Mr. DODGE. I would commend this to the attention of EPA on the question of the extent it is possible to offer advance guidance to its employees.

I have no further questions, Mr. Chairman.

Mr. Moss. I am interested in your statement that it is somewhat unrealistic to regulate in certain areas the acquisition of stock. You readily concede that there are other areas where it is possible to identify very clearly that there should not be ownership. You mentioned automobiles as an example. You broke them down into categories. For example, you said you should not prohibit ownership of Sears, Roebuck stock because of the fact there was an limitation on automobiles in order to control air quality.

Has an effort been made in EPA to make this more than just a theoretical distinction and actually develop lists for those where it is possible to do it? We have two deputy counselors, but where in the agency is there a coordinated effort to do anything?

Mr. FRICK. No attempt has been made to do that on an agency

wide basis.

Mr. Moss. Why should the agency continue to operate in this way-there are some 40-odd deputy counsel; is that correct? Mr. FRICK. That is correct.

Mr. Moss. With 40-some-odd standards then for agreeing on what is permissible in the way of a conflict.

Ms. BLUM. I thought about this a lot. I think that the agency counselor system is a good one because I think it is important that the heads of these programs realize the stock holdings of the people underneath them.

It is the whole theory of decentralization we have had in EPA. That is putting it closer to the people.

I think that those people are going to be much more responsive to their employees and to their employees' stock holdings. However, I want to tell you some of the things we are going to do, if you feel it is appropriate at this time.

At present, we are in the process of rewriting the 1973 regulations and tightening them up. We already have a draft copy of that. The final should be out for review within 2 to 3 weeks.

We are going to have that reviewed by special committee which is going to be appointed this week. It is going to be the Deputy Administrator's Committee on Avoidance of Conflict of Interest. What this committee would do would be to provide the process and the beginnings of adequate guidance for prohibited stocks. It will look into better mechanisms for followthrough.

We are considering such concepts as Special Assistant to the Administrator on Ethics, a full-time person who would be watching conflict of interest.

Another alternative to that might be a full-time attorney in the General Counsel's Office who works on nothing but ethics and reviews everything the 40 deputy counselors do. I think it is important for them to see it and give a preliminary review because they need to know the stocks held by their people. I think there needs to be a higher authority which looks at that in every single case.

I even thought of-these are just possibilities-a full-time person working in security and investigations working on nothing but ethics. I think it would have to be an attorney.

These would be an alternative to the Deputy General Counsel serving as agency counselor. It would be somebody whose prime responsibility would be ethics.

Personally, I think I probably would prefer option one in which the Agency Counselor would report directly to the Administrator or the Deputy Administrator.

The other thing we are in the process of doing is printing a pamphlet on conflict of interest to be distributed to all employees. I do not think one has been distributed since 1975, which is way too long ago. We want one that can be distributed now to all employees and which will be presented to all new employees as they come into the agency.

Mr. Moss. I would merely observe that I do not see too much. promise in any of it. I think they are interesting. But I do not think we are going to have, one, a coherent policy of removing employees from positions of conflict under your proposals. And I do not think we now have it.

Ms. BLUM. Well, as I said, these formats that we were discussing are simply my ideas that are some of the things that would be considered by the Administrator's Committee on Avoidance of Conflict of Interest. The members would include the two Deputy Assistant Administrators who have been so strict.

Mr. Moss. Thank you.

Mr. LUKEN. Mr. Dodge?

Mr. DODGE. Can you please indicate whether, Ms. Blum, in your proposed revision of the EPA 1973 regulations, you contemplate including any prohibitions of stock ownership beyond what the two Deputy Counselors who now have prohibitions are imposing?

Ms. BLUM. I cannot answer that now because this is all new thinking and the committee has not had its first meeting yet. This is something that we can certainly get back to you on.

Mr. DODGE. Earlier we discussed the need to get some of the questions resolved at a level where there is some sensitivity to stock holdings and to job duties at the operating level.

Is not that, in itself, a consideration that ought to be taken into account? If all of these matters-some of which may involve serious potential conflicts are resolved, more or less, within the family, can we expect them to be resolved in accordance with the need to avoid the possibility of the appearance of or actual conflicts and without excessive lenience?

Ms. BLUM. If I understand your question correctly, I would hope so. My initial thinking-at this point, I say, it is only my initial thinking is that the Deputy Assistant Administrators would go over every single conflict of interest paper that comes in and would sign off on it. But it would go on for review. Every single one would go on. That would eliminate a decision being made on that level that might be questionable.

Mr. LUKEN. You are suggesting an administrator's committee. Ms. BLUM. Yes.

Mr. LUKEN. You have had a counselor up to now?

Ms. BLUM. Right.

Mr. LUKEN. The investigators have found more potential conflicts than the counselors have found?

Ms. BLUM. Yes.

Mr. LUKEN. Now, it seems to me that there is a potential vice in the counselors' or the administrator's committee similar to what we encountered this morning when we were talking to the FCC.

We were trying to find out why a Commissioner owns considerable stock in a company that the FCC regulates. We found there were conflicts there. But he said he submitted it to the Civil Service Commission, which was to be the repository for such information.

What I am getting to is this. It seems to me that in many conflict of interest situations the individual involved has to have the burden of making the interpretation and that there will always be ways of submitting it to a friendly tribunal, especially a friendly tribunal which is close by.

I am not so sure that we are going to get the kind of super-clean administration with that kind of administration.

Ms. BLUM. I can assure you that nobody is more interested in having a super-clean administration than I am.

Mr. LUKEN. We are both shooting for the same thing.

Ms. BLUM. The Deputy Administrator's Committee on Avoidance of Conflict of Interest is simply an advisory committee. It is not going to continue. It will not replace the person going over the papers, who is now the Deputy Counselor or the Counselor.

What it will do is come up with a study of conflict of interest, see whether we have adequate guidance for prohibited stocks, see whether or not we can develop better mechanisms for followthrough.

It is simply going to be an advisory committee that will go into business, staying in business a few weeks, tell us how they feel it should be done, and then go out of business.

Mr. LUKEN. Would the Counselor remain?

Ms. BLUM. He would certainly remain in that position until after the report had been made to the Administrator or the Deputy Administrator.

Then I am thinking that we might have to have a full-time person on ethics who would go over every single one of these papers. But the administrator's Committee will self-destruct; they will not be judging their peers.

Mr. LUKEN. Then, if we have a full-time person, he could be the friendly interpreter; could he not?

Ms. BLUM. I am not sure how one gets around that.

Mr. LUKEN. I am questioning the whole concept of a counselor or any type of administrative setup of that kind that tends, by confusion, to obfuscate the real issue. This is for the individual employee to make up his or her mind under the law whether or not there is a real conflict.

I do not think you can take it away from that basic test. If we put in any kind of counselor, it seems to me we put in a dangerous situation whereby you can use that as an excuse.