ML20248A414

Responds to Re Evaluation of NRC Ethics Program. Expresses Appreciation for Assistance Provided Re Subj

ML20248A414
Person / Time
Issue date:	03/14/1989
From:	Zech L NRC COMMISSION (OCM)
To:	Nebeker F OFFICE OF PERSONNEL MANAGEMENT
References
NUDOCS 8904100201
Download: ML20248A414 (11)

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UNITED STATES 1 .I NUCLEAR REGULATORY COMMISSION o,, gv* .,*f[ WASHINGTON, D.C. 20656 CHAIRMAN C-March 14, 1989 . Ys '

b. i The Honorable Frank O. Nebeker, Director Office of Government Ethics 3

P.O. Box 14108 O

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,                           Washington, D.C. 20044

Dear Judge Nebeker:

This responds to your February 1,1989 letter which sets forth your evaluation of the Nuclear Regulatory Commission's (NRC) ethics program. I am. pleased to inform you that all of your recommendations are being implemented. The NRC is fully committed to considering whether to take administrative action against its employees when the Department of Justice has declined prosecution of potential 'violatinns of the conflict of interest laws. ' An October 20, 1988 bulletin to employees explains infonnation about this position. Also, as you note, we have resolved the problems which may have prevented administrative action in the past. , t On March 13, 1989 our Office of the General Counsel submitted to your office for review several proposed minar amendments to NRC's conflict of interest regulations. These changes incorporate your recommendations. I shall continue to play an active role in NRC's ethics education and awareness program. In this connection, in the attached March 3, 1989 bulletin to all employees, I recently stressed the importance of compliance with the ethics laws and avoidance of the appearance of impropriety. Finally, I would like to express my appreciation to you and your staff for the assistance that you have provided this agency's ethics program. If we can be of further assistance, please have a member of your staff contact Karla Smith, OGC, at 492-1606. Sincerely. 4 W. Lando W. Zech r.  !

Enclosure:

March 3, 1989 Bulletin - i Nth::y N h i E_ --_ _ _ _ -

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i .s s :e E UNITED STATES 5., jI NUCLEAR REGULATORY COMMISSION ANNOUNCEMENT NO. 22 OATE: March 3, 1989 TO: ALL NRC EMPLOU.FS

SUBJECT:

INFORMATION REGARDING CONFLICTS OF INTEREST (10 CFR PART 0) As you are aware, President Bush has placed great emphasis on the need for federal employces to comply with pertinent federal conflict of interest laws and to avoid all appearances of impropriety. I strongly endorse the President's cifort. Historically, NRC employees have had an outstanding record-in avoiding conflicts of interest. Ycur continued efforts to comply with pertinent ethics requirements are appreciated. I ask each of you to read carefully the enclosed memorandum prepared by the Office of the General Counsel which summarizes pertinent. cthics requirements. That office is always available to provide necessary guidance to employees regarding conflict of interest requirements. I YJ. f. Lando W. Ze , Jr. j Chairman D Enclosurc: OGC Memorandum on Conflicts of Interest l l i I

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i OGC MEMONANDUM ON CONFLICT OF INTEFEST v ,

                                           - Almost daily, Deputy Ethics'Courselors in the Office of.the General Counself receive telephone calls and written requeste
                                             .for advice c* conflict of interest metters from current and former. agency employees. We welcome such inquiries.- It is in the intereut of the agency and the' employee'that potential conflict of interest situations be resolved bef ore ' there has been a violation of the various legal requirements in-this.

area. .Your knowledge-and understanding of these. requirements is the key to early identification and resolutionfof potential conflict problems. To aid you.in identifying potential; conflict problems, we previously distributed a booklet entitled "How to Keep' Out' of Trouble." :This booklet, which was prepared by the. Office of Government : Ethics, ccutains a brief summary of the government-

                                             ' wide ethics' requirements and is an excellent ready reference tot answering general' questions. Copics of this booklet may be obtained by calling Nichael-Korwin at 492-1613. In addition, please review carefully the more detailed outline of major.

agency conflict of interest requirements that follows. I. ' Financial Disclosure Reportc Last spring, niany of you submitted - a Confidential ' Statement of Employment and Financial Interests (NRC Form 269) or a Financial Dicciosure_ Report (Form 278). This office has completed its review of these statements. We have written A Lindividual letters to those of you who have stockholding and/cr outside employment that could present a conflict of interest or an appearance of impropriety. These. letters' remind you not to participate in natters affecting those-organizations. Generally, organizations listed in the letters, while.not entities placed on the prohibited securitieb list discussed in.Part II of this announcement,.nonetheless are engaged in activities in the commercial nuclear field or have, or potentially may have, business before the Commission. For this reporting period, like last, most employees who filed these statements will not receive-individual letters regarding their statements. Many employees declared that they had no L reportable stockholding or other financial interests. In addition, persons who listed interests such as holdings in real property, personal loans, and other investments or associations of a-kind unlikely to present a conflict or possible conflict with NRC employment will not receive individual letters. h-.---_.__a-_ 2.ma._._. _..._, m_m. a

2G II. . Prohibited Securities Commissioners, employees (including special government employees who are members of.the ACRS,:ACNW, the-ASLEP, or the ASLAP) uho occupy a position at.cr above GG-13 or its-ecuivalent, and.the spouce, minor children, or.cther. members of-the immediate household of Commissioners or covered employees,. are not permitted to own any stocks, bonds, or other-security

                   . interests issued by:

(A) . Publicly or privately owned utilitiet that have (1) filed an application w2th the Commission requesting an early site review,. / 2) sought authorization to construct or operate a facility for the generation of electric energy by means of a nuclear reactor, or (3) received a construction permit or an operating license from, the Commission that currently is effective. (B) State or local governments, if the primary purpose of the security is to finance the constructicu or operation of a nuc1 car reactor. (C) Companies manufacturing or selling nuclear power reactors or test reactors. (D) Architectural-engineering companies that have (1) been engaged.by an applicant for a construction permit or for-an operating license to provide services relating to a nucle 6r

                                                     ' facility, or (2) filed a standard reference design that ic under Commission review or has been approved by the Commission and currently is effective.

(E) Commission-licensed companies that are, or app]icants that will be, substantially engaged in nuclear fue] cycle or nuclear waste disposal activitled. This stock ownership prohibition also applies to individuals below the GG-13 level who provide input into the NRC decisionmaking process. See NRC Announcement No. 50, dated April 15, 1960, for the current listing of the employees subject to the stock ownership ' restrictions and those companies whose securities employees may ) not own. l l l 2 e l L_______.

Employees and members of their family covered by the stock ownership restrictions'may'not purchase prohibited securities for their' Individual Retirement Acccunts (IPAs) . Employect. may, however, own shares'in diversified mutual' funds that do not have a major percentage of'their hcidings in prohibitec securitics. III. Other Financial Interests A. participation in Patters Affecting A Personal Financial Interest An employee may own an unlimited amount of stocks, bonds, and other recurity interests in companies not falling within the classifications of prohibited securities' set forth above, but may not participate as an NRC employee'in matters affecting any such entity if the current value of the holdings in that company exceeds $1,000 or constitutes more than one percent of the dollar value of the outstanding shares of the company. An employee also may not participate in matters affecting the financial interest of any organization in which he or she serves as an officer, director, trustee, partner, or employee, or in matters in which the employee's spouse, minor child, or partner has a financial interest. B. Disclosure of Nonpublic Official Information Furthering a private Interest Employees also are barred from furthering any private interest by directly using or. allowing the use of otticial information obtained through or in connection with FFC employment that bac not been mace available to the general public. Thus, employees should not use or, through' improper disclosure, allow others to use nonpublic " insider" information. IV. Outside Employment Full-time Commission employees require written authori~ation

                     .before accepting any employment, fee, or compensation from Commission licensees (including universities), license applicants, organizations directly engaged in activities in the commercial nuclear field, Commission contractors, Commission suppliers, Agreement State licensees, nuclear trade associations, or law firms or other organizations that are participating in an NRC proceeding or that regularly represent themselves or clients before the NRC. Employees who work for 3

g . 1 offices icperting to the Commission t'hrough.the Executive Director for Operations (EDO) must receive written approval from the FDC.--Fmployees, working for. offices' reporting directly to the Cerimission must receive written approval from,their office 1 director. 1The procedure for obtaining approval is-spe13ed out in NFC regulations,.10 C.F.R. 0.735-40(b). LAgency cmployees.cendidering outside empicyment that would involve cervices rendered to or appearances before federal courts and agencies should note that the feceral conflict of intettst laws prohibit them from:

1. Receiving'any compensation tied to the, profitability or services' rendered by the-employee or by another with respect to'any particular matter (e.g. ,' contract, rulemaking, adjudication) before any federal department, agency, or court in which the United. States is a party or has a direct and substantial interest;.

or

                              ?. Acting as en agent or attorney for anyone with regard to a particular matter.

An exception to these prohibitions is afforded for an employee acting as agent or attorney for his or her parents, spouse,. children, or for a person or estate for which he or she is a guardian, executor, or other personal fiduciary, provided that agency approval has been obtained in accordance with 10 C.F.R'. 0.735-23(d). V. Reimbursement for Travel Expenses by Outside Entity Uritten authorization from the EDO'or, lu the case of Commission-level offices, the office director alco is required beier e en employee may accept payment (3 ) f for of ficial ' travel expenses from any outside entity or (2) for travel expenses unrelated.to official businebc from any outside-entity within the categories described.in Part IV'above. With regerd to reimbursement for official travel expenses, such reimbutrement from an outcade entity to an NRC employee is appropriate only

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it:

1. The travel is incidental to training at a non-Government facility or attendance at a meeting; and

2. The donor is a nonprofit, tax-exempt institution deceribed in 26 U.S.C. S 501 (c) (3) .

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j In addition, the.tclationship of the' donor organization w2th the agency and the!individuel employee-must be scrutinized to ensure that no actuc) or potentici conflict of interest is

                         - Jnvolved. Similar scrutiny is necessary for any travel reimbursenint from a donor to en Nkt eraployee who is not. on             .{

official business. NBC employees also should be aware thht 1 acceptance.oi expenses for unofficial travel from a foreign

                         . government or its agent-may constitute a violation of the Foreign Gif ts and Decorations Act.
                         - Khether an eniployee can ' accept ' travel' expenses' f rom anyone outside the' agency (including foreign' governments or-international] organizations) can be a complex question.           Any employee contemplating'doing so should apply for permission in accordance with the approval procedure in 10 C.F.R. 0. 735-4 0 (b) as far in advance of the travel date as possible to ensure that any conflict of interest problems 'can be avoided. Also, see Section VII infra regarding travel expenses relating to employment negotiations.

V7. Gifts-NEC employees are' precluded from accepting any gift, gratuity, fcvor, or any other thing cf monetary value from Commission licensece and others regulated by the Commiscion or from .those doing butiness with the Commission, with a few exceptions that-are spelled out in 10 C.F.R. 0.735-42.- Thus, as was described in.several recent memoranda to all employees.(Announcement No. 177, dated hovember 16, 1987; Announcement No. 178, dated October 20, 1988), food, refreshments, and entertainment generally may not be accepted from those in the commercial nuclear field, including applicants and 31censees and their consultants-and contractors, or.from those who have or are

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seeking business with the agency. When questiens arise, employees should contact OGC.

                          - Under the Foreign Gifts and Decorations Act, employces are able to accept gifts from-foreign governments presented as a souvenir- or mark of courtesy, provided the value of the gif t does not exceed $180.00.        Before accepting such gifts, howcVer, you should consult with this office.
                          .VII. Negotiating for Fmployment; Interview Travel Expenses l

An employee should not participate in matters affecting an organization with which he or she is negotiating or has any  : arrangement concerning prospective employment.. See NRC I Announcement No. 96, datcd July 11, 1966, for a further 5 1

detailed explanation of the rest rictions relating to co11 citing or negotiating for employment outside the agency. Also, li in the course of negotiating for employment you are offered interview travel expenses by the potent ial employer, you may be required to report this to occ prior to accepting the expense money. See Announcement No, 179, dated October 20, 19E8, for details. VIII. Postemployment Festrictiog OGC frecuently receives questions regarding the restrictions on contacts with the agency by former Nhc employees. The restrictions in. posed by the Ethics in Government Act fall into three categories: (A) There is a permanent ban on acting as another percon's representative (basically making any written or oral communication with intent to influence the Fedcral Government) to the Government on any cusc, contract, application, or other particular natter involving a specific party if the forraer employce participate

                              " personally or substantially" with regard to the matter while employed by the UFC.

(B) There is a two-year ban en such representation with rebpect to those particular matters involving specific parties that actually were pending under the former enployee's " official responsibility" within one year prior to termination of that responsibility. (C) Most employeeb classified as SES or GG-17 or above are subject to more restrictive conditions, including (1) a orx-year ban on contacting the 1 P.C with intent to influer.ce agency action or any matters pending before, or of substantial interest to, the agency, a' well as (2) a two-year prohibition en giving assistance in the representation of anyone other than the United States if that assistance involvec personal presence at any tormal or informal appearance and is in conr.ection with any particular matter involving a specific party in which he er she participated personally and substantially while a covernment employee. The Executive Director for Operations may exempt a former employee from these restrictions to permit the individual to communicate scientific or technological information to the NRC. 6 M* I L

Detailed regulations on how to secure the EDO's approval have been established by the Commission. See 10 C.P.R. 0.735-26(e). The postenployment restrictions are explajned in greater detail in the regulations promulgated by the Office of Personnel Management in 5 C.F.R. Part 737, a ecpy of which is given to all professional croployees at the time they leave the NRC. l Copies also are available upon reouest from Personnel Operations, Nail Stop E-328, 492-4965. NRC also has adopted administrative procedures to enforce these postemployment restrictions. They heve been published as 1:EC Appendix 4124, Part III. VIII. Examples of Conflict of Interest Situations for your information, we provide the following summary of some OGC conflict of interest advice that we have given in recent months. (The facts have been chenged slightly for illustrative purposes.)

3. An employee's spouse inherits prohibited stock.

Fe advised the employec that divestiture of the ctock should take place within six months. (Determinations regarding the appropriate divestiture time for securitics acquired involuntarily, such as through inheritance or marriage, are made on a case-t ,-case basis. ) The employee also was advised that until divestiture took place, he could not participate in matters affecting that company.

2. An association composed of several utilities invited two NRC employees to serve as speakers at a one-day workshop. A particular utility hosted the luncheon for the workshop and asked the NPC emplcyees to be its guests for lunch. The employees asked whether they could attend tbc luncheon. OGC advised that the employees could either decline the invitation for lunch, or they could attend and pay for their lunch cut of.their personal or per diem funds.

3. An NRC cmployee stated that she wished to negotiate for employment with an UFC licensee.

We advised the employee that once she submits a resune to the utility she is precluded from working on matters for the NRC affecting that licensee. If negotiations ended unsuccessfully, generally she could resume working on matters affecting that company. 7 %%m------_-_._n__.. .____ _

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4. An: hre employee asked ;whether he could- serveL on.

his own time,1without compent.ation on.-'an ecvisory j board at a university that has.a rescarch reactor regulated byfthe NRC. OCC advised that.he could serve :on the' board '1f : he'dsd not work on any-

                   - matterr. involving the university in connection with his.NRC work, he dic!not.have any' contact
                   ' with the NPC on behalf of 'the university, . he tock                  ~

annual leave 1for any university work' scheduled during his ccmmission work hourr, he prepared for his university work on his own time, and he. received prior written authorization from the EDO.

              ~5. A university with hh NRC materials .licensc asked an NRC employee to give a lecture at the-university on his own time on a subject 1not '

related to the agency or its regulatory responsibilities. The university offered the. employee an honorarium. OGC advised the employee that he could dcIlver the lecture and accept the

                   ~ honorarium from the university ~if he received sprior written authori dtion from the FDO.-

6.. Ac part of official duties, an NRC employee was invited by a health physics organization to give

a. speech. The organization offered the employee an honorarium. The employee asked whether the honorariutr, could be accepted. OGC advised that

                   'because the speech was given in an official capacity as an NRC employee, the employee was precluded from accepting the honorarium.

7. An NRC employee inquired.whether he coula operate a firm that wculd provide home and business radon oss surveys. Because NRC has no' direct regu]etory role in the detection cnc prevention of naturally-occurring radon gas, we aavised the employee that we did not object to his operation of such a business. However, we also ctated that, particularly in light of.the potential uncertainty ebout NRC'c role in regulating radon that may exist on the part of the general public, he should not use his title or NRC affiliation in any business promotions. Also, we advised him that if his company sought a radon monitoring proficiency certification from the Environmental Protection Ager.cy, federal conflict of interest laws would preclude him from making any representational appearances before that agency,

                   . including ~ phone calls and signing correspondence, with respect to that certification.

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P. -An NRC' employee,'formerly emplo)ed by a nuclear utility, was 6sked by that utility,to serve as a witness.in litigation it had with another concern-

                                                          -relating to matters that' occurred'while he wasJa-utility employee.        (The litigation did not
                                                          . involve thc federal government.or.any federal interests.) . .The utility offered to reimburse the employeeLior his time. spent.in preparing for>

trial and in providing deposition and trial . testimony. It also offered:to pay any related travel and. subsistence expenses. .OGC. advised the employee that he'should seek. approval from the-EDO prior to providing any. services to the utility and that he would be limited to actual t ravel and subsistence expenses and a daily.

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witness fee of:an amount no greater than the: amount permitted for witnesses inL federal ~ court ($30 per day) for each' day he expended in preparation, deposition, and trial actjvities. OGC wishes to thank c31 NRC employees forLtheir outstanding record of compliance with the Commission's conflict of interest regulations. If there are any ouestions en the issues discussed in this memorandum, or any other questions pertaining to 3 0 C.F.R. Part 0, . please contact Michael Korwin- (492-1613) in the Office of the Ceneral Counsel. l 9 L __ - - _ _ _ - _ _ - _ _ _ _ - _ - - _ _ - . - _ _ _}}