(d) An employee shall not accept any gift, present, decoration or other item from a foreign government, except as authorized by the Foreign Gifts and Decorations Act (5 U.S.C. 7342).

(e) An employee may accept payment of travel, subsistence, and other expenses, incident to attendance at a meeting, from a charitable organization as defined in 26 U.S.C. 501(c)(3), if the donor is not a prohibited source described in subsection (1) of this section (5 U.S.C. 4111).

$0.735-205 Misuse of Government personnel and property.

An employee shall not directly or indirectly use, or allow the use of, Government property of any kind, including property leased to the Government, or the services of any HUD employee, for other than officially approved activities. An employee has a positive duty to protect and conserve Government property, including equipment and supplies, entrusted to him or her.

$0.735-206 Misuse of official information.

For the purpose of furthering a private interest, an employee shall not, except as permitted by $0.735–203(e)(2), directly or indirectly use, or allow the use of, official information which has not been made available to the general public.

$0.735-207 Misuse of official position.

Except as may be permitted in the course of official business, an employee shall not use his or her supervisory relationship or management position, directly or indirectly, to seek a favor from, encourage a contribution from, or attempt to sell to, another HUD employee or person who has business with HUD.

$0.735-208 General conduct and conduct prejudicial to the Government.

(a) Each employee shall be courteous, considerate, and prompt in dealing with the public and with persons or organizations having business with the Department;

(b) An employee shall not engage in criminal, infamous, dishonest, immoral, or notoriously disgraceful conduct, or other conduct predjudicial to the Government.

§ 0.735-209 Intermediaries and product rec

ommendations.

In communicating with any person or organization doing, or seeking to do, business with the Department, an employee shall not recommend or suggest the use of any particular or identified nongovernmental intermediary to deal with the Department, except as required by the employee's official duties.

$0.735-210 Membership in organizations in an official capacity.

(a) An employee may not, in his or her official capacity, serve as a member of a nonFederal or private organization except where express statutory authority exists, or statutory language necessarily implies such authority, or where the Secretary has determined in writing that such service would be beneficial to the Department and consistent with the employee's service to the Department.

(b) An employee may be designated to serve as a liaison representative of the Department to a non-Federal or private organization when the Secretary, the Under Secretary, an Assistant Secretary, the General Counsel, or a Regional Administrator, as appropriate, has determined in writing that such service would be beneficial to the Department and provided that:

(1) The activity relates to the work of the Department.

(2) The employee does not participate by vote in the policy determinations of the organization.

(3) The Department is not bound by any vote or action taken by the organization.

$0.735-211 Political activities.

Employees are required to observe the prohibitions against partisan political activities in 5 U.S.C. 7321-7327 and 18 U.S.C. 602, 603 and 607. Regulations implementing these restrictions are set forth in 5 CFR part 733. $0.735-212 Miscellaneous statutory provisions.

The attention of each employee is directed to the following statutory provisions which relate to his or her conduct:

(a) Public Law 96-303, 5 U.S.C. 7301 note, the "Code of Ethics for Government Service."

(b) Chapter 11 of title 18, United States Code, relating to bribery, graft, and conflicts of interest.

(c) The prohibition against lobbying with appropriated funds (18 U.S.C. 1913).

(d) The prohibitions against disloyalty and striking (5 U.S.C. 7311, 18 U.S.C. 1918).

(e) The prohibition against the employment of a member of a Communist organization (50 U.S.C. 784).

(f) The prohibitions against

(1) The disclosure of classified information (18 U.S.C. 798, 50 U.S.C. 783(b)); and

(2) The disclosure of confidential information (18 U.S.C. 1905).

(g) The provision relating to the habitual use of intoxicants to excess (5 U.S.C. 7352). (h) The prohibition against the misuse or unauthorized use of Government vehicle (31 U.S.C. 1344, 18 U.S.C. 641).

(i) The prohibition against the misuse of the franking privilege (18 U.S.C. 1719).

(j) The prohibition against the use of deceit in an examination or personnel action in connection with Government employment (18 U.S.C. 1917).

(k) The prohibition against fraud or false statements in a Government matter (18 U.S.C. 1001).

(1) The prohibition against concealing, removing, mutilating or destroying a public record (18 U.S.C. 2071).

(m) The prohibition against counterfeiting and forging transportation requests (18 U.S.C. 508).

(n) The prohibitions against

(1) Embezzlement and theft of Government money, property, or records (18 U.S.C. 641);

(2) Failing to account for public money (18 U.S.C. 643); and

(3) Embezzlement or wrongful conversion of the money or property of another which comes under the control, or into the possession, of an employee by reason of his employment (18 U.S.C. 654).

(0) The prohibition against unauthorized taking or use of documents relating to claims from or by the Government (18 U.S.C. 285).

(p) The prohibitions against an employee acting as the agent of a foreign principal registered under the Foreign Agents Registration Act of 1938, as amended (18 U.S.C. 219). (q) The prohibition against the employment of an individual convicted of felonious rioting or related offenses (5 U.S.C. 7313).

(r) The prohibition against a public official appointing or promoting a relative, or advocating such an appointment or promotion (5 U.S.C. 3110).

Subpart C-Statements of Employment and Financial Interests

$0.735-901 Employees required to file under the Ethics in Government Act of 1978. (a) The following employees shall submit public financial disclosure reports in accordance with the provisions of title II of the Ethics in Government Act of 1978, as amended:

(1) Officers and employees whose positions are classified at GS-16 or above of the General Schedule, or whose basic rate of pay (excluding "step" increases) under other pay schedules is equal to, or greater than, the rate for GS-16 (step 1);

(2) Officers and employees in any other positions determined by the Director of the Office of Government Ethics to be of equal classification to GS-16;

(3) Administrative Law Judges;

(4) Employees in the excepted service in positions which are of a confidential or policy-making character, unless their positions have been excluded by the Director of the Office of Government Ethics;

(5) Designated agency ethics officials.

(b) Those employees required to file under paragraph (a) of this section are subject to the provisions of 5 CFR part 734 regarding procedures for filing, contents of reports, and penalties for failure to file or for falsifying a report.

§0.735-302 Employees required to file confidential financial disclosure statements.

The following categories of employees, other than those required to file under $0.735-301, shall submit confidential statements of employment and financial interests:

(a) Employees classified at GS-13 or above who are in positions which include responsibility for making a Government decision or taking a Government action in regard to: (1) Contracting or procurement;

(2) Administering or monitoring grants or subsidies;

(3) Regulating or auditing private or other non-Federal enterprises;

(4) Conducting Departmental investigations; or

(5) Other activities where the decision or action has an economic impact on the interests of any non-Federal enterprise.

(b) Employees classified at GS-13 or above who are in positions which the Department has determined have duties and responsibilities which require the incumbent to report employees and financial interests in order to avoid involvement in possible conflicts of interest.

(c) Employees classified below GS-13 who are in positions which otherwise meet the criteria in paragraph (a) or (b) of this section. These positions have been justified in writing to OPM as exceptions that are essential to protect the integrity of the Government and to avoid employee involvement in possible conflicts of interest.

(d) Employees, regardless of grade level, who have been selected to serve on a Technical Evaluation Panel or Source Evaluation Board.

$0.735-303 Employee's grievance regarding filing requirements.

If an employee believes that his or her position has been improperly designated as one requiring its incumbent to submit a confidential statement of employment and financial interest, the employee may obtain review of the designation through the Department's grievance procedures.

$0.735-304 Reporting and review requirements.

(a) Confidential statements of employment and financial interest and supplementary statements:

(1) Shall be submitted on forms prescribed by the Department Counselor;

(2) Shall contain information required by the Department Counselor regarding the employment background and financial interests of the employee, the employee's spouse and family members, and

(3) Shall be submitted at the times and places designated by the Department Counselor.

(b) Notwithstanding paragraph (a) of this section, the Department Counselor shall not require reporting of information relating to the interests of an employee, or his or her spouse and family members, in professional associations or charitable, religious, social, fraternal, recreational, public service, civic, or political organizations or similar organizations not conducted as business enterprises.

(c) The appropriate Deputy Counselor shall review and retain employees' statements and shall advise employees as to corrective action if necessary.

$0.735-305 Confidentiality

statements.

of employees'

To insure the confidentiality of statements filed under $0.735-302, the appropriate Deputy Counselors shall not allow access to, or allow information to be disclosed from, statements except as the Office of Personnel Management or the Department Counselor may determine for good cause shown.

Subpart D-Conduct and Responsibilities of Special Government Employees

$0.735-401 Applicable provisions.

(a) Every special Government employee is subject to the provisions of §§0.735-101 through 0.735-106, 0.735-201, 0.735-202, 0.735204(d), 0.735-205 through 0.735-210.

(b) Every special Government employee should become familiar with the statutes listed at §0.735.212.

$0.735-402 Outside employment, activities and financial interests.

(a) Special Government employees may not engage in outside employment and activities or have financial interests that conflict with the responsibilities and duties of Federal employment. However, because special Government employees usually are employed outside the Department, they may engage in employment or activities prohibited other Federal employees under §0.735203 when there is no actual conflict of interest. Special Government employees may also have financial interests prohibited other Federal employees under $0.735-204(a)(1) through (a)(5) when there is no actual conflict of interest.

(b) Notwithstanding the provisions of paragraph (a) of this section, a special Government employee may not directly or indirectly seek or receive compensation for services rendered by himself, herself or others in

connection with any proceeding, application, request for ruling, contract, claim or other particular matter in which the United States is a party or has a direct and substantial interest and:

(1) Which is before any Federal or District of Columbia department or agency and in which he or she participated personally and substantially for the Government, or

(2) Which is pending before the Department, provided that a special Government employee who has served in the Department no more than 60 days in the previous 365 days shall be bound only as to a matter in which he or she participated personally and substantially (18 U.S.C. 203).

(c) Notwithstanding the provisions of paragraph (a) of this section, a special Government employee may not act, with or without compensation, as an agent or attorney for another in prosecuting a claim against the United States, or in connection with any proceeding, application, request for ruling, contract or other particular matter in which the United States is a party or has a direct and substantial interest, and

(1) Which is before any Federal or District of Columbia department, agency or court and in which he or she participated personally and substantially for the Government,

or

(2) Which is pending before the Department, provided that this clause shall not apply in the case of a special Government employee who has served in the Department no more than 60 days in the previous 365 days (18 U.S.C. 205).

(d) Permissible exceptions to the prohibitions set forth in paragraphs (b) and (c) of this section include:

(1) Representation without compensation in connection with a disciplinary, loyalty, or personnel proceeding;

(2) Representation with or without compensation of parents, spouse, child, and those to whom the employee owes a fiduciary duty except in those matters in which the employee has participated personally and substantially as a Government employee or which are the subject of his official responsibility; and

(3) Statements required to be made under penalty for perjury or contempt.

(e) A special Government employee seeking to engage in one of the excepted activities should consult in advance with a Deputy Counselor.

(f) The Secretary may allow a special Government employee to represent his or her regular employer or another person or organization before the Department in the performance of work under a grant or a contract. The Secretary must first certify in the FEDERAL REGISTER that such representation is in the national interest. (18 U.S.C. 205).

$0.735-502 Disciplinary action.

(a) Disciplinary action may be taken against any former Department employee or special Government employee (hereafter referred to as former employee) found under this subpart to have violated the post employment restrictions set forth in §§0.735–405 and 0.735-501 of this part.

(b) The Department Counselor or a Deputy Counselor may initiate disciplinary proceedings. For purposes of this subpart, such an official is referred to as an Initiating Official.

(c) Disciplinary action may consist of:

(1) Prohibiting the former employee from making, on behalf of another, except the United States, any informal or formal appearance before, or with the intent to influence, any oral or written communication to the Department, on any matter of business for a period not to exceed five years. This prohibition may be accomplished by directing Department personnel to refuse to participate in any such appearance or to accept any such communication; or

(2) Other appropriate disciplinary actions, including but not limited to:

(1) Prohibiting, for a definite period of not more than five years, the former employee from any representational activity in connection with a specific office in the Department, or with a specific matter, in which the employee had an interest;

(ii) Issuing a letter of warning to the former employee.

§0.735-503 Initiating disciplinary proceedings.

(a) The Initiating Official, upon receiving information indicating grounds for disciplinary action, shall request that the Office of the Inspector General conduct an investigation and report all relevant investigative findings back to the Initiating Official.

(b) The Inspector General shall coordinate all investigations under this subpart with the Department of Justice as appropriate.

(c) All investigations under this subpart shall be conducted in a manner which protects the privacy of former employees. To the extent possible, information received as a result of the Inspector General's investigation shall remain confidential except as necessary to carry out the purposes of this subpart.

(d) After the Inspector General reports the facts of the investigation to the Initiating Official, the Initiating Official shall determine either:

(1) That there is reasonable cause to believe that a violation has occurred, in which event the Initiating Official shall expeditiously provide all relevant information, along with any comments or agency regulations, to the Director of the Office of Government Ethics (OGE); in addition, the Initiating Official shall commence disciplinary ac

tion against the former employee by serving notice in accordance with §0.735-504; or

(2) That there is no reasonable basis for believing that a violation has occurred, in which event the Initiating Official shall advise the former employee and the Inspector General's office of that determination.

(e) In the event disciplinary action is initiated, the Department Counselor shall promptly appoint an impartial hearing offlcer who shall be a member of the HUD Board of Contract Appeals or an Administrative Law Judge. The hearing officer shall not have participated in any manner in the decision to initiate disciplinary action.

$0.735-504 Notice.

(a) The Initiating Official shall notify the former employee of the proposed disciplinary action in writing, by registered or certified mail, return receipt requested, or by any other means which gives actual notice or is reasonably calculated to give actual notice. (b) The Notice shall include:

(1) A statement of allegations and the basis thereof sufficiently detailed to enable the former employee to prepare an adequate defense;

(2) A statement that the former employee is entitled to a hearing with a right to counsel if he or she requests a hearing within 15 days after receiving the notice;

(3) A statement explaining the method by which a hearing may be requested including the name, business address, and telephone number of the person to be contacted if there are further questions;

(4) A statement explaining the right to submit documentary evidence and a report to the hearing officer if a hearing is not requested and the method by which evidence may be submitted; and

(5) The disciplinary action proposed.

$0.735-505 Hearings.

(a) Formal rules of evidence and procedure applicable to a proceeding in a court of law will not be applied. Parties may object to clearly irrelevant material, but technical objections to testimony as used in a court of law will not be sustained.

(b) A former employee, against whom disciplinary action is proposed, is entitled to a hearing upon a written request submitted to the hearing officer within 15 days after the former employee receives notice as set forth in $0.735-504. If no timely request is made, the hearing officer may proceed under §0.735506 to make a decision without a hearing.

(c) An attorney from the Department's legal staff shall represent the Department in the matter.

(d) The hearing shall be conducted at a reasonable time, date, and place as set by the hearing officer.

(1) In setting a hearing date, the hearing officer shall give due regard to the former