sanctions for false statements generally (for example, a false tax statement to the Internal Revenue Service) but to exempt from criminal sanctions the false statements of Members of Congress and other high government officials on their financial disclosure forms. Not only is there no evident reason to make public officials exempt from the scope of S 1001, there are strong reasons for continuing to apply S 1001 to the Ethics in Government Act. Financial disclosure is a cornerstone of the Act, which has as its legislative purpose the preservation and promotion of public confidence in the integrity of Federal officials. There is absolutely no rationale or justification for exempting Members of Congress and other high-level public officials from a general provision designed to encourage compliance and prevent knowing deception in any situation where information is required to be filed with the government. Common Cause strongly opposes S. 2214 and urges this Subcommittee and Congress to flatly reject it. This Subcommittee has asked for our views on three specific issues with regard to S. 2214: First, the current application of 18 U.S.C. S 1001 to false financial statements filed under the Ethics in Government Act; second, the retroactivity provisions of S. 2214; and third, the impact of the bill on public perceptions of the integrity of high-ranking government officials. The Applicability of 18 U.S.C. S 1001 to the Ethics in Government Act (EIGA) The question of the applicability of 18 U.S.C. § 1001 to the filing of false statements under the financial disclosure provisions of the Ethics in Government Act has been at the center of United States v. Hansen, a well-known case involving former Idaho Congressman George Hansen. In an opinion written for the United States Court of Appeals, District of Columbia Circuit, by Judge Antonin Scalia (recently nominated by President Reagan to the Supreme Court), the court made clear that S 1001 applies to the Ethics Act and rejected Hansen's argument that "'Congress prescribed only a civil remedy and did not authorize criminal punishment for the submission of a false EIGA statement.' Hansen at 944 (quoting Brief for Appellant at 27). The court determined that the legislative history of the Act does not establish by the required "clear and manifest" evidence that Members of Congress believed § 1001 would not apply by its terms to an Ethics in Government Act violation. The court therefore concluded that S 1001 covers falsification of Ethics in Government Act financial disclosure forms. The Court further pointed out that Representative Hansen was warned of the applicability of criminal penalties "with a specificity that a prospective lawbreaker rarely enjoys. The forms that Hansen signed all contained a warning, immediately above or below the signature line, that 'any individual who knowingly and willfully falsifies, or who knowingly and willfully fails to file this report may be subject to civil and criminal sanctions. See 2 U.S.C. S 706 and 18 U.S.C. S 1001.' In Hansen, the Court also rejected the argument that 2 U.S.C. S 706 displaced S 1001. The court stated that federal statutes, 18 U.S.C.A. S 1001 and 2 U.S.C. S 706, "combine to produce a natural progression in penalties: those who intention ally fail to file EIGA forms are subject only to the civil sanction of $ 706, while those who lie on their reports are additionally subject to criminal penalties of S 1001." Hansen at This incremental approach to the severity of sanctions, in our view, is appropriate and desirable and necessary for the Ethics Act to function properly. 945. The effort to exempt Members of Congress and other high public officials from the application of 18 U.S.C. S 1001 would be a fundamental change in the current enforcement mechanisms available under existing law, would be a major step backward in the application of ethics standards and would profoundly weaken enforcement at a time when vigorous enforcement of ethics laws should be a priority for all branches of government. But most of all, Congress would be carving out for itself a special exception to a law applicable to all other citizens and would be saying that Members of Congress and other high-level public officials are above the law when it comes to telling the truth to the government in matters of ethics and financial disclosure. S. 2214 should be flatly rejected. Retroactivity Provisions According to S. 2214, the removal of criminal penalties is "deemed to be effective on the date of the enactment of the Ethics in Government Act." In other words, the removal of criminal penalties would be retroactive to 1978. Common Cause strongly opposes S. 2214 whether it is prospec- tive or retroactive. makes it even more insidious. According to a recent article in the Washington Post, after the court rejected Representative Hansen's plea for probation, "Hansen is placing high hopes in a bill, introduced by Senator Orrin G. Hatch (R-Utah), that states that civil penalties are the only penalties to be applied for violations of the financial disclosure requirements of the Ethics in Government Act ... Hansen's attorney, (Nathan] Lewin, said yesterday that passage of the bill would make the Hansen prosecution 'moot' and the criminal case would be 'wiped off the books.'" This would be a disastrous result if - in one of the rare convictions under ethics statutes Congress then were to wipe the conviction off the books, rendering the prosecution "moot". Impact of S. 2214 on Integrity of High-Ranking Officials Mr. Chairman, we believe that there is deep reason for concern in the country about the growing ethics problems in Washington. The American people have a right to expect their public officials to act in the public interest and not for their own personal financial gain. The American people have a right to expect that those who lie to the government will be subject to the same sanctions whether they are a Member of Congress, a Cabinet Secretary, or an average taxpayer. The American people have a right to expect basic fairness. Nothing is so damaging to our democracy as the loss of integrity in government. We are at a crisis point today, believe, faced with a question of whether public service continues to be a public trust. It is incumbent on Congress to strengthen ethics laws and to work to ensure that existing statutes are vigorously enforced. While pro S. 2214 goes in the exact opposite direction. foundly weakening the enforcement of ethics laws, it also thumbs its nose at the American people and says, "Members of Congress and other high public officials are special; the same laws that apply to everyone else do not apply to us. It's a crime when you, as an average citizen, file a false statement to the government but it's not a crime when I, as a high government official, file a false financial disclosure." Mr. Chairman, the impact of this bill on public perceptions of the integrity of government and high-ranking government officials would be disastrous. We strongly urge this Subcommittee to flatly reject S. 2214 and send a strong, clear message that the Congress stands for equal application of the law. |