The Office of Government Ethics’ Rulemaking on Federal Executive Branch Gift Rules

By:  Joseph M. Birkenstock & Josh Rosenstein  – Sandler Reiff Lamb Rosenstein & Birkenstock, P.C.

Since the 1970’s, regulations of the Office of Government Ethics, codified at 5 CFR part 2635, have established a broad set of ethics standards for employees of the executive branch of the federal government. These regulations focus on several specific areas: gifts from outside sources; gifts between employees; conflicting financial interests; impartiality in performing official duties; seeking outside employment; misuse of official position; and permissible outside activities.

Since the issuance of Executive Order 13490 by President Obama the day after he took office in 2009, OGE has now twice proposed broad new amendments to those executive branch ethics rules – and yet so far no new rules have been promulgated in the wake of either proposal. First in 2011 the OGE proposed mirroring the ban on gifts from lobbyists to presidential appointees imposed in EO 13490 in the overall gift rules applicable to all federal executive branch employees.

No final action was taken on that proposal, but in November 2015, OGE released another proposed rule that would revise the standards as they applied to the solicitation and acceptance of gifts from outside sources.  This most recent set of proposed changes would, among other things:

– Clarify the factors employees should use when evaluating whether they can accept an otherwise permissible gift;

  • In fact, the proposed regulations emphasize that the question of technical legal permissibility should not end an agency’s or an employee’s consideration of whether to accept a particular gift.

– Provide amended definitions of the term “gift” to permit, among other things, the acceptance of items of little intrinsic value given primarily for presentation;

– Explicitly permit the acceptance of free attendance at an event at which an employee is speaking;

– Permit the acceptance of certain membership fees, frequent flier miles, honorary degrees, and the like;

– Require written authorization from the agency ethics designee for employees to attend “widely-attended gatherings”

  • Broader limits on involvement by government contractors or other “prohibited sources” in the organization or execution of the gathering would still apply.
    • For example, if an association is hosting a widely attended gathering, a contractor that is a member of that association may not direct funds to the association for the purposes of inviting government officials.
    • However, that contractor may provide funds to sponsor the event generally, even if that sponsorship means that some additional government employees could attend at the invitation of the association as the sponsor.

– Specify that an employee can accept an invitation to attend a social event permitted under the current rule only when that invitation is unsolicited, and clarifying that the gift exception includes food, refreshments, and entertainment that are provided to the employee’s spouse or other accompanying guests.

  • When the sponsor of the event is an organization (rather than individual), however, the agency must provide specific authorization to attend.
  • The proposed rules contain a change that would be particularly meaningful to events like holiday parties or convention receptions relating to the availability of alcoholic beverages. As drafted, a new example to be added by the new rules would specify that “alcoholic beverages are not modest items of food and refreshments,” and that consequently it would be impermissible for an employee to even attend an event where alcohol is served, regardless of whether that employee does or doesn’t accept any alcoholic drinks at the event.

– Confirm that informational materials are generally exempt from the gift prohibition, similar to House and Senate rules.

– Codify the “prohibited source” list, which includes contractors and entities doing business before the official who is being offered the gift; anyone seeking official action by the agency; anyone who has interests regulated by the agency; anyone who has interests that may be substantially affected by the performance or nonperformance of the official’s duties; and any organization a majority of whose members are prohibited sources.

So, where is the regulation?

Despite being published in November, with a call for final comment in January 2016, no final rule has yet been issued.  Given the timing, even if the final rule does issue, it may not be issued prior to the new administration being sworn in next January. In fact, it’s worth considering whether the Congressional Review Act, which provides that Congress may disapprove any major agency regulations, might impact the timing of the regulations. This may be unlikely, since a given regulation needs to have an annual economic impact in excess of $100M to be considered a “major” regulation for this purpose, and the Notice of Proposed Rulemaking did not indicate that OGE considers these regulations to be subject to Congressional review and potential disapproval under the CRA.

Efforts to contact OGE about the status of this rulemaking have provided no new guidance.  The comment period, now closed for four months, makes one wonder whether the regulations—which languished for months initially—will be forthcoming.

Nevertheless, the political and advocacy worlds are already deep into the planning process for the major party national nominating conventions, election season, and the eventual January inauguration. These and other events always involve opportunities for private-sector sources (including those currently categorized as prohibited under existing regulations or the Obama executive order) to interact with executive branch employees in ways that can involve potential issues under the OGE gift & ethics rules.

Consequently, it’s worth bearing in mind that while new rules may or may not appear in the foreseeable future, the current regulations remain in place, so industry—particularly prohibited sources—should be sure to comply with existing guidance while retaining flexibility, to the extent possible, in their planning going forward to adapt to potentially significant new ethics rules.


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