ployee of the United States compensated at a rate equal to or in excess of the minimum rate prescribed for employees holding the grade of GS-16; (6) each member of a uniformed service compensated at a rate equal to or in excess of the monthly rate of pay prescribed for grade 0-7 (brigadier general); (7) candidates for nomination for or election to the office of President, Vice President or Member of Congress; (8) persons nominated by the President for any salaried federal office subject to Senate or congressional confirmation; and (9) individuals compensated at a rate below the rate prescribed for individuals holding the grade of GS-16 or 0-7 as designated by the appropriate agency head, commanding officer, or comparable authority in the legislative and judicial branches. 3. With whom reports should be filed Executive Branch and regulatory agency officials should file reports with the United States Civil Service Commission and with appropriate officials within their respective agencies. Members of Congress and congressional employees should file their reports with the General Accounting Office (GAO) and, respectively, with the Clerk of the House and the Secretary of the Senate. Justices, judges, magistrates and employees of the Judicial Branch should file with the Administrative Office of the United States Courts and with their respective Supreme Court, Circuit Court or District Court clerks. The President should be authorized to exempt intelligence agents from filing other than with their own agency head. Candidates for elective office should file with the GAO, and Presidential nominees for offices requiring Senate or congressional confirmation should file with the appropriate congressional committees to which their nominations are sent. 4. Contents of report The reports should include the following information for the preceding calendar year: A. (1) The amount and source of each item of income which exceeds $1500; (2) each cash gift or aggregate of cash gifts from one source (other than gifts received from any member of the immediate family), which exceeds $100; and (3) each fee or other honorarium received for speeches, attendance at meetings or preparation of writing for publication which exceeds $100. Only the total amount, and not the identity of the sources, of any items of income which exceed $1500 must be reported, if the identity of the source is confidential information resulting from an attorney-client, doctor-patient, or other recognized privilege. B. The value and source of gifts in kind received from one source (other than items received in kind from any member of the immediate family), including transportation or entertainment, which cumulatively exceed $500. C. The identity and value of each asset, other than tangible personal property or a vehicle owned solely for the personal use of the individual or immediate family and not held for investment or production of income, which exceeds $1500. D. The identity and amount of liabilities in excess of $1500. E. The identity, amount, and date of transactions in securities or commodities in excess of $1500. F. The identity and amount of a purchase or sale of real property or an interest in such property in excess of $1500. G. A full description of any agreement with respect to employment after the individual leaves government, including one involving a leave of absence from a position outside of government, and a description of any unfunded pension agreement between the individual and a private employer. Appropriate categories of value should be reported rather than specific dollar amounts when reporting items in paragraphs B and G. Where an individual is in doubt as to the category of value, the higher category should be reported. The personal residential address of the covered individual should not have to be reported, only the city. For purposes of paragraphs A through F, the report shall include all such items received or held by members of the immediate family of the covered individual unless such items are not derived from activities of the covered individual. Reimbursement for reasonable expenses in attending meetings for non-personal purposes should not be reported. Trusts should be reportable if known to the filer and within his control. Blind trusts would thus be excluded except as to their total value. If however, a blind trust is created during the reporting period, the individual must disclose the identity and amount of all assets at the time they were placed in the trust. All reports should include identity and amounts, except for annual reports filed by sitting judges. As to such judges, who are subject to strict statutory recusal requirements if they have a financial interest no matter how small, only the identity of the matters covered by paragraphs B through G, and not the amounts, must be disclosed. 5. Extent of public disclosure All individuals being considered for covered elective or appointive positions and offices should be required to make a full and complete financial disclosure complying with paragraph 4 above which should be available to the public. All covered individuals should be required to submit annual reports updating the first full financial disclosure report. Procedures should be worked out to assure access to reported information by the public and to assure that the covered individual can ascertain who is requesting such access. With the exception of the judiciary, all annual reports should be available to the general public. An attorney representing a party in a case before a sitting judge may submit to the clerk of the court, at the time of filing the case or thereafter, a list of parties and interests which he believes may be substantially affected by the outcome of the litigation. The clerk will review the list and identify those parties and interests, if any, in which the judge has a financial interest as reflected in his filed disclosure statements. The clerk will submit this list to the judge, who will in turn review the list for possible conflicts. If there are none, he will instruct the clerk to so notify the attorney. If the judge has a financial interest in any of the parties and interests on the list, he shall either recuse himself, or, if his financial interest is in a non-party interest which he does not believe will be substantially affected by the outcome of the litigation, instruct the clerk to so notify the attorney. The attorney may then, if he wishes, file a disqualification motion. 6. Regulating and auditing financial disclosure The General Accounting Office (GAO) should oversee the promulgation of regulations by the U.S. Civil Service Commission (CSC) and the Administrative Office of the U.S. Courts (AO) to govern compliance with the filing requirements and auditing of reports for completeness and veracity. These regulations should be developed in accordance with procedures, similar to those under the Administrative Procedure Act, permitting public review and input on regulations before they are adopted. The GAO, CSC and AO should be responsible for the initial auditing of individual reports filed with them. The GAO should maintain a monitoring role over individual agency audit processes to ensure adherence to the purposes of the statute. 7. Prohibitions and sanctions A knowing, willful and material falsification, or a knowing and willful failure to report complete information in a disclosure report should be a misdemeanor punishable by imprisonment for not more than one year or a fine not exceeding $10,000, or both. Failure to file a report should be subject to a civil penalty not to exceed $5,000, and the Attorney General should be authorized to bring such a civil action. No person may inspect, obtain, or use copies of filed reports for any unlawful or commercial purpose, to determine or establish the credit rating of the individual or for use directly or indirectly in the solicitation of money for any purpose. The Attorney General may bring a civil action against persons inspecting, obtaining, or using such reports for such purposes. The remedies in such actions should be injunctive relief or a fine of $5,000 or twice the profit, which is larger, or both. It should be the responsibility of the agency with which reports are filed (GAO, CSC and AO) to make appropriate referrals to the Attorney General for any violations of the law. AMERICAN BAR ASSOCIATION, Release: Immediate Chicago, Ill. ABA SUPPORTS FINANCIAL DISCLOSURE LEGISLATION WASHINGTON, D.C., September 9-The American Bar Association told Congress today that existing financial disclosure requirements covering top-level federal officials are inadequate and new legislation is needed. "There is ample historical evidence that men are not angels and 'auxiliary precautions' must be taken to prevent future officials from being tempted to abuse their power," Livingston Hall, chairman of ABA's Special Committee to Study Federal Law Enforcement Agencies, said. Hall was testifying at House Judiciary subcommittee hearings on proposed financial disclosure legislation. He told Committee members that ABA studies found that basic institutional and structural reform is essential to assure the public of the integrity of our federal government process. "We believe comprehensive federal legislation providing for financial disclosure by officials in all three branches is appropriate and necessary to ensure accountability of public officials and public confidence in such officials," Hall explained. In his testimony, Hall underscored several provisions the Association feels should be included in any financial disclosure legislation. The Association recommends that candidates for nomination for President, Vice-President or member of Congress be covered under such legislation as well as candidates for election. "We believe that both primary and general elections are public elections and should be treated in the same fashion, particularly since in many congressional districts and some states the primary nomination is tantamount to election," he said. In addition, the following individuals would be covered under the Association's proposal: Persons nominated by the President for any salaried federal office subject to Senate or congressional confirmation, Members of Congress, the President, Vice-President, and judges. Individuals holding the grade of GS-16 or 0-7 and higher (or those in policymaking positions). The ABA proposal recommends a threshold level of $100 for cash gifts and honoraria and $500 for gifts in kind. For other items of income and for assets in liabilities, a uniform level of $1500 is recommended. Hall stressed that only the total amount, and not the identity of the sources, of any items of income which exceeds $1500 must be reported if the identity of the source is confidential information resulting from an attorney-client, doctorpatient or other recognized privilege. "Without such a provision, the disclosure legislation would place a professional person in the position of having to violate the confidentiality of a privileged relationship, and incur potential liability in order to comply with the statute," he said. With regard to income and assets of spouses, the ABA proposal recommends that spouses and dependents be required to make the same disclosures as the covered individual, except to the extent that their financial interests are not derived from the activities of the covered individual. Although permitting blind trusts, the ABA proposal would require disclosure of the total value of the assets in the blind trust and, if recently created, disclosure of the assets which were placed in the trust when it was created. All nominees, including those for federal judgeships, would be required to disclose both identity and amounts of their financial interests under the ABA proposal. However, Hall said, after the initial disclosure, there is no need for judges to disclose amounts of financial interests (other than items of income, cash gifts, and honoraria) as long as the identity of assets is disclosed. He pointed to existing laws, applicable only to judges and not to other federal officials, which require a judge to disqualify himself in any matter in which he has any financial interest no matter how small-including even one share of stock. "Amounts of holdings therefore become superfluous," Hall told Committee members. "Whether it be one or one thousand shares of stock, or a minor or major interest of some other sort, judges are required to recuse themselves." Hall also suggested that the scope of public disclosure for judges be limited to the parties in actual cases before a particular judge which may involve conflict of interest. "We do not analogize the position of judges to that of legislators and officials in executive and regulatory agencies who deal every day on an ongoing basis with a host of major policy issues which require continual decisions on their part," he explained. In contrast, Hall said, judges neither select the issues with which they will deal or the nature and scope of how the issues are presented. ABA also suggested financial disclosure legislation include provisions to: Allow officials to file with a designated authority within the official's own branch of government, Give coordination and "oversight" responsibility to the General Accounting Office, Provide civil penalties for knowing failure to file a financial disclosure statement, Provide criminal penalties for knowing and willful falsification or omission of material. Professor HALL. I appreciate that. I would like to discuss a few items on the summary where we may be helpful in pointing out what we think should be done here. I was much interested in Congressman Preyer's statement. We have made no analysis of H.R. 7401. I was much impressed with many of the points he made which go along with our recommendations. I would say that the American Bar Association feels strongly that legislation is needed, and that it is not something that can be done by rules in the executive branch or rules in the judicial branch or rules in Congress. Coming to the second point about coverage, I would like to mention two things here. One is, Presidential nominees are often purely honorary, nominated for purely honorary positions and advisory committees and things like that, where they don't have real power. We have suggested that Presidential nominees subject to congressional nomination should be required to file only if nominated to salaried positions. I think that is important. These nonsalaried positions don't carry with them policymaking power. Mr. HARRIS. I have had two hearings today. One in the Civil Service Committee and one in this committee on this bill. I have raised this point. I have been in positions locally where we tried to attract people to advisory committees-they were busy people, and a lot of times, we were not paying them per diem. In order to get the breadth of representation on these committees that we wanted, it is difficult to attract those kinds of volunteers to the committee, if it means they will have to make a massive public financial disclosure. Professor HALL. We are in sympathy with that idea and with what Congressman Preyer said about not having requirements going further than the need. There is another point under who should be covered dealing with the spouses and other members of the family. We think there that they should not be required to file unless they have property which is the product of the officeholder himself, his activities. We have spelled out in detail in the statement and in the recommendations how that should be phrased. I don't think any of the bills now before you are quite as limited as we think they should be. Where should they be filed? Our point was that the filings with the specific department or agency and with the Civil Service agency would be enough for executive officials. 95-896 O-77-32 We see no alternative to filing the congressional reports with the GAO, for it is primarily the Congress own agency. With regard to judges, their statements should be filed in the Administrative Office of the U.S. Courts. We do not think that everything must be filed with the GAO. We have taken no position on whether there should be an office of government ethics, so we have no comment on that. We have taken no position on title III of H.R. 6954 about disqualification of people after they leave government service. On that_point I would mention to you, since this is before you, that President Spann of the American Bar Association has sent to the American Bar Association Committee on Professional Responsibility the study—the job of studying this as applied to lawyers. Now, that is a narrow study. But I suggest to you that whatever comes out of this committee with regard to lawyers may provide a very useful analysis which would be helpful in dealing also with nonlawyers. I think something can be expected in the near future that would be helpful to you, generally. Then, about what sort of threshold level and what sort of blind trust reporting should be given. We thought $1,500, except for income, was a good minimum threshold level. With regard to blind trusts, we agree with Congressman Preyer that they should be respected, but we would require two types of disclosure. First, when the blind trust was set up, I think the officials should disclose what was in it, when he set it up. Second, I think the total amount in it should be disclosed year by year. Otherwise we do not believe there should be disclosure of what is in it any way. Now we come to two interesting problems you face. One is the opposition of the judges to giving the amounts of their holdings. The statutory program for disqualification of a judge is that if he has any interest, no matter how microscopic, he must recuse himself. So the conflict of interest that may come up is, does he have a particular type of property which creates a conflict of interest. No matter how small it is, he still can't sit. The amount is not important. With regard to public disclosure of the judges' financial statements, the only purpose to be served in requiring judges to report their assets this is after confirmation-before confirmation they should report everything-is to make sure they recuse themselves when they should. There can be no other type of conflict of interest. We believe that public disclosure of the judges' statements shouldn't be required after they have been confirmed, but there should be available to counsel from the clerk of the court any specific holdings that the judge may have, not as to amount, so if the judge doesn't recuse himself, this matter can be brought up. We do not see any need for 5 years retroactivity, that a person filing for the first time must file for the previous 5 years. I simply mention that. There is one difficult problem faced not only by lawyers, but by other types of people, such as physicians. And that is confidentiality. Some of the bills before you would say that with regard to the 5-year retroactivity, no disclosure was required of the |