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

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

(3) Work which identifies the Department or any employee in his official capacity with any organization commercializing products relating to work conducted by the Department, or with any commercial advertising matter, or work performed under such circumstances as to give the impression that it is an official act of the Department or represents an official point of view;

(4) Outside work or activity that takes the employee's time and attention during his official work hours;

(d) An employee shall not receive any salary or anything of monetary value from a private source as compensation for his services to the Government (Item 6, Appendix A). For example, a Department employee may be called upon, as a part of his official duties, to participate in a professional meeting sponsored by a non-Government organization, or to contribute a paper or other writing prepared on official time for publication under non-Government auspices. The employee must not accept an honorarium or fee for such services, even though the organization accepting the service customarily makes such a payment to those who participate. In some cases of this kind, the organization involved may indicate a desire or willingness to make a contribution to some charity, educational institution, or the like, in appreciation of the services furnished by the Department employee since he cannot accept the usual payment. Department standards require that all offers to make such a contribution be refused. No Department employee may suggest, or agree to a suggestion made by others, that such a contribution should be made. Any employee with whom such a question is raised shall explain that the service involved was provided as an official action of the Department and is authorized by law. Under these circumstances, it is inappropriate for any payment to be made, even indirectly and to a third party, for services which are furnished without charge by the Government.

(e) An employee who is a Presidential appointee covered by section 401(a) of Executive Order 11222 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 his agency, or which draws substantially on official data or ideas which have not or will not on request become part of the body of public information.

(f) Application of these general provisions to some specific activities is discussed in §§ 73.735-402 to 73.735-407. § 73.735-402 Professional and consultative services.

(a) Employees may engage in outside professional or consultative work only after meeting certain conditions. Except as provided in §§ 73.735-403, 73.735-404, and 73.735-405, the conditions which must be met are:

(1) The work is to be rendered to organizations or to individuals seen as private patients or clients, and

(2) Is not to be rendered to organizations, institutions, or State or local governments with which the official duties of the employee are directly related, or indirectly related if the indirect relationship is significant enough to permit existence of conflict or apparent conflict of interest, and

(3) Is not to be rendered for compensation to help institutions or government units prepare or aid in the preparation of grant applications, contract proposals, program reports and other material which are designed to become the subject of dealings between the institutions or government units and the Federal Government. All requests to perform consultative services, both compensated and uncompensated, for institutions or government units which have recently negotiated or may in the near future seek a contract or grant from the Federal Government must be carefully appraised to avoid any conflict or apparent conflict of interest.

(4) The compensation expected must bear a reasonable relationship to the services to be performed.

(5) Advance administrative approval in accordance with Subpart I of this part must be obtained. Such approval is required whether or not the services are for compensation, and whether or not related to the employee's official duties.

(b) For the purpose of this section, "professional and consultative work" is work in occupations such as those listed in Appendix B to this part.

§ 73.735-403 Writing and editing.

(a) General. Employees are encouraged to engage in outside writing and editing whether or not done for compensation, when such activity is not otherwise prohibited. Such writing and editing, though not a part of official duties, may be on a directly related subject or entirely unrelated. Certain conditions must be met in either case, however, and certain clearances or approvals are prescribed according to the content of the material as set forth in paragraphs (b) through (e) of this section.

(b) Conditions applying to all writing and editing done not as a part of official duties. All of the following conditions shall apply to all writing and editing whether related or unrelated to the employee's official duties:

(1) Government-financed time or supplies shall not be used by the author or by other Government employees in connection with the activity.

(2) Official support must not be expressed or implied in the material itself or advertising or promotional material, including book jackets and covers, relating to the employee and his contribution to the publication.

(3) Editing activities must not involve approval or disapproval of advertising matter.

(4) Advance administrative approval must be obtained if required by paragraph (f) of this section.

(c) Additional conditions applying to writing and editing activities unrelated to the employee's official duties or other responsibilities and programs of the Federal Government. In addition to observing the conditions in paragraph (b) of this section, the employee must either:

(1) Make no mention of his official title or affiliation with the Department,

or

(2) Use his official title or affiliation with the Department in a way that will not suggest or convey official endorsement of the work.

(d) Additional conditions applying to writing and editing activities related to the employee's official duties or other responsibilities and programs of the Federal Government. In addition to observing the conditions in paragraph (b) of this section, the employee must either:

(1) Make no mention of his official title or affiliation with the Department,

or

(2) Use his official title or affiliation with the Department and a disclaimer as provided in paragraph (e) of this section, or

(3) Submit his material for technical clearance within the operating agency and for clearance for publication by the public information officer of the employee's operating agency or bureau. When technical clearance is denied at any lower level, the employee shall have recourse for review up to the head of the operating agency. If the public information officer has question as to granting clearance for publication, he should refer the question for resolution by the Director of Public Information. These two clearances by the Department will show there are no official objections to the activity and the employee may then use his official title or affiliation with the Department usually without a disclaimer. (Publications and Reports Bulletin No. 2, available in public information offices, governs clearances necessary for writing and editing as a part of official duties.)

(e) Disclaimers. Disclaimers are required in writing and editing activities in accordance with the following provisions:

(1) Disclaimers shall be used in all writing and editing related to the employee's official duties or other responsibilities and programs of the Federal Government in which the employee identifies himself by official title or affiliation with the Department, except where requirement for disclaimer is waived as result of official clearance.

(2) Disclaimers shall be used in all writing and editing related to the employee's official position or other responsibilities or programs of the Federal Government, when the prominence of the employee or his position or other reason might lead the public to associate him with the Department, even without identification other than name.

(3) Disclaimers shall read as follows unless a different wording is approved by the public information officer with the concurrence of the Division of Business and Administrative Law, Office of the General Counsel: "This (article, book, etc.) was (written, edited) by (employee's name) in his private capacity. No official support or endorsement by (name of operating agency, or of De

partment) is intended or should be inferred."

(f) Advance approval. Advance approval is required in accordance with Sub-part I of this part when one or more of the following conditions apply:

(1) Any Government information is used which is not available on request to persons outside the Government;

(2) Material is written or edited which pertains to subject matter directly related to an employee's official duties. (This includes editing for scientific or professional journals which is related to his official duties.)

(3) Material is written or edited which pertains to any Government-sponsored research or other studies for which clinical case records or other material of a confidential nature are used or to which access is limited for persons outside the Government. Such use will not be permitted unless made under safeguards established by the operating agency to retain the confidentiality of the material and such use is determined to be in the public interest.

(4) Material is edited for publications organized for profit.

Employees are encouraged to engage in publishing activities which are not part of their official duties, when all the following conditions are met:

(a) No financial profit is derived from publishing materials which are made available to the general public by this Department or which are available to the employee because of his official duties, but are not available to the general public.

(b) No financial profit is sought or derived from publishing proceedings or similar compilations of conferences, symposia, or similar gatherings:

(1) Which are sponsored by the Government, or

(2) Which involve the performance of official duties, or are directly related to official duties, or

(3) Where participation or attendance has been authorized on Government time.

(c) The publishing activities are conducted on non-Government time at no expense to the Government.

(d) The official title of the individual engaged in such publishing business is not used. If the individual is the author as well as the publisher, the provisions referred to under § 73.735-403 apply.

§ 73.735-405 Teaching and lecturing.

(a) Conditions that must be met. Employees are encouraged to engage in teaching and lecturing activities which are not part of their official duties when certain conditions are met. These conditions, which apply to outside teaching and lecturing (including giving single addresses such as commencement and Memorial Day speeches) whether or not done for compensation, are:

(1) No Government-financed time is used in connection with such activity, nor Government supplies which are not otherwise available to the public;

(2) Government travel or per diem funds are not used for obtaining or performing such teaching or lecturing;

(3) Such teaching or lecturing is not dependent on specific information which would not otherwise be available to the public;

(4) Teaching, lecturing, or writing may not be 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 depends 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 agency head gives written authorization for use of nonpublic information on the basis that the use is in the public interest.

(5) Such activities do not involve knowingly instructing persons on dealing with specific matters pending before Government organizations with which the employee is associated in an official capacity;

(6) Advance approval is obtained when required by paragraph (b) of this section.

(b) Advance approval. Advance approval must be obtained in accordance with Subpart I of this part before an employee may:

(1) Teach or lecture for an institution which has or is likely to have official dealings with the operating agency in which he is employed;

(2) Use, for teaching or lecturing purposes, clinical case records or other material of a confidential nature or to which access is limited for persons outside the Government. Such use will not be permitted unless made under safeguards established by the operating agency to re

(a) Employees may be members of professional societies and be elected or appointed to office in such a society. Activity in professional associations is generally desirable from the point of view of both the Department and the employee. Employees shall avoid, however, any real or apparent conflict of interest in connection with such membership. For example, they must not:

(1) Directly or indirectly commit the Department or any portion of it on any matter;

(2) Permit their names to be attached to documents the distribution of which would be likely to embarrass the Department;

(3) Serve in capacities involving them as representatives of non-Government organizations in dealing with the Government.

(b) In undertaking any office or function beyond ordinary membership in a professional association, a Department employee must obtain advance approval in accordance with Subpart I of this part in any situation in which his responsibilities as an officer would create a real or apparent conflict of interest with his responsibilities as a Department employee. For example, advance administrative approval must be obtained:

(1) Before an employee who is responsible for review and approval of grants or contracts, or is in a supervisory position over those who conduct review and approval, may hold office, or be a trustee or member of the governing board, or the chairman or member of a committee, in any organization which has or is seeking a grant or contract with the operating agency in which he is employed;

(2) Before an employee may hold office in an organization which customarily expresses publicly views on matters of legislative or administrative policy within the areas of concern to the Department.

§ 73.735-407 Holding office under State or local government.

An employee may hold State or local office if it is compatible with his Federal employment in terms of the same cri

teria as for other private employment. Approval for outside employment with a State or local government may be given orally by the immediate supervisor of the employee unless written approval or approval at a higher level is required by Subpart I of this part, or by the employee's operating agency or bureau, or as deemed desirable by the employee or his supervisor because of the nature of the part-time work.

[33 F.R. 15290, Oct. 15, 1968]

Subpart E-Financial Interests

§ 73.735-501 General provisions.

(a) An employee shall not have a direct or indirect financial interest that conflicts substantially or appears to conflict substantially with his Government duties and responsibilities. He shall not participate in his Government capacity in any matter in which he, his spouse, his minor child, or an outside business associate or organization (profit or nonprofit) with which he is connected or is negotiating employment has a financial interest (Item 5, Appendix A). The indirect interest in business entities which the holder of shares in a widely held diversified mutual fund or other regulated investment company derives from ownership by the fund or regulated investment company of stocks in business entities is exempted from the provisions of this statutory provision as being too remote or inconsequential to affect the integrity of an officer's or employee's services, except as provided in paragraph (b) (1) and (2) of this section. In other cases, when the outside financial interest appears not substantial enough to have an effect on the integrity of his official services, the employee shall, each time a matter arises to which his financial interest relates, request administrative approval to participate in accordance with Subpart I of this part.

(b) An employee shall not engage directly or indirectly in financial transactions as a result of, or primarily relying on information obtained through his employment. For example:

(1) An employee shall not use official information not available to the public, on such matters as the successful clinical trials of drugs, a successful bid on a contract, or planned Government actions for speculative stock purchases, or stock investment.

(2) An employee shall not use official information not available to the public,

(a) Employees in regulatory, procurement and contracting activities are prohibited from having certain types of financial interests, as stated below. The term "employee" as used here, includes line supervisory officials in the upward chain of authority and staff officials who advise supervisory officials.

(1) Regulatory activities. For the purpose of this paragraph all activities in the following organizations or functions within organizations are designated as regulatory activities: Control activities in foods, drugs, cosmetics, colors, devices, pesticides, hazardous substances, food additives, and veterinary foods, drugs, preparations, and devices in the Food and Drug Administration; Division of Biologics Standards, NIH, PHS; Division of Foreign Quarantine Program, NCDC, PHS; inspection and enforcement activities of the Environmental Sanitation Program, NCUIH, BDPEC, PHS; National Center for control activities of Air Pollution Control, BDPEC, PHS; and the divisions of the Office of the General Counsel serving the above regulatory activities. An employee who is engaged in a regulatory activity shall not have financial interests in any company whose business activities are subject to such regulations, unless the regulated activities of the company are an insignificant part of its total business operations. Such an employee may not hold shares in a mutual fund or other regulated investment company which specializes in holdings in industries that are regulated by the organization in which he is employed.

(2) Procurement or contracting activities. An employee who serves as a procurement or contracting officer or whose duties include authority to recommend or prepare specifications, negotiate noncompetitive contracts, or evaluate bids, shall not have financial interests in companies with which his office has

any significant procurement or contracting relationship. An insignificant relationship exists only when all the following conditions are met: (i) the company is one with which the employee would rarely or never do official business; (ii) such business as he would do with the company is with respect to items of a standard type on the basis of competitive bids or regulated prices, as for utility services; and (iii) the amount of the financial interest is very small in relation to the size of the company. Such an employee may not hold shares in a mutual fund or other regulated investment company that specializes in holdings in industries with which his office has any significant procurement or contracting relationship.

(b) An employee who has a direct or indirect financial interest that would be prohibited except that he believes it to be relatively "insignificant" in terms of the discussions in paragraph (a) (1) and (2) of this section should request approval for retention by discussing the matter with his supervisor. If the supervisor approves the retention, the fact concerning such financial interest should be recorded. An employee who retains such an approved financial interest must disqualify himself from participating in his Government capacity if a matter arises involving the organization in which he has such interest. If in a special situation an exception to this rule appears desirable, administrative approval must be obtained in accordance with Subpart I of this part. Such approval extends only to the specific situation and may not be interpreted as extending to other situations, even though involving the same outside organization or similar official activities.

§ 73.735-503 Disposition of financial interest.

An employee who is newly assigned to a position in which the holding of stock or other financial interests is prohibited shall liquidate his interests within 90 days of entrance on duty in such position. § 73.735-504 Exceptions.

If any situation arises in which it would appear to be contrary to the best interests of the Government, or cause extreme and undue hardship to an individual to apply strictly the policies set forth in this subpart, a request for exception should be forwarded through supervisory channels to the counselor or