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encouraged to get the city council to enact an equal housing opportunity ordinance. If this administration believes the employees should be doing this, the next administration can ask them to seek repeal of the equal housing laws; could it not?

Mr. COXNERY. Yes, we believe so. Mr. AUTRY. You are asked to support beautification endeavors to provide for flower and grass seed. I'm not sure what that means; I suppose individual managers would have to decide for themselves. What is the status of this draft now? The subcommittee is not certain.

Mr. CONNERY. We have been asked by the Internal Revenue Service as an organization to comment on these provisions that you refer to and we submitted our comments, as memory serves me, in the latter part of July. As to what the particular status of this proposed amendment to the manual is at this time, I have no idea. I do not know what it is now. However, I do want to emphasize that we are for merit within the Federal Establishment, but we are very concerned, as you express your concern here, by the obvious thrust of these particular proposals in manual form.

For example, I think the chapter, the revised chapter to which you referred, as I remember, refers to making one's self available to teach dropouts at night. Well, we, in the Internal Revenue Service, we represent just thousands, thousands of highly skilled enforcement officers. And believe you me, our nights are filled with study of our cases that we are working on, doing research, relative to tax issues on our cases and I think it is quite easily discerned what could happen with the enactment of this particular manual. For example, it has been our experience that where this sort of encouragement, so to speak, is given, that those who do not sign up for it become very discouraged when promotions are announced down the road. Mr. AUTRY. Thank you.

On page 6 of your statement you mention the Escobedo and Miranda decisions, and you also mention the lack of any right to counsel for the Internal Revenue Service employees. I will ask, in fact, if Internal Revenue Service employees are not two steps removed from the standards set by the Supreme Court in Escobedo and Mirandathat is, defendants in criminal cases are required to be appraised of their rights, to be taken before a magistrate and told that they may have an attorney. If an employee asks for an attorney, then it is completely within the supervisor's discretion that you can have an attorney; is that

Mr. CONNERY. I refer that to counsel. Mr. Graves. That is essentially correct, Mr. Autry. As a matter of fact, when NAIRE was negotiating over that year-long, rather tortuous period with IRS attempting to obtain an administrativecreated right to counsel, that issue of notice and appraisal of rights tas another one that was swept under the rug when the final decision was made, or I would say when the IRS finally implemented the decision that it had already agreed to in principle and that was left ungranted. There is no guaranteed right of notice and certainly no right of the substantive counsel that you are speaking about.

Mr. AUTRY. Mr. O'Rourke of the NAIRE 12th district wrote the subcommittee concerning financial disclosure and said that, coupled with other programs that had been foisted on employees in one guise



or another in the last few years, it accounts for the high turnover in Federal agencies. He stated that the morale of the Federal employees has never been lower. He said that the current invasion of privacy accounts in part for the lowering of morale which has led to 33percent turnover. Would you agree with his opinion?

Mr. CONNERY. We agree with that, Mr. Autry. I think the Internal Revenue personnel officials will inform you that the turnover hes hit an all-time high this year. And this, I might emphasize, is in areas and in skills that are very difficult to replace. It takes many years to replace a highly skilled investigator capable of working with our complex tax cases.

Mr. AUTRY. You do feel, then, that morale is lower and this is substantiated by the high turnover this year?

Mr. CONNERY. I most definitely do, sir. As a matter of fact, these people are completely frustrated by their inability to come to grips with their problems with the agency as a matter of communication. You cannot--you have no means under the present setup to even know what the decisions are —what decisions are in the mill. And the only right or grace that is afforded you is to come in and consult, so-called with the managers after the decision has been made, you see, as Mr. O'Rourke points out. And I happen to be very well acquainted with him and I know that is one of the problems that he is referring to.

Another thing that Mr. O'Rourke was referring to that you touched on, I believe, is dealt with in your section 1(k) where the bill very wisely provides for the presence of counsel or other person of the individual's choice in these interrogations that you referred to in my statement.

Now, the reason that that is so very important to us is that mans of the Government employees cannot afford even the reasonable stand ard bar association fees to have an attorney present, a private attorney present during what may be days of questioning, whether he could very easily

because I know of an instance in which an employee had an attorney present during 3 or 4 days of this interrogation and wound up with a $1,100 bill that he could not quite match financially. And many of our members in NAIRE are attorneys that are working in the service and these people are familiar with the various Treasury personnel manuals and regulations and could be of vast assistance to these individuals when they are being interrogated by these members of the inspection service.

Now, this is, as I mentioned in my statement, is particularly apt, relative to these noncriminal matters, and at the present time under the policy statements issued by the Commission of Internal Revenue we are not afforded this right. We do have the right-he is granted these rights in substance, relative to criminal, and suspected criminal matters, but not otherwise.

Mr. AUTRY. And though it may start out as a supervisory matter, it could become a criminal matter.

Mr. CONNERY. A very good point. That is exactly right.

Senator Ervix. In the previous hearing we had our attention called to a regulation of the Internal Revenue Service which vested power in the inspector to determine whether a man should have a lawyer or not depending upon the likelihood of a criminal charge arising. I practiced law for years and when a person came to me and asked the

question of whether a certain course of conduct was legal or criminal, it often took days of reading the statutes and decisions of the court for me to give a legal opinion of that character. Now, how can a Federal employee who is not an expert lawyer, or even if he is an expert lawyer, called upon to explain something to the inspector, possibly know whether or not he is entitled to counsel or whether there is a likelihood of criminal prosecution or criminal charge originating out of the investigation? All the evidence is in the hands of the 8ccusers.

Mr. GRAVES. The answer is very short, Senator. It is "No, he cannot," and this makes it all the more treacherous an arrangement.

Senator ERVIN. The ultimate result of that regulation, it seems to me, could be designed to deny a man of the fundamental right to counsel.

Mr. GRAVES. It can and is, we have no doubt about it. The inspector to whom the discretion is granted by this regulation to which you adverted, is in no way competent to make the determination that he is supposed to make. Furthermore, even if he could make it there are no clear guidelines or precise standards laid down in the regulations. That is the thing it refuses to do.

Senator Ervin. The man might well be denied, as a result of the investigation, the right to earn in the future a livelihood for himself and his family and be denied the right of counsel in the investigation that could lead to such a result. Mr. GRAVES. It can and does, no doubt about that. Senator Ervin. It has a harsh result, it seems to me, of allowing one who is in an adversary position to determine whether the accused being interrogated, is going to be allowed counsel.

Mr. GRAVES. That is one of the ironies of the second-class citizenship and status of the Federal employee. Only if you are suspected of being a criminal do you enjoy the constitutional right of counsel. Senator ERVIN. Yes, and even aside from the issue of criminality the person may need the benefit of counsel to protect his right to the capacity to earn a livelihood. That is just as important to him as the right to counsel is to the person charged with a crime, justly or unjustly.

Mr. ĞRAVES. We think so. We think this discriminatory treatment should cease and that is one of the major impacts of the bill.

Senator ERVIN. I cannot dream of worse tyranny than to allow one who is in an adversary position to determine whether one has the right to have counsel or not. That principle ought to be the right of the individual who is being interrogated.

Mr. Graves. The IRS, as a matter of fact, employees may prefer to be suspected of a crime rather than to be under investigation merely for the loss of a job. Senator ERVIN. In that case he could receive the benefit of a basic right of counsel that belongs to all Americans and ought to belong to them in all circumstances, even though he is not suspected of crime.

Mr. Graves. We concur wholeheartedly, Senator. Mr. Autry. Mr. Connery, do you know of any instances of conflict of interest that ever occurred in the Internal Revenue Service which hare been prevented or which would have been prevented by the financai disclosure provisions?

Mr. CONNERY. I am not aware of any, Mr. Autry, specifically. N

Mr. ATTRY. Do you know of any employees in the Internal Revenu Service who might have conflicts of interest who are going to revea them on a disclosure form?

Mr. CONXERY. I could think of that or would not imagine that woul be done, no. As a matter of fact, as I mentioned in my statemen actually, these statements of financial interest as distinguished fro your ordinary financial statement that you would give to banks an so forth, actually, they result in little more than a needless embarrass ment to employees, because they are forced to disclose the intimate de tails of their personal householding accounts to this supervisory chain starting with their immediate supervisor. I have been in the business so to speak-I am a senior Internal Revenue agent. I examine th returns of the largest corporations in the United States. I engag in supervised team audits of many agents over many months, examin ing the returns of large corporations, and I, in my experience, ca think of no good reason that these statements of financial interes would serve.

Mr. AUTRY. And it has created a morale problem?

Mr. CONNERY. Yes. As a matter of fact, as an example of this, has been reported to me and to other officials of this organization tha supervisors noting the status of these individuals financially, a these statements pass through the chain for their perusal, have sug gested to some of these people that they could retire since they ap peared to be at least comfortably fixed, and that has been used as a arm-twisting device in some of the cases that we have in our file: here.

Mr. AUTRY. We have 92 complaints contained in one letter from the State of Michigan. From the State of Ohio we have at least a many. These are from individual employees in the Internal Revenue Service who have filed complaints with the subcommittee. So I thin! you are right. Thank you, Mr. Chairman.

Senator Ervin. In your statement you alluded to the hazard of any employee making any complaint. We have pursued innumerable com plaints and we will not disclose the identity of any person who makes the complaint when he feels he might suffer some reprisal. But I am astounded by this questionnaire that I referred to before which says "List all assets"—or everything—“Make a search the second time. List all assets or everything you and your immediate family own on the effective date of this statement."

“Among all other things, all personal effects and household furniture." In other words, if a person complies with the directions contained here, he would have to count the number of socks and shoes, pocket handkerchiefs, every personal item-every single item of household furniture.

Mr. CONNERY. That is well taken, Senator, and in addition, this form provides for quarterly adjustment up and down. And there is a more insidious thing involved here, I feel, from my experience and it is this: That since these statements are required to be submitted under oath, it is very easy, very easy to omit inadvertently small items, since this is so all-inclusive, and you are at the mercy of the interrogator or

nvestigator as to whether or not you forgot $200 or $300 series E onds when you made this out. There is a very grave danger there, as think Mr. Graves alluded to previously.

Mr. BURSACH. When this first came out—we had an agent—when his first came out he was in the midst of an audit of a certain corporaion and he owned two shares of stock in that corporation. He asked what to do. It developed he had to sell his stock and take a loss in order to complete his audit of the company.

Senator Ervin. I have had a good deal of correspondence with officials who have initiated some of these questionnaires that have been circulated. I shall refer to one in particular called Minority group status questionnaire. I was assured that this was going to be confidential, and yet there was none with respect to those who did not fill it out and return it. They could identify them in two different ways: Their name and social security number. It is like the man who was absent from home and he got a telegram and it said, “Your mother-inlaw died, shall we cremate her or bury her?" He said, "Take no chances, cremate her and bury her."

So, to make sure, they have him give his social security number, yet they assured me this was perfectly voluntary.

I have a letter here from a long-time İnternal Revenue employee who did not fill out his. He said he thought it was voluntary. He was very trusting, as I was, when I was assured it was perfectly voluntary. For his failure to fill out the form he gets this, with another copy of it, with his name and social security number on it—and this was going to be kept confidential.

It reads as follows: During the latter part of May, 1966, a blue card questionnaire form was distributed which asked each employee to provide information about his race or Lational origin. The records indicate that a usable questionnaire card for you Las not been processed to date. This may be due to your not having previously ben furnished a card; the Data Center not receiving a card, if submitted; or the card, if received, could not be processed. With your cooperation a current and complete record can be established. Please complete the questionnaire card in privacy in accordance with the instructions printed thereon. Place the card in an Favelope and promptly return the sealed envelope to your time keeper. In the light of the old adage that a “request from a superior is equivalent to a command," do you think an employee of the Internal Revenue Service receiving this notice could possibly come to the conclusion that he was free to ignore the notice and still persist in refraining from filling out and returning the questionnaire ?

Mr. CONNERY. No, sir; we do not. We agree with you wholeheartedly.

As a matter of fact, these followups, the original request for this information came through on a white 4-by-8 card and the followups were indentifiable by virtue of being in blue.

The other point that you made there, we are completely in agreement with, because the information, and we have seen it, that circulated in IRS offices was directed down to the supervisory level only, making known the fact that these were voluntary. Now, the same distribution could have been made to employees generally, because many of the items have even less import, the distribution is across the board to


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