any one entity on the List of Designated Entities and the covered employee or covered family member neither exercises control over nor has the ability to exercise control over the flnancial interests held in the fund; or

(11) Certificates of deposit, checking accounts, savings accounts and other deposit accounts.

(4) Support by the Bank means:

(1) Direct loans made by the Bank; (ii) Guarantees by the Bank of loans from lending institutions; or

(iii) Insurance policies issued by the Bank under any of its insurance programs.

(d) Restrictions arising from third party relationships. If a covered employee has knowledge that any of the entities described in paragraphs (d)(1) through (d)(6) of this section own any security that a covered employee or covered family member would be prohibited from owning by paragraph (a) of this section, the covered employee shall promptly report such interests to the DAEO. The DAEO may require the covered employee to terminate the third party relationship, undertake an appropriate disqualification, or take other appropriate action necessary, under the particular circumstances, to avoid a statutory violation or a violation of part 2635 of this title or of this part, including an appearance of misuse of position or loss of impartiality. This paragraph applies to any:

(1) Partnership in which the covered employee or covered family member is a general partner;

(2) Partnership in which the covered employee and/or covered family member(s) in the aggregate holds more than a ten percent limited partnership interest;

(3) Closely held corporation in which the covered employee and/or covered family member(s) in the aggregate holds more than a ten percent (10%) equity interest;

(4) Trust in which the covered employee or covered family member has a legal or beneficial interest;

(5) Investment club or similar informal investment arrangement between the covered employee or covered family member and others; or

(6) Other entity if the covered employee and/or covered family mem

ber(s) in the aggregate holds more than a ten percent (10%) equity interest.

(e) Period to Divest. Unless a waiver is granted pursuant to paragraph (f) of this section, a covered employee or covered family member who owns securities of a designated entity as of the date that the initial List of Designated Entities is circulated to covered employees, the date that a revised List of Designated Entities is circulated to covered employees, or the first day that an individual becomes a covered employee, shall divest the securities within six (6) months of such date. The DAEO may, in certain cases of unusual hardship, grant a written extension of up to an additional six (6) months within which a covered employee or covered family member must divest securities of a designated entity. Notwithstanding the grant of an extension, a covered employee remains subject to the disqualification requirements of 5 CFR 2635.402 and 2635.502. A covered employee or covered family member who must divest securities pursuant to this section should refer to section 1043 of the Internal Revenue Code and to the regulations of subpart J of 5 CFR part 2634 under which the covered employee or covered family member may be eligible to defer the recognition of taxable gain on the sale or other divestiture.

(f) Waivers. The DAEO may grant a written waiver from the securities prohibition contained in this section based on a determination that the waiver is not inconsistent with 5 CFR part 2635 or otherwise prohibited by law and that, under the particular circumstances, application of the prohibition is not necessary to avoid the appearance of misuse of position or loss of impartiality, or otherwise to ensure confidence in the impartiality and objectivity with which Bank programs are administered. A waiver under this paragraph may be accompanied by appropriate conditions, such as requiring execution of a written statement of disqualification. Notwithstanding the grant of any waiver, a covered employee remains subject to the disqualification requirements of 5 CFR 2635.402 and 2635.502.

(g) Agency determinations of substantial conflict. Nothing in this section prevents the Bank from prohibiting or restricting an individual Bank employee from acquiring or holding a financial interest or a class of financial interests based upon the Bank's determination of substantial conflict pursuant to 5 CFR 2635.403(b).

§6201.103 Prior approval for outside employment.

(a) Prior approval requirement. Before engaging in any outside employment, whether or not for compensation, an employee, other than a special Government employee, must obtain the written approval of the employee's immediate supervisor and the DAEO. Requests for approval shall be forwarded through normal supervisory channels to the DAEO and shall include the name of the person, group, or organization for whom the work is to be performed; the type of work to be performed; and the proposed hours of work and approximate dates of employment.

(b) Standard for approval. Approval shall be granted only upon a determination that the outside employment is not expected to involve conduct pro

hibited by statute or Federal regulation (including 5 CFR part 2635). In the case of an employee who wishes to practice a profession involving a fiduciary relationship, as defined in 5 CFR 2636.305(b), approval will be granted only for each individual matter in the course of practicing such profession.

(c) Definition of employment. For purposes of this section, "employment" means any form of non-Federal employment or business relationship involving the provision of personal services by the employee. It includes but is not limited to personal services as an officer, director, employee, agent, attorney, consultant, contractor, general partner, trustee or teacher. It also includes writing when done under an arrangement with another person for production or publication of the written product. It does not, however, include participation in the activities of a nonprofit charitable, religious, professional, social, fraternal, educational, recreational, public service or civic organization, unless such activities involve the provision of professional services or advice or are for compensation other than reimbursement of expenses.

§6301.102 Prior approval for certain outside activities.

(a) An employee, other than a special Government employee, must obtain written approval prior to engaging— with or without compensation-in the following outside activities:

(1) Except as provided in paragraph (b)(1) of this section, providing services, other than clerical services or service as a fact witness, on behalf of any other person in connection with a particular matter:

(1) In which the United States is a party;

(ii) In which the United States has a direct and substantial interest; or

(iii) If the provision of services involves the preparation of materials for submission to, or representation before, a Federal court or executive branch agency.

(2) Except as provided in paragraph (b)(2) of this section:

(1) Serving as an officer, director, trustee, general partner, agent, attorney, consultant, contractor, employee, advisory committee member, or active participant for a prohibited source; or

(ii) Engaging in teaching, speaking, consulting, or writing that relates to the employee's official duties.

(b) Unless the services are to be provided for compensation, including re

imbursement for transportation, lodging and meals:

(1) Prior approval is not required by paragraph (a)(1) of this section to provide services as an agent or attorney for, or otherwise to represent, another Department of Education employee who is the subject of disciplinary, loyalty, or other personnel administration proceedings in connection with those proceedings; and

(2) Prior approval is not required by paragraph (a)(2) of this section: (1) To participate in the activities of

a:

(A) Social, fraternal, civic, or political entity;

(B) Religious entity that is not a prohibited source; or

(C) Parent-Teacher Association or similar parent organization at the employee's child's school or day care center, other than as a member of a board of directors or other governing body of the school or center, or the educational agency of which it is a part; or

(ii) To provide direct instructional, social, or medical services to students or other individuals.

(c) An employee who is required by paragraph (a) of this section to obtain prior written approval shall submit a written request for approval in accordance with Department procedures.

(d) The cognizant reviewing official shall grant approval unless he or she determines that the outside activity is expected to involve conduct prohibited by statute or Federal regulations, including 5 CFR part 2635.

(e) For the purposes of this section: (1) "Active participant" has the meaning set forth in 5 CFR 2635.502(b)(1)(v).

(2) "Prohibited source" has the meaning set forth in 5 CFR 2635.203(d). (3) "Relates to the employee's official duties" means that the activity meets one or more of the tests described in 5 CFR 2635.807(a)(2)(1) (B) through (E). It includes, in relevant part:

(1) Activities an employee has been invited to participate in because of his or her official position rather than his or her expertise in the subject matter;

(ii) A situation in which an employee has been asked to participate in an activity by a person or organization that

has interests that may be substantially affected by the performance or nonperformance of the employee's official duties;

(iii) Activities that convey information derived from nonpublic information gained during the course of Government employment; and

(iv) Activities that deal in significant part with any matter to which the employee is or has been officially assigned in the last year, any ongoing or announced Department policy, program or operation, or-in the case of certain noncareer employees-any matter that is generally related to education or vocational rehabilitation.

Example 1: A Department employee witnessed an automobile accident involving two privately owned cars on her way to work. Some time later she is served with a subpoena at home to appear in Federal court as a fact witness on behalf of the plaintiff, who was injured in the car accident, in a civil case alleging negligence. The Department employee is not required to obtain prior approval to comply with the subpoena because this civil case is not a matter in which the United States is a party or has a direct and substantial interest.

Example 2: A Department employee would like to prepare Federal tax returns for clients on his own time. He is required to obtain prior approval to participate in this outside activity because it involves the provision of personal services in the preparation of materials for submission to the Internal Revenue Service, an executive branch agency.

Example 3: Arlene, a Department employee, has been asked by a Department colleague to represent him, without compensation, in an equal employment opportunity complaint he filed alleging that his supervisor failed to promote him because he is over 40 years old. Arlene is not required to obtain prior approval under this regulation before providing such representation because it involves services for another Department of Education employee in connection with a personnel administration proceeding. However, under 18 U.S.C. section 205, she may only provide such representation if it is not inconsistent with faithful performance of her duties.

Example 4: A local school board offers a Department employee a paid position as a referee of high school football games. The employee must seek prior approval to accept this outside employment because the local school board is a prohibited source. If, on the other hand, the employee volunteered to coach soccer, without pay, in a sports program sponsored by the local school board, no prior approval is required because she would be engaging in direct instructional services to students.

Example 5: A Department program specialist in the Office of Elementary and Secondary Education actively pursues an interest in painting. The community art league, where he has taken evening art classes, asks him if he would be interested in teaching an evening course on painting with acrylics. The employee is not required to obtain approval prior to accepting this employment. The community art league is not a prohibited source, and the subject matter of the course is not related to his duties.

Example 6: A Department employee helps organize local tennis tournaments. A national tennis magazine calls and asks her to write a monthly column about recreational tennis in her area. The magazine offers to pay the employee $500 for each column. The subject matter is not related to her duties, and the employee is not required to seek prior approval to write this column. However, the employee is still subject to all of the Standards of Conduct and other laws that may apply, including the limitation on outside earned income for certain noncareer employees, as well as the prohibition on using Government resources to pursue outside activities and employment.

Example 7: An employee's elderly parent is retired and receiving Social Security benefits. The employee would like to represent his parent in an administrative hearing before the Social Security Administration concerning a dispute over benefits. The employee must obtain prior approval to undertake the activity of representing his parent because he is providing services to his parent in a particular matter in which the United States is a party. Moreover, the services will involve representation before a Federal agency.

[60 FR 5817, Jan. 30, 1995]