§ 735.409 $735.409 Information not required. This subpart does not require an employee to submit on a statement of employment and financial interests or supplementary statement any information relating to the employee's connection with, or interest in, a professional society or a charitable, religious, social, fraternal, recreational, public service, civic, or political organization or a similar organization not conducted as a business enterprise. For the purpose of this section, educational and other institutions doing research and development or related work involving grants of money from or contracts with the Government are deemed "business enterprises" and are required to be included in an employee's statement of employment and financial interests. [33 FR 12487, Sept. 4, 1968, as amended at 40 FR 48339, Oct. 15, 1975] 8735.410 Confidentiality of employees' statements. An agency shall hold each statement of employment and financial interests, and each supplementary statement, in confidence. To insure this confidentiality, an agency shall designate which employees are authorized to review and retain the statements. Employees so designated are responsible for maintaining the statements in confidence and shall not allow access to, or allow information to be disclosed from, a statement except to carry out the purpose of this part. An agency may not disclose information from a statement except as OPM or the agency head may determine for good cause shown. (1) All other employment; and (2) The financial interests of the special Government employee which the agency determines are relevant in the light of the duties he is to per. form. (c) An agency head may waive the requirement in paragraph (b) of this section for the submission of a statement of employment and financial interests in the case of a special Government employee who is not a consultant or an expert when the agency finds that the duties of the position held by that special Government employee are of a nature and at such a level of responsibility that the submission of the statement by the incumbent is not necessary to protect the integrity of the Government. For the purpose of this paragraph, "consultant" and "expert" have the meanings given those terms by Chapter 304 of the Federal Personnel Manual, but do not include: (1) A physician, dentist, or allied medical specialist whose services are procured to provide care and service to patients; or (2) A veterinarian whose services are procured to provide care and service to animals. (3) A specialist appointed for intermittent confidential intelligence consultation of brief duration. (d) A statement of employment and financial interest required to be submitted under this section shall be submitted not later than the time of employment of the special Government employee as provided in the agency. Chapter I-Office of Personnel Management regulations. Each special Government employee shall keep his statement current throughout his employment with the agency by the submission of supplementary statements. 133 FR 12487, Sept. 4, 1968, as amended at 34 FR 6515, Apr. 16, 1969) 8736.103 On March 21, Senator Hatch and Senator Cranston introduced S. 2214, a bill proposing that civil penalties be the exclusive sanctions for knowing and willful violations of the financial disclosure requirements of the Ethics in Government Act of 1978. The provisions of this legislation would apply to reports filed by officials of all three branches of the Federal government and would be retroactive to the date of the enactment of the Ethics in Government Act. I am enclosing a copy of S. 2214 for your consideration. The Subcommittee on Oversight of Government Management, to which S. 2214 has been referred, is considering holding a hearing on this legislation next month. In light of the central role that the Office of Government Ethics performs in administering the financial disclosure system for the Executive Branch, it would be most useful to the Subcommittee to learn your views on S. 2214, particularly with regard to the effects that this proposal may have on compliance with the financial disclosure reporting requirements. I would appreciate your providing me with your comments Thank you for your March 24, 1986 letter requesting our comments on S. 2214, a bill proposing that civil penalties be the exclusive sanction for knowing and willful violations of the financial disclosure requirements of the Ethics in Government Act of 1978. As you know, this Office has normally taken a position that would favor the use of administrative remedies in lieu of stricter criminal penalties when dealing with enforcement issues involving conflict of interest matters. Consequently, we favor the less restrictive civil approach when dealing with noncompliance problems under the Ethics in Government Act. However, in the case of section 204 of the Act, we think that there is a distinction between failing to file (noncompliance) and intentionally filing a false report. Our experience is that a failure to file public financial disclosure reports usually involves "termination reports." The provisions of section 201(e) of the Act require that such reports be filed on or before the thirtieth day after termination of federal employment. It seems that some individuals are reluctant to file once they terminate federal service. Generally, this reluctance to file is overcome by a letter from this Office or the parent agency pointing out the civil penalties for failure to file. In the case of intentional false filing, however, we are of the opinion that a more stringent approach is in order. While we do not believe that criminal penalties are appropriate in every case of intentional false filing, we think that they should be available. The provisions of 18 U.S.C. S 1001 and 5 U.S.C. S 204 complement each other, and, more importantly, they both complement the entire range of criminal conflict of interest provisions contained in chapter 11 of title 18, United States Code. For example, it is not unusual to use the false statement provisions of 18 U.S.C. S1001 when prosecutorial discretion rules out the use of 18 U.S.C. S 208(a) in matters involving official acts which may redound to an individual personal financial interest. The legislative history of the Ethics in Government Act seems to make clear that "mere inadvertence" should not be the basis for pursuing a matter criminally when dealing with public financial reporting. However, when intentional false reporting is involved, the legislative history reveals no unequivocal intent that criminal penalties should not apply. Please let me know if I may be of further assistance as you deliberate this matter. Sincerely, Paintthent David H. Martin Director |