there. So I requested the Department of Justice to forward to me the underlying documents.

If the underlying documents did not afford enough information to make a conflicts analysis, then disclosure of the entire assets in the limited blind partnership would be required pursuant to our regulations. So I asked for the documents from the Department of Justice, and I think telephonically said, "You please make your analysis, too."

At that time, I was advised that the Department of Justice was undertaking its threshold review to see if an independent counsel should also look at this matter. Deputy Attorney General Arnold Burns so advised me that that was the case, and pursuant to my policy, I advised Janis Sposato, the deputy designated agency ethics official, of that determination-I think she already knew it-and she responded to me in a letter saying, "This confirms our understanding of your policy that you defer to a criminal or other investigation and would not pursue it."

And so that is how the matter stood when I responded to your letter-your April letter, I think-asking for information about the status of that limited blind partnership. And you received that information on May 11th. I also responded to other inquiries.

Senator LEVIN. Let me just stop you right there. I am going to have to go and vote in a moment.

Is it your policy not to pursue the information that you sought if it had been voluntarily offered to you by the Department of Justice? You asked them for the underlying document.

Mr. MARTIN. I did.

Senator LEVIN. Let us assume they just sent them to you.

Mr. MARTIN. Oh, I would have accepted them. I certainly would have. But I think

Senator LEVIN. Would you have reviewed them if you——

Mr. MARTIN. Oh, absolutely. Absolutely.

Senator LEVIN. But why did they not send them to you? Did they tell you?

Mr. MARTIN. Why did they not?

Senator LEVIN. Why did they not send them to you?

Mr. MARTIN. Well

Senator LEVIN. You asked for them.

Mr. MARTIN. I asked for them, and pursuant to a long-standing policy that I have had, I talked to Ms. Sposato.

Senator LEVIN. I understand your policy that you do not pursue it. I am talking about their policy that they do not forward it.

Mr. MARTIN. Well, they did not forward it pursuant to that policy, because in the-

Senator LEVIN. They did not forward it pursuant to your policy? Mr. MARTIN. Yes.

Senator LEVIN. You mean you ask for a document and then they say no because you have got a policy?

Mr. MARTIN. Yes, and I agreed with that. I have to say I did. I agreed with that because I did-Senator, the reason I have that policy is I do not want to prejudice anybody's rights-a prosecutor, an investigator, or possible defendant-by my actions.

Senator LEVIN. Just by privately reviewing something?

Mr. MARTIN. Well, I did not know if it got to me whether it might get public. I just did not know. And that has been my policy, and especially when an independent counsel is involved. That is very sensitive business.

Senator LEVIN. Let me just make reference briefly before I run and vote to the letter that you have now twice made reference to, which is the letter that you sent to me on April the 11th. I think you have copies of that. I have not released the May 11, 1987, letter to me. I have not released that letter until this morning. I am now releasing that letter.

Do you stand by that letter?

Mr. MARTIN. Yes.

Senator LEVIN. Pardon?

Mr. MARTIN. Yes.

Senator LEVIN. I am just going to briefly read some portions of that letter, and then I am going to leave.

On page 2 of that letter, you say that, the Ethics in Government Act contains specific requirements for the creation of blind trusts, including the necessity of approval by our Office and, in some instances, concurrence by the Department of Justice. Authority for these requirements may be found at Section 202(f) of the Ethics in Government Act and 5 C.F.R. part 734, subpart D. The requirements, amplified by the language of model trust drafts which are circulated by this Office, include specific approval in advance by the Office of Government Ethics of the language of the proposed trust instrument, of the proposed trustee who must be independent of the Government official pursuant to statutory guidelines and of the proposed initial assets of the trust. "*** we do not recognize 'blind' arrangements created by a filer's own action. *** No limited blind partnership has been or could be approved under the statutory scheme as creating a qualified blind trust arrangement under the Ethics in Government Act. We view the use of a qualified trust as a very serious matter which under Section 202(f)(4)(a) of the Act conveys extraordinary benefits on a Government official and his immediate family by ameliorating conflicts of interest and standards of conduct concerns related to outside holdings which were attributable to them. In return for these benefits, strict rules, including pre-clearance by this Office are imposed under the Ethics Act and regulations thereunder which are closely enforced by this Office. It should be noted that the standards for public financial disclosure imposed by the Act are a separate issue from the substantive conflict, statutes and standards regulations."

Then down to Paragraph 5, "Mr. Meese did not seek advice or approval from OGE prior to establishing this limited blind partnership." And then you have indicated you are not in receipt of the underlying documentation.

But this letter and what your testimony is telling us, as I understand it-in addition to what it very clearly states-is that that partnership was never approved by your office.

Mr. MARTIN. It clearly was not, Senator.

Senator LEVIN. All right. Nor was approval sought by your office. Mr. MARTIN. It was not.

Senator LEVIN. I will be back in about five minutes. [Recess.]

Senator LEVIN. We are back in order.

Mr. Martin, did you finish your statement?

Mr. MARTIN. I did not, Senator, but if you will allow me to continue, I do not think I will be very long.

Senator LEVIN. Sure.

Mr. MARTIN. Continuing with my explanation of the procedures and steps that I took in regard to Mr. Meese's filing.

After receiving a response from Ms. Sposato regarding this policy-I decided that I would obey that policy and not proceednothing occurred until-I was out of the office on official business the week of Monday, June 29, I think, returned to the office on July 2d. I received a call from Stephen Trott, Associate Attorney General, who was going to review Mr. Meese's 1987 filing for the calendar year 1986, and he was seeking advice regarding the limited blind partnership.

Senator LEVIN. What was the date of that?

Mr. MARTIN. To my best recollection, that was on July 2d when I returned to the office. If that is a Wednesday, I think that is the day.

I told him that I wanted to find out from the independent counsel whether or not I could now proceed in view of his investigation. So I contacted the independent counsel's office, and they advised me that they had no objection to my proceeding through my normal orderly process.

On that day, I advised the agency ethics official, Mr. Flickinger, by letter-I think he is Assistant Attorney General for Administration. I have the letter here; you are welcome to it-that he should proceed with his analysis and forward me the underlying documents to determine whether or not a conflicts analysis could be made on the underlying documents.

Following that, I advised Mr. Trott that-I think Mr. Trott told me the underlying documents do not afford a conflicts analysis, and I said, "Well, then, disclosure would probably be required of the assets." At that point, I think Mr. Meese decided to make the full disclosure that he did on-well, the disclosure he made on Monday of this week.

Senator LEVIN. Have you seen his 1986 disclosure form? You have actually seen that form?

Mr. MARTIN. I have actually seen it.

Senator LEVIN. Do you understand that he has amended that form in order to list the holding?

Mr. MARTIN. No-you mean, is that something separate from what he released on Monday? No, I have not received that Senator. I just have a few comments I would like to finish up with. I will just be a minute, and you can have at me.

Senator LEVIN. Go ahead.

Mr. MARTIN. The Executive Branch Filing Disclosure Program is decentralized. The initial day-to-day administration is through the agency ethics official, as I have said to you many times before.

There is some confusion about our procedures and what the regulations require in terms of when we go back to seek additional information, and I want to clear that up now. We work through the designated agency ethics official as the regulations so authorize us to do. The regulations also authorize us to go directly to the filer.

We find it is much more efficient and more convenient to go through the agency ethics official for the following reasons:

The ethics official may already know the answer to a question we are seeking. It avoids duplicate questions to the filer. It provides us with a discourse between the agency ethics official to discuss what our position is so they understand it for future problems.

The agency ethics official really has better access to a high-ranking president appointee requiring Senate confirmation than do my lower level management analysts. So we go back to the agency ethics official, put the burden on them, and they do have better

access.

Then if we do it that way, the agency's 278, their copy, can be annotated with the questions that we went back with. So we think it is a much more professional and comprehensive way to handle that process.

Now, you may ask me what do we now intend to do, and the information that we have received has raised some additional questions. In keeping with our procedure that I have outlined above, we will probably in the near future-no doubt in the near futuresend a letter to the Justice designated agency ethics official providing that person with our views and additional questions that we think will have to be addressed by them before they can certify this most recent statement.

With that, Senator, I would be glad to answer any of your questions.

Senator LEVIN. Thank you. Now, before I had to leave for the vote, I asked you whether or not you had approved the partnership, that Meese partnership with Chinn, called Meese Partners.

Mr. MARTIN. No. It never has been.

Senator LEVIN. You answered that you had never approved it. Mr. MARTIN. No. I had never seen it.

Senator LEVIN. You have seen it now, I take it.

Mr. MARTIN. I have seen it.

Senator LEVIN. All right. But until a week or so ago, you had never seen it.

Mr. MARTIN. Until Monday of this week, I had never seen it.

Senator LEVIN. All right. In any event, you had never approved, and your office had never approved, that partnership agreement. Mr. MARTIN. That has been asked and answered. Yes, sir, that is correct.

Senator LEVIN. I just want to make it real clear since we were interrupted by a vote here. I also asked you whether or not he had sought approval of that, and you indicated he had not.

Mr. MARTIN. He did not.

Senator LEVIN. All right. Now, is the law clear that in the absence of your approval that the holdings of that partnership had to have been disclosed on the disclosure form of 1985?

Mr. MARTIN. Not necessarily.

Senator LEVIN. All right.

Mr. MARTIN. It may have been. That may have been required once you looked at the underlying documents. As I said in our instructions, the reviewer has to be afforded enough information to make the conflicts analysis. The underlying documents might have done that. For instance

Senator LEVIN. Now, let me make sure you understand my question. I am saying, in the absence of your approval must those holdings be disclosed?

Mr. MARTIN. This is my technical adviser. This is Ms. Ley, Senator. I forgot to introduce her. She is one of our senior attorneys. Senator LEVIN. Is it Ley or Leahy?

Mr. MARTIN. Ley.

[Pause.]

Mr. MARTIN. Senator, to answer your question, I think the answer is yes, but let me then describe my answer.

You have to make an analysis of the underlying documents. I think that is fair first. If the underlying documents do not afford you with enough information to determine the conflicts analysis, then you would have to be required to disclose all of the assets and the transactions in any financial arrangement.

Senator LEVIN. Well, I can re-ask my question, but I think the answer sooner or later is you are going to give me a clear yes. In the absence of your approval of that limited partnership,

is

Mr. MARTIN. The answer is

Senator LEVIN [continuing]. Is it not true that he must disclose the holdings of that partnership? You are saying—

Mr. MARTIN. Based on the present facts and what I know, yes. Senator LEVIN. All right. Based on the law.

Mr. MARTIN. Based on the law and the facts—that is, the review of the underlying documents.

Senator LEVIN. Well, I have not even gotten to the review of the underlying documents yet. I will get to that in a minute. I am just talking about the law. Is not the law clear that in the absence of your approval of that partnership that the holdings of that partnership must be disclosed?

Mr. MARTIN. Yes.

Senator LEVIN. Thank you.

Mr. MARTIN. With my explanation. [Laughter.]

Senator LEVIN. Now, you are saying that you can then look at the underlying document, after there is a statement in a disclosure form, and you can either approve or disapprove the absence of the listing of holdings based on your review of that underlying document. Is that correct?

Mr. MARTIN. You could, yes.

Senator LEVIN. And you have?
Mr. MARTIN. Have what?

Senator LEVIN. You have looked at the underlying document.
Mr. MARTIN. I have.

Senator LEVIN. And now that you have looked at that underlying document, can you say that those holdings had to be disclosed? Mr. MARTIN. I can.

Senator LEVIN. And did they have to be disclosed?

Mr. MARTIN. They did.

Senator LEVIN. All right. Now, were they disclosed in the 1985

form?

Mr. MARTIN. In the-

Senator LEVIN. In the 1985 disclosure form.