Individuals selected for positions subject to filing a Public Financial Disclosure Report (OGE Form 278e) at the NIH must receive ethics pre-clearance before an official job offer can be extended.
Why does the NIH conduct a pre-clearance review?
To help identify and resolve conflicts of interest between your official duties and your personal and imputed interests prior to assuming your position. Otherwise, you may inadvertently run afoul of a federal statute prohibiting government employees from participating personally and substantially in a government matter if that matter directly and predictably affects their personal or imputed financial interests.
What interests are imputed to me?
For purposes of the government-wide conflict of interest statutes, the financial interests of your spouse, minor child, general partner, organization in which you are serving as an officer, director, trustee, general partner, or employee, or any person or organization with whom you are negotiating or have any arrangement concerning prospective employment, are imputed to you. Thus, the interests of these persons and organizations are viewed as your own.
What will I be asked to do during the pre-clearance review?
Prior to an official job offer being extended, you will be asked to complete a draft Public Financial Disclosure Report (OGE Form 278e) to disclose certain financial interests and relationships.
What relationships will I have to disclose?
You will need to disclose those relationships where you serve as an officer, director, trustee, general partner, proprietor, representative, employee, or consultant of any corporation, firm, partnership, or other business enterprise or any non-profit organization or educational institution, as well as any current or prospective employment.
Which financial interests must I disclose?
A full list of reportable items is available in the OGE Form 278e instructions on the Office of Government Ethics website.
Among other things, you must disclose assets, such as stocks, bonds, and mutual funds that belong to you, your spouse, or your dependent child. Assets are commonly found in the following accounts and investment vehicles:
- Retirement accounts (e.g., IRAs, 401(k), 403(b) and pension plans)
- Self-directed or managed brokerage accounts
- Stock options
- 529 college savings plans
- Trusts where the filer, spouse, and/or dependent child are beneficiaries
- Variable accounts (e.g., annuities and life insurance)
- Contracts (e.g., fixed annuities, whole or universal life insurance plans, and pre-paid tuition plans)
- Real estate held for investment
- Partnerships
For yourself, also report the source and actual amount of earned income exceeding $200 (other than from the U.S. Government). For your spouse, report the source but not the amount of earned income of more than $1,000 (except report the actual amount of any honoraria over $200 for your spouse). The most common forms of earned income are:
- Salaries
- Fees
- Rent
- Royalties
- Partnerships
The form you provided says “Public Financial Disclosure Report,” so does this mean that the report is publicly available?
If you are offered and accept the position, yes. We recommend you carefully review the report prior to filing to ensure it does not include any sensitive information (e.g., account numbers, home addresses, or family members' names). It may be released through an OGE Form 201 request.
Is there other guidance that I can seek to assist me in preparing the Public Financial Disclosure Report (OGE Form 278e)?
Yes, additional information can be found on the websites of the NIH Ethics Program and the Office of Government Ethics. You may also contact your prospective Institute, Center, or Office’s Ethics Office.
What if a conflict is identified upon review of my financial interests?
A conflict of interest can be resolved in four ways:
- Regulatory exemption
- Divest or otherwise dispose of the conflicting asset (e.g., stock) or sever the conflicting relationship
- Disqualify (recuse) yourself from the government matter (e.g., the contract, research project, or grant)
- Obtain a waiver of the conflict
Will there be a written document outlining the options I have and the actions I must take to maintain compliance with the Standards of Ethical Conduct?
Yes. You will receive a written ethics agreement that will identify conflicts and the necessary steps that you will take to resolve the identified conflicts.
What is the STOCK Act and how does it affect me?
The Stop Trading on Congressional Knowledge (STOCK) Act signed into law in April 2012, has several provisions that apply to Executive Branch employees. If you become an Executive Branch employee who is required to file an OGE Form 278e, you are required to notify the NIH if: 1) you enter into post-government employment negotiations or an agreement for future employment or compensation; and/or 2) you, your spouse, or dependent child make certain transactions through the filing of a Periodic Transaction Report (OGE Form 278-T).
Under the STOCK Act, which transactions must I disclose via the Periodic Transaction Report (OGE Form 278-T)?
Within 30 days of when you receive notification of a transaction but not later than 45 days after the transaction, you must report any purchase, sale, or exchange by you, your spouse, or dependent child of stocks, bonds, commodity futures, and other securities if the amount of the transaction exceeded $1,000. You do not need to report: (1) mutual funds and other excepted investment funds; (2) certificates of deposit, savings or checking accounts, and money market accounts; (3) U.S. Treasury bills, notes, and bonds; (4) Thrift Savings Plan accounts; (5) real property; and (6) transactions that are solely by and between you, your spouse, or dependent child.
A full list of reportable items is available in the OGE Form 278-T instructions on the Office of Government Ethics website.
If I am offered and accept the position, will I be required to submit any other documents or forms to the Ethics Office?
Yes. Within 30 days of appointment to the position, we will ask you to update the draft OGE Form 278e (e.g., add acquired holdings and sources of income, remove assets that have been sold, and verify the current values of your holdings) and file a final report. Filing of an annual OGE Form 278e is required each year you are in the position.
You will also be required to file a Confidential Report of Financial Interests in Substantially Affected Organizations (HHS-717-1) within 30 days of your appointment date, even if you have no interests in substantially affected organizations (SAO) when you file the report. Thereafter, if you, your spouse, or your minor child acquire a financial interest in an SAO, you will need to complete a new HHS-717-1 within 30 days of acquiring the SAO interest.
Additionally, pursuant to the STOCK Act, you will need to file a Periodic Transaction Report (OGE Form 278-T) if you, your spouse, or your dependent child make certain transactions.
If you wish to engage in an outside activity, you may need to seek prior approval through the submission of a Request for Approval of Outside Activity (HHS-520). Continued participation in an outside activity will be discussed in your ethics agreement, and your ethics official will help you with the necessary paperwork.
What happens if I make a mistake on the ethics paperwork, such as the financial disclosure form?
You are required to provide the information requested. However, if you later identify an inadvertent omission, notify your ethics official and we can work with you to make the appropriate corrections.
I am currently the Principal Investigator on one or more scientific projects. Will I be able to continue this work once I am employed at NIH?
You may be authorized to continue work on the projects; however, your current employer will need to assign a new Principal Investigator to take over the projects. These projects should be discussed during the pre-clearance process with both your prospective supervisor and your Institute, Center, or Office’s Ethics Office, and the agreed-upon arrangements will be noted in your ethics agreement.
I am the editor of the scientific journal and would like to continue this work. Will I be able to do this?
Most likely, yes. This activity, as well as other professional endeavors, such as leadership roles in scientific societies, may be permitted as an official duty activity if your supervisor feels that it is an appropriate use of NIH time and resources. You may also be able to pursue this activity in your personal capacity as an outside activity. If this activity is pursued as an outside activity, then a Request for Approval of Outside Activity (HHS-520) is required, and your ethics official will help you with the necessary paperwork. You should raise these types of activities during the pre-clearance process. The final arrangements will be noted in your ethics agreement.
I am committed to conducting one or more presentations that are scheduled for dates after I start at the NIH. Will I be able to deliver these presentations?
The NIH may authorize you to honor these types of prior engagements, and they may be pursued as either part of your official duties or as an outside activity. You should discuss these commitments during the pre-clearance. The final arrangements will be noted in your ethics agreement.
I currently hold a patent for technology developed at my current employer. Is this something I should raise during the pre-clearance process?
Yes. Intellectual property ownership [rights] may create a conflict and should be reviewed during the pre-clearance process.
What if the divestiture of a conflicting asset, such as stock, results in significant capital gains and, in turn, subjects me to a tax liability?
Such divestiture may make you eligible for a certificate of divestiture (CD). PLEASE NOTE: you will NOT be eligible to receive a CD if you sell your stock before the approval of the CD.
What is a certificate of divestiture?
A certificate of divestiture (CD) is a mechanism that allows an employee who must divest certain financial interests to reduce a potential tax burden. The CD is used when you realize a capital gain from the sale of a holding, and it permits you to defer the tax on the capital gain because you had to sell the holding due to your government position.
How do I initiate a CD?
Once directed to divest, you will work with your Institute, Center, or Office’s Ethics Office to initiate the paperwork to request a CD.
Is there additional information on CDs?
Yes. The Office of Government Ethics has issued a pamphlet about the CD program. Additionally, the HHS Office of General Counsel has issued FAQs on the process. This information can be found on the NIH Ethics website.
What if I have an SAO bond that will mature soon?
Exceptions to an immediate divestiture can be made on a case-by-case basis. The divestiture will still occur after the agreed-upon grace period from your NIH start date.
To whom do I direct questions regarding this process?
You should consult with your Institute, Center, or Office’s Ethics Office.