administrative penalty for noncompliance, but there are no provisions which require the review of submissions for potential conflicts. Therefore, I recommend that this or any legislation dealing with the "revolving door" problem ensure that the reports are analyzed for possible violations by a person's former employing department or agency and acted on in a timely manner. Mr. Chairman, that concludes my statement. I will be happy to try to answer any questions you or the other members of the Subcommittee may have. Mr. GLICKMAN. First of all, thank you for your testimony. Mr. VANDER SCHAAF. This point has been made before, Mr. Chairman, but I think it is so important. This is not a Department of Defense issue alone. We are not the sole Department with problems of revolving door. It upsets me because I think the Department of Defense is well run and well managed in terms of our relationship with contractors; our standard of ethics and our code of conduct is as tough as anybody's, yet we are pinpointed for this kind of legislation. I think if you get into this area, you should do it on a Governmentwide basis. Mr. GLICKMAN. OK, let me start at that point because I agree with you totally. But I guess the concern that we have that 75 to 80 percent of the procurement in the U.S. Government today is DOD related, and if you are going to make revolving door apply across the board-and in a lot of agencies it is not procurement related at all, it is regulatorily related. It is the Chief Counsel of the Securities and Exchange Commission working on rules governing the New York Stock Exchange and going to work for them. This bill, as drafted, would not be applicable in those cases. Mr. VANDER SCHAAF. It would not be, but it would be very applicable to the National Aeronautics and Space Administration, to the General Services Administration, probably the Department of Agriculture, and other agencies that have significant procurement activities. They are not as big as the Department of Defense but they are significant. Mr. GLICKMAN. So you think that the bill ought to be amended to include all agencies as we deal with procurement responsibilities? Mr. VANDER SCHAAF. Yes, I do, Mr. Chairman. Mr. GLICKMAN. The second thing, you indicate the bill does not adequately define "significant responsibilities," and then you go on and I think you establish a more precise definition, or you tried to. It is on page 4 of your statement. You say, coverage should be limited to individuals whose procurement-related duties are substantial or continuing with respect to a particular contractor, and who exercise decisionmaking responsibilities either directly or as an adviser to the decisionmaker. Mr. VANDER SCHAAF. Yes. Mr. GLICKMAN. Is that the kind of language that you- Mr. VANDER SCHAAF. That is the kind of language I would like to see. I don't know how essential that language is. As I say, I don't see that the inspectors general of the departments, or other enforcement agencies that are required to enforce this kind of law, would take up minor things if we left it as broad as it currently is. But you have that fear that someone might go out on a witch hunt, if you will, and try to apply this to where it is not appropriate. Mr. GLICKMAN. So you want this person to have at least discretionary responsibility, make some choices? Mr. VANDER SCHAAF. That is what I would like to see. Mr. GLICKMAN. Then in your next paragraph on page 4 you say you worry about the problem that this might represent a burden and to some degree a financial sacrifice on people. Then at the end of that paragraph on page 5 you say, however, if the rulemaking and policy decisions are directed at contractors across the board, that officer should not be precluded from immediate post-Government employment with any one contractor, that is, my example with David Packard. David Packard comes to work as Deputy Secretary of Defenseand I don't mean to pick on him. He is just a guy worth a ton of dough involved with a Defense contractor. He comes to work at the Department of Defense. Hewlett-Packard is bidding on some star wars items, and you get a zillion dollars' worth of star wars contracts issued, but David Packard's responsibilities may be limited to generally approving the star wars plan without specifically approving Hewlett-Packard's part of the star wars. Is this the kind of thing that you are talking about? Mr. VANDER SCHAAF. That is exactly the kind of thing, but only one phase of it. I also back at it from the other side. We go through the electoral process in this country. We have a democracy. We go through this issue of who is going to run the Government, if you will, for a period of 4 years, at least in the executive branch. I think the elected President should be given the opportunity to bring in the people he wants to run the Government who are the most qualified to do the job. I want to be sure that when these people who he brings in to manage, oversee, and set policy for the Government, deal with a specific matter that directly influences the balance sheet of some contractor that they are held accountable like anyone else would be. But if they make a general rule or they set a policy which applies across the board, that shouldn't exclude them from going to work for a particular company even though that policy that might have some effect on that company. Mr. GLICKMAN. Let me just ask you a couple of other questions. Has your office been involved in investigating alleged conflicts of interest regarding former procurement officials of the Department? Mr. VANDER SCHAAF. Yes, we have. Mr. GLICKMAN. If so, have these investigations established the extent of a revolving door problem in the Department? Mr. VANDER SCHAAF. I wouldn't say they have established the extent of a revolving door problem to the extent that Mr. Bennett, the Armed Services Committee chairman-Seapower Committee chairman saw it. I don't see it so much as a problem of realities. I think we have referred a total of Mr. GLICKMAN. I am sorry-you don't see it as Mr. VANDER SCHAAF. A problem of actual, documented kinds of conflicts where we could take them to the Justice Department and say we have a case, let's go to trial, you guys take it to trial for us. I don't see so much of that. I think we made fewer than 20 referrals in 1983 and 1984, of which, I have to add, only one went to prosecution. But I could give you a list of those for your record. Mr. GLICKMAN. You sent 20 referrals to the Department Mr. VANDER SCHAAF. Twenty referrals in 1983 and 1984, roughly 20. At that point, we had some 23 on the list, of which 4 were currently under investigation, and I don't know if they were referred or not. But you have to understand Mr. GLICKMAN. Now, where do you send the referrals to? Mr. VANDER SCHAAF. To either the assistant U.S. attorney in the region in which our criminal investigative activity-and it may be ours, or it may be the Army's criminal investigators, or the Air Force's, or the Navy's, as the case may be. They may work for us directly or they may only work under our policy guidance. The point is, we do make these referrals. I don't want to tell you that there is no real problem at all and that it is only perception. I think the problem is one of perception, but when do perceptions become reality out there with the American public and when do they begin to erode confidence in our institutions of Government? Those are the kind of questions one has to ask, I think, in dealing with this, rather than- Mr. GLICKMAN. I am still interested. Twenty cases have gone to the Department of Justice directly to the U.S. Attorney's Office in the last 2 years? Mr. VANDER SCHAAF. Two years. During 1983 and 1984. Mr. GLICKMAN. And there have been no prosecutions based upon those referrals? Mr. VANDER SCHAAF. There was only one prosecution, that is correct. Mr. GLICKMAN. In your view, does the Department of Defense vigorously enforce the existing conflicts of interest laws regarding the revolving door, 18 U.S.C. 207 and negotiations for future employment, 18 U.S.C. 208? Mr. VANDER SCHAAF. In my opinion, those laws are ineffective. Mr. GLICKMAN. Ineffective? Mr. VANDER SCHAAF. Yes. Mr. GLICKMAN. Why? Mr. VANDER SCHAAF. There are two basic terms particularly in section 208. I went through a case with our investigators this past summer, and we had problems with the use of the term "negotiation" and what constitutes "negotiation," as your previous witness indicated. And also what constitutes a particular matter when this individual was involved in rulemaking and policy writing. It just looked to me like a rather hopeless situation from a criminal prosecution standpoint. I think the other point I ought to make clear is we are trying to avoid doing this in the criminal context as much as possible. We like this particular legislation because it has some administrative or contractual remedies in it. I think they are more appropriate for fixing this problem in many respects than are our criminal remedies. Mr. GLICKMAN. Does the Department of Defense have adequate personnel to enforce these laws? Mr. VANDER SCHAAF. I believe we do. I think that if we hear or have reason to believe there has been a violation of these laws, we do have the assets to go out and attempt to check it out. Mr. GLICKMAN. I thank you for your testimony. Mr. Brown. Mr. BROWN. Thank you, Mr. Chairman. I would just simply like to inquire and I think you addressed it briefly. Why should you treat the Department of Defense differently in these respects than other people who procure items for the Government? Mr. VANDER SCHAAF. In my opinion, you shouldn't, sir. I agree with the chairman 100 percent that this ought to be Governmentwide. If we are going to adopt this kind of legislation, we ought to adopt it on a Governmentwide basis. Mr. BROWN. Do you see any reason why Members of Congress who are active in Defense procurement should be treated differently than members of the Defense Department? Mr. VANDER SCHAAF. Yes-not differently than the Defense Department in terms of policysetting and rulemaking, and I think the Congress certainly plays a policysetting role for the country. You can't take a Member's vote, and hold that against him for voting for or against a weapon system in which a contractor may have a great interest. However, if a staffer up here on the Hill-and I was a staffer here for 10 years-gets deeply involved in a particular program and then suddenly goes to work for that contractor, I would say it probably ought to apply as well. You have to have a direct involvement you can't just have him doing work to advise a Member or advise a committee from his standpoint. But where he really pressed an issue hard, you may want to consider that. That is a little out of my territory right now. Mr. BROWN. Your thought is that a Member does not-what are the words-have significant responsibilities for procurement? Mr. VANDER SCHAAF. No, I think with respect to a particular-— Mr. BROWN. Or that their significant responsibilities for procurement shouldn't come under Mr. VANDER SCHAAF. That he exercised decisionmaking responsibilities with respect to a particular contractor. I don't think a Member does that other than when the Congress works its legislative will. I don't think that this kind of legislation should apply to Members of Congress. Mr. GLICKMAN. When we tell the Department of Defense which plane to acquire or which vehicle to acquire? Mr. VANDER SCHAAF. To some extent that is a legitimate role for the Congress. Mr. GLICKMAN. You know, I assume all these things are legitimate. It is a question of whether or not we live under the same rules that others do. Let me ask you: The provision of not permitting someone to work for a contractor for 2 years after they terminate their relation ship-how does that affect your ability to recruit people in these key positions? How many people do you know that can go 2 years without a job in their field of expertise? Mr. VANDER SCHAAF. Very few people can go 2 years without a job, if that is the question. But I think you have to look at the impact of the bill. That is why I recommend that we have certain exclusions in here for rulemakers and policymakers. That is where I differ with Chairman Bennett, and that is why I believe the bill as it came out of the House Armed Services Committee is a better bill than his bill in that aspect. Now, most of our people, the vast majority of the approximately 400,000 people who work in procurement in the Department of Defense, I don't think anybody has an exact number. This bill would restrict their future employment opportunities to companies, a few in which they had a direct relationship. It does not restrict their capability to go out and work for someone else. If I have an administrative contracting officer who runs our Air Force plant for Hughes Aircraft Corp. in Tucson, the bill does not restrict him from going to work for the Grumman Aircraft Co. in Long Island, and he may be very valuable. I think he ought to be able to bring back into industry the things he has learned. I just don't think he ought to go to work immediately for the Hughes Aircraft Co. in that case. Mr. BROWN. Yes, to that point, let's say he is acquiring, they are in the process of acquiring aircraft from the Hughes Aircraft Co. doesn't Grumman also produce aircraft that could be a bidder? Doesn't this statute provide not just the one-that prohibition, for not just the one company that gets the contract but for those others who also bid on it? Mr. VANDER SCHAAF. It could-yes, it would in the right situation. If the contracting officer were deeply involved and there were four competitors, that would apply to him. The reference I used was to an administrative contracting officer who was located in the facility and looking after the Government's interest in one particular contractor's facility. It wouldn't preclude him from seeking employment immediately with some other contractor in another facility. But you are right, as far as the contracting officer who reviewed four or five offerors' proposals and played an important role in that decision process. He would probably have to take the 2-year cooling off period. Mr. BROWN. How do you recruit somebody who is an expert in aircraft-tell them they can't get a job with a company that is in the aircraft industry for 2 years after they leave? Mr. VANDER SCHAAF. Again, I think I take care of that. We don't say he can't get a job in the aircraft industry. We say he cannot get a job with a particular company in the aircraft industry in which he had a decisionmaking responsibility of a substantial nature. Mr. BROWN. OK, I understand that. How do you recruit someone for a position with significant responsibility of a decisionmaking stature whose expertise is in that industry? Someone who is going to be handling a broad procure |