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United States Office of Government Ethics
P.O. Box 14108
Washington, D.C. 20044
August 7, 1986
Audley Hendricks
Designated Agency Ethics Official and Assistant General Counsel
Veterans Administration
810 Vermont Avenue, N.W.
Washington, D.C. 20420
Dear Mr. Hendricks:
This informal advisory letter is in response to your request,
dated July 7, 1986, for an opinion concerning the compensated
participation of Veterans Administration employees in a market
research survey to be conducted by Intersearch Corporation. Based
upon our review of the facts, we conclude that VA supply service
personnel should not accept compensation for their participation in
Intersearch's market research survey.
FACTS: According to your letter, Intersearch Corporation is a custom
market research supplier, specializing in medical, pharmaceutical,
and instrumentation product areas. Intersearch proposes to conduct a
survey of government hospital procurement procedures. In conducting
its research, Intersearch would survey VA supply service personnel at
VA Medical Centers, offering each participant an honorarium in
appreciation for his or her assistance. The survey would be conducted
during non-duty hours, and Intersearch would solicit only public or
non-confidential information from the participating VA employees.
According to Intersearch's proposal, the areas of inquiry would
include: (1) purchase or use of reagent consumables in the
laboratory; (2) contract and non-contract procurement procedures; (3)
advantages and disadvantages for the hospital of alternative
procurement procedures; (4) factors affecting the selection of
reagent suppliers; (5) use of clinical chemistry instruments related
to the purchase of reagents; and (6) other related topic matter.
However, a copy of the actual survey was not available for our
review. From the information it obtains through the survey,
Intersearch plans to prepare a business analysis and report, which it
will sell to hospital suppliers.
DISCUSSION:
In reaching the conclusion that VA employees should not receive
compensation for their participation in Intersearch's survey, we
evaluated the facts presented in terms of the prohibition of 18 U.S.C. 209 on compensation from nongovernmental sources and the
following provisions in the standards of conduct regulations: 38 C.F.R. 0.735-10(b)(1); 38
C.F.R. 0.735-12; and 38 C.F.R. 0.735-15.
Each of these issues is addressed below, starting with 18 U.S.C. 209.
In your discussion of the use of public office for private gain,
you refer extensively to the analysis contained in OGE's memorandum
on participating in privately-sponsored conferences and seminars. In
addressing the issue of outside employment as it pertains to
lecturing and writing, the memorandum focused on subsection (c) of 5 C.F.R. 735.203. The memorandum explained that the permissibility of
participating in conferences or seminars which do not involve
non-public information depends upon how closely the subject matter
relates to the agency's responsibilities. We stated that an employee
not covered by subsection (c) of 5 C.F.R. 735.203 may lecture on a
subject within his or her inherent expertise, even though the subject
matter is related to the employing agency's activities. However, when
the activity focuses specifically on the agency's responsibilities,
policies, and programs, the employee is prohibited from receiving
compensation for the activity.
In arguing that the proposed activity is permissible, you state
that the prohibition extends only to compensated outside activities
which are related to official duties and which involve policy
deliberation and determination. As a result, since the individual
participants are lower-level employees who lack procurement
responsibilities, you believe they may participate. By taking that
approach, you have disregarded two considerations. First, OGE's
memorandum states that an "employee will be prohibited from receiving
compensation only when the activity focuses specifically on the
agency's responsibilities, policies, and programs, when the employee
may be perceived as conveying the agency's policies, or when the
activity interferes with his or tier official duties." If the
activity focuses on the agency's responsibilities, the employee may
not accept compensation for the activity, regardless of whether the
employee may be perceived as conveying agency policy. Second,
lecturing and writing are encouraged by the standards of conduct at
38 C.F.R. 0.735-12(c). Other outside employment activities, such as
the type you have described, do not enjoy such favored treatment. As
a result, the discussion of the scope or permissible activity in that
context does not necessarily apply to all other types of outside
employment.
If, as you suggest, we were to extend the analysis contained in
the memorandum to the present situation, it would cut against
allowing VA employees to participate in Intersearch's survey for
compensation. As you have described the survey, it will be aimed at
specific information about VA's procurement procedures, rather than
issues related to procurement in general. It does not appear that
Intersearch has requested assistance from VA supply service personnel
because of their inherent expertise in the field; lntersearch has
sought out these individuals because they know specific VA
procurement policies and how they arc applied. A government employee
cannot receive compensation from an outside source for providing such
information.
The misuse of information is governed by 38 C.F.R. 0.735-15, which
prohibits VA employees from using, for the purpose of furthering a
private interest, official information obtained through or in
connection with their government employment, which has not been made
available to the general public. Although some of the information
Intersearch's proposal covers may be available to the general public,
it is not clear that all of what they are requesting fits within that
category. Without listing the actual questions it plans to ask,
Intersearch states that it would inquire into contract and
non-contract procurement procedures, advantages and disadvantages for
the hospital of alternative procurement procedures, and other related
topic matter. Because these topics are quite broad, it is possible
that VA employees would be asked to provide information that goes
beyond that which the VA has made public in the past or would like to
have made public. Since both Intersearch and the participating VA
employee would be profiting from the use of this information, the
proposal could run afoul of section 0.735-15.
18 U.S.C. 209
According to 18 U.S.C. 209, government employees are prohibited
from receiving compensation for their services as employees of the
federal government. In your letter, you argue that participation in
the survey would not constitute the performance of official duty.
Therefore, 18 U.S.C. 209 would not bar employees from receiving
honoraria from Intersearch. However, you state that these employees,
in the course of their government employment, provide
publicly-available procurement information of the type lntersearch is
seeking through its survey to members of the public and firms who do
business with the VA. If providing this type of information to the
public is within the scope of the employee's responsibility as a
government employee, he or she should not be able to receive outside
compensation for performing that function just by delaying the
activity for a couple of hours, so that he or she can do it on his or
her own time. Therefore, it is conceivable that 18 U.S.C. 209 could
be in issue, since the employee would be receiving compensation for
providing Intersearch with information that the employee would be
required to provide within the scope of his or her government
position.
Standards of Conduct Regulations
Under the standards or conduct regulations, acceptance by VA
employees of the proposed honoraria would violate 38 C.F.R.
O.735-10(b)(1). That provision states that an employee shall avoid
any action which might result in, or create the appearance of, using
public office for private gain. When a government employee receives a
payment from an outside source for supplying information that the
employee is required to provide in the course of his or her official
duties, the employee is using his or her position and the information
he or she has acquired in that position for private gain. Even if the
government employee does not receive any payment for this activity,
it might still involve some form of private gain. Where, as in this
case, the private gain will be realized by some person or entity
other than the government employee, there may still be a violation of
the regulation. (Office of Government Ethics, Memorandum on
Participating in Privately-Sponsored Seminars or Conferences for
Compensation, October 28, 1985, page 5.) Your statement that "paid
for public information provided by the VA employees would not place
Intersearch in a better position than anyone else with respect to
procurement information" might be correct in the sense that it will
not assist Intersearch in dealings with the VA. However, Intersearch
will gain financially by selling the information that it collects
through its survey.
Since the proposal is to have the VA employees participate in
Intersearch's survey on their own time, the standards of conduct
regulation on outside employment, at 38 C.F.R. O.735-12, would apply.
According to that provision, an employee shall not engage in any
outside activity that is not compatible with the full and proper
discharge of his or her duties. Incompatible activities include the
acceptance of anything of monetary value, which would include
honoraria, in circumstances in which acceptance may result in, or
create the appearance of, a conflict of interest. Since this proposal
raises questions under 18 U.S.C. 209 and appears to involve the use
of public office for private gain and potentially the dissemination
of non-public information, there is at least an appearance of a
conflict of interest. As a result, the standards of conduct
regulations would prohibit a VA employee from accepting the
honorarium.
CONCLUSION
We believe the arrangement you described would violate the
standards of conduct provision on the use of public office for
private gain. In addition, it would raise other conflict concerns
under the standards of conduct and 18 U.S.C. 209. As a result, we
think that VA employees should not participate in Intersearch's
proposal as it has been described.
Sincerely,
David H. Martin, Director
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