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ment program for aircraft, don't you literally preclude them from getting a job in the industry that they know?

Mr. VANDER SCHAAF. I believe the House Armed Services Committee, in reporting this bill out, dealt with that problem nicely. It is one way to deal with it, there may be others. They have the Secretary of Defense in agreement with the head of the Office of Government Ethics to work together and decide that that position ought to be excluded.

Mr. Brown. No, no, that is not my question.

My question is how do you recruit somebody for a position that does in fact come under that definition? Aren't you in effect telling them they have to go for 2 years without a job in their field of expertise if they come with the Government?

Mr. VANDER SCHAAF. I don't think we recruit people, for the most part, where that would better effect. Government employees tend to come into the Government and advance to higher level positions, except for certain political appointees, and some other schedule C appointees, where this may be a problem., I say they have to have some sort of excusal process if they are involved in rulemaking or policymaking of a general nature.

Mr. BROWN. Just one last question if I may, Mr. Chairman.

Directing your attention over to page 3 on the reporting requirements. It seems to me, if I understand that right, they are talking about a different definition. In the first instance, they are talking about people under the (g)(1) schedule who have significant responsibilities for procurement, but for the reporting requirement they are talking about people who have these responsibilities for procurement. Can you give me who their covers?

Mr. VANDER SCHAAF. Are you on item (b), limitations, on page 3?

Mr. BROWN. On page 3, subparagraph (2)(c), line 21, the reporting requirement. Who is that? Could that be 2 million people?

Mr. BROWN. A million?

Mr. VANDER SCHAAF. Under this bill, it would probably-I don't want to give you a number. It will be those people that the Department of Defense says have a substantial responsibility.

Mr. BROWN. All right. But isn't the provisions with regard to who the Department of Defense identifies the ones that are under (g)(1)? That's my question. Doesn't the reporting requirement involve a whole different group of people that isn't defined?

Mr. VANDER SCHAAF. The ones under (g)(1), if I know which section you are referring to, are those individuals who are reported back by the company, as having actually been hired and employed by the company. That is another feature of this bill that I think is much better than existing legislation, because it is like double entry bookkeeping. Now we get a report from 30 percent of the individuals that are supposed to report, and we get nothing from the companies that hire these individuals, so we have nothing really to check against to find out if we are getting all of the reports.

This bill says you, as an individual covered by this language, must file a report each year for 2 years, and the companies that employ these individuals must file this report. Now I have a source to bounce one list against the other and see what we have.

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Mr. BROWN. Excuse me, let me get you back to the subject if I could.


Mr. BROWN. The question is: Who are we referring to when we say an officer or employee of the Department of Defense, or a member of the Armed Forces, having responsibility for procurement function, who does that definition apply to? Where is that defined? Who is covered by that reporting requirement?

Mr. VANDER SCHAAF. That is going to have to be worked out by the regulatory people. We are going to have to examine that problem back in the Department of Defense. I think you have to ask them. I can tell you roughly who it is going to apply to, primarily contracting officers, PCO's, procurement contracting officers, ACO's, administrative contracting officers and their staffs. It is also going to apply to other people that work with them who have direct, continuing relationships with contractors.

It could also apply to high-level political appointees when they become involved in a particular matter of a contractual nature that affects a particular contract.

Mr. BROWN. Are you telling me that the only ones it applies to are ones that will be delineated by the Department of Defense?

Mr. VANDER SCHAAF. The Secretary of Defense will make that determination. That's the way I understand this legislation, I think you ought to ask the drafters of the legislation that question rather than me, I am an enforcer, if you will, of this legislation. But I would say that individuals could be excluded because the Secretary of Defense with the concurrence of the Office of Government Ethics chose not to cover them.

Mr. BROWN. Where does it say that? Mr. GLICKMAN. There is a waiver provision in the bill. The definition is on page—(g)(1), covered positions, on the bottom of page 7. Those are covered positions under the bill. And then page 9 has the waiver positions—the Secretary can make a waiver there.

That is one of the points in dispute between Mr. Bennett in this bill. He wants no waiver positions at all.

Mr. BROWN. With that particular language there, I don't know how you tell if you have responsibilities. It seems to me that anybody in the Armed Forces that orders anything ends up having some responsibility in that area. I would hope, if our intention is to restore confidence in this system, we would make that clear.

Mr. GLICKMAN. Would the gentleman yield?
Mr. BROWN. Yes.

Mr. GLICKMAN. What you are basically saying is that the Defense Department would have the responsibility to specifically delineate who is a covered employee and who is not a covered employee so that no question

Mr. VANDER SCHAAF. That is in this bill, the way I understand it. Mr. GLICKMAN. The list covered definition-

Mr. Brown. It is in the bill for those having specific responsibilities.

Mr. VANDER SCHAAF. On (g), page 7, it says "not later than 180 days after enactment, the Secretary of Defense shall publish in the Federal Register regulations identifying those positions within the Department of Defense that have as their primary duty the management, direction, oversight, or justification, with respect to a particular product or service, of" dealing with those functions listed. Then if you hold one of those positions, you are covered.

Mr. GLICKMAN. But are you specifically notified that you are a covered person?


Mr. GLICKMAN. These are just generic categories listed on page 8. I want to make sure that

Mr. BROWN. I think if you check, the (g)(1) applies only to those having significant responsibilities. The reporting requirement is significantly broader and has a different definition.

Mr. VANDER SCHAAF. The reporting requirement with respect to contacts of employment is broader, yes, sir, but not the reporting requirement for post-Government employment.

Mr. BROWN. I understand that, but my question is: How do you know if you come under the reporting requirement or not?

What are there, a little over 3 million people in the Defense Department, when you count civilian employees?

Mr. VANDER SCHAAF. Under our existing standards of conduct in the Department of Defense, DOD Directive 5500.7, an employee of the Department of Defense, if he has any doubt with respect to an employment contact, irrespective of this legislative proposal would have to report such a contact to his standards of conduct officer and to his supervisor. I don't see an additional burden placed on anyone there.

Mr. Brown. Help me with that. Any employee of the Department of Defense, including members of the Armed Forces, has to notify if they get a job offer?

Mr. VANDER SCHAAF. No, if he gets a job offer with a contractor in which he has a working relationship.

Mr. BROWN. Is that the same definition as what we have got in the bill or a different one?

Mr. VANDER SCHAAF. I can't tell you that right now I would have to look at it very closely. I would want the General Counsel from the Department of Defense, who will be here tomorrow to answer that question. I think that is a very good question to ask Ms. Buck, who will be here tomorrow. She also takes care of the standards of conduct regulation, and is familiar with this particular law, and its application

But my initial answer to you is that I don't see any additional burden, because that requirement to report is already there in our own internal standards.

Mr. BROWN. You are saying that internal standards end up with whom he has significant contact, or-

Mr. VANDER SCHAAF. With whom he has any kind of a business relationship, I believe those are the words used, and it is even broader than this legislation.

I think that is the way the Department's standards of conduct regulation is written if you have any conflict of interest, real or apparent, you have to inform your superior about that particular contact.

Mr. GLICKMAN. Thank you. I am reminded of Justice Black during one of the decisions in which he was required to rule on pornography. The Supreme Court

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was wrestling with that, and his classic line was, "I can't define it, but I know it when I see it."

This issue reminds me of that. We know that there are ethical problems and conflict-of-interest problems, but I am not sure we can define them very well.

I think Mr. Brown raises a good point in terms of the absurdity of taking this to its very logical conclusion, which is everybody, including domestic help, in the Department of Defense, reportingwhich, of course, is ridiculous. But we know what we are trying to get at. We know an Assistant Secretary of Defense who is close with General Dynamics and gives favorable treatment on a contract goes back to work with them-we know that is the kind of thing we are aiming at, maybe even high-level contracting officers.

Notwithstanding Mr. Bennett telling me this separates the men from the boys, I think it is a hell of a lot more complicated issue than that.

Let me just ask you one question. What about the possibilities? I understand that the bill has basically two 2-year thresholds. The 2 years that you are in the service or working for the Government during the time that you had relations with the contractor, in a contracting relationship, and then the 2 year ban on postemployment. What about reducing the first 2 years to 1 year? Is it unfair that the period ought to be 2 years by which that period of time takes place during which the second 2-year period takes place?

Mr. VANDER SCHAAF. I think 2 years is a reasonable number. In fact, as an enforcer I would probably like to see something longer, maybe 3 years. You know, there are also permanent bars with respect to selling products to the Government. For example, an Army officer cannot during the first 3 years following his Army career go back and sell something even to the Air Force or any element of the Department of Defense. He doesn't probably have any apparent conflict of interest or anything else, but that is existing law the way I understand it. I think 2 years is about

Mr. GLICKMAN. Wait a second. An Army officer can't go back and sell a product to the Air Force.

Mr. VANDER SCHAAF. That's right, he can't sell a product back to the Department of Defense at any time during those first 3 years.

Mr. GLICKMAN. But he can go to work for a company that does sell products to the Air Force?

Mr. VANDER SCHAAF. Yes, he can.

Let me give you another example. There are some ridiculous things we have to go through. I have a lot of auditors out there in the field. An auditor is busy meeting with the company representatives and they are talking over a finding, and the auditor may have $1 million finding laying on the table. The corporation brings out the coffee and the doughnuts. Now, my auditor is precluded from having a cup of coffee or eating the doughnut but he is not precluded from taking a $50,000 job offer when he is earning $40,000 now. That is the kind of situation we have here.

I think it is far more important to address the revolving door, the $50,000 issue, than it is whether he drinks a cup of coffee sitting across the table with a contractor.

Mr. GLICKMAN. Maybe neither one of them are very good for him, the coffee or the job.

The criminal penalty side, how important do you think the criminal penalties are in this bill as opposed to the contract damages part of it? We have criminal penalties in the other statutes, you know, 207, 208. Do you think that the contract damages is a more important remedy than the criminal penalty?

Mr. VANDER SCHAAF. I can only guess based on what happened when we went through this last time with the Ethics in Government Act. Based upon that scenario, I would have to say that the contractual provisions will turn out to be more important than the criminal ones.

Mr. GLICKMAN. Do you think, though, that the criminal provisions ought to remain in this bill?

Mr. VANDER SCHAAF. Yes, I do think they ought to remain, to provide you that necessary leverage and reason to even start the investigation in the first place.


We thank you for your testimony today. I think you were a very good witness.

Mr. VANDER SCHAAF. Thank you, Mr. Chairman.

Mr. GLICKMAN. Our last witness today is the National Academy of Public Administration, Mr. Ray Kline, president. Mr. Kline, it is a pleasure to have you here today and you may feel free to summarize your statement if you wish to because the entire statement will appear in the record. TESTIMONY OF RAY KLINE, NATIONAL ACADEMY OF PUBLIC

ADMINISTRATION, PRESIDENT Mr. KLINE. The revolving door issue involves important considerations relating to public trust, effective public and private sector management of defense programs, and the protection of individual freedoms.

The Congress has attempted over the years to deal with the issue. Despite these efforts, through occasional horror stories, there is a public perception that the problem continues.

Any effective solution must deal not only with perception but with the actual reality of the problem which thus far, in the eyes of the academy panel that has looked at this issue, has escaped definition.

In view of the cost of implementation of H.R. 2554, the academy recommends that the committee study the issue and have the problem defined, including the effectiveness of the administration of current applicable law and regulation, and then decide just what appropriate action by the Congress is required.

The academy further recommends that the numerous existing laws and regulations of the subject be combined into a single consolidated framework. The academy can bring its unique resources to bear on any aspect of this issue in support of the committee, if the committee so desires.

[The statement of Mr. Kline follows:

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