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would be filed with their respective agencies where they would be available for public inspection. Personnel below the grade of GS-16 would continue to remain subject to the present financial reporting requirement contained in the Commission's regulations in part 735 of title 5 of the Code of Federal Regulations. Their statements, however, would not be subject to public inspection. If in time the administration feels that public disclosure should be required for employees in positions below ĠS-16, appropriate approval will be sought of the Congress.

The administration has tried to incorporate provisions in this bill which balance the need to assure impartiality with the individual's right to privacy. In particular, the bill includes provisions that are designed to minimize potential harassment. H.R. 6954 would make it unlawful for any person to inspect or obtain a copy of a financial statement for any commercial or credit rating purpose, for use directly or indirectly for any political, charitable, or similar cause, or for any unlawful purpose. À civil action for violation of this restriction may be brought by the Attorney General for a penalty not to exceed $5,000.

The statement filed by officials under the proposed legislation would require much more detailed information than is now sought under Executive Order 11222 and the Commission's regulations. The report would have to contain information on the source and amount of each item of earned income of $100 or more, including any fee or honorarium, and of the source and category of value of unearned income, such as dividends and interest, which exceeds $100 from any one source. The categories for reporting the value of unearned income are; up to $5,000, $5,000 to $15,000, $15,000 to $50,000, $50,000 to $100,000, and greater than $100,000.

Gifts in excess of $25 or gifts aggregating $250 or more from a single source would have to be reported, other than gifts from relatives with whom the employee has no contact in the course of his official duties. The term "gifts” would include transportation, lodging, food, and entertainment.

Each official subject to the act would have to report each liability, other than to a relative, which exceeds $2,500 at any time during the course of the year. Assets of $1,000 or over would have to be listed, including personal property held in a trade or business or for investment or production of income, other than household furnishings, works of art or jewelry, as well as securities transactions, commodity futures, and dealings in real property. Agreements for future employment would be made public as would continuing relationships with former private employers, such as pensions, employee benefit plans, and leaves of absence to enter upon Government employment. H.R. 6954 also requires the listing of assets and liabilities of a spouse and minor children occupying the household of the reporting individual.

Title II of this legislation creates an Office of Government Ethics within the Civil Service Commission. This Office would be headed by a director to be appointed by the President by and with the advice and consent of the Senate. The Director would function under the general supervision of the Commission. Each agency would retain its own responsibility for the enforcement of the provisions of the bill regarding the filing of statements and public disclosure.

H.R. 6954 would remove the uncertainty that exists now under Executive Order 11222 as to the authority and responsibility of the Commission for the ethics program for the executive branch. The present bill states specifically that the Director of the Office must monitor and investigate compliance with the public disclosure requirements by other agencies, that it must conduct, on a random basis, a review of the financial statements filed in the agencies and that it can require such reports from agencies as it deems necessary. Most importantly, the Commission, through the Director, will be able to order corrective action on the part of any agency or its employees where positive action has not been taken in a situation which demands it.

In the consideration of this bill, there are three major points that I think are important to bring to the attention of the subcommittee members.

First, the new system of ethics enforcement in the executive branch as proposed in H.R. 6954 is one that has the President's personal support and attention. In addition, we are specifically asking for a clear congressional mandate to improve the current system. Under the existing Executive order, enforcement has not been as effective as we believe is necessary.

With strong Presidential and congressional support for these needed improvements, we will establish clear agency responsibility for ethics enforcement. This responsibility will no longer be buried beneath other agency priorities. Agency heads will be responsible for the dayto-day operations of their ethics programs and the Office of Government Ethics will be given new authority to supervise and audit agency performance.

The operating and auditing functions are important, but separate, responsibilities that form the basic elements of our new system. In addition to these functions, however, there will be another new element—that of public scrutiny through public disclosure—to reinforce the entire system. The President believes that this three-part system will provide a foundation for public confidence in the integrity of government decisionmaking.

Second, the President's bill provides for reporting the interests of spouses and minor children occupying the same household as the reporting individual. It has been the experience of both the White House and the Civil Service Commission that the holdings of a spouse are most meaningful for purposes of determining whether or not an employee has an actual or potential conflict of interest. The administration strongly supports the reporting of spouse's interests.

We can, however, support the narrow four-part exception of S. 555 contained in section 3037c) (2). This section provides that an individual shall not be required to report any information concerning the interests of a spouse if: (a) he or she has no knowledge of such information; (b) he or she has made every reasonable effort to obtain the required information from his or her spouse or dependents; (c) he or she derives and expects to derive no benefit from such interests; (d) and that such interests were not derived directly or indirectly from interests or income formerly owned or controlled by the reporting individual.

Third, we consider the steps taken in H.R. 6954 to be a beginning, not the final answer, to an effective ethics program in the executive branch. As you can see by the provisions of the bill relating to the Office of Government Ethics, the Director is to be the President's and the Commission's agent in continuing the examination of problem areas and in recommending future changes that are needed.

Likewise, the system itself is designed to be a reasonable beginning for requiring public financial disclosure. We have tried to limit the coverage to policymaking and other top officials so that we can evaluate our experience with public disclosure before considering extending these requirements to other groups of employees. We have also tried to keep the paperwork burden

at a minimum in response to the President's concern for unnecessary Federal paperwork requirements.

It has been a pleasure to appear before you and I would be happy to answer any questions you may have.

Mr. Mazzoli. Mr. Campbell, thank you very much. I apologize for what appears to be a shuffling in and out of people. When we convene at 10 o'clock the ball game is over by 10:05 o'clock.

I want to thank you personally. Maybe counsel would have questions or comments?

Mr. COFFEY. Thank you, Mr. Campbell. I will ask this on behalf of Congressman Moorhead, since I know he's interested in your thoughts on this point.

What is the practical impact of provisions dealing with post-Government service? The President's bill and S. 555 contain restrictions on what employees can do after Government employment. What are the implications for recruiting people for public service!

Mr. CAMPBELL. There has been concern expressed about that problem by a number of people. It is our judgment that the level of people that are being sought, the kind of commitment which is necessary for undertaking a public service job—the restrictions, which, as you know, vary in terms of time from an absolute restriction to contact with an agency for 1 year to 2 years and the experience in recruiting people for this administration, the requirement of remaining in office for 4 years, these restrictions would not be a serious deterrent to people accepting public service assignments.

Mr. COFFEY. Do you see post-employment restrictions as an essential part of an ethics package or could they be separated out for perhaps more study from the rest of the financial disclosure package?

Mr. CAMPBELL. From the point of view of public confidence in Government, the issue of taking advantage of one's government employment as a way of improving one's situation in the private sector is a serious problem. It is one that the general public is concerned about.

We would certainly not favor it being excluded from this year'swhat we hope is this year's action.

Mr. COFFEY. Thank you very much.

Mr. SHATTUCK. Mr. Chairman, this bill covers GS-16 and people in the executive schedule.

Do you have statistics as to how many people are covered and in what category?

Mr. CAMPBELL. We don't have an exact count on it. It is something under 20,000, between 18,000 and 20,000. It is the military people who have comparable rank with the supergrades and the executive level appointments. It totals approximately that number.

Mr. SHATTUCK: I believe that the number of military personnel in grade 0-7 and above is about 500. Is that the number you have in the military?

Mr. ČAMPBELL. The bulk is civilians, yes, indeed.

Mr. Mazzoli. Our colleague, Mr. Harris, is interested in asking questions. Would you have a moment to wait until he returns from the floor?

Mr. CAMPBELL. I would be glad to.

Mr. Mazzoli. Let me ask a question at this point. Maybe this is out of school.

As you read these bills that are pending and all of the various nuances in them, is there anything that would have caused the public to know more about Bert Lance's affairs and his situation had this been the law in January?

Mr. CAMPBELL. His filings with the White House and Senate committee and Civil Service Commission contained full information about his financial situation, and, therefore, there is nothing here which would have revealed anything more than what would be appropriate in relationship to what is required in this bill.

This is a conflict-of-interest public disclosure bill. It is not related to behavior in the private sector and does not concern itself with that except to the degree that the past private sector activities produced one's current financial situation.

To the extent of behavior in the private sector, that, of course, would be revealed through the FBI investigation, which is a confidential—and ought to be, in my judgment—a confidential judgment.

Mr. Mazzoli. Would a person who took a plane ride-say the next Director of OMB-be required to report that plane ride since there is a section on gifts if transportation, food, lodging and entertainment aggregating $50 or more! If so, would that be a category that would have been picked up again in 1977 had the law been on the books?

Mr. CAMPBELL. It would not have been, because it would have occurred before the appointment. The transportation is included in the bill and if it is-if transportation is provided, then after one is in office it would have to be reported under the gifts section of the bill, but not things that occurred before taking office.

Mr. Mazzoli. Would the—and I'm ignorant here—but would the applicant for OMB start from scratch on the day he or she was appointed by the President or nominated ? Is that the date you start looking at and forward from, rather than behind or before that date?

Mr. CAMPBELL. The reporting of your public disclosure of your financial condition would be your financial condition on the day of appointment. And then after that, any change in it would have to be regularly reported so it is related to the proposition that conflicts of interest occur—can occur only when you are in office and holding office.

Mr. Mazzoli. How about conflict of interest that might have been conflicts under the law of the State of Georgia—if there were such a law and if this conduct were found to be in violation of that law, would that be at all part of the application papers or the forms that would go to the Senate ?

Mr. CAMPBELL. In relation to the disclosure portion of his statement, the answer would be no. Obviously, the investigating agency would, indeed, report that to those who have appointment-making power.

Mr. Mazzoli. Things like overdrafts and the type of things—would they fall into the canon of the bill in the sense that if the overdraft occurred when you are in office, thereby creating an indebtedness, it would be reflected as an indebtedness.

If a person were overdrawn on the day of appointment, would that be reflected ?

Mr. CAMPBELL. The person should report that.
Mr. Mazzoli. Because that constitutes a debt owed to somebody?
Mr. CAMPBELL. Yes.

Mr. Mazzoli. Are you satisfied in your reading of these bills that they represent the best effort we can make short of going beyond what Mr. Preyer said earlier today, and getting into something that is so intensely complicated that we have to be CPA or something that is intrusive on our right to privacy?

Mr. CAMPBELL. We spent a lot of time in the Commission staff and White House staff putting this together. A lot of ideas in that process were rejected because they were—they would require too much investigation, too much paper work, and certainly we believe that this is the right balance.

Mr. Mazzoli. Let me ask you one final question, and also ask you to wait for a moment. I understand Mr. Harris is on his way back.

Lastly, I would like to say we, the Congress, are on trial as well as the executive branch and judiciary. The jury is the American people. I fear that some may think that none of us has their interests at heart, and we are here to aggrandize ourselves and so forth.

Do you think this bill, if it becomes law in this form, would satisfy that problem in going beyond the question of what it shows and the fact it is not intrusive and not too burdensome from a paperwork standpoint ?

Would you, as a taxpaying American citizen, be satisfied that if this is on the books the people who would deign to represent you and are given the opportunity to spend your money would be people who have largely passed muster?

Mr. CAMPBELL. In order to restore the public confidence in the institutions you mention-and I agree that is a fundamental need we have, and we feel it keenly in the executive branch and I think you do in the legislative branch-my judgment is this alone will not restore my confidence, but that it is an important element of behavioral changes which will help.

I am personally very much involved, for example, with the Federal workers and the whole question of providing some flexibility in that system to assure the public they are getting a dollar's worth of work for a dollar's pay. That has to be part of it, too.

I think the whole question of the relationship of lobbying to both executive and legislative branches is important. In terms of the integrity of the individuals, it seems to me that this—these requirements for disclosure will go a long ways to upset the view that people are using public office for private gain.

Mr. Mazzoli. Thank you, Mr. Campbell, and thank you to your colleagues.

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