February 23, 2007DO-07-006

MEMORANDUM

TO: Designated Agency Ethics Officials

FROM: Robert I. Cusick Director

SUBJECT: Waivers Under 18 U.S.C. § 208

Attached is a memorandum that provides guidance onissues you should consider when deciding whether to grant awaiver under 18 U.S.C. § 208(b)(1) or (b)(3). Because agencies have a variety of attitudes about issuing conflictof interest waivers, it is not possible to have completeconsistency throughout the executive branch in this area.However, we hope this guidance will give you some basicinformation on waiver practices that the Office of Government Ethics (OGE) finds acceptable.

Also, this memorandum should serve as a reminder thatagencies are required by Executive Order 12674 to consult,when practicable, with OGE about proposed waivers. You maycall your desk officer or an OGE attorney for this consultation. In addition, please remember to forward toOGE copies of all waivers you issue, as required by theExecutive order.

Attachment

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TABLE OF CONTENTS

I. INTRODUCTION.......................................... 1

II. PRELIMINARY MATTERS ................................... 3

Is a waiver really necessary?...................... 3Can the employee recuse?........................... 4Is divestiture of the conflicting financialinterest a reasonable option?...................... 4What if OGE thinks the waiver is inappropriate?.... 5Is an employee entitled to receive a waiver?....... 5

III. STATUTORY REQUIREMENTS FOR WAIVERS .................... 6

Requirements common to all 208 waivers............. 6Additional Requirements for all 208(b)(1) waivers.. 6Additional Requirements for all 208(b)(3) waivers.. 7

IV. ADDITIONAL ELEMENTS THAT OGE STRONGLY RECOMMENDS BEINCLUDED IN ALL WAIVERS ............................... 7

V. FACTORS TO WEIGH IN MAKING THE SUBSTANTIALITYDETERMINATION ......................................... 9

VI. FACTORS TO WEIGH IN MAKING A DECISION TO ISSUE A208(B)(3) WAIVER..................................... 11

VII. ISSUES RELATING TO SPECIFIC TYPES OF FINANCIALINTERESTS ............................................ 14

Stocks............................................ 15Corporate financial obligations and other debts... 17Negotiating for employment........................ 18Outside employment and positions as officer ordirector.......................................... 19Service on the board of directors of a non-Federalentity in an official capacity.................... 20Spousal (or a minor child’s) employment........... 21General Partnerships and Financial Interests ofGeneral Partners.................................. 22Law Firms......................................... 23Limited Partnerships and Trusts................... 25

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VIII. MISCELLANEOUS CONSIDERATIONS IN DECIDING WHETHER A 208WAIVER MAY BE APPROPRIATE............................ 26

What effect will a change in the value of theholding have on the waiver?....................... 26What if the disqualifying financial interest isheld as part of a larger investment?.............. 26What if a particular matter will affect only asubsidiary of a larger corporation in which theemployee has a financial interest?................ 27Are the interests of the Government and theconflicting entity adverse?....................... 27Once a 208 waiver is issued, should you make aseparate “appearance” determination under 5 C.F.R.' 2635.502?....................................... 28May you issue “blanket” waivers to groups ofemployees involved in the same particular matter?. 28Should you use “templates” for the waivers youissue?............................................ 29May you apply a more relaxed standard for waiversfor Special Government Employees (SGEs)?.......... 29

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GUIDANCE ON 208 WAIVER CONSULTATIONS__________________________

I. INTRODUCTION

The criminal conflict of interest law at 18 U.S.C.§ 208 prohibits an employee from participating in anofficial capacity in a particular matter in which he has afinancial interest. The law is intended to beprophylactic, and its scope is quite broad. In order tomitigate the impact of section 208, Congress included twoprovisions that permit an agency to issue a waiver of theprohibition in individual cases. OGE already has publishedregulations for you to follow in issuing such waivers. See5 C.F.R. § 2640.301 et seq. This memorandum providesadditional guidance to consult when you are consideringwhether a waiver is warranted. The guidance is based onOGE’s experience in consulting with agencies on waivers,and on our experience in interpreting section 2081.

Under Executive Order 12674, agencies have theresponsibility of consulting "when practicable" with OGEprior to issuing a waiver under section 208. Moreover,agencies are required to send OGE copies of any waiversthey issue. However, the final decision of whether togrant a waiver is yours; OGE’s role is to advise you whatconsiderations should be weighed in reaching a decision,and to ensure that statutory requirements are met. Becausethe statute places the authority to grant waivers in the

1 This guidance is focused on the issues to consider before issuing a waiver under 18 U.S.C. § 208(b)(1) or (b)(3). It does not contain in depth interpretations of the prohibition in section 208(a). For additional information about OGE’s interpretation of 208(a), you should consult 5 C.F.R. § 2640, and the Preambles that accompanied our proposed publications of part 2640. See 60 Fed. Reg. 47207-47233 (September 11, 1995) and 60 Fed. Reg. 44705- 44709 (August 28, 1995). Additionally, you can find numerous OGE advisory opinions and DAEOgrams dealing with section 208 on OGE’s website(www.oge.gov). Opinions of the Office of Legal Counsel at the Department of Justice can be found at http://www.justice.gov/olc/opinions; over the years, OLC has also issued many opinions interpreting section 208.

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hands of agency officials, not OGE, our role is to provideadvice, and we do not concur in any waiver determinations.

It is important to remember that a waiver analysisusually requires the consideration of several competingfactors. In some cases, it may be clear that oneparticular factor is most significant. But often theanalysis is not that simple. You may be presented withseveral factors that seem to favor issuing the waiver, andone or two other factors that seem to weigh in the oppositedirection. In addition, appearance concerns can sometimesmilitate against issuing a waiver even where the statutorystandard arguably is met. Because each waiver is so fact-specific and the factors you are evaluating may besubjective, the decision to grant or deny a waiver can bedifficult. One way that OGE can help in this regard is toadvise you about waiver practices at other agencies.

It would be impossible for OGE to anticipate everyfactor and issue that might come up when you areconsidering granting a 208 waiver. Although this documentcovers several of the more common scenarios, at one time oranother you will probably confront situations differentfrom those described in this guidance. Nevertheless, wehope this guidance will help you proceed through the stepsof analyzing: (1) whether a waiver is necessary,(2) whether a waiver is warranted, (3) what is required foran effective waiver, (4) what factors to consider in youranalysis, and (5) what to include in a fully documentedwaiver.

You also should remember when using these guidelinesthat the discussion is limited to section 208. Even so,you should always take into account any applicable portionsof the Standards of Ethical Conduct for Employees of theExecutive Branch (5 C.F.R. part 2635). As stated in theNote in 5 C.F.R. § 2635.501(b): where an employee complieswith all the terms of a 208 waiver, the granting of awaiver will be deemed to constitute “a determination thatthe interest of the Government in the employee’sparticipation outweighs the concern that a reasonableperson may question the integrity of agency programs andoperations.” Thus, appearance concerns will always play animportant role in your decision about whether to go forwardwith a waiver. Also, a waiver issued under section 208will not eliminate any prohibitions that may apply becauseof an agency organic statute or other statutoryrestriction.

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Additionally, remember to take into account anysection 208 exemptions that already have been promulgatedby OGE at subpart B of 5 C.F.R. part 2640. Theseexemptions are self-executing, and will eliminate the needfor an individual waiver in many cases.

Finally, you sometimes may be considering a waiver foran employee who has already participated in a particularmatter in which he has a financial interest. As will bediscussed in the guidance, waivers may be issued only forprospective participation. In addition, in such cases youhave a responsibility to refer the matter to the Departmentof Justice or your Office of Inspector General inaccordance with 28 U.S.C. § 535. Where an employee hasalready participated in a particular matter in which he hasa financial interest, we strongly recommend that youdiscuss the situation with your IG or DOJ before issuing awaiver for any continuing participation.

II. PRELIMINARY MATTERS

Section 208 contains two provisions that permit waiverof the general prohibition at section 208(a) on anindividual basis. The two provisions are found at18 U.S.C. §§ 208(b)(1) and 208(b)(3); therefore, waiversissued under these provisions are commonly referred to as“208(b)(1) waivers” and “208(b)(3) waivers.” Theregulations implementing these statutory provisions arefound in subpart C of 5 C.F.R. § 2640. Each waiverprovision will be discussed individually in this guidance;however, there are several preliminary matters that applyto both types of 208 waivers, as addressed below.

Is a waiver really necessary?

Sometimes you may want to issue a 208 waiver just to“be on the safe side” or “in an abundance of caution” whenit is not clear that a waiver is necessary. Although thisapproach sometimes is warranted, remember that 208 waiversneed not be issued in situations where a regulatoryexemption clearly applies (see subpart B of 5 C.F.R.§ 2640), or where there is no real likelihood that theemployee will participate in particular matters that willhave a direct and predictable effect on his financialinterests. Or, if you believe section 208 is inapplicablebased on the facts, you might consider issuing an advisory

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opinion explaining how you concluded that section 208 doesnot bar the employee’s participation in the Governmentmatter.

So-called prophylactic waivers are used most commonlyin situations where the employee is involved in broadpolicy matters that may not be “particular matters” at all.In such a case, you may be concerned that the matter willevolve into a “particular matter” and the employee may notrecognize the distinction between a “matter” and a“particular matter.” In this situation, a waiver canprotect an employee from an inadvertent violation ofsection 208. The waiver document might specificallymention that the waiver would apply only in the event thata particular matter would be involved.

A prophylactic waiver also may be used where it is notentirely clear that a particular matter will have a “directand predictable effect” on the employee’s interest. Insome cases, the very fact that it is unclear that thematter will have such a direct and predictable effect canbe cited in support of determination that the financialinterest is not likely to affect the employee’s officialservices.

Can the employee recuse?

One of the first questions you should consider iswhether a recusal would resolve the conflict. If theemployee’s duties can easily be adjusted to avoid a waiver,the need for the waiver is more questionable. On the otherhand, there may be no reason to consider recusal if thefinancial interest is clearly insubstantial.

Is divestiture of the conflicting financial interest areasonable option?

Sometimes a waiver may be considered if circumstancesdemonstrate that the conflict cannot readily be resolvedthrough divestiture. This can occur, for example, when theconflicting assets are held in a trust or in a limitedpartnership. In such cases the employee sometimes has nocontrol over the investments in the trust or partnership.He may not be able to sell his partnership interest, or itwould be unreasonable to ask him to renounce his interestin the trust.

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Also, a waiver may be considered when an employee hasagreed to divest, but divestiture cannot be completedimmediately. For example, an employee may have accumulatednon-public corporate stock through the stock ownership planof a former employer that buys back its corporate sharesonly on a periodic basis. Or, immediate divestiture mightviolate insider trading laws. In such cases, a temporarywaiver may be a good solution, especially where limitationson the waiver can eliminate participation in obviouslyproblematic matters. The appropriate length of a temporarywaiver will depend on the circumstances, and OGE canprovide guidance based on experience in handling a varietyof situations.

What if OGE thinks the waiver is inappropriate?

Occasionally, OGE may disagree with an agency’sdecision to grant a waiver. This sometimes happens whenthe agency is giving weight to irrelevant factors, or isfailing to take important factors into consideration. Inother cases, OGE may simply disagree that the facts supporta conclusion that a waiver meets the statutory standard.OGE’s disagreement with an agency’s analysis does not meanthat the waiver is ineffective. However, you should beaware that OGE’s records will indicate that the agency wasadvised against issuing the waiver. Moreover, keep in mindthat OGE’s advice is based on its experience andfamiliarity with waivers issued by other agencies.Typically, agencies will want their waiver practices to bewithin the norm of practices in the executive branch.

Is an employee entitled to receive a waiver?

No. An employee does not have any entitlement to awaiver. The decision to issue a waiver is within thediscretion of the agency, based on its own practices andits analysis of all the relevant facts. Many agenciesrarely issue waivers and tend to rely more heavily onrequiring recusal, divestiture, or resignation.

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III. STATUTORY REQUIREMENTS FOR WAIVERS

Requirements common to all 208 waivers

Once a decision has been made that a waiver isnecessary, section 208 requires that the followingthree conditions be met for all 208 waivers. If theseconditions are not met, an employee acting in reliance onthe waiver risks violating section 208.

1. All waivers must be issued in writing by the personresponsible for the employee’s appointment or someoneto whom that authority has been delegated. In manyagencies, this authority is delegated to the DAEO.

2. All waivers must be issued before the employeeparticipates in a particular matter covered by thewaiver. Waivers cannot be issued for past conduct.

3. All waiver documents must make clear that the waiveris based on the applicable statutory standard. Notethat the waiver standard in 208(b)(1) is differentfrom the standard in 208(b)(3).

Additional Requirements for all 208(b)(1) waivers

Section 208(b)(1) contains the followingtwo additional requirements:

1. The employee must disclose the disqualifying financialinterest and the nature and circumstances of theparticular matter to the official with the authorityto grant the waiver. Failure to make full disclosureof all relevant information can jeopardize thevalidity of the waiver.

2. The waiver must be based on a written determinationthat the disqualifying financial interest is not sosubstantial as to be deemed likely to affect theintegrity of the employee’s services. Thisdetermination should be made without regard to theemployee’s good character.

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Additional Requirements for all 208(b)(3) waivers

Section 208(b)(3) contains the followingthree additional requirements:

1. The waiver must be for a special Government employee(SGE) who is serving on a committee established underthe Federal Advisory Committee Act (FACA). The issueof whether a committee member is an SGE or not isdiscussed in detail in OGE Informal Advisory Opinions82 x 22, 04 x 9, and 05 x 4. You should not issue awaiver if the committee member is a representativebecause 18 U.S.C. § 208 applies only to employees, andrepresentatives are not Government employees. Also,SGEs who are not members of a FACA advisory committeeare not eligible for a waiver under section 208(b)(3).

2. The waiver must be issued after a review of theindividual’s financial disclosure report.

3. The waiver must certify in writing that the need forthe employee’s services outweighs the potential for aconflict of interest.

IV. ADDITIONAL ELEMENTS THAT OGE STRONGLYRECOMMENDS BE INCLUDED IN ALL WAIVERS

Although not required by section 208, there areseveral vital elements of the 208 waiver determinationprocess that OGE recommends should be included in thewritten waiver. Excluding these considerations from thedocument will not make the waiver ineffective, but addingthem will make the waiver much more defensible. Further,OGE recognizes that some agencies include the analysis ofthese elements in a decision memorandum that accompaniesthe waiver:

1. Description of the Interest. An adequate descriptionof the interest involved should include not only thetype of interest (stock, mutual fund, outsideemployment, etc.), but also an approximation of thevalue of the interest (e.g., current market value ofstock or other investment holding, or annual salaryfrom outside employment).

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2. Description of the particular matter and theemployee’s role in the matter. Be sure to include anadequate description of the particular matters towhich the waiver applies and the employee’s role inthe matters. In other words, the waiver shouldexplain in enough detail the types of matters in whichthe employee is likely to participate that mightaffect the financial interest concerned, and thepotential effect those matters might have on therelevant financial interests. The specificity of suchinformation can vary greatly from waiver to waiver.It may be as broad as including any particular matteraffecting the financial interest or as limited asdescribing only a single particular matter. However,if the waiver will apply to all particular mattersunder an employee’s responsibility, you should includea reasonably detailed description of theseresponsibilities.

3. Limitations. If applicable, the waiver must includeany limitations on the employee’s ability to act inthe particular matters involved. This might includelimits on the particular matters to which the waiverapplies or limits on the work an employee isauthorized to do on a particular matter. For example,an employee may have a waiver that allowsparticipation in matters related to a particularcontract, but specifically excludes any contractnegotiations or formal evaluations. Another commonlimitation is that the employee may be prohibited fromworking on particular matters where a conflictingentity is a party, but may work on broader policymatters affecting the entity as part of a class orgroup. Also, a waiver can be time-limited, e.g.,until the disqualifying interest is divested.Limitations tailored to an individual’s specificcircumstances can demonstrate that your agency hasused its best efforts to address and resolve potentialconflicts.

4. Additional factors taken into consideration. Agenciesnormally take a variety of other factors intoconsideration when issuing either a (b)(1) or (b)(3)waiver. These factors are discussed in more detail inSections V and VI.

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V. FACTORS TO WEIGH IN MAKINGTHE SUBSTANTIALITY DETERMINATION

In determining whether a disqualifying financialinterest is sufficiently substantial to be deemed likely toaffect the integrity of the employee’s services to theGovernment, OGE regulations at 5 C.F.R. § 2640.301 et seq.implementing section 208(b)(1), provide that theresponsible official may consider the following factors:

1. The type of interest that is creating thedisqualification. Some types of interests are easierto waive than others. For example, it would be easierto waive an interest arising from ownership ofpublicly-traded stock than a financial interest in anew job an employee is seeking.

2. The identity of the person whose financial interest isinvolved; and if the interest is not the employee’s,the relationship of that person to the employee.There are situations where the employee may not have adirect financial interest in a matter, but has animputed interest in the matter. Where the imputedinterest is somewhat remote from the employee’s ownfinancial interest, a waiver may be easier to justify.In such cases, the interest may be less likely toaffect the integrity of the services the Governmentcould expect from the employee than if the employee=sown interests were affected. Some examples mightinclude:

A financial interest of a general partnerthat is held outside of the partnership andthat is not used as collateral for thepartnership.

A subsidiary of an employee’s outsideemployer that does work wholly unrelated tothe employee=s work for that company.

3. The dollar value of the potential gain or loss thatmay result from participation in the particularmatter. Although an important factor to consider, thevalue of the potential gain or loss often may be onlyan estimate. Furthermore, depending on the type ofinterest affected, it may be difficult to estimate.For example, it would be simpler to estimate the value

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of the potential gain that a decision to award a$1 million contract would have on a relatively smallcompany, compared to the impact of the same award on aFortune 500 company. Of course, the greater thepotential gain or loss, the more unlikely it is that awaiver can be justified.

4. The value of the financial instrument or holding fromwhich the disqualifying financial interest arises andits value in relationship to the individual’s assets.A factor weighing in favor of a 208 waiver might bethat the disqualifying financial interest is smallrelative to the value of the employee’s assets. Thisfactor is often relied upon in waivers for interestsin publicly-traded stock. For a further discussion ofthis subject, see the section Stocks beginning onp. 15.

If a financial interest meets most of the de minimisamounts in a regulatory exemption, an individual 208waiver may be easy to justify. An example of thismight be ownership of publicly traded common stockwith a value only $5,000 over the regulatory exemptionlimit allowed in 5 C.F.R. § 2640.202.

5. The nature and importance of the employee’s role inthe matter. Section 208 applies even in situationswhere the employee’s role in the particular matterdoes not directly affect his financial interest.Section 208 applies as long as the employeeparticipates personally and substantially in theoverall particular matter that affects his interest.However, the nature and extent of an employee’sparticipation in a particular matter, and how his ownparticipation could affect his financial interest, canbe relevant in determining whether a waiver isappropriate. Sometimes the employee’s role in thematter may have little or no effect on his financialinterest or the financial interest attributed to him.Examples include situations where an employee’s roleis relatively limited or where the employee’s workwill be subject to substantial review before anyaction is taken. On the other hand, where theemployee’s own participation will clearly affect hisfinancial interest, justifying a 208 waiver may bemore difficult.

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6. The sensitivity of the matter. This frequently is animportant consideration. Where the particular matteris very controversial or sensitive, the wisdom ofgranting a waiver can be questionable. Peopledissatisfied with whatever action the government takesmay point to the waived financial interest as evidencethat the ultimate decision was wrong or ethicallysuspect. (See also the discussion of appearanceconcerns under Miscellaneous Considerations onpage 26.)

7. The need for the employee’s services in the particularmatter. This consideration was discussed in thepreliminary section of this guidance, but it should berevisited once all the other factors have beenconsidered, especially if there is still concern thatthe justification for the waiver would be questioned.In some cases, an employee may be the only person witha certain needed expertise. Or an employee may havebeen working on the matter for some time before theconflict arose (for example, in the case of financialinterests acquired through a new marriage). Suchsituations may sometimes weigh in favor of a waiver.

8. Adjustments that may be made in the employee’s dutiesto address appearance concerns. For example, anemployee might be limited to giving advice about amatter rather than making a decision about thatmatter; or he might be allowed to participate inpolicy matters affecting an industry, but not a party-specific matter involving a particular entity.

VI. FACTORS TO WEIGH IN MAKING A DECISIONTO ISSUE A 208(B)(3) WAIVER

In general, because a 208(b)(3) waiver requires adetermination that the need for the employee’s servicesoutweighs the potential for a conflict of interest, thesubstantiality of the otherwise disqualifying financialinterest is not as important a factor as it is in a208(b)(1) waiver analysis. Therefore, a substantialityanalysis of the financial interest might be somewhat lessdetailed.

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Also, for 208(b)(3) waivers, make sure that you haveconsidered the exemption at 5 C.F.R. ' 2640.203(g), whichallows FACA committee members to give advice on certainparticular matters of general applicability affecting theirnon-Federal employers. If this exemption will not resolvea conflict that arises from a committee member’s non-Federal employment, a waiver may still be warranted.

Further, because 208(b)(3) waivers are applicable onlyto SGEs serving on FACA advisory committees, an importantpoint to remember when considering whether a waiver isjustified is that the services provided by a FACA committeemember are only advisory and many advisory committeemeetings are open to the public. Some agencies requirethat any bias a member may have due to his financialinterests be revealed and taken into consideration by thecommittee and the agency. Moreover, because a committeeconsists of several members providing advice, a consensusis usually required before any recommendation goes forward.

In determining whether the need for an individual’sservices on an advisory committee outweighs the potentialfor a conflict of interest created by the disqualifyingfinancial interest, the responsible official shouldconsider the factors enumerated below. Many of thesefactors are identical to the factors to be considered for208(b)(1) waivers, but may apply somewhat differently inthe advisory committee context:

1. The type of interest that is creating thedisqualification. It is not unusual for an SGEserving on a FACA advisory committee to have aconflict of interest arising from his non-Federalemployment. In fact, the employment relationship thatcreates the conflict may also be a justification forallowing the employee’s participation, i.e., hisexpertise gleaned from his outside employment.

2. The identity of the person whose financial interest isinvolved; and if the interest is not the employee’s,the relationship of that person to the employee.

This factor may be especially relevant whenconsidering a 208(b)(3) waiver because advisorycommittee members usually have board memberships oremployment outside the Federal Government.Considerations in such cases might include limitingparticipation in certain committee matters that are

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likely to specifically affect the member’s outsideaffiliations. Additionally, as mentioned previously,some agencies may have specific statutory authorityrequiring committee members to publicly discloseconflicts of interest. This public disclosure isthought by some to mitigate the potential for bias.

3. The uniqueness of the individual’s qualifications. Theimportance of the perspective or expertise the memberbrings to the committee may be the most importantfactor in justifying a waiver under section 208(b)(3).This factor often is relied on heavily when the SGEhas extremely specialized education or experience, orwhen there are a limited number of experts in acertain field.

4. The difficulty of locating a similarly qualifiedindividual without a disqualifying financial interestto serve on the committee. Even if a committeemember’s qualifications are not unique, the need forhis services still may outweigh the potential for aconflict if other qualified people would likely havethe same or similar conflict. This may not be anunusual situation, because often the people who arequalified to serve on an advisory committee have tiesto the entities that are most likely to be affectedby, or interested in, the particular matters that willcome before the committee.

5. The dollar value of the potential gain or loss thatmay result from participation in the particularmatter(s). (See previous discussion of this factor onpages 9-10.)

6. The value of the financial instrument or holding fromwhich the disqualifying financial interest arises andits value in relationship to the individual’s assets.(See previous discussion of this factor under onpage 10.)

7. The extent to which the disqualifying financialinterest will be affected individually or particularlyby the actions of the advisory committee. In somecases it may be appropriate to limit a 208(b)(3)waiver to matters of general applicability, especiallyif the committee rarely is involved in particularmatters involving specific parties. However, if it isanticipated that a committee will be advising on

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particular matters involving specific parties such asgrants and such a limitation would not be advisable,you should specifically address in the waiver whattypes of party-specific matters are covered and whythe need for the SGE’s participation in those mattersoutweighs any conflict concerns. Generally, it wouldbe hard to justify a waiver for an SGE to participatein a “party” matter specifically involving his non-Federal employer, such as consideration of a grantapplication submitted by his employer.

Further, because some policy matters can be targetedto, or affect, only a few organizations, some agenciesalso limit their 208(b)(3) waivers by excluding suchmatters from them. However, it is not always easy toknow whether a policy would have a special anddistinct effect on only a few organizations. If anagency wishes to limit its waiver in this way, youshould ensure that it is clear to the employee whattypes of policy matters are outside the scope of thewaiver.

Generally, agencies have been more flexible in issuingwaivers under 208(b)(3) than under 208(b)(1). One reasonfor this is that the 208(b)(3) waiver standard is easier tomeet. The other reason is that divestiture of conflictingassets and resignation from conflicting outside positionsmay not be practical alternatives for advisory committeemembers. It is unlikely that a FACA advisory committeemember would be willing to make substantial personalfinancial changes in order to serve on a committee thatmeets a few times a year.

And finally, remember that waivers for other SGEs whodo not serve on FACA committees are subject to the stricterstandard at section 208(b)(1). For a further discussion ofthis topic, see the last question on page 29.

VII. ISSUES RELATING TO SPECIFIC TYPESOF FINANCIAL INTERESTS

Conflicts of interest can arise from many differenttypes of interests. Most of the cases we see, however,involve financial instruments such as stocks and bonds, oroutside employment relationships and other outsidepositions. The following is a discussion of the mostcommon types of interests and relationships encountered.

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Stocks

Section 208 applies much more broadly to stockownership than simply to particular matters affecting thestock price itself. Because a stock interest is anownership interest in the company, section 208 prohibits anemployee from participating in particular matters that havean effect on the financial interests of an entity in whichhe (or anyone whose interests are imputed to him) ownsstock. Nevertheless, when considering a 208 waiver toresolve a conflict arising from the ownership of stock,both the value of the employee’s stock and his overallinvestment portfolio will be relevant considerations. Youranalysis should cover at least the following three areas:

The potential effect the particular matters wouldhave on the company;

The potential effect, if any, the particularmatters may have on the stock value; and

The relative value of the stock holding whencompared to the value of the employee’s entireinvestment portfolio.

As discussed in the section addressing 208(b)(1)waivers generally, if the value of publicly-traded stock isvery close to the regulatory exemption level, it mayrequire little additional analysis to justify a 208 waiver.In contrast, for very large holdings of stock, granting a208 waiver may create an appearance concern, even where thelikelihood of an effect on the value of that holdingappears remote, or even if the employee has othersubstantial holdings. And, as discussed previously, it maybe less problematic to issue a waiver for participation ina policy matter affecting an industry or other large groupof entities than it would be to issue a waiver toparticipate in a party-specific matter like a contract,litigation, or other matter involving only one or a smallnumber of entities.

However, generally it is the combination of variousfactors that will dictate whether a waiver is appropriate.For example, an employee who has significant holdings in alarge computer company may be able to receive a waiver toparticipate in the decision to buy a few computers fromthat company, because the effect on the company will be

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minimal. Conversely, it may be a bad idea for an employeewho owns a moderate amount of stock in a computer companyto participate in a decision to purchase a new multi-million dollar computer system from that company. In sucha case, the effect on the company would be moresubstantial, and a waiver would be harder to justify.

One rule of thumb that a few agencies have used whenstock interests are involved is that, if the value of thestock is less than 10% of the employee’s investmentinterests, a waiver may be appropriate.2 On the other hand,many other agencies use a significantly lower percentagevalue, more in the range of 1-5% of the employee’sinvestment portfolio. OGE’s view is that no particularpercentage is appropriate in all cases. Other factors,such as the likely affect of the Government matter on thevalue of the stock, or the nature of the employee’sparticipation, will affect your decision to issue thewaiver. OGE believes that agencies should not issuewaivers for stock on a pro forma basis without consideringall relevant factors.

In addition, a few agencies have compared the value ofthe disqualifying financial interest to the employee’stotal net worth. OGE believes that this comparisonsometimes could be misleading because it would include thevalue of an employee’s personal residence, which is often amajor component of net worth.

Stock that is not publicly traded presents a differentset of problems from stock in large, public companies. Thevalue of stock in a non-public company may be more likelyto be directly affected by a Government matter than thestock of a public company whose value is subject to thevagaries of the marketplace. Accordingly, waivers in suchcases should be evaluated very carefully. Moreover, theappearance concerns that arise in cases where the stock isnot publicly traded are likely to be greater than casesinvolving public companies.

2 This rule of thumb would never be appropriate to apply incases other than those involving publicly-traded stock.For example, it would not be appropriate to issue a waiverto allow an employee to award a Government contract to acompany he owns on the theory that the value of thecontract is less than 10% of his investment portfolio.

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Occasionally, OGE is asked to consult on a waiver fora class of stock other than common stock, e.g., preferredstock. Sometimes the attributes of these different classesof stock may make a waiver more or less desirable, so westrongly recommend that you consult with OGE beforeproceeding.

Finally, sometimes you may consider using a waiver forownership of a stock option. These waivers can posedifficult questions, partly because of the difficulty ofdetermining the true value of the option. Moreover, theissue can be even more complicated if the option is topurchase the stock in a non-public company. Waivers insuch cases may be difficult to justify.

Corporate financial obligations and other debts

In the case of bonds and similar debt obligations, theemployee=s financial interest is limited to whether thematter would affect the organization’s ability orwillingness to fulfill its financial obligations, or affectthe market value of the obligation (e.g., the bond).Therefore, the test for whether section 208 applies in thefirst place is not whether a particular matter will affectthe organization, but whether the matter is of suchmagnitude or importance to the organization that it wouldaffect its liquidity or financial stability, or wouldactually affect the marketability of its securities, orwould otherwise affect the organization’s willingness tofulfill its financial obligations. In the normalsituation, this might be a fairly high standard to meet.Typical interests that create these types of obligationsinclude:

defined benefit retirement plans promissory notes accounts receivable corporate or other bonds severance payment agreements installment payments

Of course, if the particular matter is truly one thatwould affect the organization’s ability or willingness tofulfill its financial obligations, or would affect themarketability of the securities held by the employee, the

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“substantiality” issue would need to be addressed. In caseswhere it is clear that the debtor’s ability to fulfill itsfinancial obligation to the employee would be impacted, itis unlikely that a waiver could be justified unless thegain or loss would be truly insubstantial. For example, ifan employee with investment interests valued at $20 millionowns corporate bonds valued at $20,000, it might bepossible to issue a waiver for participation in aparticular matter that would affect the market value of thebonds. (Also, note the exemption relating to employeebenefit plans found in 5 C.F.R. § 2640.201(c)).

Negotiating for employment

Two issues are important when analyzing conflictsarising from an employee’s outside employment negotiations.First, for purposes of section 208, the financial interestsof an entity with which an employee is negotiating foremployment are imputed to the employee. Therefore, theemployee is prohibited from participating in any particularmatter affecting the prospective employer’s financialinterests, not just matters affecting the employee’s ownspecific employment opportunity.

Second, for purposes of determining whether a waiveris justifiable, the employee’s interest in the outsideemployment opportunity must also be considered. Obviously,one major concern is that the employee might try toingratiate himself with his prospective employer by takinga favorable action on a particular matter.

Section 208 waivers allowing an employee toparticipate in particular matters affecting a prospectiveemployer should be issued only in compelling circumstances.Therefore, when such waivers are issued, OGE encourageS amuch more detailed explanation as to why the waiver isjustifiable. Examples might include a waiver toparticipate in an agency policy that is going to have avery limited potential effect on a small portion of thepotential employer’s business or where the effect would beclearly de minimus, such as participating in a smallpurchase order from a large public company. But generally,a waiver for participation in a matter in which theprospective employer is a party would almost always bedifficult to justify, as would a waiver for participationin a policy matter that would clearly harm or benefit the

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prospective employer. (For further guidance on thissubject, see DAEOgram DO-04-029 issued September 20, 2004.)

Further, it is not entirely clear how section 208would apply to a Federal employee who is negotiating foroutside employment as an independent contractor. See OGEInformal Advisory Letter 94 x 16. OGE advises that itwould be prudent for a Federal employee who wishes tonegotiate for outside employment as an independentcontractor to interpret section 208 as applicable in suchsituations. Accordingly, the employee would have to berecused from particular matters having a direct andpredictable effect on that entity, or seek a waiver. Thestandards for issuing such a waiver would be the same asdescribed above.

Finally, when considering a waiver for a Presidentialappointee negotiating for employment, you should make surethat your agency has consulted with the White HouseCounsel’s Office as required by the White House. SeeMemorandum for the Heads of Executive Departments andAgencies of January 6, 2004 from Andrew H. Card, Jr.(January 6, 2004).

Outside employment and positions as officer or director

When considering a 208 waiver for outside employmentor other non-Governmental positions, you should considertwo issues. First, for purposes of section 208, theemployee will have an imputed interest in the entirecompany or organization with which he is employed or holdsan outside position as officer, director, trustee orgeneral partner. Therefore, section 208 prohibits theemployee from participating in any particular matter thathas a direct and predictable effect on that entity.

If the effect on the entity is significant orsubstantial, a waiver would be hard to justify even if thematter does not affect the employee’s own position withthat organization. Moreover, in some cases, appearanceconcerns would militate against issuing a waiver. Forexample, a waiver that would allow an employee toparticipate in a regulatory policy matter affecting theindustry in which his outside employer is a member wouldusually be inappropriate.

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Second, it is important to consider the potentialeffect the particular matter will have on the employee’sown outside employment or position. For example, thematter may increase the likelihood that he will have acontinued position with the outside employer, or it mightincrease his expected income from the outside employment.It would be unlikely that you could justify a waiver if aparticular matter directly relates to the employee=s outsideposition.

It is important to note that section 208 applies whena Government employee also serves as an employee of anoutside entity, but not when he serves as a trueindependent contractor to the entity. Of course, 5 C.F.R.§ 2635.502 will apply in cases where an employee has anoutside consulting or contractor position, and wouldtypically require recusal from official matters affectingsomeone for whom the employee is a consultant orcontractor. If you are considering authorizing an employeeto participate in a Government matter affecting someone forwhom he is a consultant or contractor, you should followthe authorization procedures under 5 C.F.R. § 2635.502(d).But, as noted above, if the particular matter would affectthe employee’s consulting/contactor position, thensection 208 would apply and a waiver would be difficult tojustify.

Generally, if an employee has an outside employmentinterest in a state agency, 18 U.S.C. § 208 would prohibitthe employee from working on official matters having adirect and predictable effect only on that state agency,not the entire state or any other agencies of that state.If the employment interest is at a relatively high level ina state office, the prohibition might very well extend tothe entire state, including all its agencies. Waivers insuch cases might be difficult to justify.

Service on the board of directors of a non-Federal entityin an official capacity

The Office of Legal Counsel (OLC) at the Department ofJustice has concluded that the prohibition of section 208extends to a Federal employee’s service on the board ofdirectors of a non-Federal entity where such service isperformed in the employee’s official capacity. (See OLCopinion dated November 19, 1996, and subsequent DAEOgramDO-97-015, issued April 2, 1997.) Accordingly, unless an

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employee is serving in an ex officio capacity pursuant tostatutory authority or certain other factors are present,agencies generally must issue a 208(b)(1) waiver to permitthe employee to serve.

Waivers for these situations are often issued based onthe fact that the interests of the Government and the boardon which the employee will be serving are parallel, thusjustifying a determination that the disqualifying financialinterest, although arguably substantial, is not sosubstantial as to be deemed likely to affect the integrityof the services the Government may expect from theemployee. Such waivers also are justified by some agencieson the ground that the employee remains subject to agencysupervision on the outside board and may be directed toresign in the event of a real conflict between theinterests of the agency and the organization.

Nevertheless, you usually will want to limit what anemployee may do in carrying out his duties as a member ofthe board. For example, most agencies will not permit anemployee to fundraise for the non-Federal entity, or torequest Federal funds on the entity’s behalf. In addition,most agencies will not permit an employee to awardGovernment grants or contracts to an entity if he sits onthe entity’s board in an official capacity.

One common question that arises in this situation iswhether the employee who serves with the non-Federalorganization may solicit speakers from the Government for aconference or meeting sponsored by the organization. Someagencies limit this type of activity.

Also, be aware that some agencies do not, as a matterof practice, issue waivers for official service on outsideboards.

Spousal (or a minor child’s) employment

Unlike an employee’s own outside employmentrelationship, the financial interests of a spouse’s orminor child’s employer are not imputed to the employeeunder section 208. Rather, the disqualifying interest isthe employment interest of the spouse or minor child. Thiscould arise, for example, if an employee were toparticipate in a Government contract with his spouse’s

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employer, and the spouse’s job involved the very samecontract.

However, it also is important to keep in mind whenconsidering employment relationships of a spouse or minorchild that often other financial interests in the employeraccompany the employment, including stock ownership plans,compensation plans based on company profits, bonus plans,and various savings and/or pension plans. If suchfinancial interests exist, they should be addressedaccordingly, depending on the type of additional financialinterest involved.

Because employment interests are generally deemed tobe substantial financial interests, a 208 waiver allowingan employee to participate in an official matter affectingthe employment interest of his spouse or minor child wouldbe unlikely. A factor to consider might be whether thecompany has a practice of shifting employees from projectto project without adversely affecting their pay, orwhether a project is so large that the spouse’s role iscompletely divorced from the part of the project in whichthe employee would be involved.

Also, when a spouse or minor child has an ownershipinterest in a business or is a partner, remember that theinterests of the business will be treated as the interestsof the spouse. Accordingly, in such cases section 208 willapply to matters affecting the entire business, and anywaiver would have to address the interests of the business.(In particular, see the discussion of Law Firms, beginningon page 23.)

General Partnerships and Financial Interests of GeneralPartners

For purposes of section 208, the interests of anemployee’s general partner(s) are imputed to the employee.It is important to remember that the imputed financialinterests of any general partners cover not only theinterests in the general partnership, but also all of thegeneral partners’ financial interests of which the employeeis aware.

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There are two exemptions in 5 C.F.R. § 2640.202(f) forthe financial interests of general partners:

Publicly traded securities, long-term FederalGovernment securities, or municipal securitiesheld by a general partner, if those securitiesare not related to the partnership and the valuedoes not exceed $200,000; and

Any interest of a general partner, if theemployee’s relationship to the general partner isas a limited partner in a partnership that has atleast 100 limited partners.

When considering whether to issue a 208 waiver forother interests not covered by these exemptions, you shouldtake into account the identity of the general partner. Forexample, a waiver where the general partner is a largeorganization may be easier to justify than one for theinterests of an individual, especially if the individual isa close personal friend, relative, or business associate ofthe employee.

Law Firms

When an employee is severing his partnership in a lawfirm, several additional issues should be considered inrelation to the law firm and the other general partners.These typically include continuing investment or realestate partnerships with other partners of the firm and theseverance package the employee may receive from the firm.A former law firm partner may retain several partnershiprelationships with partners of the firm other than the firmpartnership itself. Retaining such interests can betroublesome, because the employee would still have arecusal obligation in connection with matters affecting thefirm’s partners. Among other things, the partners of a lawfirm will have a financial interest in any particularmatter in which the firm is providing representation. Whenconsidering a 208 waiver for such circumstances, a waiverfor particular matters affecting the financial interests ofthe general partners may be justified if the Governmentmatter involves the law firm’s representation of a client.If the matter actually affects the real estate orinvestment partnership, a waiver would be much moredifficult to justify.

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Where a severance package is concerned, section 208would prohibit an employee from participating in a matterthat would affect the firm’s ability or willingness to paymoney it owes him. Waivers in such cases would be hard tojustify.

Considerations in addition to those included in theprevious discussion of Spousal Employment arise when anemployee’s spouse is a partner in a law firm. If thespouse’s partnership share is based on all the firm’sbillings, any matter affecting the firm’s financialinterest will also affect the spouse’s interests. If thespouse is personally involved in a particular matter, it iseasier to see that his/her financial interests would likelybe affected by the particular matter and a waiver would beunlikely.

In situations where the spouse is completelyuninvolved in the particular matter under consideration atyour agency, a waiver might be considered. In a large firmwith many partners, it may be possible to conclude that onerelatively small case would only have a de minimus effecton the spouse’s partnership share. On the other hand, in asmall firm with only a few partners, most of the firm’scases will likely have a more substantial impact on thespouse’s interest and thus a waiver would be unlikely.

In cases where a firm has frequent business before theemployee’s agency, a waiver would normally be hard tojustify. Sometimes in these cases, the spouse becomes asalaried employee of the firm. In other cases, the firmmay take steps to exclude income from matters before theemployee’s agency when calculating the spouse’s partnershipshare.

If an employee’s spouse is employed by a law firm asan associate rather than as a partner, the discussionrelating to general spousal employment beginning on page 22will be applicable. In other words, only a particularmatter that would have a direct and predictable effect onthe spouse’s position with the firm would be a conflict ofinterest for purposes of section 208, unless the spouse hadother financial interests in the firm that may be directlytied to the overall profit of the firm, such as a bonusplan. Further, as stated previously, a 208 waiver allowingan employee to participate in an official matter affectingthe employment interest of a spouse is rarely justifiable.

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Limited Partnerships and Trusts

When considering a waiver for interests held in alimited partnership, the most important factor to considerwould be the overall effect the particular matter will haveon the partnership and the employee’s financial interest inthe partnership. Although for purposes of section 208,the interests of an employee’s limited partners are notimputed to the employee, the financial interests of thelimited partnership’s general partner are. Therefore, thefinancial interests of the general partner should betreated as discussed in the previous section entitledGeneral Partnerships and Financial Interests of GeneralPartners, beginning on page 22.

Similarly, an employee has a financial interest in theunderlying holdings of a trust for which he serves as atrustee, or in which he has a vested beneficial interest.(See DAEOgram DO-01-029, December 19, 2001.) Whenconsidering a 208 waiver for particular matters affectingthe underlying holdings of a trust for which the employeeis a trustee, one factor to consider might be that theemployee has no beneficial interest in the trust’sholdings, assuming he receives no payment based on theperformance of the trust’s portfolio. Nevertheless,appearance considerations might counsel against issuing awaiver in such a case if the particular matter will clearlyaffect trust assets.

Where the employee does have a vested beneficialinterest in the trust, a waiver should consider the overalleffect the particular matter will have on the employee’sfinancial interest in the trust assets. Where the trusthas been established by another individual, sometimes awaiver is the only practical way that a conflict ofinterest can be resolved. Nevertheless, the appropriatestatutory standard for a waiver must still be met. Formore on this topic, see the discussion on page 4, Isdivestiture of the conflicting financial interest areasonable option?

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VIII. MISCELLANEOUS CONSIDERATIONS IN DECIDING WHETHERA 208 WAIVER MAY BE APPROPRIATE

What effect will a change in the value of the holding haveon the waiver?

When basing a waiver on the value of a holding, youshould insure that the waiver will remain effective even ifthe value of the asset changes, as it almost inevitablywill, for example, through appreciation or dividendreinvestment. There are several approaches to this. Someagencies simply give the waiver for ”your holdings in X,”without specifying any limits. This is probably the mostcommon approach, but it could be subject to abuse, forexample, if the employee goes out and acquiressubstantially more stock, or if the value of the holdingotherwise increases.

Other agencies put parameters on the waiver, such aslimiting its validity to a maximum value or percentage ofthe employee=s net worth or total investments. Anotheralternative is to limit the waiver to the employee=s currentholdings plus any appreciation and reinvested income.

What if the disqualifying financial interest is held aspart of a larger investment?

Where a financial holding is held by a limitedpartnership or other form of a pooled investment fund, thefocus of the waiver determination is on the employee=s shareof the conflicting asset rather than on the value of histotal holdings in the fund. For example, if an employeeheld $1 million of Sector Fund X, and 6% of the fund wasinvested in conflicting stock, the value of the interestcreating the conflict would be 6% of the total $1 million,or $60,000.

A factor in favor of issuing a 208 waiver forfinancial holdings like this is the difficulty the employeemay have in divesting the asset creating the conflict. Forexample, in situations where the financial interest is heldwith other investors in a larger pool, it may be difficultfor the fund’s manager to simply divest the item creatingthe conflict, or it may not be realistic to expect themanager to divest. Also see the discussion of divestitureon page 4.

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What if a particular matter will affect only a subsidiaryof a larger corporation in which the employee has afinancial interest?

If an employee holds stock in a parent company thatowns a subsidiary, a waiver to participate in a particularmatter affecting the subsidiary may be appropriate if thesubsidiary accounts for a small percentage of the parent’sbusiness. On the other hand, if the subsidiary accountsfor a substantial portion of the parent’s business, awaiver would be harder to justify.

If an employee owns stock in the subsidiary, and he isexpected to work on a matter involving the parent company,whether the interests of the parent company should betreated the same as those of the subsidiary will depend onthe facts of the specific situation. For example, if theparent company’s activities are closely tied to those ofthe subsidiary, then it would be reasonable to concludethat particular matters having a direct and predictableaffect on the parent company would also have a direct andpredictable affect on the subsidiary. Another factor totake into account might be whether the subsidiary is awholly-owned, majority-owned, or minority-owned subsidiaryof the parent. If it is unclear whether participation inmatters affecting the parent company would also affect itssubsidiary, it might be prudent to consider a waiver out ofan abundance of caution. In any case, in evaluatingwhether a waiver would be appropriate, you should focus onthe impact the matter is expected to have on the entity inwhich the employee owns stock.

Are the interests of the Government and the conflictingentity adverse?

Sometimes agencies ask whether it is relevant if theinterests of the Government and the entity in which theemployee has a disqualifying financial interest areadversarial or parallel. Where the interest of theGovernment and the entity are parallel, in unusual cases itmay be appropriate to take this into account. For example,this is often the justification for an employee to sit onthe board of directors of an organization in his or herofficial capacity. (See previous discussion entitledService on the board of directors of a non-Federal entityin one’s official capacity beginning on page 20.)

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On the other hand, we generally reject the argumentthat the interests of a Government contractor are the sameas those of the Government, because how a Governmentcontract is performed can create ample opportunity foradversarial or conflicting positions. And where theinterests of the Government and the outside entity areclearly adverse (e.g. litigation, investigations, oraudits) appearance concerns would militate against issuinga waiver.

Once a 208 waiver is issued, should you make a separate“appearance” determination under 5 C.F.R. ' 2635.502?

As mentioned in the Introduction to this guidance, anote to 5 C.F.R. ' 2635.501 provides that when an employeeacts in accordance with a statutory waiver, the waiver willalso constitute a determination under section 2635.502 thatthe interest of the Government in the employee’sparticipation outweighs the concern that a reasonableperson may question the integrity of agency programs andoperations. Therefore, you should not issue a waiver ifyou believe there are insurmountable appearance problems.Once a waiver is issued, however, you do not need to make aseparate “appearance” determination under section 2635.502.For example, it would be inadvisable to issue a 208 waiverto a Government employee assigned to investigate a companyin which he holds stock valued at slightly above theregulatory exemption threshold, even though the value ofhis entire investment portfolio is $300,000, if doing sowould place the integrity of the investigation intoquestion.

May you issue “blanket” waivers to groups of employeesinvolved in the same particular matter?

OGE believes that so-called “blanket” waivers areinappropriate. Section 208 is a criminal statute thatapplies to employees individually, based on their specificconflicting financial interests. Sections 208(b)(1) and(b)(3) both require that the official issuing the waiverconsider the circumstances of the employee’s particularsituation. For example, section (b)(1) requires theemployee to make full disclosure of his financial interestand receive an advance written determination that thefinancial interest is “not so substantial.” Similarly,section (b)(3) requires the waiving official to review the

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employee’s financial disclosure report to determine if theGovernment’s need for the employee’s services outweighs theconflict. It is very rare that multiple employees willhave identical financial interests in a matter such thatone waiver will suffice for all employees involved. And inany event, each individual employee who receives a waivermust have a written document addressed to him that containsthe appropriate statutory determination.

Should you use “templates” for the waivers you issue?

Using templates that recite the basic provisions ofsection 208 certainly is acceptable. However, because thewisdom of granting a waiver will vary in each individualcase based on the facts, the pro forma use of one templatefor a certain type of waiver (e.g., one for interests instock, or one for interests in a trust) generally is notworkable. For example, an agency would not normally issueidentical waivers for any employee who owns stock in acompany affected by regulations the agency is developing.The affect of the particular regulation on the company, theemployee’s role in the matter, and other similar factorsmay dictate whether a waiver is appropriate in a particularcase, and these various factors would normally be discussedin the waiver. In other words, while standard waiverlanguage may be appropriate, waivers still should reflectindividualized consideration of the facts of each case.

May you apply a more relaxed standard for waivers forSpecial Government Employees (SGEs)?

Section 208(a) applies to SGEs to the same extent thatit applies to regular, full-time employees. As discussedearlier, waivers issued to SGE members of Federal AdvisoryCommittees must comply with the standard set forth in18 U.S.C. § 208(b)(3), which tends to be somewhat easier tomeet than the standard in section 208(b)(1). For otherSGEs, not serving on FACA advisory committees, however, theapplicable standard is in section (b)(1), i.e., that thefinancial interest “is not so substantial as to be deemedlikely to affect the integrity” of the employee’s services.If the employee is a temporary expert or consultant, orpart-time member of a Federal commission, a waiver of theprohibition in section 208(a) must be able to meet the “notso substantial” standard.

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Sometimes agencies tend to be somewhat more flexiblein how they interpret the (b)(1) standard for SGEs,particularly as to interests in trusts and partnerships andsimilar investment vehicles. Also, because many temporaryexperts or consultants have purely advisory, rather thandecisionmaking authority, a waiver might be justified morereadily based on their limited role and lack of unrevieweddiscretion. Nevertheless, OGE recommends that you becautious particularly in issuing waivers for SGEs in caseswhere the Government matter at issue would clearly affectthe SGE’s non-Governmental employer, his spouse’semployment, and outside organizations he serves as officer,director or trustee. In many of these situations, there isno legal justification for issuing a waiver to an SGE thatwould not be issued to a regular employee.