Dear Colleagues:

As someone who is often accused of being the bearer of bad news, I am now hopefully bringing to your attention something that may be perceived as good news. As you may recall from ethics training, federal regulations held that promotional items received by federal employees as a result of government-funded travel could not be retained by the employee. That has now changed. The new rules provide that promotional items received as a result of government-funded travel MAY be retained by the employee for his/her personal benefit. Congress passed this law in late 2001 and new regulations are currently being drafted by the General Services Administration. However, in taking advantage of this new "perk," please be mindful of the following guidelines:

1. Promotional items include frequent flyer miles, class upgrades, and access to carrier clubs or facilities. This change in the law does not change the rules governing involuntary or voluntary denied boarding compensation. If you are not certain whether a travel promotional item qualifies under the new rules, please seek guidance from me or one of the attorneys in my office. Remember, it is a lot easier to ask the question before you do it then it is to seek absolution after you have done it.

2. The promotional item that may be used for personal benefit MUST be obtained under the same terms as those offered to the general public AND at no cost to the Government. In other words, if the promotional item is only being offered as a result of your Government-employee status, or if it costs the Government additional money, you cannot use it.

3. Promotional items received before, on, or after December 31, 2001, qualify and may be used for personal benefit.

4. The Government will not reimburse fees, if any, to join frequent flyer traveler programs. Employees are responsible for taking the necessary steps to establish their own accounts.

5. Employees are still required to make travel arrangements based upon the most efficient routes and services available. In other words, you may not choose an airline strictly on the basis of the best promotion being offered (e.g., most frequent flyer miles). Employees are also still required to use airlines that have been pre-selected by the Government.

6. As of February 21, 2002, the Internal Revenue Service (IRS) has indicated that promotional travel benefits received are not taxable; however, IRS and/or Congress can change that determination whenever they choose to. IRS has also indicated that any changes that might occur would be prospective in nature. Any tax liability issues that may arise are personal and the resolution of that issue is between you, your tax accountant and the IRS.

Again, I encourage you to call me or any of the attorneys in OGC if you have questions or concerns. Good luck!