[Federal Register Volume 59, Number 143 (Wednesday, July 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18197]
[[Page Unknown]]
[Federal Register: July 27, 1994]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[GC Docket No. 93-153; FCC 94-177]
Conflict of Interest
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Commission has adopted rules to implement the provisions
of the Telecommunications Authorizations Act of 1992, which created a
new section 4(g)(3) of the Communications Act that authorizes the
Commission to accept unconditional gifts, donations and bequests in
furtherance of its functions. The Commission has ensured that its rules
are consistent with the directive in section 4(g)(3) to promulgate
implementing regulations that ``include provisions to preclude the
acceptance of any gift, bequest or donation that would create a
conflict of interest or the appearance of a conflict of interest.''
These regulations will promote the performance of the Commission's
regulatory functions.
EFFECTIVE DATE: August 26, 1994.
FOR FURTHER INFORMATION CONTACT:
Sharon Kelley, Office of General Counsel, Federal Communications
Commission, (202) 418-1720.
SUPPLEMENTARY INFORMATION: 1. This is a summary of the Report and Order
(R&O) in GC Docket 93-153, adopted June 24, 1994 and released July 22,
1994. The full text of this document is available for inspection and
copying Monday through Friday, 9 a.m. to 4:30 p.m. in the FCC Dockets
Reference Room (Room 239), 1919 M Street NW., Washington, DC 20554, and
may be purchased from the Commission's copy contractor International
Transcription Services, Inc. (ITS, Inc.), 2100 M Street NW., Suite 140,
Washington, DC 20037.
2. The purpose of this R&O is to implement the conflict of interest
restrictions in section 4(g)(3) of the Communications Act, which
authorizes the Commission to accept unconditional gifts, donations and
bequests. In order to develop implementing regulations, the Commission
looked for guidance to the policies of other agencies that have
statutory gift acceptance authority, the provisions of the new Office
of Government Ethics (OGE) government-wide standards of employee
conduct, and General Services Administration (GSA) regulations
implementing agency acceptance of travel reimbursement. The Commission
requested commenters to submit alternative proposals. None of the
parties who filed comments in this proceeding endorsed an absolute ban
on the acceptance of gifts from Commission regulatees. As discussed in
the Notice of Proposed Rulemaking (NPRM), 58 FR 34405 (1994), and as
also pointed out by commenters, we continue to believe that imposing
such an absolute ban would exclude a vast number of potential donors,
and those who may be the most likely donors of equipment or other
services that would be useful to the Commission in achieving more
efficient performance of its regulatory functions. In addition, as
discussed in our NPRM, gifts to agencies do not necessarily involve the
same type or degree of conflicts or appearance concerns as those of
personal gifts made to employees with decisionmaking responsibility--
the focus of most traditional conflict of interest regulations, such as
the OGE government-wide standards of employee conduct. In the NPRM, we
concluded that, in the context of agency gift acceptance, more flexible
approaches could be used. Commenters agreed with the conclusion reached
in our NPRM that less restrictive policies can be formulated which
adequately address conflict of interest concerns. Accordingly, the
Commission has decided to reject an absolute ban on gifts from
regulated entities and to construe section 4(g)(3) in a flexible manner
that will better achieve its statutory objective and promote the
performance of the Commission's regulatory functions.
3. Section 4(g)(3), unlike some agency gift acceptance statutes,
expressly limits the Commission's gift acceptance authority to gifts
that are ``unconditional.'' This statutory restriction effectively
precludes gifts that are made contingent on official action. To guard
against any potential that official action could be influenced by
gifts, we have determined that it is critical to ensure that the
section 4(g)(3) prohibition on conditional gifts is carefully and
scrupulously observed. The regulations adopted in this Order contain
certain structural safeguards and absolute prohibitions designed to
avoid both conflict of interest concerns and appearance concerns. In
addition, the regulations impose mandatory factors that authorized
agency ethics officials must consider in determining whether conflicts
or appearance problems exist. Finally, the regulations contain public
disclosure and reporting requirements that are intended to minimize or
eliminate appearance problems. We believe that these mechanisms work
together effectively to eliminate the conflicts of interest and
appearance concerns. In order to insulate agency officials with
programmatic responsibilities, insofar as possible, from involvement in
determinations regarding gift acceptance or discussions with potential
donors regarding gifts, we are requiring potential donors and
Commission employees who receive gift overtures to refer such matters
to the Commission's designated agency ethics official. We also are
imposing an absolute bar on agency solicitation of gifts from regulated
entities and others identified as prohibited sources under the new OGE
standards of conduct. We are requiring that all monetary gifts be made
by check rather than in cash. Further, because we think that conflicts
of interest and appearance problems may be greatest when the gifts made
to the agency appear to enure more to the personal benefit of
employees, we have decided that certain types of gifts should be
prohibited altogether, e.g., food and drink which would continue to be
governed by the OGE standards of conduct or other independent
authority.
4. We have also decided not to accept under section 4(g)(3) gifts
of travel expenses for attendance at meetings that are governed by the
regulations implementing 31 U.S.C. 1353, the government-wide travel
reimbursement statute. The GSA rules implementing section 1353 prohibit
agencies from using general gift acceptance statutes to accept travel
reimbursement for attendance at meetings that are covered by that
section. As we noted in the NPRM, however, GSA's rules implementing
1353 do not govern the acceptance of travel and related expenses for
attendance at, or participation in, meetings or events that are
required to carry out an agency's statutory or regulatory functions. We
agree with commenters that there are substantial public interest
benefits to be gained by employees' attendance at, or participation in,
certain government sponsored meetings or events (such as international
coordination meetings provided for by treaty). Thus, to the extent that
attendance at, or participation in, government sponsored meetings or
events are deemed outside the scope of 1353 coverage (because the
meetings are required in order to carry out statutory or regulatory
functions) we will permit the acceptance of travel reimbursement for
them under section 4(g)(3).
5. The Commission has established the imposition of mandatory
factors that Commission officials must consider in determining whether
conflicts or appearance problems may exist. Where gifts are offered by
a regulated entity, we will require officials making conflict of
interest determinations to evaluate at the outset the extent to which
benefits of the gift might accrue to individual employees. If the gift
does benefit an individual employee, agency officials shall consider
whether that employee is responsible for matters affecting the
potential donor that are currently pending before the agency and the
significance of the employee's role in such matters. Whether or not the
proposed gift benefits employees personally, we will consider: the
nature and sensitivity of any matters pending at the Commission
affecting the regulated source and the timing of the gift; the market
value of the gift; and the frequency of gifts made by a particular
donor. Finally, we have adopted public disclosure and reporting
requirements that are intended to minimize or eliminate appearance
problems. The Commission will keep a detailed record of all gifts
accepted from prohibited sources and make the following information
publicly available concerning gifts that are accepted: the identity of
the prohibited source; a description of the gift; market value of the
gift; documentation concerning the prohibited source's reason for the
gift; a verification from the prohibited source that the gift is
unconditional (not contingent on any promise or expectation that the
Commission's receipt of the gift will benefit the donor in any
regulatory matter); and the date the gift is accepted by the
Commission. The Commission shall file a semi-annual report to Congress
listing the gift, donor, and value of all gifts accepted from any donor
under section 4(g)(3) authority.
Conclusion
6. We believe that, as mandated by section 4(g)(3) of the
Communications Act, the regulations adopted here will preclude real and
apparent conflicts of interest when the Commission exercises its new
gift acceptance authority. In order to ensure the integrity of our
process, we have, as discussed above, adopted numerous safeguards which
will require careful consideration of conflicts of interest issues by
impartial agency ethics officials. Our rules will also ensure that our
actions implementing this authority are exposed to the fullest possible
public and congressional scrutiny.
List of Subjects in 47 CFR Part 1
Administrative practice and procedure.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Part 1 of Title 47 of the Code of Federal Regulations is amended as
follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for part 1 continues to read as follows:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303: Implement, 5 U.S.C. 552 and 21 U.S.C. 853a, unless
otherwise noted.
2. A new subpart R consisting of sections 1.3000 through 1.3004 is
added to part 1 to read as follows:
Subpart R--Implementation of Section 4(g)(3) of the Communications Act:
Procedures Governing Acceptance of Unconditional Gifts, Donations and
Bequests
Sec.
1.3000 Purpose and scope.
1.3001 Definitions.
1.3002 Structural rules and prohibitions.
1.3003 Mandatory factors for evaluating conflicts of interest.
1.3004 Public disclosure and reporting requirements.
Subpart R--Implementation of Section 4(g)(3) of the Communications
Act: Procedures Governing Acceptance of Unconditional Gifts,
Donations and Bequests
Sec. 1.3000 Purpose and scope.
The purpose of this subpart is to implement the Telecommunications
Authorization Act of 1992 which amended the Communications Act by
creating section 4(g)(3), 47 U.S.C. 154(g)(3). The provisions of this
subpart shall apply to gifts, donations and bequests made to the
Commission itself. Travel reimbursement for attendance at, or
participation in, government-sponsored meetings or events required to
carry out the Commission's statutory or regulatory functions may also
be accepted under this subpart. The acceptance of gifts by Commission
employees, most notably gifts of food, drink and entertainment, is
governed by the government-wide standards of employee conduct
established at 5 CFR part 2635. Travel, subsistence and related
expenses for non-government-sponsored meetings or events will continue
to be accepted pursuant to the Government Employees Training Act, 41
U.S.C. 4111 or 31 U.S.C. 1353, and its General Services
Administration's implementing regulations, 41 CFR 304-1.8, as
applicable.
Sec. 1.3001 Definitions.
For purposes of this subpart:
(a) The term agency means the Federal Communications Commission.
(b) The term gift means any unconditional gift, donation or bequest
of real, personal and other property (including voluntary and
uncompensated services as authorized under 5 U.S.C. 3109).
(c) The terms agency ethics official, designated agency ethics
official, employee, market value, person, and prohibited source, have
the same meaning as found in 5 CFR 2635.102, 2635.203.
Sec. 1.3002 Structural rules and prohibitions.
(a) General prohibitions. An employee shall not:
(1) Directly or indirectly, solicit or coerce the offering of a
gift, donation or bequest to the Commission from a regulated entity or
other prohibited source; or
(2) Accept gifts of cash pursuant to this subpart.
(b) Referral of offers to designated agency ethics official. Any
person who seeks to offer any gift to the Commission under the
provisions of this subpart shall make such offer to the Commission's
designated agency ethics official. In addition, any Commission employee
who is contacted by a potential donor or the representative thereof for
the purpose of discussing the possibility of making a gift, donation or
bequest to the Commission shall immediately refer such person or
persons to the Commission's designated agency ethics official. The
designated agency ethics official shall, in consultation with other
agency ethics officials, make a determination concerning whether
acceptance of such offers would create a conflict of interest or the
appearance of a conflict of interest. Agency ethics officials may also
advise potential donors and their representatives of the types of
equipment, property or services that may be of use to the Commission
and the procedures for effectuating gifts set forth in this subpart.
The Commission may, in its discretion, afford public notice before
accepting any gift under authority of this subpart.
Sec. 1.3003 Mandatory factors for evaluating conflicts of interest.
No gift shall be accepted under this subpart unless a determination
is made that its acceptance would not create a conflict of interest or
the appearance of a conflict of interest. In making conflict of
interest determinations, designated agency ethics officials shall
consider the following factors:
(a) Whether the benefits of the intended gift will accrue to an
individual employee and, if so--
(1) Whether the employee is responsible for matters affecting the
potential donor that are currently before the agency; and
(2) The significance of the employee's role in any such matters;
(b) The nature and sensitivity of any matters pending at the
Commission affecting the intended donor;
(c) The timing of the intended gift;
(d) The market value of the intended gift;
(e) The frequency of other gifts made by the same donor; and
(f) The reason underlying the intended gift given in a written
statement from the proposed donor.
Sec. 1.3004 Public disclosure and reporting requirements.
(a) Public disclosure of gifts accepted from prohibited sources.
The Commission's Security Operations Office, Office of the Managing
Director, shall maintain a written record of gifts accepted from
prohibited sources by the Commission pursuant to section 4(g)(3)
authority, which will include:
(1) The identity of the prohibited source;
(2) A description of the gift;
(3) The market value of the gift;
(4) Documentation concerning the prohibited source's reason for the
gift as required in Sec. 1.3003(f);
(5) A signed statement of verification from the prohibited source
that the gift is unconditional and is not contingent on any promise or
expectation that the Commission's receipt of the gift will benefit the
proposed donor in any regulatory matter; and
(6) The date the gift is accepted by the Commission.
(b) Reporting Requirements for all gifts. The Commission shall file
a semi-annual report to Congress listing the gift, donor and value of
all gifts accepted from any donor under this subpart.
[FR Doc. 94-18197 Filed 7-26-94; 8:45 am]
BILLING CODE 6712-01-M