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Section 208, title 18, United States Code, prohibits a Federal officer or employee from participating personally and substantially, as a Government employee, in any particular matter in which, to his knowledge, he has, or his spouse, minor child, general partner, organization in which he is serving as officer, director, trustee, general partner, or employee, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment has, a financial interest.2

You have reported on Schedule A of your Standard Form 278 that your spouse holds an interest in Exxon in her individual retirement account. This interest constitutes a financial interest within the meaning of 18 U.S.C. 208. You have advised this office that your spouse has agreed to divest of this interest immediately upon your appointment.

In addition, you have reported that you have interests in the Van Ness, Feldman & Curtis Pension Trust and the Van Ness, Feldman & Curtis Employees' Retirement Plan. Each of these is a defined contribution plan whose trustees include members of the law firm of Van Ness, Feldman & Curtis. These plans constitute financial interests in Van Ness, Feldman & Curtis within the meaning of 18 U.S.C. 208.3 You have also advised this office that you have personally guaranteed the firm's obligations to a bank and that you have entered into a contribution agreement with other members of the firm under which each member agreed to contribute equally to any liabilities the firm is unable to satisfy. You have further advised that Van Ness, Feldman & Curtis has agreed to use its best efforts to obtain the bank's agreement to release you from the personal guarantee, and that when such a release occurs, the firm will release you from the contribution agreement. The personal guarantee and contribution agreement are "financial interests" in Van Ness, Feldman & Curtis within the meaning of 18 U.S.C. 208. Accordingly, you have agreed to recuse yourself from participating in any particular matter that could have a direct and predictable effect upon Van Ness, Feldman & Curtis or any

2 Section 208(b)(1), title 18, United States Code, provides that the participation restrictions of section 208(a) shall not apply if the employee first advises the Government official responsible for appointment to his or her position of the nature and circumstances of the particular matter, makes full disclosure of the financial interest, and receives in advance a written determination from that official that the interest is not so substantial as to be deemed likely to affect the integrity of the services that the Government may expect from such employee.

3 You have advised this office that you intend to transfer these interests to an independently managed investment upon your appointment.

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other entity in which you have a financial interest for as long as you hold such interest."

The Standards of Ethical Conduct for Employees of the Executive Branch, 5 C.F. R. Part 2635, also contain a participation restriction. Section 2635.502 provides that where an employee knows that any entity, for whom the employee has within the last year served as an attorney, director, or employee, is a party, or represents a party, to a particular matter involving specific parties, and where the employee has determined that the circumstances would cause a reasonable person with knowledge of the relevant facts to question his impartiality in the matter, the employee should not participate in the matter unless he has informed the agency designee of the appearance problem and receives authorization from the agency designee.

In addition, you have received a copy of the "United States Senate Committee on Energy and Natural Resources Recusal Policy," dated May 6, 1993. You have agreed to adhere to the Committee's recusal policy upon appointment to the position of Under Secretary. You reported that you currently serve as a director of the Gas Research Institute and Keystone Center, and as a member and director of Van Ness, Feldman & Curtis. Accordingly, you should seek the advice of this office prior to participating in any particular matter in which the Gas Research Institute, Keystone Center, or Van Ness, Feldman & Curtis is, or represents, a party. In addition, you should seek the advice of this office prior to participating in any particular matter in which any of your clients of the last year is a party.

You should also be aware that Executive Order 12674, as modified by Executive Order 12731, prohibits employees appointed by the

In addition, the Standards of Ethical Conduct for Employees of the Executive Branch, 5 C.F.R. Part 2635, establish requirements with respect to extraordinary payments received from former employers. You have reported that, pursuant to the terms of your written employment agreement with Van Ness, Feldman & Curtis, you are entitled to receive a severance payment to be paid in quarterly installments over a period of approximately three years. The amount of the severance payment is determined by a formula specified in your employment agreement. In order to terminate your severance payment interest in the firm, you have proposed that the firm make a discounted lump sum payment to you upon termination of your employment. After consultation with the Office of Government Ethics, I have determined that severance payments made to you pursuant to either of the payment schedules discussed above are not extraordinary payments, since the making of such payments is pursuant to a written contract and there is a precedent for the firm varying the payment schedule for a departing employee not entering Federal service.

President to positions in the executive branch from receiving outside earned income during the term of the Presidential appointment. Further, title V of the Ethics in Government Act of 1978 (Pub. L. No. 95-521, as amended by Pub. L. No. 101-194) contains restrictions on the outside activities of certain Government employees including those appointed by the President. Specifically, section 502 of the Ethics in Government Act provides that such an employee may not permit his name to be used by any entity which provides professional services involving a fiduciary relationship, whether or not compensation is received for such activity. You have advised that you will resign from your position with, and sell your equity interest in, Van Ness, Feldman & Curtis upon appointment. Furthermore, you have advised that upon your appointment, Van Ness, Feldman & Curtis will be removing your surname from the name of the firm. In addition, you have advised that you will resign your positions with the Gas Research Institute and Keystone Center upon your appointment.

Finally, as required by Executive Order 12834, you have agreed to sign a Senior Appointee Pledge upon your appointment. The pledge describes certain post-employment restrictions that will be applicable to you when you terminate your Government service.

Please let me know if I can be of further assistance.

Rupee & Jocuring

Ralph D. Goldenberg