(a) Disqualification required. Absent an authorization pursuant to paragraph (d) of this section, an employee shall not participate in a particular matter involving specific parties if the employee is aware that any of the following have credit with or are indebted to an entity that is a party or represents a party to the matter:

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Terms Used In 5 CFR 9401.109

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Dependent: A person dependent for support upon another.
  • Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
  • Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.

(1) The employee;

(2) The employee’s spouse, domestic partner, or dependent child;

(3) A partnership in which the employee or the employee’s spouse, domestic partner, or dependent child is a general partner;

(4) A partnership or closely held corporation in which the employee or the employee’s spouse, domestic partner, or dependent child individually or jointly owns or controls more than 10 percent of its equity;

(5) A trust in which the employee or the employee’s spouse, domestic partner, or dependent child has a vested legal or beneficial interest;

(6) An investment club or similar informal investment arrangement between the employee or the employee’s spouse, domestic partner, or dependent child, and others;

(7) A qualified profit sharing, retirement, or similar plan in which the employee or the employee’s spouse, domestic partner, or dependent child has an interest; or

(8) An entity in which the employee or the employee’s spouse, domestic partner, or dependent child individually or jointly holds more than a 25 percent equity interest.

(b) Forms of credit and indebtedness exempted. The following forms of credit and indebtedness are exempted from the disqualification requirement in paragraph (a) of this section, as long as the person listed in paragraphs (a)(1) through (a)(8) of this section is not in an adversarial position (e.g., delinquent in payments; disputing the terms or conditions of the account; subject to debt collection measures like wage garnishment; involved in any disagreement that may cast doubt on the employee’s ability to remain impartial) with the entity that extended the credit or to which the indebtedness is owed, and the credit or indebtedness was offered on terms and conditions no more favorable than those offered to the general public:

(1) Revolving consumer credit or charge cards;

(2) Overdraft protection on checking accounts and similar accounts;

(3) Amortizing indebtedness on consumer goods (e.g., automobiles);

(4) Automobile leases for primarily personal (consumer) use vehicles;

(5) The provision of telephone, cable, gas, electricity, water, or other similar utility services provided on credit (i.e., the service is provided before payment is due such that consumers incur debt as they use the service and receive periodic bills for the services used);

(6) Educational loans (e.g., student loans; loans taken out by a parent or guardian to pay for a child’s education costs); and

(7) Loans on residential homes (e.g., home mortgages; home equity lines of credit).

(c) Credit or indebtedness of employee’s spouse, domestic partner, dependent child, or other specified persons. An employee’s disqualification under paragraph (a) of this section is not required if:

(1) The credit or indebtedness is solely the responsibility of the person listed in paragraphs (a)(2) through (a)(8) of this section; and

(2) The credit or the liability for repayment of the indebtedness is not dependent on, attributable to, or derived from the employee’s income, assets, or activities.

(d) Authorization to participate. The DAEO may authorize an employee to participate in a matter that would require disqualification under paragraph (a) of this section, using the authorization process set forth in 5 CFR 2635.502(d) of the OGE Standards. The DAEO will consult with senior management in the Division in which the employee works before issuing such an authorization.

[77 FR 25019, Apr. 27, 2012, as amended at 82 FR 35887, Aug. 2, 2017]