I The framework
Three layers, and knowing which one you are in tells you how serious a question is.
| Layer | What it is |
|---|---|
| Criminal statutes — 18 U.S.C. 202–209 | Bribery, conflicting financial interests, representational restrictions. Criminal exposure. |
| 5 CFR Part 2635 | Government-wide Standards of Ethical Conduct. Administrative. |
| Agency supplemental regulations | Your agency's additional rules. Frequently the strictest layer. |
Part 2635 covers gifts from outside sources, gifts between employees, conflicting financial interests, impartiality in performing official duties, seeking other employment, misuse of position, and outside activities. It rests on the fourteen principles of ethical conduct established by executive order, which function as the interpretive backdrop rather than as free-standing rules.
The first principle is the whole system compressed: public service is a public trust, and employees must place loyalty to the Constitution, the laws, and ethical principles above private gain — everything below is that idea worked out in specific cases.
Do not skip the third layer. Agency supplements are where the specific prohibitions live, and they are frequently stricter than the government-wide rule.
II Gifts from outside sources
The general prohibition: you may not solicit or accept a gift given because of your official position, or from a prohibited source — someone seeking official action from your agency, doing business with it, regulated by it, or with interests substantially affected by your duties.
The main exception, and the one everyone works from:
| Limit | Rule |
|---|---|
| $20 | Per source, per occasion — unsolicited gifts only |
| $50 | Aggregate from any one person, per calendar year, under this exception |
| Never | Cash, or investment interests such as stock, bonds, or CDs |
When a gift exceeds $20, you may not pay the excess over $20 in order to accept it. Offering to chip in $30 toward a $50 item does not make it acceptable. What you may do, when several tangible items are offered on one occasion and total more than $20, is decline distinct and separate items in order to accept those aggregating $20 or less.
Other exceptions exist — gifts based on a personal relationship independent of your job, certain widely attended gathering invitations, awards and honorary degrees, discounts available to the public or to all government employees. Each has conditions, and the widely attended gathering exception in particular requires an agency determination rather than your own judgment.
One more thing worth knowing: even where a gift is permitted, 2635.201(b) identifies considerations for declining it anyway. Permitted is not the same as advisable.
III The aggregation trap
The $50 annual limit is per person, and "person" is defined more broadly than intuition suggests: it includes not only a corporate entity but its officers and employees as well.
Four small gifts, one problem
On four occasions during a calendar year, an employee received gifts worth $10 each from four different employees of a corporation that is an agency contractor.
Each gift is individually well under $20. Each came from a different individual.
This is how a series of individually harmless items accumulates. Nobody tracks a $10 coffee, and there is no reason to — until the fourth one, at which point you are near a limit you did not know you were approaching.
If you deal regularly with a particular contractor, vendor, or regulated entity, keep a rough running count for the year. It takes no effort and it is the only way the aggregation rule can be complied with in practice. A gift from a relative who happens to work for that company can be a different matter if it qualifies under the personal-relationship exception — but that is a determination worth confirming rather than assuming.
IV Gifts between employees
A separate subpart governs gifts inside the workplace, and the rules run in a direction people find surprising.
- You generally may not give a gift to your supervisor, or to any employee who receives more pay than you.
- A supervisor generally may not accept a gift from a subordinate or from an employee receiving less pay.
- Exceptions cover occasional situations — items of nominal value on birthdays and holidays, food and refreshments shared in the office, and personal hospitality at a residence.
- Broader exceptions apply on special infrequent occasions such as marriage, the birth of a child, retirement, or a transfer that terminates the supervisory relationship.
The retirement-gift exception is why an office collection for a departing supervisor is normally fine while a birthday collection for a current one is not. If your office is organizing something, the question worth asking is which category the occasion falls into.
V Misuse of position
The rule is simple to state: do not use your public office for private gain — yours or anyone else's. The applications are less obvious.
| Prohibited | What it looks like |
|---|---|
| Use of official title or authority | Invoking your position to obtain a benefit, or in a private dispute |
| Endorsements | Endorsing a product, service, or enterprise in your official capacity |
| Nonpublic information | Using information learned on the job for private purposes |
| Government property | Equipment, supplies, and systems for private purposes beyond limited personal use |
| Official time | Your own duty time, and that of subordinates, for private matters |
Nonpublic information. Information you acquire in the ordinary course of your duties carries restrictions on private use, and those restrictions are not intuitive. Knowing about a pending procurement, an enforcement action, a regulatory decision, or a reorganization before it is public means you may not use that knowledge for private gain — including your own investment decisions or a tip to a friend. This is also where an ethics question can become a securities question.
The official-title point extends further than expected. Signing a letter in a private dispute with your agency title attached, or using an official signature block for personal correspondence, can constitute using your position for private gain even where no benefit follows.
VI Ethics Situation Checker
Select the situation. The tool identifies which rule applies and whether it warrants a call to the ethics office.
Which rule applies?
General orientation, not a determination. Your agency ethics official decides your facts.
Where the Gift Limits Fall
The $20 per-source-per-occasion limit and the $50 calendar-year aggregate under 5 CFR 2635.204(a), shown against typical gift values. Note that exceeding $20 cannot be cured by paying the difference, and that a corporation and its employees count as a single source.
VII Conflicting financial interests
This one is criminal, under 18 U.S.C. 208, which puts it in a different category from everything else on this page.
You may not participate personally and substantially in a particular matter that would affect a financial interest of:
- You;
- Your spouse or minor child;
- Your general partner;
- An organization in which you serve as officer, director, trustee, general partner, or employee; or
- A person with whom you are negotiating for employment.
Exemptions exist for small holdings. Commonly cited thresholds allow participation where the interest does not exceed roughly $15,000 for a matter involving specific parties, and $25,000 for a matter of general applicability, with a $50,000 aggregate across all affected interests. Diversified mutual funds are treated differently from individual holdings. A determining official may also grant an individual waiver where an interest is not substantial.
You disqualify yourself from participating in matters affecting the interest. Being required to sell an asset is rare — and where it does happen, a certificate of divestiture can provide favorable tax treatment on the resulting gain, which is one of the more useful and least known provisions in this area. Financial disclosure, which is how these interests surface in the first place, is covered in Topic 41.
VIII Impartiality and appearances
Separate from financial conflicts, the impartiality provisions address matters where your participation would cause a reasonable person to question your impartiality. The test is appearance, not actual bias — which is what makes it easy to miss.
The usual trigger is a covered relationship:
- A member of your household.
- A relative with whom you have a close personal relationship.
- An organization where your spouse, parent, or dependent child is an officer, director, or employee.
- An organization in which you are an active participant.
- A person for whom you have served as officer, employee, or agent in the last year.
Where it applies, the remedy is to notify your ethics official and recuse yourself. An agency official may authorize your participation if the government's interest in your participation outweighs the concern — but that is a determination for them to make and document, not for you to assume.
A spouse takes a job at a company your office regulates or contracts with. Nothing improper has happened, your spouse's employment is entirely their own, and you have no financial interest in the outcome. It is still a covered relationship, and continuing to work matters involving that company without raising it is the mistake. Raise it when the job starts, not when the matter arrives.
IX Outside employment and activities
The government-wide rule restricts outside employment and activities that conflict with your official duties. Beyond that, most of the specific restrictions come from your agency.
Common features:
- Prior written approval is required at many agencies before accepting outside employment.
- Agency supplements impose their own prohibitions — the Justice Department, for instance, bars the outside practice of law except in narrow circumstances such as uncompensated community service or matters involving yourself, parents, spouse, or children.
- Compensation for teaching, speaking, or writing that relates to your official duties is restricted.
- Certain senior employees face an earned income limitation on outside income.
- Fundraising and representational activities carry their own rules.
The teaching, speaking, and writing restriction surprises people who assume subject-matter expertise is theirs to monetize. Where the activity relates to your official duties, compensation is generally restricted even if the work happens entirely on your own time. Ask before agreeing.
X Seeking other employment
The moment employment discussions begin, a rule attaches — and 18 U.S.C. 208 reaches a person with whom you are negotiating for employment.
The practical sequence:
- Notify your ethics official as soon as discussions with a relevant entity become concrete.
- Recuse yourself in writing from official matters affecting that entity.
- Keep the recusal documented with its date.
- Ask about post-employment restrictions before you accept anything — a separate analysis under 18 U.S.C. 207.
A proactive recusal is routine and unremarkable — ethics officials process them constantly. A recusal that happens after someone else notices the overlap is a different conversation entirely, and the question becomes what you worked on and when. The dated record of your recusal is what protects you, which is why doing it early costs nothing and doing it late costs a great deal.
What happens after you leave is governed separately — see Professional Development Topic 40.
XI Using the ethics office
Every agency has a Designated Agency Ethics Official and supporting counselors. The advice is free, asking is ordinary, and it is the single most effective protection available in this area.
Situations that warrant a call before acting:
- A gift you are unsure about — before accepting.
- A matter involving a company where a relative works.
- An outside job, board seat, or paid speaking engagement.
- An investment overlapping your portfolio of work.
- The moment employment discussions begin with an entity your work touches.
- Anything where you find yourself constructing a justification.
If you are building an argument for why something is probably acceptable, that effort is the answer — call. A question asked in advance is free and unremarkable. The same question asked after the fact is an investigation, and the difference between those two outcomes is frequently one phone call.
XII The playbook
| Situation | What to do |
|---|---|
| Gift over $20 from a prohibited source | Decline. You may not pay the excess to accept it. |
| Regular contact with one contractor | Track the annual total — the entity and its employees count as one source. |
| Office collection for a supervisor | Depends on the occasion. Retirement and transfers have broader exceptions. |
| Spouse takes a job at a regulated entity | Raise it when the job starts. It is a covered relationship. |
| Investment overlapping your work | Check the 18 U.S.C. 208 exemptions. Recusal is the usual remedy. |
| Outside job or paid speaking | Check the agency supplement and get prior approval if required. |
| Job discussions begin | Notify ethics and recuse in writing, dated, immediately. |
| You are constructing a justification | Call the ethics office. That instinct is the answer. |
What to know and do
- Save your ethics office contact information where you can find it quickly.
- Read your agency's supplemental regulation — it is usually stricter than the government-wide rule.
- Apply the $20 per source per occasion limit, and remember you cannot pay the excess to accept a larger gift.
- Track the $50 annual aggregate for sources you deal with regularly, counting the entity and its employees as one.
- Never accept cash or investment interests as a gift, at any value.
- Check gift rules in both directions with supervisors and subordinates — the occasion determines the exception.
- Treat nonpublic information as restricted for private use, including your own investment decisions.
- Review your investments against your portfolio of work, and know the 18 U.S.C. 208 exemption thresholds.
- Raise a covered relationship — a spouse or relative at a regulated or contracting entity — when it arises.
- Notify ethics and recuse in writing the moment employment discussions with a relevant entity become concrete.
Frequently asked questions
An employee may accept unsolicited gifts with an aggregate market value of $20 or less per source per occasion, provided that gifts from any one person under that exception do not exceed $50 in a calendar year. The exception does not apply to cash or to investment interests such as stock, bonds, or certificates of deposit. A critical detail people get wrong: when a gift exceeds $20, you may not pay the excess over $20 in order to accept it. If tangible items on a single occasion exceed $20 in total, you may decline distinct items in order to accept those aggregating $20 or less.
More people than you might expect. A person is defined to include not only a corporate entity but its officers and employees as well, so four separate $10 gifts from four different employees of the same contractor must be aggregated against the $50 annual limit from that one source. This aggregation rule is why a series of individually harmless items can accumulate into a problem. Gifts from a relative who happens to work for that company can be a different matter if they qualify under a separate exception based on the family relationship.
Using your public office for private gain — yours or anyone else's. In practice it covers using your title or authority to obtain a benefit, endorsing a product or service in your official capacity, using nonpublic information you learned on the job for private purposes, and misusing government property, time, or the work of subordinates. The nonpublic information piece is the one that most often catches people off guard, because information acquired in the ordinary course of duties can carry restrictions on private use that are not obvious.
Under 18 U.S.C. 208, a criminal statute, you may not participate personally and substantially in a particular matter that would affect your own financial interest or the interests of your spouse, minor child, general partner, an organization in which you serve as an officer, director, trustee, general partner or employee, or a person with whom you are negotiating for employment. Regulatory exemptions cover small holdings — commonly cited thresholds are $15,000 for a matter involving specific parties and $25,000 for a matter of general applicability, with a $50,000 aggregate. Individual waivers are also possible where an interest is not substantial.
Separate from financial conflicts, the impartiality provisions address situations where your participation in a particular matter involving specific parties would cause a reasonable person to question your impartiality — typically because a covered relationship is involved, such as a household member, a relative with whom you have a close personal relationship, or an organization where your spouse or a close relative works. The standard is appearance rather than actual bias. Where it applies, the usual remedy is to notify your ethics official and recuse yourself, and an agency official may authorize your participation if the interest in your participation outweighs the concern.
Once you begin negotiating or have an arrangement concerning prospective employment with an entity, your ability to work on official matters affecting that entity is restricted, and 18 U.S.C. 208 reaches a person with whom you are negotiating for employment. The practical sequence is to notify your ethics official as soon as employment discussions with a relevant entity become concrete and to recuse yourself in writing. Doing that proactively is routine and unremarkable; doing it after someone else notices is an entirely different conversation, and the documented timing of your recusal is what protects you.
Often yes, subject to conditions. The outside activities provisions restrict employment and activities that conflict with your official duties, and many agencies require prior written approval for outside employment. Agency supplemental regulations add their own rules — the Justice Department, for example, prohibits the outside practice of law except in narrow circumstances such as uncompensated community service or matters involving yourself or immediate family. Check both the government-wide standards and your agency's supplemental regulation before accepting anything, because the agency layer is where the specific prohibitions usually live.
Before you act, and more often than you probably do. Every agency has a Designated Agency Ethics Official and supporting ethics counselors, the advice is free, and asking is treated as ordinary practice rather than as an admission of anything. The situations most worth a call are a gift you are unsure about, a matter touching a company where a relative works, an outside job or activity, an investment that overlaps with your portfolio of work, and the moment you begin discussing employment with an entity your work touches. A question asked in advance is cheap; the same question asked afterward rarely is.