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Full text of "S. 885, to modify congressional restrictions on gifts : hearing before the Subcommittee on Oversight of Government Management of the Committee on Governmental Affairs, United States Senate, One Hundred Third Congress, first session, on S. 885 ... July 19, 1993"

S. Hrg. 103-195 

S. 885— TO MODIFY CONGRESSIONAL 

RESTRI CTIONS ON GIFTS 

Y 4. G 74/9: S. HRG. 103-195 ^^^^^^^^^^^^ 

S. 885-To Hodifg Coisressioail Rest... 

..ii:ARING 

BEFORE THE 

SUBCOMMITTEE ON OVERSIGHT OF 
GOVERNMENT MANAGEMENT 

OF THE 

COMMITTEE ON 
GOVERNMENTAL AFFAIRS 
UNITED STATES SENATE 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 

ON 

S. 885 

TO LIMIT THE ACCEPTANCE OF GIFTS, MEALS, AND TRAVEL BY MEM- 
BERS OF CONGRESS AND CONGRESSIONAL STAFF, AND FOR OTHER 
PURPOSES 



JULY 19, 1993 



Printed for the use of the Committee on Governmental Affairs 




NOV 3 - ms 



U.S. GOVERNMENT PRINTING OFFICE 
70-(i.-)2 r^ WASHINGTON : 1993 

For sale by the U.S. Government Printing Office 
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 
ISBN 0-16-041502-0 



^ S. Hrg. 103-195 

S. 885— TO MODIFY CONGRESSIONAL 
RESTRICTIONS ON GIFTS 

4. G 74/9: S. HRG, 103-195 ^==^^===^~ 

88S-T0 Itodifg CoB§r8ssioD)l Rest... 

^i^ARING 

BEFORE THE 

SUBCOMMITTEE ON OVERSIGHT OF 
GOVERNMENT MANAGEMENT 

OF THE 

COMMITTEE ON 
GOVERNMENTAL AFFAIRS 
UNITED STATES SENATE 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 

ON 

S. 885 

TO LIMIT THE ACCEPTANCE OF GIFTS, MEALS, AND TRAVEL BY MEM- 
BERS OF CONGRESS AND CONGRESSIONAL STAFF, AND FOR OTHER 
PURPOSES 



JULY 19, 1993 



Printed for the use of the Committee on Governmental Affairs 




tm 3 . 1993 



U.S. GOVERNMENT PRINTING OFFICE 



70-«.^2 •-. WASHINGTON : 1993 " ^^.'^l^^^'^'-^^'^^ UOf:- 

For sale by the U.S. Government Printing Office 
Superintendent of Documents, Congressional Sales Office. Washington. DC 20402 
ISBN 0-16-041502-0 



COMMITTEE ON GOVERNMENTAL AFFAIRS 

JOHN GLENN, Ohio, Chairman 

SAM NUNN, Georgia WILLIAM V. ROTH, Jr , Delaware 

CARL LEVIN, Michigan TED STEVENS, Alaska 

JIM SASSER, Tennessee WILLIAM S. COHEN, Maine 

DAVID PRYOR, Arkansas THAD COCHRAN, Mississippi 

JOSEPH I. LIEBERMAN, Connecticut JOHN McCAIN, Arizona 
DANIEL K. AKAKA, Hawaii 
BYRON L. DORGAN, North Dakota 

Leonard Weiss, Staff Director 

Franklin G. Polk, Minority Staff Director and Chief Counsel 

Michal Sue Prosser, Chief Clerk 



SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT 

CARL LEVIN, Michigan, Chairman 
DAVID PRYOR, Arkansas WILLIAM S. COHEN, Maine 

JOSEPH I. LIEBERMAN, Connecticut TED STEVENS, Alaska 

DANIEL K. AKAKA, Hawaii THAD COCHRAN, Mississippi 

SAM NUNN, Georgia JOHN McCAIN, Arizona 

BYRON L. DORGAN, North Dakota 

Linda J. Gustitus, Staff Director and Chief Counsel 

Peter K. Levine, Counsel 

Paul Brubaker, Minority Staff Director 

Frankie de Vergie, Chief Clerk 

(II) 



CONTENTS 



Opening statements: Page 

Senator Levin 11 

WITNESSES 

Monday, July 19, 1993 

Hon. Frank R. Lautenberg, a U.S. Senator from the State of New Jersey 4 

Hon. Paul D. Wellstone, a U.S. Senator from the State of Minnesota 11 

Hon. Birch Bayh, Bayh, Connaughton, Fensterheim & Malone, and former 

U.S. Senator from the State of Indiana 16 

Hon. Frank J. Horton, Venabie, Baetjer, Howard & Civiletti, and former 

Representative in Congress from the State of New York 18 

Hon. Stephen D. Potts, Director, Office of Government Ethics, accompanied 

by Gary Davis, General Counsel, and Leslie Wilcox, Associate General 

Counsel 25 

Joan Claybrook, President, Public Citizen 33 

Alphabetical List of Witnesses 

Bayh, Hon. Birch: 

Testimony 16 

Prepared statement 74 

Claybrook, Joan: 

Testimony 33 

Prepared statement 95 

Horton, Hon. Frank J.: 

Testimony 18 

Prepared statement 77 

Lautenberg, Hon. Frank R.: 

Testimony 4 

Prepared statement 62 

Potts, Stephen D.: 

Testimony 25 

Prepared statement with attachments 85 

Wellstone, Hon. Paul D.: 

Testimony 11 

Prepared statement 71 

Wilcox, Leslie: 

Testimony 30 

APPENDIX 

Text of S. 885 43 

Excerpt from the Standing Rules of the Senate: Gift Rules. Document No. 

102-25, 102d Congress, 2d Session 60 

Prepared statements of witnesses in order of appearance 62 

Letter submitted for the record from Senator Richard Bryan, Chairman, and 
Senator Mitch McConnell, Vice Chairman, Senate Select Committee on 

Ethics, August 11, 1993 104 

Statements Submitted For the Record By: 

Senator Russell D. Feingold (D-WI) 106 

Joan Claybrook, President, Public Citizen HI 

Fred Wertheimer, President, Common Cause 114 

(III) 



S. 885— TO MODIFY CONGRESSIONAL 
RESTRICTIONS ON GIFTS 



MONDAY, JULY 19, 1993 

U.S. Senate, 
Subcommittee on Oversight of Government 
Management, Committee on Governmental Affairs, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:10 p.m., in room 
SD-342, Dirksen Senate Office Building, Hon. Carl Levin, Chair- 
man of the Subcommittee, presiding. 

Present: Senator Levin. 

Staff Present: Linda J. Gustitus, Staff Director and Chief Coun- 
sel; Peter K. Levine, Counsel; Frankie deVergie, Chief Clerk; James 
Calvin Cunningham III and Michael McGaughey, Interns. 

OPENING STATEMENT OF SENATOR LEVIN 

Senator Levin. The Subcommittee will come to order. 

Today's hearing is on S. 885, a bill introduced by Senator Frank 
Lautenberg to limit the acceptance of gifts, meals, and travel by 
Members of Congress and congressional staff, so that the rules in 
the Congress would then be substantially similar to restrictions 
that are applicable to executive branch officials. 

This bill comes to our Subcommittee with the added momentum 
of a Senate resolution adopted on May 6, 1993, which expressed the 
sense of the Senate that we should enact a comprehensive gift ban 
this year, in this session of the Congress. 

While legislation pertaining to Senate rules is ordinarily directed 
to the S3nate Rules Committee, this particular bill, because it pro- 
poses statutory restrictions on the acceptance of gifts applicable to 
both the Senate and the House, was referred by the Parliamentari- 
an to the Governmental Affairs Committee. 

There is no question in my mind that the current congressional 
gift rules are inadequate and are subject to abuse. For example, 
while the gift rules applicable to executive branch employees pro- 
hibit the acceptance of even a single gift with a value in excess of 
$20, unless the circumstances indicate that the gift is motivated by 
family relationship or personal friendship, our rules permit the ac- 
ceptance of any number of gifts under $100 from the same source. 

In theory, that means that we could accept a $95 gift from the 
same source every day and, by the way, not even disclose it. Even 
gifts of more than $100 are allowed, up to a total of $250 a year 
from a single source. 

(1) 



At a time when the public's confidence in Congress is at an all- 
time low, the disparity between our gift rules and those applicable 
to executive branch officials only serves to worsen the problem. 

I don't believe that Members or staff are influenced by the rou- 
tine gifts and meals that they are allowed to accept, but I do be- 
lieve that the acceptance of such gifts can create the appearance of 
favoritism. Such an appearance is poison for public confidence in 
government. It is not good for the Congress and it is not good for 
the country. 

I believe we must tighten our rules on gifts, so that they are 
comparable to executive branch rules. I also believe that we can do 
so, without impinging upon our responsibility to our constituents 
or our role as elected representatives and decisionmakers. There 
are, of course, some differences between legislative and executive 
branches, which would make it difficult for our gift rules to pre- 
cisely mirror the executive branch rules. 

For example, first, i;he representative responsibility of Members 
of Congress creates a relationship with the public that is very dif- 
ferent from that of executive branch officials. As a result. Members 
of Congress often perform ceremonial functions, attend functions of 
constituent groups and promote home State products in a manner 
that might be prohibited for executive branch officials. 

Second, the executive branch rules apply to gifts from people, 
known as "prohibited sources," whose actions could be affected by 
the actions of the recipient. Because the official actions of execu- 
tive branch employees typically affect only a narrow sector of the 
economy, such as a specific regulated industry, the number of pro- 
hibited sources is generally fairly limited. By contrast, the official 
actions of a Member of Congress are likely to have an impact on 
every person in the country. As a result, the prohibited source rule 
used in the executive branch cannot easily be applied to the Con- 
gress. 

While the differences between the two branches mean that our 
rules cannot be identical, I do not believe that they justify the dis- 
parity in the rules that exists today. For example, I can see no 
reason why we should permit gifts of up to $250 in value, while the 
executive branch prohibits any gift of more than $20. Where there 
is no legitimate basis for a distinction, the rules should be compa- 
rable. 

I commend Senator Lautenberg for his initiative in introducing 
S. 885 and leading the fight for a tighter ban on gifts. Certainly, 
the approach that he has chosen, an effective gift ban, is superior 
to the gift disclosure approach. If a gift is inappropriate in appear- 
ance or reality, it should be banned, not merely disclosed. Mere dis- 
closure of such gifts just gives them wider publicity, further under- 
mining public confidence in government, instead of strengthening 
it. 

I hope that today's hearing will help us move this legislation for- 
ward and help restore public confidence in this institution. And I 
look forward to the testimony of all of our witnesses and the writ- 
ten testimony which a number of people have asked to submit. 



Prepared Statement of Senator Levin 

Today's Subcommittee hearing is on S. 885, a bill introduced by Senator Frank 
Lautenberg to limit the acceptance of gifts, meals, and travel by Members and Con- 
gressional staff in a manner substantially similar to the restrictions applicable to 
executive branch officials. This bill comes to our Subcommittee with the added mo- 
mentum of a Senate resolution adopted on May 6, 1993, which expressed the sense 
of the Senate that we should enact a comprehensive gift ban this year, in this ses- 
sion of the Congress. 

While legislation pertaining to Senate Rules is ordinarily directed to the Senate 
Rules Committee, this particular bill — because it proposes statutory restrictions on 
the acceptance of gifts applicable to both the Senate and House — was referred by 
the Parliamentarian to the Governmental Affairs Committee. 

There is no question that the current congressional gift rules are inadequate and 
vulnerable to abuse. For example, while the gift rules applicable to executive 
branch employees prohibit the acceptance of even a single gift with a value in 
excess of $20 (unless the circumstances indicate that the gift is motivated by family 
relationship or personal friendship), our rules permit the acceptance of any number 
of gifts under $100 from the same source. In theory, that means that we could 
accept a $95 gift from the same source every day — and by the way, not even disclose 
it. Even gifts of more than $100 are allowed, up to a total of $250 a year from a 
single source. 

At a time when the public's confidence in Congress is at an all time low, the dis- 
parity between our gift rules and those applicable to executive branch officials only 
serves to exacerbate the problem. I don't believe that Members or staff are influ- 
enced by the routine gifts and meals they are allowed to accept, but I do believe 
that the acceptance of such gifts can create the appearance of favoritism. Such an 
appearance is poison for public confidence in government. It isn't good for the Con- 
gress, and it isn't good for the country. 

I believe that we must tighten our rules on gifts so they are comparable to the 
executive branch rules. I also believe that we can do so without impinging upon our 
responsibility to our constituents or our role as elected representatives and decision- 
makers. There are, of course, some differences between the legislative and executive 
branches, which would make it difficult for our gift rules to precisely mirror the 
executive branch rules. For example 

• The representative responsibility of Members of Congress creates a relation- 
ship with the public that is very different from that of executive branch offi- 
cials. As a result, Members of Congress often perform ceremonial functions, 
attend functions of constituent groups, and promote home-state products, in a 
manner that might be prohibited for executive branch officials. 

• The executive branch rules apply to gifts from people — known as "prohibited 
sources" — whose actions could be affected by the actions of the recipient. Be- 
cause the official actions of executive branch employees typically affect only a 
narrow sector of the economy, such as a specific regulated industry, the number 
of prohibited sources is generally fairly limited. By contrast, the official actions 
of a Member of Congress are likely to have an impact on every person in the 
country. As a result, the prohibited source rule used in the executive branch 
cannot easily be applied to the Congress. 

While the differences between the two branches mean that our rules cannot be 
identical, I do not believe that they justify the disparity in the rules that exists 
today. For example, I can see no reason why we should permit gifts of up to $250 in 
value, while the executive branch prohibits any gift of more than $20. Where there 
is no legitimate basis for a distinction, the rules should be comparable. 

I commend Senator Lautenberg for his initiative in introducing S. 885 and leading 
the fight for a tighter ban on gifts. Certainly the approach he has chosen — an effec- 
tive gift ban — is superior to the gift disclosure approach. If a gift is inappropriate in 
appearance or reality, it should be banned and not merely disclosed. Mere disclosure 
of such gifts just gives them wider publicity — further undermining public confidence 
in government, instead of strengthening it. 

I hope that today's hearing will help us move this legislation forward, and help 
restore public confidence in this institution. I look forward to the testimony of our 
witnesses. 

We will start with the sponsor of this legislation, a good friend of 
mine and a good friend of ethics in government, Senator Frank 
Lautenberg, who has introduced this bill with a number of cospon- 



sors. He is leading the fight to tighten our gift rules and to ban a 
significant number of additional gifts which now are permitted 
that, in my opinion and in his opinion, should not be. 

We are delighted you are here today. Senator Lautenberg, and 
we call on you to proceed. 

TESTIMONY OF THE HON. FRANK LAUTENBERG, » A U.S. SENATOR 
FROM THE STATE OF NEW JERSEY 

Senator Lautenberg. Thank you, Mr. Chairman, for holding this 
hearing and for the encouraging words that I heard you give here. 

I want to express my appreciation to you for your support of the 
Congressional Ethics Reform Act and for your willingness to move 
the legislation quickly. I also want to acknowledge the cosponsors 
of the bill, Senator Boren and yourself, Mr. Chairman, and Sena- 
tors Wellstone, Feingold and Kohl. 

The Congressional Ethics Reform Act would significantly tighten 
rules governing the acceptance of gifts, meals, and travel by Mem- 
bers of Congress and congressional staff. 

Mr. Chairman, I may not be able to stay, but I could not help but 
note with interest the appearance of a dear friend and a former 
Senator, a distinguished Member of this body. Senator Birch Bayh, 
whom I had the pleasure of knowing when the roles were reversed, 
when he was the Senator and I was "the civilian." 

But it was always with a great deal of respect, and I must say 
admiration and affection, Mr. Chairman, that I met with Birch 
Bayh, followed his career and his leadership, and this is not intend- 
ed to soften up any differences that we may have on this particular 
issue, but, of course, I hope he will hear my words. 

Mr. Chairman, the mission here is to significantly tighten the 
rules governing the acceptance of gifts, meals, and travel by Mem- 
bers of Congress and congressional staff. At its most basic level, the 
goals of this legislation are simple. 

To reduce the ability of lobbyists and special interests to buy 
access and influence on Capitol Hill and to ensure that average 
Americans and the broader public interest, the constituents who 
sent us here, have their interests coming first. 

Americans today — and you mentioned this, Mr. Chairman — are 
deeply distrustful of the Congress and they are angry. Poll after 
poll says that there is a great deal of cynicism and suspicion. They 
see Members of Congress as captives of special interests, uncon- 
cerned about ordinary people. In the view of many. Congress is out 
of touch, in part, because Members enjoy an assortment of special 
perks and privileges that are unavailable to the general public. 

Mr. Chairman, I know that many of my colleagues believe — and 
I share their belief — that these perceptions are inaccurate, or at 
least overstated. But the fact is that Members of Congress do enjoy 
many special advantages that ordinary Americans do not, and 
many of these special perks are specifically intended, and we can't 
kid ourselves about this, to influence Members in the performance 
of their official duties. 



' The prepared statement of Senator Lautenberg appears on page 62. 



I cannot understand why a gift suddenly developing out of a rela- 
tive stranger's largess seems not to strike a note of curiosity. Why 
did I get the 57th clock that I have gotten since I have been here? 
Perhaps it has to do with the timeliness with which the Senate 
meets. But the fact is, there is no good reason to allow these gifts. 

The bottom line is, the people are entitled to be suspicious. It is 
not just a problem of perception. Special interests do have too 
much political power and we are obliged to do something about it. 

Obviously, the Congressional Ethics Reform Act is not the only 
step that we have to take. We need to overhaul our campaign fi- 
nance laws, toughen regulation of lobbyists, close the revolving 
door and fundamentally change the policymaking environment 
here on Capitol Hill. But imposing strict new limits on the accept- 
ance of gifts, meals, and travel is also essential. 

If the phrase "business as usual" means anything, it includes the 
many special favors provided to Congress as a way to influence 
policy. It is not unusual for lobbyists to provide Members with free 
tickets to shows or sporting events or take them out for lavish din- 
ners at expensive restaurants. Sometimes they provide Members 
with trips, free trips, typically involving stays at expensive luxury 
hotels, along with various forms of sport and entertainment. 

Mr. Chairman, when lobbyists take a Senator or a key staff 
member out to dinner, it is not just to see that they are well fed. 
They are buying access, and access is power. 

Ordinary citizens do not have that access. They cannot just take 
their Senator to a quiet dinner in an expensive restaurant and ex- 
plain what it is like to be without work, what it is like to be wor- 
ried about the roof over your head, what it is like to be concerned 
about your kids' education. 

They cannot take their Congressman to the ball game, sit in the 
box seats, and discuss the problems they are having meeting their 
obligations in connection with educating kids. And they certainly 
cannot spend a relaxing weekend at the typical resort, teeing off on 
a beautiful golf course with key legislators, while they, "Joe, work- 
ing persons," review their concerns and anxieties about the future. 
For most of our citizens, they could not even afford it, if they 
scrimped and saved for a month or more. 

If any Member doubts the value of this kind of access, just ask a 
lobbyist for their corporate clients and see what their fees are. 
What are those fees for? It is to gain influence. It is to convince a 
Member of the Senate or the Congress of a particular point of view. 
If the point of view was so overwhelmingly just, it would not need 
the extraneous meals or weekends. Only the most disingenuous 
will claim that they provide these exotic trips out of the goodness 
of their heart. They pay because it gets results. They pay because it 
buys clout. 

Similar thinking is involved when tickets are given to Members 
to a show or a sporting event, or other gifts. Often, the tickets buy 
access to the Members for nine innings or four quarters or I guess 
even a few chuckers, although I don't know how many there are in 
a polo game. But if not, they buy good will, even if they do not buy 
access directly. And good will is also power. It can mean the differ- 
ence between getting your calls returned or your letter taken seri- 
ously, and that can translate into millions, even billions of dollars. 



at the expense of ordinary Americans who have no lobbyists to rep- 
resent them. 

Mr. Chairman, I was the CEO of a pretty good-sized company, 
and one of the rules that I personally established was to forbid pur- 
chasing agents or those who negotiated leases for our company 
from accepting gifts from suppliers or landlords. There weis the po- 
tential for undue influence, and the stakes were high, and I wanted 
that staff member to have an allegiance only to my company, to 
our company, to ADP. The same concerns apply to Congress, where 
the stakes are infinitely greater. 

Unfortunately, the &nate rules on the acceptance of gifts, meals 
and travel, to put it mildly, are far too lax. Currently, as you know, 
Mr. Chairman, Senators may accept gifts worth up to $250 from 
any person. However, gifts worth less than $100 are not even 
counted. Thus, a lobbyist legally may provide Senators with unlim- 
ited numbers of gifts worth $99. I assume that buys a lot of golf 
balls, tennis balls, tennis rackets, and you name it. 

Moreover, some types of gifts are excluded from the limits alto- 
gether. There is no limit, for example, on the number of meals at 
restaurants that lobbyists can provide to Senators. In addition, the 
rules allow Members broad latitude to accept reimbursement for 
various travel expenses, regardless of cost. 

By contrast, officials in the executive branch must abide by 
much stricter rules of conduct. Generally speaking, executive 
branch officials may not accept gifts from any person who does 
business with the official's agency or who has an interest that may 
be substantially affected by the performance of the employee's offi- 
cial duties. There are limited exceptions, such as awards, honorary 
degrees and other items worth less than $20. However, the rules 
apply broadly to any items of value, including meals and travel ex- 
penses. 

The Congressional Ethics Reform Act would require Members of 
Congress and congressional staff to abide essentially by the same 
rules as the executive does on gift acceptance. However, there are a 
few modifications designed to strengthen the rules further and to 
adapt them to the Congress. 

For example, the bill's proposed limits would apply to acceptance 
of gifts not just from certain prohibited sources, but from any 
person other than a family member or an established personal 
friend. 

Perhaps the bill's most important provision is its prohibition on 
accepting reimbursements for pleasure trips. Under this bill, only 
trips directly related to official duties could be paid for by outside 
parties, and no travel expense could be reimbursed for items 
beyond those reasonably necessary to participate in the event. 

To give the Subcommittee some idea of what I am getting at, let 
me give you a couple of examples. One powerful interest group in- 
vited top congressional aides for a lavish weekend at a fancy resort. 
The event w£is called a "congressional staff seminar," but the 
formal meetings were held only in the morning. At other times, the 
staffers were free to enjoy the resort's facilities, including tennis, 
swimming, horseback riding and croquet. 

Another example comes from a report prepared by Public Citizen 
called "They Love to Fly . . . And it Shows." The report describes 



a 1990 trip sponsored by an industry lobbying group. The group in- 
vited 25 Members to the luxurious La Quinta Hotel in Palm 
Springs, California. While there were a few meetings in the early 
morning, the rest of the days were set aside for golf, tennis, swim- 
ming and relaxing at this very high-priced resort. All expenses 
were picked up by the industry group, including greens fees, and 
extra plane tickets for some of the lawmakers' spouses and chil- 
dren. As the report concludes, "The event was clearly meant to 
curry favor with lawmakers." 

Mr. Chairman, these types of trips are not aberrations. They are 
typical, and they should be prohibited. There is no reason why lob- 
byists should be allowed to finance trips where the primary pur- 
pose isn't to conduct legitimate business, but to have fun. That is 
influence peddling, pure and simple, and it is wrong. 

The intent of my bill is to eliminate those trips. Unless Members 
and staff are working on matters related to official business full- 
time, they should not be accepting reimbursements from third par- 
ties. 

Under the bill, the Ethics Committee would have to approve 
trips in advance. The legislation prohibits reimbursement for items 
beyond those reasonably necessary to engage in legitimate busi- 
ness, and requires the Committee to reject any trip that raises con- 
cerns about the integrity of the Member or the Congress. 

This is designed to be a very high standard. And the Ethics Com- 
mittee, though they do not need additional work, we obviously need 
additional rules or standards here, the Ethics Committee should re- 
solve all doubts against allowing reimbursement. We may want to 
spell this out more specifically in the legislation. 

Another protection included in the bill is a requirement that trip 
details be published afterwards in the Congressional Record. Now, 
some have suggested requiring such disclosures in advance of the 
trip, and it seems like a good idea. If Members know that they may 
well confront their local press or their political opponent on their 
trip, most would toe-the-line very carefully. 

Taken together, Mr. Chairman, these protections seem strong 
and are intended to prevent any trips that would raise ethical 
questions. I recognize that some believe, as a matter of principle, 
that no trips should be privately financed. And I understand that 
view, though I believe there are occasions, including foreign travel, 
when such trips help officials perform their duties more effectively 
and would otherwise be impossible, given the budget constraints 
facing Congress. That is permitted in the executive branch. 

My bottom line is that I want to prevent all trips that raise ethi- 
cal questions, and I have an open mind about the best way to do 
that. 

Mr. Chairman, in the interest of time, I will not go into all of the 
bill's provisions. But before I close, I want to emphasize that I do 
not mean to impugn the integrity of any Member of Congress. 
Many of us, including myself, have followed the rules in the past 
and accepted some items, without providing any special treatment 
in return. 

But public cynicism has reached deeply disturbing levels. And as 
a consequence, practices that may have seemed unimportant and 



8 

innocuous a few years ago clearly are not so today. And we cannot 
ignore that widespread feeling. We have got to address it head-on. 

Mr. Chairman, S. 885 attempts to deal fairly with many issues 
related to gifts, meals, and travel. No doubt it can be improved, 
and I remain open to further suggestions. But I hope that this Sub- 
committee will proceed without delay. As you know, on May 6th, 
the full Senate voted 98 to 1 that the Senate should approve reform 
legislation as soon as possible this year. As public cynicism contin- 
ues to grow, the need for prompt action grows as well. 

I thank you very much for the opportunity to testify, and I am 
pleased by your encouragement for this legislation. 

Senator Levin. Thank you, Senator Lautenberg. Again, the 
Nation is very much in your debt for your leadership in this area. 
Actual abuse creates terrible problems, and need to be addressed. 
But even the appearance of abuse is corrosive to public confidence. 
It has got to be addressed and your bill addresses it in a compre- 
hensive way, and we congratulate you for it. 

Just a couple of questions. Your bill, as you indicated, does cover 
meals and entertainment. For instance, the tickets which have 
been received for a Super Bowl or World Series or what have you 
would no longer be allowed, greens fees for golfing, and free din- 
ners at restaurants would no longer be permitted under your bill. 

It is also my understanding, however, that you would allow a 
Member, for instance, to go to an event like a charity dinner to 
speak to that dinner or to attend that dinner under a 

Senator Lautenberg. A widely attended function. 

Senator Levin. That is what I was going to make reference to, is 
you have an exception for widely attended events. It is an excep- 
tion in your bill. 

Senator Lautenberg. Right. 

Senator Levin. I think that is a necessary exception. 

What about an invitation, a personal dinner invitation to a pri- 
vate home? You make reference in your bill to a situation where 
you have an invitation from a long-time friend, I believe. 

Senator Lautenberg. An established personal relationship. 

Senator Levin. There are many circumstances where there is an 
invitation to somebody's home where there is no personal connec- 
tion whatsoever. For instance, you may be in a small town where 
there is no hotel or motel to stay in and you stay at the home of a 
constituent that has been opened up to you, where you have got no 
long-standing relationship whatsoever. Say you are visiting a little 
town and the mayor says, well, instead of going 30 miles to a motel, 
why don't you stay with us tonight. Would that be permitted, or 
should it be permitted, even though there is no long-standing per- 
sonal relationship? 

Senator Lautenberg. Under the guidelines of the legislation 
thus far. Senator Levin, it would be prohibited. Now, if there is an 
overriding reason that would have one, I guess, at a place that was 
so inconvenient that you couldn't go elsewhere, perhaps an excep- 
tion could be made for that. 

Again, we are going to be looking at writing some of this lan- 
guage a little bit more tightly as time goes on. 



Senator Levin. But you don't have any particular problem with 
that, if it can be written in, if there is no personal relationship in- 
volved? 

Senator Lautenberg. I would want to think about it, to make 
sure that this isn't just a loophole. If someone other than a family 
member or established personal friend invited a Member and had 
white-gloved attendants serve a gourmet meal, with fine wines, 
pate and whatever else goes along, that could be even better than 
you are going to get in a restaurant, and could raise suspicions, in 
my mind. 

Senator Levin. What about dinner at the home of a political sup- 
porter, but not a long-time personal friend, just a dinner at the 
home of that supporter, not for any fund-raising purpose, just 
purely for social purposes, to get to know them better? 

Senator Lautenberg. Mr. Chairman, the mission is to reduce the 
opportunity to establish access and influence, and I think that 
should be the guideline. It ought not to be. If a contributor happens 
to be a friend and there is an established relationship, one has to 
think it through before one accepts it. This does not make life easy, 
that is for sure, but it does make it more open and more honest, in 
my view, and some of these things will just be eliminated. It will be 
a high level of discomfort for some, but that is the way it has got to 
be. 

Senator Levin. One final question: As you pointed out in your 
testimony, there are some who would oppose any reimbursement at 
all for travel. You allow it in a very narrow situation, where it is 
only for the person going, not for family. It is only for doing busi- 
ness there, not for entertainment or recreation. You have got to be 
doing business full time, and then if you have a meal or stay over- 
night, that could be reimbursed by the private party. 

Senator Lautenberg. Right. 

Senator Levin. One of the suggestions or one of the differences 
that we have to address has to do with where there is that accept- 
ance of, say, that one night's lodging in those circumstances where 
you are going to speak to an association on your bill or whatever. 

Under your bill, the Ethics Committee would have to give ad- 
vance approval, I believe, for all reimbursed congressional travel. 
We are going to get testimony later on today on this point, and I 
would be interested in getting your reaction to it while you are 
here. 

Public Citizen is going to testify later today that they oppose that 
approval by the Ethics Committee, for the following reasons, and I 
am quoting now from their testimony: 

"There will be enormous pressure on the committees to avoid dis- 
approving any trips at all, so as not to alienate a colleague or any 
particular special interest group. A likely result of this unwieldy 
arrangement is that the Ethics Committee will become rubber 
stamps, legitimizing special interest travel that most citizens al- 
ready find abhorrent. 

"Furthermore, unlike the executive branch agencies, where offi- 
cials are essentially agents of the President, each Member of Con- 
gress is an elected official. As such" — and this is their suggestion — 
"Members should be responsible for their own conduct, including 
the decision to accept private money for trips. They should not be 



10 

able to turn to another body made up of their colleagues to make 
these decisions for them, thereby displacing their responsibility." 

Now, let me be real clear on the point here. Public Citizen will 
testify that they disapprove reimbursement altogether. They do not 
like the idea of any reimbursement. But they say if there is going 
to be reimbursement permitted even under the very, very narrow 
constraints that you put in your bill, then the Member of Congress 
should make that decision on his own or her own, rather than 
having the Ethics Committee approve it, because of the rubber 
stamp argument. 

I just want to give you an opportunity, if you would like, to react 
to that point. 

Senator Lautenberg. I would say this, that while the Congress, 
including the Ethics Committee, has been criticized for some deci- 
sions, the glass bowl under which we live gets ever clearer, people 
are asking more questions, and I think that it would be very diffi- 
cult in times like this for the Ethics Committee to simply do pro 
forma approvals of travel. 

I don't know whether the public is better informed or less in- 
formed, if the Member makes that decision. But one advantage of 
giving this responsibility to the Ethics Committees is that the com- 
mittees would be able to develop uniform standards and procedures 
that would expedite these things and clarify what constitutes a 
necessary trip, an informational exchange, and that is going to be 
the first level of the test. 

The second level will be, well, if something is held in Europe, you 
may need a day or two to recover on either end, but that is it. But 
if you are going to go to Bermuda, you do not need 3 days or 2 days 
on either end to recover from that arduous trip. I think that a set 
of conditions will evolve that are fairly clear, and the Ethics Com- 
mittee, I think, is going to be ever more under scrutiny to make its 
decisions very clearly. 

Mr. Chairman, when I came here as a freshman Senator, now 10 
years ago, and traveled to the Far East, I thought it was kind of 
the routine, that is what happened in order to learn what was 
going on, whether it was in Japan or Singapore and so forth. 

When I looked at the cost for the trip, which is ex post facto, I 
was dumb-founded at the amount of money that was spent to trans- 
port a few to these distant places. We probably could have traveled 
for a sixth or a tenth of that. I think it gets to be a pretty easy 
decision. We were not invited by anyone. I was on the Banking 
Committee and we were seeing some of the financial institutions 
and the financial parts of government of the countries we visited. 
Those are just unacceptable any more. You see article after article 
about these things. 

We are going through a refining process, one that is changing 
habit and custom that has been there for decades, maybe even a 
century, if we look far enough back. So while we do not have every 
answer and every "i" dotted here, I think that as you, Mr. Chair- 
man, and your Subcommittee develops its hearings and we have a 
chance to debate it on the floor, we are going to get down to a 
pretty good system. It will not be perfect at first, but it will say to 
the American public that we are trying to do something differently 
than we used to do it. This is a different world that we live in. The 



11 

scrutiny is much clearer and people are demanding more, and I 
think we have very little choice but to get this program under way. 

Senator Levin. Senator Lautenberg, I hope we do get to that 
system. If we do and if we significantly restrict what gifts we are 
allowed to accept, as I hope we will, it will be in large measure be- 
cause there are a few people willing to take the lead in this effort. 
You have done that, and I congratulate you and thank you for your 
testimony. 

Senator Lautenberg. Thank you very much, Mr. Chairman. I 
cannot help but think of the situation that we may have to resolve, 
and that is who produces the best blueberries, Mr. Chairman, New 
Jersey or Michigan, and its distribution of colleagues around here. 

Senator Levin. I will revise my remarks later on that event. 

Senator Lautenberg. Thank you very much. 

Senator Levin. Thank you. 

Senator Wellstone, one of the newer Members of the Senate, he 
has also been involved in trying to improve public confidence in 
government. He is a cosponsor of the legislation before us today. 

Senator Wellstone, welcome. 

TESTIMONY OF THE HON. PAUL D. WELLSTONE, i A U.S. SENATOR 
FROM THE STATE OF MINNESOTA 

Senator Wellstone. Thank you, Mr. Chairman. 

Mr. Chairman, thank you for calling these important hearings 
on S. 885, the Congressional Ethics Reform Act of 1993. I am an 
original cosponsor of this important reform proposal, and I am here 
to join my colleague Senator Lautenberg in urging the Committee 
to report promptly a gift ban bill to the full Senate for its consider- 
ation. 

I am delighted to join you, Mr. Chairman, and Senator Lauten- 
berg in supporting this effort, and wanted to appear personally to 
show my interest in getting a tough new set of gift ban rules en- 
acted into law. Your Committee has agreed to move forward on an 
issue which is sensitive within the Congress, yet which must be ad- 
dressed straightforwardly and firmly. Mr. Chairman, I commend 
you for your courage. 

I also commend Senator Lautenberg for his willingness to take 
the initiative to address the persistent problem of gifts being lav- 
ished on Members of Congress from outside sources, one of the 
most important issues on the political reform agenda. 

As he observed when he introduced this bill, "It is indisputable 
that these kinds of special favors have contributed to America's 
deepening distrust of government ... as public trust diminishes, 
the ability of Congress to address our Nation's problems diminishes 
as well." 

Despite the assertions of our colleagues that they are completely 
unswayed by fancy dinners, or even by all-expense-paid trips to the 
Bahamas, such gifts have the appearance of impropriety — Mr. 
Chairman, I think you already referred to that — eroding public 
confidence in Congress as an institution, and in each of us person- 



The prepared statement of Senator Wellstone appears on page 71. 



12 

ally as representatives of our constituents. And I think that really 
is the essential point. 

I am sure my colleagues would agree, because many have told 
me that they hear it constantly in town meetings that they hold in 
their States. People are frustrated, people are angry, and people 
are demanding change. People feel that they have been left out of 
the loop. And recent public opinion polls show us, and it is an un- 
pleasant truth that we really cannot walk away from: public confi- 
dence in Congress is eroding. 

I am not so sure, Mr. Chairman, that this loss of public confi- 
dence is based completely on fact. Sometimes I have real questions 
about where this kind of anger, of disillusionment, this politics of 
anger is going to take us. I do not want it to be an across-the-board 
denigration and bashing of public service. I think that will lead to 
a further decline in democracy. It troubles me deeply. I think that 
is why this legislation, which you strongly support, is such an im- 
portant step in the right direction. 

Banning outside gifts would be an important signal of our will- 
ingness to respond to the demands of many Americans for a system 
of government that is more responsive to its citizens and less re- 
sponsive to lobbyists and others with influence and access to Mem- 
bers of Congress. Simply by conforming congressional gift rules to 
the executive branch's more stringent treatment of gifts from out- 
side sources, we can take another step down the road of reform. 

I think, Mr. Chairman, that people just want to see more sun- 
shine and they want to see more accountability in the process, and 
I really think Democrats and Republicans are for that, and I hope 
we will get very strong support for this. 

Political reform was an important part of my mandate from Min- 
nesota, Mr. Chairman, as it is for many new Members of Con- 
gress — and even for many veteran Members of Congress. Ameri- 
cans are demanding real change. That is evident from the polls. 
And to my colleagues who say, "well, this is just good government 
or goo-goo reform," and "people really are concerned about the 
bread and butter economic issues," and "it is just a fad and people 
will forget about it soon." I do not think so. I think this is a central 
dynamic in American politics today, and I think it is extremely im- 
portant that we respond to this, because I think that representative 
democratic institutions such as the Senate and the House of Repre- 
sentatives are very important. 

I view this bill as just one element in a much more sweeping 
reform agenda which would include genuine campaign finance 
reform — and I know, Mr. Chairman, you are committed to that; 
you were the one that reminded me that with the voluntary ex- 
penditure limits in the bill that we passed in the Senate, although 
I was not so keen on it as a major reform effort, you were the one 
that reminded me that this was at least a significant step in the 
right direction — tough new lobby disclosure rules, strict limits on 
political contributions from lobbyists, and reform and reorganiza- 
tion of the Congress and Federal agencies. 

Legislation in each of these areas should be acted upon by Con- 
gress as soon as possible. If we fail to move forward now on this 
comprehensive reform agenda, we will have missed an historic op- 
portunity. This is the best time in two decades for fundamental 



13 

reform, when we have a President who is committed to change, a 
Congress elected on pledges of change, and a citizenry that is angry 
enough to demand change. 

Too many here in Washington, from politicians to pundits, are 
cynical about real reform. Only public pressure will force President 
Clinton's promised "revolution in government" to rescue American 
politics from being held hostage — and I think this does happen — by 
big money special interests. We must restore the basic democratic 
principle, and it is a core principle, that each person counts as one 
and only one. That is the very issue of accessibility and openness, 
and the test of representative democracy. 

During Senate floor consideration of the Lobby Disclosure Act in 
early May, I offered an amendment to that bill to require itemized 
disclosure of financial benefits that lobbyists give to Members of 
Congress and their staffs. That amendment was adopted by the full 
Senate. 

A similar lobby disclosure bill is currently pending before the 
House Judiciary Committee. That Committee has held a hearing on 
the disclosure bill, and they are expected to act on it soon. I am 
hopeful that they will incorporate the provisions of my amendment 
in the House bill in the Committee markup, and that you will 
retain that provision in conference. I understand that there is 
growing support for such disclosure on the House side, as will be 
evidenced by the introduction of my disclosure amendment on a 
separate piece of legislation later this month, interestingly enough, 
by several Ist-term representatives. 

Of course, I agree that the preferable and most straightforward 
way to address the gift problem would be to enact the bill you are 
considering today. But until we impose a man, a comprehensive set 
of new disclosure requirements on gifts from those most likely to 
give such gifts — well-heeled special interest lobbyists with legisla- 
tive agendas before the Congress — should be enacted. Indeed, dis- 
closure may help to hasten the day when we enact such a ban. 

This bill would go further than simple lobbyist disclosure by pro- 
hibiting Members of Congress and their staffs from receiving gifts 
and other financial benefits from all private sources, subject to cer- 
tain limited exceptions. It would apply to gifts valued at over $20 
at a time, provided the aggregate value does not exceed $50 in any 
calendar year. This $20 minimum and $50 calendar year limit 
tracks the levels of prohibited gifts for the executive branch. 

Current congressional policy — and Senator Lautenberg referred 
to this — which allows gifts worth up to $250 from one source 
during a year, and which does not count gifts of less than $100 
toward that limit, stands in sharp and embarrassing contrast to 
the long-standing policy and practice of the executive branch. 

I suspect that some will argue today that the nature of the insti- 
tutions justifies different standards for the congressional and exec- 
utive branches. I disagree. I do not think those arguments meet 
what I call the "Minnesota Cafe Test," the common sense assess- 
ment of constituents I meet in Minnesota cafes, on the street, in 
the post offices and in meeting halls. 

Those people ask: Why should we in Congress not live under ba- 
sically the same rules as an official in the State Department or in 
the Labor Department or another executive office? By adopting 



14 

these rules as a basis for congressional reform, S. 885 will help to 
restore the credibility and integrity of the Congress. Its restrictions 
on gifts, meals, and entertainment, travel and contributions to 
charities all clearly reflect considerable work and thought on the 
part of Senator Lautenberg and the organizations with whom he 
consulted in developing the bill. 

I know, too, that there will be disagreements over whether to 
allow this minor exception or that, over how to regulate privately 
funded staff travel, or over the minimum gift thresholds provided 
for in the bill. But I believe the basic structure of the bill and the 
executive branch standards it contains are fair and reasonable. I 
urge the Committee during its consideration of the bill not to stray 
too far from its essential form. 

Finally, let me reiterate what I said at the outset: I commend 
you, Mr. Chairman, for cosponsoring the Lautenberg bill. I know 
that you are sincerely committed to this reform agenda and have 
been trying for many years to clean up the system. I know that you 
will do everything you can to enact tough new standards into law. 

I am grateful, Mr. Chairman, for your friendship and for your 
counsel on this issue and many others. And though we had a tacti- 
cal disagreement on my lobby disclosure amendment, you were, as 
always, gracious and kind in that disagreement. 

I thank you for this opportunity to testify and I assure you of my 
continued enthusiastic support for moving this bill to the Senate 
floor and getting it enacted promptly into law. 

Senator Levin. Thank you very much. Senator Wellstone. 

I have just a few questions. I asked Senator Lautenberg about 
some specifics. And I think your main point is correct, that we 
should focus on the basic structure and to try to mirror-image as 
much as we can the executive branch rules, and I think that is the 
main thrust of the bill and that is going to be the main thrust of 
my effort. But we also have to write some specifics, since it is legis- 
lation we are writing here. 

And one of the specifics has to do with this personal hospitality 
exception. I asked him about the meal, for instance, at the home of 
a constituent who is not a long-time friend, just a meal there, but it 
might go above the $20 threshold, I guess if the wrong variety of 
wine were served. Do you have any problem with accepting a meal 
at a private home, even if it is not a long-time friend? Would that 
give you a lot of trouble? 

Senator Wellstone. Not if it was a good meal. 

In a more serious vein, I heard the question that you had put to 
Senator Lautenberg, and I know that what Senator Lautenberg 
was saying is let's not create some big loophole. On the other hand, 
I think when you get into a tremendous amount of micro-manag- 
ing, you almost undercut the essence of what you are trying to do. 
And I think if we can have some language that would allow for 
that, I do not believe we would be doing any injustice to what it is 
we are trying to clean up here. 

Senator Levin. And the other one is staying overnight with a 
constituent. I gave the example of where you just stay overnight in 
a town that does not have a motel, or even if it does, you just stay 
overnight at somebody's home. 

Mr. Wellstone. My response would be the same. 



15 

Also, Mr. Chairman you did not ask this question, but I was also 
listening very carefully with interest to the question about the 
Ethics Committee, the whole issue of private travel by staff. I know 
that Public Citizen, which I quite often agree with, is opposed to 
that. 

I am thinking this through and it is not a final position, I am 
just sort of thinking out loud, which I guess is a little dangerous to 
do, but I used to do it teaching and I do not see why I cannot do a 
little of it before your Committee. 

I think that I would not want to see an outright ban. I think the 
Ethics Committee would develop, on the basis of having to make 
these decisions, as opposed to the individual Senator, I think the 
Committee would develop, if you will, a fairly clear set of standards 
and precedents on the basis of having to make these decisions, 
which then would become the framework for making these deci- 
sions under new rules, and I think they could do a good job of it. 

Again, given the fact that the political ground has shifted some- 
what and people are holding us to higher standards, I think the 
Ethics Committee would be rigorous in its approach. I would prob- 
ably prefer, if we do not have the outright ban — and I would need 
to hear more about it before making a final decision — I think that 
would be preferable to individuals making their own decisions 
without guidance from the Committee. I like that philosophy that 
each of us ought to be directly accountable. But I think probably 
the Ethics Committee would be the place where that guidance 
should be developed, with the final decision, of course, resting with 
the Member. This lodges accountability where it should be. 

Senator Levin. If you are not going to have an outright ban? 

Senator Wellstone. If we are not. 

Senator Levin. But you are not decided as to whether there 
should be or not? 

Senator Wellstone. I am not sure one way or the other, and I do 
not like to waffle. I think I lean toward not having an outright 
ban. 

Senator Levin. Thank you. 

Senator Wellstone. Thank you very much. 

Senator Levin. We appreciate your comments. Thank you, Sena- 
tor Wellstone. 

Next we have a couple of old friends of mine, and of other Mem- 
bers of the Senate and the House. Birch Bayh, who served here 
from 1963 to 1981, was on the Senate Judiciary Committee. I re- 
member working well with him on many issues, including a consti- 
tutional amendment to provide for the direct election of the Presi- 
dent. 

And Frank Horton, who was in the House of Representatives for 
actually even a longer period of time. I am not so sure I even ought 
to disclose how long you were in the House. It was around 30 years. 

Mr. Horton. It is public record. It has already been disclosed. 

Senator Levin. It has already been disclosed, so it is 30 years 
that Frank was in the House of Representatives. Both now practice 
law in Washington. Both came to the Congress together in 1963 
and both are, as I said, good friends of just about everybody in both 
bodies. 

We thank you for coming. Birch, why don't we start with you. 



16 

TESTIMONY OF THE HON. BIRCH BAYH,i BAYH, CONNAUGHTON, 
FENSTERHEIM & MALONE, AND FORMER U.S. SENATOR FROM 
THE STATE OF INDIANA 

Mr. Bayh. Thank you, Mr. Chairman. 

I consider it a privilege to follow two distinguished Members of 
the body. You have been with such distinction, Senator Lautenberg 
and Senator Wellstone. It is good to see you again, Senator Levin, 
and I compliment you and the Committee for the efforts that you 
are making and to share some thoughts with my friend Frank. I 
had a chance to visit with Joan Claybrook, who has served the citi- 
zens of our country so well. I am sure there are others who will 
express their opinion. 

Let me resist the temptation to abbreviate a 4-minute statement 
into a 20-minute statement. As much as I dislike to read a text, I 
have given a little thought to this, and let me just quickly do it and 
then yield to any questions. 

Senator Levin. Would you pull the mike a little closer to you. 
Birch? 

Mr. Bayh. So far you haven't missed a thing. [Laughter.] 

Senator Levin. Well, we miss your sense of humor around here. 

Mr. Bayh. You may be able to say the same thing after I am 
through. 

Senator Levin. We may ask you to push the mike back further. 
[Laughter.] 

Mr. Bayh. I do appreciate the opportunity to share some 
thoughts with you. I want to begin by saying I am not completely 
comfortable in doing so. It goes to my concern that I am really not 
comfortable in trying to judge others. I guess I recall that biblical 
admonition that "he who is without fault should cast the first 
stone." And try as I have over the past years to correct my own 
shortcomings, I am painfully aware that I have failed in many, 
many areas. 

It has been my good fortune to work with you and many men 
and women of both political parties, those who have served both 
the local. State and national government. It is my firm conviction 
that those that I have had a chance to know are by and large 
honest, dedicated, hard-working, by any definition, good public 
servants. Their standards of conduct and morality are consistent 
with or perhaps even above the norm of the constituency who elect 
them. 

I would be naive, if I did not recognize the fact that there are 
those who succumb to temptation and violate the public trust. I 
know that you and those who have preceded me feel very strongly 
about the nature of public trust. 

If one individual violates this public trust, they do irreparable 
damage to public confidence, and I think that is part of the prob- 
lem we have now with the loss of faith of our constituency. When 
they see one person do wrong, they equate that to the generally ac- 
cepted norm, which I do not think is accurate. 

I am not suggesting we need a collection of saints in public serv- 
ice. It might be sort of dull serving, if that were the case. However, 



' The prepared statement of Mr. Bayh appears on page 74. 



17 

I think that those of us who are concerned about public attitude 
and public confidence, and understand the important role that 
plays in a democratic system, understand that we must be sensitive 
to various individual or institutional practices which raise serious 
doubts in the average citizen's mind. 

I made a comment about my assessment of the people who serve 
here, and in dealing specifically with the question of gifts, I have to 
say very frankly I do not believe that there is a single Member of 
Congress that I have had the good fortune to know, or even that I 
do not know, who could be bought or influenced by a dinner or a 

gift. 

But I am quick to say that I do not think my opinion prevails 
among the public generally, and so I think it is that public percep- 
tion that you are quite wisely dealing with. And I think the fact 
that of holding these hearings and the Committee expressing its 
concern, will help to allay some of the public concern. 

As Senator Lautenberg's and Senator Wellstone's comments and 
the comments of others are heard by individual citizens, slowly, but 
surely, we can begin to repair the damage that has been done to 
the confidence level of the average citizen. 

Let me deal, if I may, just specifically with a few factors that I 
think you need to consider in your discussions. I, frankly, am not 
wise enough to know at what dollar level a Member will succumb 
to temptation or at what dollar level a citizen's confidence will be 
restored. I leave that to your judgment. But there are certain fac- 
tors I recommend for your consideration. 

As was said earlier, I think we cannot overemphasize the impor- 
tance of the appearance of impropriety. It is not just the misdeed. 
It is the fact that people thoughtlessly are entrapped or intention- 
ally do something that they are accustomed to doing by habit, with 
no real understanding of what the average citizen thinks about it. 
And I think that is every bit as important, to deal with the appear- 
ance of impropriety. 

I think you need to consider, as the legislation has, the relation- 
ship of individuals. Are they family members or are they long-time 
friends? I think you need to consider whether there is constituent 
interest involved. I think it is a valuable part of being a represent- 
ative, to be able to communicate and travel back and forth and 
visit with many different people with various interests. If you have 
to a chance to hear from all of them and witness all they do, I 
think you are serving your constituency well. Whatever you do leg- 
islatively in this area, I think it is important to maintain this criti- 
cal opportunity. 

A determining factor would be whether a Member can assimilate 
knowledge which will assist him or her in fulfilling their legislative 
responsibilities. Sometimes this knowledge is obtained by visiting 
certain places that are outside one's constituency, and I think that 
should be considered. 

The circumstances are important to consider. Are there people 
there who really have an ax to grind? Do they have a vested inter- 
est in having you be there? Is that the reason that you are invited? 
Is that the reason for the occasion? I think these things need to be 
considered. 



18 

I think another aspect you need to be concerned about is wheth- 
er restrictions make it more difficult for a Member to conduct his 
or her legislative activities or to fulfill his or her family responsi- 
bilities. 

Let's prohibit specific activity which will erode public confidence. 
Do not limit it, prohibit it. However, I also think the Committee 
understands the importance of public disclosure. You are really 
seeking balance, where a Member's personal activity and relation- 
ships really can be kept private on one hand, and at the same time 
you seek means of preventing other activities and relationships 
which may have undue influence upon the conduct of a Member's 
official responsibilities or may have the appearance thereof. 

Now, I would like to point out that these conflicts are not con- 
fined to the issues under consideration here. We have discussed 
them over the years when you and I served together, and you are 
still continuing to discuss some of them. These concern a Member's 
business or financial holdings or activities. The question of hono- 
raria and campaign contributions have received similar attention. 
Some limitations and outright prohibitions have been imposed with 
respect to these latter three areas. 

However, in my judgment, we have also resorted to public disclo- 
sure. Certain things are personal in nature and cannot be prohibit- 
ed, but the constituency and the public generally has a right to 
know, so we require disclosure. 

Let me close on one comment which may be a bit discordant. 

I think the manner in which the Senate and the House cam- 
paigns are financed does more damage to citizens' confidence in 
our democratic institutions than anything else. The millions of dol- 
lars which are spent in political campaigns is a blight upon our po- 
litical system. 

You have to say there is a little inconsistency for Congress to say 
you can't spend more than $20 to buy someone a meal, but can con- 
duct a campaign that costs $2, $10 or $20 million to be elected to 
the U.S. Senate, and not understand the impact this has on the 
people at home. 

A large majority of our citizens are suspicious and have serious 
doubts about the integrity and objectivity of decisions reached 
through such a process. I know I am speaking to the choir here, 
because you are equally concerned about this, but I pray that you 
and your colleagues will find a way and have the wisdom to deal 
with this problem the same as with the one that you invited me 
here to comment upon. 

Thank you. 

Senator Levin. Birch, thank you. 

Congressman Horton. 

TESTIMONY OF THE HON. FRANK J. HORTON, » VENABLE, 
BAETJER, HOWARD & CIVILETTI, AND FORMER REPRESENTA- 
TIVE IN CONGRESS FROM THE STATE OF NEW YORK 

Mr. Horton. Thank you, Mr. Chairman. 



' The prepared statement of Mr. Horton appears on page 77. 



19 

It is an honor for me to appear before the Subcommittee. I do 
have a statement and I would like to ask l^at it be put in the 
record at this point, and then I will try to summarize it. 

Senator Levin. We thank you, and it will be made a part of the 
record. / 

Mr. HoRTON. I would also like to introduce the Subcommittee 
and staff to John Cooney, who is sitting in the row back of me. He 
is a partner in the law firm of Venable, Baetjer, Howard and Civi- 
letti, where I am located now. He specializes in regulatory and en- 
vironmental matters. He previously served from 1982 to 1987 as 
Deputy General Counsel of the White House Office of Management 
and Budget, where, among other matters, he was responsible for 
legal issues concerning acceptance of gifts and travel by OMB offi- 
cials. 

I have benefited from his experience in the executive branch and 
some of the problems that he has brought to my attention, with 
which I was not as familiar. I want to express my appreciation to 
him for working with me on this matter, and also giving me the 
background of his experience with Federal Government regulations 
and rules as they relate to the executive branch. 

In my approach to this, I would suggest there are several basic 
principles the Subcommittee might follow in addressing this issue. 
I would like to just tick them off quickly. 

Whatever rule is adopted I think should apply to the Members of 
the Congress themselves and their staffs, rather than to have some- 
thing that would rely upon disclosures by lobbjdsts, as contrasted 
to the Members having to be familiar with and handle it them- 
selves. 

The second item is that the same standard should apply to Mem- 
bers of both the House and the Senate and the senior staff who re- 
ceive salaries of $75,000 or more. I know that senior staff is includ- 
ed and should be included. I think it is important that standards 
apply to both the House and the Senate alike. In other words, we 
ought not to have different standards in each house, as we have 
had on some occasions. I hope that can be accomplished. 

Then the standards should follow basically the executive branch 
model, with suitable modifications to allow Members to perform 
their duties. 

As a general proposition, the standards applicable to Members 
should follow the rules that are applicable to employees of the ex- 
ecutive branch. However, our job responsibilities as Members of 
Congress are quite broader than those of executive officials, and 
unlike executive appointees, we are directly accountable to the 
electorate for our actions. 

These differences are important, and there are several areas 
where I think there should be differences. One has to do with prod- 
ucts and items from our district and to promote those products of 
our home States and districts. 

As a matter of fact, I heard Senator Lautenberg refer to blueber- 
ries. He claimed New Jersey blueberries are better than those from 
Michigan. As a matter of fact. New York has some very good blue- 
berries, too. So one of the things I think has to be remembered is 
that there are products of our States that should be exempt from 
this proposed legislation. 



20 

Second, we do have to be responsive to our constituents. We have 
to attend a wide variety of social receptions and functions. I know, 
in my 30 years in the Congress, I attended a lot, not only in my 
district, but also here. People would come from my district to 
Washington and would want to have dinner. I remember the first 
time I went to dinner. I had not been here more than a week. I 
made a mistake, because I went out for dinner with a group of real 
estate people. The number kept growing and didn't start on time. 
Finally dinner was ordered. I got home about 2 a.m. I never did 
that again. People do come to Washington from the district and 
they want you to attend. Provision should be made for this. 

The matter of trips is a very touchy area. It is important for 
Members of Congress to make trips and to have the opportunity to 
see first-hand what the problems are at different places, not only in 
the United States, but also overseas. If a program that is adopted 
prohibits Members from doing that, then that would not be advan- 
tageous to the Member being able to do his job. 

I find, as a result of what is going on now, that more and more 
Members are not making the trips they should be making. It is a 
very difficult area, but there does have to be a provision made to 
permit trips. 

The implementation of restrictions on acceptance of gifts can be 
done either by legislation or by rules. My concern with legislation 
is that there are criminal implications. It would permit the Legisla- 
tive Branch to be examined by the executive branch. 

My suggestion would be you consider it by way of rules, rather 
than by legislation, in order to avoid the criminal aspects. My per- 
sonal judgment is that the amendment of the rules of each body 
would be better than to do it by legislation. 

With regard to the amount of the gifts. I have some problems 
with the limit of $20. I think $20 is a pretty low level. For example, 
I brought along with me this little gift that was given to me. I sent 
a young man to the Naval Academy and ultimately he became a 
Commander in the Navy. He commanded the Lewis & Clark, a sub- 
marine. He asked me to be the principal speaker at his change of 
command ceremony, which I was very happy to do. 

When we got finished, he gave me this pen and pencil set. It is 
probably worth more than $20. I have not priced it. It was in- 
scribed with the name of his submarine on it. I certainly would not 
want to be denied the opportunity, as a Member of Congress, of re- 
ceiving this small gift. This is just one of the examples we keep in 
mind when we start to pass this kind of legislation. 

I also brought along an Eagle given to me by FAPAC. As you 
know, I was the author of legislation that began the Asian Pacific 
American Heritage Week. Now it is a month, and it is permanent. 
One of the groups, which is the Federal Asian Pacific American 
Council, gave me this Eagle plaque last year. I am sure it is worth 
more than $20. Under Senator Lautenberg's bill, I would be prohib- 
ited from taking this award. Thus an award should be considered 
when we are talking in terms of gifts. 

The other point I would make with regard to the $20 gift is we 
ought not prohibit gifts entirely. But if you do set the level at $20, 
then you are, for all practical purposes, prohibiting any type of 
gift. I know a lot of people want to prohibit gifts entirely, but I am 



21 

not in that camp. Thus I think $20 is too low. On the other hand, I 
agree with the Committee and with Senator Lautenberg that it is 
important for us to take a look at this entire matter. I think that 
the $250 cap and the $100 limitation is out of line and should be 
tightened up. 

Basically those are the views that I have with regard to the 
present legislation. I do commend your Committee. I commend Sen- 
ator Lautenberg for bringing the matter up. I think it is something 
that does need to be addressed, and I think this is the time to do it. 
The American people are looking for answers, and this is a time to 
have answers. 

Thank you. 

Senator Levin. Thank you, Congressman Horton, for that helpful 
testimony. 

Both of you have a lot of practical experience, both in the Con- 
gress and in life, real life, and that is why we are so delighted you 
were able to accept our invitation to come and help this Commit- 
tee, to assist us in kind of piecing our way through this. 

I think both of you would agree we have got to tighten the rules. 
On the other hand, from your testimony, I think you both would 
agree that there is some de minimis gifts, some token gifts that, as 
a representative, you do not want to have to refuse, such as a 
plaque, such as a pen and pencil set, such as home State products 
that you are trying to promote, be they blueberries, peaches, cher- 
ries or anything else which we all have from our home States in 
different varieties. 

A handmade pillow embroidered by a woman who is thanking 
you for what you helped her on a social security matter, it could be 
worth $23. But a hand-embroidered pillow that is personally given 
by a constituent as a thank you, it seems to me most of us would 
say we should not have to return that. You could really do damage 
to that person needlessly, by having to return that kind of a hand- 
made item that was just a simple human thank you, although its 
value may be $23 at some antique show or whatever. 

So far, would you agree with that? I do not want to put words in 
your mouth. I think you said, Congressman Horton you would. Let 
me just ask Senator Bayh, so far we are together, would you say? 

Mr. Bayh. Yes. 

Mr. Horton. If you are from Michigan and they offer you an 
automobile, that would be another matter. Eastman Kodak was in 
my district. You know, they could offer you a camera that would be 
worth a lot more than $250. 

Senator Levin. Absolutely. The premise is how do you draw the 
line? How do you make sure that de minimis token items are OK, 
but you don't want us and I don't want us accepting World Series 
tickets and Super Bowl tickets and trips and things like that, so 
there is necessarily a line to be drawn and it gets complicated. 

I asked the earlier witnesses what about a meal at someone's 
home, and we got a different answer from each of the witnesses on 
that. Do either of you have any problem with accepting a meal at 
somebody's home, personal home? 

Mr. Bayh. To me, there is no absolute formula for this. I think 
what we are trying to do is to not keep a Congressman or a Sena- 
tor and a constituent from exchanging memorabilia, but we are 



22 

trying, it seems to me, to deal with whatever it is that destroys 
faith or lessens faith in the system. 

I cannot imagine anybody having a concern about you spending 
a night at somebody's home that you are visiting, particularly if 
that someone is a constituent. My goodness, that is what being a 
representative is all about, it seems to me. However, if a person 
asks you to stay in his home and he had dancing girls and a band, 
you could put together a scenario that would destrpy or lessen 
faith. But the normal kind of thing, it seems to me, would be some- 
thing that someone would say, "Ho hum, what difference does it 
make, it is nice that he spent an evening in his own State or even 
whatever State it might be." 

Senator Levin. Staying in a constituent's home having a home- 
made meal and sleeping overnight, that wouldn't bother anybody. I 
think your test is exactly the right test, which is what promotes 
credibility and what undermines credibility. I think that is the test 
and should be the test in everything we do, frankly. 

Mr. HoRTON. I agree with that 100 percent. 

Senator Levin. All right. 

Mr. HoRTON. I didn't have any problem with the other one, 
where it was someone you didn't know that well, either. 

Senator Levin. No, I am saying someone you don't know. 

Mr. HoRTON. In my district, I had those little towns and there 
was no hotel and no place to stay. 

Senator Levin. Now let me get to the travel issue. Thisi in a way, 
is the most complicated of all the issues, as I think maybe both of 
you said, because here we have got a fundamental question as to 
whether we allow any private organization at all to reimburse a 
Member of Congress for a trip. 

If I go back to Michigan, I think it complicates it, because I think 
that is going to be paid for out of my official travel and probably 
should be any time I go to my home State. But let's say I go to 
another State. I go to Illinois and make a speech at an AMA con- 
vention and come right back to Washington the same day. I run 
out there in the morning and make a speech at lunch and come 
back to Washington to vote in the evening. 

The subject of my speech is the health care bill that is in front of 
the Senate, and I give my views on it, with no honorarium. I have 
never accepted an honorarium, anyway, and that is simple for me. 
Let's assume that is not an issue, no honorarium. It is just a ques- 
tion of whether or not you can be paid that air fare back and forth 
by that organization. Some say no. If it is official business, if you 
are there making a speech as a Senator, giving your point of view, 
you should charge that to your travel account and the taxpayers 
should pay for it. 

Others say we have limits as to how much we can spend, and if 
we do not get reimbursed by the entity that is sponsoring that con- 
vention in Chicago for that speech, you probably are not going to 
be able to go at all, just because we do not have enough travel 
funds to go, that there is nothing wrong there, that there is no 
playing golf, there is no staying overnight at a resort. You are run- 
ning out making a speech at lunch and coming right back. 

Under your confidence test — I will ask you, instead of my saying 
anything — what is your reaction to the speech, running out for 



23 

lunch to Chicago, flying out and coming back? Do you have any re- 
action to that? 

Mr. HoRTON. I agree with you. You get into another problem, if 
you try to have it all financed by the Federal Government. You 
will get criticism, because the Federal Government is going to be 
paying for your travel to Chicago to make a speech. 

Now, no matter how you slice it, the constituents are going to be 
upset, because you go out there either at government expense, or 
you go out paid for by the organization that has invited you to 
come out. I think the lesser of the two evils is to do it with the 
AMA so long as you have to report it. I do not see any problem 
with that. 

Senator Levin. Birch. 

Mr. Bayh. You know, I suppose one word has been mentioned 
more than any other, and that is influence. We are concerned 
about influencing a Member. Well, there is another side of that 
coin. What about influencing your constituency? A democracy de- 
pends upon a flow of information. Unfortunately, a lot of folks at 
home do not have time to read the Congressional Record, unless 
they don't have any sleeping pills and need to go to sleep at night. 
This two-way dialogue I think is critical. 

This may be a mea culpa here and I don't think I did anything 
illegal, but it is the kind of thing that would be prohibited. As you 
know, I was involved in certain legislative issues and I had a list of 
places that I went in order to talk to a group about the legislation 
that I had sponsored, because I wanted that particular group to 
support it. Legislation, I thought, was good for the country — for ex- 
ample, the 25th Amendment that ultimately got passed and the 
direct election of the President, which never got passed. 

I remember flying to Dallas to the League of Women Voters' 
State convention, flying back to Washington all night, and the 
League of Women Voters picked up the tab. The group is not doing 
you a favor, if you have to travel out there and turn around and 
come right back. I don't see how they have any undue influence on 
you, and such an exchange of views is part of the dialogue. 

You hear their position on issues and you have a chance to 
report what is happening in Congress, and I think that is a positive 
contribution. From the standpoint of influence, you would probably 
be a lot better off if you could stay home and spend a night with 
your family, instead of speaking to a group, particularly outside 
your State. 

Senator Levin. Does it make any difference whether or not the 
AMA at that Chicago speech or the League of Women Voters that 
you spoke to in Texas, whether they pay the House of Representa- 
tives or the Senate for the price of the ticket, instead of paying you 
directly into your account? Does that make any difference, the me- 
chanics? Some people say the best way to do this, to insure confi- 
dence in government, is for you to use your travel money and then 
to have the League of Women Voters reimburse the Senate or the 
House of Representatives. Others say what difference does it make? 
They are reimbursing the government, in any event. 

Mr. HoRTON. Sometimes, too, they provide the ticket. They might 
get a special rate on a ticket which you might not be able to get. I 
do not think it makes that much difference. 



24 

Senator Levin. Do you think the mechanics make any differ- 
ence? 

Mr. HoRTON. The mechanics, in my judgment, don't make any 
difference. 

Senator Levin. Birch. 

Mr. Bayh. I agree. They do not. Obviously, the amount you are 
paid is the price of a ticket. There is no windfall there. If there is, 
you have trouble in more ways than one. 

Mr. HoRTON. As I said before, I think this is one of the toughest 
thickets to get into. For example, both parties. Democrats and Re- 
publicans, go to retreats and lobbyists usually pay for those re- 
treats, going and coming. That is another problem that is going to 
have to be addressed. I don't have an answer to that. 

Senator Levin. That one is addressed and should be, because 
that to me is where I draw the line. It is one of the places I draw 
the line. No way should we permit lobbyists to be paying for our 
retreats. 

Mr. Horton. I say it has been done and it should be looked at 
and tightened up. 

Mr. Bayh. I have to say what I said before: I don't think any 
Member who goes to a retreat which is paid for by a lobbyist feels 
that he or she is compromising himself. However, any lobbyist who 
is there and has a chance to visit with the Member is going to have 
an easier opportunity of getting to talk to him when he gets back 
to Washington than if the lobbyist hadn't sponsored the event. So I 
think it is an influence that you need to deal with, and I am glad 
you are. 

Senator Levin. And there is an appearance issue there very, very 
clearly, in any event. It clearly just breeds disrespect for the insti- 
tution and I think corrodes public confidence, when you have got 
lobbyists paying for travel to retreats. 

The same thing would be true, if you go and make a speech. In- 
stead of going and making your speech and come back or going and 
making your speech and staying overnight and coming back the 
next morning, if you go make a speech and stay a couple days and 
then play golf and everything else for a couple of days. That is a 
very different situation, which I think we ought to prohibit. But I 
think that is very different from going out and making a speech 
and then turning around and coming back or immediately the next 
morning coming back. I think we have to make those distinction 
and they are not easy to make, but I think we have to make those 
distinctions. 

Mr. Horton. I would also point out, in that connection, the trips 
like the U.S.-Canadian Interparliamentary, that is paid for by the 
government, and there is criticism when you go on those kind of 
trips. The U.S. North Atlantic Assembly, where Members go to 
meet with parliamentarians from the NATO countries. This is not 
subject to what you are talking about here, but, again, you get crit- 
icism. So you are going to get criticism on the travel issue any time 
you make a trip. 

But the caveat I want to add again is don't throw the baby out 
with the bath water. I think it is important that Members do have 
an opportunity, accompanied by spouses, to go on some of these 



25 

type of trips. I would not want to prohibit them. I would certainly 
want to require very strict disclosure. 

Senator Levin. Just one last question, which we have gotten into 
and which does come up in the travel issue, and that is whether or 
not it is better to have travel which is allowed in that narrow 
band, where it is not pleasure travel, it is not recreation travel, it 
is travel to make a speech or to participate in a seminar, where I 
think many people would say yes, that travel we should permit. 
Would you require that that be approved by the Ethics Commit- 
tees, or would you leave it to each individual to meet a standard? 

Mr. HoRTON. My problem with the Ethics Committee is right 
now I think they are overloaded. And if you are going to deal with 
535 Members of Congress and all of the top staff people, you are 
talking about a paperwork burden that I think might be almost im- 
possible. So I am not sure that you ought to leave it up to the 
Ethics Committee, because each and every one is going to have to 
be examined and you are going to build up a new bureaucracy, in 
my judgment. 

Senator Levin. Birch. 

Mr. Bayh. I would emphasize that if you travel some place and 
you can't look yourself in the mirror in the morning and say the 
trip passes muster as far as your constituents are concerned, then 
you had better not do it. 

The foreign travel is a very difficult kind of thing, Frank. A spe- 
cific example I had was that the taxpayers paid for me to take a 
trip to Israel, and I financed my older son, who was about 17 or 18, 
and his mother to go with me. 

I remember standing on the Golan Heights looking out on the 
valley, and my 17-year-old saying to me, "Dad, I can sure see why 
it would be a problem if there was ever artillery up in these 
places." You couldn't get that in a textbook, but going there cer- 
tainly impressed me, and it impressed a 17-year-old. There are 
other instances just like that where touching and feeling and going 
and associating with people who have to live with the problem give 
you a better understanding, and you have to vote on the issue 
whether or not you take trip. 

Senator Levin. Thank you, both. We really appreciate your blend 
of ethical approach to issues and your practical experience. 

Mr. HoRTON. Thank you. 

Mr. Bayh. Thank you. 

Senator Levin. Thank you. 

Next, Steve Potts, Director of the Office of Government Ethics. 
Mr. Potts, thank you for appearing again in front of us, and per- 
haps you could tell us who is with you today, although I think we 
know. 

TESTIMONY OF STEPHEN D. POTTS, ^ DIRECTOR, OFFICE OF GOV- 
ERNMENT ETHICS, ACCOMPANIED BY GARY DAVIS, GENERAL 
COUNSEL, AND LESLIE WILCOX, ASSOCIATE GENERAL COUN- 
SEL 

Mr. Potts. Thank you, Senator. I am very happy to introduce 
Ms. Leslie Wilcox, who is associate general counsel of the Office of 



• The prepared statement of Mr. Potts appears on page 85. 



26 

Government Ethics. Ms. Wilcox is the principal architect of the 
Standards of Ethical Conduct for the executive branch. On my left 
is Mr. Gary Davis, who is general counsel of the Office of Govern- 
ment Ethics. Needless to say, I brought them along in case the 
questions got too tough, and I could deflect them over to them. 

I do want to thank you very much for the opportunity to appear 
today to discuss S. 885, a bill to limit the acceptance of gifts, meals, 
and travel by Members of Congress and congressional staff. 

I would also, Senator, like to take this opportunity to thank you 
and your staff for helping us both to draft and to implement the 
Standards of Conduct for the executive branch. Your support has 
been invaluable in our ability to get that job done. 

Senator Levin. Thank you. 

Mr. Potts. Mr. Chairman, you indicated in your letter of invita- 
tion that the Senate had earlier adopted an amendment expressing 
the sense of the Senate that it should limit the acceptance of gifts 
in a manner substantially similar to the restrictions applicable to 
executive branch employees. And in my written statement, I pro- 
vided some discussion of the major differences between the execu- 
tive branch rules and the provisions in S. 885. 

There are also some technical differences which I did not put 
into that written statement that my staff would be happy to dis- 
cuss with yours whenever you wish. 

In your letter, you asked that I address three specific issues, and 
I have done that in my written testimony. These issues deal with 
the process followed by OGE in issuing its rules, OGE's implemen- 
tation of the agency gift authority for the payment of official travel 
expenses by private sources, and any differences between the 
branches that might justify a difference in conduct rules. 

First, as to the rulemaking process, just very briefly, my office 
issued the gift rules for the executive branch as part of the overall 
standards of conduct for executive branch employees. And, as you 
are aware, all administrative rules must go through a notice and 
comment procedure. After lengthy internal discussion and review 
of previous department and agency rules, we issued the proposed 
rules in July of 1991. They received substantial comment — in fact, 
we received about 1,200 sets of comments on those rules. About 800 
of those really focused on the provisions concerning participation 
in professional associations. 

However, it is true that the gift rules also received their share of 
comments. Then, in August of 1992, OGE issued the standards of 
conduct in final with a 180-day delayed effective date in order to 
allow the executive agencies time to train their employees on the 
rules before they went into effect. 

Now, the gift rules that are applicable here are really divided 
into two subparts. The first one, subpart B, deals with gifts from 
outside sources, and the second, subpart C, deals with gifts between 
employees. I have attached a general outline of these subparts to 
my testimony. 

The way the system works is that each agency administers these 
rules by providing guidance and, if necessary, by taking appropri- 
ate administrative action, if an employee of the agency is found to 
have violated a provision of the rules. OGE continues to provide 
guidance to agencies with regard to the rules through written and 



27 

oral communications and conferences with ethics officials that each 
agency has to have, a designated agency ethics official. And in fact, 
in some instances, we provide guidance to those who are consider- 
ing offering gifts to executive branch employees. In other words, 
sometimes we get calls from the private sector before they have 
taken action to offer a gift, asking us whether it would be appropri- 
ate or proper. 

You also asked me to address OGE's implementation of a statuto- 
ry authority that permits executive branch agencies to accept 
travel expenses from non-Federal sources or official travel to meet- 
ings or similar functions. Actually, it was the General Services Ad- 
ministration that was assigned the lead in implementing 31 U.S.C. 
Section 1353, which is the citation of the statute that provided that 
authority. But it is true that OGE provided substantial assistance 
to GSA in furtherance of our consultative role. 

Prior to the enactment of Section 1353, we estimated that only 
about one-third of executive branch agencies had statutory gift ac- 
ceptance authority permitting them to accept gifts of travel or 
travel expenses from the private sector. Moreover, there was gener- 
ally no authority for individual employees to accept travel ex- 
penses from non-Federal sources, even when that funding was 
thought to be advantageous to the agency. 

Consequently, OGE supported the enactment of a statute very 
similar to Section 1353 which permits agencies to accept funding 
from outside sources. So on that point, let me be clear. We were in 
support of something very analogous to Section 1353, and, indeed, 
we support Section 1353 and that it be continued on the books. 

Now, even though the statute, Section 1353, is silent as to con- 
flict of interest considerations, we urged GSA to promulgate an im- 
plementing regulation that required an agency to weigh the accept- 
ance of travel expenses against any circumstances that would give 
rise to a conflict of interest or an apparent conflict of interest. 

The conflict of interest standard initially adopted by GSA proved 
to be quite controversial, and basically, it w£is thought to be contro- 
versial because it was too liberal in allowing agencies to go ahead 
and accept travel funds even though perhaps there was some ap- 
pearance or shadow of a conflict of interest. 

But later on, as a result of our urging and the urging of others, 
that provision was revised to make clear that an agency may never 
justify acceptance of a payment when acceptance would give rise 
even to an appearance of a conflict of interest. 

Now, interestingly, although GSA was assigned the primary role 
of implementing the statute, OGE was assigned the responsibility 
of collecting the required semiannual agency reports and making 
them available to the public. The quality of the reports has actual- 
ly varied quite a bit, and we have received a number of complaints 
concerning the administrative burden imposed by the reporting re- 
quirement. Those complaints have come from the reporting agen- 
cies, and as I indicated, the variance in the thoroughness with 
which the agencies are preparing and submitting the reports varies 
quite a lot. 

Finally, turning back to your third question, you asked that I 
provide you with any views I might have on the differences be- 
tween the legislative and executive branches of government, and 



28 

the issues that may be raised by such differences. Well, the most 
obvious difference that I can think of in the context of a gift rule is 
determining who would be a prohibited source of gifts for Members 
and congressional staff. For officers and employees of agencies in 
the executive branch, in fact, whether those agencies are executive 
or legislative agencies, it is really pretty easy to focus on those pri- 
vate sources which have some official nexus to either the employee 
or the agency. So that makes it fairly easy for us to identify what 
is a prohibited source. 

But, of course, for Congress, that literally could be anyone, and 
usually is anyone. We note that you have tried to address this by 
making all sources of gifts initially prohibited and then setting 
forth the exceptions to that rule. And frankly, I think this is prob- 
ably a reasonable approach for Congress under those circum- 
stances. 

Now, there may also be some legitimate reason for treating all 
elected officials differently in some respects from all other employ- 
ees. For instance, I note that you have, I believe, reasonably recog- 
nized that Members may be given home State products for the pur- 
pose of redistributing them to others. As they hold representative 
positions, I believe that is certainly appropriate. Since no one in 
the executive branch is elected by a limited number of citizens, I 
don't feel that is an exception that would be appropriate for the 
executive branch. 

Before closing, I know you have raised several questions to the 
preceding witnesses, and if I may, let me just make a few com- 
ments about those. 

Senator Levin. Sure. 

Mr. Potts. First, you raised two questions having to do with per- 
haps one night's lodging after a speech, staying with a constituent, 
or home hospitality by a political supporter. There are a couple of 
exceptions built into the standards of conduct for the executive 
branch that I think are instructive in that regard. 

One has to do with an exception under subpart B, subpart B 
being that part which pertains to gifts from outside sources to 
Members of the executive branch. There is an exception for social 
invitations from persons other than prohibited sources. And that 
particular exception says that "an employee may accept food, re- 
freshments and entertainment, not including travel or lodgings, at 
a social event attended by several persons where (1) the invitation 
is from a person who is not a prohibited source and (2) no fee is 
charged to any person in attendance." Basically, we built that in 
because it is really quite common for people in the executive 
branch to receive invitations of a social nature that they really 
can't say when they arrive in Washington that that invitation is 
from a personal friend, and yet is perhaps from someone whom 
they wish to get to know and establish some contact with. So we 
built that exception in under those circumstances. 

Senator Levin. Would that cover small dinner parties? 

Mr. Potts. It would cover a small dinner party, exactly. 

We had another provision which I think also is instructive, and 
it is really related in the same way. This is in subpart C, which 
pertains to gifts between subordinates and superiors. 



29 

Senator Levin. By the way, does that cover lodging, too, or just 
the meals? 

Mr. Potts. It would not cover lodging in the first case we were 
talking about. 

Senator Levin. Do you have any particular objection? 

Mr. Potts. Well, no. I think that the comments that Congress- 
man Horton and Senator Bayh made about if you are going out as 
a congressman, and you are staying somewhere in a small town 
where there is no motel or whatever, I think it is a little absurd to 
think that you have to pack up and go 15 or 20 miles to stay in the 
Days Inn rather than stay in someone's home. 

I think there is some language, however, in this next part that 
might be helpful to include in this draft legislation to get around — 
I think Senator Bayh was correctly pointing out that it is one thing 
if you are thinking about modest lodging and modest entertain- 
ment, but you can create a scenario where they bring in a fancy 
orchestra, and they have an incredibly fancy meal and things that 
are really much out of the ordinary. You can create a situation like 
that where you could think I would be concerned about that. But I 
think we deal with that in this particular section about personal 
hospitality provided at a residence. This could be, in other words, 
that a subordinate can entertain a superior in the executive branch 
if it is personal hospitality provided at his home — they can't do it 
at a club or a restaurant, but at home — provided it is of a type and 
value customarily provided by the employee to personal friends. 

So I think a little cautionary language of that sort might go a 
long way in making clear what we are talking about here, and not 
providing a loophole for lavish entertainment. 

On the other question you raised having to do with travel, we 
would oppose the idea of an outright ban, and as you know, the sec- 
tion we discussed earlier. Section 1353, does allow government 
agencies — not individual employees, but government agencies — by 
statute, limited to the agency, to be reimbursed for the travel of an 
employee where that travel has been cleared in advance by the 
agency. 

So I guess in thinking about some of the differences between the 
Congress and our situation, and also some of the similarities — cer- 
tainly, one of the similarities is that we are both under increasing- 
ly constrained budgets, and so the amount of travel that we could 
afford out of our own budgets is probably going to lessen rather 
than increase or even stay the same. And, again, I think Senator 
Bayh put his finger on something — that it is extremely important 
for both executive branch employees as well as Members of Con- 
gress not to be imprisoned here in Washington. It is vitally impor- 
tant to really understand what is going on and what the real issues 
are for Members of the executive branch and Members of the Con- 
gress to get out beyond the beltway and really meet with people 
and talk to them and find out what is really going on. So I think it 
is important for both branches to have this opportunity to enjoy 
more travel. In other words, we not only get information, but it is 
also important when there is a policy that has been adopted by the 
executive branch, or if you as a Senator have some program you 
are trying to marshal support for, or support for a bill that you 
have introduced, you can't do that simply by sitting in your office. 



70-652 - 93 - 2 



30 

You have got to get out there in the hustings. We have to do exact- 
ly the same thing. So I think it is important for us to have some 
flexibility in getting out there and getting the word out. 

Also, I am comforted by the fact that the possibility for abuse is 
greatly lessened by what I perceive as a much greater sensitivity 
by the public and by the press on these ethical issues. And I think 
that if somebody really started abusing that, there are a lot of 
means for getting that out and embarrassing that individual so it is 
a practice that would not be allowed to continue. Of course, in the 
case of Members of Congress, they run the risk of being voted out 
of office. 

I would also say that I think that pushes me in supporting the 
idea of having disclosure of a trip before it occurs so that the 
Member — just as in the case of the executive branch, we are in a 
situation where there will be prior approval in the executive 
branch of any kind of trip — I would say in the legislative branch, 
certainly some sort of prior approval, and if actually that informa- 
tion were available even in advance of a trip, that would certainly 
be another brake on any kind of abuse. 

Finally, I would observe that I think that as we proceed, if you 
had the ethics committees having this responsibility for prior ap- 
proval, a body of precedent would quickly grow up as to which 
kinds of trips were thought to be appropriate and which trips 
would not be appropriate. 

That concludes my testimony. 

Senator Levin. Thank you. 

On the travel issue, I think you made reference early in your tes- 
timony to private reimbursement being acceptable where it is ad- 
vantageous to the agency, or words to that effect. Is there any 
standard such as that that is written in? Is that a limit on the ac- 
ceptance of private reimbursement 

Mr. Potts. Let me ask Ms. Wilcox. She worked pretty extensively 
with GSA on helping them develop their regulation. 

Ms. Wilcox. I'd have to review the regs. Senator. 

Senator Levin. While you are looking that up, let me ask a more 
general question. As you and others have pointed out, we in this 
legislation are hoping to come close to what the executive branch 
did, and we are using them as a model. That is the Lautenberg 
bill's model basically for a new congressional gift statute. 

Have the rules which you helped to create and the executive 
branch adopted come in for any major criticism either because they 
are not restrictive enough, or they are too restrictive? Can we 
learn from the experience with those rules? 

Mr. Potts. So far, I would say the comments we get are about 
half and half. And we have not formally asked for comments. The 
way we have gotten comments is through the annual conferences 
that we have held; there has been one since the rules went into 
effect. Also, we have brown bag lunches with the ethics officials, 
inviting them to come in both one at a time and then in groups of 
about 10 or 15, specifically to hear what is going on. And I would 
say it is about 50-50, some saying it is too restrictive, some saying 
it is not restrictive enough. 

Senator Levin. Has there been a lot of response? 



31 

Mr. Potts. Really, not much. In fact, I would say most of it has 
been generated by us getting people in a conference or a brown bag 
lunch saying, "Hey, you've got to tell us; how is it going out 
there?" It isn't like they have been battering on our door, saying 
this is too tough or it's too loose or whatever. 

Senator Levin. One of the things that struck me as we read 
through those rules is that you have a series of exceptions that 
permit the acceptance of certain gifts such as gifts based on a per- 
sonal relationship, awards and honorary degrees, gifts based on 
outside business or employment relationships. You also have a sep- 
arate rule which says that notwithstanding any of those excep- 
tions, no Federal employee may solicit the offering of a gift. 

Could that lead to some anomalies? For example, would an exec- 
utive branch official violate your rules if he or she solicited a gift 
from her parent? 

Mr. Potts. No, I don't think so. 

Senator Levin. You don't think it should, but would it in terms 
of the stricter language? Ms. Wilcox is trying to get your elbow 
there. 

Mr. Potts. Well, let me put it this way. It wouldn't as long as I 
am sitting there, whatever technical interpretation of the rule you 
might make. 

Senator Levin. I agree with you that it should, but Ms. Wilcox? 

Ms. Wilcox. We have run into a slight technical problem on the 
rule because of that language. It came up that one employee's car 
was broken down, and his neighbor worked for a corporation that 
was a prohibited source, and his question was could I ask my 
neighbor to jumpstart my car. Clearly, that was not the problem 
that we had in mind. So there is a technical problem on that lan- 
guage about solicitation. It hasn't been a big issue so far. 

Senator Levin. All right. 

Mr. Potts. Senator, I think there is always that old saying about 
the whole essence of management is making reasonable exceptions 
to the rules, and that certainly fits in that category. 

Senator Levin. What about requesting a benefit for which he or 
she is eligible by virtue of outside employment? 

Ms. Wilcox. Where an outside organization offers something, 
such as benefits for which one can apply, or a discount, we regard 
the employee not as soliciting those benefits but rather as accept- 
ing an offer of the benefits, and it has not been a problem. 

Senator Levin. All right. Did you get the answer to that other 
question? 

Ms. Wilcox. Yes. We basically have a requirement that the em- 
ployee be authorized to go to the meeting in his official capacity, on 
official duty. That assumes an agency interest in the matter. And 
then, if the non-Federal person offering the payment is someone 
who could be affected by the performance of the employee's duties, 
we require an affirmative determination that it won't raise an ap- 
pearance problem. So we have an interest determination in allow- 
ing the person to go in the first place, calling it official duty. It is 
built in. 

Senator Levin. Can somebody go to — I was going to ask the next 
witness this question, too, so maybe if she can listen, she'll have a 
better answer for it— can somebody accept the reimbursement of 



32 

travel to a convention where the employee, for instance, is an 
expert as a hobbyist, nothing to do with their official duties? 

Ms. Wilcox. No. It would have to be someplace that the govern- 
ment could pay for the employee to go using appropriated funds in 
the first place. 

Senator Levin. Otherwise, for instance, if the employee works for 
the Department of Health and Human Services but in his or her 
spare time is also a stamp collector, could they go and speak as an 
expert stamp collector to the philatelist convention and be reim- 
bursed — they could personally be reimbursed. 

Mr. Potts. They've got a problem now under the honorarium 
prohibition, of course. 

Senator Levin. But other than that, they don't have a problem. 

Mr. Potts. That's right. 

Senator Levin. OK. I guess the basic question here is if this 
person is traveling on official business, or must have some good of- 
ficial purpose in order to be traveling, why should we allow a pri- 
vate party to pay for the travel which is official travel any more 
than we wouldn't let the telephone company pay for our telephone? 

Mr. Potts. Well, it really is a matter of balancing the situation 
now. We have on the one hand the desire to make sure that our 
Federal officials, both executive and legislative, get out in the field 
and meet and really understand what the problems are; we also 
are faced with limited budgets, and at least looking as far as we 
can into the future, it would appear that the travel funds would be 
so constrained — I can say this for the executive branch more confi- 
dently than I can about the legislative — but our funds are going to 
be so restricted I know in fiscal year 1994 that our travel is going 
to be extremely limited. And that is certainly true of many of the 
other executive branch agencies. So the risk is that they are going 
to be stuck right here and not be able to get out as much as they 
should be able to get out. 

So it is balancing those considerations. 

Senator Levin. Has the travel provision been working all right 
from your perspective in the executive branch? 

Mr. Potts. This GSA regulation? 

Senator Levin. No; the reimbursement approach. 

Mr. Potts. I frankly am a little troubled about the role of the 
Office of Government Ethics in it, because our role is to be the re- 
pository of these travel reports. But the legislation doesn't tell us 
to do anything with them. And we don't have a duty to look at 
them and see if there are any kinds of violations or whatever, so 
here these things are — and they are massive, and they are piling 
up in tremendous quantities — and we have frankly just taken on 
our own initiative to try to do some analysis which showed that 
there was considerable confusion about what ought to be reported. 

In fact, for example, people were reporting things where they 
had gift acceptance authority under something else; or we would 
find trips reported where in fact the agency had not been reim- 
bursed by a private source, but they had simply paid for the travel. 

So it is kind of a little bit of a confused situation right now as to 
what our role is, and frankly, we would like to clarify that to make 
sure we are doing what is expected of us. 



33 

Senator Levin. We may be able to address that issue on the re- 
authorization bill. Right now, you make those forms available to 
the public immediately upon being filed? 

Mr. Potts. Yes. In fact, as Gary Davis just pointed out, initially, 
the first reporting cycle, we had a tremendous amount of interest 
from the press, and they came over and pawed through all these 
things. But since then, we have seen neither hide nor hair of them. 

Senator Levin. Could you give us an estimate of how many of 
those forms would be filed on travel in one quarter? Would it be 
hundreds? 

Mr. Potts. Well, there are hundreds filed because each agency 
has to file a report, and there is an incredible difference between 
the Department of Defense, NASA, and some of the others, that 
have a huge stack, thousands of reports, and others will report 
none. So it varies all over the lot. 

Senator Levin. And you don't catalog them, you just pile them 

up? 

Mr. Potts. We pile them up, and we have reviewed them, be- 
cause I just felt that in order to be responsive to you, really, we 
needed to just understand a little bit better what is coming in the 
door, even though the statute doesn't tell us what to do with them. 

Senator Levin. Mr. Potts, we thank you for your testimony, for 
the good work that you and your office perform. Thanks for coming 
today. 

Mr. Potts. Thank you. Senator. 

Senator Levin. Finally, Joan Claybrook, former head of the Na- 
tional Highway Traffic Safety Administration under President 
Carter, now President of Public Citizen. 

Ms. Claybrook, we are delighted to have you with us today. We 
gave you a chance to think about our hardest question, too, on the 
travel, so I know you've got a good answer for me on that. But 
we'll save that for later. 

We will make your statement part of the record in full, and 
please proceed as you wish. 

TESTIMONY OF JOAN CLAYBROOK,i PRESIDENT, PUBLIC 

CITIZEN 

Ms. Claybrook. Thank you, Mr. Chairman. 

I really appreciate the opportunity to testify today, and I will try 
not to duplicate what others have already commented on here. 

We believe this legislation is very important, and we commend 
you and Senator Lautenberg for your leadership in bringing this 
legislation forward. We also commend you for the work on S. 349, 
the Lobbying Disclosure Act, which you passed last May, which 
contained a provision requiring the disclosure of a wide range of 
gifts and other financial items valued at more than $20. We believe 
this provision, which reaches beyond the traditional concept of gifts 
but deals with, as you have mentioned, tickets to sporting events 
and expensive dinners, is very important. 

Your new legislation requires disclosure of a financial benefit to 
"an entity that is established, maintained, controlled, or financed 



' The prepared statement of Ms. Claybrook appears on page 95. 



34 

by a covered legislative branch official." This language speaks to 
the increasingly common practice of a lobbyist directing a donation 
to a foundation or organization established or connected to a law- 
maker. We believe it is very important that the bill we are discuss- 
ing today, which attempts to go further by instituting some prohi- 
bitions against financial benefits, be as broad as your Lobbying Dis- 
closure Act. 

We are very pleased to see that the current bill, S. 885, prohibits 
Members of Congress from accepting gifts of over $20 from private 
groups, and we believe this limit makes very good sense. The cur- 
rent policy of allowing gifts up to $250 a year and not counting any 
gifts below $100 stands in sharp contrast, as you have mentioned, 
to the standard in the executive branch. I would say that I have 
had some experience in the executive branch during the time I was 
at the Department of Transportation. We were not allowed to 
accept any gifts over $20, and also we were not allowed to accept 
any travel paid for by any private sources. And I didn't find that 
these limits inhibited me in any way. 

I did have an experience — everyone talks about their own experi- 
ences — but I did have an experience when I was visiting Fiat Motor 
Company in Italy where four of us from the same agency were pre- 
sented with very luxurious and beautiful briefcases, and we had to 
turn them down. We had to return them, and it was very difficult 
because our hosts did not understand the reason behind our refusal 
of their gifts. But I think that these standards are very important 
for public perception, as you have mentioned, as well as for our 
own integrity. 

It does seem to me that if an assistant secretary can't accept a 
gift over $25, there is no reason that a Member of Congress should, 
and we believe these rules should be the same. 

One of the biggest concerns that we have in S. 885 lies in the 
privately funded travel section. The bill stops short of banning 
trips and instead calls for stricter disclosure. We heartily approve 
of stricter disclosure, but we believe that the best solution would be 
to ban all privately funded travel. There is just too much abuse of 
this perk today, too much difficulty in drawing the line between 
appropriate and inappropriate private travel, and if any trip is 
truly important enough to warrant the Member's attention and 
time, which I think is more valuable in many cases than the mone- 
tary cost itself, then Congress should pay for the trip just as Con- 
gress pays for congressional offices and staff and publications and 
hearings and investigations. 

Taxpayers will not object to Members of Congress traveling with 
public money when the trip has a substantive purpose — for exam- 
ple, a fact-finding trip to an area of the country that has suffered a 
natural disaster. They will not tolerate, I don't think, the financing 
of a junket to Florida in December where the featured activity ap- 
pears to be playing golf and swimming with special interest lobby- 
ists. 

If there is any doubt about this practice of Congress accepting 
trips and that there are widespread abuses, let me say that we 
have spent a considerable amount of time at Public Citizen study- 
ing this issue. We did put out a report on the 101st Congress in the 
House of Representatives. We found that there were 4,000 privately 



35 

funded trips. On average, Members took nine trips. There were 
only a handful who did not take any. Over two-thirds were paid for 
by corporations or trade associations that were lobbying the Mem- 
bers, and there was a relationship between the companies that fi- 
nanced the trips and the committee jurisdiction on which these 
Members served. And not surprisingly, many of these trips oc- 
curred during the popular winter months when Washington is less 
desirable. 

Among the top sponsors were the National Cable Television As- 
sociation, which sponsored 75 trips, and the National Association of 
Broadcasters, which picked up the tab for 67 trips. Members went 
to Las Vegas, Palm Springs, New Orleans, and Los Angeles for 
these trips. And at the time, the two associations were locked in a 
major legislative battle over the cable television re-regulation bill. 
Along with the millions of dollars that they gave to the campaigns 
of the Members during this period of time, they used these trips as 
an overall lobbying strategy to gain an edge on Capitol Hill. And 
not surprisingly, many of the Members who travelled were Mem- 
bers of the House Energy and Commerce Committee. 

Recently, ABC's television program, "Primetime Live," aired a 
segment showing 10 Members of Congress and their spouses visited 
Florida's Captiva Island, a trip sponsored by the Electronics Indus- 
try Association. The lawmakers met with trade representatives for 
a few hours in the morning and then spent the rest of the day play- 
ing golf or tennis. The companies that sponsored this trip were 
TRW, Magnavox, Martin Marietta, Texas Instruments, and 
DuPont. The cost per couple — the wives were invited — was about 
$2,500 per couple for the 3- or 4-day trip. 

Senator Lautenberg has mentioned the trip the American Medi- 
cal Association sponsored for staffers when they went to the Green- 
brier in West Virginia, where rooms cost $424 a night. 

S. 885 attempts to limit such abuses by setting the standard for 
the approval of privately funded trips as the "condition approval 
on a determination by the Ethics Committee that acceptance of re- 
imbursement would not cause a reasonable person with knowledge 
of all the facts relevant to a particular case to question the integri- 
ty of the Member, the Congress, or congressional operations." 

This criterion is a rough copy of the executive branch standard, 
but we believe this is an example where the executive branch rules 
may not be appropriate. The provision allowing executive branch 
staff to accept privately funded travel was slipped into the 1989 
Ethics in Government Act at the last moment, and I believe it was 
subject to no hearings or prior debate, and our fears about the 
abuses that could occur under this provision, we believe, have been 
realized. 

In a 1992 review of privately funded executive branch travel, 
Common Cause noted that NASA officials accepted travel from 
McDonnell Douglas, Boeing, Dow Chemical, United Technologies, 
DuPont and IBM — all companies whose work relates to that 
agency. Defense j)epartment officials had travel paid by Grumman, 
Bell Aerospace Systems Group, the Harris Space Systems, and so 
on. Clearly these companies have a direct interest in the agencies' 
actions, and yet these trips were approved under the present stand- 
ards of the executive branch. \ 



36 

We have thought very carefully about the standard that S. 885 
would establish — that if the average person would consider the ac- 
ceptance of a trip from a certain interest to pose a conflict of inter- 
est for a lawmaker, then the trip should not be approved. After 
analyzing privately funded trips over the years, we believe that 
most of the trips would in fact raise concerns in the eyes of the av- 
erage citizen since the trip sponsors target their trips to key Mem- 
bers of Congress sitting on committees with jurisdiction over those 
industries. 

It is for that reason that we have come to the conclusion that 
such a standard as S. 885 would establish seems unworkable, be- 
cause either it would be interpreted as the equivalent of a ban, or 
it could be interpreted so that many of these would be approved on 
an automatic basis. 

Instead of following the executive branch example, we believe 
that the bill should ban congressional travel as well as executive 
branch travel. That said, I would also like to go forward and make 
some suggestions for strengthening the disclosure provisions in the 
bill as well. 

First, we think that the Ethics Committee should not be given 
the authority for approving privately funded trips. First of all, I 
agree with Frank Horton that it would be a paperwork nightmare. 
You have already heard about the executive branch, which prob- 
ably has a much larger staff than the Congress, its difficulties in 
managing the paper flow and analyzing and looking at what is 
going on. The Lautenberg bill would require the Ethics Committee 
to approval travel in advance, and we believe that this puts a 
burden on the Ethics Committee either to avoid disapproving any 
trips at all so as not to alienate people, or any particular interest 
group. 

The likely result of this unwieldy arrangement is that the Ethics 
committees will become rubber stamps, legitimizing the special in- 
terest travel that citizens really find abhorrent. Furthermore, 
unlike the executive branch, where the officials are the agents of 
the President, as you mentioned earlier in other testimony, in the 
Congress each Member is an elected official, and we believe that 
Members should be responsible for their own conduct, including de- 
cisions about taking privately funded trips. They should not turn to 
another body, made up of their colleagues, to make this decision 
for them, displacing their own responsibility. And in the case of 
travel by staff, we believe the Members should make that decision 
for their own staff. 

Second, we believe there should be strict restrictions on privately 
funded trips; that if a Member of Congress or staff do go on a pri- 
vately funded trip — that is, if the bill does not ban such trips — that 
it should be a 24-hour trip, that it should be coach fare only, and 
that it shouldn't involve spouses and other family members. No 
such limits exist presently. There is a provision now in law that in 
the Senate, it is 4 days, and in the House it is 3 days, that the 
Member is allowed to travel at private expense. These turn into 
mini vacations, and we think if there is going to be a limit that it 
should be a very strict limit so that the example you gave of going 
to Chicago and coming back in one day would be reasonable. Obvi- 



37 

ously, for California, you could not do that, so it would be going out 
and coming back with an overnight. 

We believe there should be both pre-trip and post-trip disclosure 
in a timely manner. The bill does require trips to be reported in 
the Congressional Record twice a year after the trips are taken, 
and to improve this, we believe Members should be required to 
report trips before they travel. Mr. Potts' endorsement is very ap- 
preciated; we think that that is appropriate, and that the disclo- 
sure should include the sponsor of the trip, the trip designation, 
the dates of the travel, and this information could be submitted as 
late as 48 hours before a trip. If you are going to require Ethics 
Committee approval, this disclosure certainly is not a larger 
burden. By providing such advance reports, the public would be 
alerted about the Member's plans and could therefore monitor the 
activity. 

And furthermore, we believe that when a Member returns from 
a trip he or she should file a report in the Congressional Record 
within 10 days of their return. The Record could compile these re- 
ports, for example, on a quarterly basis so that the information 
would appear in one place for easy access. 

I would say, having studied congressional travel, that it is very 
difficult to get all this information because it is either very late or 
in the way that it is compiled, it is hard to find. So we believe that 
these disclosure requirements would be very effective. It seems to 
me that if the travel is worth the Member's time, they ought to 
provide a report. 

I think of Senator John Kerry of Massachusetts, as a model. He 
has gone to Vietnam and to investigate the MIA issue, and when 
he comes back, he provides a report to the public about what his 
trip was about and what he learned and so on. 

I believe that Members should be required to provide the public 
with more precise information about their trips. Members often 
argue that these trips are necessary to do their jobs. If it is true, 
the public deserves to know what the Members have learned on 
these trips, and they should write up statements for the record in 
doing that. And also, we believe the format should be improved. 
The House has a form for the format of reporting trips that is 
better than the Senate's, and we would urge you to look at that 
issue and have there be continuity between both the House and the 
Senate. 

The House form is more user-friendly in that it has a separate 
column provided for each piece of information, for example, the 
date of the trip, and whether there is any time not at the sponsor's 
expense, while the Senate form is much briefer. Many times. Sena- 
tors do not provide complete information, and having a separate 
column for each piece of information would improve disclosure sig- 
nificantly. 

In addition, we think Members should be required to spell out 
the names of the organizations who are the sponsors. Sometimes, 
the acronyms are incomprehensible, particularly to the public at 
large. 

And then, finally, we do support the lower threshold for gifts 
from $250 to $20, and we think that there ought to be a lower dis- 



38 

closure as well because some trips could fit in within the $250 

limit. 

We believe that, as many of your witnesses have said today, 
voter confidence has plummeted in part because of the presump- 
tion that wealthy special interests are overly affecting Members of 
Congress, whether it is through campaign contributions or through 
gifts or trips, and we think that we should respond to the call of 
the public which has clearly been stated over and over again, both 
with strong campaign finance reform and improved lobby disclo- 
sure, as well as banning gifts and privately funded travel. 

Thank you. 

Senator Levin. Thank you, Ms. Claybrook. 

Let's just focus on the travel because I think that's the part that 
you have spent most of your time on in your testimony, and it is 
one of the more complicated questions that we face. 

Your main proposal is that we not permit private reimbursement 

at all. 

Ms. Claybrook. Right. 

Senator Levin. I want to just give you some situations and ask 
you if you have problems with private reimbursement. The Ameri- 
can Cancer Society has a "Legislator of the Year Award" dinner, 
let's assume — I don't know if they do or not; I have not been hon- 
ored that way by them yet— but let's assume they have it, in New 
York City. And they pick a Member of the Congress to be their 
"Legislator of the Year," and it is a draw for them. They are not 
lobbying anybody. They are saying we are going to present that 
person with a scroll saying that they are the legislator of the year. 
Let's further assume that it is a charitable organization that does 
no lobbying. I don't know if that is true of the American Cancer 
Society, but assume for the sake of discussion it is a charitable or- 
ganization that does not do any lobbying whatsoever; it is 501(cX3) 
and does not do any lobbying. 

Do you have a problem with the American Cancer Society paying 
the air fare to New York and back for that legislator? 

Ms. Claybrook. Much less of one. We did distinguish in our own 
travel study the difference between nonprofit organizations that 
were not trade associations and privately funded corporate travel. 
So I do think it is fair to make a distinction there, and I also think 
that whether or not they are lobbyists makes an important differ- 
ence as well. 

Senator Levin. OK. So that you would not prohibit, even under 
your ideal approach, you would not necessarily prohibit that reim- 
bursed travel. 

Ms. Claybrook. No, I don't think so. I think that in most cases 
when Members of Congress travel, it is for an official function and 
an official purpose, and I think that Mr. Potts made that quite 
clear, that the first distinction is, is this official, is this a piece of 
official business? 

Senator Levin. Well, I think the one I gave you is arguably offi- 
cial. 

Ms. Claybrook. It is. You know, everyone can dream up an 
award. Senator, and a lot of people do. 

Senator Levin. Well, does that fit your test of official? 



39 

Ms. Claybrook. No. I think that that is probably official busi- 
ness — particularly I am more interested in it not being a problem 
because it is a nonprofit charitable organization, and there is no 
lobbying. 

Senator Levin. But just to pin down your position, even in your 
ideal approach, you would permit that reimbursement for that 

trip? 

Ms. Claybrook. Yes. I would certainly prefer it be at govern- 
ment expense, and I think that maybe the way to look at this, so 
that one Member of Congress doesn't go to 50 award dinners a 
year, is to perhaps consider some kind of special appropriation for 
Members of Congress to have one or two trips that are of that 
nature, so we have a fair allocation. 

Senator Levin. In terms of promoting public confidence, do you 
think it is going to promote public confidence for someone to spend 
taxpayers' money to go to New York to get an award? 

Ms. Claybrook. No, not really, I don't. But then, does it promote 
public confidence in officials that they are spending their time 
doing that? I think one of the issues that we really don't focus a lot 
of energy on here is how are legislators spending their time. And 
one of the reasons that we really care about the issue of travel and 
campaign contributions is because we want legislators who are leg- 
islators, and not legislators who are running all over the place. 

Senator Levin. Well, I think we would agree travel is useful, so 
"running all over the place" may be a bit extreme. 

Ms. Claybrook. Well, if you add in the trips that are used for 
campaign fundraising, for example 

Senator Levin. I want to stay away from campaign fundraising. I 
want to give you a situation which I think is clear, but I am curi- 
ous about your views. Let's make it even clearer. It is on a Sunday 
night that that award dinner is in New York — so maybe people are 
allowed a few hours off around here — would you, even under your 
ideal scenario, where there is no reimbursed travel by private par- 
ties, allow for reimbursement to go to New York and back on a 
Sunday for a 501(c)(3) charitable foundation dinner of an organiza- 
tion that never lobbies? 

Ms. Claybrook. I wouldn't mind that, no. 

Senator Levin. OK. Next, would you permit reimbursement in 
the other situation I mentioned a little earlier today — let's assume 
a Member of Congress is also a stamp collector, and on a Sunday 
night goes to a philatelist society dinner in Chicago, is the main 
speaker, is a draw, because that person is a well-known stamp col- 
lector, and then comes back to Washington that Sunday night from 
Chicago. So that's all it is — it is just the airplane fare, a free 
dinner, and back, totally unrelated to official business; it is just 
their hobby. Would you permit that? I'd better add a fact, because 
you are struggling. Let's assume that the hobby organization is also 
a nonlobbying organization. 

Ms. Claybrook. I have less of a problem with that. The question 
that was asked before had to do with the executive branch, and 
there I think it depends on whether or not it is a weekend, and it is 
a hobby, and it has nothing to do with official business, or if it is 
during the week, you are on annual leave, so it is a purely personal 
thing and has nothing to do with your agency's jurisdiction; and 



40 

presumably, there is no lobbying or jurisdiction of the Congress 
that would affect the stamp collecting. 

I have less of a problem with that. I think people are entitled to 
a certain personal life and to do personal things, and that Member 
of Congress might well have been invited whether or not they were 
a Member of Congress. 

Senator Levin. No, I doubt it. 

Ms. Claybrook. Oh — you said they would only be invited because 
they were a draw for the organization. 

Senator Levin. They are a draw, yes. They are a Member of Con- 
gress, they are well-known, and they happen to be a stamp collec- 
tor, and their hobby organization thinks this person will 

Ms. Claybrook. Well, I have less of a problem with that. Our 
real interest here is in lobbying organizations that are concerned 
about Members of Congress, jurisdiction over the committees and 
the industries that they represent. 

Senator Levin. Are you familiar with the Aspin Institute? 

Ms. Claybrook. Yes. 

Senator Levin. Are you familiar with their meetings that they 
have? This is, I think, a nonprofit organization, and it also does no 
lobbying 

Ms. Claybrook. Right. 

Senator Levin [continuing]. And it brings together parliamentar- 
ians to meet with each other and to study, and they never lobby. 
For instance, I have gone to a number of their meetings overseas, 
met with other parliamentarians very intensively half the day, the 
other half of the day basically not, just time off for socializing. But 
they never lobby, and their goal is just to have parliamentarians 
meet. 

Do you have a problem with that? 

Ms. Claybrook. Well, I have been to Aspin Institute meetings, 
also, and some of them actually are funded by corporate sponsors, 
and the corporate CEOs attend. 

Senator Levin. None of the meetings that I have attended 

Ms. Claybrook. Well, that's one kind that they have, the corpo- 
ration and society type meetings. But then they also have these 
parliamentarian ones, and I have, again, less of a problem with 
that. I know that former Senator Clark wrote quite a stinging 
letter about our study that we did in the House, where all we did 
was disclose what the travel was, and we did segregate out the non- 
lobbying charitable organizations, or nonprofit organizations. 

Senator Levin. And finally, what about, for instance, former 
Soviet republics want some advice on democracy in action, and 
they have a session that is funded by, let's say, the German Mar- 
shall Fund in Boston, and they want to know can we come up there 
on a Saturday and meet with representatives of the former Soviet 
republics just to talk about legislative activity. So let's assume it is 
on a Saturday, and it is funded by the German Marshall Fund. 

Do you have any problem with that travel? 

Ms. Claybrook. Well, I think both in that example and in the 
example of the Aspin Institute, if it deals with issues that are rele- 
vant to the official duties of the Congress, I would prefer to have 
the funding by the government itself. I think that those last two 
examples are both appropriate ones for government funding 



41 

Senator Levin. They may be. I am not saying they are not appro- 
priate for government funding. The question is do you have any 
problem with the private German Marshall Fund funding that, 
even though it might also be 

Ms. Claybrook. It doesn't have conflict of interest issues in- 
volved in it that most of the travel that we talk about or study has, 
but I think that to the extent it is possible, wherever there are offi- 
cial responsibilities involved, it is far preferable to have the govern- 
ment pay for it. It is such a tiny amount of money in the scheme of 
things, and it just removes all of these other conflicts that con- 
stantly arise. 

But you are right, the examples that you have given are "clean" 
examples, and they are hard to argue with. I mean, it is always 
possible to find an exception to 

Senator Levin. Well, the question is do you want to make excep- 
tions for those "clean" examples? 

Ms. Claybrook. I would say that anything that deals with gov- 
ernment responsibility or is relevant to the job of the Member, that 
it is preferable to have it be funded by the government. And the 
reason why is that — at least this is true in the executive branch — 
the standards that are set for the approval of those trips, and there 
is a certain amount of money in the pot that is available for 
travel — people then choose things on the basis of what is most im- 
portant to them, and there are standards set for the amount of re- 
imbursement and per diem, so that it becomes a standardization of 
that travel, and it is not one that is subject to all of the problems 
that are associated with privately funded travel. 

Senator Levin. I just want to pin you down on one point. I un- 
derstand your position that it is preferable, but also, is it fair to say 
that if an exception were worked out for the nonprofit, nonlobby- 
ing groups, that you don't object to that exception? 

Ms. Claybrook. No, I don't vigorously object. I do hope that it 
would be the lobbying as defined under your new legislation, not 
the lobbying as defined under current rules, because there are lots 
of people who lobby today who don't register, who will tomorrow 
under your legislation. 

Senator Levin. Well, if we can get the bill passed, yes. 

Ms. Claybrook. Right. 

Senator Levin. Thank you, Ms. Claybrook. 

Ms. Claybrook. Thank you very much for having the hearing. 

Senator Levin. There may be some additional questions for the 
record particularly of our government witnesses, perhaps for other 
witnesses as well. We thank you all for coming, and the Subcom- 
mittee stands adjourned. 

[Whereupon, at 4:35, the Subcommittee was adjourned.] 



APPENDIX 



n 



103d congress 
1st Session 



S.885 



To limit the acceptance of gifts, meals, and travel by Members of Congress 
and congressional staff, and for other p^ poses. 



IN THE SENATE OF THE UNITED STATES 

May 4 (legislative day, April 19), 1993 

Mr. Lautenberg (for himself, Mr. BoREN, Mr. Levin, Mr. Wellstone, Mr. 
Feingold, and Mr. KOHL) introduced the following bill; which was read 
twice and referred to the Committee on (jovemmental Affairs 



A BILL 

To limit the acceptance of gifts, meals, and travel by Mem- 
bers of Congress and congressional staff, and for other 
purposes. 

1 Be it enacted by the Senate and House of Representa- 

2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the "Congressional Ethics 

5 Reform Act". 

6 SEC. 2. GENERAL STANDARDS. 

7 (a) General Prohibitions. — ^A Member or em- 

8 ployee shall not, directly or indirectly, solicit or accept a 

9 gift from any source except as provided in this Act. 

(43) 



44 



2 

1 (b) Relationship to Illegal Gratuities Stat- 

2 UTE. — Unless accepted in violation of subsection (c)(1), 

3 a gift accepted under the standards set forth in this Act 

4 shall not constitute an illegal gratuity otherwise prohibited 

5 by section 201(c)(1)(B) of title 18, United States Code. 

6 (c) Limitations on Use of Exceptions. — ^A Mem- 

7 ber or employee shall not — 

8 (1) accept a gift in return for being influenced 

9 in the performance of an official act; 

10 (2) solicit or coerce the offering of a gift; 

11 (3) accept gifts from the same or different 

12 sources on a basis so frequent that a reasonable per- 

13 son would be led to believe the Member or employee 

14 is using his public office for private gain; 

15 (4) accept a gift in violation of any statute; or 

16 (5) accept vendor promotional training contrary 

17 to any applicable regulations, policies, or guidance 

18 relating to the procurement of supplies and services 

19 for the Congress. 

20 SEC. 3. DEFINrnONS. 

21 For purposes of this Act — 

22 (1) Employee. — The term "employee" means 

23 an employee of the legislative branch. 

24 (2) Gift.— The term "gift" includes any gratu- 

25 ity, favor, discount, entertainment, hospitality, loan, 

•S 88S IS 



45 

3 

1 forbearance, or other item having monetary value. It 

2 includes services as well as gifts of training, trans- 

3 portation, local travel, lodgings and meals, whether 

4 provided in-kind, by purchase of a ticket, payment in 

5 advance, or reimbursement after the expense has 

6 been incurred. It does not include — 

7 (A) modest items of food and refresh- 

8 ments, such as soft drinks, coffee, and donuts, 

9 offered other than as part of a meal; 

10 (B) greeting cards and items with little in- 

11 trinsic value, such as plaques, certificates and 

12 trophies, which are intended solely for presen- 

13 tation; 

14 (C) loans from banks and other financial 

15 institutions on terms generally available to the 

16 public; 

17 (D) opportunities and benefits, including 

18 favorable rates and commercial discounts, avail- 

19 able to the public or to a class consisting of all 

20 Government employees, whether or not re- 

21 stricted on the basis of geographic consider- 

22 ations; 

23 (E) rewards and prizes given to competi- 

24 tors in contests or events, including random 

25 drawings, open to the public unless the Mem- 

•S 886 IS 



\ 



46 

4 

1 ber's or employee's entry into the contest or 

2 event is required as part of his official duties; 

3 (F) pension and other benefits resulting 

4 fix)m. continued participation in a Member or 

5 employee welfare and benefits plan maintained 

6 by a former employer; 

7 (G) anything which is paid for by the Gov- 

8 emment or secured by the Grovemment under 

9 Government contract; 

10 (H) any gift accepted by the Congress 

1 1 under specific statutory authority; 

12 (I) anything for which the market value is 

13 paid by the Member or employee; and 

14 (J) any books, written materials, audio 

15 tapes, videotapes, or other informational mate- 

16 rials. 

17 (3) Market value. — The term "market 

18 value" means the retail cost the Member or em- 

19 ployee would incur to purchase the gift. A Member 

20 or employee who cannot ascertain the market value 

21 of a gift may estimate the market value by reference 

22 to the retail cost of similar items of like quality. The 

23 market value of a gift of a ticket entitling the holder 

24 to food, refi'eshments, entertainment, or any other 

25 benefit shall be the face value of the ticket. 

•8M5 18 



47 



5 

1 (4) Member. — The term "Member" has the 

2 meaning given such term in section 109(12) of the 

3 Ethics in Government Act of 1978 (5 U.S.C. App. 

4 6 sec. 109). 

5 (5) Solicitation or acceptance. — (A) A gift 

6 is solicited or accepted because of the Member's or 

7 employee's official position if it is from a person 

8 other than a Member or employee and if a reason- 

9 able person with knowledge of all relevant facts 

10 would conclude that it would not have been solicited, 

11 offered, or given had the Member or employee not 

12 held his position as a Member or employee. 

13 (B) A gift which is solicited or accepted indi- 

14 rectly includes a gift — 

15 (i) given with the Member's or employee's 

16 knowledge and acquiescence to his or her par- 

17 ent, sibling, spouse, child, or dependent relative 

18 if a reasonable person with knowledge of all rel- 

19 evant facts would conclude that the gift was 

20 given because of that person's relationship to 

21 the Member or employee; or 

22 (ii) given to any other person, including 

23 any charitable organization, on the basis of des- 

24 ignation, recommendation, or other specification 

25 by the Member or employee, except as per- 

•8 885 IS 



48 

6 

1 mitted for the disposition of perishable items by 

2 section 5(a)(2). 

3 (6) Ethics committee. — The term Ethics 

4 Committee with respect to the House means the 

5 Committee on Standards of Official Conduct and 

6 with respect to the Senate means the Select Com- 

7 mittee on Ethics. 

8 (7) Vendor promotional training. — The 

9 term "vendor promotional training" means training 

10 provided by any person for the purpose of promoting 

11 its products or services. It does not include training 

12 provided under a congressional contract or by a con- 

13 tractor to facilitate use of products or services it fur- 

14 nishes under a congressional contract. 

15 SEC. 4. EXCEPTIONS. 

16 The prohibitions set forth in section 2 do not apply 

17 to a gift accepted under the circumstances described in 

18 paragraphs (1) through (10) of this section and a gift ac- 

19 cepted in accordance with one of those paragraphs will not 

20 be deemed to violate section 2 of this Act. 

21 (1) Gifts of $20 or less. — ^A Member or em- 

22 ployee may accept unsolicited gifts having an a^re- 

23 gate market value of $20 or less per occasion, pro- 

24 vided that the a^regate market value of individual 

25 gifts received fix)m any one person or entity under 

•8 88S IS 



49 

7 

1 the authority of this paragraph shall not exceed $50 

2 in a calendar year. This exception does not apply to 

3 gifts of cash or of investment interests such as 

4 stock, bonds, or certificates of deposit. Where the 

5 market value of a gift or the aggregate market value 

6 of gifts offered on any single occasion exceeds $20, 

7 the Member or employee may not pay the excess 

8 value over $20 in order to accept that portion of the 

9 gift or those gifts worth $20. Where the aggregate 

10 value of tangible items offered on a single occasion 

11 exceeds $20, the Member or employee may decline 

12 any distinct and separate item in order to accept 

13 those items aggregating $20 or less. 

14 (2) Gifts based on a personal relation- 

15 SHIP. — ^A Member or employee may accept a gift 

16 given under circumstances which make it clear that 

17 the gift is motivated by a family relationship or per- 

18 sonal friendship rather than the position of the 

19 Member or employee. Relevant factors in making 

20 such a determination include the history of the rela- 

21 tionship and whether the family member or friend 

22 personally pays for the gift. 

23 (3) Discounts and similar benefits. — In 

24 addition to those opportunities and benefits excluded 



•8 88S IS 



50 



S 

1 from the definition of a gift by section 3(2)(D), a 

2 Member or employee may accept — 

3 (A) reduced membership or other fees for 

4 participation in organization activities offered 

5 to all Government employees by professional or- 

6 ganizations if the only restrictions on member- 

7 ship relate to professional qualifications; and 

8 (B) opportunities and benefits — 

9 (i) offered to members of a group or 

10 class in which membership is unrelated to 

1 1 congressional employment; or 

12 (ii) offered to members of an organi- 

13 zation, such as an employees' association 

14 or congressional credit union, in which 

15 membership is related to congressional em- 

16 ployment if the same offer is broadly avail- 

17 able to large segments of the public 

18 through organizations of similar size. 

19 A Member or employee may not accept for personal 

20 use any benefit to which the Government is entitled 

21 as a result of an expenditure of Government funds. 

22 (4) Honorary degrees. — (A) A Member or 

23 employee may accept an honorary degree from an in- 

24 stitution of higher education (as defined in section 

25 1141(a) of title 20, United States Code) based on a 

•S 88S IS 



51 

9 

1 written determination by the Ethics Committee that 

2 the timing of the award of the degree would not 

3 cause a reasonable person to question the Member's 

4 or employee's impartiality in a matter affecting the 

5 institution. 

6 (B) A Member or employee who may accept an 

7 honorary degree pursuant to subparagraph (A) may 

8 also accept meals and entertainment given to him 

9 and to members of his family at the event at which 

10 the presentation takes place. 

11 (5) Gifts based on ouTsros business or 

12 EMPLOYMENT RELATIONSHIPS. — ^A Member or em- 

13 ployee may accept meals, lodgings, transportation 

14 and other benefits — 

15 (A) resulting fix>m the business or employ- 

16 ment activities of a Member's or employee's 

17 spouse when it is clear that such benefits have 

18 not been offered or enhanced because of the 

19 Member's or employee's official position; or 

20 (B) resulting fi'om his or her outside busi- 

21 ness or employment activities when it is clear 

22 that such benefits have not been offered or en- 

23 hanced because of his or her official status. 

24 (6) Political events. — ^A Member or em- 

25 ployee may accept meals, lodgings, transportation 



52 



10 

1 and other benefits, including free attendance at 

2 events, when provided in connection with active par- 

3 ticipation in political management or political cam- 

4 paigns by a political organization described in sec- 

5 tion 527(e) of the Internal Revenue Code of 1986. 

6 (7) Widely attended gatherings and 

7 OTHER events. — 

8 (A) Speaking and similar engage- 

9 ments. — ^When a Member or employee partici- 

10 pates as a speaker or panel participant or oth- 

11 erwise presents information related directly or 

12 indirectly to the Congress or matters before the 

13 Congress at a conference or other event, his or 

14 her acceptance of an offer of free attendance at 

15 the event on the day of the presentation is per- 

16 missible when provided by the sponsor of the 

17 event. The Member's or employee's participa- 

18 tion in the event on that day represents a cus- 

19 tomary and necessary part of the performance 

20 of his or her responsibilities and does not in- 

21 volve a gift to him or to the Congress. 

22 (B) Widely attended gatherings. — (i) 

23 A Member or employee may accept a sponsor's 

24 unsolicited gift of free attendance at all or ap- 

25 propriate parts of a widely attended gathering 

•S 888 IS 



53 



11 

1 of mutual interest to a number of parties. A 

2 gathering is widely attended if, for example, it 

3 is open to members from throughout a given in- 

4 dustiy or profession or if those in attendance 

5 represent a range of persons interested in a 

6 given matter. 

7 (ii) A gathering is not widely attended if it 

8 is a congressional retreat to which a majority of 

9 Members of either House of Congress or the 

10 majority of the Members of a political party in 

11 one or both Houses are invited and which is 

12 held outside the United States Capitol grounds. 

13 (C) Free attendance. — For purposes of 

14 subparagraphs (A) and (B), free attendance 

15 may include waiver of all or part of a con- 

16 ference or other fee or the provision of food, re- 

17 freshments, entertainment, instruction and ma- 

18 terials furnished to all attendees as an integral 

19 part of the event. It does not include travel ex- 

20 penses, lodgings, entertainment collateral to the 

21 event, or meals taken other than in a group set- 

22 ting with all other attendees, 

23 (D) Cost provided by sponsor op 

24 EVENT.— The cost of the Member's or employ- 

25 ee's attendance will not be considered to be pro- 

•8 886 IS 



54 



12 

1 vided by the sponsor where a person other than 

2 the sponsor designates the Member or employee 

3 to be invited and bears the cost of the Mem- 

4 ber's or employee's attendance through a con- 

5 . tribution or other payment intended to facilitate 

6 that Member's or employee's attendance. Pay- 

7 ment of dues or a similar assessment to a spon- 

8 soring organization does not constitute a pay- 

9 ment intended to facilitate a particular Mem- 

10 ber's or employee's attendance. 

11 (E) Accompanying spouse. — ^When oth- 

12 ers in attendance will generally be accompanied 

13 by spouses, a Member or employee may accept 

14 a sponsor's invitation to an accompanying 

15 spouse to participate in all or a portion of the 

16 event at which the Member's or employee's free 

17 attendance is permitted under subparagraph 

18 (A) or (B). 

19 (8) Protocol exception. — ^A Member or em- 

20 ployee who is on official travel to a foreign area or 

21 who is attending an event sponsored by a foreign 

22 government may accept food, refreshments, or enter- 

23 tainment in the course of such travel or event pro- 

24 vided that such acceptance is in accordance with any 

25 rules that the Ethics Committee may establish. 

•S 885 IS 



55 

13 

1 (9) Gifts accepted under specific statu- 

2 TORY AUTHORITY. — The prohibitions on acceptance 

3 of gifts contained in this Act do not apply to any 

4 item, receipt of which is specifically authorized by 

5 statute. 

6 (10) Items primarily for free distribu- 

7 TION TO constituents. — ^A Member or employee 

8 may accept food or other items of minimal value in- 

9 tended primarily for free distribution to visiting con- 

10 stituents. 

1 1 SEC. 5. PROPER DISPOSITION OF PROHIBITED GIFTS. 

12 (a) In General. — ^A Member or employee who has 

13 received a gift that cannot be accepted under this Act 

14 shall— 

15 (1) return any tangible item to the donor or 

16 pay the donor its market value (a Member or em- 

17 ployee who cannot ascertain the actual market value 

18 of an item may estimate its market value by ref- 

19 erence to the retail cost of similar items of like 

20 quality); 

21 (2) when it is not practical to return a tangible 

22 item because it is perishable, the item may be given 

23 to an appropriate charity or destroyed; 

24 (3) for any entertainment, favor, service, bene- 

25 fit or other intangible, reimburse the donor the mar- 

•S 88S IS 



56 

14 

1 ket value (subsequent reciprocation by the employee 

2 does not constitute reimbursement); and 

3 (4) dispose of gifts from foreign governments or 

4 international organizations in accordance with rules 

5 established by the Ethics Committee. 

6 (b) Use of Appropriated Funds To Return 

7 Gifts. — ^A Member or employee may use appropriated 

8 funds and franked mail to return gifts. 

9 (c) Prompt Compliance. — ^A Member or employee 

10 who, on his own initiative, promptly complies with the re- 

1 1 quirements of this section will not be deemed to have im- 

12 properly accepted an unsolicited gift. A Member or em- 

13 ployee who promptly consults his Ethics Committee to de- 

14 termine whether acceptance of an unsolicited gift is proper 

15 and who, upon the advice of the Ethics Committee, re- 

16 turns the gift or otherwise disposes of the gift in accord- 

17 ance with this section, will be considered to have complied 

18 with the requirements of this section on his own initiative. 

19 SEC. 6. CHARITABLE DESIGNATION OF OUTSIDE EARNED 

20 INCOME. 

21 Subsection (c) of section 501 of the Ethics in Govem- 

22 ment Act of 1978 is repealed. 

23 SEC. 7. REPEAL OF OLD rule. 

24 Section 901 of the Ethics Reform Act of 1989 (2 

25 U.S.C. 31-2) is repealed. 

•8 88S IS 



57 



15 

1 SEC. 8. ACCEPTANCE OF TRAVEL AND RELATED EXPENSES 

2 FROM NON-FEDERAL SOURCES. 

3 (a) In General. — The Ethics Committees shall pre- 

4 scribe rules establishing the conditions under which their 

5 respective Houses may accept payment, or authorize a 

6 Member or employee to accept payment on the House's 

7 behalf, from non-Federal sources for travel, subsistence, 

8 and related expenses with respect to attendance of the 

9 Member or employee (or the spouse of such Member or 

employee) at any meeting or similar function relating to 

1 the official duties of the Member or employee. Any cash 

2 payment so accepted shall be credited to the appropriation 

3 applicable to such expenses. In the case of a payment in 

4 kind so accepted, a pro rata reduction shall be made in 

5 any entitlement of the Member or employee to payment 

6 from the Government for such expenses. 

7 (b) Rules. — The rules prescribed pursuant to sub- 

8 section (a) shall — 

9 (1) require that the Ethics Committee approve 

20 in advance all travel for which related expenses are 

21 to be reimbursed; 

22 (2) condition such approval on a determination 

23 by the Ethics Committee that acceptance of reim- 

24 bursement would not cause a reasonable person with 

25 knowledge of all the facts relevant to a particular 

•S 88S IS 



58 



16 

1 ease to question the integrity of the Member, the 

2 Congress or congressional operations; and 

3 (3) prohibit reimbursement for items beyond 

4 those reasonably necessary for the Member or em- 

5 ployee to participate in the event. 

6 (c) General Prohibition. — Except as provided in 

7 this section or any other statute, no Member, employee, 

8 or House of Congress may accept payment in cash or in 

9 kind for expenses referred to in subsection (a). A Mem- 

10 ber or employee who accepts any such payment in violation 

11 of the preceding sentence — 

12 (1) may be required, in addition to any penalty 

13 provided by law, to repay, for deposit in the general 

14 fund of the Treasury, an amount equal to the 

15 amount of the payment so accepted; and 

16 (2) in the case of a repayment under paragraph 

17 (1), shall not be entitled to any payment from the 

18 Government for such expenses. 

19 (d) Reports. — 

20 (1) In general. — The Ethics Committees 

21 shall, in the manner provided in paragraph (2), pub- 

22 lish in the Congressional Record reports of payments 

23 of more than $250 accepted under this section. 

24 (2) Contents. — The reports required by para- 

25 graph (1) shall, with respect to each payment — 

•S 885 IS- 



59 

17 

1 (A) specify the amount and method of payment, 

2 the name of the person making the payment, the 

3 name of the Member or employee, the nature of the 

4 meeting or similar function, the time and place of 

5 travel, the nature of the expenses, and such other in- 

6 formation as the Ethics Committee may prescribe; 

7 (B) be submitted not later than May 31 of each 

8 year with respect to payments in the preceding pe- 

9 nod beginning on October 1 and ending on March 

10 31; and 

11 (C) be submitted not later than November 30 

12 of each year with respect to payments in the preced- 

13 ing period beginning on April 1 and ending on Sep- 

14 tember 30. 

15 SEC. 9. SOUCITATION OF REGISTERED LOBBYIST& 

16 A Member or employee shall not knowingly solicit 

17 contributions from any registered lobbyist for an organiza- 

18 tion described under section 501(c) of the Internal Reve- 

19 nue Code of 1986. For purposes of this section, the fact 

20 that the name of a Member or employee is on the letter- 

21 head of a solicitation is not sufficient to establish that the 

22 named Member or employee has solicited a contribution. 



•8 Ml IS 



60 



EXCERPT OF STANDING RULES OF THE SENATE 
RULE XXXV 

GIFTS 

(As amended by Ethics Reform Act of 1989 and Leg. Appr. Act, PL 
102-90 pursuant to S. Res. 192, 10/31/91: Effective date, Jan. 1, 
1992) 

1. (a) No Member, officer, or employee of the Senate, or the 
spouse or dependent thereof, shall knowingly accept, directly or in- 
directly, any gift or gifts in any calendar year aggregating more 
than the minimal value as established by section 7342(a)(5) of title 
5, United States Code, or $250, whichever is greater from any 
person, organization, or corporation unless, in an unusual case, a 
waiver is granted by the Select Committee on Ethics. 

(b) The prohibitions of subparagraph (a) do not apply to gifts — 

(1) from relatives; 

(2) with a value of $100 or less as adjusted under section 
102(aX2XA) of the Ethics in Government Act of 1978; 

(3) of personal hospitality of an individual. 

2. For purposes of this rule — 

(a) the term "gift" means a payment, subscription, advance, 
forbearance, rendering, or deposit of money, services, or any- 
thing of value, including food, lodging, transportation, or enter- 
tainment, and reimbursement for other than necessary ex- 
penses, unless consideration of equal or greater value is re- 
ceived, but does not include (1) a political contribution other- 
wise reported as required by law, (2) a loan made in a commer- 
cially reasonable manner (including requirements that the 
loan be repaid and that a reasonable rate of interest be paid), 
(3) a bequest, inheritance, or other transfer at death, (4) a bona 
fide award presented in recognition of public service and avail- 
able to the general public, (5) a reception at which the 
Member, officer, or employee is to be honored, provided such 
individual receives no other gifts that exceed the restrictions 
in this rule, other than a suitable memento, (6) meals or bever- 
ages consumed or enjoyed, provided the meals or beverages are 
not consumed or enjoyed in connection with a gift of overnight 
lodging, or (7) anything of value given to a spouse or dependent 
of a reporting individual by the employer of such spouse or de- 
pendent in recognition of the service provided by such spouse 
or dependent; 

(b) the term "relative" has the same meaning given to such 
term in section 107(2) of title I of the Ethics in Government 
Act of 1978 (Public Law 95-521). 

(c) the term "necessary expenses" means reasonable ex- 
penses for food, lodging, or transportation which are incurred 
by a Member, officer, or employee of the Senate in connection 
with services provided to (or participation in an event spon- 
sored by) the organization which provides reimbursement for 
such exj^enses or which provides the food, lodging, or transpor- 
tation directly, however necessary exp>enses do not include — 

(1) the provision of food lodging, or transportation, or the 
payment for such expenses, for a continuous period in 
excess of 3 days exclusive of travel time within the United 



61 



States or 7 days exclusive of travel time outside of the 
United States unless such travel is approved by the Com- 
mittee on Ethics as necessary for participation in a confer- 
ence, seminar, meeting or similar matter, and 

(2) the provision of food, lodging, or transportation, or 
the payment for such expenses, for anyone accompanying 
a Member, officer, or employee of the Senate, other than 
the spouse or child of such Member, officer, or employee of 
the Senate or one Senate employee acting as an aide to a 
Member. 

3. If a Member, officer, or employee, after exercising reasonable 
diligence to obtain the information necessary to comply with this 
rule, unknowingly accepts a gift described in paragraph 1, such 
Member, officer, or employee shall, upon learning of the nature of 
the gift and its source, return the gift or, if it is not possible to 
return the gift, reimburse the donor for the value of the gift. 

4. (a) Notwithstanding the provisions of this rule, a Member, offi- 
cer, or employee of the Senate may participate in a program, the 
principal objective of which is educational, sponsored by a foreign 
government or a foreign educational or charitable organization in- 
volving travel to a foreign country paid for by that foreign govern- 
ment or organization if such participation is not in violation of any 
law and if the Select Committee on Ethics has determined that 
participation in such program by Members, officers, or employees 
of the Senate is in the interests of the Senate and the United 
States. 

(b) Any Member who accepts an invitation to participate in any 
such program shall notify the Select Committee in writing of his 
acceptance. A Member shall also notify the Select Committee in 
writing whenever he has p)ermitted any officer or employee whom 
he supervises (within the meaning of paragraph 11 of rule XXXVII) 
to participate in any such program. The chairman of the Select 
Committee shall place in the Congressional Record a list of all indi- 
viduals participating; the supervisors of such individuals, where ap- 
plicable; and the nature and itinerary of such program. 

(c) No Member, officer, or employee may accept funds in connec- 
tion with participation in a program permitted under subpara- 
graph (a) if such funds are not used for necessary food, lodging, 
transportation, and related expenses of the Member, officer, or em- 
ployee. 

Gifts to Supervisors— Section 402 of PL 101-194 (Ethics Reform 
Act of 1989) amends section 7351 of title 5 U.S. Code to permit ex- 
ceptions to the prohibition on gifts from employees to supervisors 
as set forth by regulation issued by the supervising ethics office. 



70-652 - 93 - 3 



62 

Testimony of 

SBMKSOR YBKSK R. UUITBHBBRG 

before the 
Subcommittee on Oversight of Government Memagement 
Committee on Governmental Affairs 
United States Senate 

on 
S.885, the Congressional Ethics Reform Act 

A bill to limit the acceptance of gifts, meals and travel 
by Members of Congress and congressional staff 

July 19, 1993 



Mr. Chairman, Senator Cohen and members of the 
Subcommittee, thank you very much for holding this hearing, and 
for the opporttinity to testify. I also want to express my 
appreciation to you, Mr. Chairman, for your support of the 
Congressional Ethics Reform Act, and for your willingness to 
move the legislation quickly. 

As you know, the Congressional Ethics Reform Act would 
significantly tighten rules governing the acceptance of gifts, 
meals and travel by Members of Congress and congressional staff. 

At its most basic level, the goals of this legislation are 
simple: to reduce the ability of lobbyists and special interests 
to buy access and influence on Capitol Hill, <md to ensure that 
average Americans and the broader public interest come first. 



63 



- 2 - 



Americans today are deeply distrustful of the Congress, and 
they're angry. They see Members as captives of special 
interests, unconcerned about ordinary people. In the view of 
many. Congress is out of touch in part because Members enjoy an 
assortment of special perks and privileges that are unavailable 
to the general public. 

Mr. Chairman, I know many of my colleagues believe that 
these perceptions are inaccurate, or at least overstated. But 
the fact is. Members of Congress do enjoy many special 
advantages that ordinary Americans do not. And many of these 
special perks are specifically intended to influence Members in 
the performance of their official duties. 

The bottom line, in my view, is this: the people are 
entitled to be suspicious. This isn't just a problem of 
perception. Special interests do have too much political power. 
And it's time to do something about it. 

Obviously, the Congressional Ethics Reform Act is not, by 
itself, the only step we must take. We need to overhaul our 
campaign finance laws, toughen regulation of lobbyists, close 
the revolving door, and fundzunentally change the policymaking 
environment here on Capitol Hill. But, imposing strict new 
limits on the acceptance of gifts, meals and travel is also 
essential . 

If the phrase "business as usual" means anything, it 
includes the many special favors provided to Congress as a way 
to influence policy. It is not unusual for lobbyists to give 



64 



- 3 - 

Members free tickets to shows or sporting events, or to take 
them out for lavish dinners at expensive restaurants. Sometimes 
they provide Members with free trips, typically Involving stays 
at expensive luxury hotels along with various forms of 
entertainment . 

Mr. Chairman, when lobbyists take a Senator or key staff 
member out to dinner, they're not just buying a meal. They're 
buying access. And access Is power. 

Ordinary citizens don't have that access. They can't just 
take their Senator to a quiet dinner at an expensive restaurant 
and explain what It's like to be unemployed. They can't take 
their Congressman to a ballgame to discuss the problems they 
have making ends meet or educating their kids . And they 
certainly can't spend a relaxing weekend at a tropical resort, 
playing golf with key legislators while reviewing their concerns 
and anxieties about the future. 

If any Member doubts the value of this kind of access, just 
ask a lobbyist or their corporate clients . Only the most 
disingenuous will claim that they provide these exotic trips out 
of the goodness of their heart. They pay because it gets 
results . 

They pay to buy clout. 

Similar thinking is involved when lobbyists give Members 
tickets to a show or sporting event, or other gifts. Often, the 
tickets buy access to Members at the event Itself. But if not. 



65 



4 - 



they buy good will. And good will also is power. It can mean 
the difference between getting your calls returned, or your 
letter taken seriously. And that can translate into millions, 
even billions of dollars — at the expense of ordinary Americans 
who have no lobbyists to represent them. 

Mr. Chaiirman, when I was a CEO in the private sector, my 
company strictly forbade purchasing agents from accepting gifts 
from suppliers. There was the potential for undue influence, 
and the stakes were so high. The same concerns apply to 
Congress, where the stakes are infinitely greater. 

Unfortunately, the Senate rules on the acceptance of gifts, 
meals and travel, to put it mildly, are far too lax. Currently, 
Senators may accept gifts worth up to $250 from any person. 
However, gifts worth less than $100 are not counted. Thus, a 
lobbyist legally may provide senators with unlimited nvimbers of 
gifts worth $99. 

Moreover, some types of gifts are excluded from the limits 
altogether. There is no limit, for example, on the number of 
meals at Washington restaurants that lobbyists can provide to 
senators. In addition, the rules allow Members broad latitude 
to accept reimbursement for various travel expenses, regardless 
of cost. 

By contrast, officials in the Executive Branch must abide 
by much stricter rules of conduct. Generally speaking. 
Executive Branch officials may not accept gifts from any person 
*^o does business with the official's agency or who has 



66 



- 5 - 

interests that may be substantially affected by the performance 
of the employee's official duties. There are limited 
exceptions, such as awards, honorary degrees, and other items 
worth less than $20. However, the rules apply broadly to any 
items of value, including meals and travel expenses. 

The Congressional Ethics Reform Act would require Members 
of Congress, and congressional staff, to abide essentially by 
the same rules on gift acceptance that already apply to the 
Executive Branch. However, there are a few modifications 
designed to strengthen the rules further and to adapt them to 
the Congress. For example, the bill's proposed limits would 
apply to acceptance of gifts not just from certain prohibited 
sources, but from any person other than a family member or an 
established personal friend. 

Let me add at this point that I have heard some concerns 
about the bill provision that allows a Member or employee to 
"accept a gift given under circumstances which make it clear 
that the gift is motivated by .. .personal friendship rather than 
the position of the Member or employee." The concern is that 
Members would attempt to skirt the rule by claiming that 
lobbyists are personal friends . 

Given this concern, I want to emphasize that this language 
is designed to be read very strictly. The exception applies 
only under circumstances which make it clear — and I emphasize 
the term, "clear" — that the gift is motivated by personal 
friendship. If there is ambiguity about the motivation, this 
standard would not be met. 



67 



- 6 - 



I also would point out that, as under the Executive Branch 
rules, the bill provides that "Relevant factors in making such a 
determination include the history of the relationship and 
whether the family member or friend personally pays for the 
gift." Thus, in the typical case, where a lobbyist has got to 
know a Member only in the course of doing legislative business, 
and where the lobbyist's firm or client is paying for the gift, 
this exception would not apply. 

While the bill's language is strong, it also may be worth 
considering additional protections where a Member is claiming a 
registered lobbyist as a personal friend. One possibility would 
be to include an explicit presumption that gifts from registered 
lobbyists are not motivated by a personal friendship if the 
relationship was established after the Member was first elected 
to the Congress. Another possibility would be to require 
disclosure in the Congressional Record of sxobstantial gifts to 
Members from registered lobbyists who they claim as personal 
friends . 

Incidentally, as a general matter, I want to state for the 
record that while the bill proposes limited exceptions to an 
outright gift ban, items so exempted should not necessarily be 
exempted from disclosure requirements . 

Let me turn now to perhaps the bill's most important 
provision, its prohibition on accepting reimbursements for 
pleasure trips. Under the bill, only trips directly related to 
official duties could be paid for by outside parties. And no 



68 



- 7 - 

travel expenses could be reimbursed for items beyond those 
reasonably necessary to participate in the event. 

To give the Subcommittee some idea o£ what I'm getting at, 
let me give you a couple of examples. 

One powerful interest group invited top congressional aides 
for a lavish weekend at a fancy resort. The event was called a 
"congressional staff seminar", but the formal meetings were held 
only in the morning. At other times, the staffers were free to 
enjoy the resort's facilities, including tennis, swimming, 
horseback riding, and croquet. 

Another example comes from a report prepared by P\iblic 
Citizen, called "They Love to Fly. . .And it Shows". The report 
describes a 1990 trip sponsored by an industry lobbying group. 
The group invited twenty-five Members to the luxurious La Quinta 
Hotel in Palm Springs, California. While there were a few 
meetings in the early morning, the rest of the days were set 
aside for golf, tennis, swimming, and relaxing at the high- 
priced resort. All expenses were picked up by the industry 
group, including greens fees and extra plane tickets for some of 
the lawmakers' spouses and children. As the report concludes, 
"The event was clearly meant to curry favor with latonakers." 

Mr. Chairman, these types of trips are not abberations. 
They're typical. And they should be prohibited. There is no 
reason %rtiy lobbyists should be allowed to finance trips lAera 
the primary purpose isn't to conduct legitlaate business, but to 
have fun. That's influence-peddling, pure and siople. And it's 



i 
i 



69 



- 8 - 



wrong. The intent of my bill is to eliminate all such trips. 
Unless Members and staff are working on matters related to 
official business full-time, they shouldn't be accepting 
reimbursements from third parties. 

Under the bill, the Ethics Committee would have to approve 
all trips in advance. The legislation prohibits reimbursement 
for items beyond those reasonably necessary to engage in 
legitimate business, and requires the Committee to reject any 
trip that raises concerns about the integrity of the Member or 
the Congress. This is designed to be a very high standard, and 
the Ethics Committee should resolve all doubts against allowing 
reimbursement. We may want to spell this out more explicitly in 
the legislation. 

Another protection included in the bill is a requirement 
that trip details be published afterwards in the Congressional 
Record. Some have suggested requiring such disclosure in 
advance of the trip. This seems like a good idea. If Members 
know that they may well confront their local press or their 
political opponent on their trip, most would toe the line very 
carefully. 

Taken together, these protections seem strong, and are 
intended to prevent any trips that would raise ethical 
questions. I recognize that some believe as a matter of 
principle that no trips should be privately-financed. I 
understand that view, though I believe there are occasions, 
including foreign travel, when such trips help officials perform 
their duties more effectively, and would otherwise be impossible 



70 



- 9 - 

given the budget constraints facing Congress. This Is permitted 
in the Executive Branch, and I have not been made aware of any 
abuses . 

My bottom line is that I want to prevent all trips that 
raise ethical problems, and I have an open mind about the best 
way to do that. 

Mr. Chairman, in the interests of time, I will not go into 
all the bill's provisions. But before I close, I want to 
emphasize that I do not mean to impugn the integrity of any 
Member of Congress. Many of us, myself included, have followed 
the existing rules in the past and accepted some items , without 
providing any special treatment in return. 

But public cynicism has reached deeply disturbing levels . 
As a consequence, practices that may have seemed innocuous a few 
years ago clearly are not innocuous today. 

We can't ignore that widespread feeling. We've got to 
address it head-on. 

Mr. Chairman, S.885 attempts to deal fairly with many 
issues related to gifts, meals, and travel. No doubt it can be 
improved, and I remain open to further suggestions. But I hope 
the Subcommittee will proceed without delay. As you know, on 
May 6, the full Senate voted 98-1 that the Senate should approve 
reform legislation as soon as possible this year. As public 
cynicism continues to grow, the need for prompt action grows as 
well. 

Again, thank you very much for the opportunity to testify. 



71 



statement of Senator Paul D. Wellstone 

before the Senate Committee on Governmental Affairs 

on S. 885, the Congressional Ethics Reform Act of 1993 

July 19, 1993 

Mr. Chairman, thank you for calling these important hearings on S. 885, the 
Congressional Ethics Reform Act of 1993. I am an original cosponsor of this 
important reform proposal, and I am here to join my colleague Senator 
Lautenberg in urging the committee to report promptly a gift ban bill to the full 
Senate for its consideration. 

I am delighted to join you and Senator Lautenberg in supporting this effort, and 
wanted to appear personally to show my interest in getting a tough new set of 
gift ban rules enacted Into law. Your committee has agreed to move forward on 
an issue which is sensitive within the Congress, yet which must be addressed 
straightforwardly and firmly. I commend you for your courage. 

I also commend Senator Lautenberg for his willingness to take the initiative to 
address the persistent problem of gifts being lavished on Members of Congress 
from outside sources, one of the most important issues on the political reform 
agenda. As he observed when he introduced this bill, "It is indisputable that 
these kinds of special favors have contributed to American's deepening distrust 
of government.. ..as public trust diminishes, the ability of Congress to address 
our nation's problems diminishes as well." Despite the assertions of our 
colleagues that they are completely unswayed by fancy dinners, or even by all- 
expense-paid trips to the Bahamas, such gifts give the appearance of 
impropriety, eroding public confidence In Congress as an institution and in each 
of us personally as representatives of our constituents. 

I am sure my colleagues would agree, because many have told me they hear it 
constantly in town meetings in their states. People are frustrated and angry, and 
they are demanding change. They feel they have been left out of the loop of 
government decisionmaking, and they want back in. Recent public opinion polls 
demonstrate clearly that public trust in Congress is at an historic low, and the 
demand for political reform is very high. Banning outside gifts would be an 
important signal of our willingness to respond to the demands of many 
Americans for a system of government that is more responsive to its citizens, 
and less responsive to lobbyists and others with influence and access to 
Members of Congress. Simply by conforming Congressional gift rules to the 
executive branch's more stringent treatment of gifts from outside sources, we 
can take another step down the road of reform. 

Political reform was an important part of my mandate from Minnesota, as it is for 
many of the new Members of Congress. Americans are demanding real change. 



72 



That is evident from the polls and from the rising popularity of Ross Perot and 
his political reform efforts. We must deliver real change. 

I view this bill as just one element in a much more sweeping reform agenda 
which includes genuine campaign finance reform, tough new lobby disclosure 
rules, strict limits on political contributions from lobbyists, and reform and 
reorganization of Congress and the federal agencies. 

Legislation in each of these areas should be acted upon by Congress as soon 
as possible. If we fail to move forward now on this comprehensive reform 
agenda, we will have missed an historic opportunity. This is the best time in two 
decades for fundamental reform, when we have a President committed to 
change, a Congress elected on pledges of change and a citizenry angry enough 
to demand change. 

Too many here In Washington, from politicians to pundits, are cynical about real 
reform. Only public pressure will force President Clinton's promised "revolution 
in government' to rescue American politics from being held hostage by big- 
money special Interests. We must restore the basic democratic principle of one 
person, one vote by enacting this reform agenda Into law. 

During Senate floor consideration of the Lobby Disclosure Act in early May, I 
offered an amendment to that bill to require itemized disclosure of financial 
benefits that lobbyists give to Members of Congress and their staffs. That 
amendment was adopted by the full Senate. A similar lobby disclosure bill is 
currently pending before the House Judiciary Committee. 

That committee has held a hearing on the disclosure bill, and they are expected 
to act on it soon. I am hopeful they will incorporate the provisions of my 
amendment Into the House bill in the Committee mark-up, and that you will 
retain the provision in conference. I understand there is growing support for 
such disclosure on the House side, as will be evidenced by the introduction of 
my disclosure amendment as a separate piece of legislation later this month. 

Of course, we agree that the preferable and most straightforward way to address 
the gift problem would be to enact the bill you are considering today. But until 
we impose a ban, a comprehensive set of tough new disclosure requirements on 
gifts from those most likely to give such gifts ~ well-heeled special Interest 
lobbyists with legislative agendas before the Congress - should be enacted. 
Indeed, disclosure may help to hasten the day when we enact such a ban. 

This bill would go further than simple lobbyist disclosure by prohibiting 
Members of Congress and their staffs from receiving gifts and other financial 
benefits from all private sources, subject to certain limited exceptions. It would 
apply to gifts valued at over $20 at a time, provided the aggregate value does 
not exceed $50 in any calendar year. This $20 de minimus and $50 calendar 



73 



year limit tracks the levels for prohibited gifts for the executive branch. Current 
congressional policy, which allows gifts worth up to $250 from one source 
during a year, and which does not count gifts of less than $100 toward that limit, 
stands in sharp and embarrassing contrast to the longstanding policy and 
practice of the executive branch. 

I suspect that some will argue today that the nature of the institutions justifies 
different standards for the congressional and executive branches. I disagree. I 
don't think those arguments meet what I call the "Minnesota Cafe Test," the 
commonsense assessment of constituents I meet in Minnesota cafes, on the 
street, in the post offices and meeting halls. Those people ask: Why should we 
in Congress not live under basically the same rules as an official in the State 
Department, or in the Labor Department, or another executive office? By 
adopting these rules as the basis for congressional reform, S. 885 will help 
restore the credibility and integrity of the Congress. Its restrictions on gifts, 
meals and entertainment, travel, and contributions to charities all clearly reflect 
considerable work and thought on the part of Senator Lautenberg and the 
organizations with whom he consulted in developing the bill. 

I know too that there will be disagreements over whether to allow this minor 
exception or that, over how to regulate privately-funded staff travel, or over the 
minimum gift thresholds provided for In the bill. But i believe the basic structure 
of the bill, and the executive branch standards it contains, are fair and 
reasonable. I urge the committee, during its consideration of the bill, not to 
stray too far from its essential form. 

Finally, let me reiterate what I said at the outset. I commend you, Mr. Chairman, 
for cosponsoring the Lautenberg bill. I know that you are sincerely committed 
to this reform agenda, and have been trying for many years to clean up the 
system. I know that you will do everything you can to enact tough new 
standards into law. 

I am grateful for your friendship and your counsel on this issue and many 
others, and though we had a tactical disagreement on my lobby disclosure 
amendment, you were there, as always, gracious and kind in disagreement. I 
thank you for this opportunity to testify, and I assure you of my continued 
enthusiastic support for moving this bill to the Senate floor and getting it 
enacted promptly into law. 



74 



statement of The Honorable Birch Ravh 
Former Member. United States Senate 



Before the Subcommittee on Oversight 
of Government Management 
Senate Committee on Governmental Affairs 
Hearing on S.885, July 19, 1993 



I appreciate the invitation to share my thoughts with you 
today. Let me begin by saying that I am not comfortable judging 
others. I recall the biblical admonition, "Let he who is without 
fault cast the first stones." Over the years, I have tried to 
strengthen my own personal short-comings. However, try as I have, 
I fear that many remain. 

It has been my good fortune to work with and to know as 
friends and colleagues, men and women, of both political parties, 
who have served as public officials in local, state and national 
government. It is my firm conviction that the large majority of 
these individuals are honest, dedicated and hard working public 
servants. Their standard of conduct and morality is consistent 
with or above the norm of the constituency from which they are 
chosen. 

It would be naive not to recognize that there are some who 
succumb to temptation and violate the public trust which is theirs 
from the moment they accept public responsibility. In my judgment, 
public trust is sacred and those who violate it do irreparable 
damage to the public's confidence in our governmental fabric. 

I am not suggesting that a collection of saints is required 
for public service. However, those of us who are concerned about 
public attitudes toward Congress must be sensitive to individual or 
institutional practices which raise serious doubts in the average 
citizen's mind. 

Now permit me to comment upon the specific issue of gifts 
which is the subject of your deliberations. I compliment you for 
doing so. Before proceeding, let me observe that I do not know of 
a single Member of Congress who could be bought or influenced by a 
dinner or gift. However, my opinion does not prevail among the 
public generally. 



75 



Th« fact that the ConiBittea is concerned about the possible 
influence of gifts should be a positive step toward allaying public 
concerns. The concern expressed by Senator Lautenberg through his 
legislation is also a positive influence. Frankly, I am not wise 
enough to know at what specific dollar value a Member might be 
tempted, nor can I assess at what level the public might assume 
such is the case. There are certain factors which should be 
considered in your deliberations. 

1. Appearance of impropriety is as much a part of the 
problem as actual misconduct. 

2. What is the relationship of the individuals? Are they 
family members or long time friends? 

3. Is there a constituent interest involved? 

4. Can the Member assimilate knowledge which will assist in 
fulfilling his or her legislative responsibilities? 

4. Is the environment such or are the individuals with whom 
the Member will be relating those where a Member's 
objectivity may be compromised on a given legislative 
issue? Does the individual associating with the Member 
have an interest in securing support for a specific 
legislative position? Is the occasion designed to secure 
the support of the Member for a specific legislative 
position? 

5. To what extent do further restrictions make it more 
difficult for a Member to conduct his or her legislative 
activities or fulfill his or her family responsibilities? 

Specific activity which will erode public confidence should be 
prohibited. However, I know that the Committee will recognize the 
important role that public disclosure can serve in the issue under 
consideration. You are seeking an ideal balance where a Member's 
personal activity and relationships can continue and will remain 
private. At the same time, you seek a means of preventing other 
activities and relationships which may have undue influence upon 
the conduct of a Member's official responsibilities or may have the 
appearance thereof. Let me point out that such conflicts are not 
confined to the issues under consideration. They also have been 
considered in respect to a Member's business and financial holdings 
and activities. Honoraria and campaign contributions have received 
similar attention. Some limitations and outright prohibitions have 
been imposed in respect to these latter three areas. However, in 
my judgment, public disclosure has also had a significant impact. 



76 



At the risk of concluding my comments upon a discordant note, 
I would like to suggest that the manner in which Senate and House 
campaigns are financed does more damage to citizen confidence in 
our democratic institutions than anything else. The hundreds of 
thousands, the millions of dollars which are spent in political 
campaigns is a blight upon our political system. The large 
majority of our citizens are suspicious and have serious doubts 
about the integrity and objectivity of decisions reached through 
such a process. I know that you, also, share this concern. I pray 
that you have the wisdom to resolve this serious problem. 



i 



i 



77 



TBSTZHOMT OP BOMOKABLI WUMXK J. HOKTOH 

BBTOSB TBM SUBOOIOUTTBI OM OVEBflZOBT OF OOVKKIOIEIIT KMAOBMBMr 

COMMITTBI OM OOVBRMMBlfTAL ATTAIKS 

UHITBD STATES SBNATI 

July 19, 1993 

It is a pleasxire to appear before the Subconmittee today to 
testify on the subject of %rhat rules should govern the acceptemce 
of gifts, neals and travel by Members of Congress. While the 
Subconmittee is considering several issues, I will confine my 
comments to the issue of gifts, meals and travel. 

I appear before the Subcommittee today as a private 
individual. I do not represent any other person or organization. 
I want to share with the Subcommittee my personal views on this 
issue, developed in my thirty years as a Member of the House of 
Representatives. For the last twenty years of my service, I was 
Ranking Minority Member of the House Committee on Government 
Operations. 

Governing Principles . I believe that there are several 
basic principles that the Subcommittee should follow in 
addressing this issue: 

(1) Whatever rule is adopted should aopl v to the Members of 
Con<yress themselves . An approach that imposes substantive 
restrictions and disclosure obligations on the Members themselves 
is greatly preferable to proposals to create a system that would 
operate on the basis of disclosure by lobbyists or other persons 
trho provide gifts, meals or travel to Members. 



78 



The public is Interested In how their elected 
representatives perform their jobs, rather them in tracking the 
activities of lobbyists. In other areas, the Congressional 
ethics system focuses on the Members' actions. It should 
function the same way for acceptance of gifts, meals or travel. 
The responsibility should rest squarely on the Member to make any 
required disclosure. 

The standards should provide objective criteria by which 
Members may determine what gifts, meals or travel they may or may 
not accept. These standards should be backed up by a system that 
requires Members to disclose any gifts that they do accept. The 
disclosure statements should be freely availedsle to the press and 
members of the public. In this fashion, the media will be able 
to keep track of the pattern of gifts accepted by any Member, and 
the public will obtain the information it needs to determine if a 
Member is performing his or her job satisfactorily. 

(2) The same standards should apply to Members of both the 
House and Senate . I understand fully how proud each body is of 
its independence and how jealously each guards the power to set 
its own ethical rules for its Members. Nevertheless, there is no 
justification for having different stemdards of conduct for the 
House and Senate in the area of gift acceptance. There are 
important questions, which I will address later in my testimony, 
about whether the gift restrictions should be imposed by Rules 
adopted by each body or by a uniform statute. Whatever approach 



-2- 



79 



is taken, it is importamt that the House and Senate agree upon 
common stemdards. 

(3) The standards should follow the Executive Br anch model. 
with suitable m odifications to allow Members to perform their 
duties. As a general proposition, I support the position that 
the standards applicable to Members should, insofar as possible, 
follow the rules applicable to employees of the Executive Branch. 
However, the job responsibilities of Members of Congress are 
substemtially broader than those of Executive officials. 
Further, the Members, unlike Executive appointees, are directly 
accountedjle to the electorate for their actions. These 
differences are important, and the gift acceptance and disclosure 
system should reflect the unique role of our elected officials. 
Members' ability to perform their jobs effectively should not be 
compromised in an effort to estiOilish complete uniformity in the 
standards for the two Branches. 

There are several respects in which the responsibilities of 
Members differ significantly from those of Executive employees. 

— First, part of Members' work is to promote their home 
States and their districts. This meems that there are occasions 
in which it is appropriate for members of Congress to accept 
gifts of samples of products made by people they represent, so 
that they cem showcase those products and contribute to the 
economic development of their districts. 

— Second, in order to be responsive to their constituents. 
Members inevited^ly must attend a wide variety of social 

-3- 



80 



receptions and functions, especially when travelling in their 
home State or district. It is vital that the gift standards not 
prohibit Members from attending such functions, or accepting the 
s£une refreshments as other guests. 

— Third, it often is necessary for Members to take official 
trips, in order to understand subjects on which they are required 
to legislate. No aspect of Congressional behavior is as 
frequently criticized as their travel. I believe that, if the 
public is given the facts, they will be able to look at the 
voting records of the Members and distinguish between those whose 
travel is undertaken for a true legislative purpose and those who 
have a pattern of accepting travel for essentially private 
purposes. I believe that, as long as appropriate disclosure and 
public access mechanisms are in place, public accountiUsility will 
be fully protected in a system where Members may undertake 
official travel whose cost is defrayed by private parties. The 
proposal to esteiblish a mechanism by which the House or Senate as 
an institution could be reimbursed for the costs of such travel, 
in lieu of direct payment to the Member, would allow for such 
accounted) i 1 i ty . 

Implementation of the Restric tions on Acceptance of Gifts. 
One question before the Subcommittee is whether the new 
restrictions on acceptance of gifts, meals euid travel should be 
implemented through adoption of legislation, or by amendment of 
the existing Rules of each body. There are importsmt 
considerations on both sides of this question. 

-4- 



81 



The Bost iaiportant argu>Ant for proceed ing through enactaent 
of legislation is that it would establish a unifom system, and 
one that could be iiQ>leBented through existing investigative and 
prosecutorial Becheuiisms. There also sight be beneficial effects 
on how Congress writes laws in the future if Nenbers have to live 
by the same stzmdards they iiq>08e on Executive officials. 

The major negative factor is that, under such an approach. 
Members could find themselves in violation of a criminal law if 
they innocently accepted a gift that was barred by the standards. 
This is a real concern. It is my understanding that 
implementation of the gift rules in the Executive Branch has been 
difficult, and that there are substantial gray areas where it is 
difficult for Executive employees to determine whether they may 
or may not accept a gift. 

Implementation of the new gift rule through a statute would 
mean that Members of Congress would spend a siibstantial eunount of 
time worrying about whether they are inadvertently breaking the 
law by such unremarkable activity as accepting a ride from the 
airport from a constituent, or staying in a constituent's home 
while travelling in their districts. The potential for criminal 
punishment would force Members to devote more time to worrying 
about their personal liability and less time to their jobs. 

Further, %rtiile I eun not sy]q>athetic to persons who accept 
isproper gifts, sensitive separation of powers questions would be 
implicated by having Executive Branch prosecutors routinely 
investigating gift acceptance by Members of the Legislative 

-5- 



82 



Branch. Given the difficulty that the Executive Branch has had 
in distinguishing between a proper and an inproper gift in the 
simpler environment in which Executive officials operate, I am 
concerned eibout the potential problems in having criminal 
prosecutors applying to another branch of government concepts 
that are so difficult to define. 

My own personal judgment is that Congress should proceed by 
eunendment of the Rules of each body. I believe that Congress can 
effectively police its own Members' compliance with such 
standards as long as the substantive criteria are well defined. 
And I believe the public will support this approach, if the 
standards that are adopted tighten existing loopholes and provide 
for a full disclosure system. The approach I advocate would 
require both bodies to adopt the szuoe set of Rules, but there is 
no reason why the House and Senate C2mnot work this out. 

Amount of Gifts tha t Mav Be Accepted. Finally, I wish to 
comment on proposals to reduce substantially the dollar amount of 
gifts that members may accept from euiy source. The Senate Rules 
currently provide that a member may not accept more them $250 
euinually from any one person, but that gifts in eunounts of less 
than $100 need not be counted towards that lumual ceiling. Under 
the current standard, meals and travel may be accepted without 
dollar limitations. I agree that these provisions are too loose 
and need to be tightened. In particular, I believe it 
appropriate to include meals and travel within an overall gift 
limit. 

-6- 



83 



An argiwent can be made for prohibiting Menbers froa 
accepting any gifts froa anyone other than faaily aeabers or 
close friends. But I do not think this would be a wise decision. 
By the nature of their duties and responsibilities, Meabers of 
Congress are going to be placed in aany social situations «rhere a 
flat ban on gifts would create inter-personal probleas. In ay 
judgment, an absolute ban on gifts is neither necessary nor 
appropriate, and would cause more problems them it solves. 

In setting a ceiling on the «unount of gifts a Member may 
accept, it is ia^ortant that the standard be set at a reasonable 
level, and not at such a low level that Members will be forced to 
reject or return items that are proffered innocently and in the 
noraal coiurse of personal relations. I aa concerned that the $20 
liait being considered is too low. Its adoption would constitute 
overkill in laudable efforts to identify and prohibit acceptance 
of gifts of significant value that either are, or create the 
appearance that they are, designed to curry favor with a Neaber. 

For exaaple, trtien I was a Neaber, I was asked to give a 
speech at a change in coaatmd cereaony, %rtien an officer I 
previously had noainated to the Naval Acadeay assuaed coaaand of 
a ship. At the conclusion of ay speech, I was unexpectedly 
presented with a pen and pencil set. I have no idea what the 
gift was worth, but I suspect it aust have been aore than $20. 
It would have created an eabarrassing social situation if I had 
been coapelled to refuse such an innocent gift in front of this 
officer's faaily and friends and his new crew. I aa concerned 

-7- 



84 



that an artificially low limit would constantly put Members in 
such an awkward situation. 

Similarly, while the current exclusion of meals from 
monetary limits is unjustified, I believe that the public would 
support a reasonable balemce point, and would not insist on 
dollar limits that essentially would restrict Members to eating 
with their constituents at fast food establishments, either back 
in their districts or in Washington. 

Finally, if the gift acceptemce emd reporting ceiling is set 
at an unrealistically low level, I eun concerned that the 
paperwork emd administrative burdens of complying with the ethics 
system could prove counterproductive, by reducing the amount of 
time Members can devote to their legislative responsibilities. 

The Subcommittee is better positioned than I to determine 
what the proper balance point would be. But I regard the $20 
figure as unrealistic, and I believe that the public would 
support a more reasonable figure that is still substantially 
lower than the current gift limit. 



I 



-•- 



( 



85 



STATEMENT OF 

STEPHEN D. POTTS 
DIRECTOR, OFFICE OF GOVERNMENT ETHICS 

ON 

S. 885, A BILL TO AMEND THE LEGISLATIVE BRANCH GIFT RULES 

BEFORE THE 

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT 

COMMITTEE ON GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 



JULY 19, 1993 

MR. CHAIRMAN, AND MEMBERS OF THE SUBCOMMITTEE: 

Thank you for the opportunity to appear today to discuss 
S. 885, a bill to limit the acceptamce of gifts, meals «"H travel 
by Members of Congress and congressional staff. You indicated in 
your letter of invitation that the Senate had earlier adopted an 
amendment expressing the sense of the Senate that it should limit 
the acceptance of these gifts in a manner substantially similar to 
the restrictions applicable to executive branch eaiployees. 
Therefore, I will provide some general comment upon how similar 
this bill is to existing executive branch restrictions and will 
also address certain specific <zuestions you included in your letter 
of invitation. I will begin n^y testimony by addressing your 
questions . 

You asked for am explanation of the process by which the 
executive branch gift rules were adopted and an outline of how the 
rules work. Prior to 1989, a 1965 executive order (E.O. 11222) 
directed the then Civil Service Commiseion to adopt model standards 
of conduct to be used by agencies in establishing their own rules 
and regulations. Among other things, the executive order provided 
a basic framework for gifts restrictions which was enhanced by the 
model rules promulgated in 1968. Thereafter, each agency developed 
its own rules which were to be consistent with that model. 

As you know the Office of Government Ethics (OGB) was 
estaJslished in 1979, in part as a response to the inconsistencies 
that had developed throughout tLa executive branch in the 
application and interpretation of the various provisions of the 
standards of conduct. The gift rules were no exception. One of 
OGE's responsibilities was to attempt to bring some consistency to 
those interpretations, when appropriate. In 1989, President Bush 
determined, after receiving the report of his Conaission on Federal 
Ethics Law Reform, that he would issue a new executive order on 
ethics directing OGB to develop one, single uniform set of 



70-652 - 93 - 4 



86 



standards of conduct for the executive branch. Later that same 
year. Congress passed, as a part of the Ethics Reform Act, 5 U.S.C. 
S 7353, a statutory gifts restriction for all officers and 
employees of all three branches of the Federal Government including 
Members of Congress. That statute directed OOB to develop 
exceptions to that restriction for the executive branch. 

Under those mimdates, the Office began the process by 
reviewing the standards of conduct regulations of all the 
departments and of a sampling of small agencies. Those standards, 
of course, included the provisions dealing with gifts. Thereafter, 
we engaged in informal discussions with a number of agencies and in 
July 1991, published proposed standards of conduct on trtiich we 
requested comments . The Office received approximately 1100 
separate sets of comments on the proposed regulations. While most 
of them dealt with the provision regarding participation in 
professional associations, many of the rest had at least one 
comment on the gifts provisions. After considering the comments, 
the Office issued a final rule on August 7, 1992 with a delayed 
effective date of 180 days. The timing was selected to give 
agencies an opportxinity to train their employees before those 
employees became subject to the new rules. As required by the 
executive order and by statute, the Office engaged in extensive 
consultation with the Department of Justice and the Office of 
Personnel Management on both the proposed rule and the final rule 
prior to their publication. 

The gift rules are divided into two subparts — the first, 
subpart B, deals with gifts from outside sources and the second, 
stibpart C deals with gifts between employees. I have attached a 
general outline of these subparts to this testimony. Bach agency 
administers these rules by providing guidance, and if necessary, by 
taking appropriate administrative action if an employee of the 
agency is found to have violated a provision of the rules. OOB 
continues to provide guidance to agencies with regard to the rules 
through written and oral communications to agency ethics officials 
and, in some instances, to those who are considering offering gifts 
to executive branch employees. 

You also asked us to describe 0GB 's implementation of the 
statutory authority permitting agencies to accept travel expenses 
from non-Federal sources for official travel. Section 1353 of 
title 31, United States Code, was enacted by the Bthics Reform Act 
of 1989, and permits acceptance of payments of travel or travel 
expenses in connection with official travel to "meetings or similar 
functions." Essentially an appropriations law, the General 
Services Administration (GSA) was assigned the task of iavl^Bsnting 
the statute in consultation with OOB. 

Prior to the enactment of section 1353, w« estimated that only 
about one-third of executive branch agencies had statutory 
authority to accept gifts of travel expenses. Moreover, even among 



87 



those who had it, policies relating to acceptance varied from 
agency to agency and there was no uniform reporting reijuirement . 
In too many cases, es^loyees of agencies without gift acceptzmce 
authority would run afoul of the standards of conduct concerning 
the personal acceptance of gifts because they accepted gifts of 
travel which, although of benefit to the agency, could not legally 
be accepted by them or by their agency. 

The statute itself is silent concerning conflict of interest 
considerations. Nevertheless, we urged 6SA to include in the 
implementing regulation a provision requiring an appropriate 
official to weigh the acceptance of each payment in light of the 
identity of the donor, the duties of the employee who would perform 
the official travel, and other relevant factors. The initial 
implementing regulation, published on March 8, 1991, incorporated 
such a reczuirement . In a hearing before a House subcommittee on a 
related matter, however, 06B was subseijuently criticized for having 
ac(2uiesced in a standard that was too lenient. After additional 
consultations with OGE and in light of other public comments, 6SA 
published a revised regulation which strengthened the original rule 
by deleting what had been characterized as the "balancing test." 
The current regulation lists a number of factors to be used as a 
guide to assist authorized agency officials so that they do not 
accept payment in circumstauices that would cause a reasonable 
person to question the integrity of the agency's programs or 
operations. Had we imposed a flat ban on acceptance of payments 
from "prohibited sources," or even just on sources affected in some 
manner by the traveling employee's duties, we felt that we would 
have severely limited the utility of the statute. 

Our other responsibility in this area is simply to be the 
public repository of the records that agencies are required to file 
every six months. We note that S. 885 requires that these reports 
be published in the Congressional Record. The Ethics Committees 
may find that they need some assistance in the form of an incentive 
in the statute in order to get the reports necessary to make that 
publication. We have had to regularly call agencies who have not 
filed reports in a timely manner to get them to do so. This has 
caused some administrative headaches for us. 

Finally, turning back to your third question, you asked that 
I provide you with any views I might have on the differences 
between the legislative and executive branches of Government and 
the Issues that may be raised by such differences. The most 
obvious difference that I can think of in the context of a gift 
rule is determining who would be a prohibited source of gifts for 
Members and Congressional staff. For officers and employees of 
agencies, be those agencies executive or legislative, it is easier 
to focus on those private sources which have some official nexus to 
the employee or the agency. For Congress, that could be anyone. 
We note that you have tried to address this by making all sources 
of gifts initially prohibited and then setting forth exceptions. 



88 



This is probtibly a reasonable approach for Congress under the 
circumstances. It nay not, however, prove as reasoneible for the 
individuals ^rho are employees of legislative branch agencies such 
as the Library of Congress, the General Accounting Office, 
Government Printing Office or Copyright Royalty Tribunal. 

There may also be some legitimate reason for treating all 
elected officials differently in some respects than all other 
employees . For instance , Z note that you have reasonably 
recognized that Members may be given home state products for the 
purpose of redistributing them to others. As they hold 
representative positions, I believe that is certainly appropriate. 
Since no one in the executive branch is elected by a limited number 
of citizens, that is not an exception that would be appropriate for 
the executive branch. 

I also think there is now an opportunity to review the statute 
relating to the disclosure of gifts. In the 1991 Legislative 
Appropriations Act, the threshold reporting re(xuirements were 
substantially increased atnd one provision was amended so as to 
cause unnecessary expense to the executive branch in amending its 
forms. Section 314 of Public Law 102-90 amended the Ethics in 
Government Act so that only gifts with an aggregate value of $250 
or the minimal value for Foreign Gifts acceptance, whichever was 
more, had to be reported. Just prior to that time, the threshold 
value had been raised from $75 to $100 for tangible gifts with 
travel expenses and reimbursements remaining at $250. 

This amendment has already caused an unnecessary expense to 
the Government because it creates a system that re(3uires changes to 
the reporting forms and their instructions which in practice will 
only be able to occur with a retroactive effective date. In the 
executive branch that is a costly process and it will only create 
periods of substantial confusion. I would be quite willing to 
work with the subcommittee to address this issue on a Government- 
wide basis. 

My staff and I would be happy to work with the staff of the 
subcommittee on a technical analysis of the differences between the 
provisions of S. 885 and the executive branch rules. With regard 
to the gifts provisions contained in this bill, generally, we found 
these to be the major differences: 

1. 5 U.S.C. S 7353, which applies to all Federal officers and 
employees, sets forth a description of who is a "prohibited source" 
of gifts to employees in the executive branch. S. 885 does not use 
this concept; rather it applies a restriction to all gifts 
regardless of donor and then attempts to set forth exceptions that 
will cover all instances lAere it would not be inappropriate to 
accept a gift. 



89 



2. The executive branch rules note that an indirect acceptance by 
an employee includes gifts given at the employee's designation, 
recommendation, or other specification except as to those honoraria 
that are properly directed to charitable organizations pursuant to 
that authority in the statutory restrictions on honoraria. Section 
6 of S. 885 eliminates' the option of officers and employees of all 
three branches from making such a charitable designation. We, of 
course, would recommend that the entire honoraria restriction be 
amended and that the option be left for executive breuach employees 
to continue to designate to charity an honorarium in any case where 
it would be acceptable to take the honorarium directly. The 
executive branch has never allowed an employee to give to charity 
what he or she was offered because of an official speech, article 
or appearance. 

3. There is no definition of the word "person" which becomes a 
problem when the term is used to note a source of gifts. For 
instance, during the course of a year could five different 
employees of one corporation each give a Member gifts with a 
cumulative value in excess of $50? Onder the executive branch 
definition of person, the five could not. The source in that case 
would be considered the corporation and the gifts from all five 
together would have to meet the $50 test. That is not clear In 
S. 885 and could be viewed as a major difference. 

4. S. 885 does not Include a bona fide public service awards 
exception as do the executive branch rules. If an employee or 
Member were to be offered the Nobel Peace Prize with its monetary 
award, there would be no exception available to allow that 
individual to accept it or to designate that it be paid to a 
charity. 

5. Under the exception for opportunities and benefits, S. 885 does 
not Include an exception for offers made to an employee as part of 
a group when the group Is not defined on the basis of official 
responsibility or rank. The usefulness of that exception comes 
into play, for example, when all employees In a particular 
Government building are offered a discount at some local 
establishment In the same way as all employees in two neighboring 
private buildings. 

6. S. 885 also does not include an exception for bona fide job 
interview reimbursements for those who are seeking to leave the 
Government. The executive branch includes that exception coupled 
with any necessary disqualification from duties because often 
individuals will seek employment In the seune field as that in which 
they have been serving in the Oovemment. The private employers in 
that field may very well be prohibited sources of gifts of travel 
expenses even if they are incident to a bona fide job interview. 

7. There Is an exception in the executive branch rules for gifts 
of entertainment and food if it is offered incident to an 



90 



employee's authorized participation as a panelist or at a widely 
attended gathering. The value o£ those gifts need not fit within 
the $20 exception. One of the crucial tests of the exception is 
that the employee is assigned to speak or that attendance at the 
widely attended gathering is determined, usually by someone other 
than the employee, to be in the agency's interest. S. 885 has a 
similar exception' but does not include zmy concept of assignment or 
determination of Congressional interest. It appears each Member or 
employee can make that determination him or herself. We see that 
as potentially being a provision that could in practice be put to 
a troublesome use. While each Member as the head of his office may 
be in a position to decide for him or herself what is in the 
interests of the office or the Congress or when the speech he or 
she is giving is official or personal, you may want to consider 
some review procedures for all other officers and employees. This 
would include not only a review of the official nature of the 
participation but of the event to determine if it fits the widely 
attended definition. 

8. As mentioned earlier, the executive branch rules set forth two 
reasons a gift must be analyzed under the rules: first if it comes 
from a "prohibited source" and second if it is given simply because 
of Government position, i.e status gifts. If neither of those 
reasons is present, then the gift may be accepted without reference 
to any exception. While in most cases either source is treated 
equally by the rules, we did make an exception for certain types of 
gifts that were offered siir.ply because of status and not from an 
otherwise "prohibited source." We call that the purely social 
invitation exception which S. 885 does not contain. While there 
are a number of facts that must be present before the social 
invitation exception can apply, the typical Washington event that 
does come within its scope is the at-home dinner party hosted by 
persons known for their soirees who wish simply to have well-known 
people in Washington as their guests, as much for themselves as to 
enhance the likelihood that other invitees will attend. If the 
hosts invite a new Cabinet member and a new committee chairman 
because of their new positions, under the executive branch rules 
the cabinet member could go if he or she wished and under the 
restrictions in S. 885, the new committee chairman could not 
attend. (The assumption in both cases is that the hosts are not 
close personal friends and that they are not "prohibited sources" 
of gifts to officers and employees of the Cabinet secretary's 
departmert . ) since these types of events do happen in Washington, 
the legislative branch may want to consider adding an exception for 
in-home entertainment. The executive bremch language could not be 
used because of the "prohibited source" concept. 

9. We note that S. 885, while addressing gifts from foreign 
govenments, does not include any exception for gifts from other 
sources when traveling or stationed outside the United States. We 
would assume that when traveling abroad. Members or employees may 
find themselves in situations where gifts of entertainment and 



91 



hospitality are offered by foreign businesses, U.S. companies doing 
business abroad, non-profit organizations or educational 
institutions. The executive branch has an exception for gifts 
given under those circumstances. While it may be envisioned that 
Members and Congressional staff may always be hosted by a 
government or the U.S. may pay their expenses, we note that 
legislative branch agencies, such as GAO, do have employees who 
travel to audit various U.S. operations abroad. In some places 
abroad, the $20 exception may not be realistic for even the most 
minor offer of hospitality. The executive branch rule is based 
upon the U.S. per diem rates for the country in which the gift is 
offered, a rate adopted as a reasonable measure of costs in the 
country. 

10. In the proposed provisions in S. 885 on the disposition of 
prohibited gifts, we noted two differences from the executive 
branch rules. The first is that \inder certain circumstances, the 
executive branch does allow a perishable gift to be shared among 
the members of an office. Examples would be a fruit basket which 
is unwrappred at the office for all to share, or flowers placed in 
a public room for all to enjoy. This type of allowed disposition 
is not among those in S. 885. The second difference is that S. 885 
does not limit the circumstances under which an individual can use 
appropriated funds or Government mails to return a prohibited gift. 
The executive branch re(2uires that an agency decide whether it will 
use public funds for such purposes depending upon the 
circumstances. In that way an employee who uses extremely bad 
judgment in accepting some item cannot automatically use taxpayers 
money to return it . Nor can someone who sends an unsolicited but 
unacceptable gift expect the Government to return it to him or her 
at no cost, we would strongly recommend that someone other than the 
recipient determine whether Government funds can be used to return 
the item or items. 

This concludes my statement. I will be happy to respond to 
any questions you may have. 



92 



SYNOPSIS OF SUBPART B • GIFTS FROM OUTSIDE SOURCES 

BASIC PROHIBITION ON GIFTS FROM OUTSIDE SOURCES. An employee shall not solicit or accept 
a gift given because ot his oflicial position or trom a prohibited source. A prohibited source is defined as 
any person, including any organization nwre than half of whose members are persons: 

Seeking official action by his agency; 

Doing or seeking to do business with his agency; 

Regulated by his agency; or 

Substantially affected by the performance of his duties. 

DEFINITION OF A GIFT. The term "gift" includes almost anything of monetary value. However, it does 
not Include: 

Coffee, donuts and similar modest Items of food and refreshments when offered other than 
as part of a meal; 

Greeting cards and nrrast plaques, certificates and trophies; 

Prizes in contests open to the public; 

Commercial discounts available to the general public or to all Government or military 
personnel; 

Comnrtercial loans, and pensions and similar benefits. 

Anything paid for by the Govemment, secured by the Govemment under Govemment 
contract or accepted by the Govemment in accordance with a statute; 

Anything for which the employee pays mart<et value; 

EXCEPTIONS. Subject to the limitations noted betow, there are exceptions which will permit an empkjyee 
to accept: 

Unsolicited gifts with a market value of $20 or less per occasion, aggregating no more than 
$50 in a calendar year from any one source (this exception does not permit gifts of cash 
or investment interests); 

Gifts when dearty motivated by a family relationship or personal frierKJshIp; 

Commercial discounts and similar t>enefits offered to groups in which membership Is not 
related to Govemment emptoyment or, if membership Is related to Govemment 
employment, where the same offer is broadly available to the public through similar groups, 
and certain benefits offered by professnnal associations or by persons who are not 
prohfeited sources. 

Certain awards and honorary degrees; 

Gins resulting trom the outside business activities of emptoyees and their spouses; 



93 



Travel and entertainment in connection with employment discussions; 

Certain gifts from political organizations; 

Free attendance provided by the sponsor of an event for the day on which an employee 
is speaking or presenting information at the event; 

Free attendance provided by the sponsor of a widely-attended gathering of mutual interest 
to a number of parties where the necessary determination of agency interest has been 
made; 

Invitations to certain social events extended by persons who are not prohibited sources, 
provided no one is charged a fee to attend the event; 

Certain gifts of food and entertainment in foreign areas; 

Gifts accepted by the employee under a specific statute, such as 5 U.S.C. 4111 and 7342, 
or pursuant to a supplemental agency regulation. 

LIMITATIONS ON USE OF EXCEPTIONS An employee may not use any of the exceptions noted above 
to solicit or coerce the offering of a gift or to accept gifts: 

For being influenced in the pertormance of official duties; 

In violation of any statute; 

So frequently as to appear to be using public office for private gain; or 

In violation of applicable procurement policies regarding participation in vendor promotional 
training. 

DISPOSITION OF GIFTS. When an employee cannot accept a gift, ttie employee should pay the donor 
Ms market value. If the gift is a tangible item, the employee may instead retum the gift. Subject to 
approval, however, perishable items may be donated to a charity, destroyed or shared within th'^ office. 



94 



SYNOPSIS OF SUBPART C - GIFTS BETWEEN EMPLOYEES 

BASIC PROHIBITION ON GIFTS BETWEEN EMPLOYEES. An employee shall not: 

Give or solicit for a gift to an official superior: or 

Accept a gift from a lower-paid employee, unless the donor and recipient are personal 
friends who are not In a superior-subordinate relationship. 

DEFINITION OF A GIFT. The term "gift" has the same meaning as in subpart B. However, carpooling and 
similar arrangements are excluded where there is a proportionate sharing of the cost and effort involved. 

DEFINITION OF AN OFFICIAL SUPERIOR. The term "official superior includes anyone whose official 
responsibilities involve directing or evaluating the pertormance of the employees official duties or those of 
any other official superior of the employee. The term is not limited to immediate supervisors but applies 
to officials up the supervisory chain. 

EXCEPTIONS. Subject to a limitation on using any exception to coerce a gift from a subordinate, there 
are exceptions that: 

On an occasional basis, including birthdays and other occasions when gifts are traditionally 
exchanged, permit giving and accepting: 

Items other than cash aggregating $10 or less per occasion; 

Food and refreshments shared in the office; 

Personal hospitality at a residence; 

Appropriate hostess gifts: and 

Leave sharing under OPf^ regulations; 

On infrequent occasions of personal significance, such as mam'age, and on occasions that 
terminate the superior-subordinate relationship, such as retirement, permit giving and 
accepting gifts appropriate to the occasion; and 

Permit voluntary contributions of nominal amounts to be made or solicited for gifts of food 
and refreshments to be shared in the office or for group gilts on occasions such as 
marriage or retirement described in the preceding paragraph. 



95 



Citizen 



Buyers Up • Congress Watch • Critical Mass • Health Research Group • Litigation Group 

Ralph Nader, Founder 



Testimony of 
Joan Claybrook 

President, 
Public Citizen 



Before the 

Senate Governmental Affairs Committee 

Subcommittee on Oversight of Government Management 



July 19, 1992 



215 Penns>'K-ania Avenue SE • Washington. D C 20003 • (202) 546-4996 • FAX; (202) 547-7392 

A Printed on Recyclfld Paper 



96 



Mr. Chairman and members of the Subcommittee, thank you for inviting me 
to testify today. My name is Joan Claybrook, and I am president of I\iblic Citizen. 
Founded by Ralph Nader in 1971, Public Citizen is a national consumer research and 
advocacy organization with more than 150,000 members nationwide. 

Public Citizen has long advocated for an end to perks lavished upon Congress 
by special interest groups, from junkets to tropical climates in winter months to 
tickets to sporting events. It is nO secret that lobbyists use such gifts as tools to gain 
access to Members of Congress - tools which ordinary citizens cannot afford. This 
practice skews the legislative process toward monied interests. At a minimum, there 
is an appearance of impropriety. We believe strongly that Congress should enact a 
comprehensive ban, by statute, on the acceptance of all privately donated gifts, 
entertainment, travel and other financial perks. 

We commend you and Sen. Lautenberg for your leadership on this important 
issue. Your support was instrumental in the Senate's overwhelming vote in favor of 
S. 349, the Lobbjdng Disclosure Act, last May, which contained a provision requiring 
the disclosure of a wide range of gifts, perks, and other financial favors valued at 
more than $20. This provision reached beyond what people generally think of as 
"gifts" - tickets to sporting events, expensive dinners -- to other financial favors just 
as common but sometimes not as well known. For example, your Lobbying Disclosure 
Act requires disclosure of any financial benefit given to "an entity that is established, 
maintained, controlled, or financed by a covered legislative branch official." This 
speaks to the increasingly common practice of a lobbyist directing a donation to a 
foundation or organization established or connected to a lawmaker. It is very 
important that the bill we are discussing today, which attempts to go further by 
instituting some prohibitions against accepting financifd benefits, be as broad in its 
reach as the Lobbying Disclosure Act. 

We are pleased to see that S. 885 prohibits Members of Congress from 
accepting gifts over $20 from private groups. This makes good sense. The current 
Congressional policy of allowing gifts worth up to $250 from one source during a year, 
and not counting any gifts under $100 toward that Umit, stands in sharp contrast to 



97 



the executive branch standard of banning acceptance of any gift over $20. To the 
public, such a discrepancy seems odd. If an assistant secretary at a federal agency is 
prohibited from accepting a $25 gift firom a private entity, why is it all right for a 
Member of Congress to accept a $250 gift from a trade association which wants a 
provision inserted in some piece of legislation? In using executive branch rules as a 
benchmark for reformulating rules for Congress, S. 885 goes a long way toward ' 
repairing the institution's tarnished credibility. Congress should not, however, rely 
on executive branch rules as its outside limit of what should be done. There are ways 
in which the executive branch rules also need strengthening. 

One of our biggest concerns with S. 885 lies in the section on privately funded 
travel. The bill stops short of banning trips and, instead, calls for stricter disclosure 
of such trips. While We heartily approve of stricter disclosure requirements, we 
believe strongly that the best solution would be to ban all privately funded travel. 
There is just too much abuse of this perk, and too much difficulty in drawing the line 
between appropriate and inappropriate private travel. If any trip is truly important 
enough to merit a Member of Congress' attention and time, then the Congress should 
pay for it, just as public money pays for Congressional offices, staff, publicatic is, 
hearings, and investigations. Taxpayers wiU not object to Members of Congress 
traveling with public money when the trip has a substantive purpose ~ for example, 
a fact finding trip to an area of the country that recently suffered fix>m a natural 
disaster. They will not tolerate, however, financing a junket to Florida in December 
where the featured activity appears to be playing golf and swimming with special 
interest lobbyists. 

If there is any doubt that the practice in the Congress of accepting trips from 
private groups is not widespread, consider this evidence: 

*In 1991, Public Citizen published a report that analyzed trips taken by 
Members of the House of Representatives during the 101st Congress (1989-1990.) 
Members of the House went on nearly 4,000 privately funded trips during that time 
period. On average, lawmakers went on nine trips each, and only a handful refused 
to go on such trips at all. Over two-thirds of these trips were paid for by corporations 



70-652 - 93 - 5 



98 



or their trade associations who were often lobbying lawmakers on specific legislation 
affecting their economic interests. Not surprisingly, the most popular months for 
traveling were vnnter months, when the weather grows cool in Washington and 
tropical climes are all the more inviting. 

Among the top sponsors of trips between 1989-1990 were the National Cable 
Television Association, which sponsored 75 trips, and the National Association of 
Broadcasters, which picked up the tab for 67 trips. Destinations included Las Vegas, 
Palm Springs, New Orleans, and Los Angeles. 

At the time, these two trade associations were locked in a mtgor legislative 
battle over the cable television re-regulation bill. Along with the millions of dollars 
they gave to lawmakers' campaigns, they used these trips as part of an overall 
lobbying strategy designed to give them the edge on Capitol Hill. Most Members 
invited on these trips served on the House Energy & Commerce Committee, which 
oversees legislation affecting the television industry. 

•ABC's "Primetime Live" recently aired a segment on a trip by ten Members 
of the House of Representatives and their spouses to Florida's Captiva Island 
sponsored by the Electronics Industry Association. The lawmakers met with trade 
association representatives for a few hours in the morning, where they heard the 
industry's side on issues ranging from telecommunications policy to the environment. 
Then, they spent the rest of the day playing golf or tennis with lobbyists from such 
companies as TRW, Magnavox, Martin Marietta, Texas Instruments and DuPont. 
Airline tickets, acconunodations, food, and golf course greens fees amounted to about 
$25,000 for 10 couples - $2,500 a couple. 

*The American Medical Association (AMA) recently entertained nine high level 
Congressional staffers for a weekend at the luxurious Greenbrier resort in West 
Virginia, where the cheapest rooms go for $424 a night, not including greens and 
tennis fees. (The AMA did not pay for travel expenses, but the resort is only a four 
hour drive from Washington.) These staffers will be critical in developing any health 
care reform legislation. Lee Stillwell, the AMA's senior vice president for government 
and political affairs, told Wall Street Journal reporter Timothy Noah that the purpose 

3 



99 



of the weekend was to "to provide information and data. . .We have found it's best to 
change the setting, admittedly, to a more relaxed environment [because] the everyday 
distractions you have in your ordinary environment are counterproductive." 

S. 885 attempts to limit such abuses by setting up a standard for approval of 
privately funded congressional trips: "condition ...approval on a determination by the 
Ethics Conunittee that acceptance of reimbursement would not cause a reasonable 
person with knowledge of all the facts relevant to a particular case to question the 
integrity of the Member, the Congress or congressional operations." This is a loose 
copy of executive branch standards, which allow federal agency officials to accept 
travel reimbursement from private parties if "an agenc^s interest in the 
employee's.. .attendance.. .outweighs the concern that acceptance of the pajmient may 
or may (sic.) reasonably appear to influence improperly the employee in the 
performance of his/her official duties." 

But here is a clear case of where following the example of executive branch 
rules is simply not appropriate. The provision allowing executive branch officials to 
accept privately funded travel, sUpped into the 1989 Ethics in Government Act at the 
last minute and subject to no hearings or debate, has only proven our fears about 
abuses and conflicts of interest. In a 1992 review of privately funded executive branch 
travel, Common Cause noted that NASA officials had accepted travel from such 
companies as McDonnell Douglas, Boeing, Dow Chemical, United Technologies, 
Dupont and IBM. Defense Department officials had travel paid for by Grumman 
Corporation, Bell Aerospace Systems Group and the Harris Space Systems 
Corporation. Clearly these companies have a direct interest in these agencies' actions. 
Yet the trips were approved anjrway. 

We have thought very carefully about the standard S. 885 would establish ~ 
that if the average person would consider the acceptance of a trip from a certain 
interest to be pose a conflict of interest for a lawmaker, then the trip should not be 
approved. Our analysis of privately-funded trips indicates that most trips would in 
fact raise concerns in the eyes of the average citizen since trip sponsors target their 
trip giving to key members of Congress sitting on committees with jurisdiction over 



100 



their industries. Such a standard, therefore, seems unworkable. 

In &ct, instead of following the executive branch example, S. 885 should ban 
such travel - by Congress and the executive branch alike. Failure to enact a ban only 
invites more inappropriate behavior by executive branch officials and Members of 
Congress. It is no surprise that when news of such trips hits the media the pubHc 
reacts with resentment: people know that only the very wealthy special interests can 
use these sorts of strategies for access to decisionmakers. 

That said, we have a number of suggestions for strengthening the travel 
disdosure requirements set out in S. 885. 

•Don't give Ethics Committees authority for approving privately funded trips. 
S. 885 delegates authority to the Ethics Committees to develop rules setting out 
conditions for acceptance of outside funds to pay for trips. It also requires the Ethics 
Committees to approve in advance all such travel. Public Citizen recognizes that the 
bill attempts to follow the structure of the executive branch rules, which puts 
authority for approving travel in a designated official at each agency. The Ethics 
Committees, however, are not the appropriate bodies in the Congress in which to vest 
such authority. 

There will be enormous pressure on the Committees to avoid disapproving any 
trips at all, so as not to alienate a colleague or any particular special interest group. 
The likely result of this unwieldy arrangement is that the Ethics committees will 
become rubber stamps, legitimizing special interest travel that most citizens already 
find abhorrent. Furthermore, unUke the executive branch agencies, where officials are 
essentially agents of the president, each Member of Congress is an elected official. As 
such. Members should be responsible for their own conduct, including the decision to 
accept private money for trips. They should not be able to turn to another body, made 
up of their colleagues, to make these decisions for them, thereby displacing their 
responsibility. In the case of Congressional staffers, the Member of Congress who 
employs them should bear the responsibility for these decisions. 

•Establish strict restrictions on privately funded trips. If Members of Congress 
and staff decide to go on a privately funded trip, they should follow strict guidelines. 



101 



For example, such trips should be limited to 24 hours in length; reimbursement 
should be coach £are rates only, and there should be a prohibition on accepting 
reimbursement for spouses and other family members. Such restrictions would be in 
line with Congress' previous actions in regulating privately funded travel — for 
example the current four-day limit on privately funded domestic travel in the Senate. 
Allowing multi-day privately funded trips t>nly encourages Members and staffis to 
make the trip into a mini-vacation with special interest dollars. 

•Require both pre-trip and post-trip disclosure ~ and in a timely manner. S. 
885 requires that trips be reported to the Congressional Record twice a year, after 
trips are taken. To improve disclosure. Public Citizen believes that Members of 
Congress should be required to report plans to take a privately funded trip before 
they go on the trip. Such reports should include the sponsor of the trip, the trip 
destination, and the dates of travel. These reports could be submitted as late as 48 
hotirs before a trip. (Since the bill now requires prior Ethics Conunittee approval of 
trips, there is no good argument why the same information can't be provided to the 
Records) By providing such an advance report the public would be alerted about a 
Member's plans to travel and could therefore monitor that activity more effectively. 
Furthermore, upon returning fi^m a trip, Members should file complete reports with 
the Congressional Record within ten days of return. The Record should compile all 
these records quarterly, so that all the information would appear in one place for easy 
access, but, in the meantime, the information would be more immediately available. 

•Require Members to provide the public with information about their trips. 
Members of Congress often argue, privately funded trips are necessary to do their 
jobs adequately. If this is true, then the public deserves to know what their 
representatives have learned on such trips and how and why the trip was necessary. 
Members of Congress should, therefore, write up statements, to be published in the 
Congressional Record, which lay out their reasons for taking a trip and what they 
learned and accomplished. 

•Provide clear guidance on the format of travel disclosure forms. S. 885 sets out 
comprehensive requirements for the content of travel disclosure reports. It is still 



102 



necessary, however, to establish guidance on the format of the forms. At present, 
there is a disparity between travel disclosure forms filed by Senators and Members 
of the House of Representatives, with the House disclosure forms being more "user 
friendly." On the House forms, a separate colunm is provided for each piece of 
information, i.e., whether a family member is traveling with the Member, dates of the 
trip, and whether any time is spent at the location not at the sponsor's expense. The 
Senate form, in contrast, simply presents Senators with a line for "dates and brief 
description." Many times Senators do not provide complete information on this line. 
Having a separate column for each piece of information would undoubtedly improve 
disclosure. In addition, there should be a requirement to spell out the names of 
organizations sponsoring trips rather than providing incomprehensible acronyms. 
Collectively, these points make all the difference in whether or not the information 
is useful to the public. 

•Lower threshold for disclosure from $250 to $20. A $250 threshold for 
reporting of trips is counterproductive. First, some trips would slip under this 
threshold if the trip is taken to a nearby city, such as New York City, or Homestead, 
West Virginia. A Member could conceivably accept daily trips to a resort in the 
Adirondacks and never have to report a single one. Second, the bill sets a standard 
for the gift ban of $20, and that standard should be followed in the travel section of 
the bill. 

Senator Lautenberg recognized the troubling effect these trips and gifts have 
on public confidence when he introduced his legislation, saying, "I know many of my 
colleagues will deny that they can be influenced by a free dinner or even a luxury trip 
to the Caribbean. However, it seems indisputable that these kinds of special fiavors 
have contributed to Americans' deepening distrust of Government.. .For as public trust 
diminishes, the ability of Congress to address our nation's serious problems also 
diminishes." 

In 1992, voter confidence in Washington lawmakers plummeted to historically 
low levels. Unless Members of Congress want to face an even more hostile voting 
public in 1994, it is time to start responding to citizens' call for change in how 



103 



business is conducted in the nation's capital. Along with passing a strong campaign 
finance reform package and improved lobbying disclosure, banning most gifts and 
privately funded travel would go a long way toward restoring voter confidence in 
government. We commend this committee and Sen. Lautenberg for tackling this 
difBcult issue. 



\ 



8 



104 



MCHANO H MVAN. MfVAOA. CNMWMI 
MTTCH lAcCONWLL tlMTUCXV, VtCf CHAMMAM 
BAMAJU WWULSKI. MAmOAND MOaiflT SHITM. MEW HAMPSHMf 

THOMAS DASCn^ SOUTH OAJCOTA LAMTV ClUtC fDAMO 



flmtd States Senate 

SELECT COMMITTEE ON ETHICS 

HART SENATE OFFICE BUILDING. ROOM 220 

SECOND AND CONSTITUDON AVENUE, NE. 

WASHINGTON. DC 20S 10-6425 

TELEPHONE (202) 224-2981 

August 11, 1993 

The Honorable Carl Levin 

The Honorable William S. Cohen 

Subcommittee on Oversight of 

Government Management 
United States Senate 
Washington, D. C. 20510 

Dear Senator Levin and Senator Cohen: 

Thank you for your July 21, 1993 letter concerning S. 885 and 
providing the opportunity to comment upon several provisions of the 
bill. 

Specifically, your letter notes that Section 8 of the bill 
would require the Ethics Committee to: 

— prescribe rules establishing the conditions under which the 
Senate, or Members and employees of the Senate, would be 
permitted to accept private reimbursement for travel 
expenses ; 

— approve in advance all travel for which related expenses are 
to be reimbursed, based on a determination that "acceptance 
of reimbursement would not cause a reasonable person with 
knowledge of all the facts relevant to a particular case to 
question the integrity of the Member, the Congress or 
congressional operations"; and 

— publish in the Congressional record reports of all payments 
of more than $250 accepted under the provision. 

We greatly appreciate the opportunity to comment because, as 
your letter indicates, this section of the bill would have a 
significant effect on the operations of the Ethics Committee. 

Fundamentally, we believe that the above provisions would be a 
step in the wrong direction because those provisions would shift 
responsibility for the decision to accept travel expenses from the 
shoulders of the individual involved to the Ethics Committee. We 
are firmly of the opinion that Members who accept travel expenses or 
who permit employees under their supervision to accept such expenses 
should be directly responsible for deciding that acceptance of such 
expenses will not create a conflict of interest and that the travel 
will benefit the Member or employee in the performance of their 
official duties and is in the interests of the Senate and the United 



105 



states. Also, for the Ethics Committee to make the proposed 
determination that acceptance of reimbursement "would not cause a 
reasonable person with knowledge of all the facts relevant to a 
particular case to question the integrity of the Member, the 
Congress or congressional operations," would appear to impose upon 
the Committee an overwhelming, as well as misplaced, investigative 
burden . 

Likewise, it appears to us that the individual accepting or 
permitting acceptance of travel expenses, not the Ethics Committee, 
should bear the burden of any additional reporting requirements 
which might be required. 

Thank you again for the opportunity to comment on this matter. 

Sincerely, 





Vice Chairman 



106 



STATEMENT OF SENATOR RUSSELL D. FEINGOLD 

BEFORE THE SENATE GOVERNMENTAL AFFAIRS COMMITTEE 

SUBCOMMITTEE ON OVERSIGHT 

OF GOVERNMENT MANAGEMENT ON S. 885, 

THE CONGRESSIONAL ETHICS REFORM ACT OF 1993, 

A BILL TO MODIFY CONGRESSIONAL RESTRICTIONS ON GIFTS 

July 19, 1993 

Thank you Mr. Chairman, for allowing me the opportunity to submit 
my testimony on S. 885, a bill which I am proud to be an original 
cosponsor, and for holding this hearing on a subject that is very 
important to both myself. Congress, and the American public ~ 
that is reform of the way in which Congress deals with the 
thousands of gifts and other perl(s that are offered to Members 
each year from individuals and organizations that seek access and 
influence in the United States Congress. 

I would also like to thank Senator Lautenberg for introducing both 
the resolution that expressed the sense of the Senate that the full 
Senate would consider during this session, changes in the way 
Members and staff are allowed to accept gifts, meals and travel 
similar to the restrictions currently applicable to executive branch 
officials, and S. 885, the Congressional Ethics Reform Act of 1993. 
His leadership and the overwhelming margin in which the sense of 
the Senate resolution passed leads credence to my hope that we 
will be able to enact meaningful legislation this area of 
Congressional reform. 

The current rules, which allow Members of Congress and their staff 
to accept gifts worth up to $250 from one source during a year and 
does not include towards that limit any gifts under $100, create the 
potential for conflicts of interest and the appearance of impropriety, 
and are yet another reason why the public's confidence in 
Congress has fallen to dangerously low levels. 

S. 885 would, among other things, reduce these limits along the 
lines of the rules applicable to the Executive Branch, setting the 
new single gift limit at $20, with a $50 limit from any one source. 



107 



Although I am an original cosponsor of the Congressional Ethics 
Reform Act of 1993 and will work my hardest to see that change in 
the present system is enacted, I would like to focus my remarks on 
my experience with the gift ban policy I have enacted with regards 
to myself and my office. 

For ten years as a Wisconsin State Senator, I served in a legislative 
body that prohibited the acceptance of anything of value from a 
lobbyist or a lobbying organization. l\/ly experience, as well as the 
State of Wisconsin's experience with the policy of a total ban, led 
me to adopt an office ethics policy which combines the most 
restrictive elements of the existing ethics policy of the United 
States Senate and the ethics rules followed in Wisconsin state 
government. 

This policy includes an all out ban on the acceptance of things of 
value. Specifically, as under Wisconsin law, individuals employed 
in my office, including myself, paid staff, fellows and interns, 
cannot accept food, drink, transportation, lodging, employment or a 
thing of pecuniary value from a lobbyist or an organization that 
employs a lobbyist, or food, drink, transportation, lodging, 
employment, or any item or service of more than nominal value 
from any individual offered because of public position. 

As under Wisconsin law, exceptions to these restrictions have been 
made in order to facilitate the day to day legislative related work 
that is conducted in my office. Therefore, these restrictions do not 
apply to the provision of educational or informational materials; 
lodging, transportation, and food or beverage offered coincidentally 
with the presentation of a talk or participation in a meeting, 
program, conference or seminar relating to official business, and 
by or for a political campaign committee. The restrictions also do 
not apply to functions sponsored by, or items provided by, federal 
agencies or federal officials or diplomatic functions sponsored by 
foreign governments where attendance at such an event is part of 
the individual's official responsibilities. I have attached a copy of 
my office ethics policy so that it can be made part of the hearing 
record. 



108 



This Committee wiil iiear from many individuals and organizations 
wlio wlli compiain ttiat a gift ban ttiresiioid amount and reporting 
ceiiing set at too low of a level will result In a overwhelming 
amount of paperwork and administrative work which could 
ultimately take away from the time IMembers of Congress spend on 
their legislative duties. H/ly own experience with a gift ban set at $0 
has not borne these fears out. As of the date of this hearing, my 
office has logged over 220 gifts or offers that have been declined 
or donated to charities. I can assure you that my office ethics 
policy has neither interfered with my or any member of my staff's 
legislative responsibilities, nor created any unduly amount of 
administrative work for my office. 

As I stated before, I am a cosponsor of S. 885, and will do all I can 
to help make sure that it Is enacted into legislation during this 
Congress. The $20 and $100 limits are a significant step towards 
reducing the opportunity for potential conflicts of interest and the 
negative perception that permeates through and surrounds the 
entire Congress. 

However, I would urge members of this Committee, and any 
member who plans on Initiating a gift ban policy, to take into 
account the ease of administration of a flat-out ban. A general 
prohibition would be much easier to administer than a policy which 
sets an arbitrary benchmark value over which items are not to be 
accepted. A flat-out ban not only eases the burden of drawing the 
line on what is acceptable and what is not and any valuation that is 
necessary to administer any type of gift ban policy, but it also 
reduces the potential for any misperceptions of conflicts of interest 
or any other improprieties. 

In conclusion, although I feel that a total gift ban would achieve the 
reform goals set out in S. 885 in a more effective and efficient 
manner, I would like to again thank Senators Lautenberg and Levin 
for their work in this area of reform, and would like to offer my help 
in any way necessary to enact this important legislation. 



109 



OmCX OF U.S. SENATOR rXZMGOLD 
KTHICS POLICY 



It is the policy of this office to comply voluntarily with the 
provisions of the Wisconsin Code of Ethics for Public Officials and 
Employees (Subchapter III, Chapter 19, Wisconsin Statutes) which 
are applicable to Wisconsin state legislative employees. Certain 
provisions of the Wisconsin law are more restrictive than those 
applicable to Senate employees under federal law and Senate rules. 
In other cases, federal and Senate laws are more restrictive. In 
each case, the office will comply with the more stringent 
requirement . 

Specifically, as under Wisconsin law, individuals employed in 
this office, including the Senator, paid staff, fellows and 
interns, may not accept food, , drink, transportation, lodging, 
employment or a thing of pecuniary" value from a lobbyist or an 
organization that employs a lobbyist (Section 13 . 625 (1) -(3) ) or 
food, drink, tramsportation, lodging, employment, or any item or 
service of more than nominal value from any individual offered 
because of public position (Section 19.45(2) and (3m)). 

As under Wisconsin law, these restrictions do not apply to the 
provision of educational or informational materials (Section 
19.45(2) and 13.625(6t))/ lodging, transportation, and food or 
beverage offered coincidentally with presentation of a talk or 
participation in a meeting, program, conference or seminar relating 
to official business (Section 19.56(1), (2), and (3^)); by or for 
the benefit of the federal government (Section 19.56(3) (c) / or from 
a political campaign committee (Section 19.56 (3) (d) ) . These 
exceptions are to be narrowly interpreted. For exeimple, 
participation in a meeting is interpreted to mean more than simply 
attendance at a meeting, but rather playing an active role such as 
participation in a panel presentation or giving a report or speech. 
Under Wisconsin law, "for the benefit of the federal government" is 
interpreted to mean items which would otherwise be paid for by 
official funds. This provision will also be narrowly construed so 
as not to create the appearance of impropriety. Finally, staff 
should be aware of the fact that the Senate Ethics Rules provide 
additional restrictions on acceptance of expenses for domestic and 
foreign travel from non-governmental sources. 

These restrictions shall not apply to functions sponsored by 
or items provided by federal agencies or federal officials or 
diplomatic functions sponsored by foreign governments where 
attendance at such event is part of the individual's official 
responsibilities . 



no 



Waivers 

The Senate Ethics Rules provide for waivers in the case of a 
significant, . personal dating relationship. A similar policy will 
be appliceible in the Feingold Office. These rules are also not 
applicable with respect to items received from a relative of the 
employee. 

Disposition of Gifts. Food and Beverage 

Circumstances will arise where it is not practicable to 
prevent a gift from being delivered. Wisconsin law provides that 
such items be transferred to the ownership of the public agency 
where the individual is employed or, if practicable, returned to 
the donor, or donated to a charitcdsle organization. The Feingold 
Office will implement this policy in the following manner: 

Those items appropriate to be accepted on behalf of the people 
of the state of Wisconsin (for example, books, maps, pictures, 
reference materials, etc.) will be stamped accordingly and retained 
in the office. Items such as food, sundries, plants, etc. will be 
donated to a local charity providing' services to needy individuals 
and feunilies. The donors will be notified of the disposition of 
the item. 

Occasions will also arise when it is not possible or 
appropriate to reimburse a host for food and beverage. For 
example, an individual may be invited to someone' s home under 
circumstances where it is apparent that the invitation is extended 
because of one's public employment, rather than a personal 
relationship. In such cases, the individual involved shall make a 
good faith estimate of the value of the items consximed and shall 
make a payment on a periodic basis to a fund which will be donated 
to the United States Treasury to reduce the federal deficit. This 
option should be used only in very limited circumstances. 

Guidelines for Implementation of Feingold Office Ethics Policv 

The purpose of the application of the Wisconsin Ethics Code is 
to avoid the appearance of members of the Senate staff being 
subject to influence by private interests or receiving personal 
benefits because of their public employment. In applying these 
rules, some situations will be readily apparent; others may not be 
as clear. Each situation should be analyzed by determining 
whether the item is being provided by a) a lobbyist, b) an 
organization that employs lobbyists, or c) because of the 
recipient's official position. If so, the individual should 
politely explain the office policy and decline. 

In all circumstances, employees of this office are expected to 
comply with both the letter and the spirit of the Wisconsin Code of 
Ethics as well as federal and Senate ethics provisions. Staff are 
directed to consult with the Administrative Director and/or the 
Legislative Director on any questions regarding application of this 
policy. 



Ill 



■(^itizen 



Buyers Up • Congress Walch • CriucalMass • Health Research Group • Litigation Group 
Ralph Nader. Founder 



August 16, 1993 

The Honorable Carl Levin 

Chairman 

Subcomnittee on Oversight 

of Government Management 
United States Senate 
442 Senate Hart Office Building 
Washington, DC 20510 

Dear Mr. Chairman: 

I appreciated the chance to testify recently before your 
committee on S. 885, the bill to ban gifts over the value of $20 
to Congress and establish standards and disclosure for privately 
funded travel. 

Upon reviewing the transcript of the question-and-answer 
portion of my testimony, I decided that it would be helpful to 
the committee if I reiterated Public Citizen's position on 
private reimbursement of Congressional travel expenses. 

Public Citizen's position has been — and remains — that 
Congress should ban privately funded Congressional trips. The 
present system, which allows Members of Congress to go on junkets 
and other trips at the expense of special interests, produces 
countless examples of blatant conflicts of interest. It is no 
wonder that the voters lose faith in Congress as an institution 
when they need only turn on the television and see Members of 
Congress golfing with business lobbyists at a sunny resort. They 
know that they do not enjoy the same access and power with their 
representatives that these lobbyists do. 

It is always possible to think of exceptions to the rule, 
and there are certainly cases when an outside group reimburses a 
Member of Congress for a worthwhile trip, or, at minimum, a trip 
that raises no great questions of conflict. The cases you 
proposed during the question-and-answer part of the hearing — of 
an American Cancer Society benefit, an educational Aspen 
Institute conference, and a German Marshall-funded educational 
event — provide some such examples. Nevertheless, Public 
Citizen believes that it is difficult, perhaps impossible, to 
craft a legislative proposal that would simply and generically 
differentiate between these sorts of trips and more problematic 
ones. 



ZOOOPStreetNW . Washington, DC 20036 • (202)833-3000 
•4^^r< A Prtmsd on Rwycled Paper 



112 



The Honorable Carl Levin 
Page Two 
August 16, 1993 

For example, consider if Congress were to legislate that all 
privately funded travel would be banned, except that Members of 
Congress would be allowed to accept compensation for travel from 
non-governmental organizations providing that the organization 
was a nonprofit group and does no lobbying. (Your line of 
questioning seems to point toward this kind of proposal.) At 
first it might seem that such an exemption makes sense, since the 
main problem with acceptance of travel expenses from private 
groups is that the act often produces the appearance of a 
conflict. If an organization does npt lobby, then there is no 
appearance of conflict. 

Unfortunately, this line of reasoning does not hold up in 
the practical world. First and foremost, such an exemption would 
open an enormous loophole. Unhappy that they no longer can fly 
Members of Congress to Florida in December for a three-day 
"conference," the directors of a trade group might simply decide 
to set up a new organization. This new group would not lobby. 
It would be a nonprofit educational organization, and one of its 
main "educational activities" would be to fly Members of Congress 
to Florida in December for a three-day "conference." If Congress 
were to exempt nonprofit, non-lobbying groups from a travel ban, 
such a group would escape the ban. Clearly, such front groups 
would proliferate. 

Second, what is a "clean" trip and what is problematic is 
often in the eyes of the beholder. Even charitable organizations 
such as the American Cancer Society, whether or not they lobby 
directly, have an enormous stake in the millions of dollars 
appropriated by Congress every year for cancer research. The 
distinction between organizations that lobby and those that don't 
is not a useful one for the purposes of a travel ban. 
Universities present another example. Consider as well the 
example of nonprofit organization Citizens for a Sound Economy. 
Their employees do not register as lobbyists, although they were 
active in helping to coordinate intense grassroots lobbying 
activity around President Clinton's proposed BTU energy tax. 
This same group also has, in the past, paid for travel by Members 
of Congress. Clearly this group has an interest in legislative 
policy, and has acted on that interest. By accepting 
reimbursement for travel from this group, a Member of Congress 
would risk the same sort of appearance of conflict of interest as 
they do when accepting trips from trade associations. 

I cannot stress enough the sanitizing effect that providing 
public funds for substantive Congressional travel would have. 
Public funding of trips would force Members of Congress to think 
twice before setting out on a trip, knowing that they will be 
held accountable by taxpayers. It would limit the likelihood of 
inappropriately using these trips for campaign fundraising 



113 



The Honorable Carl Levin 
Page Three 
August 16, 1993 

purposes. It would help control the frequent temptations to 
travel instead of legislating. It would also, however, support 
the necessary, substantive travel that Members of Congress should 
do in order to do their jobs well. * 

Thank you again for the opportunity to testify. I look 
forward to working with you in the future. 



Sincerely, 







<r\ 
Jlaybrook 
President 



VJ^^WCML^ 



114 



GDrnmon Cause 

2030 M STREET, NW ♦ WASHINGTON, D.C. 20036-3380 ♦ PhonE: (202) 833-1200 ♦ FAX: (202) 659-3716 

Edward S. Cabot Fred Wertheimer Archibai.d Cox John W. Gardner 

CiainmoM Pmu/nr CJiairman Emrritus hoMnJimg CJunnmow 



Testimony of Fred Wertheimer 
President 



on Proposals to Ban Gifts 

and Other Financial Benefits Provided to Members of 

Congress and Congressional Staff 



Submitted to the 

Subcommittee on Oversight of Government Management 

of the Senate Governmental Affairs Committee 



July 19, 1993 



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On behalf of Common Cause, I am submitting this written testimony outlining 
our views regarding proposals to ban the acceptance of gifts and other financial 
benefits by Members of Congress and congressional staff. We commend Senator 
Frank Lautenberg (D-NJ) for introducing S. 885, the Congressional Ethics Reform 
Act, and believe his bill makes a very important contribution to reform efforts in this 
area. We urge this Subcommittee to act promptly to report to the full Senate 
Governmental Affairs Committee a comprehensive reform bill. 

We believe that gifts and other financial benefits provided to Members of 
Congress and their staff should be banned. To the extent that any such financial 
benefits are not prohibited, they should be subject to effective public disclosure such 
as the essential disclosure provided by the amendment offered by Senator Paul 
Wellstone (D-MN) and included in the Senate-passed Lobbying Disclosure Act of 
1993. 

In the 1992 elections, the American people provided the new President and 
Congress with a mandate to change the country's course, and to reform and revitalize 
its politics. If that mandate is to be realized, there must be a fundamental change in 
the Washington special-interest money culture. There must be an end to the current 
practice of special interests engaged in the business of influencing government 
decisions by providing financial benefits to the elected officials who make those 
government decisions. 

Reform of the current corrupt campaign finance system is central to changing 
the way business is done in Washington. The bill recently passed by the Senate, S. 3, 
contains a number of basic reforms, although it also is missing an essential element of 
campaign finance reform ~ public campaign resources for candidates who agree to 



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spending limits. 

In addition to campaign contributions, there are various other ways that special 
interests provide financial benefits to Members of Congress. These include tickets to 
the Super Bowl and Broadway shows and other entertainment, payments to elected 
officials for vacation and pleasure trips, and constant wining and dining. Special 
interests also give charitable contributions to elected officials' pet causes and to 
foundations the officials control. They host ski trips and golf tournaments and they 
finance receptions and other events held for Members of Congress, such as parties at 
political conventions. 

These practices should be ended. The guiding principle ought to be that 
Members of Congress should pay their own way. Members of Congress and staff 
should be covered by new comprehensive statutory restrictions on the receipt of 
financial benefits. 

Like executive branch officials. Members and staff should be prohibited from 
receiving gifts, with only limited exceptions. A prohibition on gifts, however, deals 
with only one of the ways that Members of Congress and their staff receive financial 
benefits from lobbyists and others. Various other financial benefits that Members and 
staff currently receive also should be banned. To the extent such benefits are allowed, 
they should be placed under very tight restrictions with public disclosure such as 
required in S. 349, the Lobbying Disclosure Act of 1993, passed by the Senate on 
May 6. This bill includes the critically important Wellstone amendment to require 
lobbyists to disclose on an itemized Member-by-Member basis the financial benefits 
they provide to Members of Congress and their staff. 

As long as Members are allowed to accept and lobbyists are able to provide any 
financial benefits, lobbyists — who are in the business of trying to influence Congress 
~ should be required to itemize and disclose the financial benefits they provide on a 
Member-by-Member basis. Citizens should be able to examine a registered lobbyist's 



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disclosure report and see on a timely basis all the financial benefits and favors that a 
lobbyist has provided to individual Members of Congress. 

Common Cause is working to ensure that the House version of the lobby 
disclosure bill also contains the provisions of the Wellstone amendment. 

Addressing the Problem of Gifts 

• The Association of American Railroads spent $4,344 for Washington Capitals 
tickets and $6,252 for Washington Redskins tickets in 1991 to give to Members of 
Congress and their staff. According to The Arizona Republic, in 1991 "a large 
manufacturing company provide[d] Baltimore Orioles tickets to a Senate aide 
whose responsibilities include[d] crafting trade legislation that could affect the 
marketing of goods produced by the firm." 

• For several years, a group of House Memtwrs met once a week at a Washington, 
D.C. restaurant where a lobbyist, whose clients included both labor and business 
interests, often ate with them and picked up the check. 

Current congressional rules allow Members and congressional staff to accept 
gifts valued at up to $250 per year from a single source. Gifts valued at less than 
$100, however, are not counted against the overall $250 limit. Furthermore, 
unlimited amounts may be spent to buy an unlimited number of meals for Members of 
Congress in Washington, D.C. restaurants. There is no public disclosure of any of 
the gifts a Member is currently allowed to accept within these limits. 

In 1989, the President's Commission on Federal Ethics Law Reform called for 
enactment of a "uniform gift acceptance authority government- wide" and a "uniform 
maximum value for gifts to individuals." S. 885 tracks the "Standards of Ethical 
Conduct for Employees of the Executive Branch" which went into effect in February 
of this year. The executive branch regulations, issued pursuant to Executive Order 
12674, established a single set of standards governing ethical conduct for all executive 



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branch employees. 

Under S 885, Members of Congress and congressional employees are 
forbidden by law from accepting any item of value from any individual or entity, with 
limited exceptions. These exceptions include gifts valued at less than $20, provided 
that the aggregate value of all gifts received from any one person does not exceed $50 
in a calendar year. 

Common Cause believes this basic approach is sound. 

S. 885 has an exemption, however, which allows Members of Congress and 
staff to accept gifts based on a personal relationship. Given past lax enforcement of 
ethics rules, a blanket exception for gifts from personal friends is subject to abuse and 
could create a serious loophole. 

Recognizing the potential for abuse in this area, the House ethics committee 
states in the House Ethics Manual that such gifts may be accepted only in the case that 
they do not create a "potential conflict of interest or appearance of impropriety" and 
they are given because of "a long-standing personal or social relationship with a 
Member or employee, where it is clear that it is those relationships that are the 
motivating factors of the gift, rather than the fact of the individual's office or position 
in the Congress." 

S. 885 takes a similar approach, tracking executive branch regulations requiring 
that it be "clear that the gift is motivated by a family relationship or personal 
friendship rather than the position of the employee. Relevant factors in making such a 
determination include the history of the relationship and whether the family member 
or friend personally pays for the gift." 

We believe that these kind of provisions, if included in the statutory gift ban, 
could help guard against abuses, but only if they are effectively enforced. A 
comprehensive reform bill must include provisions to strengthen enforcement of rules 
regarding gifts from personal friends and ensure that this exemption is not abused. 



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Otherv^'ise, this exemption should be eliminated. 

Restricting Other Financial Benefits 

In addition to gifts, there are a number of other financial benefits provided to 
Members and staff which must be restricted as part of a comprehensive reform 
approach. This Subcommittee should avoid past practices which have construed the 
notion of gifts too narrowly and have failed to cover the wide range of other financial 
benefits which are provided to Members of Congress and congressional staff. 

1. Travel Reimbursements 

• A recent article in TTie Wall Street Journal described a "lavish" weekend at the 
expensive Greenbrier resort in West Virginia for nine staffers from the House and 
Senate who work on health care, all courtesy of the American Medical 
Association. The article noted that "a congressional staffer who stayed the full 
three days received amenities that, had he or she paid his own way, would likely 
have totaled more than $1,500 - and that is assuming the aide stayed in the very 
cheapest rooms, skipped lunch, carried his or her own golf clubs, and was a 
teetotaler to boot. " 

• A 1991 study by Public Citizen which analyzed privately funded travel by 
Members of the House found that they took nearly 4,000 trips paid for by private- 
interest groups during 1989-1990. 

• In 1992, a group of key staffers of the House Energy and Commerce Committee 
(which oversees health and insurance matters) enjoyed the amenities of Key West, 
Florida as part of a three-day seminar on issues affecting the insurance industry ~ 
paid for and attended heavily by the insurance industry. 

• One House Member logged 60 days on the road in 1992 during 31 separate trips 
as a guest of ^)ecial interests. 



e 



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While executive branch rules governing the acceptance of gifts may provide a 
good model for the legislative branch, in the area of travel, current laws and 
regulations for both the executive and legislative branches are inadequate. 

In the case of the legislative branch. Common Cause believes that strict 
provisions must be adopted to prohibit reimbursement for vacation or pleasure trips 
for Members of Congress. Privately financed travel for Members has too frequently 
become part of a lifestyle subsidized by special interests as part of their efforts to gain 
special access to Members of Congress and their staffs. Just as honoraria payments 
over the years became a conduit for special-interest money from interests trying to 
influence Congress and were eventually banned, reimbursements for travel have 
become a way for special interests interested in influencing Congress to finance 
vacation or pleasure trips and provide financial favors to Members and staff. 

Under current rules. House Members can accept up to four days (including 
travel time) for expenses for so-called "fact-finding" trips or to events in which they 
"substantially participate." Tlie allowance for foreign trips is seven days (excluding 
travel days). A Senator is allowed to take up to three days for domestic travel and 
seven days for foreign trips. There is no limit on the value of Ihe travel expenses a 
Member or staff may receive, nor a limit on the number of trips a Member may 
accept from any one source. 

In the area of travel, S. 883 requires the congressional ethics committees to 
pre-approve any payments for travel related to official duties, and to make a finding 
that the payments are only for items that are "reasonably necessary" and "would not 
cause a reasonable person with knowledge of all the facts relevant to a particular case 
to question the integrity of the Member, the Congress or congressional operations." 
According to Senator Lautenberg, the intent of these provisions in S. 885 is to ban 
pleasure trips, which are occurring under current rules as "fact-finding" trips or trips 
where Members "substantially participate." Once again the key to the effectiveness of 



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any such new rule would depend on its interpretation and enforcement by the ethics 
committees. 

Others believe that the only way to end these special-interest financed vacations 
is to ban all privately financed travel for Members of Congress and staff. They 
reason that if a trip is deemed to be in the interest of the general public and, 
therefore, worth taking, it should be funded by the government. 

We share the goal of ending the practice of special interests providing Members 
and staff with privately financed vacations and pleasure trips. 

If any reimbursed travel is to be allowed, it must be done in a way that ensures 
the travel is not a vacation or pleasure trip in the guise of congressional business. 
One way of doing this is to provide that reimbursements can only be provided for one 
day and any expenses thereafter would be borne by the Member or staff. In addition, 
reimbursements should not cover such items as greens fees, ski lift tickets, tennis 
court time, or other entertainment costs that are collateral to the event in which they 
are participating. In addition. Members should be banned ft"om stringing together a 
series of sponsors to underwrite day after day of privately financed travel. 

In any event, any reimbursed travel that is allowed should be subject to both 
the pre-approval requirements contained in S. 885 and advance public disclosure 
through insertion in the Congressional Record. 

We also urge the Subcommittee to revise current laws governing executive 
branch acceptance of travel payments from non-federal sources which were 
significantly weakened in 1989 and do not sufficiently protect against conflicts of 
interest. 31 USC §1353, which allows acceptance by agencies of reimbursements 
firom non-federal sources, should be repealed and the General Services 
Administration's (GSA) interim rule issued in March 1991, which compounds the 
problem and undermines basic conflict-of-interest standards for the executive branch, 
should be withdrawn. 



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Inserted at the last minute into the Ethics Reform Act of 1989 at the request of 
the Bush Administration, 31 USC §1353 changed long-standing executive branch 
policies governing the acceptance of travel reimbursements from private interests. 
The provision allows federal agencies to accept from private sources payments for 
travel and related expenses for employees' official travel. This misguided change to 
create a new travel acceptance authority for agencies has opened the door for new 
conflicts of interest. In addition, the implementing regulations proposed by the GSA 
has compounded the problem by allowing an agency to accept reimbursements from 
private interests even if it creates conflicts of interest or the appearance of conflict of 
interest. 

A review of reports filed last year under the new acceptance authority in 
31 USC §1353 showed significant receipts by agencies from potentially "conflicting" 
interests that clearly raise potential conflicts of interest and the appearance of conflict 
of interest. A Treasury Secretary traveled to Mexico at the expense of an individual 
who heads a company which has a direct interest in U.S. trade and commerce- 
policies. Officials at the National Aeronautics and Space Administration traveled 
courtesy of McDonnell Douglas, Boeing, Dow Chemical, Thiokol Corporation, United 
Technologies, DuPont and IBM. 

Prior to 1989, rules and regulations prohibited federal officials from accepting 
travel reimbursements as a violation of the prohibitions against supplementing their 
salaries from private sources. In addition, agencies, in most cases, were barred from 
accepting travel reimbursements since this violated the prohibition against private 
augmentations of agency appropriations. The only reimbursements allowed from 
outside sources were, in limited instances, foreign governments, international 
organizations and charitable, nonprofit organizations, only if the entity did not have 
business before the employee's agency. 

Common Cause believes the GSA interim regulation should be withdrawn and 



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that 31 use §1353 should be repealed, thereby returning the executive branch to the 
pre- 1989 standards. 

2. Special Events Held on Behalf of Members of Congress 

• During the Democratic convention in New York, Enron Corporation, a Houston- 
based oil and energy company whose chief executive headed the Host Committee 
for the Republican Convention, was one of the sponsors of a $200,000 "Street 
Fair" at a New York restaurant honoring a Senator who sits on the Commerce and 
Finance Committees. Other sponsors of the event were the Distilled Spirits 
Council, the Tobacco Institute and the National Restaurant Association, as well as 
energy and labor groups. 

• During the Republican and Democratic conventions, regional telephone companies 
underwrote parties for a number of k0y Members. During this same period, these 
telephone companies were fighting le^slation in Congress dealing with the 
electronic publishing business. In Houston during the Rqjublican convention, a 
senior Senator hosted a reception with phannaceutical companies picking up the 
bill. 

• A number of Capitol Hill inaugural parties this year were underwritten by 
corporate donors. One Senator's celebration was sponsored by 10 companies that 
paid $3,000 each. 

Special interests should not be financing parties held for Members of Congress. 
A number of these were held during the national political conventions last summer and 
the inauguration — many of them quite elaborate and often in honor of a Member. As 
John Block, former Secretary of Agriculture and now president of the National 
American Wholesale Grocers Association, explained, these events give special 
interests an opportunity to "rub elbows with and show support for the Members of 
Congress who are there, and for the party. ... We're not just throwing a party for 



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anybody off the street." 

S. 885 fails to curb this type of financial benefit. Corporations, lobbyists and 
others should be banned from financing parties and other events held by or in the 
name of a Member of Congress. 

3. Contributions to Charities and Organizations 

• A House Committee Chair reported directing more than $100,000 in honoraria to 
unnamed charities in 1991. 

• In 1992, U.S. Tobacco, the Securities Industries Association, the American 
Bankers Association, Northern States Power and the Chemical Manufacturers 
Association were among those who gave honoraria to charities at the direction of 
one House Member. 

Another financial benefit that special interests can provide to Members under 
current rules is to give honoraria fees that a Member can no longer accept to charities 
chosen by the Member, thus subsidizing a Member's charitable contributions. 

Citizens are responsible for making their own charitable contributions and 
Members of Congress should be similarly responsible. S. 885 repeals the current law 
allowing Members and staff to direct honoraria to charities. We strongly support this 
provision. 

4. Members and Foundations 

• During the 1980s, savings-and-loan owner Charles Keating contributed $850,000 
to three voter-registration organizations founded or controlled by then Senator 
Alan Cranston (D-CA) while also seeking the Senator's intervention on behalf of 
Lincoln Savings and Loan. 

• Since establishing his own foundation in 1985, one senior Senator has helped raise 
more than $1 million a year for it, including contributions over the years of more 



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than $100,000 each from Archer Daniels Midland Corporation, Anheuser-Busch, 
the AT&T Foundation, IBM and Marriott. 

Common Cause believes that Members of Congress should be precluded from 
establishing, maintaining or controlling a foundation which solicits contributions. 
Those solicited to make contributions to the Member-controlled foundation often have 
interests before the Congress or even the committee on which the Member serves. 
These relationships raise serious conflict-of-interest and appearance questions and 
undermine public confidence in Congress. 

S. 885, in addition to prohibiting a Member from directing honoraria to charity, 
prohibits a Member from designating or recommending the giving of a gift to any 
other entity or person, including any charitable organization. These provisions, while 
important, do not go far enough. For example, S. 885 does not appear to restrict a 
representative of a Member of Congress such as a foundation's executive director ~ 
rather than the Member ~ firom soliciting and directing a gift to a Member-controlled 
foundation, thus avoiding the restriction on Members. In order to prevent conflicts of 
interest or the appearance of conflict raised by contributions from special interests to 
Member-controlled foundations. Members of Congress should be banned from 
establishing, maintaining or controlling a foundation that solicits contributions. 

5. Congressional Retreats 

• This year a retreat for House Republicans was sponsored by a nonprofit institute 
and underwritten by corporate sponsors. Individual lobbyists paid $6,000 to 
attend the retreat and spend time with the Members. An additional $15,000 
bought a lobbyist attendance at eight other luncheons with the Members 
throughout this year. 

• A similar retreat for House Democrats held this past January in Annapolis also 
was flnanced with contributions from lobbying interests, although lobbyists were 



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not permitted to attend as they had prior to 1989. 

Special interests underwrite legislative retreats and political strategy meetings 
for Members and their staffs. At some of these policy retreats, lobbyists pay to 
attend, spend time with Members and staff as they discuss political strategy, and are 
able to gain better insight and information for their clients about upcoming policy 
decisions. 

Common Cause supports Senator Lautenberg's proposal to prohibit the private 
financing of congressional retreats. 

6. Conversion of Campaign Funds to Personal Use 

• A 1990 study published in the Los Angeles Times found that a majority of the 
expenditures from campaign funds by House Members were for "items that have 
little or nothing to do with winning the support of ordinary voters, [such as] 
overhead, fund-raising costs and donations to charities and other candidates. " The 
Times found that many incumbents are using their campaign treasuries as '"giant 
slush funds - with the money going for lavish entertainment of important 
constituents and for such personal indulgences as expensive cars, real estate, 
tuxedos, club memberships and even personal travel." For example, one 
Representative used campaign money to buy a $30,000 Lincoln Continental, and 
94 other Members either bought or leased a car with campaign money. 

• According to Congressional Quarterly, nearly a third of the more than $350,000 
in operating expenditures by one Member's campaign and political action 
committee in 1990 and 1991 "went for items that enhanced his lifestyle or income 
- travel, chauffeurs, car insurance, cable TV bills, dinner out, a golf caddy and 
rental payments to himself and his family. " 

• A 1992 article in The Commercial Appeal of Memphis, Tennessee reported that a 
former Representative received $16,200 from his campaign fund during a two-year 
period by claiming non-itemized expenses for campaigning in his home state. The 



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Representative stated he had started claiming a daily allowance from his campaign 
funds, in per diem payment "because all his travel in his district is 'political" and 
he could no longer personally afford 'incidental expenses" like meals and coffee 
for constituents, T-shirts, newspapers, gasoline and dry cleaning." He reported 
this same money as personal income on his 1990 and 1992 federal tax returns. 
Another Representative who recently retired used his campaign funds to pay all of 
his personal expenses while in his congressional district. 

Another way that Members are able to indirectly receive benefits financed by 
special interests is to, in effect, give themselves gifts by converting campaign funds to 
personal use. Much of these campaign funds represent contributions made by special 
interests. The Federal Election Commission and congressional ethics committees have 
compiled a record of inaction and acquiescence that has encouraged widespread abuse 
of the federal campaign laws and congressional rules that prohibit such conversion. 
By refusing to take action against colleagues, the ethics committees are protecting the 
flow of special-interest money through campaign accounts to Members for their 
personal benefit. 

Common Cause believes that a comprehensive ban should include provisions to 
strengthen current rules and laws to ensure that the prohibitions against the conversion 
of campaign funds to personal use are effective and enforced. 

The Importance of Making Any Proposed Changes Statutory 

We strongly support Senator Lautenberg's efforts to ensure that new restrictions 
on gifts and other financial benefits are written into statute, not into congressional 
rules. Congressional rules are by definition easier to change. Past experience has 
demonstrated that putting ethics standards in congressional rules makes it easier to 
weaken what has been enacted. In early 1979, the Senate, after accepting a major pay 
raise for itself as part of a 1977 ethics reform-pay package, reneged on the ethics 



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reforms, repealing new limits that had been established on honoraria fees and other 
outside-earned income. The Senate was able to do this without agreement from the 
House or the President because the ethics reforms had been established as Senate rules 
rather than as a federal statute. The result was that Senate ethics reforms that had 
been key to enacting a pay raise were repealed shortly after the reforms took effect on 
January 1, 1979, while the pay raise, which became effective in 1977, stayed in 
effect. 

The same compelling case applies when dealing with new restrictions on the 
acceptance of gifts and other financial benefits by Members and employees of the 
legislative branch. We believe it is essential for fundamental ethics measures to be 
permanent, statutory provisions, subject to statutory civil penalties for violations and 
requiring a new statute in order to make any changes. 

Conclusion 

Current legislative branch rules governing the acceptance by Members of 
Congress and staff of financial benefits feed the view that Members' lifestyles are 
being financed by special interests. Common Cause believes that, to restore public 
confidence in the institution. Congress must enact a comprehensive statutory ban on 
the receipt of financial benefits. Such a statutory ban should prohibit gifts; end the 
blanket exemption for meals in Washington, D.C.; place tough new restrictions on the 
underwriting of travel by private interests as well as events and retreats for Members 
by special interests; end the practice of special interests subsidizing Members' 
charitable contributions; prohibit Members fi'om establishing, maintaining or 
controlling foundations which solicit contributions; and prohibit the conversion by 
Members of campaign funds to personal use. Those financial benefits not prohibited 
outright by such a ban should be subject to effective public disclosure such as the 
disclosure provided by the Wellstone amendment to S. 349, the Lobbying Disclosure 
Act of 1993. 

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