Resolution to Informal Dispute on Proof of Divestiture of Prohibited Holdings

NTEU informally resolved a dispute on whether the FDA Ethics Office could require bargaining unit employees (BUEs) to submit a sales receipt proving the divestiture of prohibited holdings.

United States of Government Ethics (OGE) sealAccording to the Agency, an Office of Government Ethics (OGE) regulation, 5 C.F.R. § 2634.804(b)(2), requires written notification that the divestiture has occurred. OGE has indicated that a written statement that an item has been sold, or a copy of a sale document, is sufficient evidence per OGE designated official (DO) memorandum DO-09-015. Where a BUE has filed an HHS 717-2, provided Part V of the form (page 5) is fully completed and signed by the employee in question, that would be sufficient to satisfy this requirement.

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NTEU’s interpretation of 5 C.F.R. § 2634.804(b)(2) is that it only requires written notification that the divestiture or resignation has occurred. The DO memorandum (DO-09-015) cited above provides procedures and required evidence of compliance for ethic agreements for political-appointed staff whose positions required the advice and consent of the Senate. As a result, the memorandum’s language is not applicable to any FDA BUE. Even if it was applicable, it states that the type of evidence required is, “A written statement that the item has been sold, along with the sale date, or a copy of the sale document.” Thus, a copy of the sale document wouldn’t even be required under the referenced memorandum; it is optional.

In light of the above, it is NTEU’s position that a completed and certified HHS 717-2 form is sufficient to satisfy the written notification requirement under 5 C.F.R. § 2634.804(b)(2). As such, the Agency cannot require additional documentation without proper notification of such a policy to NTEU under Article 3 of the CBA.

Food and Drug Administration (FDA) logoFDA Ethics Officer Asim Akbari agreed that FDA BUEs cannot be required to provide documentation that they have divested a prohibited holding when notified by the FDA Ethics Office. Mr. Akbari informed his staff that documentation is not required. Mr. Akbari clarified that BUEs are asked to sign page 5, part V, “Compliance,” on HHS form 717-2 to certify the divestiture, the date the divestiture was completed, and describe the steps that the employee has taken to fulfill the divestiture obligation, for example, sale, liquidation, or other transfer that terminated their personal and imputed interest in each identified interest.

Skeptical baby, This dispute originated from a BUE complaint who was ordered to submit a sales receipt to prove divestiture of prohibited holdings. Mr. Akbari was copied in the order, and he did not object to it. NTEU, however, challenged the order immediately. Sadly, delays in Agency response to NTEU’s dispute, and the Agency’s tight deadline given to the BUE to produce a sales receipt, resulted in the BUE complying with the order, providing the sales receipt.

I am sharing this information with you to ensure that you know your rights and responsibilities in such circumstances. Also, to remind you that NTEU has your back.

I welcome your questions and comments on this subject.