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fected in accordance with applicable laws, Executive orders, Civil Service Commission regulations and the regulations in this part. The action taken may involve, among other things:

(1) Divestment by the employee of his conflicting interest;

(2) Changes in existing duties;

(3) Disqualification for a particular assignment;

(4) Appropriate disciplinary action, up to and including removal.

[32 FR 17663, Dec. 12, 1967, as amended at 33 FR 494, Jan. 13, 1968]

§ 1105.735-6 Statements of employment and financial interests.

(a) Employees other than special Government employees-(1) General requirement. Statements of employment and financial interests are required of all Federal employees occupying positions at or above Grade 16 or the equivalent, as well as all employees occupying positions which either require the exercise of judgment in making a Government decision, or in taking Government action with regard to:

(i) Contracting or procurement; (ii)

Administering or monitoring grants or subsidies;

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

(iv) Other activities where the decision or action has an economic impact on the interest of a particular nonFederal enterprise; or

require the incumbent to report in order to avoid involvement in a possible conflicts-of-interest situation and carry out the purpose of law.

(2) Requirements of the National Endowment for the Arts and the National Endowment for the Humanities. In order to fulfill the Endowments' obligations under the general Government requirement described in paragraph (a)(1) of this section, it has been determined that a Statement of Employment and Financial Interests must be completed and submitted in accordance with the procedures set forth in this section by employees occupying the following positions:

(i) National Endowment for the Arts:

(a) Deputy chairman.

(b) All special assistants to the chairman and deputy chairman.

(c) All program, division and office directors.

(ii) National Endowment for the Humanities:

(a) Deputy chairman.

(b) All assistants (including special assistants) to the chairman and deputy chairman.

(c) All program and office directors (but not including the Public Information Director).

(d) All program officers classified at GS-13 and above.

(iii) Shared staff:

(a) All attorneys.

(b) Director and Assistant Director of Administration.

(c) All auditors classified at GS-13 and above.

(d) Financial manager.

(e) Administrative services officer. All grants officers.

(3) Inclusion and exclusion of positions. (i) Whenever appropriate, the Chairman of an Endowment may amend paragraph (a)(2) of this section to include additional positions in his Endowment that entail submission of such statements or may exclude any positions in his Endowment listed in paragraph (a)(2) of this section the inclusion of which is not required by the general requirement in paragraph (a)(1) of this section. Inclusion or elimination of shared positions will be accomplished by agreement of both Chairmen. Each supervisor is responsible for bringing to the attention of the appropriate Chairman (through the Deputy Chairman) any position which the supervisor believes should be covered or excluded by this requirement. (ii) If an employee believes that his position has been improperly included among those for which a Statement of Employment and Financial Interests is required, he may bring this matter, via the Foundation's grievance procedures, to the attention of the appropriate Deputy Chairman or, in the case of shared staff, to the attention of both Deputy Chairmen. In the event that the recommendation is made that the position be included, the employee may appeal to the Chairman of the Endowment concerned, or, in the case of shared staff,

to both Chairmen, whose ruling shall be final.

(iii) Although an employee's position may generally be included within the terms of paragraph (a)(1) of this section, such position may be excluded from the reporting requirement when it is determined that:

(a) The duties of a position are such that the likelihood of the incumbent's involvement in a conflicts-of-interest situation is remote; or

(b) The duties of a position are at such a level of responsibility that the submission of a statement of employment and financial interests is not necessary because of the degree of supervision and review over the incumbent or the inconsequential effect on the integrity of the Government.

(4) Submission of original and supplementary statements. Each employee covered by this requirement shall complete the statement and submit it within 90 days after the effective date of this part. Each new employee shall complete and submit the statement within 30 days after his entrance on duty or within 90 days after the effective date of this part, whichever date is later. All changes in, or additions to, the information contained in each employee's original statement must be reported in a supplementary statement submitted by the employee as of June 30 each year. If no changes or additions occur a negative report is required. Not withstanding the filing of the annual report required by this subparagraph, each employee shall at all times avoid acquiring a financial interest that could result, or taking an action that would result, in a violation of the conflicts of interest provisions of section 208 of title 18, U.S.C., or § 1105.735-7 of this part. The Administrative Office of the Foundation is responsible for informing each new, affected employee of the requirement for him to submit the statement within 30 days after his entrance on duty.

(5) Interests of employees' relatives. For purposes of the statement, the interests of a spouse, minor child, or any other member of an employee's immediate household who is a blood relation of the employee, are considered to be interests of the employee.

(6) Information not known by employees. If information required to be included on the statement of employment and financial interests (supplementary or otherwise, including holdings placed in trust) is not known by the employee but is known to another person, the employee shall request such other person to submit the information on his behalf.

(7) Information not required. Employees are not required to submit information relating to their financial interests in any professional society not conducted as a business enterprise as described in the next sentence, charitable, religious, social, fraternal, recreational, public service, civic, political, or similar organization not conducted as a business enterprise. Professional societies, educational institutions, and other nonprofit organizations engaged in research, development, or related activities involving grants of money from, or contracts with, the Government are deemed "business enterprises" and are required to be included in employees' statements of employment and financial interests.

(8) Effect of employees' statements on other requirements. The statements of employment and financial interests and supplementary statements required of employees are in addition to, and are not in substitution for, or in derogation of, any similar requirement imposed by law, regulation, or Executive order. The submission of the statement or supplementary statement by an employee does not permit him or any other person to participate in any matter in which his or the other person's participation is prohibited by law, regulation, or Executive order.

(9) Confidentiality of employees' statements. Each statement of employment and financial interest and each supplementary statement will be held in strictest confidence. The officials designated below to receive such statements will not allow access to, or information to be disclosed from, a statement except to carry out a purpose of this part. Information will not be disclosed from the statement except as the Civil Service Commission or the appropriate Chairman (or Chairmen,

in the case of shared staff members) may authorize for good cause shown.

(10) Review of statements. (i) Each Deputy Chairman will submit his statement to the appropriate Endowment Chairman.

(ii) Employees of either Endowment shall submit their statements to the Deputy Chairman of that Endowment.

(iii) Joint employees shall submit their statements to both Deputy Chairmen.

(iv) When a statement submitted under paragraph (b)(2) or (3) of this section indicates a conflict between the interests of an employee and the performance of his services for the Government and when the conflict or appearance of conflict cannot be resolved by the Deputy Chairman (or by both Deputy Chairmen in the case of joint employees), he shall report the information concerning the conflict or appearance of conflict to the Chairman through the General Counsel. In the case of joint employees, information concerning the conflict or appearance of conflict shall be reported to both Chairmen. The employee concerned shall be given an opportunity to explain the conflict or appearance of conflict before remedial action is initiated.

(b) Special Government employees. (1) Each special Government employee shall submit a statement of employment, and, unless otherwise directed, a statement of financial interests not later than the time of his employment. It is necessary that the special Government employee report all Federal and non-Federal employment, and, when a statement of financial interests is required, those financial interests which relate, either directly, or indirectly, to his Foundation responsibilities or duties.

(2) Each special Government employee must file a supplementary statement of employment and financial interests whenever a significant change occurs, either in his employment or financial interests, in order that his statement may be kept current.

(3) The provisions of paragraph (a)(5) through (9) of this section apply to special Government employees in

the same manner as to other employ

ees.

(Sec. 10, 79 Stat. 852, as amended at 82 Stat. 186, 84 Stat. 443 (20 U.S.C. 959))

[32 FR 17663, Dec. 12, 1967, as amended at 38 FR 3512, Feb. 7, 1973]

§ 1105.735-7 Employee conduct.

(a) General. (1) Each Endowment assumes that an employee will conduct himself in a manner that will not discredit or embarrass himself or the Endowment. However, it is pointed out that the violation of the regulations in this part, or any criminal, infamous, dishonest, immoral, or notoriously disgraceful conduct on the part of an employee (whether in official duty status or not), is cause for immediate disciplinary action, up to and including removal.

(2) Employees shall avoid any action, whether or not specifically prohibited, which might result in or create the appearance of:

(i) Using public office for private gain;

(ii) Giving preferential treatment to any person;

(iii) Impeding Government efficiency or economy;

(iv) Losing complete independence or impartiality;

(v) Making a Government decision outside official channels; or

(vi) Affecting adversely the confidence of the public in the integrity of the Government.

(b) Indebtedness. Employees are expected to meet their just financial obligations and not to take advantage of the fact that their wages are not subject to garnishment for private debts. Failure to meet just financial obligations in a proper and timely manner may result in disciplinary action, up to, and including, removal. For the purpose of this section, a "just financial obligation" means one acknowledged by the employee or reduced to judgment by a court, and "in a proper and timely manner" means in a manner which the agency determines does not, under the circumstances, reflect adversely on the Government as his employer. In the event of dispute between an employee and an alleged creditor, this section does not require

the Endowment concerned to determine the validity or amount of the disputed debt.

(c) Payment of taxes. Employees are expected to meet their obligations for payment of taxes to Federal, State, and local authorities. Delinquency in payment of Federal, State, and local taxes is cause for disciplinary action, up to, and including, removal. Federal agencies are required to furnish State taxing authorities (including the District of Columbia) with a copy of Form W-2 indicating annual earnings and Federal income tax withheld. Employees are authorized to pay delinquent Federal taxes by payroll deduction: Provided, That they make satisfactory arrangements with the Internal Revenue Service to liquidate their tax liabilities in this manner. When such arrangements are not made, District Directors of Internal Revenue have the authority to levy upon the salaries of Federal employees for the full amount of delinquent Federal income tax.

(d) Financial interests. Any employee may hold financial interests and engage in financial transactions in the same way as any private citizen, proIvided that such interests or activities are not prohibited by law, Executive order, or the regulations in this part. In particular, no employee may have any direct or indirect financial interest that conflicts substantially or appears to conflict substantially with his duties and responsibilities as an Endowment employee. No employee shall carry out Endowment duties involving any organization in which he has a direct or indirect financial interest. No employee shall engage directly or indirectly in any financial transaction resulting from, or primarily relying on, information obtained through his employment, or use his employment to coerce, or give the appearance of coercing, a person, to provide financial benefit to himself or another.

(e) Participation in Endowment grants by former Endowment employees. In cases not directly coming under the prohibitions of 18 U.S.C. 207 (relating to activities of former Government officials), the following rules shall apply:

(1) In addition to the statutory bars against ever dealing with the U.S.

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Government in connection with a particular matter in which he participated personally and substantially while an employee, and against dealing with the Government for 1 year after leaving in connection with a matter under his official responsibility while in the Government, a former regular employee of an Endowment may not negotiate with either Endowment, with a view to obtaining support for himself or his organization within 1 year after having left the Endowment, except with the written permission of the Chairman of the Endowment in which he had been employed.

(2) A former regular employee of an Endowment may not be compensated from an Endowment grant directly or indirectly within 1 year of his leaving the Endowment, except with the written permission of the Chairman of the Endowment in which he had been employed.

(3) In the case of joint employees, the written permission referred to in paragraphs (e)(1) and (2) of this section must be given by both Chairmen. (f) Gifts, entertainment, and favors. Employees may not solicit, or accept directly or indirectly from any person, institution, corporation, or group, anything of economic value as a gift, gratuity, favor, entertainment, or loan, which might be reasonably interpreted by others as being of such a nature that it would affect his impartiality. This is especially applicable in those instances where the employee has reason to believe that the person, institution, corporation, or group:

(1) Has, is seeking, or is likely to seek, assistance, support, or funds from an Endowment; or

(2) Conducts operations or activities which are involved with, or are supported by, an Endowment; or

(3) Has interests which might be substantially affected by the employee's performance or nonperformance of duties; or

(4) May be attempting to affect the employee's official actions.

(i) An employee shall not solicit a contribution from another employee for a gift to an official superior, make a donation as a gift to an official superior, or accept a gift from an employee receiving less pay than himself (5

U.S.C. 7351). However, this paragraph does not prohibit a voluntary gift of nominal value or donation in a nominal amount made on a special occasion such as marriage, illness, or retirement.

(ii) Employees are not permitted to accept a gift, or decoration, or other objects from a foreign government unless authorized by Congress as provided by the Constitution and in 5 U.S.C. 7342.

(iii) Employees may accept promotional material of nominal intrinsic value such as pens, pencils, note pads, calendars, etc. Employees may, on infrequent occasions, accept items of nominal value such as food in the ordinary course of a luncheon or dinner meeting, site visit, or professional conference, when the employee is properly in attendance.

(iv) Neither this paragraph nor paragraph (g) of this section precludes an employee from receipt of bona fide reimbursement, unless prohibited by law, for expenses of travel and such other necessary subsistence as is compatible with this part for which no Government payment or reimbursement is made. However, this paragraph does not allow an employee to be reimbursed, or payment to be made on his behalf, for excessive personal living expenses, gifts, entertainment or other personal benefits, nor does it allow an employee to be reimbursed by a person for travel on official business under agency orders when reimbursement is proscribed by Decision B128527 of the Comptroller General dated March 7, 1967.

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(3) Regular employees shall not receive anything of value from a private source as compensation for their activities as endowment employees.

(4) Employees shall not engage in teaching, lecturing, or writing which is dependent on official information obtained as a result of Government employment, except when the information has been, or is being made available to the general public, or will be made available to the public on request, or when the Chairman or Deputy Chairman of the Endowment concerned gives written authorization for the use of nonpublic information on the basis that the use is in the public interest. However, employees are encouraged to engage in teaching, lecturing, and writing not prohibited by the regulations in this part, by law, or by Executive order.

(5) Employees shall not receive anything of monetary value for any consulting, lecturing, discussion, writing, or presentation, the subject of which is devoted to the responsibilities, programs, or operations of an Endowment, or which draws on official data or ideas which have not become part of the body of public information.

(6) Employees shall not serve as organizers or directors of conferences, colloquia or similar events supported by grant or contract from an Endowment, but may otherwise participate in such events provided they do not receive any compensation or economic benefit for such participation.

(7) Employees may, however, participate in the affairs of, and accept an award for meritorious public contribution or achievement given by a charitable, religious, fraternal, educational, recreational, public service, or civic organization.

(h) Advice or assistance to nonprofit or commercial organizations. The conditions under which full-time employees may offer assistance or advice to nonprofit or commercial organizations are set forth in this paragraph (h). Although these conditions are stated as general rules, illustrative applications to specific situations are set forth as an aid to interpretation:

(1) General rules. While not on official duty, an employee may provide advice or assistance and receive com

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