certify to the Senate that the nominee is free from conflicts of interest. If you had determined that the nominee had a possible conflict-of-interest problem, would you inform the Senate committee?

Mr. MARTIN. Possible conflict? Well, that is difficult to answer, Senator. We try to resolve those things before they ever get to the Senate committee, and if we do, then I don't feel it is necessary to advise a committee.

Senator COHEN. In other words, assuming you can resolve them, you don't feel there are any obligations to let the chairman of the committee, be it Judiciary or whatever committee, know that there was a potential problem here that you have satisfactorily resolved? Mr. MARTIN. No, I don't feel it is necessary to do that.

Senator COHEN. Earlier, I mentioned David Scott, the former Chief Counsel and Acting Director of OGE, who has submitted written testimony. One of the questions I asked him was whether the OGE Director has an obligation to report to the Senate confirmation committees cases where he found possible violations of standards-of-conduct regulations.

He replied that it should be reported to the Senate committee members when it would enable them "to arrive at a more informed judgment, assessing the nominees' compliance in fact with all applicable laws and regulations concerning conflicts of interest." So I take it you disagree with that?

Mr. MARTIN. I don't think that we totally disagree on that. He qualified his answer there.

But Mr. Scott did work for me for a good time, and we had instances where things like that did occur, and I don't recall him ever insisting or telling me that it is essential that I tell a Senate committee of every possible conflict that I have resolved.

Senator COHEN. What if there are serious questions that you resolved satisfactorily? You don't think that would be an indication to call the chairman and say, "Listen, we have got a problem here; we think we have got the answer and we think we have got it resolved, but you ought to know about it?"

Mr. MARTIN. Sure, if it is serious enough, and it goes to the heart of-let's say the heart of the man's qualifications. Yes, I probably would do that. I would have no problem doing that.

Senator COHEN. Probably would do that, but there is no guarantee the committee would ever find out about it unless it were leaked to the press?

Mr. MARTIN. That is right. I try to keep things like that out of the press, as you know.

Senator COHEN. But what if the people who sit up here have a different interpretation of the Executive order than you do, that they would equate appearance with an actual violation, as the Executive order was written? Don't you see a problem if you sit in OGE as the chief enforcer of the Ethics Act, as such, and make decisions based upon your own personal determination as to whether or not appearance is equal to a violation or whether it is precatory language only, to use a lawyer's phrase, and you thus exclude the members from their constitutional confirmational duty from having any knowledge of those kinds of situations?

Mr. MARTIN. Senator, if I thought that the problem was something the Senate should consider and was a sufficient problem and

I had not been able to resolve it to my satisfaction, then I certainly would raise it.

Senator COHEN. In 1983, when we went through the reauthorization of the Ethics in Government Act, we adopted a number of amendments in which we tried to strengthen the Office itself. One of those amendments provided that you could call upon the inspector general's office of any agency to conduct an investigation.

I think what we did was recognize that you had a pretty small operation, with limited staff, and we didn't want that restriction encumbering your activities. I would like to know whether or not you have made any use of this new authority. Have you asked assistance from any of the inspectors general of any office concerning these conflicts?

Mr. MARTIN. In a particular investigation, no, I have not, but I have worked very closely with the inspectors general in terms of training and assistance. They utilize a number of our questions that we raise in their reviews and their audits. But in a particular case, no, I have not called upon the inspectors general.

Senator COHEN. In that legislation, we made some recommendations that you approve your training programs for employees in order to assure that political employees are fully aware of conflict of interest and other ethical requirements, and I think your office conducted a number of training programs for career employees during the past year.

I was wondering what you have done with respect to increasing the training for Presidentially appointed officials. They sort of come in from the cold world of business where the standards are quite different than what they are here, and they are shocked, many of them, suddenly to find themselves in the spotlight of interrogation-what they would call inquisition-for something that they had no idea was a violation of the law. What are you doing about informing or training Presidential nominees for office about strict requirements?

Mr. MARTIN. I have recommended through the PCIE that every agency conduct annual or semiannual training for all employees, as is done in a number of agencies. That includes the Presidential appointees as well.

In addition, I have encouraged the Cabinet Secretary, Mr. Craig Fuller, who is no longer there, to implement a 1- or 2-day refresher course for all Presidential appointees, let's say when they first come in, to gather 30 or 40 of them and spend a day on ethics matters and other things, budget, personnel, that might be encountered when they first arrive-for instance, like travel, gifts, honoraria, things like that.

That was in the works, and I was optimistic we would be doing that early this year, but Mr. Fuller had left, and I have got to reestablish my attempts to establish that program.

But there are a number of agencies that do conduct the training, and it is required training. The Department of Energy is very high on that.

Senator COHEN. Back in May of 1983, your office sought a delegation of authority from the President to issue regulations requiring that those confidential financial disclosure requirements be the same as the public disclosure requirements?

Mr. MARTIN. That is correct.

Senator COHEN. I take it, since May 1983 you have had a change of heart?

Mr. MARTIN. Well, no, I have never had a change of heart, but based on the Department of Justice's opinion, if you were to proceed administratively you had to require that. Their interpretation of the Ethics Act was such that if you were going to have a confidential system it had to be in the same form and require the same information as those who file publicly.

So we had no choice. We were implementing what Justice said we were required to.

Senator COHEN. The Justice Department said that the Ethics in Government Act nullified or invalidated the confidential financial disclosure system.

Mr. MARTIN. It says it superseded it, that is correct.

Senator COHEN. That was when, early in 1983, you were advised of that?

Mr. MARTIN. Yes, I think it was in the spring of 1983.

Senator COHEN. Why has it taken 2 years to correct the problem? Mr. MARTIN. When I came into office, that was one of the problems presented me in June of 1983, and I immediately sought to determine what we can do about it, either administratively or through legislation.

I convened a number of meetings with department heads-not department heads-general counsel and with OMB officials, and the departments were of the view-and I share that to a certain extent that maybe we could get Justice to modify its views if we were to go back with an expanded argument, not only legalistic but policywise. So I did that. That was-I think I forwarded a memorandum back to Justice in the fall of-no, it was later than thatthe fall or early winter of 1983.

Justice came back to me in June 1984 and said, sorry, we adhere to our original opinion, but there are certain things you might be able to do in lieu of a confidential system, like require certifications that we don't have any conflicts of interest by employees or certain things like that.

So using those kind of things, I tried to accommodate administratively what we wanted to do to preserve some reporting system. But I found that I just couldn't accommodate and do it and still ensure that we would have a good system, free of conflicts of interest, for Federal employees, a reporting system.

So I then decided legislation was the better route to go. Senator COHEN. But what you are advocating now is that you should have less information, rather than more, on the confidential disclosure requirements?

Mr. MARTIN. Less than would be required by those who file publicly, yes.

Senator COHEN. Have you ever had any problem with confidential statements being leaked to the press or disclosed? Has that been a problem?

Mr. MARTIN. No. There was a lawsuit about it, but, no, I haven't had any problem. Senator, I have had no one-even the public filers-I have had no one request a career employee's public filings. They only request political appointees.

So I think there is no interest in reviewing the confidential reports.

Senator COHEN. Then why is there a reluctance, I am told there is, on the part of those people who would be at the mid-level of employment or advisory status to comply with these disclosure requirements? Why is that if they are going to remain confidential? Mr. MARTIN. I am sorry, Senator?

Senator COHEN. I am told there has been a reluctance on the part of some who would either operate in an advisory capacity or some advisory position-a reluctance to file these disclosure requirements, even though they would remain confidential.

The first question: Has there been a problem with a loss of that confidentiality? You say no?

Mr. MARTIN. I am not aware of any.

Senator COHEN. So, why is there a reluctance to file the disclosure requirements?

Mr. MARTIN. I didn't know there was.

Senator COHEN. It doesn't present a great, burdensome problem, in your judgment?

Mr. MARTIN. To file a confidential statement in its abbreviated form? No, it does not.

And my view is if you required those people who sit on boards and technical people who are not full-time employees, to have them file what the people who file publicly, I think you would have a loss of their services. I think they would not file.

Senator COHEN. Have you had any indication that would be the case?

Mr. MARTIN. I have from the agencies and departments. I have, indeed. That was the problem in the hiatus between the 1983 decision of the Department of Justice and the 1984 decision. That was when we first requested a new Executive order requiring that filing. That was the complaint that the departments and agencies came back to me with.

Senator COHEN. So the confidentiality is not a problem. They just don't want to file the form; because they don't want the burden of filing it?

Mr. MARTIN. They don't want the burden of filing what would be required of public filers.

Senator COHEN. But it has nothing to do with the confidentiality or lack of it?

Mr. MARTIN. I don't think it does.

Senator COHEN. I will tell you one of the problems we have-at least that I have-in terms of your struggle to interpret the distinction between appearances, even though the letter of the Executive order is quite clear.

We now have a similar problem with the Department of Justice. We passed a law called the Competition in Contracting Act, and the President signed it into law. And then, the Department of Justice said, "We don't think that a particular provision of the act is constitutional, and we are sending out a memo to all of our agencies dealing with contractors, telling them not to pay any attention to it."

That, to me, is one of the most flagrant displays of arrogance I can think of. If you don't like the law, don't sign it. If you don't

think it is constitutional, don't sign it. But don't pass a law and give it the stamp of approval by the President, and then say that these provisions are constitutionally violative. To me, it really fits into a pattern of what we are seeing. If we don't like it, just don't obey it. If we don't like it, come up with a different rationale.

What you have got to do, it seems to me, if you have a system of laws, is either pass the law or reject the law; either enforce it or you are going to violate it.

But we can't have, I think, these individual ad hoc interpretations of what Congress has done or hasn't done because it does, in fact, create a morass of difficulties for us, as well as for you.

I have more questions I would like to ask you, but I am going to defer for the moment to Senator Levin so he may pose any questions he might have.

Senator LEVIN. Thank you, Mr. Chairman.

I am very much troubled by the way in which you have not applied the Executive order. I think you have given it an interpretation which nobody else in Government has given it, and thereby taken the law into your own hands and created a double standard-some employees of the executive branch vis-a-vis other employees who are governed by the Merit Systems Protection Board rulings. I am deeply troubled by it.

I think that your interpretation has created a real serious problem for morale, and has created a problem in terms of the credibility of our ethical standards. We now have two sets of standards. We have the opinions of the Merit Systems Protection Board, which I gather you are familiar with, which say if you create the appearance of a conflict of interest you are violating the law. That is what the law says.

You are saying that if you create the appearance of a conflict of interest you are not violating the law.

You have not sought to change the law. You have not asked for a change in the Executive order. You are taking that under review. You are studying that. You may do it this fall, or you will do it this fall-whatever your intentions are. But you haven't done it yet.

In the meantime, the Executive order, I think, is the law, not you.

Frankly, I am very much troubled by your taking the law into your own hands, which is what I think you have done, thereby creating a double standard for different employees in the executive branch; how they are being treated if it is a HUD employee compared to how they would be treated if they are a HUD Assistant Secretary.

Have you talked to Fielding about your request for the amendment of the Executive order?

Mr. MARTIN. In general, yes, I have discussed that, not in detail. Senator LEVIN. Do you have commitments from him to recommend changes in the Executive order?

Mr. MARTIN. I do not.

Senator LEVIN. You told him you are going to be recommending changes?

Mr. MARTIN. I said I am going to review it, and I would like to change it.

Senator LEVIN. Have you told them how?