Honorable William S. Cohen March 28, 1985 Page 6 already started while the DAEO is conducting his or her review in order to expedite the whole procedure. Then, if the Director of OGE is (b) satisfied that there is no unresolved conflict, the Director shall sign the report and date the approval. The Director shall submit the report with a letter to the Senate Committee involved expressing the Director's opinion that on the basis of information contained in the report the nominee is in compliance with applicable laws and regulations." 5 CFR § 734.604(c)(3). If the Director of the OGE has found possible violations of standards Yes under certain circumstances. Those circumstances would be where such information would enable the Senate confirmation committee members to arrive at a more informed judgment in assessing the nominee's compliance in fact with all applicable laws and regulations concerning conflicts of interest. This, of course, would include the Standards of Conduct where a nominee was already subject to those regulations even before confirmation by reason of holding another position in the Government. (4) Under what circumstances do you believe that the Director of the OGE should issue public statements on ethical matters or investigations involving Executive Branch officials? As I stated on a prior occasion to this Subcommittee (see pages 12 & 13 of the February 24, 1983 Hearing on S.461, S. Hrg. 98-35), I believe that a public statement by OGE is not appropriate to announce an allegation or finding Honorable William S. Cohen Page 7 of an ethical violation in most instances. Since OGE's primary mission is to prevent conflicts of interest and to bring executive branch personnel into compliance, the regular issuance of public statements by OGE would be counter-productive to many confidential negotiations, would reduce the amount of private information that is voluntarily supplied to it, and would discourage a large number of persons from seeking OGE's advice on potential conflicts of interest. However, I also believe that in exceptional cases OGE should issue a public statement if the Office's views were either being misinterpreted or ignored. To use the same hypothetical that I used with Senator Cohen in the February 29, 1983 OGE re-authorization hearing, I feel that the Director of OGE should issue a public statement if his or her recommendation to bring a high-level official into compliance with the conflict of interest statutes was being disregarded. (5) During your tenure at OGE, did any issues arise concerning the legal basis for the confidential financial disclosure system? What was your position on the legal authority of agencies to administer and enforce this system? Yes. This issue has a long and complicated history. Suffice it to say that the Office of Legal Counsel in the Department of Justice, which has the responsibility to approve the legality of all Executive Orders for the executive branch, opined that the confidential financial disclosure system established by Part IV of Executive Order 11222 and 5 CFR § 735.401 et seq. was entirely superseded by Section 207 (c) of the Ethics in Government Act of 1978. Taking this unwavering view of the Department of Justice into account, I believed that Honorable William S. Cohen Page 8 the only practical solution to this problem was to obtain a new Executive Order under Section 207(a) of the Ethics in Government Act or failing that, to seek new legislation. I hope that these responses to your questions will be of some assistance to you and your Subcommittee for the April 2, 1985 Oversight hearing. Sincerely, David Ratt David R. Scott United States of America Office of Government Ethics Office of Personnel Management JAN 28 1980 Honorable Strom Thurmond United States Senate Dear Senator Thurmond: Pursuant to your request, enclosed please find the staff working papers prepared by Office of Government Ethics attorneys regarding the report of the Independent Counsel on Edwin Meese III. I am providing this for your review in order that you may carry out your responsibilities regarding the nomination of Edwin Meese III to be Attorney General. This document was prepared solely at my request and direction. I instructed Mr. Davis and Ms. Feathers to make a thorough review of all allegations so that I might carry out my responsibilities under the Ethics in Government Act. Following the preparation of this working paper, my staff and I engaged in a robust, open and free exchange of the conclusions contained in this paper. This open exchange in the preparation of papers such as this, and in subsequent discussions, is an essential part of the fair and proper functioning of this Office. The working papers, therefore, are confidential and I am most reluctant to make a general release of them. Would you please, therefore, limit access to this working paper such that your committee can accomplish its responsibilities. This working paper obviously does not represent the final decision-making act of the office, nor does it represent the final conclusions reached by the authors. The conclusions reached by Mr. Davis and Ms. Feathers were discussed at length over a number of days with me and my Chief Counsel, Donald Campbell. After very frank and open discussions, I concluded, any my staff agreed, that no conflicts of interest existed and that only one of the allegations rose to the level of a violation of the standards of conduct. That one violation involved what we term an "appearance problem" involving the loan arranged by John R. McKean for Mr. Meese and the subsequent participation by Mr. Meese in the appointment of Mr. McKean to a full-term position on the Board of Governors of the Postal Service. The standards of conduct for the Executive Office of the President, which are aspirational in nature, at '3 C.F.R. S100.735-4 provide that employees shall avoid any action which might result in, or create the appearance of, losing complete independence or impartiality. The fact that Mr. McKean arranged a loan for Mr. Meese on two separate occasions and that Mr. Meese was one of four persons who approved Mr. McKean for an executive branch appointment, created the appearances which the standards of conduct caution against. Although an appearance problem was created by this set of facts, it was incumbent upon me to look behind the appearance to determine if there was any substance to the appearance. Based on the facts as developed, I satisfied myself that this was an appearance problem only, that the loans in question were armslength transactions, and that there existed credible explanations for the actions of both Mr. McKean and Mr. Meese independent of their financial relationships. Sincerely, Danch Mart David H. Martin Enclosure Excerpt From Testimony of David H. Martin, Esq., The Chairman. Thank you. Now Mr. Martin, do you have a statement? You understand what this hearing is all about? Mr. Martin. Yes. I do, Senator. I have a brief- The Chairman. And you have been requested to come and testify here. And do you have a statement you would like to present to the Committee? Mr. Martin. I have a brief statement, some notes that I put together, that I would, Senator. The Chairman. All right. You may proceed. Mr. Martin. Thank you. I would like to take this opportunity to explain to you what we do in the Office Of Government Ethics, when confronted with what we call an appearance problem. As you know, there is a rule in the Executive Branch regarding appearances, whose coverage is very broad. It provides that an employee should avoid any actions which might result in, or create the appearance of a number of things, and let's call them an impropriety, for now. Might result in or create the appearance. This rule is aspirational in nature. That is, we all try to avoid that, creating an appearance, but as we know in the public sector, that is often difficult to do. Our attitude is, when there is an appearance problem, that the persons involved have done no wrong, have committed no improprieties, and are presumed to have acted ethically. It is an appearance only. However, the job of the Agency ethics official, and those of my staff, is to determine whether or not there is any substance or reality to the appearance. If there is not, there has been no violation of the standards of conduct, except the broad-based rule, which I read to you, which cautions against creating an appearance. We should all, in the public sector, strive to avoid appearances of impropriety. |