370.735.6 - Financial Interests

6/6/2001

OPR: Office of Human Resources

1. Purpose. This chapter provides supplemental instructions to the Department of the Interior regulations governing financial interests as contained in 43 C.F.R. 20, Employee Responsibilities and Conduct; and 5 C.F.R. 3501, Supplemental Standards of Ethical Conduct for Employees of the Department of the Interior, except for the following activities which are covered elsewhere in the Survey Manual as indicated below:

A. Intergovernmental Assignments. See SM 370.334.1

B. Political Activity. See SM 370.733.1.

C. Nonofficial Expression. See SM 370.735.4.

D. Outside Work. See SM 370.735.5

2. Statutory and USGS Policy Restrictions - Conflict of Interests.

A. The U.S. Geological Survey Organic Act.

(1) This statute (43 U.S.C. 31(a)) states in part: "The Director and members of the Geological Survey shall have no personal or private interests in the lands or mineral wealth of the region under survey . . ."

The Solicitor of the Department of the Interior interprets the phrase "the lands . . . under survey" to mean the Public or Federally-held lands, whose title is in the United States Government, including lands "acquired," annexed, or otherwise obtained. The statute is viewed as generally prohibiting USGS personnel from having direct or indirect interests in the mineral wealth of the Federal lands, either directly through a leasehold or indirectly through financial instruments (securities, limited partnerships, etc.) issued by companies that have extensive Federal oil, gas, or mining leaseholds. The latter provision implicitly prohibits ownership of holdings in petroleum, mining, transportation, and public utilities, among others, whose activities involve exploration, development, and/or production of oil, gas, or mineral resources on extensive acreages of Federal lands through the parent, a subsidiary, or an affiliated company. Companies that are covered include all of the major petroleum companies, many of the large independents, many of the major U.S. mining companies, public utilities (primarily in the Western United States), and several Western railroads. A list of the companies that are absolutely prohibited to all USGS employees is available from the Deputy Bureau Ethics Counselor, USGS, 603 National Center, Reston, Virginia 20192.

(2) The statute also states that: "The Director and members of the Geological Survey . . . shall execute no surveys or examinations for private parties or corporations" (43 U.S.C. 31(a)). This provision prohibits the performance of surveys (e.g., line surveys, preparation of topographic, geologic, drainage, or street maps) and the examination and/or evaluation of properties for mineral, petroleum, or water potential, with or without remuneration.

B. USGS Policy. To eliminate even the possibility of the appearance of a conflict of interest because of financial holdings in petroleum and mining companies or other companies having major petroleum or mining activities and doing business on private lands in the United States, the long-standing USGS policy has been retained, partially modified, and codified in the Supplemental Standards of Ethical Conduct for Employees of the Department of the Interior (5 C.F.R.3501.104(b)). These standards are the controlling authority which should be consulted for detailed information. This policy is summarized as follows:

(1) No employee of the USGS, or spouse or minor child of a USGS employee, shall have a direct or indirect financial interest in private mining activities in the United States.

(2) Exceptions. The prohibition does not apply to:

(a) A single financial interest worth $10,000 or less or an aggregate of financial interests worth $20,000 or less for all USGS employees (or their spouses and minor children).

(b) Mineral royalties and overriding royalty interests (ORRI) of $600 per year or less.

(c) A publicly traded or publicly available investment fund (e.g., mutual fund) which, in its prospectus, does not indicate the objective or practice of concentrating its investments in entities engaged in private mining activities in the United States, if the employee neither exercises control nor has the ability to exercise control over the financial interests held in the fund.

(d) A legal or beneficial interest in a qualified profit sharing, retirement, or similar plan, provided that the plan does not invest more than 25 percent of its funds in debt or equity instruments of entities engaged in private mining activities in the United States, and the employee neither exercises control nor has the ability to exercise control over the financial interests held in the plan.

(e) The ownership of a financial interest by an employee's spouse or minor child where the spouse or minor child obtained the interest through:

(i) A gift from someone other than the employee or a member of the employee's household;

(ii) Inheritance;

(iii) Acquisition prior to the employee's becoming a USGS employee;

(iv) Acquisition prior to marriage to a USGS employee; or

(v) A compensation package in connection with the employment of the spouse or minor child.

(3) The Director of the U.S. Geological Survey may require an employee to divest an interest the employee is otherwise authorized to retain under an exception based on a determination of substantial conflict under 5 C.F.R. 2635.403(b).

(4) The Director of the U.S. Geological Survey may grant a written waiver from the prohibition based on a determination that the waiver is not inconsistent with 5 C.F.R. 2635 or otherwise prohibited by law, and that, under the particular circumstances, application of the prohibition is not necessary to avoid the appearance of misuse of position or loss of impartiality, or otherwise to ensure confidence in the impartiality and objectivity with which Department programs are administered. A waiver under this paragraph may be accompanied by appropriate conditions, such as requiring execution of a written statement of disqualification. Notwithstanding the granting of any waiver, an employee remains subject to the disqualification requirements of 5 C.F.R. 2635.402 and 2635.502.

(5) A spouse or minor child of an employee may retain a financial interest which was permitted under criteria and procedures used before October 16, 1997, unless the Director of the U.S. Geological Survey determines in writing that such retention is inconsistent with the standards for waivers.

(6) The key phrase of the policy is "private mining activities" which means exploration, development, and production of oil, gas, and other minerals on land in the United States that is not owned by the Federal government or by a State or local government. Activities of international companies headquartered outside the United States but carrying out mining activities on private lands in the United States are also subject to the limitations of the policy. A list of the companies that are subject to the limitations of the USGS policy is available from the Deputy Bureau Ethics Counselor, USGS, 603 National Center, Reston, Virginia 20192.

C. Compliance Procedures.

(1) Notification of Restrictions. The following statement must be shown on all vacancy announcements issued by the USGS, inquiries as to availability, and all recruiting material and advertisements: "USGS employees are subject to Title 43, U.S.C. 31(a) and may not: (a) have any personal or private, direct or indirect, interest in lands or mineral wealth of lands whose title is in the United States; (b) have any substantial personal or private, direct or indirect, interest in any private mining or mineral enterprise doing business in the United States, except where specifically authorized by the Director of the USGS; or (c) execute surveys or examinations for private parties or corporations."

(a) If the position requires that the incumbent file OGE Form 450, Confidential Financial Disclosure Report, the following statement is included: "The incumbent of this position will be required to file a Confidential Financial Disclosure Report (OGE Form 450) and Interior Supplement (DI-1993)."

(b) If it is a senior level position that requires the incumbent to file the SF-278 form, Executive Branch Personnel Public Financial Disclosure Report, the following statement is included: "The incumbent of this position will be required to file an Executive Branch Personnel Public Financial Disclosure Report (SF-278) and the supplemental form, Confidential Statement of Employment and Financial Interests (DI-278)."

(2) Certificate of Disclaimer. Every new employee is required to sign Form 9-1909, USGS Employee Certification, which is filed in the official personnel folder. To assist the new employee in interpreting the Form 9-1909, the appropriate personnel office provides a copy of "Ethics, An Employee Guide;" a copy of the latest Financial Guide that discusses securities subject to various prohibitions and limitations; and provides information sources for electronic copies of 43 C.F.R. 20.101-603 and 5 C.F.R. 3501. In signing this certification, an employee indicates that, to the best of his/her knowledge or belief, the signatory has no interests in the Federal lands and no substantial interest in companies engaged in mining activities (including petroleum and natural gas extraction) on private lands.

(3) OGE Form 450, Confidential Financial Disclosure Report, and Interior Supplemental Form DI-1993.

(a) All full-time and selected part-time and intermittent employees at the grade GS-15 are required to file OGE Form 450. In addition, the form must be filed by each employee whose position is listed in the annual Appendix C to Part 20 of Title 43 of the Code of Federal Regulations.

(b) Each position description must indicate whether or not the OGE form 450 filing is required, as must each Request for Personnel Action (SF-52).

(c) The appropriate personnel office gives a copy of the OGE Form 450 to a new employee, or a current employee who is being assigned to a covered position. The employee completes the forms, retains a copy, and sends them to the Deputy Bureau Ethics Counselor at USGS, 603 National Center, Reston, Virginia 20192.

(4) Form SF-278, Public Financial Disclosure Report, and Supplemental Filing Form DI-278, Confidential Statement of Employment and Financial Interests.

(a) Senior level positions, those in the Senior Executive Service (SES), those with rates fixed at the GS-16 level or above, (e.g., special senior research position), and those for political appointments, no matter what the grade, are subject to filing the SF-278, Executive Branch Personnel Public Financial Disclosure Report and the Interior Supplement, DI-278.

(b) Position descriptions that fall within the categories listed in section (a) should note that the SF-278 and DI-278 are required. The Request for Personnel Action (SF-52) should also note the requirement for these filings.

(c) When an employee vacates a position subject to filing the Form SF-278, he/she must complete the SF-278 at termination.

(d) The Headquarters Personnel Office provides a copy of Forms SF-278 and DI-278 to each new entrant and a copy of the SF-278 to each individual terminating from covered positions. The employee completes the forms, retains a copy, and sends them to the Deputy Bureau Ethics Counselor, 603 National Center, Reston, Virginia 20192.

3. Appearance of Conflict of Interest Other than Statutory or USGS Policy. There are some USGS positions in which ownership of certain securities, unrelated to either the Organic Act or to the USGS Policy, might tend to create the appearance of a conflict of interest. For example, a contract specialist who is responsible for handling computer hardware or software acquisitions should not hold interests in companies that might make proposals to provide such equipment; an environmental geologist engaged in review of environmental impact statements should not hold interests in contracting companies that might provide services to the USGS through contracts; a hydrologist should not own stocks or bonds issued by a company providing water supplies to cities or towns within his district; the holder of an overriding royalty interest should not have occasion to conduct official dealings with the company that pays the royalty. These more general types of potential conflict of interest are discussed in 43 CFR 20.735-21.

4. Appearance of Conflict of Interest with Holdings of Spouses and Minor Children Domiciled with Employee. Because of the phrasing of the Organic Act from which most regulations governing conflict of interest in the USGS derive, spousal holdings and those of minor child(ren) domiciled with the employee are not subject to the Organic Act prohibitions or the USGS Policy if the interest of the spouse or minor child(ren) was obtained by the holder: 1) as a gift from someone other than the employee or a member of the employee's household; 2) by inheritance; 3) by acquisition prior to the employee's becoming a USGS employee; 4) by acquisition prior to marriage to a USGS employee; or 5) through a compensation package in connection with the employment of the spouse or minor child. If these conditions are not met, the holding will be subject to the Organic Act and USGS Policy.

If, however, the employee's position involves dealings with the company or individual in which the spouse or minor child(ren) have an interest, then precautionary measures are necessary to avoid the appearance of a conflict of interest or the occurrence of a real conflict-of-interest situation. When such circumstances occur, the employee is asked to prepare a written document to his/her supervisor requesting that he/she be exempt from official responsibilities with respect to the company/individual involved. If the supervisor cannot make the adjustment requested, then remedial action is taken. Inquiries concerning such problems should be referred to the Deputy Bureau Ethics Counselor.

5. Ethics Counselors. The Director is the Bureau Ethics Counselor. Questions concerning conflict-of-interest matters relating to financial interests should be directed to the Bureau Ethics Counselor or Deputy Bureau Ethics Counselor. Their mailing address is USGS, 603 National Center, Reston, Virginia 20192. Telephone inquiries can be made as follows:

Bureau Ethics Counselor - (703) 648-7411

Deputy Bureau Ethics Counselor - (703) 648-7474