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contain provisions requiring officers and employees of legislative branch agencies to file with the appropriate committee of the Congress.
BALANCING PRIVACY CONSIDERATIONS WITH PUBLIC DISCLOSURE While both the Senate and House have decided to have public disclosure of financial interests of its Members, we believe that as legislation is considered for the three branches of Government, the Congress should continue to balance conflict-of-interest and public disclosure concerns with the rights of individuals to privacy.
Obviously, the Congress faces a difficult dilemma in seeking to accommodate the public policy considerations underlying requirements for public disclosure of personal financial information and the right of personal privacy which affects all of us. This dilemma is somewhat the same as is inherent in the public policy aims of the Freedom of Information Act and the Privacy Act of 1974—the one promoting openness in Government administration and the other carefully spelling out the basis upon which "private" information in the hands of the Government may be used and disclosed.
Here the primary concern is promoting confidence in public officials through a code of ethics and full disclosure of their personal financial status. Aside from any philosophical or ethical objections which might be voiced against such disclosure, there are difficult problems that need to be considered-problems which, to our mind, are avoidable without undermining the overall objective being pursued.
We suggest that if public availability is to be required disclosure of individual reports not be automatic but on a request basis and that there be notice to the individual that disclosure of his financial report has been made and to whom. Prior to inspecting or receiving a copy of any financial report, we believe the requester should be required to present a written request giving his name; address, names and addresses of persons or organization, if any, or on whose behalf he is making the request, and the intended use of the report.
We also believe that if the financial disclosure statements of top-level officials are made public, many more questions will be raised than are answered because of the absence of Governmentwide standards of conduct. Questions will likely be raised as to whether certain interests could be potential conflicts of interests or whether certain actions are unethical. Such actions or interests, if held up against absolute but impractical ethical standards, could tarnish the careers of many honest individuals without their even being given a hearing.
We believe that the supervising ethics office in cach branch has a duty, to the public, and to the individual against which a complaint is made, to insure that each complaint is fully considered, that a thorough investigation is conducted if warranted, and that an unbiased opinion is rendered on each complaint.
This concludes my statement and I will be glad to respond to any questions.
Mr. KELLER. We have been much involved in this legislation on the Senate and House side.
Skipping over to page 3 or bottom of page 2, we make mention that the President submitted to Congress on May 3, 1977, a legislative proposal which would establish an Office of Government Ethics, among other things, for the executive branch with strong oversight and enforcement authority. This is embodied in H.R. 6954 but only would be applicable to the executive branch.
We believe that the provisions of H.R. 6954 are needed to remedy the deficiencies that exist in the executive branch disclosure systems. We note that the provisions of title I of H.R. 9 as amended by the subcommittee are similar to those provisions.
Several bills, such as H.R. 1, which is before this committee, would establish financial disclosure systems for all three branches of Government. These bills would give the responsibility to the Comptroller General for administering a Government-wide financial disclosure system. We do not agree that this responsibility should be given to the Comptroller General.
On July 29 of last year, the Comptroller General appeared before your subcommittee to present his views on H.R. 3249 which was a similar bill to H.R. 1. At that time, he strongly emphasized that giving GAO the responsibility for administering a financial disclosure system, particularly for Members of Congress and congressional employees, could potentially do great damage to the overall effectiveness of our Office and endanger the close working relationships which this Office must have with Members of Congress and with committees of Congress.
We do not believe that oversight and investigation of the personal financial transactions of individual Members of Congress is consistent with our role as a nonpartisan arm of the Congress.
We believe that the responsibility for administering a financial disclosure system should rest with each branch of government, H.R. 9, the Ethics and Government Act of 1977, would establish a financial disclosure system for all three branches of the Federal Government. Title I of H.R. 9, embodies in the President's proposal.
This title reflects GAO recommendations on actions needed to improve the executive branch financial disclosure system.
In our opinion, title I with its strong enforcement provisions would create an effective financial disclosure system.
We are not, of course, privacy to what the Congress or House has in mind, but we assume that title II, which is left blank in the committee print I have of that bill, will embody something along the lines of H.R. 7401 which was reported by the Select Committee on Ethics, which Congressman Preyer talked about this morning.
The manner in which the duties of the Comptroller General is dealt with in that bill is entirely satisfactory to us. The Comptroller General testified before the select committee and opposed at that time the giving of responsibility for auditing Congressional disclosure statements to the General Accounting Office.
The bill, as reported, puts a responsibility for compliance with the act, with the Committee on Ethics of the Senate, and Committee on Standards of Official Conduct of the House.
The Comptroller General, though, is required to conduct a study before November 30, 1979, and regularly thereafter to determine whether the act is being carried out effectively and whether timely and accurate reports are being filed by individuals subject to the act.
The bill specifically directs the General Accounting Office in its first study under this provision to analyze the feasibility and potential need for systematic random audits of financial disclosure reports. And within 30 days after completion of an investigation or study, the Comptroller General must submit his recommendations to Congress. We feel that this type of GAO oversight if incorporated in H.R. 9 or by some other method which the House will decide upon, together with the enforcement authority of the supervising ethics office for the executive branch and the Attorney General and the public in their review of financial disclosure statements, would be sufficient to insure the integrity of a Government-wide financial disclosure system.
A minor point which I will mention briefly, we note that the bill reported by the House Select Committee does not deal with legislative agency employees. As an employee of one of those agencies we
feel we probably should be included under the legislative provisions under title II.
I don't think it is proper for the Comptroller General or myself or other top people to be reporting to the Civil Service Commission in this particular type of thing. That is a technical matter which I am sure can be worked out.
We do make a point, Mr. Chairman, in our statement which both the Comptroller General and I feel strongly about and which Mr. Wiggins referred to this morning. We think that Congress has a problem of balancing private interests versus public interests in the matter of disclosure statements. It is somewhat the same type of proposition which some of us in government think is a dilemma, with the Freedom of Information Act on one side and the Privacy Act on the other side, and the two conflict on occasions.
We think there is a very serious consideration that Congress must give to this and we don't want to ee something come about which will undermine the effectiveness of Government and the effectiveness of being able to recruit people from the Government and also the question of unnecessary invasion of privacy.
We do suggest that if public availability is to be required, I know both the House and Senate have required that of its Members by their own resolutions, that disclosure should not be automatic but on a request basis. And that there be notice to the individual that disclosure of his financial report has been made and to whom.
Prior to inspecting or receiving any financial report we believe the requester should be required to present a written request giving his name, address and so forth and if he is making a request on behalf of somebody else, who he is making it for. That is not a cure-all but we think it is a deterrent to unnecessary invasion of privacy.
We do have concern that if you just have of-public disclosure of every statement that is made, it could sometimes raise more questions than it answers. And when you balance that against somebody's absolute code of ethics in their own mind there can be conclusions that "obviously this is a conflict," which may not be true at all.
Every one of us has different standards for different things. We hope we are all reasonable people. I think to help
cure that, the supervising ethics office which would be set up under H.R. 9 should play an important part in bringing those types of cases to a head rapidly, seeing that they are disposed of rapidly and making a decision which should be available to the public whether there is a conflict or not a conflict.
I will be glad to answer any questions I can.
Mr. HARRIS. Thank you, Mr. Keller, for the statement. Do I understand basically you would like to have oversight but you don't want to administer it; is that right?
Mr. KELLER. Yes, that is right. When I said administration, some of the bills require filing of all the statements with the GAO. We heard testimony from Mr. Campbell a few moments ago that we were talking about 20,000 or 25,000 statements.
Some of the bills require a random audit and some people think that is not very productive because the people I have talked to say it is the most difficult type of thing in the world to audit, a personal financial statement.
But we think each branch of Government should administer their own. They should be filed in the agency but the overall ethics offices would have supervision of it.
We have no objection to going in and taking a look at how good a job we think they are doing. Also, we have no objection to the provisions in the bill from Congressman Preyer's committee, that we take a hard look at the necessity of a random audit and report back to the Congress by next year.
Mr. Harris. It seems to me that the comprehensive coverage of all GS-16's through GS-18's, without reference to what the position is or the sensitivity of the position, adds a tremendous amount of additional filings and tremendous administrative burden without a whole lot of necessity.
Do you have any thoughts on that?
Mr. KELLER. I share your concern on it. However, my own experience in government is that some of the key decisions, and I am not talking about the major national interest decisions, but some of the key decisions on transactions of government are made by other than the agency head and other than by a grade of 18.
I think if I were a lawyer, practicing outside of government, that I would want to talk to the first person working on the project, writing the first draft. That is my personal view.
Mr. HARRIS. Mr. Moorhead?
Under the theory of most of these bills all three branches of the Federal Government would be under the same general rules as far as accounting and reporting. Do you think that that is a good idea ?
Mr. KELLER. Well, if I
Mr. MOORHEAD. For instance, if you don't know what I am driving at. The judicial branch quite often makes the point when they testify before this Committee that they are handling the problem all right. To link the judiciary with the executive branch on disclosure requirements, is that essential?
Mr. KELLER. My personal reaction, Mr. Moorhead, is that I think as nearly as possible, they should be consistent.
I think I have heard the argument of the judiciary. They say they don't deal with broad things but they deal with individual cases that come up and then appropriately disqualify themselves. But I guess, personally, I don't share their concern that disclosure of the judges' assets and liabilities will impair his independence that much. But I am not an expert on that.
Mr. MOORHEAD. You have suggested that each department should be their own watchdog and keep their own records so to speak. Your agency is willing to come in and check as to compliance?
Mr. KELLER. I have no problem with that. We have that basic responsibility under our statute anyway, to see how various operations of government go.
Mr. MOORHEAD. Isn't there bound to be a duplication of workload if there are separate ethics offices within the agencies themselves to take care of these matters?
Mr. KELLER. I suppose, yes, there is, but I don't know how much additional is really required.
You have, of course, many agencies and if you are talking about the executive branch. But to put them all in one place such as have the Civil Service Commission handle the whole business, there would be a tremendous workload on them when you are talking about some 20,000 employees.
Mr. MOORHEAD. The same amount of work will be done whether you divide it up or put it all in one spot, isn't that right?
Mr. KELLER. I guess that is right. I have a theory of my own that centralization isn't always efficient. It depends on the case.
Mr. MOORHEAD. I think many would agree with you on that. We have somewbat of a problem dealing with confidentiality when you consider certain Federal employees such as those working for the CIA, National Security Agency, Defense Intelligence Agency, and so forth.
I guess there are instances when you might find one of those security persons in another department. A disclosure statement in both departments might blow their cover totally. I just wonder how you would handle those problems of confidentiality.
Mr. KELLER. I hadn't thought of that, Mr. Moorhead. The bills do provide that the President can exempt certain officials for security reasons, they don't have to file. Persons undercover in another agency, I am not sure how that would work out.
Mr. MOORHEAD. I think if you exempted him specifically he would be uncovered right then. But there is a problem there that i think someway or another has to be handled.
Mr. KELLER. I think I would defer to Mr. Campbell, Chairman of the Civil Service Commission, on that and maybe he can answer better than I could.
Mr. MOORHEAD. Thank you, very much.
Mr. Harris. We appreciate your testimony. We apologize for the interruptions. We appreciate your testimony very much.
Prof. Livingston Hall, of the American Bar Association, and Prof. Herbert S. Miller, of Washington, D.C.
TESTIMONY OF PROF. LIVINGSTON HALL, CHAIRMAN, SPECIAL
COMMITTEE, AMERICAN BAR ASSOCIATION, AND PROF. HERBERT S. MILLER
Mr. HARRIS. Dr. Hall and Dr. Miller, we are especially privileged to have you here today. I know both of you by reputation. I know of your long service in the field of law, and we appreciate your testifying.
You may proceed any way you wish, but we would prefer, if you would like to, to have you file statements.
Professor IIall. I would like to file our statement with you and to call attention to the one-page summary. This is Professor Miller, who is available to help answer questions.
He has been a member of the American Bar Association special committee to study special law enforcement agencies, which had, by