2006 Annual Ethics Training

1. 2006 Annual Ethics Training Provided By: Mr. Patrick C. Drury ITEC4 Legal Office Voice: COML (703) 325-3359, DSN 221-3359 Fax: COML (703) 325-0916, DSN 221-0916 E-Mail: PATRICK.DRURY@ITEC4.ARMY.MIL 1

2. Discussion Topics • General Principles of Ethics Conduct • Letter of Appreciation to Contractor Employee • Personal Participation in Private Organization • Official Travel in Contractor Vehicle • Fundraising for Unofficial Purpose • Official Participation in Private Organization and Non-Federal Event • Gift from Non-Federal Entity • OGE Form 450 Filing Process • Conflict of Interest • Hiring Former Contractor Employee • Seeking Employment with Contractor • Employment with Contractor 2

3. General Principles of Ethical Conduct 1. Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws and ethical principles above private gain. 2. Employees shall not hold financial interests that conflict with the conscientious performance of duty.  3. Employees shall not engage in financial transactions using nonpublic Government information or allow the improper use of such information to further any private interest.  4. An employee shall not, except as permitted by subpart B of [the OGE Standards of Conduct], solicit or accept any gift or other item of monetary value from any person or entity seeking official action from, doing business with, or conducting activities regulated by the employee's agency, or whose interests may be substantially affected by the performance or nonperformance of the employee's duties.  3

4. General Principles of Ethical Conduct(Continued) 5. Employees shall put forth honest effort in the performance of their duties.  6. Employees shall not knowingly make unauthorized commitments or promises of any kind purporting to bind the Government. 7. Employees shall not use public office for private gain.   8. Employees shall act impartially and not give preferential treatment to any private organization or individual.  9. Employees shall protect and conserve Federal property and shall not use it for other than authorized activities.  10. Employees shall not engage in outside employment or activities, including seeking or negotiating for employment, that conflict with official Government duties and responsibilities. 4

5. General Principles of Ethical Conduct(Continued) 11. Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities. 12. Employees shall satisfy in good faith their obligations as citizens, including all just financial obligations, especially those--such as Federal, State, or local taxes--that are imposed by law. 13. Employees shall adhere to all laws and regulations that provide equal opportunity for all Americans regardless of race, color, religion, sex, national origin, age, or handicap.  14. Employees shall endeavor to avoid any actions creating the appearance that they are violating the law or the ethical standards set forth in [the OGE Standards of Conduct]. Whether particular circumstances create an appearance that the law or these standards have been violated shall be determined from the perspective of a reasonable person with knowledge of the relevant facts. 5

6. You Make the Call The DNA Research Office at the National Institutes of Health (NIH) has many support contractors. The program manager for its primary support contractor has asked the Head of the DNA Research Office, Gene Hackman, to write a letter of appreciation (LOA) to a subcontractor employee who also supports the Office. Gene feels that a LOA would serve as positive reinforcement for a job well done. Any problems? 6

7. LOA for Contractor Employee • DoD 1400.25-M, Subchapter 451.15  Honorary awards (such as LOAs) may be granted to private citizens, groups, or organizations. • But, Wait !!! – Persons or organizations having a commercial profit- making relationship with DoD shall not be granted recognition unless the contribution is substantially beyond that specified or implied in the contract. – And must coordinate with KO. 7

8. LOA for Contractor Employee • No express or implied endorsement of NFE, event, product, service or enterprise. • General Principle #8 • Act impartially and don’t give preferential treatment to NFE or individual • Be Wary of Contract Ramifications • Today’s kudo may be tomorrow’s nightmare! . 8

9. You Make the Call • In her personal capacity, Eileen Tudor-Wright, assists a conservative think tank, a non-profit organization in which many Federal employees are members. The organization has prepared a pamphlet that it would like to sell to the Army. It asks Eileen to contact the appropriate Army command to obtain informal feedback regarding the likelihood that the Army will agree to buy the pamphlet. Should she? 9

10. Personal Participation in NFE • May Join and Participate in Non-Federal Entity (NFE) Activities • May Become Officer or Director of NFE • Provided position not offered because of Federal position • Must report on OGE Form 450 or SF 278 • Must Act Exclusively Outside Scope of Official Position • And no solicitation of subordinate or prohibited source 10

11. Personal Participation in NFE • May Speak and Write for Some NFEs – But disclaimer may be required • Must Not “Represent” NFE in Communications with Federal Government – Unless NFE is non-profit cooperative, voluntary, professional, recreational or similar organization and majority of members are DoD employees, spouses and dependent children. – – But this exception N/A to communications regarding Federal contracts, grants, claims and judicial proceedings 11

12. Personal Participation in NFE • Must Not Use Official Position, Time or Resources for NFE Matters • With supervisory approval, may use limited time and resources for writing paper if NFE is professional association or learned society. • If Officer/Director of NFE, Must Not Participate in Official Actions Affecting NFE. 12

13. You Make the Call • The Government PM, one of her support contractor employees, and the development contractor’s PM are traveling to a meeting out of town. The development contractor’s PM, Lisa Carr, has a rental. Can the Government PM ride in Lisa’s rental car? 13

14. Official Travel In Contractor Vehicle • No Acceptance of Official Travel Absent Legal Authority for Acceptance 14

15. Official Travel in Contractor Vehicle • Legal Authority Includes: • Travel from a tax-exempt organization • Travel from a foreign government • Travel to a “meeting” (under 31 U.S.C. § 1353) • Travel paid for by contractor IAW contract provision 15

16. Official Travel In Contractor Vehicle • 31 U.S.C. § 1353 “Meeting” • Conference, seminar, speaking engagement, symposium, training course, or similar event • Relates to employee’s official duties • Takes place away from employee’s official duty station • Employee will attend function in official capacity • Payment would not cause reasonable person to question integrity of agency operations • Acceptance is approved by employee’s travel-approving authority before travel begins 16

17. Official Travel in Contractor Vehicle • “Meeting” Does Not Include: • meeting or other event required to carry out agency’s statutory or regulatory functions (i.e., function that is essential to agency’s mission) such as investigations, inspections, audits, site visits, negotiations or litigation. • promotional vendor training or other meeting held for primary purpose of marketing Non-Federal source’s product or service. • long-term TDY or training travel. 17

18. Official Travel in Contractor Vehicle • Government Payment IAW Contract • Depends on Contract Type • Direct reimbursement – acceptance permissible • Rolled in with other costs so that full reimbursement not certain – acceptance not permissible 18

19. Official Travel in Contractor Vehicle • Sharing Cost of Transportation • Permissible if each traveler pays pro-rata share. • Caution – Consider appearances   Example – in midst of source selection when contractor is an offeror. 19

20. You Make the Call A Federal employee in your office, Max Stout, is having financial problems. You would like to raise funds to help with his mounting bills by conducting a flea market in your agency’s conference room. Personnel will be invited to donate items that will be sold with the proceeds to be given to Max. Can you do so? 20

21. Fundraising for Unofficial Purpose • Permissible Provided:  No official endorsement  No solicitation from subordinate or prohibited source  Not conducted in Federal workplace unless:   In compliance with building/installation regulations, and   Head of component authorizes, on a limited basis, for support of the “unfortunate” 21

22. You Make the Call • The Chief of a Government legal office, Lou Pole, is also a member and advocate of the Professional Bar of United States Esquires (PBUSE). Lou is certain the Government would benefit if one of his more capable subordinates serves as an officer of PBUSE as part of his official duties. Any problems? 22

23. Official Participation in Private Organization and Non-Federal Event • Attendance at Conference, Seminar, etc. Permitted with Supervisory Approval and if for Legitimate Government Purpose • Participation in Management Prohibited • Absent authorization from Secretary of the Army and DoD General Counsel 23

24. Official Participation in Private Organization and Non-Federal Event • Membership Prohibited • Absent authorization from Component head to serve as “liaison” – – Significant and continuing agency interest – – Represent only agency interests – – No exercise of management or control – – Cannot be full-time position – Unless authorized by law or regulation 24

25. Official Participation in Private Organization and Non-Federal Event • Participation at NFE as Speaker, Panel Member, etc. Permitted with Supervisory Approval and Only If: • No interference with official duties • Legitimate public affairs or training interests served • Appropriate to associate agency with event • Event benefits some part of DoD • Agency willing and able to provide same support to comparable event • No violation of law or regulation • Admission fee no more than reasonable costs to sponsor, or no fee for portion supported by DoD 25

26. You Make the Call Ida Kleinhas been offered a free box seat, right behind the dugout, at a Washington Nationals game. The face value of the ticket is $55. The offer was made by a non-profit organization, the Society for Accredited Marine Surveyors (SAMS). What more does Ida need to know to determine whether she can accept? 26

27. Gift from Non-Federal Entity (NFE) • Is Non-profit Organization a “Prohibited Source” – Seeking official action by DA – Doing business with, or seeking to do business with, DA – Have interests that may be substantially affected by employee’s official duties – Is organization a majority of whose members fall into one or more of above categories • Is Gift Offered Because of Employee’s Official Position – Would not have been offered had employee not held a status, duties or authority of Federal position 27

28. You Make the Call Ida Klein concludes that she cannot accept the free ticket, but she really wants to go to the game, and the game is a sellout. Can she pay the non-profit $55 and accept the ticket, even though the street price for box seats for the solded-over game is $100? 28

29. Gift from NFE • Gift – Any gratuity, favor, discount, entertainment, etc. having monetary value. • Not a Gift (Can Be Accepted): – Modest items of food and refreshment not part of meal – Items with little intrinsic value and greeting cards – Loans from banks, etc. on publically available terms – Opportunities and benefit available to public or all Government personnel or all military personnel 29

30. Gift from NFE • Not a Gift (Can Be Accepted): – Rewards and prizes to competitors in contests and events open to public – Pension or other benefits from former employer – Anything paid for by Government – Anything accepted by Government under statutory authority – Anything for which “market value” is paid • “Market Value” – Retail cost to purchase – But market value of ticket entitling holder to food, entertainment or other benefit is face value of ticket 30

31. You Make the Call When Ida offers $55 to the non-profit organization representative who offered the ticket, the representative tells Ida to just make a $55 donation to her favorite charity. Does that comply with the ethics rules? 31

32. Gift from NFE • Proper Disposition of Prohibited Gift • For tangible item, return to donor or pay donor market value • For perishable items give to charity, destroy or share within office – – with approval of supervisor or ethics official • For intangible item, pay market value • Special rules for gifts from foreign government or international organization 32

33. You Make the Call A Director at a Department of Justice Criminal Prosecutions Division, Gil T. Azell, is retiring. His subordinates take up a collection to buy a nice gift. Support contractor employees want to contribute. Can the subordinates accept contributions by the contractor employees? 33

34. Gift from NFE • Within DoD, employees may solicit voluntary contributions of up to $10 from fellow employees for an appropriate gift (never exceeding $300 in value) to an official superior on a special infrequent occasion (e.g. retirement). • Official superiors may accept such gifts to which fellowemployees contributed. • Contractor employees can pool their own contributions for a group gift to the Director. • Director can accept gift if valued at $20 or less. 34

35. OGE Form 450 Filing Process • BIG CHANGES !!! • New Time to File • 01/01 – 02/15 • New Reporting Period • 10/01/05 – 12/31/06 for the next Report • Calendar year thereafter • New Form • For use beginning in 2007 • Different Information Reportable • e.g. different mutual fund reporting requirements • Maybe Electronic Filing 35

36. OGE Form 450 • OGE Form 450 Filing Process • Designed to Help Employees Avoid COIs • But it is Not a Prophylactic! • Common Filing Mistakes • Using wrong version of Form • Faxing copy of Form, instead of sending original • Failing to sign Form • Listing ‘IRA” in Part I, Assets and Income • Listing “IRA with [Investment Company]” in Part I – Failing to include anything for Part II, Liabilities – Failing to include anything for Part III, Outside Positions 36

37. OGE Form 450 • More Common Filing Mistakes – Failing to include anything for Part IV, Agreements and Arrangements – Failing to include anything for Part V, Gifts and Travel Reimbursements – Stating “N/A” for any Part – Using acronyms in any Part – Dating Form too soon – Identifying only mutual fund family in Part I (e.g., “Fidelity Mutual Funds”, “USAA Mutual Funds”, “Vanguard Funds”, “Scudder Funds”) – Incorrect use of OGE Form 450-A – – Supervisor fails to sign – – Prior year’s OGE Form 450 not included 37

38. You Make the Call After completing your OGE Form 450, you give it to your supervisor, Neera Nuff. She notices your stock in an IT company that does business with your agency, but assumes the ethics counselor will look into that, and Neera just signs and forwards the Form to the ethics counselor. Any problems? 38

39. OGE Form 450 • When Reviewing the Form – Ensure it is properly completed – Analyze and document any reported interest that violates or appears to violate conflict of interest or bad appearance rules 39

40. You Make the Call An employee reports stock in a company that does business with your agency. When the assigned ethics counselor asks the employee’s supervisor, Bea Esser, about the stock, Bea says that there’s no conflict of interest because the employee “is not a KO or negotiator, and does not deal with contractors.” Is Bea off base? 40

41. Conflict of Interest • “Personal and Substantial” Participation in “Particular Matter” Having “Direct and Predictable Effect” on your Financial Interest or Financial Interest of your: • Spouse • Minor Child • Business Partner • Non-Federal Employer 41

42. Conflict of Interest • Personal and Substantial • Direct and of significance • Includes advice and recommendations • Particular Matter • Involve deliberation, decision or action focused on interests of specific Non-Federal entities or discrete classes • Direct and Predictable Effect • Close causal link • Real, not speculative, possibility • Not necessarily immediate • Magnitude of effect irrelevant 42

43. You Make the Call You are the Director of a Government Office. The wife of your Deputy Director, Bjorn Lyer, accepts employment with your support contractor, Trilogy, and starts in October. Bjorn files his OGE Form 450 a few weeks later, and does not report his wife’s employment. In December, Bjorn tells you about his wife’s employment with Trilogy, and you ask whether he has consulted with the Ethics Counselor (EC). He says “yes”, and says that the Ethics Counselor said “no problem.” You inquired no further, and therefore did not know that Bjorn Lyer merely asked the EC a general question at an ethics training session. Did anyone do anything wrong? 43

44. Conflict of Interest • Full Disclosure of All Relevant Facts Required when Seeking Ethics Advice • Application of Conflict of Interest Standard • Effect on financial interest more likely with smaller company • Bad Appearance • No participation in particular matter involving specific parties if spouse’s employer is party to matter – – Supervisor can authorize participation by balancing bad appearance and agency’s need for employee’s participation 44

45. You Make the Call You are elated! You have a new subordinate who you know will be an all-star. You know because, for the past few years, your new employee has been doing a great job as an employee of your development contractor. You plan to take full advantage of her experience. She will help with COR duties for the development contract. Any problems? 45

46. Hiring Former Contractor Employee • Potential Conflicts of Interest • Stock Ownership • Pension • Bad Appearance • No participation in particular matter involving specific parties if prior (i.e., within the last year) employer is party to matter – – Supervisor can authorize participation by balancing bad appearance and agency’s need for employee’s participation 46

47. You Make the Call You want to look for a job with your agency’s support contractor. You wisely decide to consult with your ethics counselor FIRST. What will he tell you? 47

48. Seeking Employment • 18 U.S.C. § 208 • You may not participate personally and substantially in any particular matter that has direct and predictable effect on company with which you are negotiating for employment or have an arrangement concerning prospective employment • Criminal law 48

49. Seeking Employment • 5 CFR Part 2635, Subpart F • You may not participate personally and substantially in any particular matter that has direct and predictable effect on company with which you are seeking employment • You are “seeking employment” when you: – – engage in negotiations – – make unsolicited employment contact » includes sending resume » excludes requesting job application – – Make a response other than rejection of unsolicited communication 49

50. Seeking Employment • No Longer “Seeking Employment” when: • either party rejects job overture and discussions have terminated, or • two months have passed after mailing resume and no response 50