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say, go back, deal with my counterparts at Justice, and look at this. But we did look at this and thought we were all right.

The CHAIRMAN. But if you look at the amplification under the title of “Conditions of Utilization," it seems that in your agency you made it absolutely clear that you would regard any kind of a subgroup-there cannot be any question from your organizational chart that it is a subgroup. There cannot be any question from the way in which the people are selected and the population from which they are selected; that membership on the executive committee is a condition precedent to being a subcommittee chairman. The subcommittee broke itself up into task forces, with three to four members serving on each task force. It looks like a duck, it walks like a duck, it quacks like a duck, and I have a lot of trouble seeing a chicken here.

Mr. MARGULIES. Let me try and formulate the reason we made the judgment that we did. The task forces provide staff support to the Executive Committee, under the agreement between the Foundation and the Department. They are not, in themselves, advisory committees or subgroups of advisory committees, but rather they are the equivalent, in our view, of employees of a joint venturer who is performing the functions required of that joint venturer in the agreement with us. The way we set this thing up, Commerce entered into an agreement with the Foundation: they do certain things, we do certain things, so the whole effort would come together. We viewed them as separate. These are the fellows who come from the joint venturer; the Executive Committee is ours; the task force is theirs; they meet down here, our effort meets down here, but we close it off at the Executive Committee.

That is right or it is wrong, but that is what we did, and that is how we viewed it at the time. We viewed the task forces as not ours but theirs, and so not a part of the Executive Committee and not subject to the advisory committee act.

The CHAIRMAN. Except that the executive director, Mr. Bolduc, does not consider it to be that remote. In his memo, he addresses his memo to “desk officers and project managers.” The project managers are found only at the task force level. He gives them specific instructions on what he wants them to report back on without undue delay. He gives them a qualifier that he is not too much interested in how much money it saves as long as it is embarrassing: He says, “Try to limit your description to no more than one page." It is a specific direction on how the report is to be made back. “You may feel free to submit these to me through your desk officer on an ongoing basis.”

How do you get that separation? Mr. MARGULIES. Mr. Bolduc, as I understand it, is part of the Foundation. You have problems when you have a joint venturer arrangement. He is part of this total effort that we are doing, but he is with the Foundation. He is directing his whatever to the Foundation people.

The CHAIRMAN. If I did not believe in Santa Claus I might think that somebody deliberately structured this in a way to avoid the provisions of the act. Do you think it just accidentally fell that way?

Mr. MARGULIES. I am sure a lot of thought was given to the setup of this organization.

The CHAIRMAN. What purpose is served by separating the function, laying aside the legality of where it is, in that fashion, when you have a relatively short charter. In June the Executive order came out. December 31 is the end of their period of operation. They indicate that they are prepared at the task force level with some timetable in the first week in October. What purpose would be served by setting the structure up to avoid having the records, documents, studies, findings, recommendations, deliberations, and other activities of the task forces insulated from any public scrutiny or public exposure until it was a finalized product.

Mr. MARGULIES. I was not part of those conversations, so I can speak to it only abstractly. It seems to me as an abstract statement that there is a great problem until the work of the task forcewhich is, if you will, unfathered-is submitted to the Executive Committee and receives some sort of consideration by them. Until then, it really has no moment. The work is being done so that it can be submitted to someone else who can make recommendations. The recommendations have no paternity until they go through that established advisory group.

The great danger in letting the work of the task force be more than it is, is that in a town like this, with this broad kind of task force, work that will never see the light of day becomes very significant to everyone. People will get very excited about items that just cannot survive, for reasons that you have pointed out here. So, when you create a kind of a layering of this work that need not be fathered or authored, from the more serious efforts of that executive group, you preserve an opportunity to have some discrimination as to the work that is done in the task force, to decide what really can go forward and what is just a bunch of guys who have gotten together who have gone off half cocked.

I say that as an abstraction. I was not part of these discussions, but it seems to me, having been around this town awhile-

The CHAIRMAN. It seems that the abstraction comes very close to the impression I am getting. Mr. Grace's representatives said the other day that they did not intend to direct the task forces in how they went about their jobs. We found out that in fact they are directing them. They made up the makeup of the task forces and then task forces make out these work plans which seem to be causing all the difficulty. That is the point I raise, the question of whether or not they are violating the Executive order and indeed violating the clear statements of the White House at the time of announcing this operation when they start fooling around with program content to the exclusion of looking at program administration.

That is the reason this act is out there, that you cannot go in saying that you are fishing but carry a shotgun under your coat and start shooting pheasants. You have to declare up front, when you are going into Uncle Sam's back pocket and into his computers, what it is you are going in after. This work plan, with respect to OPM, does not read like anything we read or heard when this whole thing was set up. It was not a matter of concern then. I think the committees felt, “right on, we are happy to have somebody do this,” until we saw some of the work plans and found that indeed we are not looking at administrative savings; we are looking at program substance, basic policy decisions, running into the many tens of billions of dollars, and probably, with respect to the jurisdiction of this committee, some of the hottest policy questions that are ongoing here in this institution at the moment.

We are operating at the moment, and you as a Federal employee recognize that we have temporarily, under the Reconciliation Act, changed very significantly your pension rights that you have or will be acquiring. But that was temporary, we hope. In the meantime, everybody and his brother is looking at this to see how much of that temporary impact could be made permanent, and along comes a task force work sheet that says the CBO report suggests changes aggregating $23 billion over the period 1983 to 1987. Those are not mysterious numbers to this committee. We know how the CBO would achieve those changes.

That becomes accepted, apparently, as we are told, by one person on behalf of the task force as an estimated saving or improvement to be recommended or at least to be examined. I question why they are examining it. I think that if the question was that CBO suggests a couple of billion dollars, I would be willing to believe that this was new computers and better staffing and more up-to-date business practices. But $23 billion sounds strangely like the 50-percent cap on COLA and a number of other changes contained in a bill sent down here by the administration earlier this year.

So I am looking down the road, having the 1st of October this hit the streets when we are out of here or trying to get out of here, and upsetting everybody's apple cart in terms of doing anything rational to deal with what everybody recognizes to be at least political and probably practical problems with respect to Federal employees pension systems. Just this preliminary recommendation dealing with the subject creates the problem and takes them completely out of what it was the President said he wanted done. Yet we are told by the executive director and the representative of the chairman of the Executive Committee, “Not my problem. You fellows shouldn't ask me, because we have task forces taking care of that." I talked to the task force person this morning, and he said, “I take responsibility for it. I talk to the other fellows once in a while, but we have never had a meeting. We have never had a formal discussion. I'll put something together, and then I'll call them on the phone after I send them a copy and ask them if they have any comment, and we will submit that to the executive committee.'

That becomes the sum and substance of the executive committee's consideration of the subject matter under Federal employee personnel. I do not see any other way to draw a map to show where we are going, other than that. It is just as clear as it can be.

We cannot find the point at which we raise a question, Do you really think they ought to be wasting a lot of our time and money over there and that of our employees, looking at something that is outside the President's request in the Executive order and the explanation given by the White House in the Executive order, or do you think they ought to get on with the business of giving us a report that will have some credibility, because it uses, by capturing

the expertise of these top business executives their special ability to tell us how to run our railroad.

They are not working here at telling us how to run our railroad. They are talking about shutting down service west of the Mississippi, and changing from passenger to freight, and doing all kinds of things that do not have to do with how do we run our railroad but have to do with whether we ought to be in the railroad business. The same thing is going on there in the U.S. Postal Service, and that is a $34 billion corporation that has enough troubles of its own.

Commerce is our representative, the people's representative in this whole operation. Yet, we cannot find the place at which we raise the issue with respect to our very particular interest here: What in the world they are doing muddling around with these people over here in these areas. We cannot find anybody who will say, “Look, we interpret our charter to be so broad that this indeed is a legitimate inquiry on our behalf.” Nobody is willing to say that. Nobody will either deny or admit paternity for this idea. They do not even admit they know the woman. This just does not make sense. You cannot operate in the public fishbowl with this kind of cute situation.

Fifteen minutes with our staff 2 months ago would have saved us a lot of time and money on this whole thing. As soon as you clam up around this town, everybody wants to know what you are hiding. I am coming more to the conclusion that people like you are being boxed into sitting over there with your resources tied up, trying to interpret finite differences of opinion with respect to a statute. What I would really like to find out is, who, if anybody, will pay attention to what they are doing and get on with their business. Indeed, I do not accept, on the basis of the little bit I have learned about this, the fact that this is not an extremely expensive undertaking for the Federal Government.

I learned this morning for the first time that the $1.8 million is tax deductible. It is is a generous gift-no question about it-by members of the Fortune 500, who I understand were asked in the most direct way to make their contribution on the basis of somebody's formula worked out on last year's earned profit. It is most extraordinary. I have never been privy to that kind of fundraising; they know how to do it. They were assessed literally, but told, “Don't worry about it, because it's tax deductible.” So Uncle Sam has already picked up a substantial part of the cost of these generous contributions.

We have, God knows, how many millions of dollars in payroll bonuses, vacation pay, accrued other benefits that they get for being detatched from their home base to come to Washington, for employees of private corporations, all of which presumably are going to be written off by those corporations against the cost of doing business. I do not know what Ralph Nader is going to do with General Motors if he finds them spending this, because he has somebody at their meetings every year, screaming ultravires at the top of their voices.

It is a very big and complex undertaking that is going to cost us, before you even get to the 17 desks and support people sitting in a little agency like OPM. I do not know what they have over in

OPM. That is not my particular area of concern, but I suspect that somebody on the Appropriations Committee will be interested in that. We are talking here about something that can bubble into a very substantial expenditure of taxpayers' dollars in the middle of a time when everybody believes that the 11th Commandment is, thou shalt not spend public money.

It raises serious questions. I hope you can be helpful to us in cutting through this with your findings with respect to GAO's suggestions so that we can get enough information to get them on about their business and let this whole thing just go its way. Right now, it is presenting a challenge to me that I find unfortunate because I would rather be in Michigan campaigning for reelection than spending the next month and a half down here fooling around with these folks. But I will if that is the only way I can get the information.

Mr. MARGULIES. We will respond quickly to your request.

The CHAIRMAN. You do not have to respond to this, and I do not want to be combative about it, but I am looking to your agency, and I am sure other chairmen in the House and Senate are going to be looking to your agency as the one to unscramble this for us and, indeed, to protect the interests of everyone concerned.

Mr. MARGULIES. I understand our responsibilities.

The CHAIRMAN. Some of the members of the Executive Committee are indeed friends of members of this committee, including the chairman, and I have talked with a couple of them. They are not yet very much concerned because nobody has asked them for anything. Thev really have not been asked for one opinion. Some of them are wondering what in the world it is all about. So I am not operating with the assumption that we have a whole lot of wicked folks with bad motives out there. These are top, taxpaying Americans who ought to be protected. This ought to be worth the tremendous expenditure we are going to make when we get through.

I had to fight like the very devil to get $90,000 to make a study of the multibillion dollar Federal employee health benefit plan, to go outside with the express purpose of trying to get someone who would not be identified as having an ax to grind and to give us something valid upon which to measure the efficiency of the Federal Government's operation in this area. Even with them we had difficulty restraining them from getting into policy kinds of recommendations. They did a relatively good job of avoiding that, although they were not completely pure, and we understand that you cannot really examine something without some reference to the substance as well as the form.

But we are looking to your agency to be the one to straighten this out for us. I thank you very much for your cooperation.

[Whereupon, at 12:50 p.m., the committee recessed, to reconvene at the call of the Chair.)

[The material which follows was received for inclusion in the record. Refer to the contents page for a listing of information included.)

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