fied in Appendix C to Part 73 of this chapter), means one who: (i) Occupies an FDA position classified at GS-11 or above, or PHS Commissioned Officer 0-3 or above, or equivalent; (ii) Occupies an FDA position below GS-11 with duties of a nature that the employee could in the discharge of his official duties and responsibilities cause an economic advantage for or impose a handicap on a non-Federal enterprise (includes investigators, inspectors, regulatory analysts); (iii) Occupies a position at GS-11 or above in the Office of the Assistant General Counsel, Food and Drug Division. (2) "Insignificant" (part of an organization's total business operations) means that the FDA-regulated products constitute no more than 10 percent of the organization's annual gross sales. § 73a.735-504 Exceptions. (a) A control activity employee who can satisfy all of the conditions specified in § 73a.735-502(a)(2) may submit a request to retain a prohibited financial interest. Any such request must be submitted no later than 30 days after the event that results in the employee holding the prohibited financial interest. Such requests for exception should be forwarded in writing through supervisory channels to the Associate Commissioner for Administration for review by the FDA Conflict of Interest Review Board and subsequent recommendation to the Commissioner. All decisions on requests for exceptions shall be in writing and a copy furnished to the employee involved. (b) A memorandum of each approved exception shall be filed in the Public Records and Documents Center for public inspection. Such public disclosure shall be made within 10 days after the Commissioner's decision. The following is an example of the format of such memorandum (in a hypothetical employee situation): (1) Employee: Joe Doe. (2) Title: Research Chemist. (3) Grade/Salary: GS-14. (4) Organization: Bureau of Biologics, Food and Drug Administration, Bethesda, Md. (5) Date of employee's request for exception: (6) Date of Commissioner's approval: (7) Basis for exception: Employee owns financial interest in the ABC Foods Corporation, and permanent retention is normally prohibited under FDA/HHS conflict of interest regulations for such an employee. The employee, however, acquired this financial interest prior to his reassignment to FDA on which was part of a major Department reorganization transferring certain functions from NIH to the FDA (i.e., FDA's Bureau of Biologics). At the time of acquisition and immediately prior to the reorganization, the employee's financial interest was allowable under Department regulations. The employee's official duties are fully confined to the matters under the jurisdiction of the Bureau of Biologics, and his official duties do not involve any contact with the food industry. The Commissioner has determined that an exception is warranted under the following criteria: (i) Acquisition occurred prior to Department reorganization; (ii) Financial interest retention will not give rise to an actual conflict of interest situation; (iii) There is no direct relationship between the employee's official duties and the regulated activities of ABC Foods; (iv) The employee occupies a position below that of Bureau or Deputy Bureau Director (or equivalent position in the Office of the Commissioner); and (v) The employee agrees to refrain from engaging in any direct or indirect transactions that are designed to increase the value/shares of the "excepted" ABC Foods interests. This exception is considered equitable to the employee involved, and retention of the ABC Foods interest will not in any way impair the interests of the Government or of the public. (c) In interpreting the requirement of 873a.735-502(a)(2)(v), events not in volving employee discretion (e.g., accepting dividends in the form of cash or additional shares) do not constitute transactions designed to increase the value/shares of an "excepted" financial interest. A transaction involving discretion, e.g., exercise of stock options, may be made only if proposed to the Associate Commissioner for Administration and approved by the Conflict of Interest Review Board as an amendment to the original exception. A memorandum recording such approval shall be made public in accordance with paragraph (b) of this section. (d) An employee may temporarily retain a prohibited financial interest pending review of a written request for an exception submitted in accordance with this section. (e) Except as provided in § 73a.735501(c), no employee may participate in an official matter whose outcome will have a direct and predictable effect on a financial interest held by him. This prohibition applies to official matters handled before and after approval of an exception under this section. Subparts F-I [Reserved] Subpart J-Statements of Employment and Financial Interests § 73a.735-1004 Submission and review of statements. (a) Employees occupying control activity positions shall file Form HHS473 "Confidential Statement of Employment and Financial Interests" with the Associate Commissioner for Administration within 30 days after entrance in this category and annually thereafter as of June 30, or such other dates as the Secretary, with the concurrence of the Civil Service Commission, may approve. Prior to the due date, the Associate Commissioner for Administration shall advise "control activity" employees of the annual filing requirement through normal administrative channels. The annual reporting requirement shall commence as of June 30, 1977. (b) The Associate Commissioner for Administration (or his designee) shall serve as the principal reviewing offi the Inspector General or to any officer or employee of the Department. (b) The Inspector General shall coordinate proceedings under this part with the Department of Justice in cases where it appears criminal prosecution is warranted. § 73b.4 Proceedings. (a) Upon a determination by the Assistant General Counsel, Business and Administrative Law Division, or his/ her designee, after investigation by the Inspector General, that there is reasonable cause to believe that a former officer or employee, including a former special Government employee, of the Department of Health and Human Services (former departmental employee) has violated 18 US.C. 207 (a), (b) or (c), the Assistant General Counsel, or his/her designee, shall cause a copy of written charges of the violation(s) to be served upon such individual, either personally or by registered mail. The charges shall be accompanied by a notice to the former departmental employee to show cause within a specified time of not less than 30 days after receipt of the notice why he/she should not be prohibited from engaging in representational activities in relation to matters pending in the Department, as authorized by 18 U.S.C. 207(j), or subjected to other appropriate debarment or disqualification action under that statute. The notice to show cause shall include: (1) A statement of allegations, and their bases, sufficiently detailed to enable the former departmental employee to prepare an adequate defense; (2) Notification of the right to a hearing, and that failure to answer shall constitute a waiver of defense; and (3) An explanation of the method by which a hearing may be requested. (b) If a former departmental employee who submits an answer to the notice to show cause does not request a hearing or if the Assistant General Counsel does not receive an answer within the time prescribed by the notice, the Assistant General Counsel shall forward the record, including the report(s) of investigation, to the Assistant Secretary for Personnel Administration (Assistant Secretary). In the case of a failure to answer, such failure shall constitute a waiver of defense. (c) Upon receipt of a former departmental employee's request for a hearing, the Assistant General Counsel shall notify him/her of the time and place thereof, giving due regard both to such person's need for an adequate period to prepare a suitable defense and an expeditious resolution of allegations that may be damaging to his or her reputation. (d) The presiding officer at the hearing and any related proceedings shall be a federal administrative law judge. He/she shall insure that the former departmental employee has the following rights: (1) To self-representation or representation by counsel, (2) To introduce and examine witnesses and submit physical evidence, (3) To confront and cross-examine adverse witnesses, (4) To present oral argument, and (5) To a transcript or recording of the proceedings, upon request. (e) The Assistant General Counsel shall designate one or more officers or employees of the Department to present the evidence against the former departmental employee and perform other functions incident to the proceedings. (f) A decision adverse to the former departmental employee must be sustained by substantial evidence that he/she violated 18 U.S.C. 207 (a), (b) or (c). If a judgment of conviction has been entered by a Federal district court against the former departmental employee for violation of 18 U.S.C. 207 (a), (b) or (c), regardless of whether the judgment is based upon a verdict or a plea of guilty, such judgment of conviction shall be conclusive evidence of a violation of 18 U.S.C. 207 (a), (b) or (c), unless and until the judgment is vacated or reversed on appeal. (g) The administrative law judge shall issue an initial decision based exclusively on the transcript of testimony and exhibits, together with all papers and requests filed in the proceeding, and shall set forth in the decision findings and conclusions, supported by reasons, on the material issues of fact and law presented on the record. (h) Within 30 days after issuance of the initial decision, either party may appeal in writing to the Assistant Secretary who in that event shall issue the final decision based on the record of the proceedings or those portions thereof cited by the parties to limit the issues. If the final decision modifies or reverses the initial decision, the Assistant Secretary shall specify the findings of fact and conclusions of law that vary from those of the presiding officer. (i) If a former departmental employee fails to appeal from an adverse initial decision within the prescribed period of time, the administrative law judge shall forward the record of the proceedings to the Assistant Secretary. (j) In the case of a former departmental employee who filed an answer to the notice to show cause but did not request a hearing, the Assistant Secretary shall make the final decision on the record submitted to him by the Assistant General Counsel pursuant to paragraph (b) of this section. (k) In a case where: (1) The defense has been waived, (2) The former departmental employee has failed to appeal from an adverse initial decision, or (3) The Assistant Secretary has issued a final decision that the former departmental employee violated 18 U.S.C. 207 (a), (b) or (c), The Assistant Secretary may issue an order: (i) Prohibiting the former departmental employee from making, on behalf of any other person (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 a pending matter of business for a period not to exceed five years, or (ii) Prescribing other appropriate debarment or disqualification action, such as limiting the action to a particular organization or organizations within the Department. (1) An order issued under either paragraph (k)(i) or (ii) of this section shall be supplemented by a directive to officers and employees of the De partment not to engage in conduct in relation to the former departmental employee that would contravene such order. § 73b.5 Hearings. (a) Hearings shall be stenographically recorded and transcribed and the testimony of witnesses shall be taken under oath or affirmation. Hearings will be closed unless an open hearing is requested by the respondent, except that if classified information or protected information of third parties is likely to be adduced at the hearing, it will remain closed. If either party to the proceeding fails to appear at the hearing, after due notice thereof has been sent to him/her, he/she shall be deemed to have waived the right to a hearing and the administrative law judge may make a decision on the basis of the record before him/her at that time. (b) The rules of evidence prevailing in courts of law and equity are not controlling in hearings under this part. However, the administrative law judge shall exclude evidence which is irrelevant, immaterial, or unduly repetitious. (c) Depositions for use at a hearing may, with the consent of the parties in writing or the written approval of the administrative law judge be taken by either the Assistant General Counsel or the respondent or their duly authorized representatives. Depositions may be taken upon oral or written interrogatories. There shall be at least 10 days written notice to the other party. The requirement of a 10-day written notice may be waived by the parties in writing. When a deposition is taken upon written interrogatories, any cross-examination shall be upon written interrogatories. Copies of such written interrogatories shall be served upon the other party with the notice, and copies of any written cross-interrogation shall be mailed or delivered to the opposing party at least 5 days before the date of taking the depositions, unless the parties mutually agree otherwise. Expenses in the reporting of depositions shall be borne by the party at whose instance the deposition is taken. |