strictions prohibiting active participation in political management or in political campaigns (see 5 U.S.C. 7324 (d)).

(3) Political interference. Officials and employees serving in administrative positions in the Federal service are prohibited by law from use of official authority for the purpose of interfering with, or affecting the nomination or election of any candidate for the Office of President, Vice President, Presidential elector, Member of the Senate or House of Representatives, or Delegate or Resident Commissioner from any Territory or Possession (18 U.S.C. 595).

[32 F.R. 11785, Aug. 16, 1967, as amended at 33 F.R. 10570, July 25, 1968; 34 F.R. 11583, July 15, 1969]

(a) Giving endorsements. (1) An employee shall not, with or without compensation, give an endorsement to any business, enterprise, or product which may give rise to any inference or indication that such business, enterprise, or product is officially endorsed by this Department or the United States, without special permission from the Ethical Conduct Counselor.

(2) An employee shall not permit his postal title to be used on any letterhead, advertisement, etc. by any entity unless specifically authorized by the Ethical Conduct Counselor.

(b) Permitted activities. Employees are not precluded from:

(1) Receipt of bona fide reimbursement, unless prohibited by law, for expenses for travel and such other necessary subsistence as is compatible with this part for which no Government payment or reimbursement is made. However, an employee may not be reimbursed, or payment may not be made on his behalf, for excessive personal living expenses, gifts, entertainment or other personal benefits, nor may an employee be reimbursed by a person for travel on official business under Department orders when reimbursement is proscribed. When an employee travels on official business he should use commercial transportation at Government expense and he should not accept free transportation from a private party. In the event there is no commercial transportation which will enable him to arrive at destination in time for the performance of his duties, he may accept private transportation provided the pri

vate party is reimbursed therefor at the standard commercial rate.

(2) Participation in the activities of national or State political parties not proscribed by law. See § 742.735-26(c).

(3) Obtaining a patent for an invention providing he complies with Part 779, Postal Manual.

(4) Participation in the affairs of or acceptance of an award for a meritorious public contribution or achievement given by a charitable, religious, professional, social, fraternal, non-profit educational and recreational, public service, or civil organization, excluding participation in lotteries.

(5) Soliciting for fund raising drives for civic, religious, fraternal auxiliaries, clubs, and kindred organizations so long as they do not solicit while on duty, or solicit while wearing their uniform or any insignia or badge or in any way identify themselves as postal employees, or solicit from patrons with whom they have recurring official contact, or use their postal position to influence collections. See § § 741.73, 742.256, 742.295, and 742.296 of the Postal Manual.

[32 F.R. 11785, Aug. 16, 1967; 32 F.R. 12115, Aug. 23, 1967, as amended at 34 F.R. 11583, July 15, 1969]

§ 742.735-28 Employee organizationsconvention budgets.

(a) An employee organization whose funds for a meeting or convention are raised within the organization, plus voluntary unsolicited contributions, need not report their convention budget.

(b) Where national, State, or large sectional conventions or meetings are held, the organization may raise funds outside the organization under the following procedures:

(1) Preparing budget. A representative or representatives of the employee organization involved shall prepare a proposed budget and shall:

(i) List proposed expenditures;

(ii) Show estimated revenue and the manner in which estimated revenue is to be raised;

(iii) If solicitation is to be made by a contract solicitor (see subparagraph (4) (iii) of this paragraph), the proposed budget shall have attached a copy of the contract between the employee organization involved and the solicitor.

(2) Submitting budget—(1) National level. The organization holding a national convention shall present a copy of

the proposed budget for raising funds to the Assistant Postmaster General, B'1reau of Personnel, who may discuss the proposed budget with a representative of the employee organization involved.

(ii) State or sectional level—(a) Postmaster organizations. The organization holding the State or sectional convention shall present a copy of the proposed budget for raising funds to the Regional Director, who may discuss the proposed budget with a representative of the organization involved.

(b) Other organizations. An employee organization holding a State or sectional convention or meeting shall submit the budget to a committee composed of the postmaster at the city where the meeting or convention will be held, a representative of the local civic group, if any, interested in securing the meeting or convention and a member selected by the employee organization sponsoring the meeting.

(3) Duties

of committee members. This Committee shall:

(i) Examine the proposed budget and the manner in which the contemplated revenue is to be raised;

(ii) In the event the employee organization employs a contract solicitor (see subparagraph (4) (iii) of this paragraph), to raise funds, review the contract between the employee organization involved and the contract solicitor to insure compliance with subparagraph (4) (iii) of this paragraph.

(iii) If all terms of subparagraph (4) (iii) of this paragraph have been complied with, each member shall sign the proposed budget.

(iv) If a contract solicitor is used, the postmaster shall send a copy of the approved budget to the Regional Director who may discuss with the regional representative of the particular organization the terms of the budget or contract.

(4) Duties of sponsoring employee organization (1) National level. Within sixty (60) days after the close of the national convention, the national organization shall submit to the Assistant Postmaster General, Bureau of Personnel, a report of funds raised by the contract solicitation and how it was expended, including commissions paid to the solicitor.

(ii) State or sectional level—(a) Postmaster organizations. Within sixty (60) days after the close of the State or sectional convention, the organization shall submit to the Regional Director a report

of the funds raised by the contract solicitation and how it was expended, including commissions paid to the solicitor.

(b) Other organization. Within sixty (60) days after the close of the convention or meeting a sponsoring employee organization at a State or sectional level shall prepare a statement in quadruplicate showing the amount of money raised by the contract solicitor, how the money was expended and the amount of commission paid such solicitor. The original of this statement shall be made a part of the records of the post office in the city where the convention or meeting was held; a copy shall be sent to the civic organization, if any, a copy shall be sent to the Regional Director, and a copy shall be retained by the employee organization involved.

(c) Contract solicitors. (1) If contract solicitors are used, they must be employed by or represent a reputable firm.

(2) Before any solicitations may be made, a contract with the appropriate national, State, sectional, or local organization shall be signed specifying the amount of the commission, the maximum amount to be solicited, the number and names of the solicitors, the geographical area in which the solicitations will be made, a starting date and a termination date of the solicitation. The contract signed with and by a company employing, or represented by a solicitor must contain a provision that the files, records, and accounts relating to the solicitations and expenditures be made available for examination by an authorized post office official and/or the employee organization representative involved on demand. Either the postal officials or the employee organization representative shall notify the other of a proposed examination.

(3) A copy of the contract shall be filed with the postmaster in the city in which the convention or meeting is to be held.

(4) Contract solicitors shall be required to carry identification and shall show such identification when soliciting to indicate that they are duly authorized to solicit funds for the specific organization and to accept such funds. The authorization shall also include a definite statement that the contract solicitor is not acting as a postal employee, or a member of the specific employee organization, but is employed by the firm holding a contract with the specific employee organization.

(a) Financial interests. (1) An employee shall not: (i) Have a direct or indirect financial interest that conflicts substantially with his Government duties and responsibilities; or appears to conflict substantially with his Government duties and responsibilities.

(ii) Engage, directly or indirectly, in a financial transaction as a result of, or primarily relying on, information obtained through his Government employment.

(2) This paragraph does not preclude an employee from having a financial interest or engaging in financial transactions to the same extent as a private citizen not employed by the Government so long as it is not prohibited by law, the Executive order or this part.

(3) An employee may not participate personally and substantially in his official capacity in any particular matter in which his immediate family, partner, or organization with which he is connected by a present or prospective employment service has a financial interest unless he advises his installation head of all its aspects, makes full disclosure, and receives, in advance, a written determination of the installation head concurred in by the Ethical Conduct Counselor or Deputy Ethical Conduct Counselor, as appropriate, or unless there is specific exemption established by general rule or regulation published in the FEDERAL REGISTER, and in either case the financial interest is remote or inconsequential. The advance written determination when granted and the exception by general rule or regulation constitute exceptions to 18 U.S.C. 208(a). However, with the approval of the installation head, he may act as agent or attorney for his immediate family, or organization he is serving as personal fiduciary provided he has not participated personally and substantially in the matters involved and such matters are not subject to his official responsibility.

(4) The Postmaster General; the Deputy Postmaster General; the General Counsel; the Deputy General Counsel; the Assistant Postmaster General, Deputy Assistant Postmaster General, Division Directors, Deputy Division Directors and Assistant Directors of the Bureau of Transportation and International Services; Regional Directors; Deputy Regional Directors; employees in the Office of the Director of Transportation

(Regional) who have authority to recommend or determine routing of mail, service changes, mode of transportation to be utilized, or contracting authority in the transportation of mail; and Postal Service Officers are prohibited from having any financial interest or being employed by any entity which carries or may carry mail (i.e., airline, railroad, bus and surface transportation). Divestment of financial interest must be accomplished within 90 days. Resignation or termination of employment with such entities must be accomplished within 30 days. The time to accomplish such divestment or resignation begins to run upon the effective date of this regulation or from the date of the notification letter directing divestment or resignation.

(5) The Postmaster General; the Deputy Postmaster General; the General Counsel; the Deputy General Counsel; the Assistant Postmaster General and Deputy Assistant Postmaster General, Bureau of Facilities; and employees in the Realty Division of the Bureau of Facilities, Regional Directors and Deputy Regional Directors and employees in the Real Estate Branches in Regional Offices, and engineers in the Engineering and Facilities Division of Regional Offices are prohibited from:

(i) Having any financial interest in any business entity which deals primarily in real estate of a nature in which the Department may have a known present or future interest.

(ii) Holding any position or office in a business as described in subdivision (i) of this subparagraph.

(iii) Self-employment in a business as described in subdivision (i) of this subparagraph.

(iv) Being a broker or acting as an agent for a business as described in subdivision (i) of this subparagraph. No postal employee shall participate on behalf of the Department in any real estate transaction in which this Department has an interest, in any manner whatsoever, unless such matter is within his official responsibility and specifically assigned to him by competent authority. Notwithstanding this subparagraph, postal employees may own or participate in a real estate business which involves farmland, timberland, mineral rights, residential (including individual or multiple dwelling units), and vacation sites. However, if in the future, for whatever reason whatsoever, the Department ex

presses an interest in such property, the employee must disqualify himself from participating therein and so advise his Deputy Ethical Conduct Counselor.

(6) For purposes of this section, immediate family means spouse, minor child and other persons related to the employee by blood who are regular members of the employee's household.

(b) Use of Government property. An employee shall not directly or indirectly use, or allow the use of Government property of any kind, including property leased to the Government, for other than officially approved activities. An employee has a positive duty to protect and conserve Government property, including equipment, supplies, and other property entrusted or issued to him.

(c) Misuse of information. For the purpose of furthering a private interest, an employee shall not, except as provided in § 742.735-26(a)(5), directly or indirectly use, or allow the use of, official information obtained through or in connection with his Government employment which has not been made available to the general public.

(d) Indebtedness. (1) An employee shall pay each just financial obligation in a proper and timely manner, especially one imposed by law such as Federal, State, or local taxes. For the purpose of this section, a "just financial obligation" means one acknowledged by the employee or reduced to final judgment by a court, and "in a proper and timely manner" means in a manner which the Department determines does not, under the circumstances, reflect adversely on the Government as his employer. In the event of dispute between an employee and an alleged creditor, this section does not require the Department to determine the validity or amount of the disputed debt or to institute disciplinary proceedings.

(2) Employees shall not borrow money or contract debts which they have no reasonable prospect of being able to pay. They are expected to conduct themselves honorably, deal honestly with others, and meet their obligations promptly so that there will be no cause for embarrassment or criticism. The fact that the wages or salary of Government employees cannot be trusteed or garnisheed by legal process shall not be used by employees to avoid the payment of their just debts.

(3) The Internal Revenue Code of 1954 permits collection of delinquent income taxes from Federal employees by

taking the amount owed from pay checks and by seizure of personal property. All employees are expected to cooperate fully with the representatives of the Internal Revenue Service seeking to effect collection of adjudicated or acknowledged income taxes from postal personnel.

(4) Payments made by the Post Office Department that are either erroneous at the time made or develop into overpayments (overdrawn leave) may be setoff from current salary of employees whether or not a charge has been raised against the accountable officer involved. (5) Requests from other Federal agencies to which employees are indebted shall be forwarded to the regional controller. He, in consultation with the employee's installation head, shall attempt to work out an arrangement with the employee to make voluntary payment to the creditor-agency. When the employee does not agree that the alleged debt is just, the employee shall make his protest in writing over his signature. The written protest shall be sent to the Regional Director through the head of the employee's installation who will review the employee's letter of protest with the special assistant for employee relations, or other official designated by the Regional Director. After his review, the protest shall be sent to the creditor-agency for review and certification as to the validity of the debt before further action is taken. If confirmed and the employee fails to make satisfactory arrangements for restitution, the following procedure is required:

(i) If the debt is one for which a charge has been raised by the General Accounting Office against the Officer who certified the payment, a setoff shall be made against the employee's current salary.

(ii) If the debt is a claim by the Veterans Administration for payment of a loan, the placing of any stoppage on the retirement pay or the offsetting from any payments due a veteran or widow of a veteran is prohibited (Public Law 89358, sec. 1826(b)), unless:

(a) Consent from the veteran or the widow of a veteran is received in writing;

or

(b) Such liability and the amount thereof was determined by a court of competent jurisdiction in a proceeding to which such a veteran or widow was a party.

(iii) If a request for assistance is received from the General Accounting Of

fice or the Veterans Administration to collect an amount of this kind, do not attempt to secure payment direct from the employee. Forward the request to the appropriate regional controller who will take the necessary action.

(iv) In all other cases of employee's indebted to the United States, setoff cannot be made against the employee's current salary. Pay records shall be "flagged" for future consideration; i.e., setoff against the employee's final salary, his Civil Service retirement acount or, other amount due from the United States at the time of his separation from the Department.

(6) This Department is not expected to act as a collection agent, except as indicated in subparagraphs (3) and (5) (1) and (ii) of this paragraph. If an employee is being harassed by a creditor whose claim he believes to be unjust, he may notify his superior, in writing, so that the case may be made a matter of record in the installation.

(7) Failure to pay just financial obligations will be regarded as cause for disciplinary action. See Part 745 of the Postal Manual, Disciplinary Actions.

(e) Gambling, betting, and lotteries. (1) An employee shall not participate while on Government-owned or leased property or while on duty, in any gambling activity including, but not limited to, the operation of a gambling device, in conducting a lottery or pool, in a game for money or property, or in selling or purchasing a numbers slip or ticket. In addition, employees are prohibited from participation in the sale, directly or indirectly, of lottery tickets or tickets for other games of chance, whether on or off duty and whether on or off Government-owned or leased property. However, employees may purchase such tickets when off duty and off Government owned or leased property if the purchase is a bona fide purchase for the employee's personal use and there is no intention of resale or transfer, and is not in violation of State or local law. See section 1303 of Title 18, U.S. Code.

(2) This section, however, shall not preclude the activities names in subparagraph (1) of this paragraph if it is necessitated by an employee's law enforcement duties.

(f) Soliciting or canvassing. (1) Rural carriers when on duty shall not solicit business or receive orders for any person. Whether on or off duty they shall

not engage in any business that interferes with their official duties. Neither shall they engage in any business which, by reason of their official employment, will give them an advantage over others not in the Postal Service who are engaged in a similar business. Substitute rural carriers when on duty shall not solicit business or receive orders for any person.

(2) An employee may not engage in any sales activity, not related to his postal duties, while on duty, or while in uniform, or in the office where employed.

(g) Prohibition against instructing candidates for civil service examination. No employee of the Department shall, with or without compensation, directly or indirectly, instruct or be involved in any manner in the instruction of any person or class of persons in special preparation for examinations of the Civil Service Commission, and examinations for the Foreign Service of the Department of State, except as authorized by the Department. Such an act will be considered sufficient cause for removal from the service. See section 713.5 of the Postal Manual.

(h) Personnel-(1) Use of intoxicating liquor. Employees shall not drink beer, wine, or other intoxicating liquor while on duty and shall at no time use intoxicants to excess. Employees must not drink intoxicating liquor in public places while in uniform. Any employee who becomes intoxicated while on duty or who is addicted to intemperance may be removed from the service.

(2) Possession of intoxicating liquors. Employees shall not bring or have beer, wine, or intoxicating liquor on premises occupied by any postal facility, including headquarters, regardless of whether the container therefor is open or not.

(3) Use of narcotics. Addiction to narcotics is grounds for removal from the service.

[32 F.R. 11785, Aug. 16, 1967, as amended at 32 F.R. 17860, Dec. 13, 1967; 33 F.R. 8391, June 6, 1968; 33 F.R. 10930, Aug. 1, 1968]

Subpart C-General Conduct Prejudicial to the Government Introduction.

§ 742.735-31

An employee shall not engage in criminal, infamous, dishonest, immoral, or notoriously disgraceful conduct, or other conduct prejudicial to the Government.