[House Hearing, 106 Congress] [From the U.S. Government Publishing Office] REAUTHORIZATION OF THE OFFICE OF GOVERNMENT ETHICS ======================================================================= HEARING before the SUBCOMMITTEE ON THE CIVIL SERVICE of the COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTH CONGRESS FIRST SESSION __________ August 4, 1999 __________ Serial No. 106-134 __________ Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpo.gov/congress/house http://www.house.gov/reform ______ U.S. GOVERNMENT PRINTING OFFICE 65-930 CC WASHINGTON : 2000 COMMITTEE ON GOVERNMENT REFORM DAN BURTON, Indiana, Chairman BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California CONSTANCE A. MORELLA, Maryland TOM LANTOS, California CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania JOHN L. MICA, Florida PATSY T. MINK, Hawaii THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington, MARK E. SOUDER, Indiana DC JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio Carolina ROD R. BLAGOJEVICH, Illinois BOB BARR, Georgia DANNY K. DAVIS, Illinois DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts ASA HUTCHINSON, Arkansas JIM TURNER, Texas LEE TERRY, Nebraska THOMAS H. ALLEN, Maine JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois DOUG OSE, California ------ PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont HELEN CHENOWETH, Idaho (Independent) DAVID VITTER, Louisiana Kevin Binger, Staff Director Daniel R. Moll, Deputy Staff Director David A. Kass, Deputy Counsel and Parliamentarian Carla J. Martin, Chief Clerk Phil Schiliro, Minority Staff Director ------ Subcommittee on the Civil Service JOE SCARBOROUGH, Florida, Chairman ASA HUTCHINSON, Arkansas ELIJAH E. CUMMINGS, Maryland CONSTANCE A. MORELLA, Maryland ELEANOR HOLMES NORTON, Washington, JOHN L. MICA, Florida DC DAN MILLER, Florida THOMAS H. ALLEN, Maine Ex Officio DAN BURTON, Indiana HENRY A. WAXMAN, California George Nesterczuk, Staff Director Ned Lynch, Professional Staff Member John Cardarelli, Clerk Tania Shand, Minority Professional Staff Member C O N T E N T S ---------- Page Hearing held on August 4, 1999................................... 1 Statement of: Potts, Stephen D., Director, Office of Government Ethics, accompanied by Marilyn Glynn, General Counsel.............. 6 Walden, Gregory S., Patton Boggs LLP, former Associate Counsel to the President................................... 20 Letters, statements, et cetera, submitted for the record by: Potts, Stephen D., Director, Office of Government Ethics, prepared statement of...................................... 10 Scarborough, Hon. Joe, a Representative in Congress from the State of Florida, prepared statement of.................... 4 Walden, Gregory S., Patton Boggs LLP, former Associate Counsel to the President, prepared statement of............ 23 REAUTHORIZATION OF THE OFFICE OF GOVERNMENT ETHICS ---------- WEDNESDAY, AUGUST 4, 1999 House of Representatives, Subcommittee on the Civil Service, Committee on Government Reform, Washington, DC. The subcommittee met, pursuant to notice, at 10:10 a.m., in room 2247, Rayburn House Office Building, Hon. Joe Scarborough (chairman of the subcommittee) presiding. Present: Representatives Scarborough and Cummings. Staff present: George Nesterczuk, staff director; Ned Lynch, professional staff member; John Cardarelli, clerk; Garry Ewing, counsel; Jennifer Hemingway, legislative assistant/ scheduling; Tania Shand, minority professional staff member; and Earley Green, minority staff assistant. Mr. Scarborough. I'd like to call this hearing to order and welcome you all. I would certainly like to thank our witnesses for coming and speaking today. I apologize for the delay. Actually, I was walking down the hall and had on my card that this is in 2203. I stopped Mr. Cummings, our distinguished ranking member, and I dutifully told him he was going in the wrong direction so we enjoyed the first few minutes of John Mica's subcommittee hearing and then decided to come over here to the correct room. So I followed Mr. Cummings and will do so in the future, possibly even on issues like long-term care. I have more confidence in you this morning than myself. Again, thank you for coming. We're going to be conducting a hearing now to review the operations of the Office of Government Ethics in preparation for our legislation to reauthorize the agency. This Nation has always recognized that the character of our highest elected officials is vital to the success of our representative government. That goes for our appointed officials also. A periodic review of the works of the office established to enforce the ethical standards of Federal service permits us to assess our progress in complying with the intentions and the spirit of the ethics laws. The Office of Government Ethics, a small but very well respected agency, promulgates policies and ethical standards that are implemented by a network of more than 120 designated agency ethics officers. It also provides training and educational programs through more than 8,500 employees who conduct ethics training to provide guidance to employees throughout the government. Most of these employees work in agency counsels' offices and perform their ethical responsibilities as collateral duties related to other work. The Ethics in Government Act relies heavily upon financial disclosure requirements to guard against conflicts of interest. Senior officials are expected to disclose their assets and recuse themselves from decisions that might provide even an appearance of conflicts of interest. The act also restricts the work that government employees can perform after they leave office. As our witnesses will testify today, these conditions are meant to have a serious effect on government employment, particularly at the highest levels. It is not clear, however, that our ethics rules have produced more ethical government. Our current President pledged as a candidate that he would have ``the most ethical administration in history.'' When he entered office, he issued an Executive order tightening the post-employment restrictions on people who would serve in his administration. Our experience with this administration, however, forces us to question whether financial disclosure and post-employment restrictions are adequate to address problems associated with integrity in our public officials. The list of this administration's questionable practices is too long to ignore and they will go well beyond the use of the White House for improper campaign fund raising. Unfortunately, it is not clear that all of the administration's actions are prohibited by current law. As we continue reauthorizing the Office of Government Ethics, we should examine whether some of those practices warrant changes in the underlying laws that we have now. For example, the administration's Health Care Task Force included many ``special government employees.'' These people continued to work and receive compensation from private organizations that had substantial interests in the outcome of the task force's policy recommendations. Their activities raised much controversy concerning conflicts of interest. Then there were the so-called volunteers working in the White House, more than half of whom were actually on the payroll of the Democratic National Committee while working in the White House. Others worked at the White House while on the payroll of various special interest groups. Finally, we have the example of John Huang. This political fund-raiser received more than $700,000 from his former employer, the Lippo Group, before taking a position in the International Trade Administration at the Department of Commerce. Do large severance payments from former employers prior to government employment give the appearance of a conflict of interest or at least raise a specter of doubt? In addition to these issues, we should also consider whether the sanctions associated with violations of current law are adequate to deter and/or punish unethical conduct in office. The Office of Government Ethics currently refers criminal violations to the Department of Justice, which has primary responsibility for any prosecutions. Has this avenue of prosecution been adequate? These questions appear simple, but they arise because even the careful design of previous legislation did not address all of the potential areas of public concern. I do not anticipate a comprehensive review of the alleged improprieties, but I believe our reauthorization of this agency should at least address the concerns that we have developed from our recent experience. Obviously I think that makes all of us stronger whether we're talking about looking at a Republican administration or a Democratic administration, whether we're talking about this current administration or administrations in the future. Our witnesses today are Mr. Stephen D. Potts, the Director of the Office of Government Ethics. He is now serving his second 5-year term and that term will expire in June of next year. Our second witness today is Mr. Gregory S. Walden. Mr. Walden is currently counsel at the firm of Patton Boggs, but he was invited to serve as a witness today because of his role in overseeing Ethics in Government Act compliance as associate counsel to President Bush. He has since continued studies related to the Ethics in Government Act and published a book on the topic entitled ``Our Best Behavior.'' And with that, I would like to turn it over to Mr. Cummings for any comments he may have. [The prepared statement of Hon. Joe Scarborough follows:] [GRAPHIC] [TIFF OMITTED] T5930.001 [GRAPHIC] [TIFF OMITTED] T5930.002 Mr. Cummings. Mr. Chairman, I appreciate your convening this hearing on the Office of Government Ethics. It's been a number of years since the subcommittee has held an oversight hearing on OGE and it is prudent that we establish a record of how the agency is operating. OGE's mission is not only to prevent and resolve conflicts of interest and to foster high ethical standards for Federal employees but also to strengthen the public's confidence that the government's business is conducted with impartialialty and integrity. OGE does this by reviewing and certifying the financial disclosure forms filed by Presidential nominees requiring Senate confirmation, serving as a primary source of advice, and counseling on conduct and financial disclosure issues and by providing information on and promoting understanding of ethical standards and executive agencies. OGE and its staff are well regarded by Federal agencies with whom they do business. Mr. Gregory Walden, who will be testifying before us shortly, stated in his prepared remarks that OGE has played an essential and significant role in fostering the public's trust in the integrity of government. OGE has performed exceptionally well and deserves to be reauthorized, and I am sure that the rest of the day's testimony will prove that to be the case. There is no question that Mr. Stephen Potts has done an outstanding job along with his staff, and we thank you for your service. I look forward to hearing from all of today's witnesses regarding OGE's reauthorization. Thank you. Mr. Scarborough. If I could ask our witnesses to stand so we can administer the oath. [Witnesses sworn.] Mr. Scarborough. Thank you. Be seated. Why don't we go ahead and start with Director Potts. STATEMENT OF STEPHEN D. POTTS, DIRECTOR, OFFICE OF GOVERNMENT ETHICS, ACCOMPANIED BY MARILYN GLYNN, GENERAL COUNSEL Mr. Potts. Thank you very much, Mr. Scarborough. Mr. Chairman and members of the subcommittee, first of all let me just acknowledge the presence of Mr. Greg Walden. He's been a colleague over the years. We've continued to enjoy working with him from time to time and have great respect for what knowledge and information he has brought to the ethics community. We're very happy that even though he's in the private sector, that he continues to do so. I want to thank you for the opportunity to appear today to discuss the reauthorization of the Office of Government Ethics. And I will keep my remarks brief. And I request the subcommittee to include my formal statement as part of the hearing record. Mr. Scarborough. Without objection, so ordered. Mr. Potts. With me today is OGE's General Counsel, Marilyn Glynn. The 3 years since our last reauthorization have passed quickly and for OGE we believe very productively. I'd like to take this opportunity to review briefly some of our accomplishments during these last 3 years. Over 2 years ago to enhance our program capabilities, we reorganized our Office of Education and created a new Office of Agency Programs with three separate divisions. One was education and program services. Two was financial disclosure and the third was program review. This reorganization committed more resources to OGE's education and training functions. OGE now provides more direct service to agencies through our desk officer program and we have developed employee training materials such as a computer-based ethics game, pamphlets, and new video training tapes. We've also provided new courses designed for the education of ethics officials, including conference style workshops for ethics officials out in the various regions of the United States. In addition, our program reviews have focused not only on determining if reviewed agencies were maintaining their programs properly but also on finding and sharing best practices of agencies in carrying out the various elements of their programs which we could then in turn share with the other agencies of the Federal Government. Over the past 3 years to implement the ethics program and serve the ethics community, OGE has made more effective use of technological advances. We've developed a website for easy dissemination of information to the ethics program community, to employees and to the public. In addition, we've developed a CD-Rom containing all of the basic resource and reference material important to the program. We've developed software that is used in the completion of the confidential financial disclosure forms filed by over 250,000 employees in the executive branch, and we're in the process of developing the software necessary for the completion of the public financial disclosure reports, which of course are filed by a far smaller universe of filers. Recently as the United States and other countries and organizations have focused on the effect of corruption on governments and economies throughout the world, we have been called upon by U.S. foreign policy agencies to provide technical assistance regarding the elements of a corruption prevention program as one part of the government's overall anticorruption efforts. In response to requests from these agencies and also from foreign countries and multinational organizations for information about our program, we have met with more than 550 visitors from over 55 countries in our offices. And we've also as personnel time permitted and usually with the financial support of U.S. foreign policy entities, participated in anticorruption programs held abroad. Over the past 3 years, OGE has continued to devote a substantial amount of our resources to our ongoing programs. We've continued to review and certify the financial disclosure forms filed by Presidential nominees requiring Senate confirmation and serve as the primary authority on conduct and financial disclosure issues. During these past 3 years, we handled 724 nominee forms and approximately 3,000 annual and termination financial reports. In addition, we continue to provide interpretive guidance on the criminal conflict of interest statutes and to review and update our regulations for the standards of conduct. As you know, earlier this year our office sent draft legislation requesting an 8-year reauthorization. We hope that you'll favorably consider our proposal and our desire that future authorizations not expire during the first or fourth years of a Presidential term. Our programmatic responsibilities in the areas of nominee financial disclosure reviews and transition post employment advice places a greater strain on our resources during those particular years, the first and fourth years of a Presidential term. Consequently, we believe it's more helpful for us and for Congress for our reauthorization review to occur outside those 2 years. Now, it's true that a 3 or 4-year period of authorization would avoid the problematic first and fourth years of a Presidential administration, but we believe there are good reasons to authorize OGE for 7 or 8 years. First, our track record over the past 20 years of existence. I think that we have shown during those 20 years that this organization has operated in a nonpartisan and a very professional and effective way. So I think that's one reason to reauthorize this office for 7 or 8 years. Second, I think this is a very fundamental program. This is not some program that should run out. There are a lot of programs that sort of have their day and accomplish their mission. Then you move on and maybe they ought to be sunsetted. But this is something that is very fundamental because the fundamental tenet of our program is public service is a public trust. That is something that is permanent and should be permanent as part of the government. And so we want to make sure that this office is around to try to be the source for our implementing the strategy of public service being a public trust. The third is the size and care that we've taken with our budget. First of all, as to size, I mean, we are a tiny agency right now. We have about 80 employees and we have a total budget of about $9 million. So in terms of size and budget contrasted to the other agencies and departments, we are tiny. I think that's another reason why we should be given a longer authorization period in light of our mission and small budget. And finally, the resources that both our Office and the Congress must expend in a reauthorization process. It would be one thing if the only opportunity for the Congress to review our activities would be the reauthorization process. Then I might say that yes, it should be more frequent than just what we're requesting to have a reauthorization for 7 or 8 years. But of course as we've said, any time that this committee or any Member here or in the Senate wants to ask us questions and wants us to come up and explain our program and talk about it in detail, we are always available. We welcome that interest in our program because we are always trying to make the program better and to improve it. And in addition to that, as you noted, Mr. Scarborough, my term ends next year, and our experience is that in connection with the consideration of a new nominee, the Senate usually conducts a review of our agency's program and gets into it in some detail in that context. So I would anticipate when a new nominee to be director of the Office is being considered next year, at least on the Senate side, there will be a consideration in great detail of our program. And then finally, we have of course the responsibility to report under the Government Performance and Results Act exactly what results we have had and what our performance has been. I think there is now a mechanism in place that really hasn't been to consider exactly how we are doing and for this committee to stay on top of really what's going on at OGE. So for all of these reasons, I want to urge you to authorize the agency for either 7 or 8 years. Now, in closing, let me just shift gears briefly. Your letter of invitation posed a number of questions and I've addressed those in my written statement. If you'd like further elaboration or clarification, of course I'll do my best to respond. I'd be happy to answer any other questions that you have about OGE, our programs, or about our reauthorization legislation. I want to thank you for the opportunity to appear today. [The prepared statement of Mr. Potts follows:] [GRAPHIC] [TIFF OMITTED] T5930.003 [GRAPHIC] [TIFF OMITTED] T5930.004 [GRAPHIC] [TIFF OMITTED] T5930.005 [GRAPHIC] [TIFF OMITTED] T5930.006 [GRAPHIC] [TIFF OMITTED] T5930.007 [GRAPHIC] [TIFF OMITTED] T5930.008 [GRAPHIC] [TIFF OMITTED] T5930.009 [GRAPHIC] [TIFF OMITTED] T5930.010 [GRAPHIC] [TIFF OMITTED] T5930.011 [GRAPHIC] [TIFF OMITTED] T5930.012 Mr. Scarborough. Thank you, Mr. Potts. Mr. Walden. STATEMENT OF GREGORY S. WALDEN, PATTON BOGGS LLP, FORMER ASSOCIATE COUNSEL TO THE PRESIDENT Mr. Walden. Thank you, Mr. Chairman, Mr. Cummings. I'm pleased to testify today in support of OGE's reauthorization. This is my fourth visit before this committee and I'm honored by your invitation as well by Mr. Potts' kind remarks. In its 20 years of existence with just under 100 employees OGE has performed an essential role within the executive branch in fostering the public's confidence and trust in the integrity of government. On the whole OGE has performed exceptionally well and deserves to be reauthorized. Because of its solid performance, OGE ought to have a permanent place in the executive branch. A single executive agency independent of all others is essential to fulfill the cardinal objectives of any system of government ethics: Uniformity, consistency, reasonableness, fairness and objectivity. At this point in OGE's history, the question before the Congress should not be whether to reauthorize OGE but whether OGE should be charged with any new or different authority. I do not have a strong opinion as to the length of reauthorization, although I agree with Director Potts that a reauthorization should not expire the first or last year of any administration. In my opinion, it's a legislative judgment, to be made by those who oversee OGE, whether a regular authorization is necessary to provide the best opportunity for needed ethics reform. There are a number of programs run by the executive branch that expire after a certain time and need to be reauthorized. Those are important programs but the reauthorization period provides Congress with an opportunity to tackle necessary reforms. Regardless of whether the reauthorization is for 4 years or for 8, Congress should conduct regular oversight and I would suggest perhaps a yearly oversight hearing. Congress should oversee OGE the way it would oversee any other executive agency. Regarding OGE's rulemaking authority, OGE needs to complete its rulemaking to implement and interpret section 209, the supplementation of salary statute, and in particular section 207 dealing with post-employment restrictions. Now, there is a consensus within the ethics community--perhaps not shared by Congress, that the post-employment restrictions matrix is excessive, it's complex, and it's uneven. But it's up to Congress to reform that statute. OGE cannot do it. What OGE can do and should do is issue interpretive guidelines because right now section 207 is a trap for the unwary. The matter is not made better but made worse in my opinion by President Clinton's Executive order, which is riddled with exemptions and loopholes, and is also more excessive than necessary and should be repealed by the next President. It would also behoove OGE to conduct a rulemaking proceeding regarding the use of legal defense funds. Now, this is a difficult subject and OGE has done a good job, in my opinion, in giving advice to legal defense fund trustees and government officials to date, but I believe it deserves a comprehensive review by Congress and perhaps legislation will be necessary. Members of Congress and staff also from time to time have set up a legal defense fund and perhaps there ought to be a single rule for all employees and officials. Regarding OGE's investigative authority, OGE has statutory authority right now to investigate allegations that an executive branch official has violated ethics standards, but OGE's authority is circumscribed. OGE is just one actor in a cast of government investigators and prosecutors. And OGE by rule has further limited its authority to conduct initial investigations that do not rise to the level of a crime, deferring to agency personnel. As a general matter, I think that's reasonable, but occasionally there will be benefits to the public as well as to the administration in having OGE conduct that initial investigation. Where directed by the President or requested by a member of the cabinet, and provided OGE is given necessary resources, OGE could conduct an investigation in lieu of an agency ethics or IG investigation. In any event, if the investigation remains within the agency under current policy and practice, an OGE official in my opinion should be assigned to participate in such investigation to the extent necessary to ensure its thoroughness, objectivity, and faithfulness to OGE's interpretation and guidance. Perhaps agency ethics officials and IGs should be required to notify the Director of OGE and the White House Counsel simultaneously upon the initiation of an ethics investigation involving any Presidential appointee. The President could then determine whether OGE should conduct the investigation or whether a more formal role of OGE is necessary or appropriate. Regarding OGE's audits or program reviews, I recommend that OGE rearrange its schedule of reviews to ensure that every cabinet department and the White House Counsel's office is reviewed in the second year of a new administration. With respect to training and education, I believe more attention should be placed on Presidential appointees, non-career SES officials and schedule C employees as well as employees in regional and field offices. My sense is that these two classes of employees, for different reasons, are most at risk of violating ethics standards. In my prepared statement, I recommend several changes to the ethics laws. I wish to highlight only one of these recommendations in my opening remarks. The term special government employee should be clarified to codify the functional test used by the Department of Justice and OGE. Simply put, an informal advisor who participates regularly in internal agency deliberations or who supervises or directs other Federal employees, even an informal advisor who does so without pay or without formal appointment, ought to be subject to the conflict of interest laws and financial disclosure standards to which the rest of the Federal work force is subject. Yet, the current uncertainty of the application of the ethics laws to informal advisors has resulted in a number of situations where Federal functions are being performed by persons with conflicting Federal interests. For instance, agency personnel offices may not be sufficiently sensitive to the simple matter in which contract consultants unwittingly become special government employees. In 1996 the House passed a revision of the SGE definition to codify the functional test. The Senate deleted the provision and the revision did not become law. I urge this Congress to clarify the SGE definition and to do so before the next President is inaugurated. Thank you very much for the opportunity to testify and I will be happy to answer any of your questions. [The prepared statement of Mr. Walden follows:] [GRAPHIC] [TIFF OMITTED] T5930.013 [GRAPHIC] [TIFF OMITTED] T5930.014 [GRAPHIC] [TIFF OMITTED] T5930.015 Mr. Scarborough. Thank you very much. Let's begin our questioning with you, Mr. Potts, and let me ask you this. Since we've just had a discussion on special government employees, let me ask you whether the White House--this White House or any past White Houses, if it was even relevant then, has come to you and asked you for assistance in determining whether a particular individual fits into this class of special government employees; in fact, if they ever asked you that question. Mr. Potts. First of all, let me say that we support the idea of the legislation. In fact we're one of the forces behind that legislation being offered previously that Mr. Walden referred to, to in effect codify in the law the elements that we consider as a matter of policy in deciding whether someone is a special Government employee, but I would also caution that I would strongly oppose the idea of that being thrown into the reauthorization legislation. We don't want to have that cluttering up the reauthorization. Yes, we have been consulted by, I would say, all White House counsel that have served during the almost 9 years that I've been director, and I say Counsel but that means someone in their office, about individual cases of whether someone is a special government employee, but I think the way that it's actually applied it's usually pretty clear as to who is and who is not a special Government employee if someone really is just willing to get the facts of what the particular arrangement is. So typically when we are presented with questions like that, it's more a question of just finding out factually exactly what is the person doing--are they working in a government office? Are they being supervised? And if they are, they're special Government employees and they're subject to all of the ethics rules. Mr. Scarborough. To help us with this definition, let's talk about a few people that have played an active role in the White House, again just for the purposes of definition and whether they were, should be, or would be a special government employee under past definition or the proposed new definition. Let's start with somebody like Paul Begala or Dick Morris, where you read these books already on the history of the Clinton administration through the first 6 years and you see the very important people. I remember reading ``New York Times'' and ``Washington Post'' articles especially in 1996 talking about almost daily meetings of everybody sort of hovering around in the Oval Office and Dick Morris and Paul Begala being at the center of that and obviously being at the center of what activities all these government employees would be doing in these agencies over the next year. And I'm certainly not sitting here saying that's inappropriate because every White House, at least in modern time, has had their own-- I guess I shouldn't say Dick Morris--everybody has had friends that have come in and those lines obviously get blurred. But let me ask first of all just for the record was Paul Begala or Dick Morris classified as a special Government employee? Mr. Potts. I don't know specifically and I don't recall ever being asked. I gather you don't recall our being asked and it wouldn't be necessary, of course, for us to be asked because we expect each department agency, including the White House, to administer its own program. We're there to consult. There is, particularly with the Counsel's office, a very active back and forth about a lot of issues. But we expect them to make those decisions and so we don't actually know in the cases that you cite. Mr. Scarborough. Mr. Walden, should they be? Under your definition--and again, let's get out of the specifics of this administration and say--let's say George W. Bush or Al Gore, the next President, and they have people like this in and out of their White House, or Bill Bradley. We don't want to offend anybody from New Jersey. Should people in that position be classified as a special Government employee? Mr. Walden. Yes. If the informal advisor is taking part regularly in internal agency deliberations, there really is no difference between that informal advisor and a White House staffer. I would distinguish the meetings that all Presidents have had with the head of the Chamber of Commerce or the head of the AFL-CIO, or a good counselor and friend, or the chairman of the RNC or the DNC, in one-on-one meetings with the President or another White House official. The President should be free to continue to get advice from anybody at any time but where that advisor is brought into the government and sits around the table and helps the agency, the White House, come to a decision, he is a de facto government employee. I believe that conduct meets the functional test and I would say that based on public reports, if they're true, Paul Begala and Dick Morris crossed the line and were special Government employees. I don't want to fault Paul Begala or Dick Morris or Harry Thomason or even the White House office or certainly the OGE, but certainly within the Clinton White House there was management control of people coming in and making sure those people were judged yes or no and screened and required to file financial disclosure statements. Mr. Scarborough. Do you think your clarifying definition that you're proposing would help clean this up a little bit for the next administration? Mr. Walden. I think it would, but passing the law still requires people to administer the law and better management of the White House and some agencies would be in order. Clarifying the definition would make it very clear that even without a formal appointment, you can run afoul; you become a special Government employee. Mr. Potts. Let me say I agree with that and I think the passage of the law would help everyone in the government, including the White House, know exactly what the criteria are. They are out there but having it in a statute and clarifying that if a person is performing a Federal function and they are subject to supervision by someone that's clearly a Federal official, then they're a special Government employee. Those criteria would separate out the kind of people that Greg mentioned, like the president of the Chamber of Commerce or the president of a labor union or someone coming in. They clearly are not going to perform a Federal function nor are they subject to being supervised by someone in the Federal Government. Mr. Scarborough. I'm glad you clarified that because I think the supervisory role helps differentiate--I've heard some people say in the past they were a little concerned about this because let's say Mr. Cummings is President 10 years from now and he has a friend who's been a friend since he was 11 years old. Well, he should be able to talk to him every day and get advice from him so this definition in no way would stop somebody from leaning hard on a friend or even have a friend coming into the White House and talking and somebody that he could trust, but again supervisory issue is the key issue there? Mr. Potts. Right. Mr. Scarborough. We're going to have two votes. Why don't we go ahead and take a break and we'll go over and vote and then be back hopefully in the next 15, 20 minutes. Thank you. [Recess.] Mr. Scarborough. Mr. Cummings. Mr. Cummings. Mr. Walden, you talked about the special Government employees and I'm trying to go back to why we're here with regard to reauthorization. Mr. Potts' office didn't do anything wrong, did they, to your knowledge? Mr. Walden. To my knowledge I don't have any criticism with the advice OGE has given under the special Government employee concept. Mr. Cummings. You were talking about certain investigations and I was jotting down notes real quick. Do we--since we're talking about authorization, Mr. Potts, you know the investigations he was talking about that he felt you should be involved in. What were those, Mr. Walden? Remind me. Mr. Walden. I believe that going back to the allegations in, I believe 1994, involving the conduct between the Treasury Department and the White House, the Office of Government Ethics did look into the conduct of Treasury employees. I think it would have been more appropriate for the Office of Ethics to be asked to look at both the conduct of the Treasury Department employees and White House employees. With regard to the White House Travel Office, after the initial criticism of the firings of the Travel Office officials, the White House conducted a management review. It was not done by the White House Counsel's office. There were some people in the Counsel's office who were involved in those things. I think that a review by the Office of Government Ethics would have received a lot more credibility from the public than the White House management review received. And I also think with regard to Secretary Espy, the White House conducted a review of the allegations against Secretary Espy but that report contained no findings or conclusions. I believe that if the Office of Government Ethics had been asked to do such a review, we would have gotten a more thorough comprehensive report. Mr. Cummings. So you think the--you think with that report, Mr. Espy would have gone through the same things that he went through? Based on--this is sort of hindsight, I know. But I'm just curious. That Espy case is one which--it really bothers a lot of people because--and I'm just wondering, I mean, it seemed as if just from what I've read that if it had gotten-- that no matter what, it probably would have reached an independent counsel stage no matter what. That's from my reading as a lawyer, but I'm just wondering do you think it would have been a different result? Mr. Walden. I'm not sure and perhaps not, Mr. Cummings. We no longer have an independent counsel law, so that shouldn't happen in the future. My concern all along was having the public understand what the facts indicated, that Secretary Espy had violated the ethics laws. I was not as concerned as to whether there were violations of criminal law. I thought there were violations of ethics laws and that was somewhat muddled in the appointment of the independent counsel. If I were in the Department of Justice or an independent counsel, I might not have sought to indict Secretary Espy. I thought it would be sufficient that he forfeited his office because of violations of ethics laws. But that again was muddled because of I think an inadequate White House Counsel's report. Mr. Cummings. With the doing away with the Office of Independent Counsel, does that put, you think, more of a burden on the Ethics Office in any way? Mr. Walden. Not directly because the Ethics Office cannot conduct investigations of allegations of violations of criminal law. That's for the Department of Justice to do. Of course, inspectors general also can conduct preliminary investigations of criminal activity. I think that the vacuum left by the demise of the independent counsel law will be filled and should be filled by increased oversight by Congress as well as the Department of Justice, which would step in the shoes of independent counsel. Mr. Cummings. One of the things that you said is you think that the Ethics Office should come before the Congress with regard to oversight on a yearly basis; is that right? Mr. Walden. Yes. Mr. Cummings. And what should we be looking for? In other words, when they come before us, they come before us every year, if you were sitting here and you had a sheet, a list of things that you want to check on, what kind of things would you be looking for and why? Mr. Walden. I would ask the Office of Government Ethics how things are faring in the executive branch, whether the authorities they have are sufficient, whether the laws they interpret are unclear and deserve clarification. I might want to amplify my prepared remarks by saying that 20 years from now, I might not advocate a yearly oversight hearing but I think the ethics landscape still is unsettled. We have some new laws and until the Federal work force operates under an ethics system that's basically settled for a number of years, I think it would benefit Congress as well as OGE to have a regular exchange with Congress and yearly hearings once a year would fulfill that need. Mr. Cummings. The post-employment restrictions I think, section 207. Mr. Walden. Yes. Mr. Cummings. And you talked about the guidelines needed. In the State of Maryland, we had a situation where--I used to sit on the committee that dealt with ethics--we had a situation where the legislature for whatever reason just refused to make clear what the ethics laws were because there were all kinds of scenarios and so you had the loopholes, but clarification would have--could have cleared it up and so year after year people would come in, legislators would come in with various proposals and then we found--then we had some people who were convicted criminally of violations that were kind of serious and one of their defenses consistently was, well, it wasn't clear. And I say all that to say I take it you have a similar concern? Mr. Walden. Yes, I do. And if memory serves, one of the first prosecutions under the post-employment restrictions law involving a Reagan administration official was overturned on appeal because the court of appeals found that the statute was ambiguous or didn't clearly proscribe the conduct. I think that's post-employment restrictions. It might be lobbying. I don't know. If it was post-employment restrictions, it illustrates the concern that when an ethics law is not clear it can't be understood. If it's not understood, you cannot expect reasonable people to follow it. And the matrix of post- employment restrictions right now is way too complex. High level officials are subject to maybe six or seven different proscriptions. Each of them has different language and then if you're a lawyer, you're subject to your local bar rules, which are more onerous than the Federal law. Mr. Cummings. So now, Mr. Potts, if you have someone who questions what they are about to do, what happens? Do you give them an advisory opinion or something? Mr. Potts. We will. It can be just informal oral advice or an issue comes up that we expect to come up repeatedly and in addition if it's a question that probably is cross-cutting across various departments and agencies, we would issue a written informal advisory opinion. Those are published and also made known throughout the ethics community through what we call paeograms. These are communications to the ethics community that would describe the actions that we've taken or the opinions that we've issued. Mr. Cummings. Now, do you agree with Mr. Walden on this clarification of 207? I think he mentioned another section too, 209? Mr. Walden. The clarification most needed I think is the special Government employee section, which is section 202. Section 209, supplementation of salary, I think just needs the interpretation guidance, but section 207 is definitely post- employment restrictions. Mr. Cummings. Do you agree with that? Mr. Potts. We do agree with the 202. In other words, we think and supported previously legislation to clarify and put those criteria in the statute. So we would support that for sure. On the 209, the supplementation of salary provision, I don't see any need for any legislation on that right now. We made an attempt probably 5 years ago to clarify and simplify 207, which is the post-employment. It is extremely complicated and for a person who really sincerely wants to make sure that he or she conforms to that law; it is not easy to do it because it's really tricky. And so it requires constant professional advice about what you can and can't do, especially if you've been in the procurement area. In any event, we made a proposal that was presented and the result was that some legislation was passed that made it a little more complicated rather than simplifying it. We felt like we got our fingers burned a little bit. We felt in that instance our attempt to do good ended up doing some bad. I would strongly say if that is an area where the Congress would get involved, it really could make a difference. I might ask for my general counsel to add some comments because she's been very much involved in our consideration of what might be done to really improve 207 insofar as these post-employment restrictions are concerned. Ms. Glynn. I just wanted to make a couple of---- Mr. Scarborough. If we could ask you to just state your name for the record. Ms. Glynn. My name is Marilyn Glynn. I'm the General Counsel at the Office of Government Ethics. We agree that 18 U.S.C. 207, the rules on post-employment, are terribly complex. What OGE has tried to do is to simplify them for the average employee who has to comply with them. We've done a couple of education and training ventures. We've prepared a video that can be shown to agency employees describing that puts the post- employment rules in a setting very much like this. It's a congressional hearing. Folks like yourselves are peppering some poor former Government employee with questions about his post- employment activities. The video is an attempt to engender sympathy for the poor employee who can't possibly understand what this all about. We've also created pamphlets and educational materials that try to describe these rules in simple fashion. These materials urge employees to come and get advice in particular situations. In connection with the 209 rule to which Mr. Walden made reference, we do have pending for review and have for some time, a draft interpretive regulation at Department of Justice. Hopefully we'll receive clearance on that shortly and publish a rule that can assist employees in understanding their obligations. Mr. Cummings. I just don't want anyone to--I mean, as I'm listening to you and I'm trying to put myself in a position of a lawyer to a client, I'm going to tell you, even after I've read all the regs and the rules and everything, you know what I'd do? I'd march them right straight to you and I'd sit down with them and say look, this is my client's situation. I want something in writing. I'm serious. Because if you are saying it's complicated, if you're saying it's complicated, then my God. I can imagine a lawyer and particularly someone who doesn't even have a lawyer has got to be, you know, going crazy. I mean, just--so anyway, it's something we need to take a look at. Finally, I know we don't have anything to do with money in this committee but I'm just curious, Mr. Walden talked about a number of these investigations and what have you. Do you have enough money to do what needs to be done in your office? Mr. Potts. Our current budget is comfortable. Actually, if you go back during my term, we really assumed some additional responsibilities from the Executive order of President Bush. We had to ramp up and we got to the point at one point where we had about 100 employees. But most, probably over half of our people were hired within the 12 months or so following those additional responsibilities. So we had a lot of green people. And what we found was after some time we began operating where the knowledge curve enabled us to become more efficient. Then we just allowed attrition to bring us down to where we are now, at about 80. We really are doing now with about 80 what a few years ago it took about 100 people to do because they were inexperienced and green and weren't attuned to their jobs. But so now we've been able to get down to a level that we are comfortable, assuming that we don't have any change in our responsibilities. I think we are at a good level right now. Mr. Cummings. Just one other question. You talk about the first and the fourth year. Help me with the fourth year piece. I understand the first year and I think I understand the fourth year but it seems like the first year is the big one. Mr. Potts. That's right. Mr. Cummings. Talk about the fourth year. Mr. Potts. The fourth year. The reason that's a problem is there are people that are leaving and they have to file financial disclosure statements. In other words, termination reports and we have to review those. And of course that gets to be a big volume. But also there is a flurry of activity in new appointees to fill. Even though it's for a very short term, there is a big bulge of people that are getting appointed in the last few months. Already we see that starting up. Mr. Cummings. And you've got to turn it around quickly. Mr. Potts. Got to turn it around quickly, right. So there is that sort of bulge. It's not as bad as the first year of a Presidential term but still, there is this bulge in the first year. Then it goes down and then it kicks back up, particularly in this financial disclosure review area. Mr. Cummings. So this is--when do you leave office? Mr. Potts. My term ends August 15 of next year. Mr. Cummings. I don't know whether we'll see you again before then but I want to thank you for all you've done. Mr. Potts. Well, thank you. Mr. Cummings. For our country. I really mean that. Mr. Potts. I appreciate that. Mr. Cummings. I've heard a lot of great things about your efforts in that office. So often I think what happens is our public employees don't get the thanks which they deserve because you give so much for so little but so much benefit to the American people. So I just wanted to take this moment and thank you. Mr. Potts. I appreciate it. Believe me, it's been an honor to serve. I wouldn't have had it any other way. Mr. Scarborough. Thank you, Mr. Cummings. I've got to say I've heard great things about you also and the record today is going to reflect that you're a perfect fit for the Office of Government Ethics because you were asked a very un-Republican question. That was, did you have enough money for your agency? I wrote it down because it's a bit historical today. You said, quote, we are comfortable and second, you said we are, quote, at a good level. Only the Director of the Office of Government Ethics would say that. I thank you for that. Let me ask you in your agency's review of oversight of other agencies, you talk about best practices. Could you illustrate a few agencies on the upside that have constantly shown best practices and also a couple of agencies maybe that have had some trouble operating to the high standards of the best. Mr. Potts. Yes. We give awards at our annual conference agencies who have gotten in effect a clean program review; in other words, a review where we really don't have any recommendations that something has to be changed. We might make some suggestions about things that could be a little better or whatever. I would say over the last few years the various Defense Department components have had this sort of outstanding records. Not without exception, but for the most part our reviews of the various Defense Department components have resulted in a lot of clean reviews. Mr. Scarborough. You have speculated or do you have any reports as to where that is? Is that a military culture? What do you and your other people that work with you put that down to? Mr. Potts. I think first of all it is partly culture but I think it's also money. In other words, I think they have the resources. Once they get the assignment, they have the resources and by gosh, they go out and do it. We have also I had a list of---- Mr. Scarborough. You can submit those for the record. That's fine. Mr. Potts. One department, for example, that's had a very good program is the Department of Education. Secretary Riley has taken a personal interest in the program and has showed that personal leadership, which really is one of the things that is the hallmark of virtually any good program, that the head of the agency is out front talking about ethics and how important it is. So that is very key. On the positive side, let me mention a couple of others: The International Trade Commission, the General Services Administration, the Federal Communications Commission, Federal Deposit Insurance Corporation, Overseas Private Investment Corporation. Those are some that in this past year were reviewed that had excellent programs. In the last year, we had several agencies that were deficient. It coincided with the downsizing of the agencies and particularly for two of the cabinet departments, Interior and Agriculture, we had to issue formal notices of deficiency. Both of those were agencies where the ethics program is run through the personnel shops and, in answer to your question as to why, I think what happened was the personnel shops were getting chopped a lot during that period for a lot of other reasons. They were just the ones that felt the sharpest edge of the ax. With the ethics program being part of that, they just all of a sudden didn't have the resources, and they were really scrambling to keep their program going. I'll say in both instances after the notice of deficiency, we worked with them and they have gotten their act together. We have already rescinded the notice of deficiency for the Department of Interior, having gone back in and being satisfied they have the program back on track. Department of Agriculture has taken heroic measures. They've created a new Office of Government Ethics within the Department of Agriculture. They consulted with us and hired as to someone who had managerial experience as well as ethics program background. And they have made great progress, but they're not quite there yet. But the situation in Agriculture frankly is more complicated because they have all of these different components. They're scattered all around, literally around the world and it's been harder for them to get their hands around it. They're going to get there and we'll be right along helping them. Mr. Scarborough. Since the White House is graded on its own scale as a separate agency, where do they fit on that scale? Mr. Potts. They got a very good report when we reviewed their programs. The last review was 1996 and 1992, so we've had them on a 4-year cycle. They'll be coming up next year. Mr. Scarborough. What about your dealings with the Justice Department? Have you referred more or fewer cases to the Justice Department of late than let's say you'd done 5 or 6 years ago? Mr. Potts. The cases that come to us for referral are really kind of haphazard. In other words, if a person is really knowledgeable, they wouldn't really come to us thinking that we're going to take it and then send it over to Justice. So it's kind of just haphazard as to how things happen to come over the transom or we become aware of some particular situation. But things like that do happen and when they happen, if it's clearly criminal in nature and especially if it's something that seems to be ongoing, we would send it over to Justice and expect the FBI to investigate it. If it's more of an administrative nature, then we would send it to the Inspector General where that person worked for the investigation. Mr. Scarborough. Let me ask you some questions that either one of you can answer because it may sound a bit political. You may be more comfortable, Mr. Walden, in responding. I was wondering, obviously we have the First Lady, who's considering a run for the Senate campaign, and when the President--whenever Air Force One goes somewhere and campaigns, there's always a portion of the use of Air Force One and the security arrangements, other factors associated with the office that recognizes political expenses and billed to campaign. I was curious, do you think under the set of laws that we have right now if Mrs. Clinton decides to campaign for Federal office next year, would she be subject to the same regulations regarding the appointment of expenditures? Should she be? Mr. Walden. If Mrs. Clinton qualifies for a candidate as defined in the Federal Election Commission regulations, then that would trigger the reimbursement provisions under Federal law and Federal standards. There are additional questions involving how many people travel on government airplanes and which persons are necessary to travel for official reasons. When the President or the Vice President travels for a political activity, there are still a small set of individuals who must accompany the President or the Vice President at all times and we had a term for them in the Bush White House ``Official travelers.'' We kept a list of those people. Those people would travel with the President even to attend a political event, but they could not participate in the political event and there was no reimbursement required of the Bush-Quayle campaign. With regard to the First Lady, I would simply ask, does the First Lady require--how many people if anybody, does the First Lady require in terms of official travelers? There are obvious reasons why the President has to have his staff secretary, military aides, and a few other people always with him because the President is always President. The First Lady may always be First Lady but not in the same sense as the President is always the President. So I think those issues are difficult and I think that the White House, working with OGE and perhaps the Federal Election Commission, should work out a set of standards and protocols so there won't be any questions. Mr. Scarborough. In your opinion should the First Lady or the Vice President's wife or the Vice President's husband be subject to the same ethics laws as the President and Vice President? We're getting into a new era. First Ladies have always been engaged but obviously in the future I think that they're going to be more so. Hillary Clinton has been a trend setter of sorts and I think you're going to see more and more professional First Ladies or First Men in the future. Do you think she has sort of opened the door a little bit to what the future is going to be and does that also raise some concerns regarding closing the loophole on first spouses? Mr. Walden. I actually recommend that Congress tackle the issue and do so in the next year or two. I would recommend that, to the extent the first spouse observes the traditional responsibilities of First Ladies, that is, quasi-diplomatic, going to state events or funerals or charitable activities, that would not make that First Lady or first spouse a special Government employee or regular employee. But Mrs. Clinton was charged to chair the Health Care Task Force. She was, within the White House, Donna Shalala, and I don't know why the ethics laws wouldn't apply to her unless Congress made the legislative judgment that Congress made years ago with regard to the President, the Vice President, and Members of Congress that they would not be subject to the conflict of interest laws. When Congress did so, I think there was a recognition that the public scrutiny on the President and Vice President and Members was such that Members of Congress and the President and Vice President would follow general ethics principles because they wanted to stay out of hot water and not have ethics allegations distract from their duties. I'm not sure the same consideration applies to First Ladies. It might because First Ladies, first spouses, are within that same bubble within the White House that gets enormous scrutiny. What I believe is that under current law the First Lady crossed over the line and should have been considered an employee under 18 U.S.C. 202, the special Government employee definition that's in that statute. Now, the court of appeals in a litigation challenging the Health Care Task Force's meetings under the Federal Advisory Committee Act, said that Mrs. Clinton was the functional equivalent of a government employee, thereby allowing the task force to close its meetings to the public because all of the members of the task force had to be full-time government employees. But the court of appeals dropped a footnote and said, we're not going to decide whether the First Lady is a government employee for purposes of the ethics laws. That's the big question. I don't think it was answered appropriately or completely by the White House Counsel at the time. When Representative Clinger asked the White House Counsel, whether the Federal Advisory Committee Act law should be changed to make sure that the First Lady would be considered part of the government so that the meetings could be withheld from the public, the White House Counsel said, we don't need legislation because she's not a government employee under Justice Department opinions. But the Justice Department precedent relied upon involved Mrs. Reagan's charitable fundraising and that is not comparable to the responsibilities that Mrs. Clinton has exercised. Again, I don't want to fault Mrs. Clinton. I want to fault the system and the management within the White House that did not appreciate the difficult issues that were presented, the public criticisms that would result, and attempt to work out a system where everybody would be happy. Mr. Scarborough. I think on the specific issue of the Health Care Task Force to me, it's a very clear example of somebody that should have been--had that classification. I think that is black and white. While I'm not surprised that the Justice Department came to the opinion that they did, I think that opinion is laughable because she was engaged in activities that would affect one-sixth to one-seventh of the Nation's economy based on what the Federal Government did, what the administration did. So for me--I say all that not just to make a political speech but to say that one seems easy to me. What is not so easy are some middle grounds that we may tread on in future administrations with first spouses. So in a situation not quite so clearcut, but if you think I'm terribly wrong in my assessment, you can correct me. But let's say we have an administration in the future that is a bit more subtle than the First Lady. Do you think that first spouses should have the same ethical laws attached to them as the President and Vice President? Mr. Potts. I think Greg put it very well. First of all, I think it is complicated because we are in this transition period about the role of the First Lady, and I agree with your comments, Mr. Scarborough, that we should expect that to probably continue. Therefore, I think it would really be a wise thing for the Congress to take a look at this and then establish some ground rules because I would agree with Greg that if a spouse is playing the traditional role, there isn't any reason for him or her to fall under the ethics laws. But if the spouse is in there really performing a government function or running a task force or something like that where it really is substantive, then all those rules really should kick in. Now, let me just add a couple of thoughts. One is that, the President and the Vice President because they are elected executive branch officials are not subject to the same conflict rules as other people in the branch. But they do have to make public, for example, all of their gifts. They have to show what the gift is, who gave it and an estimate as to its value, so the public can be informed about the gifts and make individual judgments about whether that is improperly influencing the President. And so I would say those rules for a First Lady would be appropriate if she is getting into the same area. One other comment is that with regard to the travel of the First Lady, sometimes security issues arise. For example, in the Bush administration, there was a time when there were a lot of concerns about terrorist activity. President Bush had said there were certain people that he wanted to use government transportation only. Not only for their own protection but also, he didn't want them on a civilian airliner where other innocent people might get killed. So they were required, even for personal uses, as well as much less political or government, to use government transportation. Then there was a formula by which they had to reimburse the government when they used government transportation for personal purposes. So I don't know whether that's the situation with the First Lady right now or what the situation is but it's just something to bear in mind. Where there are reports from the CIA or the FBI that there is some imminent threat, I think things are tightened up and some officials that normally would travel commercially are directed to start using government equipment only. Mr. Scarborough. Let me ask you one final question. Back in 1989 Congress passed a law that banned honoraria for writing, speaking. And they also banned that for Federal employees, which I think a couple of years later, the courts ruled that to be unconstitutional. I know Mr. Walden has suggested that you all clarify issues regarding honoraria and I thought I read that you all had been working on it and was wondering what sort of progress is being made on that or if you even think it's necessary. Is it something you'd like to see done before you leave next year? Mr. Potts. Let me just comment and then I'll ask Ms. Glynn to comment. First of all, it was clear to us after that honoraria ban law was passed that we thought it was unconstitutional, and we went back and tried to get some corrective legislation passed to deal with our concerns. It was not any big surprise when it was challenged. After the Government lost in the lower courts and was going up to the Supreme Court, we met with the Solicitor General and said, our opinion is this is a loser. It's a waste of time to go up there and fight it. But I think they felt since it had been enacted by Congress, they had an obligation to try to uphold it. So anyway, it was not a big surprise to us that it was held unconstitutional. But let me ask Ms. Glynn to sort of explain what we have done subsequently as a result of that. Ms. Glynn. We did amend our regulations to drop references to the prohibition on receipt of honoraria but there is a continuing trend in the courts toward expanding employee's rights in this area. We have a rule, in addition to that former prohibition on receipt honoraria, that prohibits employees from accepting compensation for any teaching, speaking, or writing that's related to their duties. In a challenge by a group of employees from the EPA, the D.C. Court of appeals ruled that a provision of that rule was unconstitutional. It was the provision that relates specifically to accepting reimbursement of travel expenses from outside sources for speaking about your Government job. So we have informed the Federal work force that they are now free, if they're below the non-career senior employee level, to accept reimbursement of travel expenses from outside sources for speeches about their government jobs. And we're amending the rule to reflect that. This is an area that's developing along a line that gives us some concern, frankly, because the courts seem to be opening up the door toward permitting more acceptance of compensation for talking about your government job. The courts' rulings are going in a direction that gives us concern. Mr. Potts. Let me just add--I don't want to take up too much of the committee's time, but this is a very interesting area. I was at a conference at which the head of the British civil service was also there. I was describing this case in which our regulation had been held unconstitutional because of basically how it had been applied. This particular EPA employee was getting reimbursed expenses to make a speech criticizing the EPA. When I got through describing it, I could see the look on his face was just like I must be lying; can't possibly be true. And I said, well I can see this is hard to swallow. He said, well, first of all the whole philosophy of the British civil service is one of loyalty to whoever is elected and in power, that you can't have a civil servant going out and undermining government policy. They get fired immediately for being disloyal. And I said, well, you don't have a first amendment. We do. And again, even as close as we are with Britain and we think of ourselves as cousins, yet there is a very fundamental difference in government structure because we do have that first amendment right. In this case, I have to say that I thought it was stretching the first amendment to say that this person was entitled to get reimbursed expenses for expressing his view. We were saying we don't have any problem with the individual saying whatever he or she wants to say whenever and wherever. However, we don't think they're entitled to get reimbursed the expenses. We have a real ethics problem there because you had a situation where a person couldn't get paid for talking about their job. Well, the obvious end run around that was to say, oh, well, OK you can't get paid for talking about your job but we want you to come out to Hawaii. We have a suite for you on Waikiki Beach. We have lavish meals and entertainment. All we're going to do is reimburse you those expenses. So that's what we were focused on to try to prevent. We've now had to change that rule and that loophole has opened up because of this first amendment case. Mr. Scarborough. That whole situation about flying to Hawaii for this conference, I know it shocks the conscience of all Members of Congress. That sort of thing wouldn't go on here. I'm sure also that some Members of Congress might like the court's expansive interpretation of the first amendment also for purposes of accepting honoraria but I don't think that's going to happen soon. I have no more questions. I want to thank both of you for coming. Director Potts, again we certainly appreciate your service. And Mr. Walden, thank you for coming again. We're honored to have all of you as well as you, Ms. Glynn. We appreciate the testimony. We certainly want to assure you that we will work with you any way we can to work on a reauthorizing bill that can be drafted and passed in September. Mr. Potts. Thank you very much. Mr. Walden. Thanks for the invitation. Mr. Scarborough. Thank you. We're adjourned. [Whereupon, at 12:24 p.m., the subcommittee was adjourned.]-