This memorandum is intended to serve as a statement from the
designated agency ethics official for this Department, to be
included with the Statement for Completion by Presidential
Nominees that you are submitting to the United States Senate
Committee on Energy and Natural Resources in connection with your
nomination to the position of Assistant Secretary for
Environmental Management, U.S. Department of Energy. I have
reviewed your Executive Branch Public Financial Disclosure Report
(Standard Form 278) dated November 6, 1995, and have certified
that the information contained therein discloses no conflict of
interest under applicable laws and regulations.

As a supervisory employee, you will be prohibited by section
602(a) of the Department of Energy (DOE) Organization Act (Pub.
L. No. 95-91) from knowingly receiving compensation from, holding
any official relation with, or having any pecuniary interest in
any energy concern. The term "energy concern" is defined in
section 601(b) of the Act as any entity "significantly engaged in
the business" of any of a variety of activities related to energy
production, distribution, sale, or research and development, or
any entity significantly engaged in such research and development
pursuant to a DOE-funded program irrespective of whether it
otherwise engages in such business. The term also includes any
entity holding an interest in property from which an energy
resource is commercially produced or obtained. You have not
reported holding any such interests; however, you should be aware
of this restriction when making future investment decisions.

Section 208, title 18, United States Code, prohibits a Federal officer or employee from participating personally and substantially, as a Government employee, in any particular matter in which, to his knowledge, he has, or his spouse, minor child, general partner, organization in which he is serving as officer, director, trustee, general partner, or employee, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment has, a financial interest.'

1

Section 208(b)(1), title 18, United States Code, provides that the participation restrictions of section 208(a) shall not apply if the employee first advises the Government official

You have reported on Schedule A of your Standard Form 278 that you hold a number of interests in Science Applications International Corporation (SAIC). These interests include common stock, vested stock options, the SAIC employee stock ownership plan, the SAIC 401(k) plan (which includes SAIC stock), and the SAIC Keystaff Deferral Plan. These interests constitute a financial interest within the meaning of 18 U.S.C. 208.2 SAIC has numerous contracts with the Department including contracts with offices that report to the Assistant Secretary for Environmental Management. You have advised this office that you will initiate divestiture of these interests immediately upon your appointment.3

According to the terms of the SAIC Keystaff Deferral Plan, SAIC may wait up to 12 months from the termination of your SAIC employment before paying you the proceeds of the Plan. In addition, SAIC, a privately traded entity, only allows shares of stock to be sold once each quarter. You have agreed to recuse yourself from participating in any particular matter that could have a direct and predictable effect upon SAIC or any other entity in which you have a financial interest for as long as you hold such interest. This office will recommend that the Secretary issue you a waiver to allow you to work on general policy matters affecting SAIC while you are waiting for SAIC to pay you the proceeds of the Plan and for the sale of your SAIC stock to occur. The waiver will not include SAIC specific

matters.

The Standards of Ethical Conduct for Employees of the Executive Branch, 5 C.F.R. Part 2635, also contain a participation restriction. Section 2635.502 provides that where an employee knows that any entity, for whom the employee has within the last year served as a consultant, director, officer, or employee, is

responsible for appointment to his position of the nature and circumstances of the particular matter, makes full disclosure of the financial interest, and receives in advance a written determination from that official that the interest is not so substantial as to be deemed likely to affect the integrity of the services that the Government may expect from such employee.

2 You also have an interest in the SAIC Profit Sharing Plan. All of your proceeds in this Plan are invested in widelyheld mutual funds. However, you have advised this office that you will be divesting of your interest in this Plan as well.

3 You have advised this office that you will be requesting a certificate of divestiture from the Office of Government Ethics for the interests which will result in a capital gain. You have further advised this office that upon your appointment, you will take steps to immediately divest of remaining SAIC interests.