U.S. Department of Housing and Urban Development
                           Office of Ethics, Administration
 
Ethics Letter 91-1         June 1991
 
           Prohibition of Advance Disclosure of Funding Decisions
 
Section 103 of the HUD Reform Act provides that, during the process of
selecting applicants for HUD assistance, no HUD officer or employee shall
knowingly disclose any covered selection information to any person other
than an employee authorized to receive such information. Section 103
applies to any grant, loan, subsidy, guarantee, or other financial
assistance under a program administered by HUD that provides for the
competitive distribution of assistance.  The regulation implementing
Section 103 was published in the Federal Register on May 13, 1991.
 
What is the intent of Section 103?
 
The intent is to prohibit the unauthorized disclosure of information during
the selection process to applicants, lobbyists, consultants, Members of
Congress, Congressional staff, or others that would give, or would appear
to give, one applicant an advantage over another applicant.  It is not the
intent of Section 103 to stifle communication between HUD employees or with
applicants.  However, there are certain permissible disclosures which are
discussed below.
 
Who is an "authorized employee"?
 
An authorized employee is defined as one whose responsibilities in
connection with the selection process require that the employee have the
covered selection information to perform her or his official duties.  There
is no list of authorized employees.
 
In general, authorized employees may discuss covered selection information
with other persons who are working on that particular competition or who
have a need to know that information to perform their official duties.  You
may not discuss covered selection information with people who are not
working on the selection process or do not have an official need to know.
 
When does the "selection process" begin and end?
 
The selection process begins when the HUD official responsible for awarding
the assistance (or his or her designee) makes a written request (which
includes the selection criteria that will be used) to the Office of General
Counsel to prepare a Notice of Fund Availability (NOFA).  It concludes with
the announcement of the selection of recipients of assistance.
 
What is "covered selection information"?
 
This is information that is:
 
o  Required by statute, regulation, or order to be confidential;
o  Contained in an application or request for HUD assistance; or
o  Used in arriving at the decision to make assistance available, unless
   the information is generally available to the public.
 
Examples of information that you may not disclose include but are not
limited to:
 
o  The relative standing of any applicant;
o  The amount of assistance requested by any applicant;
 
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o  The identity of any applicant;
o  The number of applicants;
o  Any information contained in another applicant's application.
 
Examples of information you may disclose include but are not limited to:
 
o  Information that has been made public;
o  Information about HUD program requirements (including unpublished policy
   positions) provided the information is made available on a uniform basis
   to any applicant;
o  The dates by which particular decisions in the selection process will
   be made;
o  Information needed for an audit, inquiry, or investigation by the HUD
   Office of Inspector General;
o  Information needed by an attorney who is representing the Department in
   connection with legal activities;
o  Information needed to process an application, e.g., information given to
   an environmental review contractor.
 
An authorized employee may contact an applicant to:
 
o  Discuss the applicant's failure to qualify (after a preliminary review
   for eligibility and completeness) and the reasons for the failure to
   qualify;
o  Discuss the applicant's failure to be technically acceptable after a
   full review; and
o  Discuss the applicant's application to obtain clarification.
 
How should a violation be reported?
 
Violations should be reported to:
 
o  The Office of Ethics: 708-3815, FTS 458-3815;
o  The Regional Inspector General for Investigation; or
o  The HUD Hotline: FTS 458-4200, toll free 1-800-347-3735.
 
Regulations prohibit the disclosure of the identity of any employee who
reports a violation without the consent of that employee or unless it is
determined by the Office of Inspector General that the disclosure is
unavoidable during the course of the investigation.
 
What are the penalties?
 
For HUD employees who "knowingly and materially" violate Section 103, there
are civil money penalties of up to $10,000.  Employees who act carelessly
or negligently, for example, by leaving documents with covered selection
information in an area accessible to or frequented by applicants or
unauthorized employees, may be subject to other disciplinary action.  The
Department can also take administrative sanctions against applicants who
receive such prohibited information.
 
Where can more information be obtained?
 
The Office of Ethics can supply information of a general nature.  If you
have a specific program question, such as whether you can or cannot discuss
a particular subject, you should contact your Regional or Field Office
Counsel or the program counsel in Headquarters.
 
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Distribution: W-A, F-A                       Originator: W. White, 708-3813