USDA Ethics

ETHICS REVIEW OF EMPLOYEE FARMING INTERESTS:
An Employee Guide

I. Executive Branch Public Financial Disclosure Report, SF 278 II. Ethics Analysis

III. Additional Restriction for Certain Non-Career Senior Executive Schedule (SES) Employees

IV. Secretary and Other Presidential Appointees Requiring Senate Confirmation (PAS) Outside Earned Income Limitation
Numerous employees at the U.S. Department of Agriculture (USDA) have farming interests. For the most part, farming poses no problem. However, when these employees are appointed to positions of authority, a careful review of their farming activities should be made. This review is generally accomplished through the financial disclosure process.

Below are the reporting elements of the SF 278, Executive Branch Public Financial Disclosure Report, followed by the analytical considerations for an ethics advisor. They serve here as a checklist for public filers. Confidential filers, who have farming interests, may also use this material as a guide for the completion of the OGE-450, Executive Branch Confidential Financial Disclosure Report. While the reporting elements of the OGE-450 are not as extensive as those of the SF 278, they cover the same subject matter. Respective “Parts” of the OGE-450 are indicated within parentheses below.

I. Executive Branch Public Financial Disclosure Report, SF 278

Schedule A

Block A: Assets and Income. (Part I of the OGE-450)

Report the following:

  • Name under which the farm does business (if incorporated, so indicate);
  • Location of the farm (city/county and state);
  • Type and percentage of interest you have in the farm, such as a limited partner, general partner, sole owner, or corporate shareholder;
  • Identification of and relationship to other owners; and
  • Business of the farm, such as corn or livestock.

Note: Exact acreage or bushels of a particular crop or number of livestock are not required.

Block B: Valuation of Assets. (Not reportable on the OGE-450)

Report the aggregate market value of assets listed in Block A. If you are a:

  • Limited partner or investor - report the value of all shares held; or
  • Sole owner or general partner - report the value of the land, crops (standing or in storage), livestock, farm equipment, buildings, etc.

Block C: Income Type/Amount. (Part I of the OGE-450, report income type only. OGE-450 filers do not report amount of income.)

Report the type and amount of income from the farm and all related assets. If you are a:

  • Sole Proprietor - report the type of income (i.e., crop sales) in the column titled, “Other,” and the amount of income under the column titled, “Actual Amount.”
  • General Partner - follow the format for a sole proprietor above, however, report the type of income as a “partnership distribution.”
  • Limited Partner/Corporate Shareholder - check the type of income and category of amount of income.

Also list farm rents or royalties.

Schedule B

Part I: Transactions. (Part I of the OGE-450, limited to indicating those line items sold during the reporting period by placing an “X” in the column provided.)

Disclose purchases, sales and exchanges involving real estate or investment shares not solely incidental to the business.

Part II: Gifts, Reimbursements, and Travel Expenses. (Part V of the OGE-450)

List all gifts received from the farm (corporation) such as transportation, food or entertainment totaling $285 or more.

Schedule C

Part I: Liabilities. (Part II of the OGE-450)

Unless a corporation, list all liabilities connected with the farm, i.e., mortgages on real property and equipment, operating notes, etc. Include the name and address of each creditor (address of nationally recognized creditors may be omitted). Under “Type of Liability” identify the property and include its location (i.e., farm in Louisa County, VA).

Part II: Agreements or Arrangements. (Part IV of the OGE-450)

List all other connections with the farm such as any benefit and pension plans, leases and tenant relationships.

Schedule D

Part I: Positions Held Outside U.S. Government. (Part III of the OGE-450)

List all positions you currently hold and held within the preceding two calendar years relating to your farming interests. This includes: general partners in a farm partnership; officer or employee of a farm corporation; or director of a farming-related organization or association.

Part II: Compensation in Excess of $5,000 Paid by One Source. (Not reportable on the OGE-450)

This reporting requirement is limited to new entrant public filers only.

List the name and address (city and state) of each entity from which your farm received compensation in excess of $5,000 within the preceding two calendar years and the current calendar year up to the date of filing. Include a brief description of the service provided for each.

II. Ethics Analysis

Conflict of Interest (18 U.S.C. 208)

When considering a potential for a conflict of interest, the reviewing ethics advisor will raise questions regarding:

  • Identification of the farm’s participation in subsidy and other Federal programs;
  • Geographic location in relation to the filer’s government activities and the potential for contracts between the farm and the filer’s office or jurisdiction; and
  • Land rented to sharecroppers.

To avoid a potential conflict, you should disqualify yourself from substantially participating in (i.e., recommending, influencing or deciding) a particular matter that will affect the financial interests of the farm (i.e., contract, grant, application or claim). This is accomplished by submitting a formal Notice of Disqualification to the agency, which your ethics advisor will help craft.

Prohibited Representation (18 U.S.C. 203/205)

If the employee holds any interest other than a sole proprietorship, he/she may face a possible section 203/205 violation regarding the representation of others before the Executive or Judicial branches of the government on matters of application for USDA/Federal benefits on behalf of the farm.

Representation means to knowingly make with intent to influence, a communication (orally or in writing) to, or appearance before (including mere attendance at a meeting) any officer or employee of the Executive or Judicial branches of the government on behalf of a third party in connection with a matter of interest to the Federal government. The term does not include the communication of technical information.

To avoid a violation in these instances, you should refrain from representing the interests of the farm to the government and pass that task to a, spouse, partner or other corporate officer.

Additional Restriction for Farm Service Agency Employees (FSA)

All FSA employees, their spouses, and their minor children are subject to the following prohibitions:

  • Prohibited Real Estate Purchases. These individuals may not directly or indirectly purchase real estate:
            (1) Held in the FSA inventory;
            (2) For sale under forfeiture to FSA; or
            (3) From an FSA "program participant."
  • Prohibited Transaction with FSA Program Participants. FSA employees, their spouses, and their minor children may not directly or indirectly:
            (1) Buy, sell, or lease real property to or from;
            (2) Buy personal property from, sell personal property to, or
                  lease personal property to or from; or
            (3) Employ for compensation a person whom the filer knows
                  or reasonably should know to be an FSA program
                  participant directly affected by decisions of the FSA State
                  Office.

The above information serves as a brief overview. See 5 C.F.R Part 8301 for an explanation of terms used, exceptions and additional information.

III. Additional Restriction for Certain Non-Career Senior Executive Schedule (SES) Employees

Non-career employees whose rate of basic pay is at or above 120% of the rate of basic pay for GS-15-01 are subject to a 15% outside earned income limitation. These employees may not have outside earned income attributable to a calendar year, which exceeds 15% of the annual rate of basic pay for Level II of the Executive Schedule. The restriction applies on a pro rata basis to persons who enter into covered non-career positions after January 1st of any calendar year. Employees, who expect to exceed the above income limitation, should contact the USDA Office of Ethics. This restriction does not apply to special Government employees (SGEs).

IV. Secretary and Other Presidential Appointees Requiring Senate Confirmation (PAS) Outside Earned Income Limitation

These employees may earn no direct income during their appointment. Passive income such as rents and royalties in place prior to Federal appointment or dividends, capital gains and interest is acceptable.