STATEMENT OF CONGRESSWOMAN BARBARA BOXER On H.R. 2554: To Limit Conflicts of Interest in Defense Procurement House Judiciary Subcommittee on Administrative Law and Governmental Relations January 29, 1986 MR. CHAIRMAN, THANK YOU FOR THE OPPORTUNITY TO ONCE AGAIN ADDRESS THE ISSUE OF THE REVOLVING DOOR IN DEFENSE DEPARTMENT PROCUREMENT. MY CONCERN WITH THE REVOLVING DOOR PROBLEM BEGAN TWO YEARS AGO WHEN I LEARNED THAT THOUSANDS OF DEFENSE DEPARTMENT EMPLOYEES INVOLVED IN CONTRACT NEGOTIATIONS, OR IN THE TESTING OR DEVELOPMENT OF WEAPONS PROGRAMS, WERE RESIGNING THEIR GOVERNMENT JOBS AND GOING TO WORK FOR THE CONTRACTOR THEY WERE SUPERVISING. MANY OF THESE PROGRAMS HAD ABOMINABLE RECORDS OF COST OVERRUNS AND SHODDY PERFORMANCE. THE IMPRESSION IS INESCAPABLE THAT THE PROSPECT OF A JOB WITH THE CONTRACTOR MAY HAVE INFLUENCED THE JUDGEMENT OF THOSE INDIVIDUALS. I BELIEVE IT IS CRITICAL TO STOP AN EMPLOYMENT PATTERN WHICH DOES NOT PROTECT THE PUBLIC AGAINST THE MISUSE OF ITS TAX DOLLARS. THE REVOLVING ARE, AT THE SAME TIME, AFFECTING THEIR OWN ECONOMIC FUTURES BY THE CRITICS OF THE APPROACH TAKEN BY ME AND MR. BENNETT, AND ENDORSED OVERWHELMINGLY BY THE HOUSE, SAY THE PROBLEM IS NOT REAL. THEY SAY IT IS MERELY ONE OF PUBLIC PERCEPTION. I SAY THE PROBLEM IS REAL. EACH YEAR, DEFENSE CONTRACTORS HIRE THOUSANDS OF OUTGOING DEFENSE DEPARTMENT PROCUREMENT OFFICIALS. BY SOME ESTIMATES, ONE-THIRD OF THOSE SWITCHING SIDES ARE WORKING FOR COMPANIES OVER WHOM THEY EXERCISED SIGNIFICANT OVERSIGHT RESPONSIBILITY. THIS CONSTITUTES REAL CONFLICT OF INTEREST. I KNOW IT, AND THE AMERICAN PEOPLE KNOW IT WHEN THEY PICK UP THEIR PAPER AND READ ABOUT TOP PROCUREMENT OFFICIALS SOLICITING BUSINESS FROM CONTRACTORS AND TAKING LUCRATIVE JOBS WITH THE CONTRACTORS THEIR DECISIONS HAVE AFFECTED. UNFORTUNATELY, THE SENATE DID NOT RECOGNIZE THE DAMAGE TO MORALE AND PUBLIC PERCEPTION THAT SUCH CONFLICT OF INTEREST SITUATIONS REPRESENT. THEY REJECTED THE STRONG HOUSE ENDORSEMENT OF A TWO-YEAR JOB BAN ON ALL THOSE WITH SIGNIFICANT PROCUREMENT RESPONSIBILITY, MILITARY AND CIVILIAN, PRESIDENTIAL APPOINTEES AS WELL AS MID-LEVEL OFFICIALS. THE LEGISLATION THAT EMERGED FROM THE DEFENSE AUTHORIZATION CONFERENCE WOULD COVER ONLY PRESIDENTIAL APPOINTEES. THE DEPARTMENT OF DEFENSE HAS AGREED WITH A JUSTICE DEPARTMENT DECISION THAT THIS SHOULD INCLUDE COMMISSIONED OFFICERS, BUT IT IS UNCLEAR EXACTLY WHAT MILITARY POSITIONS WOULD BE SUBJECT TO THE LAW. FOR INSTANCE, IT IS NOT AT ALL CLEAR THAT THE LEGISLATION WOULD PREVENT THE REVOLVING DOOR CHANGES THAT TOOK PLACE ON THE ILL-FATED DIVAD PROGRAM. AT LEAST EIGHT OFFICIALS INVOLVED IN THE DEVELOPMENT AND MANUFACTURERS. NOR IS IT CLEAR WHETHER THE CONFERENCE LANGUAGE WOULD HAVE AFFECTED THE COLONEL WHO PLAYED A KEY ROLE IN SELECTING GENERAL ELECTRIC AS THE BIG WINNER IN THE COMPETITION BETWEEN GENERAL ELECTRIC AND PRATT & WHITNEY FOR THE F-15 and F-16 FIGHTER ENGINES. THE COLONEL RETIRED FROM THE AIR FORCE AND WENT TO WORK FOR GE TO MANAGE THE QUALITY CONTROL PROGRAM IN ITS TROUBLED ENGINE PLANT. IT IS CLEAR THAT THE LAW WOULD NOT COVER SOMEONE LIKE THE DEFENSE CONTRACT AUDIT AGENCY AUDITOR, A CIVILIAN, WHO WAS IN CHARGE OF REVIEWING COSTS AT A BOEING COMPANY PLANT, RETIRED FROM THE AGENCY, AND A DAY LATER WENT TO WORK FOR BOEING. H.R. 2554, THE BENNETT/BOXER BILL, WOULD HAVE REQUIRED A TWO-YEAR COOLING OFF PERIOD FOR ALL OF THESE PROCUREMENT OFFICIALS. NEITHER DOES THE NEW CONFLICT OF INTEREST LAW DO ENOUGH TO ADDRESS THE KINDS OF CONCERNS EXPRESSED BY SEVERAL, FRONT-LINE PROCUREMENT OFFICIALS, WHOSE VIEWS HAVE BEEN MADE KNOWN TO SEVERAL HOUSE COMMITTEES. THE FORMER STAFF JUDGE ADVOCATE OF KIRTLAND AIR FORCE BASE, COLONEL JACK FINDER, TOLD AN OFFICE OF GOVERNMENT ETHICS INVESTIGATOR IN 1982 THAT THE HEAD OF THE AIR FORCE PLANT REPRESENTATIVE'S OFFICE AT NORTHRUP ON FRIDAY, COULD BECOME A NORTHRUP VICE-PRESIDENT FOR QUALITY ASSURANCE ON MONDAY. HE SAID THE RESULT WAS THAT AFPRO MORALE WAS "DESTROYED. AFPRO EMPLOYEES FELT BETRAYED THAT THE CONTRACTOR GAINED THE KNOWLEDGE OF HOW THE AFPRO OPERATED. HE ADDED THAT "THESE TYPES OF CASES ARE DEVASTATING TO THE ETHICS PROGRAM BECAUSE OF THE APPEARANCE OF CONFLICT OF INTEREST ALONE." OMPAL CHAUHAN, AN AIR FORCE INDUSTRIAL ENGINEER AT THE BOEING PLANT IN WICHITA TOLD THE HOUSE ARMED SERVICES COMMITTEE LAST APRIL THAT "MANY FIELD PEOPLE I KNOW HAVE FEELINGS OF HELPLESSNESS, DESPAIR AND DISAPPOINTMENT AS THEY WATCH THEIR SUPERIORS KOWTOW TO CONTRACTORS TO FURTHER PERSONAL AMBITIONS..." FORMER AIR FORCE CAPTAIN JEFF ROHM WAS STATIONED AT PRATT & WHITNEY'S PLANT IN WEST PALM BEACH. IN 1982 ROHM SUBMITTED A FORMAL SUGGESTION TO THE AIR FORCE THAT THOSE WITH SUPERVISORY RESPONSIBILITY OVER A CONTRACTOR SHOULD BE BARRED FROM WORKING FOR THAT CONTRACTOR FOR TWO YEARS AFTER LEAVING GOVERNMENT. IN CONGRESSIONAL TESTIMONY LAST FALL, HE DESCRIBED A NUMBER OF SITUATIONS IN WHICH KEY PROCUREMENT OFFICIALS WENT DIRECTLY TO WORK FOR THE CONTRACTOR THEY WERE SUPPOSED TO BE OVERSEEING. HE ALSO TALKED ABOUT THE KINDS OF SENSITIVE DECISIONS, AFFECTING THE FLOW OF MILLIONS OF DOLLARS, THAT HE AND OTHER OFFICIALS HAD TO MAKE. HE TOLD THE COMMITTEE IT WAS DIFFICULT TO "PREACH THE SANCTITY OF CONFLICT-OF-INTEREST PROHIBITIONS AND TELL OUR EMPLOYEES NOT TO TAKE GRATUITIES AND THAT COFFEE AND DOUGHNUTS ...WILL INFLUENCE THEIR ROHM IS PROOF THAT SUCH A REVOLVING DOOR BAN ON PROCUREMENT OFFICIALS IS NOT ONEROUS OR UNFAIR. HE RETIRED AND FOUND A JOB WITH A DEFENSE CONTRACTOR OTHER THAN PRATT & WHITNEY. MR. ROHM SAID HE SUPPORTED THE BENNETT/BOXER BILL. I HAD HOPED THAT THE APPROPRIATIONS CONFEREES WOULD HAVE ACCEPTED A MODIFIED VERSION OF THE BENNETT/BOXER BILL, ONE THAT WE FELT WAS A FAIR AND EFFECTIVE WAY TO BALANCE THE INDIVIDUAL'S RIGHT TO EMPLOYMENT OPPORTUNITIES, WITH THE PUBLIC'S RIGHT TO EXPECT GOVERNMENT EMPLOYEES TO PROPERLY CARRY OUT THEIR RESPONSIBIITIES. THEY DID NOT, AND MR. BENNETT AND I WILL REDOUBLE OUR EFFORTS THIS SESSION TO PASS A BILL THAT EXPANDS THE COVERAGE OF THE PRESENT LAW. I AM PLEASED THE JUDICIARY COMMITTEE IS HOLDING THIS IMPORTANT HEARING ON THE ISSUE OF ETHICS IN GOVERNMENT I WILL BE PLEASED TO ANSWER ANY Mr. GLICKMAN. Charlie, why don't you go ahead and proceed. TESTIMONY OF HON. CHARLES E. BENNETT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA Mr. BENNETT. I have a statement which I would like to submit for the record. Mr. GLICKMAN. Sure, without objection, your statement will be put in the record. Mr. BENNETT. If you have it there, I am going to speak from it. Mr. GLICKMAN. OK. Mr. BENNETT. In other words, I will take from it and at the end of it I will do something extemporaneously. Mr. GLICKMAN. That's fine. Mr. BENNETT. Mr. Chairman and members of the committee: Thank you for allowing me here to speak about H.R. 2554, the Defense Procurement Conflict of Interest Act, and about how it could be improved. The bill you have before you now is the amended version of the bill as passed by the House Armed Services Committee. The committee's amendments opened up huge loopholes in the legislation and it needs to be returned to the original form, which is attached to the end of my statement. I support the original form, and so does the majority of the House. The House, as a matter of fact, approved this by an overwhelming vote of 397 to 19, turning down the House Armed Services version by a vote of 397 to 19 having the stronger version. I have been active in ethical reform measures since 1951. That year I introduced legislation which established the code of ethics for Government service and did other matters. In April of 1985, we held joint hearings on this issue before my Seapower Subcommittee and the Investigations Subcommittee chaired by Congressman Nichols. As a result of those hearings, on May 6 I introduced on behalf of myself, Mrs. Boxer, and Mr. Nichols, the Defense Procurement Conflict of Interest Act. Our bill combined the best features of our original bill and that of Mrs. Boxer on this issue. It has almost 50 other cosponsors and was passed by the House Armed Services Committee this June, but unfortunately with objectionable amendments. The original bill is very clear and direct. It prohibits anyone with significant responsibility for a defense contract from immediately going to work for a firm involved with that contract. Employees who have dealt with a contractor during their last 2 years of Government service are barred from going to work for that contractor for 2 years after leaving the Government. Anyone violating this ban would be subject to up to 1 year in jail and/or a fine of $10,000. Contractors would be subject to the same criminal penalties and would also be liable for contract damages of at least $100,000 if they hired someone in violation of the ban. Although I believe such measures should be applied to all Government employees, we limited the bill to the Department of Defense in order to avoid the bill being bottled up in different committees. You know, the best way to kill a bill today is to give it to |