Section 7001.104 - Prohibited financial interests of the members of the Board of Governors(a)General prohibitions.(1) No member of the Board of Governors, which includes the Postmaster General, the Deputy Postmaster General, and the nine appointed Governors of the United States Postal Service, or any spouse or minor child of any member of the Board of Governors, shall acquire or hold, directly or indirectly: (i) Any financial interest in a person engaged in the delivery outside the mails of any type of mailable matter, except daily newspapers; or(ii) Any financial interest in a publicly-traded entity engaged primarily in the business of leasing real property to the Postal Service.(2) No member of the Board of Governors shall actively control the acquisition of, or the holding of, any financial interest described in paragraph (a)(1)(i) or (ii) of this section, on behalf of any entity whose financial interests are imputed to them under 18 U.S.C. 208 . A member of the Board of Governors actively controls the financial interests of an entity if he or she selects or dictates the entity's investments, such as stocks, bonds, commodities, or funds. A member of the Board of Governors does not actively control the financial interests of an entity if he or she merely directs the investment strategy of the entity, hires the entity's financial manager(s) who selects the entity's investments, or designates another employee of the entity to select the entity's investments. A member of the Board of Governors may have such investment authority when serving as an officer, director, trustee, general partner, or employee of an entity. Example 1 to paragraph (a)(2): A Governor is also the chief executive officer (CEO) of a life insurance company. The company's policy is for: the board of directors to determine the overall investment strategy for the company's excess cash, an internal team to recommend to the CEO specific financial instruments in which to invest the company's excess cash to implement the board's overall investment strategy, and the CEO to approve or disapprove of the internal team's specific investment recommendations. The Governor actively controls the financial interests of the life insurance company in her position as CEO of the company.
Example 2 to paragraph (a)(2): A Deputy Postmaster General is also on the board of directors of an investment company. The company's policy is for: the board of directors to determine the overall investment strategy for the company's excess cash, the board of directors to choose an external investment manager to select and manage day-to-day the specific financial instruments in which the company's excess cash is invested to implement the board's overall investment strategy, and the CEO and other company management official to oversee the investment management process, including periodic review of the company's investment portfolio. This Deputy Postmaster General does not actively control the financial interests of the investment company in his position on the board of directors.
(b)Exception. Paragraph (a) of this section does not prohibit any member of the Board of Governors or spouse or minor child of any member of the Board of Governors from directly or indirectly acquiring or holding, or a member of the Board of Governors from actively controlling on behalf of any entity, any financial interest in any publicly-traded or publicly-available mutual fund (as defined in 5 CFR 2640.102(k) ) or other collective investment fund, including a widely-held pension or other retirement fund, that includes any financial interest described in paragraph (a)(1)(i) or (ii) of this section, provided that:(1) Neither the member of the Board of Governors nor his or her spouse exercises active control over the financial interests held by the fund; and(2) The fund does not have a stated policy of concentrating its investments in, as applicable, persons engaged in the delivery outside the mails of mailable matter, except daily newspapers, or persons engaged primarily in the business of leasing real property to the Postal Service.(c)Reporting of prohibited financial interest and divestiture-(1)General. Any financial interest prohibited by paragraph (a) of this section shall be divested, in the case of a Governor, within 90 calendar days of confirmation by the Senate of the Governor's nomination, and, in the case of a Postmaster General or Deputy Postmaster General, within 90 calendar days of his or her appointment, or as soon as possible thereafter if there are restrictions on divestiture.(2)Newly-prohibited financial interests following confirmation or appointment. If a financial interest described in paragraph (a) of this section becomes prohibited subsequent to the Governor's confirmation or a Postmaster General or Deputy Postmaster General's appointment: (i) The member of the Board of Governors shall report the prohibited financial interest to the Postal Service's Designated Agency Ethics Official (DAEO) within 30 calendar days of the DAEO informing the member of the Board of Governors that such financial interests have become prohibited; and(ii) The prohibited financial interest shall be divested within 90 calendar days of the DAEO informing the member of the Board of Governors that such financial interests have become prohibited, or as soon as possible thereafter if there are restrictions on divestiture.(3)Prohibited financial interests acquired without specific intent following confirmation or appointment.(i) If a member of the Board of Governors, or spouse or minor child of any member of the Board of Governors acquires a financial interest prohibited by paragraph (a)(1) of this section without specific intent to acquire it (such as through marriage, inheritance, or gift) subsequent to the Governor's confirmation or the appointment of a Postmaster General or Deputy Postmaster General: (A) The member of the Board of Governors shall report the prohibited financial interest to the Postal Service's DAEO within 30 calendar days of its acquisition; and(B) The prohibited financial interest shall be divested within 90 calendar days of its acquisition, or as soon as possible thereafter if there are restrictions on divestiture.(ii) If an entity whose financial interests are actively controlled by a member of the Board of Governors acquires a financial interest described in paragraph (a)(1)(i) or (ii) of this section without specific intent to acquire it (such as through a gift) subsequent to a Governor's confirmation or the appointment of a Postmaster General or Deputy Postmaster General:(A) The member of the Board of Governors shall report the prohibited financial interest to the Postal Service's DAEO within 30 calendar days of its acquisition; and(B) The prohibited financial interest shall be divested within 90 calendar days of its acquisition, or as soon as possible thereafter if there are restrictions on divestiture.(4)Disqualification from participating in particular matters pending divestiture. Pending any required divestiture of a prohibited financial interest provided for in this paragraph (c), a member of the Board of Governors shall disqualify himself or herself from participating in particular matters involving or affecting the prohibited financial interest. Disqualification is accomplished by not participating in the particular matter.(d)Waiver of prohibited financial interests. For good cause shown by a member of the Board of Governors, the Postal Service's DAEO may grant a written waiver to the member of the Board of Governors of any prohibited financial interest described in paragraph (a) or (c)(2) or (3) of this section; provided that the DAEO finds that the waiver is not inconsistent with 5 CFR part 2635 or otherwise prohibited by law, and that under the particular circumstances, application of the prohibition is not necessary to avoid the appearance of the member of the Board of Governors' misuse of position or loss of impartiality, or otherwise to ensure confidence in the impartiality or objectivity with which the Postal Service's programs are administered. The DAEO may impose appropriate conditions for granting of the waiver, such as requiring the member of the Board of Governors to execute a written statement of disqualification.(e)Definition. For purposes of this section, a person engaged in the delivery outside the mails of any type of mailable matter is as defined in § 7001.102(d)(3) .