designation through the Department's grievance procedures.

$0.735-304 Reporting and review requirements.

(a) Confidential statements of employment and financial interest and supplementary statements:

(1) Shall be submitted on forms prescribed by the Department Counselor;

(2) Shall contain information required by the Department Counselor regarding the employment background and financial interests of the employee, the employee's spouse and family members, and

(3) Shall be submitted at the times and places designated by the Department Counselor.

(b) Notwithstanding paragraph (a) of this section, the Department Counselor shall not require reporting of information relating to the interests of an employee, or his or her spouse and family members, in professional associations or charitable, religious, social, fraternal, recreational, public service, civic, or political organizations or similar organizations not conducted as business enterprises.

(c) The appropriate Deputy Counselor shall review and retain employees' statements and shall advise employees as to corrective action if necessary.

$0.735-305 Confidentiality of employees' statements.

To insure the confidentiality of statements filed under § 0.735-302, the appropriate Deputy Counselors shall not allow access to, or allow information to be disclosed from, statements except as the Office of Personnel Management or the Department Counselor may determine for good cause shown.

Subpart D-Conduct and Responsibilities of Special Government Employees

€ 0.735-401 Applicable provisions.

(a) Every special Government employee is subject to the provisions of §§ 0.735-101 through 0.735–106, 0.735– 201, 0.735-202, 0.735-204(d), 0.735-205 through 0.735-210.

(b) Every special Government employee should become familiar with the statutes listed at § 0.735.212.

§ 0.735-402 Outside employment, activities and financial interests.

(a) Special Government employees may not engage in outside employment and activities or have financial interests that conflict with the responsibilities and duties of Federal employment. However, because special Government employees usually are employed outside the Department, they may engage in employment or activities prohibited other Federal employees under § 0.735-203 when there is no actual conflict of interest. Special Government employees may also have financial interests prohibited other Federal employees under § 0.735204(a)(1) through (a)(5) when there is no actual conflict of interest.

(b) Notwithstanding the provisions of paragraph (a) of this section, a special Government employee may not directly or indirectly seek or receive compensation for services rendered by himself, herself or others in connection with any proceeding, application, request for ruling, contract, claim or other particular matter in which the United States is a party or has a direct and substantial interest and:

(1) Which is before any Federal or District of Columbia department or agency and in which he or she participated personally and substantially for the Government, or

(2) Which is pending before the Department, provided that a special Government employee who has served in the Department no more than 60 days in the previous 365 days shall be bound only as to a matter in which he or she participated personally and substantially (18 U.S.C. 203).

(c) Notwithstanding the provisions of paragraph (a) of this section, a special Government employee may not act, with or without compensation, as an agent or attorney for another in prosecuting a claim against the United States, or in connection with any proceeding, application, request for ruling, contract or other particular matter in which the United States is a

party or has a direct and substantial interest, and

(1) Which is before any Federal or District of Columbia department, agency or court and in which he or she participated personally and substantially for the Government, or

(2) Which is pending before the Department, provided that this clause shall not apply in the case of a special Government employee who has served in the Department no more than 60 days in the previous 365 days (18 U.S.C. 205).

(d) Permissible exceptions to the prohibitions set forth in paragraphs (b) and (c) of this section include:

(1) Representation without compensation in connection with a disciplinary, loyalty, or personnel proceeding;

(2) Representation with or without compensation of parents, spouse, child, and those to whom the employee owes a fiduciary duty except in those matters in which the employee has participated personally and substantially as a Government employee or which are the subject of his official responsibility; and

(3) Statements required to be made under penalty for perjury or contempt.

(e) A special Government employee seeking to engage in one of the excepted activities should consult in advance with a Deputy Counselor.

(f) The Secretary may allow a special Government employee to represent his or her regular employer or another person or organization before the Department in the performance of work under a grant or a contract. The Secretary must first certify in the FEDERAL REGISTER that such representation is in the national interest. (18 U.S.C. 205).

(g) The prohibitions set forth in paragraphs (b) and (c) of this section are in addition to any other restrictions contained in this subpart and do not permit any activities which are otherwise prohibited.

8 0.735-403 Political activities.

Special Government employees are bound by the political activity restrictions cited in § 0.735-211. Such restrictions also apply to a special Government employee engaged on an irregu

lar or occasional basis, but only on days in which service is rendered and then for the entire 24 hours of such service day.

§ 0.735-404 Financial reporting.

(a) Special Government employees who will work more than 60 days in a calendar year must submit public financial disclosure reports in accordance with the provisions of title II of the Ethics in Government Act of 1978 when their rate of pay is equal to or greater than the basic rate for GS-16, Step 1. Such employees are covered by the reporting requirements at 5 CFR part 734.

(b) All special Government employees not required to file under paragraph (a) of this section shall submit Confidential Statements of Employment and Financial Interests and supplementary statements to the appropriate Deputy Counselor for review and custody.

(c) The provisions of §§ 0.735-304 and 0.735-305 are applicable to a special Government employee who is required to file a statement under paragraph (b) of this section.

§ 0.735-405 Post employment restrictions.

All special Government employees are bound by the restrictions concerning post employment set forth in § 0.735-501 (a) and (b) and are subject to the provisions regarding disciplinary proceedings set forth in subpart E. However, the restrictions set forth in § 0.735-501 (c) and (d) apply only to special Government employees who serve as Senior Employees, as defined in 5 CFR 737.3(a)(6), over sixty days in any calendar year. The exception to the post employment restrictions set forth in § 0.735-501(f) for former employees employed by an Indian tribe also apply to former special Government employees.

Subpart E-Conduct and Responsibilities of Former Employees

8 0.735-501 Prohibited activities by former employees.

(a) No former employee, after terminating Government employment, shall knowingly act as agent or attorney for,

or otherwise represent another in any formal or informal appearance before, or with the intent to influence, make any oral or written communication on behalf of another to, any agency, employee or court of the United States or the District of Columbia, in connection with any particular Government matter involving a specific party, in which matter such employee participated personally and substantially as a Department employee.

(b) No former employee, within two years after terminating employment by the United States, shall knowingly act as agent or attorney for, or otherwise represent another in any formal or informal appearance before, or with the intent to influence, make any oral or written communication on behalf of another to, any agency, employee or court of the United States or the District of Columbia, in connection with any particular Government matter involving a specific party, if such matter was actually pending under the employee's official responsibility as an officer or employee within a period of one year prior to the termination of such responsibility.

(c) No former Senior Employee, as defined in 5 CFR 737.3(a)(6), within two years after terminating employment by the United States, shall knowingly represent or aid, counsel, advise, consult, or assist in representing another by personal presence at any formal or informal appearance before any agency, employee or court of the United States or the District of Columbia, in connection with any particular Government matter involving a specific party, in which matter he or she participated personally and substantially.

(d) For a period of one year after terminating employment by the United States, no former Senior Employee shall knowingly act as an agent or attorney for, or otherwise represent, anyone in a formal or informal appearance before, or with the intent to influence, make any written or oral communication on behalf of anyone, to the Department or any of its officers or employees, in connection with any particular Government matter, whether or not involving a specific party, which is pending before the De

partment, or in which it has a direct and substantial interest.

(e) The prohibitions set forth in paragraphs (a) through (d) of this section will be applied in accordance with regulations of the Office of Government Ethics as set forth in 5 CFR part 737.

(f) The prohibitions in paragraphs (a) through (d) of this section do not bar a former employee employed by an Indian tribe from representing the tribe in connection with any matter pending before any Federal department, agency, court or commission. However, a former employee who intends to engage in representational activities must advise the head of the department, agency, court, or commission, in writing, of any personal and substantial involvement he or she may have had as a federal employee in the matter (25 U.S.C. 450i(f)).

§ 0.735-502 Disciplinary action.

(a) Disciplinary action may be taken against any former Department employee or special Government employee (hereafter referred to as former employee) found under this subpart to have violated the post employment restrictions set forth in §§ 0.735-405 and 0.735-501 of this part.

(b) The Department Counselor or a Deputy Counselor may initiate disciplinary proceedings. For purposes of this subpart, such an official is referred to as an Initiating Official.

(c) Disciplinary action may consist of:

(1) Prohibiting the former employee from making, on behalf of another, except the United States, any informal or formal appearance before, or with the intent to influence, any oral or written communication to the Department, on any matter of business for a period not to exceed five years. This prohibition may be accomplished by directing Department personnel to refuse to participate in any such appearance or to accept any such communication; or

(2) Other appropriate disciplinary actions, including but not limited to:

(i) Prohibiting, for a definite period of not more than five years, the former employee from any representa

tional activity in connection with a specific office in the Department, or with a specific matter, in which the employee had an interest;

(ii) Issuing a letter of warning to the former employee.

§ 0.735-503 Initiating disciplinary proceedings.

(a) The Initiating Official, upon receiving information indicating grounds for disciplinary action, shall request that the Office of the Inspector General conduct an investigation and report all relevant investigative findings back to the Initiating Official.

(b) The Inspector General shall coordinate all investigations under this subpart with the Department of Justice as appropriate.

(c) All investigations under this subpart shall be conducted in a manner which protects the privacy of former employees. To the extent possible, information received as a result of the Inspector General's investigation shall remain confidential except as necessary to carry out the purposes of this subpart.

(d) After the Inspector General reports the facts of the investigation to the Initiating Official, the Initiating Official shall determine either:

(1) That there is reasonable cause to believe that a violation has occurred, in which event the Initiating Official shall expeditiously provide all relevant information, along with any comments or agency regulations, to the Director

of the Office of Government Ethics

(OGE); in addition, the Initiating Official shall commence disciplinary action against the former employee by serving notice in accordance with § 0.735-504; or

(2) That there is no reasonable basis for believing that a violation has occurred, in which event the Initiating Official shall advise the former employee and the Inspector General's office of that determination.

(e) In the event disciplinary action is initiated, the Department Counselor shall promptly appoint an impartial hearing officer who shall be a member of the HUD Board of Contract Appeals or an Administrative Law Judge. The hearing officer shall not have par

ticipated in any manner in the decision to initiate disciplinary action. § 0.735-504 Notice.

(a) The Initiating Official shall notify the former employee of the proposed disciplinary action in writing, by registered or certified mail, return receipt requested, or by any other means which gives actual notice or is reasonably calculated to give actual notice. (b) The Notice shall include:

(1) A statement of allegations and the basis thereof sufficiently detailed to enable the former employee to prepare an adequate defense;

(2) A statement that the former employee is entitled to a hearing with a right to counsel if he or she requests a hearing within 15 days after receiving the notice;

(3) A statement explaining the method by which a hearing may be requested including the name, business address, and telephone number of the person to be contacted if there are further questions;

(4) A statement explaining the right to submit documentary evidence and a report to the hearing officer if a hearing is not requested and the method by which evidence may be submitted; and

(5) The disciplinary action proposed. § 0.735-505 Hearings.

(a) Formal rules of evidence and procedure applicable to a proceeding in a court of law will not be applied. Parties may object to clearly irrelevant material, but technical objections to testimony as used in a court of law will not be sustained.

(b) A former employee, against whom disciplinary action is proposed, is entitled to a hearing upon a written request submitted to the hearing offlcer within 15 days after the former employee receives notice as set forth in 0.735-504. If no timely request is made, the hearing officer may proceed under § 0.735-506 to make a decision without a hearing.

(c) An attorney from the Department's legal staff shall represent the Department in the matter.

(d) The hearing shall be conducted at a reasonable time, date, and place as set by the hearing officer.

(1) In setting a hearing date, the hearing officer shall give due regard to the former employee's need for adequate time to prepare a defense and to an expeditious resolution of allegations that may be damaging to the former employee's reputation.

(2) Notice of the time, date, and place of such hearing shall be transmitted in writing to all interested parties by the hearing officer and shall include a statement indicating the nature of the proceedings and their purpose.

(e) At a hearing, the former employee shall have the right to:

(1) Represent himself or herself or be represented by counsel;

(2) Introduce and examine witnesses and submit relevant evidence;

(3) Confront and cross-examine adverse witnesses;

(4) Present oral argument; and (5) Receive a transcript or recording of the proceedings, upon request.

(f) In a hearing, the Department has the burden of proof and must establish substantial evidence of a violation.

(g) The hearing officer shall make a determination based exclusively on matters of record in the proceeding and shall set forth in the decision all findings of fact and conclusions of law relevant to the matters at issue.

$0.735-506 Decision without a hearing.

(a) If no hearing is requested under § 0.735-505(b), the hearing officer shall make a decision on the basis of evidence submitted under paragraph (b) of this section. The proposed disciplinary action shall be sustained upon a showing, by substantial evidence, of cause as specified in 0.735-502. Notice shall be provided to all interested parties stating the findings of fact and conclusions of law, the sanctions to be imposed if a violation has been found, and the procedure for filing an appeal to the Secretary.

(b) If no hearing is requested, the former employee and the Initiating Official may submit relevant information and reports on their behalf to the hearing officer. In making a decision the hearing officer shall consider all

evidence and reports received prior to the decision.

§ 0.735-507 Appeals.

(a) The former employee may appeal the hearing officer's decision finding a violation of the post-employment restrictions, as set forth in §§ 0.735-405 and 0.735-501 of this part, to the Secretary by making a written request within 20 days of the decision.

(b) Upon receiving an appeal, the Secretary or his or her designee shall review the decision of the hearing officer. The decision of the Secretary or designee shall be based solely on:

(1) The record of the proceedings if there has been a hearing;

(2) The record upon which the hearing officer made his or her decision if there has not been a hearing; or

(3) Those portions of the record cited by the parties to limit the issues.

(c) If the decision of the hearing officer is modified or reversed, the decision by the Secretary or designee shall state any findings of fact or conclusions of law which differ from the findings or conclusions of the hearing officer.

§ 0.735-508 Sanctions.

Disciplinary action may be imposed by the hearing officer if there was no appeal, or by the Secretary or his or her designee if there was an appeal, against a former government employee found to have violated the post-employment restrictions set forth in §§ 0.735-405 and 0.735-501 of this part. The sanctions shall not exceed those proposed by the Initiating Official in the notice which initiated the disciplinary action against the former employee.

8 0.735-509 Judicial review.

Any person found to have violated the post-employment restrictions set forth in §§ 0.735-405 and 0.735-501 of this part, may seek judicial review of the Department's final administrative determination.