<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:65930.wais]
REAUTHORIZATION OF THE OFFICE OF GOVERNMENT ETHICS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE CIVIL SERVICE
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
August 4, 1999
__________
Serial No. 106-134
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
65-930 CC WASHINGTON : 2000
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on the Civil Service
JOE SCARBOROUGH, Florida, Chairman
ASA HUTCHINSON, Arkansas ELIJAH E. CUMMINGS, Maryland
CONSTANCE A. MORELLA, Maryland ELEANOR HOLMES NORTON, Washington,
JOHN L. MICA, Florida DC
DAN MILLER, Florida THOMAS H. ALLEN, Maine
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
George Nesterczuk, Staff Director
Ned Lynch, Professional Staff Member
John Cardarelli, Clerk
Tania Shand, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on August 4, 1999................................... 1
Statement of:
Potts, Stephen D., Director, Office of Government Ethics,
accompanied by Marilyn Glynn, General Counsel.............. 6
Walden, Gregory S., Patton Boggs LLP, former Associate
Counsel to the President................................... 20
Letters, statements, et cetera, submitted for the record by:
Potts, Stephen D., Director, Office of Government Ethics,
prepared statement of...................................... 10
Scarborough, Hon. Joe, a Representative in Congress from the
State of Florida, prepared statement of.................... 4
Walden, Gregory S., Patton Boggs LLP, former Associate
Counsel to the President, prepared statement of............ 23
REAUTHORIZATION OF THE OFFICE OF GOVERNMENT ETHICS
----------
WEDNESDAY, AUGUST 4, 1999
House of Representatives,
Subcommittee on the Civil Service,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:10 a.m., in
room 2247, Rayburn House Office Building, Hon. Joe Scarborough
(chairman of the subcommittee) presiding.
Present: Representatives Scarborough and Cummings.
Staff present: George Nesterczuk, staff director; Ned
Lynch, professional staff member; John Cardarelli, clerk; Garry
Ewing, counsel; Jennifer Hemingway, legislative assistant/
scheduling; Tania Shand, minority professional staff member;
and Earley Green, minority staff assistant.
Mr. Scarborough. I'd like to call this hearing to order and
welcome you all. I would certainly like to thank our witnesses
for coming and speaking today. I apologize for the delay.
Actually, I was walking down the hall and had on my card that
this is in 2203. I stopped Mr. Cummings, our distinguished
ranking member, and I dutifully told him he was going in the
wrong direction so we enjoyed the first few minutes of John
Mica's subcommittee hearing and then decided to come over here
to the correct room. So I followed Mr. Cummings and will do so
in the future, possibly even on issues like long-term care. I
have more confidence in you this morning than myself.
Again, thank you for coming. We're going to be conducting a
hearing now to review the operations of the Office of
Government Ethics in preparation for our legislation to
reauthorize the agency. This Nation has always recognized that
the character of our highest elected officials is vital to the
success of our representative government. That goes for our
appointed officials also. A periodic review of the works of the
office established to enforce the ethical standards of Federal
service permits us to assess our progress in complying with the
intentions and the spirit of the ethics laws.
The Office of Government Ethics, a small but very well
respected agency, promulgates policies and ethical standards
that are implemented by a network of more than 120 designated
agency ethics officers. It also provides training and
educational programs through more than 8,500 employees who
conduct ethics training to provide guidance to employees
throughout the government. Most of these employees work in
agency counsels' offices and perform their ethical
responsibilities as collateral duties related to other work.
The Ethics in Government Act relies heavily upon financial
disclosure requirements to guard against conflicts of interest.
Senior officials are expected to disclose their assets and
recuse themselves from decisions that might provide even an
appearance of conflicts of interest. The act also restricts the
work that government employees can perform after they leave
office. As our witnesses will testify today, these conditions
are meant to have a serious effect on government employment,
particularly at the highest levels.
It is not clear, however, that our ethics rules have
produced more ethical government. Our current President pledged
as a candidate that he would have ``the most ethical
administration in history.'' When he entered office, he issued
an Executive order tightening the post-employment restrictions
on people who would serve in his administration. Our experience
with this administration, however, forces us to question
whether financial disclosure and post-employment restrictions
are adequate to address problems associated with integrity in
our public officials. The list of this administration's
questionable practices is too long to ignore and they will go
well beyond the use of the White House for improper campaign
fund raising. Unfortunately, it is not clear that all of the
administration's actions are prohibited by current law. As we
continue reauthorizing the Office of Government Ethics, we
should examine whether some of those practices warrant changes
in the underlying laws that we have now.
For example, the administration's Health Care Task Force
included many ``special government employees.'' These people
continued to work and receive compensation from private
organizations that had substantial interests in the outcome of
the task force's policy recommendations. Their activities
raised much controversy concerning conflicts of interest.
Then there were the so-called volunteers working in the
White House, more than half of whom were actually on the
payroll of the Democratic National Committee while working in
the White House. Others worked at the White House while on the
payroll of various special interest groups.
Finally, we have the example of John Huang. This political
fund-raiser received more than $700,000 from his former
employer, the Lippo Group, before taking a position in the
International Trade Administration at the Department of
Commerce. Do large severance payments from former employers
prior to government employment give the appearance of a
conflict of interest or at least raise a specter of doubt?
In addition to these issues, we should also consider
whether the sanctions associated with violations of current law
are adequate to deter and/or punish unethical conduct in
office. The Office of Government Ethics currently refers
criminal violations to the Department of Justice, which has
primary responsibility for any prosecutions. Has this avenue of
prosecution been adequate?
These questions appear simple, but they arise because even
the careful design of previous legislation did not address all
of the potential areas of public concern. I do not anticipate a
comprehensive review of the alleged improprieties, but I
believe our reauthorization of this agency should at least
address the concerns that we have developed from our recent
experience.
Obviously I think that makes all of us stronger whether
we're talking about looking at a Republican administration or a
Democratic administration, whether we're talking about this
current administration or administrations in the future.
Our witnesses today are Mr. Stephen D. Potts, the Director
of the Office of Government Ethics. He is now serving his
second 5-year term and that term will expire in June of next
year. Our second witness today is Mr. Gregory S. Walden. Mr.
Walden is currently counsel at the firm of Patton Boggs, but he
was invited to serve as a witness today because of his role in
overseeing Ethics in Government Act compliance as associate
counsel to President Bush. He has since continued studies
related to the Ethics in Government Act and published a book on
the topic entitled ``Our Best Behavior.''
And with that, I would like to turn it over to Mr. Cummings
for any comments he may have.
[The prepared statement of Hon. Joe Scarborough follows:]
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Mr. Cummings. Mr. Chairman, I appreciate your convening
this hearing on the Office of Government Ethics. It's been a
number of years since the subcommittee has held an oversight
hearing on OGE and it is prudent that we establish a record of
how the agency is operating. OGE's mission is not only to
prevent and resolve conflicts of interest and to foster high
ethical standards for Federal employees but also to strengthen
the public's confidence that the government's business is
conducted with impartialialty and integrity. OGE does this by
reviewing and certifying the financial disclosure forms filed
by Presidential nominees requiring Senate confirmation, serving
as a primary source of advice, and counseling on conduct and
financial disclosure issues and by providing information on and
promoting understanding of ethical standards and executive
agencies. OGE and its staff are well regarded by Federal
agencies with whom they do business.
Mr. Gregory Walden, who will be testifying before us
shortly, stated in his prepared remarks that OGE has played an
essential and significant role in fostering the public's trust
in the integrity of government. OGE has performed exceptionally
well and deserves to be reauthorized, and I am sure that the
rest of the day's testimony will prove that to be the case.
There is no question that Mr. Stephen Potts has done an
outstanding job along with his staff, and we thank you for your
service.
I look forward to hearing from all of today's witnesses
regarding OGE's reauthorization. Thank you.
Mr. Scarborough. If I could ask our witnesses to stand so
we can administer the oath.
[Witnesses sworn.]
Mr. Scarborough. Thank you. Be seated.
Why don't we go ahead and start with Director Potts.
STATEMENT OF STEPHEN D. POTTS, DIRECTOR, OFFICE OF GOVERNMENT
ETHICS, ACCOMPANIED BY MARILYN GLYNN, GENERAL COUNSEL
Mr. Potts. Thank you very much, Mr. Scarborough. Mr.
Chairman and members of the subcommittee, first of all let me
just acknowledge the presence of Mr. Greg Walden. He's been a
colleague over the years. We've continued to enjoy working with
him from time to time and have great respect for what knowledge
and information he has brought to the ethics community. We're
very happy that even though he's in the private sector, that he
continues to do so.
I want to thank you for the opportunity to appear today to
discuss the reauthorization of the Office of Government Ethics.
And I will keep my remarks brief. And I request the
subcommittee to include my formal statement as part of the
hearing record.
Mr. Scarborough. Without objection, so ordered.
Mr. Potts. With me today is OGE's General Counsel, Marilyn
Glynn.
The 3 years since our last reauthorization have passed
quickly and for OGE we believe very productively. I'd like to
take this opportunity to review briefly some of our
accomplishments during these last 3 years.
Over 2 years ago to enhance our program capabilities, we
reorganized our Office of Education and created a new Office of
Agency Programs with three separate divisions. One was
education and program services. Two was financial disclosure
and the third was program review. This reorganization committed
more resources to OGE's education and training functions. OGE
now provides more direct service to agencies through our desk
officer program and we have developed employee training
materials such as a computer-based ethics game, pamphlets, and
new video training tapes. We've also provided new courses
designed for the education of ethics officials, including
conference style workshops for ethics officials out in the
various regions of the United States.
In addition, our program reviews have focused not only on
determining if reviewed agencies were maintaining their
programs properly but also on finding and sharing best
practices of agencies in carrying out the various elements of
their programs which we could then in turn share with the other
agencies of the Federal Government.
Over the past 3 years to implement the ethics program and
serve the ethics community, OGE has made more effective use of
technological advances. We've developed a website for easy
dissemination of information to the ethics program community,
to employees and to the public. In addition, we've developed a
CD-Rom containing all of the basic resource and reference
material important to the program. We've developed software
that is used in the completion of the confidential financial
disclosure forms filed by over 250,000 employees in the
executive branch, and we're in the process of developing the
software necessary for the completion of the public financial
disclosure reports, which of course are filed by a far smaller
universe of filers.
Recently as the United States and other countries and
organizations have focused on the effect of corruption on
governments and economies throughout the world, we have been
called upon by U.S. foreign policy agencies to provide
technical assistance regarding the elements of a corruption
prevention program as one part of the government's overall
anticorruption efforts. In response to requests from these
agencies and also from foreign countries and multinational
organizations for information about our program, we have met
with more than 550 visitors from over 55 countries in our
offices. And we've also as personnel time permitted and usually
with the financial support of U.S. foreign policy entities,
participated in anticorruption programs held abroad.
Over the past 3 years, OGE has continued to devote a
substantial amount of our resources to our ongoing programs.
We've continued to review and certify the financial disclosure
forms filed by Presidential nominees requiring Senate
confirmation and serve as the primary authority on conduct and
financial disclosure issues.
During these past 3 years, we handled 724 nominee forms and
approximately 3,000 annual and termination financial reports.
In addition, we continue to provide interpretive guidance on
the criminal conflict of interest statutes and to review and
update our regulations for the standards of conduct.
As you know, earlier this year our office sent draft
legislation requesting an 8-year reauthorization. We hope that
you'll favorably consider our proposal and our desire that
future authorizations not expire during the first or fourth
years of a Presidential term. Our programmatic responsibilities
in the areas of nominee financial disclosure reviews and
transition post employment advice places a greater strain on
our resources during those particular years, the first and
fourth years of a Presidential term. Consequently, we believe
it's more helpful for us and for Congress for our
reauthorization review to occur outside those 2 years.
Now, it's true that a 3 or 4-year period of authorization
would avoid the problematic first and fourth years of a
Presidential administration, but we believe there are good
reasons to authorize OGE for 7 or 8 years. First, our track
record over the past 20 years of existence. I think that we
have shown during those 20 years that this organization has
operated in a nonpartisan and a very professional and effective
way. So I think that's one reason to reauthorize this office
for 7 or 8 years.
Second, I think this is a very fundamental program. This is
not some program that should run out. There are a lot of
programs that sort of have their day and accomplish their
mission. Then you move on and maybe they ought to be sunsetted.
But this is something that is very fundamental because the
fundamental tenet of our program is public service is a public
trust. That is something that is permanent and should be
permanent as part of the government. And so we want to make
sure that this office is around to try to be the source for our
implementing the strategy of public service being a public
trust.
The third is the size and care that we've taken with our
budget. First of all, as to size, I mean, we are a tiny agency
right now. We have about 80 employees and we have a total
budget of about $9 million. So in terms of size and budget
contrasted to the other agencies and departments, we are tiny.
I think that's another reason why we should be given a longer
authorization period in light of our mission and small budget.
And finally, the resources that both our Office and the
Congress must expend in a reauthorization process. It would be
one thing if the only opportunity for the Congress to review
our activities would be the reauthorization process. Then I
might say that yes, it should be more frequent than just what
we're requesting to have a reauthorization for 7 or 8 years.
But of course as we've said, any time that this committee or
any Member here or in the Senate wants to ask us questions and
wants us to come up and explain our program and talk about it
in detail, we are always available. We welcome that interest in
our program because we are always trying to make the program
better and to improve it. And in addition to that, as you
noted, Mr. Scarborough, my term ends next year, and our
experience is that in connection with the consideration of a
new nominee, the Senate usually conducts a review of our
agency's program and gets into it in some detail in that
context.
So I would anticipate when a new nominee to be director of
the Office is being considered next year, at least on the
Senate side, there will be a consideration in great detail of
our program. And then finally, we have of course the
responsibility to report under the Government Performance and
Results Act exactly what results we have had and what our
performance has been. I think there is now a mechanism in place
that really hasn't been to consider exactly how we are doing
and for this committee to stay on top of really what's going on
at OGE. So for all of these reasons, I want to urge you to
authorize the agency for either 7 or 8 years.
Now, in closing, let me just shift gears briefly. Your
letter of invitation posed a number of questions and I've
addressed those in my written statement. If you'd like further
elaboration or clarification, of course I'll do my best to
respond. I'd be happy to answer any other questions that you
have about OGE, our programs, or about our reauthorization
legislation. I want to thank you for the opportunity to appear
today.
[The prepared statement of Mr. Potts follows:]
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Mr. Scarborough. Thank you, Mr. Potts. Mr. Walden.
STATEMENT OF GREGORY S. WALDEN, PATTON BOGGS LLP, FORMER
ASSOCIATE COUNSEL TO THE PRESIDENT
Mr. Walden. Thank you, Mr. Chairman, Mr. Cummings. I'm
pleased to testify today in support of OGE's reauthorization.
This is my fourth visit before this committee and I'm honored
by your invitation as well by Mr. Potts' kind remarks.
In its 20 years of existence with just under 100 employees
OGE has performed an essential role within the executive branch
in fostering the public's confidence and trust in the integrity
of government. On the whole OGE has performed exceptionally
well and deserves to be reauthorized. Because of its solid
performance, OGE ought to have a permanent place in the
executive branch.
A single executive agency independent of all others is
essential to fulfill the cardinal objectives of any system of
government ethics: Uniformity, consistency, reasonableness,
fairness and objectivity. At this point in OGE's history, the
question before the Congress should not be whether to
reauthorize OGE but whether OGE should be charged with any new
or different authority.
I do not have a strong opinion as to the length of
reauthorization, although I agree with Director Potts that a
reauthorization should not expire the first or last year of any
administration. In my opinion, it's a legislative judgment, to
be made by those who oversee OGE, whether a regular
authorization is necessary to provide the best opportunity for
needed ethics reform. There are a number of programs run by the
executive branch that expire after a certain time and need to
be reauthorized. Those are important programs but the
reauthorization period provides Congress with an opportunity to
tackle necessary reforms. Regardless of whether the
reauthorization is for 4 years or for 8, Congress should
conduct regular oversight and I would suggest perhaps a yearly
oversight hearing. Congress should oversee OGE the way it would
oversee any other executive agency.
Regarding OGE's rulemaking authority, OGE needs to complete
its rulemaking to implement and interpret section 209, the
supplementation of salary statute, and in particular section
207 dealing with post-employment restrictions. Now, there is a
consensus within the ethics community--perhaps not shared by
Congress, that the post-employment restrictions matrix is
excessive, it's complex, and it's uneven. But it's up to
Congress to reform that statute. OGE cannot do it. What OGE can
do and should do is issue interpretive guidelines because right
now section 207 is a trap for the unwary. The matter is not
made better but made worse in my opinion by President Clinton's
Executive order, which is riddled with exemptions and
loopholes, and is also more excessive than necessary and should
be repealed by the next President.
It would also behoove OGE to conduct a rulemaking
proceeding regarding the use of legal defense funds. Now, this
is a difficult subject and OGE has done a good job, in my
opinion, in giving advice to legal defense fund trustees and
government officials to date, but I believe it deserves a
comprehensive review by Congress and perhaps legislation will
be necessary. Members of Congress and staff also from time to
time have set up a legal defense fund and perhaps there ought
to be a single rule for all employees and officials.
Regarding OGE's investigative authority, OGE has statutory
authority right now to investigate allegations that an
executive branch official has violated ethics standards, but
OGE's authority is circumscribed. OGE is just one actor in a
cast of government investigators and prosecutors. And OGE by
rule has further limited its authority to conduct initial
investigations that do not rise to the level of a crime,
deferring to agency personnel. As a general matter, I think
that's reasonable, but occasionally there will be benefits to
the public as well as to the administration in having OGE
conduct that initial investigation. Where directed by the
President or requested by a member of the cabinet, and provided
OGE is given necessary resources, OGE could conduct an
investigation in lieu of an agency ethics or IG investigation.
In any event, if the investigation remains within the agency
under current policy and practice, an OGE official in my
opinion should be assigned to participate in such investigation
to the extent necessary to ensure its thoroughness,
objectivity, and faithfulness to OGE's interpretation and
guidance. Perhaps agency ethics officials and IGs should be
required to notify the Director of OGE and the White House
Counsel simultaneously upon the initiation of an ethics
investigation involving any Presidential appointee. The
President could then determine whether OGE should conduct the
investigation or whether a more formal role of OGE is necessary
or appropriate.
Regarding OGE's audits or program reviews, I recommend that
OGE rearrange its schedule of reviews to ensure that every
cabinet department and the White House Counsel's office is
reviewed in the second year of a new administration. With
respect to training and education, I believe more attention
should be placed on Presidential appointees, non-career SES
officials and schedule C employees as well as employees in
regional and field offices. My sense is that these two classes
of employees, for different reasons, are most at risk of
violating ethics standards.
In my prepared statement, I recommend several changes to
the ethics laws. I wish to highlight only one of these
recommendations in my opening remarks. The term special
government employee should be clarified to codify the
functional test used by the Department of Justice and OGE.
Simply put, an informal advisor who participates regularly in
internal agency deliberations or who supervises or directs
other Federal employees, even an informal advisor who does so
without pay or without formal appointment, ought to be subject
to the conflict of interest laws and financial disclosure
standards to which the rest of the Federal work force is
subject. Yet, the current uncertainty of the application of the
ethics laws to informal advisors has resulted in a number of
situations where Federal functions are being performed by
persons with conflicting Federal interests. For instance,
agency personnel offices may not be sufficiently sensitive to
the simple matter in which contract consultants unwittingly
become special government employees.
In 1996 the House passed a revision of the SGE definition
to codify the functional test. The Senate deleted the provision
and the revision did not become law. I urge this Congress to
clarify the SGE definition and to do so before the next
President is inaugurated.
Thank you very much for the opportunity to testify and I
will be happy to answer any of your questions.
[The prepared statement of Mr. Walden follows:]
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Mr. Scarborough. Thank you very much. Let's begin our
questioning with you, Mr. Potts, and let me ask you this. Since
we've just had a discussion on special government employees,
let me ask you whether the White House--this White House or any
past White Houses, if it was even relevant then, has come to
you and asked you for assistance in determining whether a
particular individual fits into this class of special
government employees; in fact, if they ever asked you that
question.
Mr. Potts. First of all, let me say that we support the
idea of the legislation. In fact we're one of the forces behind
that legislation being offered previously that Mr. Walden
referred to, to in effect codify in the law the elements that
we consider as a matter of policy in deciding whether someone
is a special Government employee, but I would also caution that
I would strongly oppose the idea of that being thrown into the
reauthorization legislation. We don't want to have that
cluttering up the reauthorization.
Yes, we have been consulted by, I would say, all White
House counsel that have served during the almost 9 years that
I've been director, and I say Counsel but that means someone in
their office, about individual cases of whether someone is a
special government employee, but I think the way that it's
actually applied it's usually pretty clear as to who is and who
is not a special Government employee if someone really is just
willing to get the facts of what the particular arrangement is.
So typically when we are presented with questions like that,
it's more a question of just finding out factually exactly what
is the person doing--are they working in a government office?
Are they being supervised? And if they are, they're special
Government employees and they're subject to all of the ethics
rules.
Mr. Scarborough. To help us with this definition, let's
talk about a few people that have played an active role in the
White House, again just for the purposes of definition and
whether they were, should be, or would be a special government
employee under past definition or the proposed new definition.
Let's start with somebody like Paul Begala or Dick Morris,
where you read these books already on the history of the
Clinton administration through the first 6 years and you see
the very important people. I remember reading ``New York
Times'' and ``Washington Post'' articles especially in 1996
talking about almost daily meetings of everybody sort of
hovering around in the Oval Office and Dick Morris and Paul
Begala being at the center of that and obviously being at the
center of what activities all these government employees would
be doing in these agencies over the next year. And I'm
certainly not sitting here saying that's inappropriate because
every White House, at least in modern time, has had their own--
I guess I shouldn't say Dick Morris--everybody has had friends
that have come in and those lines obviously get blurred.
But let me ask first of all just for the record was Paul
Begala or Dick Morris classified as a special Government
employee?
Mr. Potts. I don't know specifically and I don't recall
ever being asked. I gather you don't recall our being asked and
it wouldn't be necessary, of course, for us to be asked because
we expect each department agency, including the White House, to
administer its own program. We're there to consult. There is,
particularly with the Counsel's office, a very active back and
forth about a lot of issues. But we expect them to make those
decisions and so we don't actually know in the cases that you
cite.
Mr. Scarborough. Mr. Walden, should they be? Under your
definition--and again, let's get out of the specifics of this
administration and say--let's say George W. Bush or Al Gore,
the next President, and they have people like this in and out
of their White House, or Bill Bradley. We don't want to offend
anybody from New Jersey. Should people in that position be
classified as a special Government employee?
Mr. Walden. Yes. If the informal advisor is taking part
regularly in internal agency deliberations, there really is no
difference between that informal advisor and a White House
staffer. I would distinguish the meetings that all Presidents
have had with the head of the Chamber of Commerce or the head
of the AFL-CIO, or a good counselor and friend, or the chairman
of the RNC or the DNC, in one-on-one meetings with the
President or another White House official. The President should
be free to continue to get advice from anybody at any time but
where that advisor is brought into the government and sits
around the table and helps the agency, the White House, come to
a decision, he is a de facto government employee.
I believe that conduct meets the functional test and I
would say that based on public reports, if they're true, Paul
Begala and Dick Morris crossed the line and were special
Government employees. I don't want to fault Paul Begala or Dick
Morris or Harry Thomason or even the White House office or
certainly the OGE, but certainly within the Clinton White House
there was management control of people coming in and making
sure those people were judged yes or no and screened and
required to file financial disclosure statements.
Mr. Scarborough. Do you think your clarifying definition
that you're proposing would help clean this up a little bit for
the next administration?
Mr. Walden. I think it would, but passing the law still
requires people to administer the law and better management of
the White House and some agencies would be in order. Clarifying
the definition would make it very clear that even without a
formal appointment, you can run afoul; you become a special
Government employee.
Mr. Potts. Let me say I agree with that and I think the
passage of the law would help everyone in the government,
including the White House, know exactly what the criteria are.
They are out there but having it in a statute and clarifying
that if a person is performing a Federal function and they are
subject to supervision by someone that's clearly a Federal
official, then they're a special Government employee. Those
criteria would separate out the kind of people that Greg
mentioned, like the president of the Chamber of Commerce or the
president of a labor union or someone coming in. They clearly
are not going to perform a Federal function nor are they
subject to being supervised by someone in the Federal
Government.
Mr. Scarborough. I'm glad you clarified that because I
think the supervisory role helps differentiate--I've heard some
people say in the past they were a little concerned about this
because let's say Mr. Cummings is President 10 years from now
and he has a friend who's been a friend since he was 11 years
old. Well, he should be able to talk to him every day and get
advice from him so this definition in no way would stop
somebody from leaning hard on a friend or even have a friend
coming into the White House and talking and somebody that he
could trust, but again supervisory issue is the key issue
there?
Mr. Potts. Right.
Mr. Scarborough. We're going to have two votes. Why don't
we go ahead and take a break and we'll go over and vote and
then be back hopefully in the next 15, 20 minutes.
Thank you.
[Recess.]
Mr. Scarborough. Mr. Cummings.
Mr. Cummings. Mr. Walden, you talked about the special
Government employees and I'm trying to go back to why we're
here with regard to reauthorization. Mr. Potts' office didn't
do anything wrong, did they, to your knowledge?
Mr. Walden. To my knowledge I don't have any criticism with
the advice OGE has given under the special Government employee
concept.
Mr. Cummings. You were talking about certain investigations
and I was jotting down notes real quick. Do we--since we're
talking about authorization, Mr. Potts, you know the
investigations he was talking about that he felt you should be
involved in. What were those, Mr. Walden? Remind me.
Mr. Walden. I believe that going back to the allegations
in, I believe 1994, involving the conduct between the Treasury
Department and the White House, the Office of Government Ethics
did look into the conduct of Treasury employees. I think it
would have been more appropriate for the Office of Ethics to be
asked to look at both the conduct of the Treasury Department
employees and White House employees.
With regard to the White House Travel Office, after the
initial criticism of the firings of the Travel Office
officials, the White House conducted a management review. It
was not done by the White House Counsel's office. There were
some people in the Counsel's office who were involved in those
things. I think that a review by the Office of Government
Ethics would have received a lot more credibility from the
public than the White House management review received. And I
also think with regard to Secretary Espy, the White House
conducted a review of the allegations against Secretary Espy
but that report contained no findings or conclusions. I believe
that if the Office of Government Ethics had been asked to do
such a review, we would have gotten a more thorough
comprehensive report.
Mr. Cummings. So you think the--you think with that report,
Mr. Espy would have gone through the same things that he went
through? Based on--this is sort of hindsight, I know. But I'm
just curious. That Espy case is one which--it really bothers a
lot of people because--and I'm just wondering, I mean, it
seemed as if just from what I've read that if it had gotten--
that no matter what, it probably would have reached an
independent counsel stage no matter what. That's from my
reading as a lawyer, but I'm just wondering do you think it
would have been a different result?
Mr. Walden. I'm not sure and perhaps not, Mr. Cummings. We
no longer have an independent counsel law, so that shouldn't
happen in the future. My concern all along was having the
public understand what the facts indicated, that Secretary Espy
had violated the ethics laws. I was not as concerned as to
whether there were violations of criminal law. I thought there
were violations of ethics laws and that was somewhat muddled in
the appointment of the independent counsel. If I were in the
Department of Justice or an independent counsel, I might not
have sought to indict Secretary Espy. I thought it would be
sufficient that he forfeited his office because of violations
of ethics laws. But that again was muddled because of I think
an inadequate White House Counsel's report.
Mr. Cummings. With the doing away with the Office of
Independent Counsel, does that put, you think, more of a burden
on the Ethics Office in any way?
Mr. Walden. Not directly because the Ethics Office cannot
conduct investigations of allegations of violations of criminal
law. That's for the Department of Justice to do. Of course,
inspectors general also can conduct preliminary investigations
of criminal activity. I think that the vacuum left by the
demise of the independent counsel law will be filled and should
be filled by increased oversight by Congress as well as the
Department of Justice, which would step in the shoes of
independent counsel.
Mr. Cummings. One of the things that you said is you think
that the Ethics Office should come before the Congress with
regard to oversight on a yearly basis; is that right?
Mr. Walden. Yes.
Mr. Cummings. And what should we be looking for? In other
words, when they come before us, they come before us every
year, if you were sitting here and you had a sheet, a list of
things that you want to check on, what kind of things would you
be looking for and why?
Mr. Walden. I would ask the Office of Government Ethics how
things are faring in the executive branch, whether the
authorities they have are sufficient, whether the laws they
interpret are unclear and deserve clarification. I might want
to amplify my prepared remarks by saying that 20 years from
now, I might not advocate a yearly oversight hearing but I
think the ethics landscape still is unsettled. We have some new
laws and until the Federal work force operates under an ethics
system that's basically settled for a number of years, I think
it would benefit Congress as well as OGE to have a regular
exchange with Congress and yearly hearings once a year would
fulfill that need.
Mr. Cummings. The post-employment restrictions I think,
section 207.
Mr. Walden. Yes.
Mr. Cummings. And you talked about the guidelines needed.
In the State of Maryland, we had a situation where--I used to
sit on the committee that dealt with ethics--we had a situation
where the legislature for whatever reason just refused to make
clear what the ethics laws were because there were all kinds of
scenarios and so you had the loopholes, but clarification would
have--could have cleared it up and so year after year people
would come in, legislators would come in with various proposals
and then we found--then we had some people who were convicted
criminally of violations that were kind of serious and one of
their defenses consistently was, well, it wasn't clear. And I
say all that to say I take it you have a similar concern?
Mr. Walden. Yes, I do. And if memory serves, one of the
first prosecutions under the post-employment restrictions law
involving a Reagan administration official was overturned on
appeal because the court of appeals found that the statute was
ambiguous or didn't clearly proscribe the conduct. I think
that's post-employment restrictions. It might be lobbying. I
don't know. If it was post-employment restrictions, it
illustrates the concern that when an ethics law is not clear it
can't be understood. If it's not understood, you cannot expect
reasonable people to follow it. And the matrix of post-
employment restrictions right now is way too complex. High
level officials are subject to maybe six or seven different
proscriptions. Each of them has different language and then if
you're a lawyer, you're subject to your local bar rules, which
are more onerous than the Federal law.
Mr. Cummings. So now, Mr. Potts, if you have someone who
questions what they are about to do, what happens? Do you give
them an advisory opinion or something?
Mr. Potts. We will. It can be just informal oral advice or
an issue comes up that we expect to come up repeatedly and in
addition if it's a question that probably is cross-cutting
across various departments and agencies, we would issue a
written informal advisory opinion. Those are published and also
made known throughout the ethics community through what we call
paeograms. These are communications to the ethics community
that would describe the actions that we've taken or the
opinions that we've issued.
Mr. Cummings. Now, do you agree with Mr. Walden on this
clarification of 207? I think he mentioned another section too,
209?
Mr. Walden. The clarification most needed I think is the
special Government employee section, which is section 202.
Section 209, supplementation of salary, I think just needs the
interpretation guidance, but section 207 is definitely post-
employment restrictions.
Mr. Cummings. Do you agree with that?
Mr. Potts. We do agree with the 202. In other words, we
think and supported previously legislation to clarify and put
those criteria in the statute. So we would support that for
sure. On the 209, the supplementation of salary provision, I
don't see any need for any legislation on that right now. We
made an attempt probably 5 years ago to clarify and simplify
207, which is the post-employment. It is extremely complicated
and for a person who really sincerely wants to make sure that
he or she conforms to that law; it is not easy to do it because
it's really tricky. And so it requires constant professional
advice about what you can and can't do, especially if you've
been in the procurement area.
In any event, we made a proposal that was presented and the
result was that some legislation was passed that made it a
little more complicated rather than simplifying it. We felt
like we got our fingers burned a little bit. We felt in that
instance our attempt to do good ended up doing some bad. I
would strongly say if that is an area where the Congress would
get involved, it really could make a difference. I might ask
for my general counsel to add some comments because she's been
very much involved in our consideration of what might be done
to really improve 207 insofar as these post-employment
restrictions are concerned.
Ms. Glynn. I just wanted to make a couple of----
Mr. Scarborough. If we could ask you to just state your
name for the record.
Ms. Glynn. My name is Marilyn Glynn. I'm the General
Counsel at the Office of Government Ethics. We agree that 18
U.S.C. 207, the rules on post-employment, are terribly complex.
What OGE has tried to do is to simplify them for the average
employee who has to comply with them. We've done a couple of
education and training ventures. We've prepared a video that
can be shown to agency employees describing that puts the post-
employment rules in a setting very much like this. It's a
congressional hearing. Folks like yourselves are peppering some
poor former Government employee with questions about his post-
employment activities. The video is an attempt to engender
sympathy for the poor employee who can't possibly understand
what this all about. We've also created pamphlets and
educational materials that try to describe these rules in
simple fashion. These materials urge employees to come and get
advice in particular situations.
In connection with the 209 rule to which Mr. Walden made
reference, we do have pending for review and have for some
time, a draft interpretive regulation at Department of Justice.
Hopefully we'll receive clearance on that shortly and publish a
rule that can assist employees in understanding their
obligations.
Mr. Cummings. I just don't want anyone to--I mean, as I'm
listening to you and I'm trying to put myself in a position of
a lawyer to a client, I'm going to tell you, even after I've
read all the regs and the rules and everything, you know what
I'd do? I'd march them right straight to you and I'd sit down
with them and say look, this is my client's situation. I want
something in writing. I'm serious. Because if you are saying
it's complicated, if you're saying it's complicated, then my
God. I can imagine a lawyer and particularly someone who
doesn't even have a lawyer has got to be, you know, going
crazy. I mean, just--so anyway, it's something we need to take
a look at.
Finally, I know we don't have anything to do with money in
this committee but I'm just curious, Mr. Walden talked about a
number of these investigations and what have you. Do you have
enough money to do what needs to be done in your office?
Mr. Potts. Our current budget is comfortable. Actually, if
you go back during my term, we really assumed some additional
responsibilities from the Executive order of President Bush. We
had to ramp up and we got to the point at one point where we
had about 100 employees. But most, probably over half of our
people were hired within the 12 months or so following those
additional responsibilities. So we had a lot of green people.
And what we found was after some time we began operating where
the knowledge curve enabled us to become more efficient. Then
we just allowed attrition to bring us down to where we are now,
at about 80. We really are doing now with about 80 what a few
years ago it took about 100 people to do because they were
inexperienced and green and weren't attuned to their jobs. But
so now we've been able to get down to a level that we are
comfortable, assuming that we don't have any change in our
responsibilities. I think we are at a good level right now.
Mr. Cummings. Just one other question. You talk about the
first and the fourth year. Help me with the fourth year piece.
I understand the first year and I think I understand the fourth
year but it seems like the first year is the big one.
Mr. Potts. That's right.
Mr. Cummings. Talk about the fourth year.
Mr. Potts. The fourth year. The reason that's a problem is
there are people that are leaving and they have to file
financial disclosure statements. In other words, termination
reports and we have to review those. And of course that gets to
be a big volume. But also there is a flurry of activity in new
appointees to fill. Even though it's for a very short term,
there is a big bulge of people that are getting appointed in
the last few months. Already we see that starting up.
Mr. Cummings. And you've got to turn it around quickly.
Mr. Potts. Got to turn it around quickly, right. So there
is that sort of bulge. It's not as bad as the first year of a
Presidential term but still, there is this bulge in the first
year. Then it goes down and then it kicks back up, particularly
in this financial disclosure review area.
Mr. Cummings. So this is--when do you leave office?
Mr. Potts. My term ends August 15 of next year.
Mr. Cummings. I don't know whether we'll see you again
before then but I want to thank you for all you've done.
Mr. Potts. Well, thank you.
Mr. Cummings. For our country. I really mean that.
Mr. Potts. I appreciate that.
Mr. Cummings. I've heard a lot of great things about your
efforts in that office. So often I think what happens is our
public employees don't get the thanks which they deserve
because you give so much for so little but so much benefit to
the American people. So I just wanted to take this moment and
thank you.
Mr. Potts. I appreciate it. Believe me, it's been an honor
to serve. I wouldn't have had it any other way.
Mr. Scarborough. Thank you, Mr. Cummings. I've got to say
I've heard great things about you also and the record today is
going to reflect that you're a perfect fit for the Office of
Government Ethics because you were asked a very un-Republican
question. That was, did you have enough money for your agency?
I wrote it down because it's a bit historical today. You said,
quote, we are comfortable and second, you said we are, quote,
at a good level. Only the Director of the Office of Government
Ethics would say that. I thank you for that.
Let me ask you in your agency's review of oversight of
other agencies, you talk about best practices. Could you
illustrate a few agencies on the upside that have constantly
shown best practices and also a couple of agencies maybe that
have had some trouble operating to the high standards of the
best.
Mr. Potts. Yes. We give awards at our annual conference
agencies who have gotten in effect a clean program review; in
other words, a review where we really don't have any
recommendations that something has to be changed. We might make
some suggestions about things that could be a little better or
whatever. I would say over the last few years the various
Defense Department components have had this sort of outstanding
records. Not without exception, but for the most part our
reviews of the various Defense Department components have
resulted in a lot of clean reviews.
Mr. Scarborough. You have speculated or do you have any
reports as to where that is? Is that a military culture? What
do you and your other people that work with you put that down
to?
Mr. Potts. I think first of all it is partly culture but I
think it's also money. In other words, I think they have the
resources. Once they get the assignment, they have the
resources and by gosh, they go out and do it. We have also I
had a list of----
Mr. Scarborough. You can submit those for the record.
That's fine.
Mr. Potts. One department, for example, that's had a very
good program is the Department of Education. Secretary Riley
has taken a personal interest in the program and has showed
that personal leadership, which really is one of the things
that is the hallmark of virtually any good program, that the
head of the agency is out front talking about ethics and how
important it is. So that is very key.
On the positive side, let me mention a couple of others:
The International Trade Commission, the General Services
Administration, the Federal Communications Commission, Federal
Deposit Insurance Corporation, Overseas Private Investment
Corporation. Those are some that in this past year were
reviewed that had excellent programs.
In the last year, we had several agencies that were
deficient. It coincided with the downsizing of the agencies and
particularly for two of the cabinet departments, Interior and
Agriculture, we had to issue formal notices of deficiency. Both
of those were agencies where the ethics program is run through
the personnel shops and, in answer to your question as to why,
I think what happened was the personnel shops were getting
chopped a lot during that period for a lot of other reasons.
They were just the ones that felt the sharpest edge of the ax.
With the ethics program being part of that, they just all of a
sudden didn't have the resources, and they were really
scrambling to keep their program going. I'll say in both
instances after the notice of deficiency, we worked with them
and they have gotten their act together. We have already
rescinded the notice of deficiency for the Department of
Interior, having gone back in and being satisfied they have the
program back on track.
Department of Agriculture has taken heroic measures.
They've created a new Office of Government Ethics within the
Department of Agriculture. They consulted with us and hired as
to someone who had managerial experience as well as ethics
program background. And they have made great progress, but
they're not quite there yet. But the situation in Agriculture
frankly is more complicated because they have all of these
different components. They're scattered all around, literally
around the world and it's been harder for them to get their
hands around it. They're going to get there and we'll be right
along helping them.
Mr. Scarborough. Since the White House is graded on its own
scale as a separate agency, where do they fit on that scale?
Mr. Potts. They got a very good report when we reviewed
their programs. The last review was 1996 and 1992, so we've had
them on a 4-year cycle. They'll be coming up next year.
Mr. Scarborough. What about your dealings with the Justice
Department? Have you referred more or fewer cases to the
Justice Department of late than let's say you'd done 5 or 6
years ago?
Mr. Potts. The cases that come to us for referral are
really kind of haphazard. In other words, if a person is really
knowledgeable, they wouldn't really come to us thinking that
we're going to take it and then send it over to Justice. So
it's kind of just haphazard as to how things happen to come
over the transom or we become aware of some particular
situation. But things like that do happen and when they happen,
if it's clearly criminal in nature and especially if it's
something that seems to be ongoing, we would send it over to
Justice and expect the FBI to investigate it. If it's more of
an administrative nature, then we would send it to the
Inspector General where that person worked for the
investigation.
Mr. Scarborough. Let me ask you some questions that either
one of you can answer because it may sound a bit political. You
may be more comfortable, Mr. Walden, in responding. I was
wondering, obviously we have the First Lady, who's considering
a run for the Senate campaign, and when the President--whenever
Air Force One goes somewhere and campaigns, there's always a
portion of the use of Air Force One and the security
arrangements, other factors associated with the office that
recognizes political expenses and billed to campaign. I was
curious, do you think under the set of laws that we have right
now if Mrs. Clinton decides to campaign for Federal office next
year, would she be subject to the same regulations regarding
the appointment of expenditures? Should she be?
Mr. Walden. If Mrs. Clinton qualifies for a candidate as
defined in the Federal Election Commission regulations, then
that would trigger the reimbursement provisions under Federal
law and Federal standards. There are additional questions
involving how many people travel on government airplanes and
which persons are necessary to travel for official reasons.
When the President or the Vice President travels for a
political activity, there are still a small set of individuals
who must accompany the President or the Vice President at all
times and we had a term for them in the Bush White House
``Official travelers.'' We kept a list of those people. Those
people would travel with the President even to attend a
political event, but they could not participate in the
political event and there was no reimbursement required of the
Bush-Quayle campaign. With regard to the First Lady, I would
simply ask, does the First Lady require--how many people if
anybody, does the First Lady require in terms of official
travelers? There are obvious reasons why the President has to
have his staff secretary, military aides, and a few other
people always with him because the President is always
President. The First Lady may always be First Lady but not in
the same sense as the President is always the President. So I
think those issues are difficult and I think that the White
House, working with OGE and perhaps the Federal Election
Commission, should work out a set of standards and protocols so
there won't be any questions.
Mr. Scarborough. In your opinion should the First Lady or
the Vice President's wife or the Vice President's husband be
subject to the same ethics laws as the President and Vice
President? We're getting into a new era. First Ladies have
always been engaged but obviously in the future I think that
they're going to be more so. Hillary Clinton has been a trend
setter of sorts and I think you're going to see more and more
professional First Ladies or First Men in the future. Do you
think she has sort of opened the door a little bit to what the
future is going to be and does that also raise some concerns
regarding closing the loophole on first spouses?
Mr. Walden. I actually recommend that Congress tackle the
issue and do so in the next year or two. I would recommend
that, to the extent the first spouse observes the traditional
responsibilities of First Ladies, that is, quasi-diplomatic,
going to state events or funerals or charitable activities,
that would not make that First Lady or first spouse a special
Government employee or regular employee. But Mrs. Clinton was
charged to chair the Health Care Task Force. She was, within
the White House, Donna Shalala, and I don't know why the ethics
laws wouldn't apply to her unless Congress made the legislative
judgment that Congress made years ago with regard to the
President, the Vice President, and Members of Congress that
they would not be subject to the conflict of interest laws.
When Congress did so, I think there was a recognition that the
public scrutiny on the President and Vice President and Members
was such that Members of Congress and the President and Vice
President would follow general ethics principles because they
wanted to stay out of hot water and not have ethics allegations
distract from their duties. I'm not sure the same consideration
applies to First Ladies. It might because First Ladies, first
spouses, are within that same bubble within the White House
that gets enormous scrutiny. What I believe is that under
current law the First Lady crossed over the line and should
have been considered an employee under 18 U.S.C. 202, the
special Government employee definition that's in that statute.
Now, the court of appeals in a litigation challenging the
Health Care Task Force's meetings under the Federal Advisory
Committee Act, said that Mrs. Clinton was the functional
equivalent of a government employee, thereby allowing the task
force to close its meetings to the public because all of the
members of the task force had to be full-time government
employees. But the court of appeals dropped a footnote and
said, we're not going to decide whether the First Lady is a
government employee for purposes of the ethics laws.
That's the big question. I don't think it was answered
appropriately or completely by the White House Counsel at the
time. When Representative Clinger asked the White House
Counsel, whether the Federal Advisory Committee Act law should
be changed to make sure that the First Lady would be considered
part of the government so that the meetings could be withheld
from the public, the White House Counsel said, we don't need
legislation because she's not a government employee under
Justice Department opinions. But the Justice Department
precedent relied upon involved Mrs. Reagan's charitable
fundraising and that is not comparable to the responsibilities
that Mrs. Clinton has exercised.
Again, I don't want to fault Mrs. Clinton. I want to fault
the system and the management within the White House that did
not appreciate the difficult issues that were presented, the
public criticisms that would result, and attempt to work out a
system where everybody would be happy.
Mr. Scarborough. I think on the specific issue of the
Health Care Task Force to me, it's a very clear example of
somebody that should have been--had that classification. I
think that is black and white. While I'm not surprised that the
Justice Department came to the opinion that they did, I think
that opinion is laughable because she was engaged in activities
that would affect one-sixth to one-seventh of the Nation's
economy based on what the Federal Government did, what the
administration did. So for me--I say all that not just to make
a political speech but to say that one seems easy to me.
What is not so easy are some middle grounds that we may
tread on in future administrations with first spouses. So in a
situation not quite so clearcut, but if you think I'm terribly
wrong in my assessment, you can correct me. But let's say we
have an administration in the future that is a bit more subtle
than the First Lady. Do you think that first spouses should
have the same ethical laws attached to them as the President
and Vice President?
Mr. Potts. I think Greg put it very well. First of all, I
think it is complicated because we are in this transition
period about the role of the First Lady, and I agree with your
comments, Mr. Scarborough, that we should expect that to
probably continue. Therefore, I think it would really be a wise
thing for the Congress to take a look at this and then
establish some ground rules because I would agree with Greg
that if a spouse is playing the traditional role, there isn't
any reason for him or her to fall under the ethics laws. But if
the spouse is in there really performing a government function
or running a task force or something like that where it really
is substantive, then all those rules really should kick in.
Now, let me just add a couple of thoughts. One is that, the
President and the Vice President because they are elected
executive branch officials are not subject to the same conflict
rules as other people in the branch. But they do have to make
public, for example, all of their gifts. They have to show what
the gift is, who gave it and an estimate as to its value, so
the public can be informed about the gifts and make individual
judgments about whether that is improperly influencing the
President. And so I would say those rules for a First Lady
would be appropriate if she is getting into the same area.
One other comment is that with regard to the travel of the
First Lady, sometimes security issues arise. For example, in
the Bush administration, there was a time when there were a lot
of concerns about terrorist activity. President Bush had said
there were certain people that he wanted to use government
transportation only. Not only for their own protection but
also, he didn't want them on a civilian airliner where other
innocent people might get killed. So they were required, even
for personal uses, as well as much less political or
government, to use government transportation. Then there was a
formula by which they had to reimburse the government when they
used government transportation for personal purposes.
So I don't know whether that's the situation with the First
Lady right now or what the situation is but it's just something
to bear in mind. Where there are reports from the CIA or the
FBI that there is some imminent threat, I think things are
tightened up and some officials that normally would travel
commercially are directed to start using government equipment
only.
Mr. Scarborough. Let me ask you one final question. Back in
1989 Congress passed a law that banned honoraria for writing,
speaking. And they also banned that for Federal employees,
which I think a couple of years later, the courts ruled that to
be unconstitutional. I know Mr. Walden has suggested that you
all clarify issues regarding honoraria and I thought I read
that you all had been working on it and was wondering what sort
of progress is being made on that or if you even think it's
necessary. Is it something you'd like to see done before you
leave next year?
Mr. Potts. Let me just comment and then I'll ask Ms. Glynn
to comment.
First of all, it was clear to us after that honoraria ban
law was passed that we thought it was unconstitutional, and we
went back and tried to get some corrective legislation passed
to deal with our concerns. It was not any big surprise when it
was challenged. After the Government lost in the lower courts
and was going up to the Supreme Court, we met with the
Solicitor General and said, our opinion is this is a loser.
It's a waste of time to go up there and fight it. But I think
they felt since it had been enacted by Congress, they had an
obligation to try to uphold it. So anyway, it was not a big
surprise to us that it was held unconstitutional.
But let me ask Ms. Glynn to sort of explain what we have
done subsequently as a result of that.
Ms. Glynn. We did amend our regulations to drop references
to the prohibition on receipt of honoraria but there is a
continuing trend in the courts toward expanding employee's
rights in this area. We have a rule, in addition to that former
prohibition on receipt honoraria, that prohibits employees from
accepting compensation for any teaching, speaking, or writing
that's related to their duties. In a challenge by a group of
employees from the EPA, the D.C. Court of appeals ruled that a
provision of that rule was unconstitutional. It was the
provision that relates specifically to accepting reimbursement
of travel expenses from outside sources for speaking about your
Government job.
So we have informed the Federal work force that they are
now free, if they're below the non-career senior employee
level, to accept reimbursement of travel expenses from outside
sources for speeches about their government jobs. And we're
amending the rule to reflect that.
This is an area that's developing along a line that gives
us some concern, frankly, because the courts seem to be opening
up the door toward permitting more acceptance of compensation
for talking about your government job. The courts' rulings are
going in a direction that gives us concern.
Mr. Potts. Let me just add--I don't want to take up too
much of the committee's time, but this is a very interesting
area. I was at a conference at which the head of the British
civil service was also there. I was describing this case in
which our regulation had been held unconstitutional because of
basically how it had been applied. This particular EPA employee
was getting reimbursed expenses to make a speech criticizing
the EPA. When I got through describing it, I could see the look
on his face was just like I must be lying; can't possibly be
true. And I said, well I can see this is hard to swallow. He
said, well, first of all the whole philosophy of the British
civil service is one of loyalty to whoever is elected and in
power, that you can't have a civil servant going out and
undermining government policy. They get fired immediately for
being disloyal. And I said, well, you don't have a first
amendment. We do. And again, even as close as we are with
Britain and we think of ourselves as cousins, yet there is a
very fundamental difference in government structure because we
do have that first amendment right. In this case, I have to say
that I thought it was stretching the first amendment to say
that this person was entitled to get reimbursed expenses for
expressing his view.
We were saying we don't have any problem with the
individual saying whatever he or she wants to say whenever and
wherever. However, we don't think they're entitled to get
reimbursed the expenses. We have a real ethics problem there
because you had a situation where a person couldn't get paid
for talking about their job. Well, the obvious end run around
that was to say, oh, well, OK you can't get paid for talking
about your job but we want you to come out to Hawaii. We have a
suite for you on Waikiki Beach. We have lavish meals and
entertainment. All we're going to do is reimburse you those
expenses. So that's what we were focused on to try to prevent.
We've now had to change that rule and that loophole has opened
up because of this first amendment case.
Mr. Scarborough. That whole situation about flying to
Hawaii for this conference, I know it shocks the conscience of
all Members of Congress. That sort of thing wouldn't go on
here. I'm sure also that some Members of Congress might like
the court's expansive interpretation of the first amendment
also for purposes of accepting honoraria but I don't think
that's going to happen soon.
I have no more questions. I want to thank both of you for
coming. Director Potts, again we certainly appreciate your
service. And Mr. Walden, thank you for coming again. We're
honored to have all of you as well as you, Ms. Glynn. We
appreciate the testimony. We certainly want to assure you that
we will work with you any way we can to work on a reauthorizing
bill that can be drafted and passed in September.
Mr. Potts. Thank you very much.
Mr. Walden. Thanks for the invitation.
Mr. Scarborough. Thank you. We're adjourned.
[Whereupon, at 12:24 p.m., the subcommittee was adjourned.]
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