has reviewed those laws. And we added the provision that if a participant is moved from one assignment in an agency to another, the Commission office must be so notified. It is my impression that some of the problems of the past existed. because there was a shift in assignments unknown to the Commission office. We tried to close that problem. Mr. KREBS. And I assume you have no information as to why these shifts have taken place, as to the motivation of these shifts? Mr. SMITII. No, I do not. Mr. KREBS. How often does the Commission meet? Mr. SMITH. Three times a year. Mr. KREBS. And how long do these meetings usually last? Mr. SMITH. The meetings usually last an evening before, in which you will have committee meetings, and then all morning the following day. We review quite thoroughly the policies and procedures and plans. Mr. KREBS. Mr. Chairman, in closing let me express my appreciation to the witness for his service on the Commission. I am sure that in his capacity there are many other things he could do and that the company would like for him to do, and I appreciate the public service he has given. Thank you, sir. Mr. WARD. If a problem arose on conflict, a problem over an assignment, let us say Mr. Parmenter had a problem in deciding whether it is a conflict or not, would you review it? Mr. SMITH. I would urge that he go to the legal counsel of the Civil Service Commission and the legal counsel of the agency involved and the legal counsel of the individual company involved. I would expect that facts of the situation, the facts of the situation would completely resolve the situation. If they did not, I would then expect to get into it. And if further review was necessary, I would get the whole Commission into it. But, I would rely on the facts of the situation and work it out by legal counsel, rather than trying to make a layman's review. Mr. DINGELL. Do you have a procedure whereby you review the appointments to the particular agencies of the particular participants of the program for possible conflict of interest prior to the time that they are actually detailed to the different agencies? Mr. SMITH. We have standards and criteria for selection of the types of jobs and the types of people, but we do not attempt to review each individual in detail, or each assignment in detail, because we think this requires more detail than a voluntary commission, made up of non-paid people, Mr. Chairman, who are full-time engaged at other work can possibly do. We would be afraid it would be a very cursory and unmeaningful review. So, we rely on procedures, on criteria, on principles, and policy. Mr. DINGELL. Do you have any requirements that you impose on the agencies that they would take this step? Mr. SMITH. Very definitely. Mr. DINGELL. Would you see to it that they are listed for us for the record? Mr. SMITH., We will. [See exhibits 1 to 4.] Mr. DINGEL. Do you have any followup to ascertain whether the agencies are, in fact, doing it, either through the Commission itself or through your staff director, or through your staff? Mr. SMITH. We believe the staff does follow up in that direction. Mr. DINGELL. Would you list to us the specific instructions to staff on this precise point for the record? Mr. SMITH. We will. [See exhibit 4, last paragraph.] Mr. DINGELL. I think it would be helpful. Do you require the agencies in any fashion specifically to consider the possible question of conflict of people you detail to them for particular positions? Mr. SMITH. Yes, we do. Mr. DINGELL. Would you list to us the specific requirements that you make in that regard for insertion in the record at a time of your convenience? Mr. SMITH. We will. Mr. WARD. Some of this is a matter of discretion, but I want to ask you a question as to how you might interpret this. We talked about the Bonin case; that is, the fellow from Shell Pesticides Division going to EPA's Pesticide Division. How would you, as director, if you were asked to look at this or as chairman, how would you, if you were asked to look at this, respond? Mr. SMITH. Well, I am sure, Counsel, that you know it is very dangerous to look at hypothetical situations. Mr. WARD. Well, this is a real situation. Mr. SMITH. It is a danger to look at iffy situations. Mr. DINGELL. But this wasn't hypothetical; this is a fellow by the name of Bonin. Mr. SMITH. This was a past situation, however, of which I do not have the full and specific facts. Mr. WARD. But just on the basis of that, what would your reaction be? Mr. SMITH. If you talk about someone from a division of a company going to a division of an agency with a similar name, I would be deeply concerned. Mr. WARD. But not opposed? Mr. SMITH. Well, by "deeply concerned" I mean unless there was overwhelming evidence that there was no conflict of interest and clearly delineated evidence that there was no conflict of interest, I would be completely opposed. Mr. WARD. Is it your interpretation of the Commission's policy that it is wrong for a company to accept the participant on the basis that he be assigned in a particular position? Mr. SMITH. We have very definite instructions that no participants may be accepted on such a qualified basis. Mr. WARD. I have no further questions. Mr. DINGELL. Returning again to this particular question-and I don't want a ringing denunciation from you of your predecessors, because I am not sure that would be fair or proper—but, have you made any changes with regard to the circumstances which led to the detail ing of Mr. Bonin to EPA? He is from Mobil-no, he was from Shell Pesticides. Mr. SMITH. Mr. Chairman, I am not trying to evade your question, but I do not know exactly what the procedures were at that time. Mr. DINGELL. That is a fair response and Mr. SMITH. I do know that we have procedures in place at the present time. Mr. DINGELL. Would you then indicate to us what those procedures are to prevent this kind of a thing. Do so, at your convenience, for insertion in the record after you have had a chance to talk with the staff at the Commission. [Exhibits 1 to 4 follow:] EXHIBIT 1 THE PRESIDENT'S EXECUTIVE INTERCHANGE PROGRAM RESPONSIBILITIES OF THE FEDERAL SECTOR HOST (As concerns the employment of a Private Sector Executive through the Executive Interchange Program) 1. Designation of a liaison officer to work with the President's Commission and the Interchange Executive from nomination to re-entry into the sponsoring organization. 2. Absolute avoidance of a conflict-of-interest situation, or appearance of such a situation, through Counseling the executive concerning his/her responsibilities and the need for ethical conduct, and Strict adherence to President's Commission Conflict-of-Interest procedure (copy attached). 3. Payment of a salary which is comparable to that earned prior to the assignment, adjusted for cost-of-living increases, merit increases, bonuses, etc. In no case will the salary exceed $36,000 a year. 4. Introduction of the Interchange Executive to agency Presidential appointees to expose the Interchange Executive to the structure, policies, and operations of the host agency. 5. Allowance of time away from the job for educational activities sponsored by the Commission: 5 days at the start of the assignment for Program Orientation, 5 days for the Mid-Year Study Tour/Seminar, and 3 days for the closing "Conference on National Issues." In addition, there is generally need of up to 2 hours per week for educational activities. Each host is responsible for payment of travel and per diem expenses for Commission sponsored education activities, which generally range between $1,000 to $1,500 annually, depending on distance from the educational event. 6. Cooperation with the President's Commission's request for an appraisal of the Interchange Executive's performance. This is done every six months. 7. Any change in assignment of duties must first be cleared by the President's Commission. 8. In keeping with the concept of the Interchange Program, hosts are reminded that offers of permanent employment to the Interchange Executive are not allowed. EXHIBIT 2 THE PRESIDENT'S EXECUTIVE INTERCHANGE PROGRAM RESPONSIBILITIES OF THE PRIVATE SECTOR HOST (As concerns the employment of a Federal Executive through the Executive Interchange Program) 1. Designation of a liaison officer to work with the Commission and the Interchange Executive from nomination to re-entry into the sponsoring organization. It is suggested this liaison officer be a senior official of the organization. 2. Absolute avoidance of a conflict-of-interest situation, or appearance of such a situation, through Counseling the executive concerning his/her responsibilities and the need for ethical conduct, and Strict adherence to Commission Conflict-of-Interest procedure (copy attached). Special attention should be paid to the Department of Justice Summary and Part II of Standards of Ethical Conduct. 3. Payment of a salary which is comparable to that earned prior to the interchange assignment, adjusted for cost-of-living increases, anticipated federal pay increases, etc. The Commission is available to advise on a fair and equitable salary. 4. Provision of a vacation allowance. 5. Introduction of the Interchange Executive to senior company officials to expose the Interchange Executive to the structure, policies, and operations of the host organization. 6. Participation in the "Host City Education Program," to allow the Interchange Executive the oportunity to meet with his fellow Federal executives assigned to the same geographic area. This will provide a broader perspective of business and increase the participants' awareness of the effect of Government policies on industry. 7. Allowance of time away from the job for educational activities sponsored by the Commission: 5 days at the start of the assignment for Program Orientation: 5 days for the Mid-Year Study Tour/Seminar, and 3 days for the closing "Conference on National Issues." In addition, there is generally need of up to 2 hours per week for "Host City Education Programs." Each host is responsible for payment of travel and living expenses for Commission sponsored education activities, which generally range between $1,000 to $1,500 annually, depending on distance from the educational event. (Note: This amount will be higher for those participants on the West Coast.) 8. Cooperation with the Commission's request for an appraisal of the Interchange Executive's performance. This is done every six months. 9. Any change in assignment of duties must first be cleared by the Commission. 10. In keeping with the concept of the Interchange Program, hosts are reminded that offers of permanent employment to the Interchange Executive are not allowed. EXHIBIT 3 THE PRESIDENT'S EXECUTIVE INTERCHANGE PROGRAM RESPONSIBILITIES OF THE SPONSOR OF A CANDIDATE FOR THE EXECUTIVE INTERCHANGE PROGRAM The following is a listing of responsibilities assumed by the sponsor of a candidate for participation in the Executive Interchange Program. Sponsoring (sending) organization responsibilities 1. Absolute avoidance of a conflict-of-interest situation or the appearance of such a situation through Counseling the executive concerning his/her responsibilities and the need for ethical conduct, and Strict adherence to Commission Conflict-of-Interest procedure (copy attached). Special attention should be paid to Department of Justice Sunimary and Part II of Standards of Ethical Conduct. 2. Designation of a liaison officer to work with the Commission and the Interchange Executive from nomination to re-entry into the sponsoring organization. 3. Development and execution of a suitable plan for re-entry to the sponsoring organization to insure proper recognition of the increased value and potential of the Interchange Executive (i.e. a position of increased responsibility and/or higher earnings). 4. Payment of moving expenses to and from the location of the Interchange assignment. 5. Sponsors are expected to pay a portion of the cost of the Education Program. This cost is currently $1,000 for each executive placed in the Program. EXHIBIT 4 PRESIDENT'S COMMISSION ON PERSONNEL INTERCHANGE EXECUTIVE INTERCHANGE PROGRAM PROCEDURES FOR AVOIDING CONFLICTS OF INTEREST The staff of the President's Commission on Personnel Interchange advises all candidates for participation in the President's Executive Interchange Program of the Commission's policy on avoiding conflicts of interest, and that participation in the program must be free of any conflict of interest or appearance of conflict of interest. 1. When acknowledging receipt of nomination from the Company, the Commission requests the Company to review the applicability of State conflict-ofinterest statutes, if any. 2. Prior to the initial interview with the candidate, the Commission sends the nominee and his sponsor a copy of the conflict of interest statutes (attached) of its publication "Compliance with the Laws on Conflict of Interest." During the initial interview, or shortly thereafter, the Commission secures from the nominee a written acknowledgement that he has received and read this publication. 3. The Commission reviews the candidate's background with him in relation to the assignments for which he may be considered to determine whether they would present conflict or potential conflict of interest situations. Assignments that may present a conflict or appearance of conflict are eliminated from consideration with respect to the candidate. 4. After the nominee has been interviewed by prospective host agencies for assignments initially determined to present no potential conflict of interest problems, the Commission again interviews him. If in his interviews with any prospective host agency information was developed indicating the possibility of a conflict of interest in any assignments tentatively considered, such assignments are eliminated from further consideration at this interview. 5. When a host organization offers the nominee a position, the Commission requests the General Counsel of the host organization to review the nominee's background and relate it to the formal position description, as well as to any work the nominee may actually be doing what is not reflected in the position description, to determine once again whether potential exists for conflict of interest in the appointment. The General Counsel of the host organization will sign that this review has been done and that no conflict exists. Every participant from both the private and Federal sectors will receive a briefing on conflict of interest by a member of the staff of the General Counsel of the Civil Service Commission early in the Interchange year. This briefing covers the philosophy and underlying principles of the conflict of interest laws and regulations, and the need for interchange executives to conduct themselves so that they bring credit upon themselves and their sponsoring organizations. They are admonished to be alert to situations that may reflect adversely upon them and upon the government, and to seek advice from the General Counsel of their host organizations whenever they perceive situations presenting potential conflict of interest or the appearance of it. They are advised that they may not accept transfer or detail assignments to other jobs without the express written approval of the President's Commission on Personnel Interchange. A member of the Commission staff counsels each participant within 30 to 60 days after he commences his interchange assignment. In addition to verifying his position description, discussing his adjustment to his new environment and similar matters, he is advised once again of the provisions of law and Executive Order on conflict of interest, the possibility of conflict arising in his work, and the need to remain alert to avoid even the appearance of conflict of interest. NOTE. Sector. Same procedure is followed with Federal Government nominees to the Private Mr. DINGELL. Now, there is this other question. Is the program— well, let me come on down to the conflict-of-interest compliance paper that you submitted. Without objection, of course, that document will be inserted in the record. [Exhibits A-C follow:] |