Sponsor employees whose salaries or other compensation are paid, in whole or in part, with agency funds are subject to the restrictions described in Sec. 1226.8 (a), (b), (c) and (d) and the exceptions in Sec. 1226.9:
(a) Whenever they are engaged in an activity which is supported by ACTION funds; or
(b) Whenever they identify themselves as acting in their capacity as an official of a project which receives ACTION funds, or could reasonably be perceived by others as acting in such capacity.