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Each Executive agency is being examined by a Task Force

headed by two members of the Executive Committee.

In accordance

with the agreement between the Secretary and the Foundation,

the staff of each Task Force is composed of employees or

agents of the Foundation. It is the responsibility of each agency to decide what information should be provided to the

Survey and to designate any special handling requirements.

Members of the Executive Committee are special government

employees and as such are subject to the Conflict of Interest

laws set forth in 18 U.S.C. SS202-209.

Each agency was

responsible for determining whether the assignment of particular Executive Committee members to examine that agency was consistent with applicable conflict of interest laws.

The only Federal employee assigned full time to the

Survey is Janet Colson who, under the agreement, is designated

as liaison between the Foundation and the agencies to be

examined.

In addition, the Department has designated employees

to provide necessary legal and administrative support to the

Executive Committee.

I would like to emphasize that the agreement provides

that the Foundation, at no cost to the Federal Government,

will provide such support as may be requested by the Chairman

of the Committee to carry out its functions set out in sec. 2 .

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of E.o. 12369. It is my understanding that thus far the Foundation has fully met this commitment.

In your letter, Mr. Chairman, you ask for our plans in following through on the recommendations concerning this Department and others. Executive Order 12369 provides that the Committee shall advise the President, the Secretary of Commerce and other agency heads with respect to improving management and reducing costs. I can assure you that the review and action on the final report of the Committee will be a high priority item for President Reagan. More specifically, I can state that Secretary Baldrige is anxiously awaiting the Committee's recommendations concerning this Department. We expect them to set forth numerous opportunities for substantial savings in Commerce operations.

This concludes my testimony, Mr. Chairman. I will be pleased to answer any questions by you or members of the

Committee.

STATEMENT OF IRVING P. MARGULIES, DEPUTY GENERAL COUNSEL, U.S. DEPARTMENT OF COMMERCE, ACCOMPANIED BY ROBERT ELLERT, ASSISTANT GENERAL COUNSEL; AND JOSEPH LEVINE, DEPUTY ASSISTANT GENERAL COUNSEL, U.S. DEPARTMENT OF COMMERCE

Mr. MARGULIES. In the interest of time, Mr. Chairman, I will be willing to rest on the prepared statement and proceed directly with your questioning.

The CHAIRMAN. You gentlemen are representing the Department of Commerce, which, as I understand it in this whole matter, is the Federal agency charged with direct supervisory control over the activities of the survey?

Mr. MARGULIES. Supervisory control in the administrative sense, Mr. Chairman, yes.

The CHAIRMAN. Are you available to them and do you provide legal assistance to them in such questions as the question we have just discussed on the coverage of the task force?

Mr. MARGULIES. We are available to them, and we have advised them on some of the matters you have discussed. On one matter, I learned today that we are in controversy with GAO; I was not aware of that until today.

The CHAIRMAN. My first question is, do you agree with GAO's opinion regarding the applicability of the Federal Advisory Act to the task forces?

Mr. MARGULIES. No, we do not.
The CHAIRMAN. That is the point of conflict?
Mr. MARGULIES. That is the point of conflict.

The CHAIRMAN. Then you are the right witness to ask. Why are they not applicable?

Mr. MARGULIES. We do not think the initial characterization is correct. We do not view the task forces as a subset of the executive committee. For that reason, we did not view them as part of that advisory committee. It is not a subgroup of the advisory committee.

The CHAIRMAN. They are not a subgroup of the advisory committee, even though three to four members of that committee constitute the cochairmen of each of the subgroups?

Mr. MARGULIES. I say that with no arrogance. That is a judgment that we made early on. We informed the GAO people of that judgment when they came to see us. I had not heard from them until today that they did not agree. It is a question that is close. I would like to read their opinion. But we proceeded under the assumption that it was not, that the task forces were not a subgroup of the advisory committee.

The CHAIRMAN. You have not seen their most recent written opinion? Mr. MARGULIES. No.

The CHAIRMAN. Then in all fairness, I think you ought to have an opportunity to look at that. We will ask you to comment for the record after you have had a chance to examine it and, if you would, critique it for us.

Mr. MARGULIES. I am not prepared to do that orally.

The CHAIRMAN. I am not asking you to do it now. After today's meeting, you could submit that.

Mr. MARGULIES. We might be persuaded.

The CHAIRMAN. I am always hopeful, and that is why I would rather you do it in the calm of your own shop over there, and take time to look at it, and tell us what is wrong with it if you find it to be weak or erroneous.

Who serves as the designated Federal employee who is responsible for overseeing compliance with the Federal Advisory Act?

Mr. MARGULIES. Janet Colson, who is, I think, in Mr. Meese's office.

The CHAIRMAN. Mr. Meese's office? It is my understanding she was in the Department of Commerce.

Mr. MARGULIES. She is in the Department with us for this function. I think she is on detail from some agency to do that with us.

The CHAIRMAN. She was detailed from some agency to Meese's office, and from Meese's office to Commerce?

Mr. MARGULIES. Yes. Is that correct, Joe? Would you speak to that?

Mr. LEVINE. Yes. Janet Colson is a Defense Department employee on detail to Mr. Meese's staff, and she has been designated for the purposes of the Survey to serve as the only full-time Federal official devoting full time to matters of the Survey.

The CHAIRMAN. She had a great deal of attention, because all the publicity attendant upon this has indicated that she is the only one we are paying for.

She is, under the act, then charged with the responsibility for protecting the public interest, if you will, by seeing to compliance with the act, at least with respect to the Executive Committee? Mr. MARGULIES. Yes.

The CHAIRMAN. Should not that person maintain, as a Federal employee, documents and records relating to the survey and make those documents and records available to the GAO and/or the public and/or this committee? Mr. MARGULIES. Yes.

The CHAIRMAN. I do not think she has been requested to yet, but this is the first time we have been advised that this is the place to which we ought to address some of these questions. Maybe we can clear this up.

What role, if any, have you played in the clearance process? Mr. MARGULIES. In terms of the employees, Mr. Chairman? The CHAIRMAN. No, the membership. Mr. MARGULIES The membership of the Executive Committee? They become special employees of the Department. We, along with legal counsel at the White House, review their conflict material. We maintain all their conflict materials in our Department, and we advise them as to conflict situations. We maintain a total file with their conflict material in the Department, because they are in fact our special employees.

The CHAIRMAN. Each one of the members of the Executive Committee has then filed with the Department of Commerce some sort of a conflict-of-interest statement?

Mr. MARGULIES. Yes; the statement required of a special Government employee.

The CHAIRMAN. It is a standard form?
Mr. MARGULIES. Yes.

The CHAIRMAN. What is this "statement of nondisclosure" that they are talking about?

Mr. MARGULIES. That is relevant not to these employees but to the employees of the task force who are not special employees of the Government.

The CHAIRMAN. But do not the Executive Committee members also subscribe to that?

Mr. MARGULIES. They have more onerous constraints because, as special employees, they are subject to just about anything that a general employee would be by way of conflict, other than some Hatch Act limitations that are not as severe. For Hatch Act purposes, they are only "hatched” on the days they are employed. For all other purposes, they are subject to the same restraints as all Federal employees.

The CHAIRMAN. Do the reemployment bars apply to the Executive Committee members, the Ethics in Government Act? Mr. MARGULIES. I cannot answer that. I really do not understand the question, Mr. Chairman.

The CHAIRMAN. You said that they are subject to the same constraints as general employees would be.

Mr. MARGULIES. The same conflict standards apply to them.

The CHAIRMAN. So that under the act, there are reemployment bars following your service with an agency, no matter how short.

Mr. MARGULIES. Now I understand. Is that the case, Joe?
Mr. LEVINE. To the extent they apply, yes.

The CHAIRMAN. We had what turned into a hypothetical situation. It appears that the person is no longer or never was an employee of a large packing company, which presumably does a substantial amount of business with the Department of Agriculture and is, presumably, more than passingly interested in their inspection processes and licensing and regulatory processes. Without reference to any individual or to the existence in fact of any individual—just hypothetically—if a person was an employee of a corporation that was in an on-going way doing business with and subject to the regulation of a department such as Agriculture or Defense or HHS, would that on its face constitute a conflict as defined in the Ethics in Government Act?

Mr. MARGULIES. You would want to look at it. I am not clear whether it would or not. You would want to look at it, and you would subject this person to the same standards coming in that you would any employee. Whatever you would require by way of divestiture or changing of his interests before he could work on this would apply to this person.

The CHAIRMAN. You mentioned that you advised the Executive Committee members with respect to these matters. Have they been advised with respect to the possibility of reemployment bars occurring if indeed they are assigned, by random selection or otherwise, to an agency that their corporation is presently connected with?

Mr. MARGULIES. I am not sure we mean a reemployment bar back to their private-sector employment. I thought you were referring to their coming back to their agency after they left.

The CHAIRMAN. No, no. I am talking about the problem or the condition that obtains when a person has an employment in an agency at a policy level and wants to return,

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