ductive where counseling is the only thing involved, let's say, in an appearance problem. That's what you want to accomplish. To label that as a violation, I think, is counterproductive and you'd get a headline.

Let's say you have an egregious act of an abusive office and you have an appearance problem. Let's say they occur on the same day, and if you label them both a violation, they would both be treated by the newspapers and by other organizations violation. And I don't care what what backfilling you might do to explain, gee, it was only an appearance problem, you're labeled with that.

Senator COHEN. The question I am asking you is whether the potential for an appearance problem can be greater than that of an actual conflict?

Mr. MARTIN. It could.

Senator COHEN. What you're doing is dismissing such action by saying, "It is only an appearance, don't call it a violation." What I'm saying is that it should be equated to the level of a violation. But we deal with it differently; we have a different remedy for a violation. But if you just say that the papers are going to print it as a violation of the law and that this man is condemned to damnation, unfortunately then you're changing the whole thrust of the law. I know, you've told me you had this opinion from the very day you took over; is that correct?

Mr. MARTIN. Not the very day but I had occasion to-someone requests that call something a violation and I didn't do it, and I guess I was excoriated for it.

Senator COHEN. I asked you once before how long you've held this view that the standard is aspirational. You said it was June 1983, when you were sworn in.

Mr. MARTIN. I don't know if it was that long but I've certainly had occasion to deal with these problems early on.

Senator COHEN. I have a copy now of an advisory letter which you wrote to an agency counsel on May 1, 1984, roughly a year after you took office.1 In that letter you advised that a Government employee should not work on a contract when his wife was working on a retainer basis for the contractor, and you ruled that the employee must recuse himself from the contract because the husband-wife relationship created "such a high degree of appearance of impropriety" that the Government employee should not participate on that project when his wife was working on retainer. Why was the appearance of impropriety important enough to require recusal in that case if the standard was only aspirational?

Mr. MARTIN. First of all, I didn't say they were only aspirational but I think they are prospective and they're forward looking and certainly you want to avoid appearances and that's exactly what that letter was about. But you didn't see me label it a violation. I think you'll find in all of my opinion letters that I don't call any of these appearance instances a violation. I call them maybe an intolerable appearance problem or an unacceptable appearance. Maybe we're talking about semantics, Senator, I'm not sure. I cer

1 See p. 155.

tainly think that prospective-looking advice is what the Office of Government Ethics is all about.

Senator COHEN. So in other words, if it's only an appearance problem, you don't want to cite it as a violation but you want to recommend action to take in light of the appearance.

Mr. MARTIN. Oh, I certainly think that action to take care of the appearance-I'll say again, if you're going to recommend counseling to somebody say, look, you have an appearance here; avoid it. I certainly would not-if someone called up and said, hey, did he violate the standards, I would say no. We counseled him to avoid this appearance.

Now-well, that's my answer.

Senator CоHEN. Go ahead.

Mr. MARTIN. Let's suppose you did an egregious act. Let's suppose somebody's counsel and I think that may be one of the cases that you have somebody's counsel goes ahead. He or she goes ahead and goes against the advice of his ethics counselor on an appearance problem and combines that with, let's say, an abusive office. Disciplinary action might be appropriate in that case.

Senator COHEN. Why, if there's no violation?

Mr. MARTIN. I'm not saying that there is or is not a violation. I'm saying disciplinary action might be appropriate.

Senator COHEN. But why?

Mr. MARTIN. Because of the egregious nature of the acts. In other words, if you're an actor

Senator COHEN. So if you have an appearance problem which doesn't amount to an egregious dimension, then you might not recommend any disciplinary action, but you would just let the appearance be described as being minor or insignificant.

Mr. MARTIN. I would describe it as an appearance problem.

Senator COHEN. The difficulty I have is that the language of the Executive order is pretty clear on its face, and it directs Federal employees to avoid not only actual conflicts of interest but also the appearance thereof. Then, the regulations implementing the Executive order state that employees "shall avoid any actions whether or not specifically prohibited which might result in or create the appearance of-". So the language is pretty clear.

Mr. MARTIN. Yes, it is. But it's very broad and it makes a very broad sweep. I guess maybe that's my problem.

Senator COHEN. Your predecessors had no difficulty in saying that's the law; that's what we're going to enforce.

Mr. MARTIN. You know, I've never read anything that my predecessors called a violation either.

Senator COHEN. Let me ask you-I assume that in reaching your decision about this metaphysical distinction we're drawing, that you consulted the case law; that you looked at cases.

Mr. MARTIN. I cited one case to you and Senator Levin, I think. Senator COHEN. I assume you read cases or your counsel advised you on existing case law.

Mr. MARTIN. I was aware of one case that I so cited to Senator Levin. I'm aware of others since then.

Senator COHEN. As a matter of fact, you would not put yourself in the position of making a statement that certainly is provocative-perhaps correct, but certainly provocative-in coming to this

conclusion unless it had been thoroughly researched by your law office; is that a fair statement?

Mr. MARTIN. I have consulted with my staff on it, yes.

Senator COHEN. I assume your staff has reviewed case law dealing with Federal employees caught in conflict-of-interest issues. Mr. MARTIN. That's correct.

Senator COHEN. Are you aware of any case law where the courts threw out disciplinary actions against employees because the workers had only created the appearance of conflict of interest?

Mr. MARTIN. I'm aware of no case in which the appearance was not accompanied by other egregious acts.

Senator COHEN. We've had a chance to review the relevant cases before the Federal courts and also the Merit Systems Protection Board, and they ruled that conduct resulting in the appearance of conflict of interest is adequate grounds for disciplinary action.

In 1982, the Merit Systems Protection Board upheld the suspension of a Government health care technician for 30 days because he cashed checks for an 84-year-old patient.1 The Government found that the employee did not in any way benefit from these particular transactions, but they ruled that the conduct created the appearance of using his public office for private gain, thus violating agency regulations. Now, under your interpretation, there would be no violation.

Mr. MARTIN. That's correct. I haven't read the case.

Senator COHEN. Well, that's just one case. We've got other cases involving the Bureau of Indian Affairs which I'll talk about with some witnesses later.2 But did you agree with the result in that case?

Mr. MARTIN. Well, I haven't read the case, Senator. I really can't tell you that I agree or disagree with it.

Senator COHEN. The only way you would disagree with it is if you use your interpretation that the appearance was not a violation.

Mr. MARTIN. Let me say, I would not label it up front a violation. If that matter were to come to me just on the facts you stated, I wouldn't label it a violation there. I might let the agency say, OK, you take whatever action you want to and I might advise them to. Senator COHEN. What guidance is there for people in this business if they are going to be held to a kind of jurisprudential interpretation that you want to give it. It might be minor; it might be OK. How do they function under this situation where they don't know whether their actions are OK or are not OK? We'll leave it to Mr. Martin to decide whether the action is so egregious that it amounts to an impropriety, an appearance problem but not a violation. How do they function in that kind of a world without some pretty hard and set guidelines?

Mr. MARTIN. Senator, I don't think I've changed much. There's always been a balancing in my office as my staff has been describing.

Let me tell you, for instance, there was a view shared by some that whatever happens regardless of the facts-if something came

1 See Burnett v. U.S. Soldiers' and Airmen's Home, 11 MSPB 413, 414 (1980) p. 160.

2 See Moffer v. Department of the Interior, 8 MSPB 134 (1981) p. 156.

up in the paper that created an appearance-regardless of the facts behind it, that's a violation. However, if upon looking at it you kind of find that there was only an appearance and you kind of backed out of it and said, well, we don't think it's a violation. I mean, that's one position that some take.

Senator COHEN. Why couldn't you say that it is a technical violation but we think that under the circumstances, no disciplinary action is warranted?

Mr. MARTIN. I resent that label, violation. I really do. We're dealing-as you know, Senator-in a very sensitive, complex area. I just think it's too convenient to have a shorthand label for the media and others to label people as violating the standards of conduct. I think it's counterproductive.

Senator COHEN. Don't you think you ought to change the Executive order rather than just interpreting it to conform with what you think?

Mr. MARTIN. As you mentioned, I am taking a hard look at the Executive order but this is my interpretation. But I don't think anybody in the agency, the people I've been in contact with or my staff, are confused about what the standards are.

Senator COHEN. Do you think that the absence of any clear-cut statement that the appearance of conflict of interest is a violation of the Executive order could generate some sloppy habits on the part of Federal employees?

Mr. MARTIN. I don't think so, no.

Senator COHEN. You know, there's a popular song out called The Heat is On. What happens when the heat is off in your experience in dealing with people? When the heat is off, they tend to relax a little bit; don't they?

Mr. MARTIN. I don't think the heat is off, Senator; I really don't. Senator COHEN. How have you advised the agency ethics officials to view the appearance problem?

Mr. MARTIN. I haven't done anything on that; I've changed nothing.

Senator COHEN. What do you advise them?

Mr. MARTIN. You mean now; presently? That if there's an appearance problem, that they need to look behind it to determine if there's anything to it, and use the balancing act that we've used from the commencement of the Office's existence.

Senator COHEN. Do you advise them that there's a violation or not a violation of the Executive order?

Mr. MARTIN. I don't talk in terms of violations.

Senator COHEN. Well, how do they function?

Mr. MARTIN. I don't think they function any differently from since I took the Office as Director.

Senator COHEN. Let me just tell you that some Federal employee unions have said they're going to raise your interpretation of the Executive order as a defense in disciplinary actions against Federal workers about the conduct that creates the appearance of impropriety. Do you think that defense is appropriate?

Mr. MARTIN. I think they should raise it but I don't know whether they'd be successful because most of the cases I've reviewed and looked at, the appearance is always accompanied by some egregious activity. So-

Senator COHEN. Do you think the signing of a check for an 84year-old man is an egregious activity?

Mr. MARTIN. No; I don't think that's egregious.

Senator COHEN. They suspended that individual for a period of 30 days. That's a pretty serious suspension; isn't it?

Mr. MARTIN. As I say, I think it's an unfortunate case if that's the case. But let me say this, which I've said before, that such a— not varied but such a-broad standard certainly is subject to abuse. Senator COHEN. Let me just say that I think your interpretation-without a clarification or a change coming from the President in the Executive order-has invited the Federal workers unions to raise this as a defense, and I think that is not going to be conducive in the future to reducing the appearance problems.

Mr. MARTIN. As I said, Senator, I am taking a hard look at this Executive order. This Executive order, if you know the history of it, was passed in 4 months in 1965. Like many of the things in the ethics area, I think it was not really-it was just bootstrapped on to past Executive orders dealing in the area.

I think the time has now come to take a hard look at it and see if we can sort out at least what I think has become the way we deal with these problems, to conform the Executive order to that system.

Senator COHEN. What you are contemplating, I take it, is that you want to recommend to the President to issue a new Executive order drawing the distinction between conflicts and the appearance of conflicts-

Mr. MARTIN. Yes; I do.

Senator COHEN [continuing]. And to delete the appearance of conflict as being a violation.

Mr. MARTIN. I am not necessarily sold on that.

Senator COHEN. But you are doing that?

Mr. MARTIN. I am going to do a thorough analysis when I get ample time. I already have in mind a person to do that for me, with me, and when I have completed that

Senator COHEN. Isn't that going to be your recommendation?

Mr. MARTIN. I am not sure it is. I am leaning that way, I must say that.

Senator COHEN. I don't understand this. On the one hand, you have had these pretty solid convictions for at least 1 year, perhaps 2 years.

Mr. MARTIN. And they remain that way.

Senator COHEN. It has been your policy for the 2 years. You have indicated you would like to have a new Executive order to clear away the ambiguity. I think it is fair to say that you are going to recommend that the new Executive order drop the appearance of conflict as being a violation of the Executive order itself.

Mr. MARTIN. I am certainly leaning that way, but I would want to have the person who does the analysis for me have a free hand in recommending to me how to deal with that and what is the best way. I would not want to commit myself to that right now, but certainly those are my views.

Senator COHEN. Mr. Martin, as you know, one of the duties of the Director is to review the public financial disclosure statements of Presidential nominees requiring confirmation by the Senate and to