Some telephone stock certificates could not be found by May 24, 1985, and these were assigned by deed to Mr. Chinn so that the Meeses, albeit record owners, would no longer have beneficial ownership of these stocks. When there were unexpected delays in obtaining substitute certificates, Mr. Meese explained the situation to White House Counsel and received a statutory waiver. 2. The Invested Funds Were Properly Reported. Mr. Meese reasonably believed that the limited partnership with Financial Management International, Inc. could be reported on his Financial Disclosure Report as a single holding, rather than by listing all the partnership's separate transactions (which were deliberately screened from Mr. Meese). There is nothing in the statute or the regulations that specifically deals with investment arrangements such as the Meeses' limited partnership with FMII. The Ethics in Government Act provides that the holdings and transactions of a "trust or other financial arrangement" must be reported unless the trust is "qualified" within the meaning of the statute. 5 U.S.C. App. S 202(f)(1). The term "other financial arrangement" is nowhere defined by the regulations. Indeed, the portion of the regulations dealing with this issue is titled "Trusts and Estates" (5 C.F.R. $ 734.303(c)) a topical description that would lead one to believe that "other financial arrangement" The Office of Government Ethics has addressed this ambiguity in various situations. In the case of mutual funds, for example, the OGE does not require an official to list the stocks, bonds or other securities in which the fund manager invests the government official's funds. The Department of Justice Ethics Officer who approved Mr. Meese's 1985 Report indicated that she considered his "limited blind partnership" to be similar to a mutual fund. The OGE has also recently recognized private investment arrangements as one possible means of ensuring that an official's financial interests are too remote or intangible to affect the integrity of the official's government service. In an April 3, 1986, Opinion Letter, the Director of OGE stated that a private investment club (in which a group of investors combine their resources and make joint decisions about investments) may be an appropriate mechanism for avoiding conflicts of interest (Tab 15). If anything, the clubs referred to by the OGE provide less assurance of officials' "blindness" to the investments made than the limited partnership arrangement between the Meeses and FMII. Under the Meeses' limited partnership, Mr. Meese had no control over, or knowledge of, the investments. The general manager was an independent company engaged in the business of financial advice and investment. The investments were strictly short-term day trades. Under such circumstances, the ownership interest in the stocks was too insubstantial and too fleeting to create a conflict of interest. Most importantly, the stocks involved and the dates of the transactions were completely unknown to Mr. Meese until long after the fact. 3/ With respect to "blind" investment vehicles, such as the limited partnership with FMII, the OGE's regulations state that "an underlying concept is that if a government official does not know the identity of his or her interests, his or her official actions should not be subject to collateral attack by questions of conflict of interest or the appearance of such a conflict." 5 C.F.R. S 734.401. That objective was fully implemented in this case. 3. The Attorney General Properly Relied on The Office of Government Ethics has the duty, under law, to notify any Executive Branch official who submits a Financial Disclosure Report if "additional information" is required to comply with the law. 5 U.S.C. App. S 206(b)(2)(A); 5 C.F.R. S 734.604(b)(2). Moreover, the OGE's statutory review obligation must be fulfilled within 60 days of transmission of the Report. Hence, by the end of November 1986, OGE should have made such a request if it believed Mr. Meese's Report was inadequate insofar as it listed a "limited blind partnership" with FMII. 3/ Mr. Meese received annual partnership tax returns for the partnership, and an attachment to these returns listed the dates, amounts and stocks that had been traded during the preceding year. Mr. Meese never reviewed these, however, and merely provided the relevant information to his own accountant for the preparation of his personal tax return. At no time did Mr. Meese have current knowledge of the partnership's investments. 17 OGE made no such request. It did ask about other items on the Report such as gifts. But it apparently was satisfied with the disclosure regarding FMII. Nor did OGE take any of the other procedural steps mandated by law. If OGE believed, as its letter of June 26, 1987, to Congressman Sikorski indicates, that there was some flaw in the reporting of the limited blind partnership, OGE had a duty to notify Mr. Meese of that conclusion and invite a response. See 5 U.S.C. App. § 206(b)(2)(B), 206(b)(3); 5 C.F.R. S 734.604(b)(3) & (4). Attorney General Meese learned of OGE's views on June 30, 1987, when Congressman Sikorski published the correspondence he had had with OGE. OGE did not even send a copy of its letter to the individual whose Financial Disclosure Report was the subject of his opinion. Had a request been made of Attorney General Meese by the OGE at any time after the Report was sent to it, Mr. Meese would have provided the requested information. is surely not to blame for assuming, as the law entitled him to do, that the Report satisfied the standards of the Office of Government Ethics. He The actions and omissions of the OGE are primarily responsible for the criticism that Attorney General Meese has had to confront. Had the OGE executed its responsibility properly, any required disclosures would have been made by Mr. Meese long ago. IV. CONCLUSION The public controversy over Attorney General Meese's Disclosure Report has its genesis in the Wedtech investigation. There has been widespread speculation in the press that Mr. Meese invested his money with Mr. Chinn in order to benefit from Wedtech. Today's disclosure demonstrates that such speculation is completely baseless. There was no investment in Wedtech or any Wedtech-related entity. The Chinn investments were trades in publicly held corporations, made through established brokers, with no relation whatever to Wedtech. Attorney General Meese voluntarily went beyond his commitment to Congress, established a blind investment vehicle for the proceeds of all his and his wife's securities holdings, reported that investment on his 1985 Disclosure Report, and relied upon a decision by ethics officials that his disclosure was proper. The conduct of the Office of Government Ethics gave him no reason to doubt the validity of that conclusion. On June 15, 1987, Mr. Meese signed and filed his That Report is Calendar Year 1986 Financial Disclosure Report. being made public today. At the time Mr. Meese signed and filed his Report, he treated the FMII limited partnership investment in the same manner as it was treated on his 1985 Report, relying on the conclusion reached in July 1986 following his meeting with Justice Department ethics officials. Attorn now informed reviewing officials that he neral Meese has ed to provide - 19 |