Inspector General reviews the information to determine whether the matter is clearly frivolous and does not merit further action. If the Inspector General (IG) determines that the matter merits further action, the IG informs the Director of the Office of Government Ethics and consults with the Criminal Division of the Department of Justice regarding the conduct of an investigation. The purpose of the consultation is to avoid prejudicing any criminal proceeding that the Justice Department may have under consideration.

4. Investigation by the Inspector General

If the Criminal Division of the Justice Department agrees that EPA should handle the matter, the IG must conduct an investigation of the possible violation of the postemployment restrictions of 18 U.S.C. 207 (a), (b), or (c).

5. Initiating Process to Impose Sanctions: Notice

If the Inspector General's investigation establishes that there are reasonable grounds to believe that a former EPA employee has violated the post-employment restrictions of 18 U.S.C. 207 (a), (b), or (c), the IG may initiate the process of imposing sanctions under 18 U.S.C. 207(j). The Inspector General must send the former EPA employee a written notice of charges and a copy of this appendix by certified mail, return receipt requested. The notice of charges must describe the allegations against the former employee in sufficient detail to enable the former employee to prepare an adequate defense and must contain the following final paragraph:

You must request a hearing by mailing or otherwise furnishing written notice of your request to me within 30 days after the date you receive this notice of charges. If you do not request a hearing within 30 days, the Agency may nonetheless determine that you have violated the provisions of 18 U.S.C. 207 (a), (b), (c) as implemented by 5 CFR Part 737 and impose administrative sanctions set forth in paragraph 15 of the enclosed appendix to 40 CFR Part 3, Subpart A: You have a right to counsel, at your own expense, at all stages of this administrative enforcement proceeding. The procedures for administrative enforcement of the post-employment restrictions are set forth in the enclosed appendix.

6. Request for a Hearing

A former EPA employee must request a hearing within 30 days after receiving the notice of charges. Otherwise, the initial determination of the charges is made without a hearing.

7. Initial Decision Without a Hearing

If a former EPA employee fails to make a timely request for a hearing, the Inspector General must prepare an initial decision in writing. The Inspector General must furnish this decision to the former employee by certified mail, return receipt requested within 60 days after the time for requesting a hearing expires. The initial decision must set forth the findings of fact and conclusions of law on which it is based.

8. Appeal of an Initial Decision Made
Without a Hearing

A former employee may appeal an initial decision made without a hearing. The appeal must be submitted to the Deputy Administrator in accordance with paragraph (10)(b) of this appendix.

9. Initial Decision After a Hearing

If the former employee requests a hearing, an initial decision is made after a hearing takes place.

(a) Appointment of a Presiding Official

The General Counsel must appoint an impartial examiner to preside over the hearing. The examiner must be an attorney and an employee of the Environmental Protection Agency. The General Counsel must promptly notify the former employee and the Inspector General of the examiner's name, address and telephone number.

The examiner shall preside at the hearing, conduct it in a fair and impartial manner, and issue an initial decision as promptly as possible after the record is complete, but in no event later than 60 days after the hearing is terminated. No person who has participated in any way in the investigation or in the decision to initiate administrative enforcement, or is a subordinate of the Agency Counsel, or who has had any connection or dealings with the former employee may serve as an examiner. The General Counsel may remove an examiner for cause.

(b) Appointment of Agency Counsel

The Agency Ethics Official shall designate an attorney to act as Agency Counsel. The Agency Ethics Official must notify the examiner and the former employee (or if the former employee is represented by counsel, his or her attorney) of the name, address and telephone number of the Agency Counsel.

(c) Hearings

Hearings will be held at EPA Headquarters in Washington, D.C., or at an EPA regional office or laboratory. After conferring with the parties, the examiner shall set a reasonable time, date and place for the hearing with due regard for the former employee's need for adequate time to prepare a defense and the need to expeditiously re

solve allegations which may damage the former employee's reputation. At least 15 days before the date set for the hearing, the examiner shall notify the parties of the time, date and place by certified mail, return receipt requested. Hearings will be as informal as reasonably possible consistent with establishing an orderly record. Federal rules of evidence do not control the hearing, although the examiner may use these rules as guidance. The examiner generally will admit evidence unless it is clearly irrelevant, immaterial or unduly repetitious. The parties have the right to:

(i) Introduce and examine witnesses; (ii) Offer documentary evidence;

(iii) Confront and cross-examine adverse witnesses; and

(iv) Present oral argument in the form of brief opening and closing statements.

In addition, the former employee has the right:

(i) To represent himself or herself or be represented by counsel at all stages of administrative enforcement; and

(ii) To require that all persons be excluded from the hearing room except the reporter, the examiner, the Agency Counsel and witnesses during the time they are actually testifying.

Witness shall testify under oath or affirmation administered by the examiner.

The examiner must arrange for a transcript of the hearing through the EPA Procurement and Contracts Management Division using the funds of the Office of Management and Agency Services. The former employee is entitled to a copy of the transcript at no charge, and the examiner must furnish it as soon as it is received from the reporter.

(d) Burden of Proof

The Agency has the burden of proof and must establish a violation by clear and convincing evidence.

(e) Initial Decision

The Examiner must make an initial decision exclusively on matters of record in the proceeding. The initial decision must be made within 60 days after the hearing and must set forth the findings of fact and conclusions of law on which it is based. The examiner must furnish this decision to the former employee by certified mail, return receipt requested to the Agency Counsel and to the Inspector General.

10. Appeal of an Initial Decision Made After a Hearing

(a) Initial Decision After a Hearing The initial decision of the examiner becomes the final Agency decision unless, within 30 days after receiving the initial decision, either party appeals by mailing or otherwise furnishing to the Deputy Administrator written notice of appeal, with a copy to the opposing party. The notice of

appeal may discuss the reasons why the party contends that the initial decision is erroneous, subject to the right of the opposing party to present a written response to the Deputy Administrator within 30 days after receiving a copy of the notice of appeal. Neither party may submit new evidence.

The Deputy Administrator must base his or her decision solely on the record of the proceedings or those portions cited by the parties to limit the issue, and the notice of appeal and response. If the Deputy Administrator modifies or reverses the initial decision, he or she must state in writing why the initial decision was erroneous.

(b) Initial Decision Without a Hearing

If the former employee did not request a hearing, the initial decision of the Inspector General will become the final Agency decision unless the former employee submits a written notice of appeal to the Deputy Administrator within 30 days after receipt of the initial decision, with a copy to the Inspector General. The notice of appeal may discuss reasons why the initial decision is erroneous, subject to the right of the Inspector General to present a written response to the Deputy Administrator within 30 days after receiving the notice of appeal. The Deputy Administrator's review will be based on an examination of the Inspector General's evidence and any legal arguments which the former employee or the Inspector General presents.

11. Exparte Communications (communications outside the record) Neither an examiner nor the Deputy Administrator will receive from any person any written or oral communication outside the record about the merits of an administrative enforcement proceeding or appeal. This does not apply to exparte discussions concerning administrative functions or procedures under this appendix, or to consultations between the Deputy Administrator and the judicial officer or other staff member who assists the Deputy Administrator.

12. Calculating Deadlines

If a deadline falls on a Saturday, Sunday or federal holiday, the next working day is considered the deadline.

13. Administrative Sanctions

Whenever a final determination is made that a former employee has violated 18 U.S.C. 207 (a), (b) or (c) as implemented by 5 CFR Part 737, the Deputy Administrator may impose an appropriate administrative sanction, which may include one or more of the following:

(i) Prohibiting the former employee from making, on behalf of any other person (except the United States) any formal or informal appearance before, or, with the intent to influence, any oral or written communication to, the U.S. Environmental Protection Agency on any matter of business for a period not to exceed 5 years. This will be accomplished by a memorandum to all EPA employees directing them to refuse to participate in any such appearance or to accept any such communication during the restriction period.

(ii) Debarring the former employee receiving any EPA contract, grant, cooperative agreement or loan for a period of up to 3 years, provided that the violation was committed in the context of seeking or performing a government contract, grant, cooperative agreement or loan.

(iii) A written reprimand with a copy to be placed in the former employee's official personnel file.

(iv) A written reprimand without a copy to the former employee's official personnel file.

The Deputy Administrator may confer with the parties before deciding upon an administrative sanction. The former employee must be notified of any administrative sanction by certified mail, return receipt requested.

14. Confidentiality

All records and information regarding administrative enforcement proceedings under this appendix will be kept confidential and will not be disclosed except as required by law or regulation.

15. Judicial Review

Any person found to have violated 18 U.S.C. 207 (a), (b) or (c) as implemented by 5 CFR, Part 737, may seek judicial review of this administrative determination.

(5 U.S.C. 301)

[46 FR 5963, Jan. 21, 1981]

Subpart B-Advisory Service and Enforcement

§ 3.200 Purpose.

This subpart establishes an advisory service for employees for the purpose of furnishing interpretations and advising on questions arising concerning standards of conduct and prescribes the types of remedial and disciplinary actions which may be taken to enforce the requirements of Subparts A, C, D, and E of this part.

§3.201 Use of advisory service.

When questions or problems arise concerning matters covered by this part, EPA employees shall seek the advice and consultative services of the counselors designated in § 3.202 of this part.

§ 3.202 Designation of counselors and statement of functions.

(a) The Deputy General Counsel is designated as the Agency Counselor. His functions consist of the following: (1) Acts as the principal point of contact with the Civil Service Commission on matters covered in these regulations.

(2) Provides general guidance to Deputy Counselors for the purpose of achieving uniform interpretation of these regulations.

(3) Coordinates EPA's services for counseling personnel on questions of conflict of interest.

(b) Deputy Counselors:

(1) The following officials are designated as Deputy Counselors under this part:

(i) Assistant Administrators.

(ii) Deputy Assistant Administrators. (iii) Heads of Staff Offices reporting directly to the Administrator Deputy Administrator.

(iv) Regional Administrators.

or

(v) Directors of National Environmental Research Centers.

(2) Functions of the Deputy Counselors:

Deputy Counselors shall be responsible for

(i) Counseling employees on all problems and questions arising under the regulations set forth in this subpart.

(ii) Reviewing and maintaining custody of statements of employment and financial interests, filed pursuant to the provisions of Subpart C of this part.

(iii) Making determinations on requests from employees for approval for outside employment or other outside activity pursuant to the provisions of Subpart E of this part.

(iv) Consulting, as necessary, with the Agency Counselor on questions and problems arising under regulations.

(v) Reviewing and maintaining copies of statements of known financial interests, filed pursuant to the provisions of Subpart C of this part.

[38 FR 9556, Apr. 17, 1973, as amended at 42 FR 6809, Feb. 4, 1977]

§ 3.203 Review, enforcement, reporting, and investigating.

(a) Each statement of known financial interests and each statement and supplementary statement of employment and financial interests submitted under Subpart C of this part shall be reviewed by the appropriate Deputy Counselor or by the Agency Counselor. If that review discloses a conflict of interest or apparent conflict of interest, the employee shall be given an opportunity to explain the conflict or apparent conflict, and every effort shall be made to resolve the matter. If the matter cannot be resolved by the Deputy Counselor, it shall be referred to the Agency Counselor, and if it cannot be resolved by the Agency Counselor, it shall be reported to the Administrator.

(b) Employees shall consult with their Deputy Counselors with regard to any questions concerning these regulations. Resolution of problems disclosed by such consultations shall be accomplished at the lowest possible supervisory level in the agency through counseling or by taking administrative action to eliminate real or apparent conflicts of interest. The Director, Security and Inspection Staff, shall be requested by the Deputy Counselor, when necessary, to conduct investigations to ascertain all relevant facts.

(c) Any employee receiving an allegation of a possible violation of the provisions of this subpart by any other employee (including personnel or other Government agencies detailed to EPA) shall promptly report it directly to the appropriate Counselor or Deputy Counselor. If the Counselor or Deputy Counselor deems that an investigation is necessary, he shall request the Director, Security and Inspection Staff, to conduct the investigation.

(d) A violation of the regulations in this subpart may be cause for disciplinary action. All disciplinary or remedial action taken hereunder shall

be in conformance with applicable laws, Executive orders, Civil Service Commission regulations, and EPA regulations. Disciplinary or remedial action includes, but is not limited to, divestiture by the employee of his conflicting interest, disqualification for particular assignments, reassignment, or other disciplinary action.

(e) The employee concerned shall have a reasonable opportunity during any investigation and at all levels of consideration of his problems to present in person and through documents his position on the matter.

[38 FR 9556, Apr. 17, 1973, as amended at 42 FR 6809, Feb. 4, 1977]

Subpart C-Financial Interests and Investments

§ 3.300 Purpose.

This subpart prescribes policies and procedures for the avoidance of conflicting financial interests in connection with an employee's Government position or in the discharge of his official responsibilities, and sets out the requirements for reporting financial interests and outside employment.

§ 3.301 General.

(a) Employees are subject to three types of controls in connection with apparent or actual conflicting financial interests. One type is a criminal statute, 18 U.S.C. 208, which by its terms prohibits an employee's participation in certain official activities where he has a conflicting personal financial interest. The second type is a requirement under Executive Order No. 11222 of May 8, 1965, and Civil Service Commission regulations that employees occupying certain Government positions shall report all personal financial interests and outside employment by filing a statement of employment and financial interests. The third type is the requirement under four specific statutes: the Toxic Substances Control Act (15 U.S.C. 2601 et seq., 90 Stat. 2003, Pub. L. 94-469), the Solid Waste Disposal Act as amended by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. 6901 et seq., 90 Stat. 2795, Pub. L. 94-580), the

Clean Air Act, as amended (42 U.S.C. 7401 et seq., 91 Stat. 685, Pub. L. 9595), and the Environmental Research, Development, and Demonstration Authorization Act of 1978 (91 Stat. 1257, Pub. L. 95-155), that employees performing any functions or duties under any of the statutes must file a written statement of known financial interests in persons subject to or receiving benefits under any of the statutes. The criminal statute prohibits and punishes. The statement of employment and financial interests and the statement of known financial interests are intended to aid the employee and those who review his statements in identifying and avoiding situations that present conflicts of interest.

(b) The statement of employment and financial interests for regular Government employees, referred to in paragraph (a) of this section shall be filed in accordance with the procedures set forth in Appendix A to this subpart, and shall include all personal financial interests of the reporting employee, except those exempted from the reporting requirements of this subpart by virtue of the first paragraph of Appendix C of this subpart. The submission of a statement or supplementary statement by an employee does not permit him or any other person to act in a manner prohibited by law, order, or regulation. Procedures for obtaining waivers of the prohibitions of section 208(a) of Title 18, United States Code, are set forth in § 3.303.

(c) All employees, whether or not they are required to file a statement of employment and financial interests or a statement of known financial interests, shall avoid acquiring a financial interest that could result, or taking an action that would result, in a violation of section 208(a) of Title 18, United States Code, or of this subpart.

(d) All employees must file the statements of known financial interests referred to in paragraph (a) of this section in accordance with §§ 3.305, 3.306, 3.307, and 3.308 and with the procedures set forth in Appendix D of this subpart. The submission of a statement by an employee does not permit him or any other person to act in a

manner prohibited by law, order, or regulation. Procedures for obtaining waivers of the prohibitions of section 208(a) of Title 18, United States Code, are set forth in § 3.303.

[38 FR 9556, Apr. 17, 1963, as amended at 42 FR 6809, Feb. 4, 1977; 43 FR 1338, Jan. 9, 1978]

§ 3.302 Statutory prohibitions against acts affecting a personal financial interest. (a) The provisions of section 208(a) of Title 18, United States Code, prohibit any employee from participating personally and substantially in the course of his Government duties in any judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in relation to which matter, to his knowledge, the following persons or organizations have a financial interest:

(1) The employee, his spouse, minor child, or partners;

(2) A business or nonprofit organization in which the employee is serving as an officer, director, trustee, partner, or employee; or

(3) A person or business or nonprofit organization with whom or with which the employee is negotiating, or has any arrangement with, concerning prospective employment.

(b) The prohibitions in paragraph (a) of this section may be waived under certain circumstances which are set out in § 3.303.

(c) Illustrative of the types of matters in which employees commonly participate and which may fall within the prohibitions described in paragraph (a) of this section are the following:

(1) The negotiation, administration, or auditing of contracts or agreements;

(2) The selection or approval of contractors or known subcontractors under an EPA prime contract;

(3) The technical monitoring or direction of work under a contract; (4) Enforcement activities;

(5) Issuance of permits to discharge industrial waste;

(6) Registration of pesticides products.