may be significantly affected by, postal rates, fees, or
classifications; and (2) persons whose interests are substantially
dependent on providing goods or services to, or for use in connection
with, the Postal Service. Proposed Sec. 7001.102(b)(1)(ii) would
require employees to obtain prior approval before engaging in such
employment or business activities. Definitions of the outside
businesses to which the prior approval requirement would apply are
provided in Sec. 7001.102(c)(2) and (c)(3). Whether such outside
employment or business activities should be approved will usually
depend upon the relationship between the particular postal employee's
official duties and the operations or interests of the outside
business. Therefore, the Postal Service considers that a prior approval
requirement is the appropriate mechanism to bring to light and address
outside relationships that are likely to raise ethical conduct issues
under 5 CFR part 2635.
Proposed Sec. 7001.102(b)(2) would set forth the procedure by which
employees may request approval to engage in outside employment or
business activities for which prior approval is required. The standard
for approval would be set forth in proposed Sec. 7001.102(b)(3). Under
this standard, approval could be granted only when it is determined
that the outside employment or business activity will not involve
conduct prohibited by law or Federal regulation. Because requests for
prior approval might involve situations where the employee's conduct
could violate the principle that employees shall endeavor to avoid any
actions creating the appearance that they are violating the law or the
standards set forth in 5 CFR part 2635, the approval standard includes
a specific reference to 5 CFR 2635.101(b)(14).
Proposed Sec. 7001.102(c)(1) would provide a definition of
``outside employment or business activity.'' The definition would
clarify that the regulations cover those who would engage in business
as a principal--as proprietor, general partner, director, or holder of
a franchise--as well as to [[Page 15702]] those who would serve a
business as employee, contractor, or the like. Under the proposed
definition, an employee would not, simply by holding shares in a
publicly held corporation, be engaged in employment or business
activity with or on behalf of that corporation.
Section 7001.103 Statutory Prohibition Against Interests in Contracts
To Carry Mail and Acting as Agent for Contractors
Proposed Sec. 7001.103 would provide notice to Postal Service
employees that certain interests in, and conduct in connection with,
mail transportation contracts are prohibited by a criminal statute, 18
U.S.C. 440. The section is for purposes of notification only. Neither
the Postal Service nor OGE has issued regulations interpreting this
statutory prohibition.
III. Matters of Regulatory Procedure
Although the Postal Service is exempted by 39 U.S.C. 410(a) from
the advance notice requirements of the Administrative Procedure Act
regarding rulemaking (5 U.S.C. 553(b), (c)), the Postal Service invites
comments on this proposed rule.
List of Subjects in 5 CFR Part 7001
Conflict of interests, Ethical standards, Executive branch
standards of conduct, Government employees.
Dated: March 8, 1995.
Mary S. Elcano,
General Counsel and Vice President, United States Postal Service.
Approved: March 15, 1995.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the United States Postal
Service, with the concurrence of the Office of Government Ethics, is
proposing to amend title 5 of the Code of Federal Regulations by adding
a new chapter LX, consisting of part 7001, as follows:
Chapter LX--United States Postal Service
PART 7001 -- SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR
EMPLOYEES OF THE UNITED STATES POSTAL SERVICE
Sec.
7001.101 General.
7001.102 Restrictions on outside employment and business
activities.
7001.103 Statutory prohibition against interests in contracts to
carry mail and acting as agent for contractors.
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government
Act of 1978); 39 U.S.C. 401; E.O. 12674, 54 FR 15159, 3 CFR, 1989
Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990
Comp., p. 306; 5 CFR 2635.105, 2635.802, and 2635.803.
Sec. 7001.101 General.
In accordance with 5 CFR 2635.105, the regulations in this part
supplement the Standards of Ethical Conduct for Employees of the
Executive Branch contained in 5 CFR part 2635, as applied to employees
of the United States Postal Service (Postal Service). Postal Service
employees are subject, in addition to the standards in 5 CFR part 2635
and this part, to the executive branch financial disclosure regulations
contained in 5 CFR part 2634, and to any rules of conduct issued
separately by the Postal Service, including but not limited to,
regulations contained in 39 CFR part 447, the Postal Service Employee
and Labor Relations Manual, and the Postal Service Procurement Manual.
Sec. 7001.102 Restrictions on outside employment and business
activities.
(a) Prohibited outside employment and business activities. No
Postal Service employee shall:
(1) Engage in outside employment or business activities with or for
a person, including oneself, engaged in:
(i) The manufacture of any uniform or other product required by the
Postal Service for use by its employees or customers;
(ii) The transportation of mail under Postal Service contract to or
from the postal facility at which the employee works, or to or from a
postal facility within the delivery area of a post office in which the
employee works;
(iii) Providing consultation, advice, or any subcontracting
service, with respect to the operations, programs, or procedures of the
Postal Service, to any person who has a contract with the Postal
Service or who the employee has reason to believe will compete for such
a contract; or
(iv) The operation of a commercial mail receiving agency registered
with the Postal Service, or the delivery outside the mails of any type
of mailable matter, except daily newspapers; or
(2) Engage in any sales activity, including the solicitation of
business or the receipt of orders, for oneself or any other person,
while on duty or in uniform, or at any postal facility.
(b) Prior approval for outside employment and business activities--
(1) Requirement for approval. A Postal Service employee shall obtain
approval, in accordance with paragraph (b)(2) of this section, prior
to:
(i) Engaging in outside employment or business activities with or
for any person with whom the employee has official dealings on behalf
of the Postal Service; or
(ii) Engaging in outside employment or business activities, with or
for a person, including oneself, whose interests are:
(A) Substantially dependent upon, or potentially affected to a
significant degree by, postal rates, fees, or classifications; or
(B) Substantially dependent upon providing goods or services to, or
for use in connection with, the Postal Service.
(2) Submission and contents of request for approval. An employee
who wishes to engage in outside employment or business activities for
which prior approval is required by paragraph (b)(1) of this section
shall submit a written request for approval to the Postal Service
Ethical Conduct Officer or appropriate delegate. The request shall be
accompanied by a statement from the employee's supervisor briefly
summarizing the employee's duties and stating any workplace concerns
raised by the employee's request for approval. The request for approval
shall include:
(i) A brief description of the employee's official duties;
(ii) The name of the outside employer, or a statement that the
employee will be engaging in employment or business activities on his
or her own behalf;
(iii) The type of employment or business activities in which the
outside employer, if any, is engaged;
(iv) The type of services to be performed by the employee in
connection with the outside employment or business activities;
(v) A description of the employee's official dealings, if any, with
the outside employer on behalf of the Postal Service; and
(vi) Any additional information requested by the Ethical Conduct
Officer or delegate that is needed to determine whether approval should
be granted.
(3) Standard for approval. The approval required by paragraph
(b)(1) of this section shall be granted only upon a determination that
the outside employment or business activity will not involve conduct
prohibited by statute or Federal regulation, including 5 CFR part 2635,
which includes, among other provisions, the principle stated at 5 CFR
2635.101(b)(14) that employees shall endeavor to avoid any actions
creating the appearance that they are violating the law or the ethical
standards set forth in part 2635.
(c) Definitions. For purposes of this section: [[Page 15703]]
(1) Outside employment or business activity means any form of
employment or business, whether or not for compensation. It includes,
but is not limited to, the provision of personal services as officer,
employee, agent, attorney, consultant, contractor, trustee, teacher, or
speaker. It also includes, but is not limited to, engagement as
principal, proprietor, general partner, holder of a franchise,
operator, manager, or director. It does not include equitable ownership
through the holding of publicly traded shares of a corporation.
(2) A person having interests substantially dependent upon, or
potentially affected to a significant degree by, postal rates, fees, or
classifications includes a person:
(i) Primarily engaged in the business of publishing or distributing
a publication mailed at second-class rates of postage;
(ii) Primarily engaged in the business of sending advertising,
promotional, or other material on behalf of other persons, through the
mails;
(iii) Engaged in a business that depends substantially upon the
mails for the solicitation or receipt of orders for, or the delivery
of, goods or services; or
(iv) Who is, or within the past 4 years has been, a party to a
proceeding before the Postal Rate Commission.
(3) A person having interests substantially dependent upon
providing goods or services to or for use in connection with the Postal
Service includes a person:
(i) Providing goods or services under contract with the Postal
Service that can be expected to provide revenue exceeding $100,000 over
the term of the contract and that provides five percent or more of the
person's gross income for the person's current fiscal year; or
(ii) Substantially engaged in the business of preparing items for
others for mailing through the Postal Service.
Sec. 7001.103 Statutory prohibition against interests in contracts to
carry mail and acting as agent for contractors.
Section 440 of title 18, United States Code, makes it unlawful for
any Postal Service employee to become interested in any contract for
carrying the mail, or to act as agent, with or without compensation,
for any contractor or person offering to become a contractor in any
business before the Postal Service.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 95-7469 Filed 3-24-95; 8:45 am]
BILLING CODE 7710-12-P