(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 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 entrance on duty. § 0.735-104 Interpretation and advisory service. (a) Department counselor. The General Counsel of the Department 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 by the Secretary or his designee from among the staff of the Office of the General Counsel to give authoritative advice and guidance to current and prospective employees and special Government employees who seek advice and guidance on questions of conflicts of interest and on other matters covered by this part. § 0.735-105 Reviewing statements and reporting conflicts of interests. (a) Subpart D of this part and the appendix to this part identify the cate gories of positions and, as necessary, the specific positions the incumbents of which are required to submit statements of employment and financial interests. (b) When a statement submitted under Subpart D of this part and the appendix to this part or information from other sources indicates a conflict between the interests of an employee or special Government employee and the performance of his services for the Government the employee or special Government employee concerned shall be provided an opportunity to explain the conflict or appearance of conflict. (c) When the conflict or appearance of conflict is not resolved by the Department Counselor, he shall report the information concerning the conflict or appearance of conflict to the Secretary. (d) If the resolution of the conflict or appearance of conflict contemplates or includes any of the remedial action indicated in § 0.735-106 with the exception of paragraph (b) (2), appropriate personnel officers of the Department shall be notified and shall participate in the determination of the action proposed to be effected. [36 F.R. 24402, Dec. 22, 1971, as amended at 37 F.R. 23260, Nov. 1, 1972] $ 0.735-106 Disciplinary and other remedial action. (a) A violation of this part by an employee or special Government employee may be cause for appropriate disciplinary action, which may be in addition to any penalty prescribed by law. (b) When, after consideration of the explanation of the employee or special Government employee provided by § 0.735-105, the Secretary decides that remedial action is required, he shall take immediate action to end the conflicts or appearance of conflicts of interest. Remedial action may include, but is not limited to: (1) Changes in assigned duties; (2) Divestment by the employee or special Government employee of his conflicting interest; and unless otherwise provided divestiture is to be completed within 60 days after notice of a decision that a conflict exists. (3) Disciplinary action; or (4) Disqualification for a particular assignment. Remedial action, whether disciplinary or otherwise, shall be effected in accordance with any applicable laws, Executive orders, and regulations. (c) If any of the remedial action indicated in this section with the exception of paragraph (b)(2) of this section is contemplated, appropriate personnel officers of the Department shall be notified and shall participate in the determination of the action proposed to be effected. Subpart B-Conduct and Responsibilities of Employees § 0.735-201 Basic principle. (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 (a) Except as provided in paragraphs (b) and (e) of this section, an employee shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan, or any other thing of monetary value, from a person who: (1) Has, or is seeking to obtain, contractual or other business or financial relations with the Department; (2) Conducts operations or activities that are regulated by the Department; or (3) Has interests that may be substantially affected by the performance or nonperformance of the employee's official duty. (b) The prohibitions of paragraph (a) of this section do not apply in the following cases: (1) Obvious family or personal relationships, such as those between the parents, children, or spouse of the employee and the employee, when the circumstances make it clear that it is those relationships rather than the business of the persons concerned which are the motivating factors; (2) 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; (3) The acceptance of loans from banks or other financial institutions on customary terms to finance proper and usual activities of employees, such as home mortgage loans; and (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 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. (d) An employee shall not accept a gift, present, decoration, or other thing from a foreign government unless authorized by Congress as provided by the Constitution and in 5 U.S.C. 7342. (e) Neither this section nor § 0.735204 precludes an employee from receipt of bona fide reimbursement, unless prohibited by law, for expenses for 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 Department orders when reimbursement is proscribed by Decision B-128527 of the Comptroller General dated March 7, 1967 $ 0.735-204 Outside employment and other activity. (a) An employee shall not engage in outside employment or other outside activity not compatible with the full and proper discharge of the duties and responsibilities of his Government employment. 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, conflicts of interest; (2) Outside activities which tend to impair his mental or physical capacity to perform his Government duties and responsibilities in an acceptable manner; (3) Outside 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) Outside activities 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; (6) Engaging directly or indirectly in the purchase, sale or management of real estate, including the financing of realty transactions; except (i) the employee's residence, immediate past residence, vacation or retirement home, or (ii) realty transactions involving a moderate scale of investment properties which are not likely in the foreseeable future to be involved in a HUD program. (7) Outside activities 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, land planning, and real estate development. (8) Employment with any person, firm, or other private organization having business either directly or indirectly with the Department. (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 part-time employees with a regularly scheduled tour of duty must obtain the prior approval of the appropriate deputy counselor before engaging in outside employment in the following categories: (1) Employment in the same professional field as that of the individual's official position. However, an attorney in this Department may, in off-duty hours and consistent with his official responsibilities, participate, without compensation for his services, in a program to provide legal assistance and representation to poor persons. Such participation shall not include representation or assistance in any judicial matter or proceeding, whether Federal, State, or local, involving programs of this Department or in any other matter or proceeding in which the United States, including the District of Columbia, is a party or has a direct and substantial interest. Notice of intention to participate in such a program shall be given by the attorney in writing to his superior in such detail as that official shall require. (2) 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 the appropriate deputy counselor. (e) Employees are encouraged to engage in teaching, lecturing, and writing that is not prohibited by law, Executive order, Civil Service Commission regulations, or this part. However, an employee shall not, either for or without compensation, engage in teaching, lecturing, or writing, including teaching, lecturing, or writing for the purpose of the special preparation of a person or class of persons for an examination of the Civil Service Commission or Board of Examiners for the Foreign Service, that is dependent on information obtained as a result of his Government employment, 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. (1) Each employee including the Secretary, and including each full-time member of a committee, board, or commission appointed by the President, shall not receive compensation or anything of monetary value for any consultation, lecture, discussion, writing, or appearance, the subject matter of which is devoted substantially to the responsibilities, programs, or operations of the Department, or which draws substantially on official data or ideas which have not become part of the body of public information pursuant to the regulations in this part. (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 the appropriate deputy counselor. (f) This section does not preclude an employee from: 8 (1) Participation in the activities of National or State political parties not proscribed by law. (2) Participation in the affairs of or acceptance of 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. [36 F.R. 24402, Dec. 22, 1971, as amended at 37 F.R. 23260, Nov. 1, 1972] § 0.735-205 Financial interests. (a) An employee shall not: (1) Have a direct or indirect financial interest that conflicts substantially, or appears to conflict substantially, with his Government duties and responsibilities. (2) Engage in, directly or indirectly, a financial transaction as a result of, or primarily relying on, information obtained through his Government employment. (3) Acquire securities issued by the Federal National Mortgage Association or guaranteed by the Government National Mortgage Association or the Community Development Corporation. (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 on a moderate scale. There is a presumption of speculation when the use of borrowed funds is involved on a continuing basis or in large sums or the income characteristic of an investment is disproportionate or absent. (b) (1) No employee, including a special Government employee, may participate as such in any matter in which to his knowledge he, his spouse, minor child, organization in which he is serving as an officer, director, trustee, partner, or employee, or a partner has a financial interest. He must also not participate in any matter in which to his knowledge a person, business, or nonprofit organization with whom he is seeking, or has an arrangement for, employment has a financial interest (18 U.S.C. 208(a)). (2) Subparagraph (1) of this paragraph does not apply: (i) If the officer or employee first advises the Department counselor in writing of the nature and circumstances of the matter, makes full disclosure of the financial interest, and receives in advance a written determination by such official or his designee that such interest is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from such officer or employee; or (ii) If the financial interest is within one of the following categories which are hereby exempted from the requirements of section 208(a) of title 18, United States Code as being too remote or too inconsequential to affect the integrity of a Government officer's or employee's services; (a) Any holding in a widely held mutual fund, or regulated investment company, which does not specialize in any particular industry. (b) Ownership of shares of stock and of corporate bonds or other corporate securities, if the current aggregate value of the stocks and other securities so owned in any single corporation is less than $7,500 and is less than 1 percent of the outstanding stock of the organization concerned, and if the employee, his spouse, or minor children are not active in the management of the organization and have no other connection with or interest in it. (c) Continued participation in a bona fide pension, retirement, group life, health, or accident insurance plan or other employee welfare or benefit plan that is maintained by a business or nonprofit organization by which the employee was formerly employed, to the extent that the employee's rights in the plan are vested and require no additional services by him or further payments to the plan by the organization with re 84-076-73-2 spect to the services of the employee. To the extent that such plans are profit sharing or stock bonus plans, this exemption shall not apply. 9 (c) The interest of a spouse, minor child, or other member of an employee's immediate household is considered to be an interest of the employee. For the purpose of this section, "member of an employee's immediate household" means those blood relations who are residents of the employee's household. (d) 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 Government so long as it is not prohibited by law, Executive Order 11222, Civil Service Commission regulations, or this part. [36 F.R. 24402, Dec. 22, 1971, as amended at 37 F.R. 23260, Nov. 1, 1972] § 0.735-206 erty. Use of Government prop An employee shall not directly or indirectly use, or allow the use of Government property of any kind, including property leased to the Government, for other than officially approved activities. An employee has a positive duty to protect and conserve Government property, including equipment, supplies, and other property entrusted or issued to him. $ 0.735-207 Misuse of information. For the purpose of furthering a private interest, an employee shall not, except as provided in § 0.735-204 (e), directly or indirectly use, or allow the use of, official information obtained through or in connection with his Government employment which has not been made available to the general public. $ 0.735-208 Indebtedness. An employee shall pay each just financial obligation in a proper and timely manner, especially one imposed by law, such as Federal, State, and local taxes. 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 Department determines does not, under the circumstances, reflect adversely on the Government as his employer. In the event of a dispute between an employee and an alleged creditor, this section does not require the |