The maintenance of unusually high standards of honesty, integrity, impartiality, and conduct by Government employees and special Government employees is essential to assure the proper performance of the Government business and the maintenance of public confidence. The avoidance of misconduct and conflicts of interest on the part of Government employees and special Government employees through informed judgment is indispensable to the maintenance of these standards. To accord with these concepts, this part sets forth the Department's regulations prescribing standards of conduct and responsibilities, and governing statements of employment and financial interests for employees and special Government employees.

(a) "Department" means the Department of Housing and Urban Development.

(b) "Employee" means an officer or employee of the Department, but does not include a special Government employee.

(c) "Special Government employee" means an officer or employee of the Department appointed to serve with or without compensation, for not more than 130 consecutve days during any period of 365 days, on a full-time, part-time, or intermittent basis, and who is retained, designated, appointed, or employed as a special Government employee under the provisions of section 202 of Title 18 of the United States Code.

(d) "Person" means an individual, a corporation, a company, an association, a firm, a partnership, a society, a joint stock company, or any other organization or institution.

(e) "Outside employment" means all gainful employment other than the performance of official duties. It includes, but is not limited to, working for another employer, the management or operation of a private business for profit (including personally owned businesses, partnerships, corporations, and other business entities), and other self-employment. § 0.735-103 Interpretation and advisory

service.

(a) Department counselor. The General Counsel is designated Counselor for

the Department and shall serve as the Department's designee to the Civil Service Commission on matters covered by this part. He shall be responsible for coordinating the Department's counseling services and for assuring that counseling and interpretations on questions of conflicts of interest and other matters covered by this part are available to designated deputy counselors. He may form ad hoc committees to evaluate the effectiveness of the standards, or to consider any new or unusual question arising from their application.

(b) Deputy counselors. Such deputy counselors as may be required shall be designated to give authoritative advice and guidance to current and prospective employees and special Government employees on questions of conflicts of interest and on other matters covered by this part.

§ 0.735-104 Notification to employees

and special Government employees. The provisions of this part and all revisions thereof shall be brought to the attention of and made available to:

(a) Each employee and special Government employee at the time of issuance and at least annually thereafter;

(b) Each new employee and special Government employee at the time of employment.

§ 0.735-105 Remedial action.

A violation of this part by an employee or special Government employee may be cause for remedial or disciplinary action. Such action may include, but is not limited to:

(a) Changes in assigned duties;

(b) Divestment by the employee or special Government employee of his conflicting interest;

(c) Disciplinary action, including separation, which may be in addition to any penalty prescribed by law; or

(d) Disqualification for a particular assignment.

Remedial action, whether disciplinary or otherwise, shall be effected in accordance with any applicable laws, Executive orders, and regulations.

§ 0.735-106 Interests of employee's or special Government employee's relatives.

For the purposes of this part, the interest of a spouse, minor child, or a blood relative who is a full-time resident of an employee's or special Government em

(a) Each employee must realize that the Government's basic and controlling purpose in employing him is the public interest, rather than his private or personal interest, and that he can never have a right of tenure that transcends the public good. He can properly be a Government employee only as long as it remains in the public interest for him to be one. Public trust and confidence in the integrity of the Government are paramount.

(b) (1) This basic principle applies with special force and effect in the Department of Housing and Urban Development, which deals directly with important segments of the public, and whose success depends upon public trust and confidence in its actions. The official actions of the Department often have a direct bearing upon the financial and other interests of individuals, firms, and institutions with which it does business. Furthermore, the effective accomplishment of the Department's mission is significantly dependent upon a public image that engenders confidence in the Department's integrity. Accordingly, the avoidance of any involvement that tends to damage that image is a responsibility of exceptional importance for all employees who participate in or influence official operating determinations that affect the interests of those with whom the Department does business.

(2) If there is knowledge of an employee's involvement in or association with circumstances reasonably construed to reduce public confidence in the acts or determinations of the Department, such knowledge may be sufficient cause for the initiation of action adverse to the employee. Employees, therefore, are alerted to the gravity with which the Department will view any such involvement, especially if it has to do with conflicts of interest or the compromise of integrity-whether real or only apparent. § 0.735-202 Gifts, entertainment, and favors.

(a) Except as provided in paragraph (b) of this section, an employee shall not solicit or accept, directly or indirectly,

(b) The prohibitions of paragraph (a) of this section do not apply to:

(1) The acceptance of customary business services from banks or other financial institutions if such services are obtained under terms and conditions available to the general public;

(2) Obvious family or personal relationships, such as those between the employee and his parents, children, or spouse, when the circumstances make it clear that it is those relationships rather than the business of the persons concerned which are the motivating factors;

(3) The acceptance of food and refreshments of nominal value on infrequent occasions in the ordinary course of a luncheon or dinner meeting or other meeting or on an inspection tour where an employee may properly be in attendance;

(4) The acceptance of unsolicited advertising or promotional material, such as pens, pencils, note pads, calendars, and other items of nominal intrinsic value.

(c) An employee shall avoid any action, whether or not specifically prohibited by the regulations in this part, which might result in, or create the appearance of:

(1) Using public office for private gain;

(2) Giving preferential treatment to any person;

(3) Impeding Government efficiency or economy;

(4) Losing complete independence or impartiality; or

(5) Making a Government decision outside official channels.

(d) An employee shall not solicit contributions from another employee for a gift, or make a donation as a gift, when such gift is for an employee in a superior official position. An employee in a superior official position shall not accept a gift presented as a contribution from employees receiving less salary than himself.

(a) An employee shall not engage in outside employment or other outside activity not compatible with the full and proper discharge of his duties and responsibilities as an employee of the Department. Incompatible activities include but are not limited to:

(1) Acceptance of a fee, compensation, gift, payment of expense, or any other thing of monetary value in circumstances in which acceptance may result in, or create the appearance of, a conflict of interest;

(2) Employment which tends to impair his mental or physical capacity to perform his official duties and responsibilities in an acceptable manner;

(3) Activities that may be construed by the public to be the official acts of the Department;

(4) Activities that establish relationships or property interests that may result in a conflict between his private interests and his official duties; and

(5) Employment that may involve the use of information secured as a result of employment in the Department to the detriment of the Department or the public interest, or that may give preferential treatment to any person, corporation, public agency, or group.

(b) An employee shall not receive any salary or anything of monetary value from a private source as compensation for his services to the Government (18 U.S.C. 209).

(c) Full-time employees and parttime employees with a regularly scheduled tour of duty must obtain the prior approval of a designated personnel officer before engaging in outside employment in the following categories:

(1) Employment related to or similar to the substantive programs conducted by any part of the Department. This includes but is not limited to the broad fields of real estate, mortgage lending, property insurance, construction, construction financing, and land and real estate planning.

(2) Employment in the same professional field as that of the individual's official position.

(3) Employment with any person, firm, or other private organization hav

ing business either directly or indirectly with the Department.

(4) Employment by State, local, or other governmental body.

(d) No full-time employee or parttime employee with a regularly scheduled tour of duty shall maintain a publicly listed place of business without the prior approval of a designated personnel officer.

(e) Except for employees subject to the requirements of Subpart E of this part, approvals required by paragraphs (c) and (d) of this section shall be requested on Form HUD-843, Request for Authorization to Engage in Outside Employment and/or Statement of Financial Interests. All pertinent facts regarding the proposed employment, such as the name of the employer, the nature of the work to be performed, and the amount of time involved, shall be set forth.

(f) (1) Employees are encouraged to engage in teaching, lecturing, and writing that is not prohibited by law, Executive order, or this part. However, an employee shall not, either for or without compensation, engage in teaching, lecturing, or writing that is dependent on information obtained as a result of his employment by the Department, except when that information has been made available to the general public or will be made available on request, or when the Secretary or his designee gives written authorization for the use of nonpublic information on the basis that the use is in the public interest.

(2) An employee may use his name and title in connection with articles for publication which bear upon his work in the Department only if he obtains the approval of a designated personnel officer.

(g) This section does not preclude an employee from:

(1) Accepting bona fide reimbursement, unless prohibited by law, for actual expenses for travel and such other necessary subsistence as is compatible with this part for which no Government payment or reimbursement is made. However, an employee may not be reimbursed, and payment may not be made on his behalf, for excessive personal living expenses, gifts, entertainment or other personal benefits.

(2) Participating in the affairs of or accepting an award for a meritorious public contribution or achievement given

by a charitable, religious, professional, social, fraternal, nonprofit educational and recreational, public service, or civic organization.

(3) Participating in the activities of National or State political parties not. proscribed by law.

§ 0.735-204 Financial interests.

(a) An employee shall not:

(1) Have a direct or indirect financial interest that conflicts, or appears to conflict, with his official duties and responsibilities.

(2) Engage in, directly or indirectly, a financial transaction as a result of, or primarily relying on, information obtained through his employment by the Department.

(3) Acquire securities issued by the Federal National Mortgage Association.

(4) Acquire ownership of stock or other interest in a rental project financed with an FHA insured mortgage as long as the insurance is in force.

(5) Acquire ownership of FHA debentures or certificates of claim.

(6) Acquire interest in a cooperative or condominium housing project financed under the National Housing Act if the interest is not for obtaining a home for himself or his family.

(7) Be an officer or director of any organization which is an FHA approved mortgagee or lending institution or which services mortgages or other securities for the Department. An employee may hold stock or shares in such organizations provided his official duties are such that the holding will not create or tend to create a conflict of interest. The prohibitions of this paragraph do not apply to Federal Credit Unions that have been approved as Title I lending institutions.

(8) Participate directly or indirectly in any real estate activities for speculative purposes as distinguished from bona fide investment purposes.

(b) This section does not preclude an employee from having a financial interest or engaging in financial transactions to the same extent as a private citizen not employed by the Department so long as it is not prohibited by law, Executive Order 11222, or this part.