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Mr. Powers. You were not substantially involved in 271?
Mr. GOODMAN. That is the third proceeding in which the Senator and I are involved. 270 sub 2 involves railroad service, as distinguished from the rates.
Mr. POWERS. Were you involved in railroad services? Do you say you were not involved in railroad services or rates?
Mr. GOODMAN. I was not involved in any of the three proceedings that are the subject of the letter contract in a substantial way as a member of the Commission staff.
Mr. Powers. Would you submit for the record your involvement in the insubstantial way that you were involved in?
Mr. GOODMAN. I would like to go one step further than that, Mr. Powers, and submit for the record, first, a letter of February 20, 1973, that I wrote to Mr. Leon Ulman, Deputy Assistant Attorney General, Office of Legal Counsel, Department of Justice, in which I asked Mr. Ulman his opinion as to whether there would be any conflict of interest if I did assume any position with the Senator after having had some participation in 270 and related cases. I described my participation in those proceedings to Mr. Ulman, and this is a letter of February 20 by the way, it is a single-spaced letter of nearly two pages.
My second submission which I would like to make to this committee is a letter of February 27 to Mr. Ulman, which responds to some oral requests that he made of me, to supplement my letter of February 20.
Thirdly, I would like to submit for this committee's attention, a memorandum of agreement between the Senator and myself dated February 27, 1973, which was specifically subject to a ruling from the Department of Justice that there would be no unlawful conflict of interest in my participating in a proceeding with him.
Mr. DINGELL. I think that in fairness, we should have these for the record.
Mr. GOODMAN. I intend to submit these and I want to identify them.
Mr. DINGELL. Without objection, they'll be submitted in the record. [The material referred to follows:]
FEBRUARY 20, 1973. LEON ULMAN, Esq., Deputy Assistant Attorney General, Office of Legal Counsel, Department of Justice,
Washington, D.C. DEAR MR. ULMAN: This is to request your opinion as to whether my participation in three rate proceedings before this Commission upon leaving its employment would run afoul of any of the conflict of interest or criminal statutes.
I am currently the Associate General Counsel and Chief, Section of Research and Opinions in the agency's Office of the General Counsel. On February 15, 1973, I was asked by a former member of Congress, who was then, and continues to negotiate on a contract to become the agency's Special Counsel in three related rate investigations, whether I might be interested in joining him as his chief legal assistant or staff director. My name had been among those recommended to him by the Chairman of the Commission, as well as by another Commissioner. Upon opening discussions with him, I immediately separated myself from any further participation on behalf of the Commission in the three proceedings.,
The proceedings involve, (1) an investigation into the so-called “freight rate structure," i.e., the relationships among freight rates; (2) an investigation into railroad service; and (3) an investigation into rail earnings, including the standards for judging them, such as the appropriate rate base and rate of return. Each is a broad legislative and rulemaking proceeding; I have attached copies of the rders instituting all of the major proceedings, as well as a copy of an interim eport in the proceeding discussing its scope and the numerous interests particiati ng or represented.
I have not personally participated in any portion of the proceedings numbered (2) and (3), above, but did participate in a limited way in number (1) (Docket No. Ex Parte 270). For example, I prepared comments of the General Counsel in August, 1971, on two somewhat conflicting drafts of the above interim report. However, neither I nor anyone reporting to me drafted the report; not did I or anyone reporting to me participate as a member of the staff committee which prepared the final draft.
The Commission's primary involvement in Ex Parte 270 over the past two years has been, prior to retaining Special Counsel, to engage a private firm to conduct special studies. I did not participate in that phase of the proceeding; another member of the General Counsel's staff with a higher office rank than mine represented this office in those discussions and negotiations.
If I joined the staff of Special Counsel, I would participate in the investigation on behalf of the public. Special Counsel will be retained by the Commission as an independent contractor to represent the public interest in the investigation over perhaps a three-year period. The Commission has obtained from Congress an initial appropriation of $650,000 for the Special Counsel's function.
I anticipate that the contract with the prospective Special Counsel will be signed this week. Accordingly, your early response will be greately appreciated. Yours very truly,
LEONARD S. GOODMAN,
Associate General Counsel. Enclosures
FEBRUARY 27, 1973. LEON, ULMAN, Esq., Deputy Assistant Attorney General, Office of Legal Counsel, Department of Justice,
Washington, D.C. DEAR MR. ULMAN: This will supplement my letter of February 20, 1973, requesting your opinion regarding my participation in three investigations before the Commission as an employee of Special Counsel.
I have enclosed for your information the following items:
(1) A copy of the contract entered into yesterday between the Honorable Gordon L. Allott, a former Senator of the United States, and the Commission in which Mr. Allott agrees to participate in these proceedings on behalf of the public interest. You will note in section A, that the contract emphasizes Mr. Allott's independence from the Commission;
(2) A copy of the press release and order issued by the Commission today in connection with the contract with Mr. Allott;
(3) A copy of a letter dated February 26, 1973, from Robert E. Hampton, Chairman, Civil Service Commission, to W. Donald Brewer, Vice-Chairman of the Interstate Commerce Commission. In this letter, the Civil Service Commission states that under the contract "Senator Allott will function as an independent contractor and not as a Federal employee as defined under section 2105 of title 5, United States Code.”
(4) Finally, a copy of the agreement between Mr. Allott and me with respect to my future employment with him. You will note that under the agreement I will resign from the Government and become employed by him. Upon my resignation, there will be no further accrual of civil service retirement, health benefits, and the like. Your early response will be appreciated. Yours very truly,
LEONARD S. GOODMAN,
Associate General Counsel. Enclosures.
MEMORANDUM OF AGREEMENT
The Honorable Gordon Allott, hereinafter Special Counsel, and Leonard S. Goodman of 7119 Sixteenth Street, N.W., Washington, D.C. 20012, hereinafter Mr. Goodman, agree as follows:
1. Effective thirty days from the signing of this Memorandum, Mr. Goodman shall resign his present Government position and become employed by Special Counsel as his Staff Director and Chief Attorney in the proceedings for which Special Counsel has been retained by the Interstate Commerce Commission. In this capacity, Mr. Goodman will coordinate all other staff work for Special Counsel, plan and assign individual projects, delegate functions within his office, and otherwise direct the day-to-day work of the office, under Special Counsel's general supervision and control.
2. Mr. Goodman shall be employed in a full-time capacity, approximating a 40-hour week, but excluding Saturday from the work-week.
3. Mr. Goodman's annual salary shall be $40,000 plus his cost of parking payable bi-weekly less his employee contribution for social security and tax withholding as required by law. The salary shall be adjusted upward at annual intervals according to the change in Civil Service retirement benefits under 5 U.S.C. 8340.
4. As additional benefits, Mr. Goodman shall be entitled to paid vacation leave of four calendar weeks each year distributed at mutually convenient times and sick leave in accordance with office policy.
5. After expiration of one year from the effective date of this Memorandum either party hereto may terminate the arrangement by providing the other party with a written notice of termination at least sixty days in advance of the date of termination. If Special Counsel shall elect to terminate the arrangement, Mr. Goodman shall in addition be entitled to severance pay of two months of his salary.
6. If the period of Mr. Goodman's employment shall extend for more than two years and eight months from the effective date of this Memorandum, then he shall be entitled to payment for lost sick leave (which currently totals 1,394 hours) in a liquidated sum of $6,000.
7. Mr. Goodman shall be permitted to continue to participate to a conclusion in the litigation in which he is now engaged, and appeals therefrom, relating to insurance and electric utility rates in the District of Columbia. His participation in such litigation during business hours shall be chargeable as necessary to his vacation time, and he shall be entitled to receive such fees and expenses as may be awarded by the courts for such pro bono publico efforts. Otherwise, Mr. Goodman shall not engage in any other professional activities, except those in connection with his personal business, without the prior wrtiten consent of Special Counsel.
8. This Memorandum and the agreed upon arrangement between the parties hereto are subject to a favorable opinion of the Department of Justice, Office of Legal Counsel, that Mr. Goodman's participation in the said proceedings before the Interstate Commerce Commission raises no unlawful conflict of interest, nor violates any other statutory requirement.
9. This Memorandum and agreed upon arrangement shall also be subject to the letter of contract and the definitive contract entered, or to be entered, into between Special Counsel and the Interstate Commerce Commission, and Special Counsel shall not be liable for any sums in excess of those allotted under said contracts. This the 27th day of February, 1973.
Mr. GOODMAN. Now let me continue, if I may, Mr. Chairman, these letters went on and on.
Mr. DINGELL. I want to be fair to you.
Mr. GOODMAN. And I want to be fair to the committee. I'll make a full disclosure of what transpired on March 2, I received a letter from the Deputy Assistant Attorney General. It is a letter signed by Mr. Ulman, a three-page letter responding to my letters of February the 20 and 27.
Well, pursuant to the letter of March 2, I then addressed a letter, a short note, I suppose you would term it, to Commissioner Brewer forwarding a copy of the March 2 letter and requesting a determination from the Commission, which the Department in effect suggested. My final letter, then, that
I would like to submit for the committee's attention, is a letter from Commissioner Brewer to me dated March 6, which I think is the final part of this package on the conflict of interest problems.
[The information follows:]
DEAR MR. VICE CHAIRMAN: I have attached a copy of the letter dated March 2, 1973, from the Office of Legal Counsel of the Department of Justice setting forth their response to my inquiry regarding conflict of interest problems that might arise from my participation in the above proceedings on behalf of Special Counsel. On pages 2 and 3 of the letter they suggest that the Commission determine whether my past participation in these proceedings has been personal and subş.antial within the meaning of 18 U.S.C. 207. I, therefore, request such a determination from the Chairman. Yours very truly,
LEONARD S. GOODMAN,
Associate General Counsel.
DEPARTMENT OF JUSTICE,
Washington, D.C., March 2, 1973. MR. LEONARD S. GOODMAN, Associate General Counsel, Interstate Commerce Commission, Washington, D.C.
DEAR MR. GOODMAN: This is in response to your inquiry to me of February 20, 1973, as supplemented by your letter of February 27. You ask whether your prior participation in certain rate proceedings before the Interstate Commerce Commission, upon your leaving its employment to serve as chief legal assistant or staff director to former Senator Gordon L. Allott, Special Counsel in ICC's investigations involving these proceedings, would be contrary to the conflict of interest law, 18 U.S.C. 202–209 or other criminal statutes.
From the materials which you have submitted, it appears that the proceedings involved are entitled: (1) Ex Parte No. 270, Investigation of Railroad Freight Rate Structure; (2) Ex Parte No. 270 (Sub. No. 2), Investigation of Railroad Freight Service; and (3) Ex Parte No. 271, Net Investment-Railroad Rate Base' and Rate of Return.
You state that you did not personally participate in any aspect of the proceedings numbered (2) and (3), above. You did participate in a limited way in proceeding number (1), Ex Parte No. 270, as, for example, in preparing comments of the General Counsel in August 1971, on two somewhat conflicting drafts of án interim report. However, neither you nor anyone reporting to you drafted the report; nor did you or anyone reporting to you participate as a member of the staff committee which prepared the final draft. You state, moreover, that the Commission's primary involvement in Ex Parte No. 270 over the past two years, has been, prior to retaining Special Counsel, to engage a private firm to conduct special studies; and that you did not participate in that phase of the proceeding. Finally, it appears that Special Counsel has been retained by the Commission in the status of an “independent contractor” to represent the public interest in the investigation, which is expected to run for about three years.
Preliminarily, I regret that we are unable to supply you with an official opinion on the questions you present, since the authority of the Attorney General (or that of his assistant) is limited to legal advice to the President and heads of executive departments in connection with their official business. 28 U.S.C. 511-512.
However, as a matter of information and to the extent that we are able, I am glad to be of assistance to you. The relevant provision is 18 U.S.C. 207, which deals with postemployment restrictions. That section establishes two rules applicable to former Government employees. First, section 207(a) bars the former Government employee for life from knowingly acting as agent or attorney for anyone other than the United States in connection with a particular matter involving specific parties in which the United States is a party or has a direct and substantial interest and in which he participated personally and substantially. Section 207(b) erects a one-year bar against personal appearance as an agent or attorney before a court or a governmental agency in connection with any such particular matter which was under his "official responsibility” within a year prior to the termination of such responsibility.
Passing the question whether Ex Parte No. 270 is "a particular matter” covered by the section and whether you would appear as “agent or attorney,' this Office is not competent to determine from the facts stated by you whether your prior participation in this particular matter was "personal and substantial” or whether it was under your official responsibility." Determinations of this kind must of necessity turn upon circumstances that are more appropriately to be evaluated by the Commission, which has immediate and closehand knowledge of them. If the Commission agrees with the conclusions you have drawn regarding your prior participation, 18 U.S.C. 207 would not stand in your way of serving as chief legal assistant or staff director to the Special Counsel. I am not aware of any other criminal statutes that would be applicable under the facts presented by you.
Finally, it is noted from the attached agreement between you and the Honorable Gordon L. Allott that provision is made in paragraph 6 thereof that in the event that your employment extends for more than two years and eight months, you "shall be entitled to payment for lost sick leave (which currently totals 1,394 hours) in a liquidated sum of $6,000.” The terms of your employment agreement with the Special Counsel do not appear to present any question under the federal conflict of interest law. Sincerely,
Office of Legal Counsel.
INTERSTATE COMMERCE COMMISSION,
Washington, D.C., March 6, 1973. Re Ex Parte Nos, 270,270 (Sub-No. 2), 271. LEONARD S. GOODMAN, Esq. Associate General Counsel, Interstate Commerce Commission, Washington, D.C.
DEAR MR. GOODMAN: I received your request for a determination whether your participation in the above proceedings has been “personal and substantial” within the meaning of 18 U.S.C. 207, and the copy of the letter to you of March 2, 1973, from the Office of Legal Counsel, Department of Justice.
As the Department of Justice relates, section 207(a) bars a former Government employee from participating in a “particular matter” involving specific parties in which he participated personally and substantially. Section 207(b) creates a one-year bar against personal appearance in connection with a particular matter that was under the former employee's “official responsibility."
After consulting with our General Counsel, I am initially of the view that section 207 does not apply to rulemaking and investigatory proceedings like those in which Special Counsel would participate. In connection with section 207, Attorney General Kennedy stated the following in his memorandum of January 28, 1963, published in volume 18 of U.S.C.A. at page 282:
"Subsections (a) and (b) describe the activities they forbid as being in connection with “particular matter[s] involving a specific party or parties” in which the former officer or employee had participated. The quoted language does not include general rulemaking, the formulation of general policy or standards, or other similar matters. Thus, past participation in or official responsibility for a matter of this kind on behalf of the Government does not disqualify a former employee from representing another person in a proceeding which is governed by the rule or other result of such matter."
In any event, your participation in the subject proceedings, while at times personal, has not been substantial; and these proceedings have not been under your official responsibility. Sincerely,
W. D. BREWER, Acting Chairman.
Mr. GOODMAN. The upshot of all this correspondence, if I may briefly describe it, is that 18 U.S.C., section 207, would not apply to me in my particular situation.
Mr. POWERS. All right. You have a letter in there from Mr. Leon Ulman. Is that part of the submission?