Mr. COLLINS. My counsel tells me they own 50 shares out of 46,500. I would not think that would be a major factor in policy for Pennzoil. That is pretty remote.

Martin Marietta has some type of communications system.

You have never had Martin Marietta before you: have you?
Mr. WILEY. I just do not know that. We could supply that.

Mr. COLLINS. Have you ever had the Civil Service Commission question you? Have you had anyone question you? Has anyone ever told him that there might be a conflict of interest? I am referring to Mr. Quello.

Mr. WILEY. He advised me before this hearing that no, no one had questioned him after his confirmation. He sold a number of stocks at the time of his confirmation.

I have personally not had any question on my own situation from the Civil Service Commission.

Mr. COLLINS. So, you have never had it come up to you publicly. No one has ever questioned any impropriety?

Mr. WILEY. Well, we had the committee report.

Mr. COLLINS. But this is the first time it has ever come up.

There is a company here called Gladding Corp. I never heard of them. Do you know who they are?

Mr. WILEY. I think that they are currently in chapter 10. I think they are a fish tackle company with a CB division. I am just not sure. Mr. COLLINS. Counsel advises they are in bankruptcy.

Anybody that is a private investor could have some type of a conflict. But this is the most remote situation that I can imagine. If he had any property and he worked for the Government-if he had Government bonds, he might be inclined to want to see the interest rate on Government bonds go up.

Mr. Moss. Would the gentleman yield?

Mr. COLLINS. Yes.

Mr. Moss. I would point out that section 4(b) is not cast in any kind of quantifying language. It says that they shall hold no interest. Mr. COLLINS. I will inform the chairman

Mr. Moss. "No member of the Commission or person in its employ shall be financially interested"—and then it lists a whole series. It does not say for one-tenth of 1 percent or one-thousandth of 1 percent: it says "none."

Mr. COLLINS. The chairman might be interested in the interpretation I had from the Ethics Committee last week on my own portfolio. I asked whether or not a corporation in which I own substantial stock could participate in a certain venture.

I received from the congressional Ethics Committee this answer: "We have no control over what the corporation does in the way of its business. All we can do is determine whether or not you own stock in the corporation."

In other words, what they were saying specifically was that Congress cannot determine what the corporation itself does in the way of its activities. Well, following that through on this case, that would mean that he would not be responsible for what the company owned. He would only be responsible for what he owned.

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This is the second phase, which would be indirect. This is not direct ownership. This is indirect ownership.

Mr. Moss. You and I can discuss this later, but I see no relevant point.

Mr. COLLINS. We were talking about an issue which I thought might be a conflict. But they said as long as a corporation went into it they could do anything they wanted to. I could not do it direct, but a corporation could.

This whole subject of ethics gets into such fine little points. The whole question is, has the Commissioner ever been questioned while he has been sitting, by anybody at any time for showing any favoritism to these companies, direct or indirect? Have you ever heard of anyone that has challenged him, directly or indirectly? This is in civil service. People know he has owned these stocks.

Mr. WILEY. On these three stocks, I do not know of any challenge to him.

Mr. COLLINS. In any way-publicly, directly?

Mr. WILEY. Other than the committee report

Mr. COLLINS. Had these stocks ever been brought to his attention before we had this hearing?

Mr. WILEY. I am not the best witness on this. I do not know.

Mr. COLLINS. I am sorry that we cannot call Mr. Quello today. I would like to go into the whole deal. We made a challenge on him. I would like to ask the chairman again

Mr. Moss. The chairman is going to take exception to that. We have made no challenge at all. We had a factual analysis made of holdings of employees and of officers of commissions.

We are considering those in context with the applicable laws, rules, and regulations. We have made no charges against anyone.

Mr. COLLINS. Mr. Chairman, if I could just answer that.

This is a summary of a staff study of conflicts of interest. They saythe Commissioner's statement, "We found one instance of a Commissioner with a conflict of interest"-period.

Mr. Moss. That is a statement of clear, legal fact. They found a Commissioner who held shares that, under section 4(b) of the Communications Act, constituted a conflict. That is a statement of fact. They did not name the Commissioner.

Mr. COLLINS. Mr. Chairman, he has been before a Senate committee. They did not challenge these shares

Mr. Moss. Now, the gentleman can take care of the other body anytime he wants. I am going to take care of this one.

Mr. COLLINS. But, if we found him, Mr. Chairman, would not the man be entitled to his day in court before our committee?

Mr. Moss. We are not a court. We have made no charges.

Mr. COLLINS. Mr. Chairman, I want to repeat, what is this staff statement. The staff man says, "We found." Who is he speaking for? Mr. Moss. He is speaking for the staff, at my instruction, to give us a factual accounting of what they found.

Where does he mention any names?

Mr. COLLINS. He says "one instance of a Commissioner."
Mr. Moss. All right-"one instance of a Commissioner."

Mr. COLLINS. Then he says, "This Commissioner reported ownership." and he specifically names-we checked back. This one Commissioner is Mr. Quello.

Mr. Moss. Mr. Quello made that quite clear in response to a question put to him by a reporter from the Washington Star. But that is not a matter of this committee doing anything other than attempting to determine how the laws are being administered.

Mr. COLLINS. Mr. Chairman, do we determine, as members of the committee, the position of this committee? Or does the staff determine, and we are guided by their report?

Mr. Moss. We determine it.

Mr. COLLINS. Does the minority have the right to call witnesses? Mr. Moss. The gentleman knows full well that the minority has, upon proper request, the right to call witnesses.

Mr. COLLINS. Well, we have called witnesses before, Mr. Chairman, from out of the audience.

Mr. Moss. I am not going to be bullied into doing it.

Has the gentleman finished his questions of the present witnesses? Mr. COLLINS. Since this is secondary and would not be a primary answer, that is all I have to say. Thank you, Mr. Chairman.

Mr. Moss. I want to get back very carefully to what we have been talking about because I do not think we have it in proper context. You are a member of the Federal Communications Commission? Mr. WILEY. Yes.

Mr. Moss. You are appointed pursuant to the provisions of the Communications Act of 1934?

Mr. WILEY. Yes.

Mr. Moss. You are Chairman of that Commission; is that correct? Mr. WILEY. Yes, sir.

Mr. Moss. That Commission administers exclusively administers the Communications Act of 1934; does it not?

Mr. WILEY. Yes.

Mr. Moss. And section 4 (b) of the act of 1934 proscribes ownership of certain kinds of interests, be they securities, debentures, whatever? Is that correct?

Mr. WILEY. Yes.

Mr. Moss. And the Commission-and not the Civil Service Commission-has the responsibility for 4(b)?

Mr. WILEY. Yes.

Mr. Moss. What steps do you take, then, to insure that the Commission employees and the Commissioners are in conformity with 4(b)?

Mr. WILEY. We require the employees to file an annual report with us. The Commissioners have a reporting obligation to the Civil Service Commission

Mr. Moss. Under an Executive order.

Mr. WILEY. That is right.

Mr. Moss. All right, but I am talking about the act you administer. What do you do to insure that the Commissioners are meeting the requirements of section 4(b)?

Mr. WILEY. I think the answer would be the Commissioners are responsible to the people who appoint them-to the President-and,

to themselves, under 4(b), to the people. The Commission itself does not have an obligation to enforce it upon the Commissioners individually, I don't believe, under the law.

Mr. Moss. I thought it had an obligation to enforce the Communications Act.

Mr. WILEY. That is right.

Mr. Moss. This is a section of that act.

Mr. WILEY. Can I ask my counsel for some assistance in this?

Mr. Moss. Yes.

Mr. HARTENBERGER. As you stated, Mr. Chairman, the Commission does have the obligation to enforce 4(b), as all other Communications Act sections.

Under the laws of the Commission, Commissioners rather than employees report their holdings to the Civil Service Commission. It has been the practice of the agency then to let the Civil Service Commission advise individual Commissioners when

Mr. Moss. I know what the practice has been; but I want to find out what your practice is under section 4(b), the obligation imposed on you under section 4(b).

Mr. HARTENBERGER. If we were to be informed that a security was being held by a Commissioner and that it was a prohibited security, I believe we would advise the Commissioner to divest that security. Mr. Moss. What means have you then for knowing whether or not that situation develops, where a Commissioner holds a prohibited security?

Mr. HARTENBERGER. There is an annual report submitted to the Civil Service Commission. If they uncover such a security they tell

us.

Mr. Moss. That doesn't do any good for you, does it? You do not even see that report.

Mr. HARTENBERGER. That is correct; we do not.

Mr. Moss. That, in effect, insulates you from administering section 4(b).

I am interested in what you do about 4(b).

Mr. HARTENBERGER. It does not insulate the Commission. But it does put obligation on both the Commission and the Civil Service Commission to work in concert.

Mr. Moss. You have elected not to meet obligations imposed on you by section 4(b).

Mr. HARTENBERGER. No. We await determination by the Civil Service Commission, and we act in concert with that Commission.

Mr. Moss. I know what you do, but I know what you don't do, too. I think this record will make it quite clear what you don't do. What you don't do is administer section 4(b).:

Mr. WILEY. The point I think you are making-and I would agree with it is that we need better coordination with the Civil Service Commission.

Mr. Moss. You need some coordination; you have none.

Mr. WILEY. Yes; and we are going to be supplying them with the prohibited list that we have.

I think the point you make is well taken, that we should-
Mr. Moss. What are they going to supply you with, though?

Mr. WILEY. I think we should request them to give us a reading if there are prohibited stocks in their estimation that raise a problem and advise us. Suffice it to say that we have never received that advice. I would assume that they would be doing that.

Mr. Moss. Rather than-as my distinguished colleague has suggested-not having any kind of conflict of interest proposals, the fact is that the President is going to be sending to us a tighter package.

I am a firm believer than most of the problems we have can be taken care of with existing law. I do not think we always have to write a new law.

I have seen your agencies turned around before, where they start. to administer law the way it was really written and not in some esoteric manner that really was not intended. I still say that Congress, even in writing 208 (a) and (b), did not intend that the matter of a bona fide holding by a wife, was intended to cause the employee to have a problem.

Nor do I think if a child is a beneficiary of a trust set up by a grandparent, that that is intended to constitute a conflict.

But I think when the person directly involved holds the stock and then, merely for the convenience of getting around the law, divests himself through a transfer to a child or a spouse, that goes way beyond what the Congress intended in 1962. I do not think Congress writes laws with an open invitation to circumvent. That has not been my experience here.

Mr. WILEY. Mr. Chairman, I can appreciate that concept. One of the problems you would have, I would suggest, is you would have to go into the state of mind of the employee. Some parents wish to give stock to their children.

Mr. Moss. Let's go into it. How many of the employees have opted to go the route of disqualifying themselves rather than seeking the exception

Mr. WILEY. I am consulting with Mr. Goldsmith because I do not know the answer to that question.

I think the chairman's question was how many file notice that they will disqualify themselves rather than transfer their stock.

Mr. Moss. Very few is the answer; is it not?

Mr. WILEY. Most transfer the stock

Mr. Moss. Most transfer the stock. It is the quickest, most convenient way

Mr. GOLDSMITH. That is correct.

Mr. Moss. [continuing]. Of getting around the prohibition of 208. So, the statement that it is almost routine is true, is it not?

Mr. WILEY. Well, I think the question was, do we routinely approve them. That is what I was disagreeing with.

Mr. Moss. Well, do you routinely do other than approve them? Mr. WILEY. We look at them very carefully. We have just adopted, as you know, a formula which

Mr. Moss. Yes: we were told about that formula a few days before the hearings. I think you had adopted them a couple of months earlier, but you had not informed us.

Mr. WILEY. I am sorry; I am just not aware of those facts.