as the beginning of negotiation. This particular finding pointed out to us a need to better define the meaning and application of terms "particular matter" and "negotiations" as used in Section 208 of Title 18, United States Code.

Second, we concluded that Ms. Gilleece violated Section VII A of our own Department of Defense Standards of Conduct regulation by engaging in activities that placed her private interests in conflict with the duties and responsibilities of her DoD position. We also concluded that under Section VII D of this regulation, Ms. Gilleece had a duty to formally disqualify herself from "any official activities" which would create a conflict of interest or the appearance of a conflict of interest with her private interests. We concluded Ms. Gilleece created a conflict between her official duties and her private interest in preparing to establish a consulting firm that she believed would only be viable if it were retained by a substantial number of major Department of Defense contractors. Therefore, she was required to disqualify herself from the policy and rule making responsibilities of her office to avoid creating the appearance of a conflict between her private interests and her official activities.

We also concluded that:

o The actions taken by Ms. Gilleece, and the ensuing publicity, so compromised her ability to perform her rule making

and policy setting role that she could no longer effectively serve the Department in such a position.

o The lack of clarity in the Department of Defense Standards of Conduct regulation and in the advice Ms. Gilleece received concerning her regulatory responsibilities, indicated that a more structured approach must be used when advising senior officials. The miscommunication which occurred between Ms. Gilleece and Mr. Ream, the Standards of Conduct attorney in the Office of the General Counsel, may not have occurred if a concise, written summary of their meeting had been prepared.

o Although Ms. Gilleece testified that her letters were not intended to be solicitations of business, they gave the appearance that they were, and were perceived as such, by many of the recipients.

In our report we recommended that:

o Ms. Gilleece be removed from acquisition-related

responsibilities.

o The Office of the General Counsel prepare a formal outline for advising senior officials on Standards of Conduct and, in the future, furnish them with a written summary of its

advice as soon as practicable after responding to their specific inquiries.

o The "Standards of Conduct" regulation be revised to more clearly state the responsibilities of the Department of Defense employees and supervisors with regard to recusals from actual or potential conflicts of interest and "affiliations."

We also noted in the report that Ms. Gilleece's Executive Assistant, who planned to retire from Military Service and join Ms. Gilleece in the proposed consulting firm, played a part in contacting the Government contractors. We recommended that his actions be reviewed by his supervisors, other than Ms. Gilleece, for possible Standards of Conduct violations.

On August 19, 1985, we forwarded our report of investigation to the Department of Justice for a determination of whether a prosecutable offense occurred. The Justice Department responded

on August 28, 1985, with a request for back-up documentation. We provided the additional documentation requested by the Justice Department on September 20, 1985. We also reported that we were unable to find any evidence relative to one of the four elements of a violation of 18 U.S.C. 208(a). Although her contacts with firms were solicitations of future business and an attempt to open negotiations, we found nothing to indicate Ms. Gilleece actually conducted "negotiations" concerning prospective employment with defense contractors.

You asked for our views on what additional legislation may

be needed to avoid both the perceived and actual problems associated

with the phenomenon commonly referred to as the "revolving door." In my opinion, there is a need for regulations and policies which deal with the perception of conflict of interest, as well as with actual verifiable of conflicts. Often, there is no clear proof of a statutory criminal violation, but the public is left with a bad taste and loses confidence in the institutions of Government. Certainly the numerous "revolving door" cases reported over the years have reduced confidence in the Government, but not one single case involving post-Department of Defense service has been prosecuted where the Government employees were convicted.

A number of bills have been introduced in the House and Senate which are intended to correct the problems associated with the "revolving door." Several pieces of "revolving door" legislation are contained in the pending Department of Defense FY 1986 Authorization Bill. I believe these provisions are worthwhile and hope that they remain in the version that passes Congress. However, the Office of the Inspector General believes additional measures should be considered to supplement those in the Authorization Bill. We believe that in order to address fully the "revolving door" problem, such additional legislation should contain the following elements:

o Require a cooling-off period between the time an employee stops exercising procurement related responsibilities for the Government and begins working for a Government contractor with whom he or she had a continuing or substantial working relationship.

o Impose contractual sanctions on contractors, in

addition to criminal penalties for violations, and enforce the sanctions through terms in Government contracts. These sanctions should be in addition to civil or criminal actions against the

individual.

o Specifically identify those classes of official duties which would be subject to this "cooling-off" requirement.

o Make any changes in law applicable to all branches

and activities of the Federal Government.

o Increase the amount of information which former Government employees with procurement-related duties must report regarding their employment with contractors, and require the reports to be analyzed for possible violations by a person's former employing department or agency.

o All provisions with respect to a "particular matter" should apply uniformly throughout the Government to all types of civilian officials, as well as to members of the Armed Services. However, some type of exclusion must be adopted for policy and rule making officials whose duties do or could financially impact large numbers of contractors.

With respect to the last point, I believe that there must be some type of exception for officials with broad policy or