the revolving door. It prohibits a Presidential appointee who is a primary government representative in the negotiation of a government contract with a defense contractor from accepting employment with that contractor for two years.

This was a victory--but only a partial one. I was disturbed after the conference to find out that our compromise was being interpreted by the Department of Defense to cover, not the thousands we had intended, but a handful of officials. I believe this interpretation is wrong. The Department of Justice has advised me that the conference language does cover, not just high-level officials, but military officers, who, of course, are all appointed by the President This was my intention and I hope the Department of Defense when it issues its regulations implementing this language will follow what the Department of Justice has said on this.

Because there has been considerable debate about whether "Revolving Door" legislation should apply to high-level officials, let me discuss that issue as it developed in the Committee amendments to HR. 2554.

In the version you have before you today, high-level officials are excluded from coverage by section (g) and section (g)(4). The bill exempts precisely those positions of authority which are the most important to include in any conflict-of-interest legislation.

This bill, as amended, would exempt for example:

the former top Navy official who negotiated a $500 million settlement with General Dynamics and then left to go to work for

that corporation.

-- the former Army assistant chief of staff for research and development, the president of the Army Defense Board and other high-ranking officers who were responsible for testing the DIVAD system, and who then quit to work for the company producing the DIVAD, Ford Aerospace.

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the former head of the Air Force Systems Command, who retired and set up his own one-man counsulting firm for defense contractors whose business he had once overseen on behalf of the government, and,

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the former top Pentagon procurement regulator who wrote letters to dozens of contractors she had dealt with officially, seeking retainers for a consultant service she planned to set up.

Why is it important to include high-level officials in the coverage of this bill?

Firstly, the standards of conduct of any organization are set by the leaders of that organization. If the leaders engage repeatedly in questionable, unethical or illegal activities, then it is likely that their subordinates will do likewise--regardless of the regulations on the books. How can we expect that the program manager or auditor for a particular weapon will follow the spirit and letter of this law if those above leave the government and reappear on the other side of the desk with obvious increases in

personal income and the apparant approval of the government? The morale and motivation of procurement officials is already adversely affected by "revolving door" abuses of superiors and passing a law which establishes a double standard of conduct will make the problem worse, not better.

Secondly, the American public must be assured that decisions involving billions of dollars and the lives of thousands of service personnel are made as objectively and honestly as possible. This is very important for those high-level officials with the highest public visibility. The public must have faith in the management of the defense budget if we are to retain the existing national support for a strong defense, especially when confronted with mounting federal deficits.

Unfortunately, the public has had good reason in recent years to doubt the objectivity of some officials. While most procurement officials bring the highest integrity to the performance of their duties, well-publicized hirings by major defense contractors of high officials (in some cases immediately after those officials had concluded deals favorable to the contractors) have tarnished the reputation of the Department of Defense. Additionally, we have had several major weapons programs, such as the DIVAD air defense gun and the MAVERICK missile, where dozens of officials in charge of the programs, including test officers, program managers, auditors and piant representatives, have left federal employment for jobs with the very defense contractors they had previously supervised.

It is difficult to prove a direct relationship between the "revolving door" and the poor performance and skyrocketing cost of these troubled programs. However, this is certainly more than a perception problem, as some seem to think. This problem cannot be solved merely by better public relations or the passage of paper reforms. This situation threatens the national security of our nation and demands corrective action--even if that action adversely affects the lucrative career opportunies of some officials.

It is unfortunate that many people have chosen to approach this legislation from the point of view of the career interests of procurement officials rather than the national interests of the United States. While many members of the armed services and officials involved in the procurement process have welcomed legislation such as this, the official view of the Department of Defense, as stated by Mr. Chapman Cox, is that "the public has been well protected against the potential influences of conflicting public and private interests by the Ethics in Government Act of 1978 [codified at 18 USC $207]. Yet the Staff Judge Advocate at the Air Force's Contract Management Division has stated that 18 USC $207 did not deter the types of post-employment problems typical of the Department of Defense. Government studies, witness testimony, and investigative reporting have established overwhelming evidence that serious conflict-of-interest problems exist, that they have not been properly addressed by current law, and that they contribute to the decreasing quality and increasing cost of some of our most important weapons systems.

Because the existing regulations are inadequate and because they have been infrequently enforced, I introduced the Defense Procurement Conflict of Interest Act. The amendments added by the Committee watered down this legislation. I hope you will approve the bill in its original form, amending the measure before you to do that.

I would be very grateful for any suggestions this Committee would care to offer on this legislation. I hope to pass this bill in the House this session in the form of its passage before the House mentioned above and I will offer that again as an amendment to the fiscal year 1987 Defense Authorization Act, if need be. I will also continue my efforts to make sure that the correct interpretation is given to the langauge in the Defense Authorization Act for Fiscal Year 1986.

Mr. Chairman, I have attached for the record a copy of the original language of HR. 2554 as it was passed by the House in the Defense Bill, and a copy of the language in the FY 1986 Authorization Act.

Mr. Chairman, I appreciate the opportunity to discuss these matters with your Committee, and I would welcome any actions your Committee might undertake in this area. Thank you.