[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR2635.503]

[Page 569-570]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
                CHAPTER XVI--OFFICE OF GOVERNMENT ETHICS
 
PART 2635--STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EXECUTIVE BRANCH--Table of Contents
 
          Subpart E--Impartiality in Performing Official Duties
 
Sec. 2635.503  Extraordinary payments from former employers.

    (a) Disqualification requirement. Except as provided in paragraph 
(c) of this section, an employee shall be disqualified for two years 
from participating in any particular matter in which a former employer 
is a party or represents a party if he received an extraordinary payment 
from that person prior to entering Government service. The two-year 
period of disqualification begins to run on the date that the 
extraordinary payment is received.

    Example 1: Following his confirmation hearings and one month before 
his scheduled swearing in, a nominee to the position of Assistant 
Secretary of a department received an extraordinary payment from his 
employer. For one year and 11 months after his swearing in, the 
Assistant Secretary may not participate in any particular matter to 
which his former employer is a party.
    Example 2: An employee received an extraordinary payment from her 
former employer, a coal mine operator, prior to entering on duty with 
the Department of the Interior. For two years thereafter, she may not 
participate in a determination regarding her former employer's 
obligation to reclaim a particular mining site, because her former 
employer is a party to the matter. However, she may help to draft 
reclamation legislation affecting all coal mining operations because 
this legislation does not involve any parties.

    (b) Definitions. For purposes of this section, the following 
definitions shall apply:
    (1) Extraordinary payment means any item, including cash or an 
investment interest, with a value in excess of $10,000, which is paid:
    (i) On the basis of a determination made after it became known to 
the former employer that the individual was being considered for or had 
accepted a Government position; and
    (ii) Other than pursuant to the former employer's established 
compensation, partnership, or benefits program. A compensation, 
partnership, or benefits program will be deemed an established program 
if it is contained in bylaws, a contract or other written form, or if 
there is a history of similar payments made to others not entering into 
Federal service.

    Example 1: The vice president of a small corporation is nominated to 
be an ambassador. In recognition of his service to the corporation, the 
board of directors votes to pay him $50,000 upon his confirmation in 
addition to the regular severance payment provided for by the corporate 
bylaws. The regular severance payment is not an extraordinary payment. 
The gratuitous payment of $50,000 is an extraordinary payment, since the 
corporation had not made similar payments to other departing officers.

    (2) Former employer includes any person which the employee served as 
an officer, director, trustee, general partner, agent, attorney, 
consultant, contractor or employee.
    (c) Waiver of disqualification. The disqualification requirement of 
this section may be waived based on a finding that the amount of the 
payment was not so substantial as to cause a reasonable person to 
question the employee's ability to act impartially in a matter in which 
the former employer is or represents a party. The waiver shall be in 
writing and may be given only by the head of the agency or, where the 
recipient of the payment is the head of the

[[Page 570]]

agency, by the President or his designee. Waiver authority may be 
delegated by agency heads to any person who has been delegated authority 
to issue individual waivers under 18 U.S.C. 208(b) for the employee who 
is the recipient of the extraordinary payment.