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The CHAIRMAN. Well, let us turn him into a hypothetical.

Mr. LARKIN. I understand-they have been introduced to and have met with the Secretaries. They know their background. Those top people have been cleared by the agency itself. The assistant secretary for management or whoever else is the liaison with the task force is introduced to and meets and makes arrangements for all these task force members, whom they know, to deal with them. Specifically, as I understand it, those task force members are not Federal employees and are, therefore, as such, not subject to the conflict-of-interest statutes of the Federal Government. They are asked to and have signed secrecy agreements. So we are going further, without legal requirement, as I understand it. That is the situation.

The CHAIRMAN. We are running out of time, and I am fascinated, and I really want to thank you on behalf of the committee for giving us this kind of an overview and being so forthcoming and responsive.

I do not mean to be, although sometimes it appears to be, in a combative kind of process, but we try to get at an understanding in each of our own ways, as best we can. We would like to submit some additional questions to you, and I would ask if the list that Mr. Bolduc has there, of all the task force breakdown of membership could be left with us. If you do not have a copy, we will copy it for you here, so that we can then frame some questions to you on the basis of that knowledge.

Mr. LARKIN. We will be happy to receive your questions.

The CHAIRMAN. As I indicated before, you are perfectly welcome to add to or supplement anything you have said today or anything that occurs to you after you leave today that you feel will illuminate this record and further serve whoever is interested enough to look back, in the future, and see who these people were and what they did for their Government. Under no circumstances do I want any of my comments to be construed as critical of businesspeople or Americans of any kind who are willing to give of their time and effort to try and make this Government work better.

This committee has one-seventh of the Federal budget under its jurisdiction, and we have been forced to make some very difficult and painful cuts, numbering in the billions of dollars in recent years, as a result of just the kind of effort that we hope you are putting forth. If you come up with ways in which we can save more money, you will make our job much easier. You are going to find that the Congress, on both sides of the Capitol, is more than anxious to be cooperative in every way possible. I do not want you to leave with the impression that I either started with or developed a prejudice toward your objectives. I just really am having some difficulty completely understanding them and will want to pursue further with other people what you are doing in order to get that understanding.

Mr. LARKIN. We find this project a very difficult one and complex one. It takes a lot of time and effort ourselves, so I guess we are both in the same boat.

The CHAIRMAN. Thank you very much.

We have witnesses from the Department of Commerce and from the GAO. This room is going to be used in a few minutes to mark up legislation. Dr. Devine is coming in, as a matter of fact, right now from OPM. So I wonder if we could ask you to let the staff work out with you another time that we could have you back before the subcommittee.

Who is here from Commerce?

Mr. MARGULIES. I am here from Commerce, and that is perfectly fine.

The CHAIRMAN. And what about GAO?
Ms. KLEEMAN. That is fine with GAO.

The CHAIRMAN. Thank you very much for your cooperation. Please accept my humble apologies for dealing with you in this fashion.

[Whereupon, at 1:28 p.m., the committee recessed, to reconvene at the call of the Chair.]





Washington, D.C. The subcommittee met, pursuant to adjournment, at 10:15 a.m., in room 304, Cannon House Office Building, Hon. William D. Ford (chairman of the subcommittee) presiding.

The CHAIRMAN. Today, the Subcommittee on Investigations resumes its inquiry into the status of the President's Private Sector Survey on Cost Control in the Federal Government.

Last week, as we opened our hearings, the subcommittee heard from Felix E. Larkin, a member of the Executive Committee on the President's study. Frankly, Mr. Larkin raised more questions than he answered, and I think members of the subcommittee were left with the feeling that the survey, which is being conducted by executives of large corporations, may indeed be exceeding or completely outside of its announced objectives.

When he first announced the study last winter, and again when he signed the Executive order setting up the operating machinery, the President gave assurances that various task forces would apply management techniques to correct waste and inefficiency problems. He stressed that the Survey would concentrate on procedures and not policy. Mr. Larkin left a different impression. His testimony, along with documents the subcommittee has obtained, make it plain that there are serious policy considerations involved in the activities of this group.

This seems especially true in the case of the task force looking into Federal personnel issues. This task force is concerning itself with potentially far-reaching policy questions, such as health care, retirement, and social security. This should not be within the purview of a study such as this. We are led to wonder if this is a study of process and inefficiencies, as the President stressed, or the beginning of an agenda for major policy change.

We hope that one of our witnesses today, Mr. Sy Pranger, who heads up the task force on personnel, would be able to tell us what his group is up to. If his group is working on a blueprint for major policy shifts, we would like to hear about it. This is only one of the areas where the subcommittee feels it knows far too little about how such a broad and extensive survey is being conducted throughout the Federal Government.


Both Mr. Larkin's testimony and the documents we have looked at raised some serious questions about whether the survey is complying with the Federal Advisory Committee Act, both in the disclosure of the subject matter and in the identification of the players involved. Last week, we asked Mr. Larkin for a list of the thousand or more corporate executives assigned to the task forces, So far, we do not have the list.

I want to make it clear to anybody in the room who has an interest in the continued good relationship between these task forces and this committee that I do not take lightly the fact that on the public record, both the executive director and Mr. Larkin said, “We will leave the list with you when we leave here today.” They not only did not leave the list but they now refuse to acknowledge that they agreed to give it to us.

I cannot, for the life of me, imagine why a list of public-spirited citizens serving in the best interest of the Government should in any way be secret, certainly not from a congressional committee. While I do not like to talk about subpenas and the embarrassment it brings to all of us to have to resort to that, I would have absolutely no hesitation, with that witness or those who appear before this committee in the future, who refuse any legitimate request-in the opinion of the committee-for what should be public information. I find it absolutely extraordinary that prominent businessmen of the stature we are talking about are playing little childish games, like "We don't want to give you the list of our task force members.'

We are not setting out to embarrass people because of conflicts of interest or other problems that were raised the other day, or the potential for other problems, but certainly the kind of cooperation that would have led this to be just a little passing inquiry is not forthcoming. I am becoming intrigued now about what is so great and mysterious about the list and who is assigned to what. By God, I am going to find out now, if it takes me the rest of the year and I have to abandon my campaign.

When somebody is afraid to tell a congressional committee something as simple as the names of the outstanding volunteers who are here to save our Government from fraud, abuse, and waste, there is something wrong. Either there is something wrong with the way in which the list was concocted, or there is something wrong with the makeup of the task force, or there is something wrong in the minds of the people operating this program, in the way they view their public responsibility. We will get that straightened out some place along the way.

Neither do we have task force work plans and agendas. Now, I have a number of them that have come to us in ways that I have no way to trace, so I had to assume they were public records and readily available. If copies were floating in here, they must be floating around elsewhere. We were told that the executive director does not have available the work plans to turn over to us. That raises additional questions with me and with other members of the committee.

Some questions of conflicts of interest or at least the appearance of such conflicts also have been raised. It may be possible that some corporations could benefit from certain inside information ob


tained by all these executives roaming freely throughout the Federal establishment. We have been told that this huge undertaking is being financed from the pockets of large business firms and that it will cost the public nothing. So far, corporations have given $1.8 million to conduct the survey, in itself a highly unusual method of financing a study of government. We cannot help but wonder, however, if these corporations are able to write off expenses and salaries of officials whose services have been volunteered. If this is the case, then there is a cost that the public is bearing. The subcommittee is also interested in knowing if there are any other hidden costs, such as special studies, equipment, and space.

So far, those conducting the survey have been proceeding with Congress and the public in the dark as to methods and procedures. In light of the documents obtained and testimony presented, some of the objectives themselves seem to be questionable. It seems to me that every committee of the Congress has a need and a right to know exactly what the survey is up to.

Mr. Pranger, we are happy to have you here today. I understand you have a prepared statement. You may either read or summarize it for the record, as you find most convenient, or add to it and supplement it in any way.

[The prepared statement follows:]

Mr. Chairman and members of the committee: My name is S. B. Pranger. I am
Project Manager of the Personnel Task Force of the President's Private Sector
Survey on Cost Control.

By way of background, I am a retired Federal Senior Executive. I worked in the field of Federal personnel management for over 25 years. During that period, I was Director of Personnel for the United States Department of Agriculture for eight years. Just prior to retiring I served three years as Associate Director of the Office of Personnel Management. I am currently self-employed as an independent consultant.

Our task force has three Co-Chairmen. They are Donald R. Keough, President and Chief Operating Officer of the Coca-Cola Company; John A. Puelicher, Chairman and Chief Executive Officer of the Marshall and Ilsley Corporation; and Robert Hatfield, President of the New York Hospital. Task Force membership consists on 17 people from 16 different companies, most of whom are senior executives with experience and expertise in a broad range of personnel specialities.

Our work has been done in accordance with guidance and policies provided by the Management Office of the President's Private Sector Survey on Cost Control. We have completed two phases of the study and are currently involved in the third phase. These are:

Phase I: Organization and orientation of members.

Phase II: Identification of major issues to be studied in depth. It was at this stage that we developed our Work Plan which contained preliminary indicators of improvement opportunities subject to further review and analysis during Phase III.

Phase III: Detailed exploration of the issues identified in Phase II. The Personnel Task Force is currently in this phase. No final findings or recommendations have been drawn at this time.

Throughout each of these phases, we have gathered information from various sources including the following:

Interviews with Federal Managers (Office of Personnel Management, Office of
Management and Budget, most cabinet level Departments and several independent

Reports of the General Accounting Office;
Various budget documents;
Baseline analysis of various private sector personnel managment systems;
Reports of the Congressional Budget Office;

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