on extensive training in the Department of Defense in the last year and extensive training and education throughout the executive branch. We have instituted an Ethics Newsgram that addresses some of the things that you are now concerned about. It is a little paper that we put out. I have brought with me copies of every one. We started in 1984. There are articles in these Newsgrams about negotiating for employment, what a particular matter might mean, how to interpret section 208. I would like you to have them for the record, Mr. Chairman, this little packet of all our Newsgrams, which I think demonstrates that we are trying to-we are in the business of prevention and education and training and counseling. That's where our effort is directed. I think we have done a great amount of that in the last 2 years. With that, I would be glad to answer any questions you may have. [Statement of David H. Martin follows:] STATEMENT OF FOR RELEASE ON DELIVERY DAVID H. MARTIN OFFICE OF GOVERNMENT ETHICS BEFORE THE ADMINISTRATIVE LAW AND GOVERNMENT RELATIONS SUBCOMMITTEE OF HOUSE OF REPRESENTATIVES COMMITTEE ON THE JUDICIARY ON THE "DEFENSE PROCUREMENT CONFLICT OF INTEREST ACT" JANUARY 30, 1986 MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE: "Defense I appreciate the invitation to appear before this hearing of the Subcommittee to present the views of the Office of Government Ethics (OGE) on H. R. 2554 Procurement Conflict of Interest Act." Prior to addressing the merits of the proposed legislation, I think it important to review the current post-employment rules and their affect on the procurement process. At the time the Ethics in Government Act was signed into law in 1978, Title V of the Act contained amendments to 18 U.S.C. section 207, a criminal provision designed to delimit former officers and employees' representational participation in matters relating to their previous official activities and responsibilities. Sections 207(a) and (b)(i) are designed to. prevent any former employee from switching sides and representing a private client in the same particular matter involving specific parties in which he or she had previously participated personally and substantially while a Government employee or which had been under his or her official responsibility. The former is a permanent or lifetime bar, while the latter involves a two-year bar on any particular matter under the former employee's official responsibility during his or her last year of federal service. Section 207(c) is based on a different theory as its prohibitions are not limited to particular matters in which the former employee was involved. Former high-ranking (senior) employees are barred for one year from representing anyone before or, with the intent to influence, doing business with their former agency. The matters covered are broader; they need not involve specific parties so the former employee could not, for example, attempt to influence rulemaking or policy formation. The restriction covers the former employee's self-representation. The language of the Ethics in Government Act, as originally enacted, prohibited for a period of two years after employment ceased those designated as "Senior Employees" from providing assistance in representing any person, other than the United States, "concerning" any formal or informal appearance. The original language was not thought to accurately reflect the intention of Congress in that it allowed for two possible but clearly unintended interpretations: (i) that certain otherwise legitimate activities connected with the management of grants and contracts were barred; and (ii) that the "assistance in representing" bar extended both to matters in which the former Senior Employee had personally and substantially participated and matters which, although not having personally and substantially participated in them, had been actually pending under his/her official responsibility. The amendments to the Act (Pub. L. 96-28, June 22, 1979) provide that 18 U.S.C. S207(b)(ii) applies only to that assistance given within two yeɛ "s after leaving Government serivce, by "personal presence" at any appearance before the The amendments further provide that this two-year bar applies only to matters in which the former employee has "personally and substantially" participated. Government. The provisions of 18 U.S.C. $207 do not, however, bar any former Government employee, regardless of rank, from employment with any private or public employer after Government service. Nor do they effectively bar employment even on a particular matter in which the former Government employee had major official involvement except in certain circumstances involving persons engaged in professional advocacy. Former Government employees may be fully active in high-level supervisory positions whether or not the work is funded by the United States and includes matters in which the employee was involved while employed by the Government. The statutory provisions are not intended to discourage the movement of skilled professionals in Government to and from positions in industry, research institutions, law and accounting firms, universities and other major sources of expertise. See for instance Congressman Danielson's 1977 report on behalf of the Committee on the Judiciary (Rept. No. 95-800, 95th Cong., 1st. Session, P. 32) and his remarks on the occasion of the 1979 amendments to 18 U.S.C. § 207(b) in which he expressed concerns with provisions which are so stringent that highly skilled people would leave the federal work force causing an unacceptable "brain drain". Cong. Record, daily edition, H. 4596, June 15, 1979. Government-wide regulations, promulgated by the Office of Government Ethics, implementing the criminal provisions can be found at 5 C.F.R. Part 737. The Department of Defense has implemented departmental regulations in DOD Directive 5500.7. Broader restrictions have been suggested to close the revolving door to prevent subjective influence on federal employees, to protect the Government's interest in confidential information made available to its employees, and to guard against the appearance of conflict of interest on the part of its employees. This call for broader restrictions has to some extent been precipitated by abuses that occur when current federal employees negotiate for or enter into arrangements with future employers. Participation as a Government employee in a particular matter in which such employee has a financial interest is prohibited by the criminal provisions of 18 U.S.C. S 208. Subsection (a) of $ 208 prohibits a Government employee from participating personally and substantially as a Government employee in any particular matter "in which, to his knowledge, he, his spouse, minor child, partner, organization which he is serving as an officer, director, trustee, partner or employee... or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment . . . has a financial interest". The term "financial interest" is not defined. However, a number of federal court decsions such as United States v. Conlon, 628 F. 2d 150 (D.C. Cir. 1980) have addressed the "negotiating" issue. The statute deals with the conduct of a Government employee in his role as its servant or representative, as distinguished from his conduct in a private capacity. Section 208 does not disqualify anyone from holding a particular Government position; instead it provides sanctions for participation in certain governmental matters in which an employee has a financial interest. This requires a case by case determination as to whether disqualification, recusal or a waiver is necessary. ... Opponents contend that broader restrictions would inhibit the beneficial movement of employees from private industry to government and vice versa by making public employment less attractive. We are aware of little empirical data to support either side |