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individual ethics cases,

what resources OGE would use to gather the relevant

information necessary to reach an informed and definitive decision on a

particular ethics matter, or how that matter was intended to come before OGE

to be subject to such an order in the first place. The Senate Committee on

Governmental Affairs in its report seemed to indicate, however, that the au

thority to order agency or individual action on a particular ethics or con

flicts matter would be brought to bear on a case where the OGE has uncovered

or made a "discovery" of enforcement failures which have been brought to its

attention by way of a collateral inquiry or investigation:

Paragraph (11) grants the Director the au-
thority to order corrective action by agencies
and employees as he deems necessary.

In per-
forming his responsibility to monitor compliance
with the disclosure provisions of this statute,
the Director might discover that an agency has
failed to comply with this statute or related
laws or regulations governing standards of con-
duct. In such cases the Director is empowered
to order an agency to comply with applicable
regulations and to direct the type of correc-
tive action the agency must take. In other
cases, the Director may discover that an em-
ployee has failed to take a necessary action
to avoid a conflict of interest. In such an
instance, the Director may order the employee
to take such action and recommend appropriate
administrative action to the individual's

S. Rpt. No. 95-170, supra at 148.

In investigating and monitoring agency and employee compliance with the

financial disclosure and other financial reporting requirements, therefore,

it was apparently intended by Congress that OGE may also look at and evaluate

other aspects of conflict of interest and ethics enforcement concerning in

dividual cases and matters.

Further, it was arguably intended by Congress


that OGE may order agency or employee action on a specific matter which OGE

discovers in other ways, such as through publicity of the matter, or noti

fication of OGE by persons in the affected agency or by third parties.

In testifying in 1983 on the Office of Government Ethic's reauthoriza

8/ tion legislation, agency officials described the office's policy on individ

ual ethics or conflict of interest allegations and determinations.

The agency

official testifying, the then acting Director of OGE, David R. Scott, noted

that the agency does not have a "mandate" to "investigate" conflict of in

terest allegations in the executive branch, but in response to questioning

from Senators, did make a semantical distinction in noting that although the

OGE does not "investigate" conflict allegations, it does conduct an indepen

dent "inquiry" into such matters brought to their attention:

It is important to note one function that was not given to the Office of Government Ethics by the Ethics in Government Act. The office was given neither the mandate nor the manpower to staff its own investigations of conflict-of-interest or standard-of-conduct allegations in the executive branch.

Rather, the act's legislative history shows
the Office of Government Ethics' role is to di-
rect a decentralized system of ethics advice and
enforcement where agency personnel usually
either the designated agency ethics official or
the Inspector General's staff - would conduct
investigations which were deemed necessary
either by that agency or by the Office of Gov-
ernment Ethics and would make any necessary
referrals to the Department of Justice.

8/ Hearings, Senate Committee on Governmental Affairs. Subcommittee on Oversight of Government Management. "Reauthorization of the Office of Government Ethics," 98th Cong., 1st Session (1983).


Senator RUDMAN

It is my understanding
that you are currently considering whether or not
the details of a contract involving a book written
by Mr. Deaver of the White House, violates any con-
flict-of-interest laws or regulations.
currently involved in such an investigation and if
so, are you in the process of preparing to deliver
a legal opinion?

Are you

Mr. SCOTT. Yes, Senator Rudman. We would
call it an inquiry. An investigation is, as I
think I indicated briefly in my statement, some-
thing for which we do not have a mandate
don't have investigators, but we do conduct

- we

Senate Governmental Affairs Hearings,
supra at 4, 7-8.

As to the manner in which a specific conflict of interest batter may

come within the purview or attention of the Office of Government Ethics for

an "inquiry," the acting Director of OGE explained in response to questions:

Senator COHEN. If you learn about a signif-
icant problem in an agency, similar to the story
Senator Rudman was obliquely referring to, which
I think was EPA, over on the House side, how would
you get involved, assuming this issue is not brought
to you directly?

Your're not an investigatory body. You do not have the staff or the budget to be an investigative body, although some recommend that you become one.

How would you get involved? Do you simply wait until the newspaper starts writing about it or until there are hearings? Where would you get involved in a situation like EPA with allegations of conflict of interest?

Mr. SCOTT. Mr. Chairman, we have an interesting way of getting involved in things, because certainly the press does like to talk to us and bring us problems. And, of course, we welcome that.

But, in fact, for a lot of other problems
we have what might be called an informal network


of people, not only the designated agency ethics
officials in the various agencies if we discuss
EPA as the example--but all the agencies which
bring us problems.

And then we have what I always categorize as
anonymous informers. And while, of course, many
times they are off base and they will waste our
time, we do receive those. And then, we will
figure that if there is enough--if it seems like
there is enough--substance to what they are saying,
we will then make an inquiry to see that someone
18 looking at the problem.

Senate Governmental Affairs Hearing,
supra at 13-14.

In the face of OGE's explanations of their investigatory, oversight, and

enforcement functions and practices concerning individual conflicts of in

terest and ethics matters, the Senate and the House in the 98th Congress, in

reauthorizing OGE for 5 more years, agreed to no substantive changes in the

statutory authority of OGE with regard to its responsibilities and powers over

these matters.

See P.L. 98-150.

The reauthorization legislation did provide

that the Director of OGE may request assistance from the inspector general of

an agency in conducting investigations of the public financial disclosure

statements under subsections (b)(3) and (b)(4) of section 402 of the Act.


P.L. 98-150, § 5 (5 U.S.C. App. § 403).

This authority did not expressly ex

tend, however, to "inquiries" or other activity with respect to individual

conflicts or ethics matters beyond financial disclosure statements, nor spe

cifically to such matters in the course of "ordering corrective action on

the part of agencies and employees" under section 402(b)(9) of the Act.

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Jack H. Maskell
Legislative Attorney
American Law Division
August 1, 1986

Mr. SIKORSKI. Our first witness today is the gentleman, a Member of Congress from Tennessee, Don Sundquist.

It is the practice of this subcommittee to swear in all witnesses. A copy of the House rules is available before you. You don't wish to have counsel present, and you have no objection to being sworn in?

Witness sworn.) Mr. SIKORSKI. The subcommittee welcomes Mr. Sundquist and will allow him such time as he needs.


CONGRESS FROM THE STATE OF TENNESSEE Mr. SUNDQUIST. Thank you, Mr. Chairman. I might add before I begin my testimony that TVA did not call me and ask me to testify.

Mr. Chairman, thank you for this opportunity to testify before this subcommittee. As a Member of Congress from the Tennessee Valley, and I might add a vocal and consistent critic of TVA management, I have always tried to work with fellow Members who were genuinely interested in helping this agency resolve its problems. So it came as quite a surprise to me when I learned late yesterday afternoon that this hearing was being called on short notice. It is my understanding that TVA itself, was not notified about this hearing until one o'clock yesterday.

I am also quite aware that The Washington Post ran a lengthy critical article over the weekend concerning Admiral Steven White's contract with TVA. I think the timing and the nature of this hearing then is just a little more than coincidental. For fairness' sake, I wish this subcommittee had not proceeded so hastily.

Today you will hear testimony concerning the propriety of Admiral White's $355,200 contract. The validity of this contract along with allegations of conflicts of interest is being investigated by the TVA Inspector General, by private counsel, and by the Office of Government Ethics. Until these investigations are complete, I think hearings in Congress will serve no useful purpose, beyond the purpose of publicity.

The testimony you will hear today, like the Post story on Saturday, is based on allegations of TVA's former general counsel. The Post article clearly implied that the former general counsel resigned his position recently in protest the TVA Board's actions in hiring Admiral White. The story made no mention of the fact that the general counsel resigned amid reports that he had improperly divulged pension fund information to benefit TVA's former nuclear power management. Nor did the story point out that the same former general counsel, who is currently being investigated by TVA's Inspector General for what the Associated Press described Friday as possible "kickbacks and manipulation of the Retirement System for personal gain.'

Mr. Chairman, I have no idea whatsoever whether these charges against this former general counsel are true or false. I don't know about Mr. Sanger's motivation in attacking Admiral White. But in light of the severity of the allegations, I think any reasonable

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