EARLIER COMMENCING DATES FOR RETIREMENT ANNUITIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00965R000400260001-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: November 11, 2016
• Document Release Date: June 4, 1999
• Sequence Number: 1
• Content Type: REGULATION

Approved For Release 1999/09/27 : CIA-RDP91-00965R000400260001-8(
ARLIER COMMENCING DATES FOR RETIREMENT
ANNUITIES
Under H.R. 8289, passed by the House
September 14, civil service retirement
annuities will commence the first day
after separation from the service if im-
mediate benefits are payable or, in the
case of deferred benefits payable at a
certain a e, the first day after the pre-
scribed alb is reached. Benefits of sur-
viving widows a` children will begin
the day after the ?ath of the.,employee
or annuitant on' os ? ervige they are
based. Under present law, annuities-and
survivor 'benefits commence the first of
the month following separation from the
service or,death, as the case may be. The
w.
bill is particularly.helpful for widows and
children, since'their survivor benefits will
become payable immediately diately after jleath
of the employee or - annuitant whereas
under existing law the benefits are not
payable for periods of as much as 30
days after death.
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 196o Approved For ReleaGwIl39 Gt2lL: CIER P- -1 R000400260001-8 3153
to brotherhood, tolerance and men-of-good-
will. They see little connection between
such words and the practical exigencies that
confront them.
The present system, which might best be
described as biracial, developed during the
80 years following Reconstruction. It is
the result of natural forces, the end prod-
uct of a massive accommodation of two sep-
arate and distinct racial groups to each
other. It is the consequence of generations
of trial and error, conflict, mediation, pa-
tience, endurance, and the demands of grim
necessity.
In the South, white and colored people
mingle freely and familiarly in their daily
pursuit of bread. In social areas, including
homes, schools, parks, swimming pools,
restaurants, and hotels, the line is strictly
drawn, and both races respect it. Under
our biracial system, the Negro has steadily
improved his lot economically and educa-
tionally as the entire South has risen from
the ashes of devastation. Whites and blacks
live in a physical proximity and on terms of
personal cordiality that seldom fail to sur-
prise the uninitiated northerner who may
come loaded to the gills with brotherhood,
but whose personal knowledge of Negroes has
been confined to a few intellectuals in the
literary salons of northern universities, or
to faceless mass-men jamming the concrete
canyons of the northern metropolis.
This biracial system obviates the fear that
pervades race relations in northern cities.
Southern blacks and whites live in an easy-
going atmosphere which includes mutual
respect and a frank recognition of differ-
ences. The well-defined code of personal
decorum between the races that is so thor-
oughly understood in Dixie has been the
object of much ridicule from social experts
in the North. They are unable to see the
extent to which it arises from a considera-
tion of the feelings of the Negro himself,
and a desire to spare him the cold, cutting
personal humiliations he is subject to in
the North.
The point is that we live by a system that
works. It is based on reality. It is based on
law. It is based on the human experience
of generations, not on the social theories
of a Scandinavian sociologist named Gun-
nar Myrdal. The tendency of our national
publications to dismiss the folkways of a
whole region as superficial prejudice is
curious social science.
If the people of the North want to Inte-
grate, it's all right with us. It's their priv-
ilege. We don't believe in meddling with
other folks' business. And we don't take too
kindly to their meddling with ours. But
we were taught to be polite, and despite ex-
treme provocation we're trying hard.
If the people in New York want to trans-
port children across Manhattan and the
Bronx for the privilege of being in inte-
grated schools, it's their business. If they
want to keep police stationed in integrated
schools to keep order, as a grand jury de-
manded, it's their business. If Washington,
D.C., wants to adopt an integrated school
system that runs white families out of the
District, it's their business. If the big cities
of the North want political machines based
on irresponsible, purchasable bloc votes, it's
their business. If they wanted to integrate
with the buffaloes on the western plains, it
would still be their business. We might
have our opinions, but we'd keep them to
ourselves.
But if we in the South want to have a bi-
racial social system, that's our business.
Let's put the shoe on the other fact. Sup-
pose the South began piously demanding
that the schools in the North be segregated
"with all deliberate speed." Suppose we sent
swarms of reporters combing over the North
to magnify every incident involving individ-
uals of different races, and had somber-faced
announcers on television scrsens'constantly
denouncing northerners as biased, bigoted,
prejudiced, racist, Ignorant, un-Christian,
reactionary, un-American hate-mongers.
Would not Yankee patience and long suffer
Ing wear a bit thin?
We read about the chaos and violence In
the "blackboard jungles" of Brooklyn, St.
Louis, and Kansas City. Forty-one schools
in New York requested police protection last
year. Southerners don't understand this as
progress. Such conditions are unknown
south of the Mason-Dixon line. There are no
organized gangs terrorizing students and
and teachers. As far as I know there is not
a single incident on record where police have
been needed to keep order in a southern seg-
regated school. Is it surprising that con-
servative southern parents are reluctant to
exchange this peace for the discord that
would inevitably accompany integration?
Until the last few years, the conservative
South has remained unorganized, but the
militancy of liberal pressure groups has
forced it to unite in self defense. We have
watched unorganized majorities manip-
ulated by tightly organized integrationist
minorities. We have watched integrationist
and collectivist ideologies permeate the opin-
ion-forming professions and publications.
We have seen northern politics veer radically
in response to the gravitational pull of left-
wing labor and Negro leaders. The northern
conservative political position has eroded
under the relentless grind of bloc voting
until little semblance of its once great na-
tional influence remains. Our two-party po-
litical system has virtually been welded into
a single "me-too" chorus of appeasement to
the demands of the liberals. We have seen
our Supreme Court, in the school segregation
cases, issue an ukase which handed the
National Association for the Advancement of
Colored People a quasi-legal weapon it can
use to wreck our public school system if per-
mitted free rein. Other strictly social areas
of our life have been similarly laid open to
invasion by court edicts, areas which his-
torically in our country have been absolutely
free of Government control. These develop-
ments have precipitated a constitutional
crisis, the end of which no man can see.
Highly organized pressure groups have
turned whole sections of American life
upside down. The nature of our constitu-
tional form of government Is being changed
before our very eyes.
The groups behind these moves have enor-
mous power, and they know how to use it.
Their leaders have mastered techniques of
social revolution that are a closed book to
most of our political leaders and private citi-
zens. They have been overwhelmingly suc-
cessful in the North and at the national
political level because there has been no
organized force in being of sufficient size
and power to check their advance. Coura-
geous Individuals and small groups have
been crushed and eliminated or simply
ignored.
Integration of the races is not the only
battle front in this wide-ranging social con-
flict. The rapid growth of big Government
and centralization of power in Washington
under an overweening bureaucracy, welfare
statism, invasion of the reserved rights of the
States, the replacement of a salvational by
a social gospel, the collectivization of
American life, confiscatory taxes, all are
components of a total, all-out assault against
American conservatism. Many conservatives
consider other aspects of their position more
important than their stand on race, but my
own view Is that no other issue in the galaxy
of conflicts besetting us is comparable to
this one in its permanent impact on the lives
and fortunes of conservative white Ameri-
cans.
For what do the liberals have in mind for
us? Leaders of the highly organized Negro
pressure groups have made their objective
crystal clear. It is to alter totally the pat-
terns of southern life and custom. Achieve-
ment of this objective would change our
national politics at a stroke. The Old
South with its familiar voices in Congress
would be dead. The voices that replaced it
would be elected in large part by colored
votes and would speak in very different ac-
cents. With the rudder of Congress thus
changed, our Government would indeed
lurch into new, uncharted seas.
Of course there is self-interest In this
issue. Our region is now beginning to come
again into its own. Despite dire predictions
of what would happen to our economy if we
didn't integrate, the South has continued
to boom. Several authoritative business
publications of national standing have
placed Jackson, Miss., "the segregation
capital of the United States," at the top of
the Nation's cities in business growth during
the past year. The South is filling up with
upper class white refugees from the race
friction and labor troubles of strife-ridden
northern cities. Simultaneously, the South
is exporting Negroes by the trainload. Lured
by promises of easy welfare checks and en-
ticements of civil rights from vote-hungry
politicians, these people are beelining it for
northern slums in ever-increasing numbers.
We don't want this trend stopped.
Under the fiscal policies enforced by the
pressures of collectivist organizations, the
once-powerful State of Michigan has been
brought close to bankruptcy. Mississippi
may be accused of everything under the sun,
but we happen at the moment to be enjoy-
ing a pleasant surplus.
Perhaps we may be pardoned, then, in our
reluctance to see our land reduced to' the
abject fate of many northern cities where
the Negro-collectivist element has the upper
hand. We have no desire to see our law
enforcement machinery break down because
Negro lawbreakers have to be coddled for the
bloc vote. We want our streets to continue
as places where white and black circulate
freely without fear of bodily harm.
Once we, the white conservatives of the
South, sized up the forces arrayed against
us, we felt no inclination to roll over and
play dead. Nor were we seduced into the
alternative of burying our,heads in the sand
and pretending that everything was rosy, as
were many of our northern contemporaries
under the anesthesia of personal affluence.
Being down-to-earth folk, we did some-
thing else. Instead of being taken in by the
cloud of "brotherhood and tolerance" talk
that was drifting down from the North, we
looked under this cloud. And what we saw
was that the "democracy" that was beamed
our way should be translated "Negro political
domination"; the "tolerance" should be read
as "the integration of our children." We
looked further. We saw that the current
commotion had been raised because those
who wanted it were organized and worked
hard to achieve what they wanted. So the
white conservative South began to organize
in return. In the 11 States of the former
Confederacy, the chief organized forms of
the South's resistance include the citizens'
councils and similar local groups under dif-
ferent names, coordinated through State as-
sociations which form the citizens' councils
of America. In the northern and border
States, the strongest resistance has come
from property owners' protective associa-
tions. In the Deep South, this mobilization
has stopped the integration drive cold.
There is no integration whatever in the
Deep South.
The conservative South is not made up of
Ku Kluxers. We are not anti-Negro. We
have always drawn a sharp distinction be-
tween the great masses of southern Negroes
and the NAACP, which we regard as a pres-
sure group and not the Negro's true spokes-
man. In these difficult times we continue
to enjoy the same pleasant relations with
our colored friends, within the framework of
our biracial system, that we have always en-
joyed. We have been subjected to vicious
personal attacks, but that is simply a price
that has had to be paid.
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What will be the outcome of the present
turbulence in race relations? Now that the
conservative South is mobilized, with its in-
fluence deeply rooted in the power structure
of hundreds of communities, we believe that
the ideals under which our country has
grown great will be preserved for ourselves
and our children. And what are these? The
conservative white southerner believes with
his northern counterpart that the best gov-
ernment is the least government. He be-
lieves in governing himself. He believes in
the fundamental right of each individual to
pursue his own destiny, free from. the cold
social regimentation of distant authority but
in compliance with the customs and mores
of his own people.
Why has the conservative white southerner
responded to the threat to his position while
the conservative white northerner has not?
For one thing, the southerner is not physi-
cally intimidated by the Negro. He is ac-
customed to dealing with his Negro neighbor
on the basis of a personal acquaintance that
may be difficult for the nonsout:herner to
understand. Moreover, the white population
of the South is more homogeneous than in
the rest of the country, and is united by a
feeling of racial solidarity. The fact that
one-fourth of its population is of African
origin stands as a constant call to group
identification.
I think the answer also lies in something
that might be called southern patriotism.
The South was once a Nation, with a short
and tragic history it Is true, but a nation
nonetheless. It has a proud, military tradi-
tion, and the memory of common suffering.
These things evoke an almost mystic attach-
ment to the region, an attachment which has
provided the theme of some of the finest
American literature The South 1,, home to
its inhabitants in a way that the North or
West are not to those who live there. The
southerner Is aware of a deep sense of kin-
ship with the land of his fathers. He has a
personal sense of history, an awareness of
proud tradition.
On a crisp, frosty, autumn morning, when
he steps out on his porch to see the day
quicken Into life and watches the lazy curl
of smoke from a neighbor's chimney lift into
the softness of light blue haze, It is as if
still he can hear, faintly In the distance, the[ CONFLICTS O
bugle strains of the "Bonnie Blue Flag," lin- EXECUTIVE BRANCH
gering where his grandfather once rode. Het
knows :he's home. And. he will fight for his (Mr. LINDSAY a ;ked and was given
home. permission to extenc his remarks at this
ESTONIANINDEPENDENCE DAY
(Mr. McC-ORMACK (at the request of
Mr. ALBERT) was given permission to ex-
tend his remarks at this point in the
RECORD.)
Mr. McCORMACK. Mr. Speaker, in
the early days of 1918, when the chains
that held down freedom-loving peoples
seemed to be snapping loose, Estonians
regained their freedom and proclaimed
their independence on February 24.
Thenceforth these sturdy Estonians,
numbering a bare million in their his-
toric homeland on the northeastern
shores of the -Baltic, instituted their own
democratic form of government, took
their destiny into their own hands and
became masters of their fate. For some
two decades they worked hard at the
task of rebuilding their devastated
country, and in the course of years when
that was accomplished, they lived hap-
pily in their almost recreated home-
land. As one of the smallest independ-
ent and sovereign states in Europe, the
people of Estonia gave a good account
of themselves in all walks of life. Eco-
nomicaly, socially, culturally, and polit-
ically their leaders showed remarkable
gifts and rare tact. Wishing to remain
at peace and live on friendly terms with
all their neighbors, they were content
to be left alone. But as we know today,
they were not allowed to live in peace;
nor were they allo ved to enjoy their
well-earned freedorr. Early in the last
war the Soviet Unior i seemed determined
to crush and elimin bte all these democ-
racies on its western borders. Early in
1940 withone treael.erous blow all three
Baltic democracies, : ncluding the Eston-
ian Republic, were destroyed, the coun-
try was occupied by the Red army, and
in mid-1940 it was incorporated into the
Soviet Union. Thus ended the Estonian
Republic that was born on February
24.
it is ironic to state.,, but there appears,
perhaps by accident, some chronological
symmetry in the Inodern and recent
Estonian' history. These people were
brought under the oppressive czarist
regime of Russia ir. 1710. For exactly
208 years they suffered under it. Then
they had their freet.om which ran for a
period not much mo -e than one-tenth of
the time they lived - under the autocratic
czars. Their indep(ndence was allowed
to last for just a little over two decades.
And today, for almc st another period of
two decades, they ::rave been suffering
under the unspeaka )le yoke of Commu-
nist totalitarian tyranny. Would that
this chronological : ymmetry be main-
tained, and that soc n these unfortunate
souls could look forward to a period of
freedom? On this 42d anniversary of
their Independence Day, I can wish them
nothing less than t: iat, full liberty and
iv
in peace in their be-
freedom to l
e
li
61
e
point in the REcoRI and to include ex-
traneous matter.)
Mr. LINDSAY. IMr. Speaker, I have
Introduced in the House a bill, H.R.
10575, which is an c mnibus bill relating
to conflicts of inter sst in the executive
branch ofthe Gover anent of the United
States. This bill is the work product of
a special committee on the Federal con-
flict-of-interest law;: of the Association
of the Bar of the City of New York. The
project was funded ley the Ford Founda-
tion.
I have been hon ored to serve as a
member of this con mittee from its be-
ginnings, which was prior to my election
to Congress. This Committee has spent
over 2 years in researching and develop-
ing an approach to t lis difficult problem.
It has met in New York City as a regular
matter 2 full days a Lid an evening every
month.
The committee's ieport is unanimous.
The committee alto drafted the bill
which I have Introduced. There were
many, many long Iiours of labor that
went behind this ref ort and bill, but the
committee worked well together and
each member contributed in his own way.
Speaking personally, I have never worked
with a finer group of men, and I am
deeply appreciative of having been one
of their colleagues. I should like to men-
tion the other members of the committee:
Roswell B. Perkins, of New York, former
Assistant Secretary of Health, Education,
and Welfare, chairman; Howard F.
Burns, of Cleveland, Ohio, member of the
Council of the American Law Institute;
Charles A. Coolidge, of Boston, former
Assistant Secretary of Defense for legal
and legislative affairs; Paul M. Herzog,
of New York, former, Chairman, Na-
tional Labor Relations Board; Alexander
C. Hoagland, Jr., of New York; Everett
L. Hollis, former General Counsel, Atomic
Energy Commission; Charles A. Horsky,
former' assistant prosecutor at Nurnberg
with the chief of counsel for war crimes;
John E. Lockwood, of New York, former
General Counsel, Office of Inter-Ameri-
can Affairs; and Samuel I. Rosenman,
of New York, former special counsel to
Presidents Roosevelt and Truman.
The committee staff included Prof.
Bayless Manning, of the Yale Law
School, staff director; Prof. Marver H.
Bernstein, of the Department of Politics
of Princeton University, associate staff
director; and Miss Ruth D. Carter, com-
mittee secretary.
Mr. Speaker, under unanimous con-
sent, I include in the RECORD at this
point the text of the bill and, in addi-
tion, a brief explanatory statement about
the bill.
The report of the committee will be
published in book form in the late spring
or early-summer. Prepublication mimeo-
graphed copies were released by the com-
mittee in order to make available the
committee's work product to the House
Committee on the Judiciary which is
currently holding hearings on this im-
portant subject.
H.R. 10575
A bill to supplement and revise the criminal
laws prescribing restrictions against con-
flicts of interest applicable toemployees
of the executive branch of the Government
of the United States, and for other
purposes
Be it enacted by the Senate and House of
Representatives of the United States of
America in Congress assembled,
TABLE OF CONTENTS
Title I-Prohibited conduct, administration,
and procedure
Sec. 1. Preamble; declaration of policy and
purpose.
Sec. 2. Definitions.
Sec. 3. Acts affecting a personal economic
interest.
Sec. 4. Assisting in transactions involving the
Government.
Sec. 5. Compensation for regular Govern-
ment employees from non-Govern-
ment sources.
Sec. B. Gifts.
Sea. 7. Abuse of office.
Sec. 8. Postemployment.
Sec. 9. Illegal payments..
Sec. 10, Administration.
Sec. 11. Preventive measuro_.
Sec. 12. Remedies; civil penalties; proce-
dures.
Title 11-Criminal penalties
21. Acts in violation of Executive Con-
flict of Interest Act.
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Title 111-Amendment and repeat of
existing laws
Sec. 31. Amendment of title 18, United States
Code, sections 216 and 1914.
Sec. 32. Amendment of title 18, United States
Code, sections 281, 283, 434.
Sec. 33. Amendment of title 1Q, United States
Code, section 284.
Sec. 34. Amendment of title 22, United States
Code, section 1792.
Sec. 35. Amendment of title 5, United States
Code, section 30r(d).
Sec. 36. Repeal of particular substantive re-
straints.
Sec. 37. Repeal of particular substantive re-
straints applicable to retired offlcers.
Sec. 38. Repeal of exemptions from particu-
lar conflict-of-interest statutes.
Title IV-Miscellaneous provisions
Sec. 41. Short title.
Sec. 42. Effective date.
TITLE I-PROHIBITED CONDUCT, ADMINISTRATION
AND PROCEDURE
1. Preamble; declaration of policy and pur-
pose
(a) The proper operation of a democratic
government requires that officials be inde-
pendent and impartial; that government de-
cisions and policy be made in the proper
channels of the governmental structure;
that public office not be used for personal
gain; and that the public have confidence in
the integrity of its government. The attain-
ment of one or more of these ends is im-
paired whenever there exists, or appears to,
exist, an actual or potential conflict between
the private interests of a government em-
ployee and his duties as an official. The
public interest, therefore, requires that the
law protect against such conflicts of inter-
est and establish appropriate ethical stand-
ards with respect to employee conduct in
situations where actual or potential conflicts
exist. -
(b) It is also fundamental to the effective-
ness of democratic government that, to the
maximum extent possible, the most qualified
individuals in the society serve its govern-
ment. Accordingly, legal protections again
conflicts of interest must be so designed as
not unnecessarily or unreasonably to impede
the recruitment and retention by the gov-
ernment of those men and women who are
most qualified to serve it. An essential
principle underlying the staffing of our gov-
ernmental structure is that its employees
should not be denied the opportunity, avail-
able to all other citizens to acquire and
retain private economic and other interests,
except where actual or potential conflicts
with the responsibility of such employees to
the public cannot be avoided.
(c) It is the policy and purpose of this
Act to promote and balance the dual objec-
tives of protecting Government integrity and
of facilitating the recruitment and retention
of the personnel needed by Government
by prescribing essential restrictions against
conflicts of interest in the executive branch
of the Government without creating unnec-
essary barriers to public service.
Unless the context of this Act otherwise
clearly requires, for purposes of this Act
the terms defined in this section shall have
the respective meanings hereinafter set
forth. The terms defined in this section in-
clude: "agency"; "agency head" and "head
of an agency"; "assist"; "compensation";
"Government action"; "Government em-
ployee"; "intermittent Government em-
ployee"; "participate"; "person"; "regular
Government employee"; "responsibility";
"State"; "thing of economic value"; and
"transaction involving the Government".
(a) "Agency" means-
(1) the Executive Office of the -President;
(2) an executive dcpartmcnt;
(3) an independent establishment within
the executive branch; and -
(4) a Government corporation.
For purposes of this subsection (a)-
(1) the executive departments are the De-
partments of State; Defense; 'Treasury; Jus-
tice; Post Office; Interior; Agriculture; Com-
merce; Labor; and Health, Education, and
Welfare; and -
(11) "independent establishment within
the executive branch" means any establish-
ment, commission, board, committee or
other unincorporated instrumentality of the
United States which is not-
(A) part of an executive department or
Government corporation; or
(B) part of the legislative or judicial
branches of the United States.
.(lit) "Government corporation" means any
corporation which is either defined as a
"wholly owned Government corporation" in
the Government Corporations Control Act
of 1946 or is designated as a Government
,corporation for purposes of this Act by the
President by regulations issued pursuant to
section 10.
(b) "Agency head" and "head of an
agency" mean - the chief executive officer of
an agency, who shall be the chairman in
the case of an independent establishment
which is a commission, board, or committee.
The Secretary of Defense may delegate to the
Secretaries of the Army, the Navy, and Air
Force such of his responsibilities as an
agency head as he may deem appropriate.
(c) "Assist" means to act, or offer or agree
to act, in such a way as to help, aid, advise,
furnish,information to, or otherwise provide
assistance to, another person with knowl-
edge that such action is of help, aid, advice,
or assistance to such person and with intent
so to assist such person.
(d) "Compensation" means any thing of
economic value, however designated, which
is paid, loaned, granted, or transferred, or
to be paid, loaned, granted, or transferred
for, or in consideration of, personal services
to any person or to the United States.
(e) "Government action" means any ac-
tion on the part of the executive branch of
the United States, including, but not limited
to-
(1) any decision, determination, finding,
ruling, or order, including the judgment or
verdict of a military court or board; and
(2) any' grant, payment, award, license,
contract, transaction, sanction or approval,
or the denial thereof, or failure to act with
respect thereto.
(f) "Government employee" means any
individual who is-
(1) appointed by one of the following
acting in his official capacity-
(A) the President of the United States, or
(B) a person who qualifies as an employee
under this definition; and
(2) engaged in the performance of a Fed-
eral function under authority of the Con-
stitution, an Act of Congress, or an Executive
act; and
(3) under the supervision or authority of
one of the persons listed in (A) or (B)
under (1).
Notwithstanding the foregoing, the term
"Government employee" shall not include
any of the following-
(i) officers and employees in the legisla-
tive and judicial branches of the United
States;
(ii) employees of the District of Columbia;
(iii) employees of corporations other than
Government corporations as. defined in sub-
section (a) (iii) of this section; and
(iv) a reserve of the Armed Forces, when
he is not on active duty and is not otherwise
a Government employee.
An individual shall not be deemed an em-
ployee solely by reason of his receipt of a
pension, disability payments, or other pay-
ments not made for current services, or by
reason of his being subject to recall to
active service.
Every Government employee shall be
deemed either "intermittent" or "regular",
as determined by the definitions contained
in subsections (g) and (j), respectively, of
this. section.
(g) "Intermittent Government employee"
means any Government employee who has
performed services as such employee on not
more than fifty-two working days (which
shall not include Saturdays, Sundays, and
holidays) out of the preceding three hun-
dred and sixty-five calendar days: Provided, -
however, That-
(1) The President may issue an order in-
creasing to not more than one hundred and
thirty days the number of working days
within a three hundred and sixty-five cal-
endar day period on which a particular Gov-
ernment -employee may perform services
while still being classified as an intermittent
Government employee for purposes of this
Act: Provided, That the President shall make
a determination that the national interest
requires the retention of such employee's
services during a further specified period. A
statement of the pertinent facts and of the
President's determination of national inter-
est shall be published in the Federal Regis-
ter;
(2) a Reserve of the Armed Forces, unless
otherwise a regular Government employee,
shall be classified as an intermittent Gov-
ernment employee for purposes of this Act
while on active duty solely for training, ir-
respective of the number of working days
of such training;
(3) irrespective of the fact he has per-
formed services- on less than fifty-two work-
ing days, a Government employee shall be
deemed a regular Government employee, as
defined in subsection (j), of this section, and
not an intermittent Government employee,
if-
(A) he was appointed to a position calling
for regular and continuing full-time serv-
ices, and
(B) his appointment did not evidence an
intent that his services would be for a period
of less than one hundred and thirty working
days in the three hundred and sixty-five
calendar day period following such appoint-
ment.
The termination of any particular term of
employment of an intermittent Government
employee shall take effect on the day when
the earliest of the following events occurs:
(1) He becomes a regular Government em-
ployee, as defined in subsection (j) of this
section;
(ii) He resigns, retires, or is disfnissed, or
the termination of his status is otherwise
Clearly evidenced; or
(iii) Three hundred and sixty-five calen-
dar - days shall have elapsed since the last
working day on which he shall have per-
formed services as an intermittent Govern-
ment employee, unless his appointment was
expressly for a longer period.
An intermittent Government employee
shall be in such status on days on which he
performs no services as well as days on
which he performs services.
(h) "Participate," in connection with a
transaction involving the Government,
means to participate in Government action
or a proceeding personally and substantially
as a Government employee, through approv-
al, disapproval, recommendation, . decision,
the rendering of advice, investigation, or
otherwise.
(i) "Person" means any-
(1) individual;
(2) partnership,- association, corporation,
firm, institution, trust, foundation, or other
entity (other than the United States or an
agency), whether or not operated for profit;
(3) State or municipality of the United
States or any subdivision thereof, including
public districts and authorities; and
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(4) foreign country or-subdivision thereof.
(j) "Regular Government employee"
means any Government employee other than
an intermittent Government employee, as
defined in subsection (g) of this section.
The termination of any particular term of
employment of a regular Government em-
ployee shall take effect when he resigns, re-
tires, or is dismissed., or the termination of
his status is otherwise clearly evidenced.
(k) "Responsibility," in connection with
a transaction involving the Government,
means the direct administrative or operating
-authority, whether intermediate or final, and
either exercistble alone or with others, and
either personally or through subordinates,
effectively to approve, disapprove, or other-
wise direct Government action In respect of
such transaction.
(1) "State" means any State of the United
-States and the District of Columbia, Puerto
Rico, Guam, and the Virgin Islands.
(m) "Thing of economic value" means
any money or other thing having economic
value, and includes, without limiting the
generality of the foregoing-
(1) any loan, property interest, Interest
in a contract, or other chose in action, and
any employment or other arrangement in-
volving a right to compensation;
(2) any option to obtain a thing of eco-
nomic value, irrespective of the conditions
to the exercise of such option; and
(3) any promise or undertaking for the
present or future delivery or procurement of
a thing of economic value.
In the case of an option, promise, or un-
dertaking, the time of receipt of the thing
of economic value shall be deemed to be,
respectively, the time the right to the option
becomes fixed, irrespective of the conditions
to its exercise, and the time the promise or
undertaking is made, irrespective of the
conditions to its performance.
(n) "Transaction involving the Govern-
ment" means any proceeding, application,
submission, request for a ruling, or other
determination, contract, claim, case, or other
such particular matter-
(1) which the Government employee or
former Government employee in question be-
lieves, or has reason to believe, is, or will
be, the subject of Government action; or
(2) in or to which the United States is
a party; or
(3) in which the United States has a
direct and substantial proprietary interest.
? 3. Acts affecting a personal economic In-
terest
(a) ECONOMIC INTERESTS OF A GOVERNMENT
EMPLOYEE.-No Government employee shall
participate in a transaction involving the
Government in the consequences' of which
he has a substantial economic interest of
which he may reasonably be expected to
knovr.
(b) ECONOMIC INTERESTS OF PERSONS IN
WHICH A GOVERNMENT EMPLOYEE HAS AN IN-
TEREST.-No Government employee shall par-
ticipate in a transaction involving the Gov-
ernment in the consequences of which, to his
actual knowledge, any of the following per-
sons has a direct and substantial economic
interest:
(1) His spouse or child; or
(2) Any person in. which he has a sub-
stantial economic interest of which he may
reasonably beexpected to know; or
(3) Any person of which he is an officer,
director, trustee, partner, or employee; or
(4) Any person with whom he Is nego-
tiating or has any arrangement concerning
prospective employment; or -
(5) Any person who is a party to an
existing contract with such Government em-
ployee or an obligee of such Government
employee as to a thing of economic value
and who, by reason thereof, is in a position
to affect directly and substantially such em-
ployee's economic Interests. -
(c) DISQUALIFICA-IoN. -Every Government
employee shall disqualify himself from par-
ticipating in a tr insactdon involving. the
Government when b violation of subsection
(a) or (b) would otherwise result. The pro-
cedures for- such 11squalification shall be
established by regi Nations issued pursuant
to section 10. -
(d) SUBSTANTIAL ECONOMIC INTEREST.-The
term "substantial economic interest" may be
defined by regulati ins issued by the Presi-
dent pursuant to section 10, but the term
shall not include-
(1) the interest of a Government em-
ployee in his grade, salary, or other matters
arising solely from his Government employ-
ment;
(2) the interest of a Government em-
ployee, or of a person referred to in subsec-
tion (b) solely as a member of the general
public, or of any significant economic or
other segment of the general public.
(e) PRESIDENTIAL EXEMPTION.-The Presi-
dent may issue an order suspending the op-
eration of subsections (a) and (b), in whole
or in part, as to a : )articular employee with
respect to transactions involving the Gov-
ernment of a particular category or in con-
nection with a particular assignment, pro-
vided that the Pres'-dent shall make a deter-
mination that under all the circumstances
the national interest in such employee's
participation excee(ts the public interest in
his disqualification. A full statement of the
pertinent facts an(: of the President's de-
termination of national interest shall be
published in the Fe,leral Register.
4. Assisting in transactions involving the
Government
(a) GENERAL RUI E FOR ALL EMPLOYEES -
Except in the course of his official duties or
incident thereto, n Government employee
shall assist another person, whether or not
for compensation, iii any transaction involv-
ing the Governmen :-
(1) in which he has at any time partici-
pated; or
(2) if such trans(?ction involving the Gov-
ernment is or has i een under his official re-
sponsibility at any time within a period of
two years precedin:l such assistance.
(b) ADDITIONAL G INERAL RULE FOR REGULAR
EMPLOYEES.-Except in the course of his of-
ficial duties or inci lent thereto, no regular
Government employees shall-
(1) assist another person for compensa-
tion in any transa(tion involving the Gov-
ernment;
(2) assist anothe? person by representing
him as his agent or attorney, whether or not
for compensation, in any transaction, in-
volving the Governnent.
(C) NO SHARING IN COMPENSATION.-NO
Government emplo Tees shall share in any,
compensation received by another person for
assistance which such Government em-
ployee is prohibits d from rendering pur-
suant to subsection (a) or (b).
(d) PARTNERSHIPS. No partnership of
which a Government employee is a partner,
and no partner or Employee of such a part-
nership, shall assist another person in any
transaction involviag the Government if
such Government employee is prohibited
from doing so by a ibsection (a).
(e) - PERMITTED EI:CEi' IoNs,-(1) Nothing
in this section shall prevent a Government
employee, subject io conditions or limita-
tions set forth in regulations issued pur-
suant to section 10, from assisting, in a
transaction involvii tg the Government-
(A) his parent, Spouse, or child, or any
thereof for whom he is serving as guardian,
executor, administi stor, trustee, or other
personal fiduciary;
(B) a person other than his parent,
spouse, or child for whom he is serving as
guardian, executor, administrator, trustee,
or other personal fit uclary;
-
(C) another Government employee in-
volved in disciplinary, loyalty, or other per-
sonnel administration proceedings; or
(D) another person in the performance of
work under a contract with or for the bene-
fit of the United States:
Provided, however, That-
(E) in the case of clauses (A) and (B),
such Government employee shall not have
at any time participated in such transactions,
nor, in the case of clause (B), shall such
transaction have been under his official re-
sponsibility; and
(F) inthe case of clauses (A), (B), (C),
and (D), the circumstancesof the assistance
shall have been disclosed to the head of
the employee's agency and approved by him
in advance of the assistance; and
(G) in the case of clause (D), the head
of such employee's agency shall have certi-
fied in writing that in his opinion the na-
tional interest will be promoted by per-
mitting the special knowledge or skills of
such Government employee to be made
available to assist such other person in con-
nection with such performance.
(2) Nothing in this section shall prevent
a Government employee from giving testi-
mony under oath or from making statements
required to be made under penalty of per-
jury or contempt.
? 5. Compensation for regular Government
employees from non-Government
sources
(a) UNCOMPENSATED EMPLOYEES: For pur-
poses of this section the term "regular Gov-
ernment employee" shall not include any
Government employee ' who, in accordance
with the terms of his appointment, is serv-
ing without compensation from the United
States or is receiving from the United States
only reimbursement of expenses incurred or
a predetermined allowance for such ex-
penses.
(b) PAYMENTS FOR SERVICESTO THE UNITED
STATES.-No regular Government employee
shall receive any thing of economic value,
other than his compensation from the
United States, for or in consideration of
personal services rendered or to be rendered
to or for the United States.. Any thing of
economic. value received by a regular Gov-
-ernment employee prior to or subsequent
to his Government employment shall be
presumed, in the absence of a showing to
the contrary by a clear preponderance of
evidence, not to be for, or in consideration
of, personal services rendered or to be ren-
dered to or for the United States.
(C) COMPENSATION FOR SERVICES TO
OTHERS.-No regular Government employee
shall receive any thing of economic value
(other than his compensation from the
United States) in consideration of personal
services rendered, or to be rendered, to or
for any person during the term of his Gov-
ernment employmnt unless such services
meet each of the following qualifications:
(1) The services are bona fide and are ac-
tually performer by such employee;
(2) The services are not within the course
of his official duties;
(3) The services are not prohibited by
section 4 or by applicable laws or regula-
tions governing non-Government employ-
ment for such employee; and
(4) The services are neither performed for
nor compensated by any person from whom
such employee would be prohibited by sec-
tion 6(b) from receiving a gift; or, alter-
natively, the services and compensation are
fully disclosed in writing to the head of the
employee's agency and are approved in writ-
ing by him.
(d) PAYMENTS FOR FUTURE SERVICES TO
OTHERS.-NO regular Government employee
shall receive, directly or indirectly, any thing
of economic value during the term of. his
Government employment In consideration of
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personal services to be rendered to or for
any person subsequent to the term or such
employment. Nothing contained in this
subsection (d) shall be deemed to prevent
a Government employee from entering into
a contract for prospective employment dur-
ing the term of his Government employment.
(e) COMPENSATION FROM LOCAL GOVERN-
MENTS-Nothing contained in this section
shall prevent a Government employee from
receiving compensation contributed out of
the treasury of any State, county, or mu-
nicipality if-
(1) the compensation is received pursuant
to arrangements. entered into between such
State, county, or municipality and such em-
ployee's agency; or
(2) the compensation and the services for
which it is received are fully disclosed in
writing to the head of the employee's agency
and are approved in writing by him.
(f) CONTINUATION IN CERTAIN PENSION AND
OTHER PLANS.-(1) Nothing contained in
this section shall prevent a Government em-
ployee's continuation Ina bona fide pension,
retirement, group life, health, or accident
insurance, or other employee welfare or bene-
fit plan maintained by a former employer
but to which such former employer makes
no contributions on behalf of such em-
ployee in respect of the period of his Gov-
ernment employment.
(2) Nothing contained in this section shall
prevent a Government employee's continua-
tion in a bona fide plan, maintained by a
former employer and to which such former
employer makes contributions on behalf of
such employee, in the case of-
(A) a pension or retirement plan qualified
under the provisions of the Internal Reve-
nue Code, or
(B) a group life, health, or accident in-
surance plan: Provided, That the contribu-
tions by such employer are not made for a
period longer than five consecutive years of
Government employment (or an aggregate
of five years out of the preceding ten).
(3) Nothing contained in this section shall
require the, termination of the rights of a
Government employee acquired under a bona
tide profit-sharing or stock bonus plan main-
tained by a former employer and qualified
under the provisions of the Internal Reve-
nue Code: Provided, That no contributions
are made by such former employer on behalf
of the Government employee based on profits
attributable to any portion of the period of
his Government employment.
(4) The provisions of this subsection (f)
shall be subject to any additional conditions
or limitations, including limitations on max-
imum amounts, set forth in regulations
issued pursuant to section 10.
(g) TRAVEL AND RELATED. ExPENSEs.-Travel
and related expenses received other than
from the United States shall be deemed to
be for or in consideration of personal serv-
ices rendered to or for a person only to the
extent provided in regulations issued pur-
suant to section 10.
? 6. Gifts
(a) GENERAL RULE FOR ALL EMPLOYEES.-NO
Government employee shall receive, accept,
take, seek, or solicit, directly or indirectly,
any thing of economic value as a gift, gra-
tuity, or favor from any person if such Gov-
ernment employee has reason to believe the
donor would not give the gift, gratuity, or
favor but for such employee's office or posi-
tion within the Government.
(b),ADDITIONAL GENERAL RULE FOR REGULAR
EMPLOYEES.-No regular Government em-
ployee shall receive, accept, take, seek, or
solicit, directly or indirectly, any thing of
economic value as a gift, gratuity, or favor
from any person. or from any officer or direc-
tor of such person, if such regular Govern-
ment employee has reason to believe such
person-
(1) has or is seeking to obtain contractual
or other business or financial relationships
with such employee's agency; or
(2) conducts operations or activities which
are regulated by such employee's agency; or
(3) has interests which may be substan-
tially affected by such employee's perform-
ance or nonperformance of official duty.
(c) PERMITTED ExcEPrIONs,-Exceptions to
subsections (a). and (b) may be made by
regulations issued pursuant to section 10 in
situations where the circumAances do not
lead to the inference that the official judg-
ment or action of the Government employee
receiving, directly or indirectly, the gift,
gratuity, or favor was intended to be influ-
enced thereby:
? 7. Abuse of Office
Except in the course of his official duties
or incident thereto, no Government em-
ployee shall, in his relationships with any
person specified in the succeeding sentence,
use the power or authority of his office or
position within the Government in a man-
ner intended to induce or coerce such other
person to provide such Government em-
ployee or any other person with any thing of
economic value, directly or indirectly. This
section shall apply to relationships with any
person, or any officer or director of such
person, from whom such Government em-
ployee, if he were a regular Government em-
ployee, would be prohibited by section 6(b)
from receiving a gift.
? 8. Postemployment
(a) GENERAL RULE.-No former Govern-
ment employee shall at any time subsequent
to his Government employment assist. an-
other person, whether or not for compen-
sation, in any transaction involving the
Government-
(1) in which he at any time participated
during his Government employment; or
(2) if such transaction involving the Gov-
ernment was under his official responsibility
as a Government employee at any time with-
in a: period of two years preceding such as-
sistance.
(b) NO SHARING IN COMPENSATION.-NO
former Government employee shall share in
any compensation received by another per-
son for assistance which such former Gov-
ernment employee is prohibited from render-
ing by subsection (a).
(c) PARTNERSHIPS.-(1) No partnership of
which a former Government employee is a
partner, and no partner or employee of such
a partnership, shall, for a period of two
years following the termination of his Gov-
ernment employment, assist another person
in any transaction involving the Govern-
ment in which such former Government
employee at any time participated during
his Government employment. For purposes
of this subsection (c) (1), the termination
of the former Government employee's em-
ployment with the agency by which he was
employed when he so participated shall be
deemed to be the termination of his Gov-
ernment employment.
(2) Whenever subsection (c) (1) would be
applicable but for the expiration of the pe-
riod of 2 years referred to therein, the
circumstances of the former Government
employee's participation in the transaction
during his Government employment, if the
individuals acting for the partnership are
aware of such participation, shall be dis-
closed to the agency principally involved in
the transaction involving the Government,
and an affidavit of such former employee to
the effect that he has not assisted in such
transaction involving the Government shall
be furnished to such agency.
(d) SPECIAL RULE FOR COMPUTATION OF 2
YEAR PERIOD FOR CERTAIN FORMER INTERMITTENT
EMPLOYEES.-For purposes of this section, a
former intermittent Government employee
whose employment terminated under clause
(iii) of section 2(g) shall be deemed to have
terminated such employment on the last
working day on which he performed services
as an intermittent Government employee.
(e) PERSONS FORMERLY ON ACTIVE DUTY AS
COMMISSIONED OFFICERS OF ARMED FORCES-
The President shall, in furtherance of this
section 8, issue regulations of the nature
herein described applicable to persons who
have been commissioned officers on active
duty in one of the armed forces of the
United States. Such regulations shall have
the effect of prohibiting such persons, for
the periods therein specified, from personally
dealing with personnel of the Department of
Defense, or of such units thereof as may be
specified in such regulations, with the pur-
pose of assisting in the sale of anything,
including services, to the United States
through the Department of Defense of such
units thereof as may be specified in such
regulations. The retirement pay of any re-
tired -commissioned officer who violates such
regulations shall be terminated pursuant to
the regulations issued hereunder for the pe-
riods therein specified.
(f) PERMITTED ExcEPTIONS.-The permitted
exceptions applicable to Government em-
ployees under section 4(e) shall also be ap-
plicable to former Government employees
under this section 8, subject to conditions
or limitations set forth In regulations issued
pursuant to section 10. For purposes of this
section 8, references in such section 4(e) to
the Government employee providing assist-
ance shall be deemed to be to the former
Government employee, and references to his
agency shall be deemed to be to his former
agency.
? 9. Illegal payments
(a) PAYMENTS AS COMPENSATION, ETC-NO
person shall give, pay, loan, transfer, or de-
liver, directly or indirectly, to any other per-
son any thing of economic value believing
or having reason to believe that there exist
circumstances making the receipt thereof a
violation of section 4, 5, or 8.
(b) Gm'rs. No person shall give, transfer,
or deliver, directly or indirectly, to a Gov-
ernment employee any thing of economic
value as a gift, gratuity, or favor if either--
(!) such person would not give the gift,
gratuity, or favor but for such employee's
office or position within the Government;
or
(2) such person is in a status specified in
clause (1), (2), or (3) of section 8(b).
Exceptions to this subsection (b) may be
made by regulations issued pursuant to sec-
tion 10 in situations referred to in section
6(c).
? 10. Administration
(a) RESPONSIBILITY OF THE PRESIDENT.-(1)
The President shall be responsible for the
establishment of appropriate standards to
protect against actual or potential conflicts
of interest on the part of Government em-
ployees and for the administration and en-
forcement of this Act and the regulations
and orders issued hereunder.
(2) The President may, and shall do so
when required by this Act, issue regulations
extending, supplementing, implementing, or
interpreting the provisions of this Act.
Such regulations shall take precedence over
any regulations issued by agency heads pur-
suant to subsection (c).
(3) The President shall have particular
responsibility for the enforcement of this
Act as applied to employees of the Executive
Office of the President and to agency heads,
and for this purpose the President shall have
all the powers of an agency head.
(4) The President may conduct investiga-
tions of facts, condition or conditions, prac-
tices, or other matters in carrying out his
responsibilities and powers under this sub-
section (a) and in obtaining information to
serve as a basis for recommending further
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legislation related to the purposes of this
Act. In connection with any such investiga-
tion the President shall have all the powers
with respect to oaths, affirmations, subpenas,
and 'witnesses as are provided in section
12(b) (2). The President may delegate any
or all of his powers under this subsection
(a) (4) to the Administrator referred to in
subsection (b) or to others, either generally
or in particular Instances.
(b) EXECUTIVE CONFLICT OF INTEREST ACT
ADMINISTRATOR.-(1) the President shall des-
ignate an official from within the Executive
Office of the President or create an office
within the Executive Office of the President
(such official or the head of such office being
hereinafter referred to as the "Administra-
tor") to perform the following functions:
(A) To assist the President in carrying
out his responsibilities under subsection (a);
(B) To receive copies of all regulations
issued by agency heads pursuant to subsec-
tion (c), to analyze the same, and make
recommendations to agency heads with re-
spect thereto;
(C) To receive reports from agencies and
to collect information with respect to, and
conduct studies of, personal conflicts of in-
terest of Government employees within the
executive branch;
(D) To consult with the Attorney Gen-
eral, the Chairman of the Civil Service Com-
mission, the Comptroller General, and other
appropriate officials with respect to conflict-
of-interest matters affecting more than one
agency;
(E) To consult with agency heads, and
with appropriate officers designated by them,
as to the administration of this Act within
their respective agencies and the regulations
issued hereunder applicable to their respec-
tive agencies;
(F) To give advice with respect to the
application of this Act and regulations is-
sued hereunder, when so requested by the
President or agency heads;
(G) To undertake and conduct, in con-
junction with agency heads, a study of the
extent; to which any of the principles bf this
Act should be made applicable to persons
and to the employees of persons having con-
tracts, subcontracts, licenses, or similar rela-
tionships with or from the United States;
and
(H) To provide reports and information
to the President and the Congress concern-
ing the administration of this Act and con-
flict-of-interest matters generally.
(2) The Administrator is authorized to
employ personnel and expend funds for the
purposes of- this Act, to the extent of any
appropriations made for the purposes hereof.
(c) RESPONSIBILITY OF AGENCY IIEADS.-(1)
Each agency head shall be responsible for
the establishment of appropriate standards
within his agency to protect against actual
or potential conflicts of interest on the part
of employees of his agency, and for the ad-
ministration and enforcement 'within his
agency of this Act and the regulations and
orders issued hereunder. -
(2) Each agency head may, subject to the
regulations issued by the President under
subsection (a) (2), issue regulations extend-
ing, supplementing, implementing, or inter-
preting the. provisions of this Act as applied
to his agency. He shall file copies of all
such regulations with the Administrator.
(3) Each agency head may conduct in-
vestigations of facts, conditions, practices,
or other matters in carrying out his- respon-
sibilities and powers under this subsection
(c). In connection with any such investi-
gation the agency head shall have all the
powers with respect to oaths, affirmations,
subnenas, and witnesses as are provided in
section 12(b) (2). The agency head may del-
egate any or all of his powers under this
subsection (c) (3) to any officer designated-
by him, either generally or in particular in-
stances.
11. Preventive mef surer
The head of an agency may, and shall do
so if so provided in r sgulations issued by the
President, require---
(a) individuals entering Government-
ployment with such agency and, periodically,
the employees or par titular categories of em-
ployees of such ages cy, to sign a statement
that they have rea.i an appropriate sum-
mary of the rules est sblished by this Act and
the regulation issued hereunder;
(b) employees of ouch agency, or particu-
lar categories thereof, to report periodically
as to their non-Government employment or
self-employment, if :coy;
(c) representatives of other personsbefore
an agency to certify that, to the best of
their knowledge, t1 eir representation will
not violate section 4 or 8 or the regulations
issued thereunder; a ad
(d) persons who ;ire principals in' trans-
actions involving thc: Government to certify
that, to the best of -their knowledge, they
have not received - a: sistance under circum-
stances which woul(. violate section 4 or 8
or the regulations is ;ued thereunder.
? 12. Remedies; civil penalties; procedure
(a) ADMINISTRATIVE ENFORCEMENT AS TO
CURRENT GOVERNMENT' EMPLOYEES.-
(1) Remedies an(. Civil Penalties: The
had of an agency may dismiss, suspend, or
take such other action as may be appropri-
ate in the circumstances in respect of any
Government employe of his agency upon
finding that such employee has violated this
Act or regulations promulgated hereunder.
Such action may include the imposition of.
conditions of the nEture described in sub-
section (b) (1).
(2) Procedure: The procedures for any
such action shall col respond to those appli-
cable for disciplinary action for employee
misconduct generail and any such action
shall be subject to jt dicial review to the ex-
tent provided by law for disciplinary action
for misconduct of Employees of the same
category and grade.
(b) ADMINISTRATIV'.: ENFORCEMENT AS TO
FORMER GOVERNMENT EMPLOYEES AND.OTHERS:
(1) Remedies and Civil Penalties: The
head of an agency, upon finding that any
former employee of.siich agency or any other
person has violated a;ly provision of this Act,
may, in addition to any other powers the
head of such agencyiaay have, bar or impose
reasonable conidtions upon-
(A) the appearan;e before such agency
of such former empioree or other person, and
(B) the conduct, o? negotiation or compe-
tition for, business with such agency by
such former employee or other person,
for such period of t.me as may reasonably
be necessary or appre priate to effectuate the
purposes of this Act.
(2) Procedure: .
(A) Hearings.-Firdings of violations re-
ferred to in subsectio a (b) (1) shall be made
on the record after n etice and hearing, con-
ducted in accordant s with the provisions
governing - adjudicati In in title 5, United
States Code, secs. 10(5, 1006, 1007, 1008, and
1011 (Administrative Procedure Act). For
the purposes of such hearing any agency
head, or any officer cesignated by it, is em-
powered to adminis~er oaths and affirma-
tions, subpena witnc sses, compel their at-
tendance, take evidc nce, and require the
production of any books, papers, corre-
spondence, memorar da, contracts, agree-
ments, or other records which the agency
head finds relevant ar material to the in-
quiry. Such attendance of witnesses and the
production of any such records may be re-
quired from any place in the United States
at any designated place of hearing. Wit-
nesses summoned br the agency head to
appear shall be paid t he same fees and mile-
age that are paid witnesses in the courts
of the United States.
(B) Judicial review.-(i) Any party to a
proceeding under subsection (b) aggrieved
by an order issued by the agency head pur-
suant hereto, may obtain a review of such
order in the court of appeals of the United
States for any circuit wherein saidparty is
located or has its principal place of business,
or in the United States Court of Appeals
for the District of Columbia, by filing in
such court within sixty days after the order
of the agency upon a written petition pray-
ing that such order be modified or set aside
in whole or in part.
(ii) A copy of such petition shall forth-
with be transmitted by the clerk of the
court to the agency head involved, and
thereupon such agency head shall file with
the court the record upon which the order .
complained of was entered. Upon the filing
of such petition, such court shall have juris-
diction, which upon the filing of the record
with it shall be exclusive, to affirm, modify,
or set aside such order In whole or In part.
(iii) No objection to the order of the
agency head shall be considered by the court
unless such objection shall have been urged
before the agency or there is reasonable
ground for failure to do so.
(iv) The findings of the agency head as
to the facts, if supported by substantial evi-
dence, shall be conclusive. If any party
shall apply to the court for leave to adduce
additional evidence, and shall show to the
satisfaction of the court that such addi-
tional evidence is material in that there
were reasonable grounds forfailure to ad-
duce such evidence in the proceedings be-
fore the agency, the court may order such
additional evidence to be taken before the
agency and to be adduced upon the hearing
In such manner and upon such terms and
conditions as to the court may seem proper.
(v) The agency head may modify his
findings as to the facts by reason of the
Additional evidence so taken and shall -file
with the court such modified or new find-
ings which, if supported by substantial evi-
dence, shall be conclusive, and his recom-
mendation, if any, for the modification or
setting aside of the original order. The
judgment and decree of the court, affirming,
modifying, or setting aside in whole or in
part, any such order of the agency head,
shall be final, subject to review by the Su-
preme Count of the United States upon
certiorari or certification as provided in
sections 346 and 347 of title 28. The com-
mencement of proceedings for review under
this subsection shall not, unless specifically
ordered by the court, operate as a stay of
the agency head's order.
(C) RESCISSION OF GOVERNMENT ACTION:
The President or any agency head may can-
cel or rescind any Government action with-
out contractual liability to the United
States where- -
(1) he has found that a violation of this
Act has substantially influenced such Gov-
ernment action; and
(2) in his judgment the interests of the
United States -so require under all of the
circumstances, including the position of
innocent third parties.
The finding referred to in clause (1) shall
be made in accordance with the procedures.
set forth in subsection (b) (2) and shall be
subject to judicial review in accordance
with the provisions of subsection (b) (2) (B)
Provided, That the President or such agency
head may suspend Government action pend-
ing the determination, pursuant to this sub-
section, of the merits of the controversy.
The exercise of judgment pursuant to clause
(2) of this subsection shall not be subject to
judicial review.
(d) CIVIL REMEDY FOR DAMAGES AGAINST EM-
PLOYEES AND FORMER EMPLOYEES: The Attor-
ney General of the United States may bring
a civil action in any district court of the
United States against any Government em-
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CONGRESSIONAL RECORD -HOUSE 3159
ployee or former Government employee who TITLE III-AMENDMENT AND REPEAL OF EXIST- of the United States for purposes of the
shall, to his economic advantage, have acted ING LAWS
may recover on behalf of the United States, ""u" -tint, vi zisie Lu, united States ? 36. Repeal of particular substantive re-
in partial reimbursement of the United Code, sections 216 and 1914 straints
States for its expenses of administering this Section 216 of chapter 11 and section 1914 The following sections are repealed:
Act, damages in an amount equal to three of chapter 93 of title 18 of the United States
times the amount of such economic advan- Code are each amended by adding the fol- U(.Sa).CSection (relating of the Revised Statutes (t
tage. - lowing as a new paragraph to precede the prosecution . 99) ms by pployee in de-
of f claims by employees in de-
(e) CIVIL PENALTIES FOR ILLEGAL PAY- present text of each such section: pa anlens); and
(e) "From and after the effective date of the (b) Section who shall violate sec- Executive Con~ict of Interest Act, this sec- (b) S.C. 254) (relating of the Revised business
tion 9 shall pay a civil penalty of not more (b U.S.C.C 254) elating
g to certain business
than $5,000, in partial reimbursement of the tion shall not apply to (1) any person who
United Sattes for its expenses of administer- is a Government employee as defined in sec- interests of clerks in the Treasury Depart-
ing this Act. The Government employee or (2) any act of
former Government employee involved shall another person which is directed toward ? 37. Repeal of particular substantive re-
not be subject to prosecution under title 18, such a Government employee." straints applicable to retired officers
United States Code, section 2, or title 18. ? 32. Amendment of title 18, United States The following sections are repealed:
United States Code, section 371, or any other Code, sections 281, 283, and 434 (a) Section 1309 of the Act of August 7,
provision of law dealing with criminal con- Sections 281 and 283 of chapter 15 of title 1963 (67 Stat. 437; 5 U.S.G. 59c), (relatin
spiracy, by reason of the receipt of any such 18 of the United States Code are each toned to loss officers of eienge engaged in c pay in retired
commis-
selling
payment. amended by deleting the second paragraph ag
(f) PUBLICATION OF CERTAIN FINDINGS AND thereof. Each of such sections is further activities).
Section DEcrsloNs.-Whenever the head of any amended and section 434 of chapter 23 of of ( the Section United States s Code chapter la7 of title 10 6112 of
agency, or the President, exercises the au- title 18 of the United States Code is amend (relating to the
thority conferred by subsections (a), (b), or ed by adding the following as a new para-
loss of pay or retirement pay by certain offt-
of this section, copies of the findings graph to pr cede the present text of each sere who sell naval supplies to the Navy
and decision therein shall be filed with the such section: Department).
President and shall be published at least ,From and after the effective date of the ? 38. Repeal of exemptions from particular
once each year as part of a volume collect-
ing such findings and opinions, Such Vol- Executive Conflict of Interest Act, this sec- conflict-of-interests statutes
be ilable
Imes shall made opinion for public votion shall not apply to any person who is The following Sections are repealed:
inspection and shall also be available for a Government employee as defined In section (a) Section 173(c) of chapter 7 of title
2(f)
distribution or sale to interested persons. of that Act."
10 of the United States Code (providing cer-
(g) INTERESTS OF NATIONAL SECURITY.-- ? 33. Amendment of title 18, United States tain conflicts exemptions for advisers to the
When any provision of this Act requires pub- Code, section 284 Secretary of Defense).
lication of Information and the President Section 284 of chapter 15 of title 18 of (b) Section 1583(b) of chapter 81 of title
finds that publication of part or all of such the United States Code is aniended by add- 10 of the United States Code (authorizing
information is inconsistent with national ing the followhig as a new paragraph to pre- conflicts exemptions for persons employed by
security, he may suspend the requirement, of cede the present text of such section: the Secretary of Defense to serve without
such publication to the extent and for sch "From and after the effective date of-the compensation).
period of time as he shall deem essential for Executive Conflict of Interest Act, this sec- (c) Section 5153(d) of chapter 513 of title
reasons of national security; tion shall not apply to any person who has 10 of the United States Code (providing cer-
(h) STATUTE OF LIMITATIONS: NO admnn- been a Government employee as defined in tain conflicts exemptions for members of the
Istrative or other action under subsections section 2(f) of that Act." Naval Research Advisory Committee).
(b), (c), (d), or (e) of this section to en- (d) Section 807 of the Act of August 2,
force any provision of this Act shall be com- ? 34. Amendment of title 22, United States 1954 (68 Stat. 645; 12 U.S.C. 1701h) (pro-
menced after the expiration of six ears Code, section 1792(a
years ) viding certain conflicts exemptions for mem-
following the occurrence of the alleged vio- Section 532(a) of the Mutual Security Act bers of advisory committees of the Housing
lation. of 1954 (68 Stat.' 859), as amended by sec- and Home Finance Agency).
TITLE II-CRIMINAL PENALTIES tion 10(d) of the Act of July 18, 1956 (70 (e)- Section 5 of the Act of June 4, 1956
? 21. Acts in violation of Executive Conflict Stat. 561; 22 U.S.C. 1792(a), is amended to (70 Stat. 243; 16 U.S.C. 943) (providing cer-
of Interest Act read as follows: tain conflicts exemptions for commissioners
Title "18 of the United States Code is "(a) Service of an individual as a mem- and members of advisory committees ap-
amended by adding a new chapter thereto, ber of the Board established pursuant to pointed under the Great Lakes Fishery Act
to be designed chapter 16 and reading as section 308 of this Act or as an expert or of 1956).
follows: consultant under section 530(a) shall not (f) Section 5 of the Act of September 7,
"Chapter 16-Conflicts of interest be considered as employment or holding of 1950 (64 Stat. 778; 16 U.S.C. 954) (providing
office or position bringing such individual certain conflicts exemptions for commis-
301. Acts in violation of Executive Con- within the provisions of section 6 of the Act sioners and members of advisory committees
flict of Interest Act of May 22, 1920 (5 U.S.C. 715), or section appointed under the Tuna Conventions Act
"Any person who shall purposely or know- 212 of the Act of June 30, 1932 (5 U.S.C. 59a), of 1950).
ingly violate any provision of the Executive or any other Federal law limiting the reem- (g) Section 5 of the Act of Septembe?27,
Conflict of Interest Act shall be fined not ployment of retiredofficers or employees or 1950 (64 Stat. 1068; 16 U.S.C. 984) (providing
more than $10,000, or imprisoned for not governing the simultaneous receipt of com- certain conflicts exemptions for commis-
more than one year, or both. For purposes pensation and retired pay or annuities. sioners and members of advisory committees
of this section, the terms 'purposely' and Contracts for the employment of retired mil- appointed under the Northwest Atlantic
"knowingly' shall have the respective means itary personnel with specialized research and Fisheries Act of 1950).
set forth in subsections (a) and (b) : development experience, not to exceed 10 (h) Section 5 of the Act of August 12,
"(a) 'Purposely': A person acts purposely in number, as experts or consultants under 1954 (68 Stat. 698; 16 U.S.C. 1024) (provid-
with respect to a material element of an section 530(a), may be renewed annually, ing certain conflicts exemptions for com-
offense when- notwithstanding section 16 of the Act of missioners and members of advisory com-
"(1) if the element Involves the nature of August 2, 1946 (5 U.S.C. 55(a) )." - mittees appointed under' the North Pacific -
his conduct or a result thereof, it is his ? 35. Amendment of title 5, United States Fisheries Act of 1954).
conscious object to engage in conduct of Code, section 30r(d) - (I) Section 1003 of the Act of September
that nature or to cause such a result; and Section 29 (d) of 2, 1958 (72 Stat. 1603; 20 U.S.C. 683) (pro-
"(2) if the element involves the attend- the Act of August 10, 1956 viding certain conflicts exemptions for
ant circumstances, he knows of the exist- (70A Stat. 632; 5 U.S.C. 301`(d), is amended members of advisory committees and infor-
ence of such circumstances: to read as follows: mation councils appointed under the Na-
"(b) `Knowingly': A person acts know- "(d) When he is not on active duty, or tional Defense Education Act of 1958).!
!u "( with ow ngl to a material element of when he is on active duty for training, a (j) Section 14(f) of the Act of May 10,
an offense when- reserve is not considered to be an officer or 1950 (64 Stat. 154, 155; 42 U.S.C. 1873(f))
employee of the United States or a person (providing certain conflicts exemptions for
"(1), if the element involves the nature of holding an office of trust profit or discharg- members of the National Science Board and
his conduct or the attendant circumstances, ing any official function under, or in con- committees and commissions appointed
he knows that his conduct is of that nature nection with, the United States because of under the National Science Foundation Act
or he knows of the existence of such circum- his appointment, oath, or status, or any of 1950).
stances; and duties or functions performed or 13ay or 163 of
"(2) if the element involves a result of allowances received in that capacity: Pro- (194 Section at. 95 1the Atomic Energy ec-
his conduct, he knows that his conduct will vided, however, That a reserve on active duty tion2of6 the Act ofSe aem er ended 21, 1959 s(73
necessarily cause such a result." for training shall be deemm,a
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CONGR SI~~g N ICECIIRIT-I~UVS
tain conflicts exemptions for members of
the General Advisory Committee and Ad-
visory boards appointed under the Atomic
Energy Act of 1951).
(1) Section 1(t) of the' Act of June 19.,
1951 (65 Stat. 87; 50 U.S.C. App. 463(a) )
(providing certain conl cts exemptions for
particular Selective Service officials).
(m) Section 113 of the Renegotiation Act
of 1951 (65 Stat. 22), as amended by section
13 of the Act of August 1, 1956 (70 Stat.
792; 50 U.S.C. App. 1223) (providing certain
conflicts exemptions for employees of de-
partments and agencies to which and e-
negotiation Act of 1951 is applicable
the Renegotiation Board).
(n) Section 7(b) (4) of the At of Au-
gust 1955
(69 Stat. 5432; 2160(b) (4)(p oviding ce$tain O conflicts Aex-
emptions for persons serving without com-
pensation under the Defense Production Act
of 1950).
TITLE IV-MISCELLANEOUS PROVISIONS
41. -Short title
This Act shall be known and may be cited
as the "Executive Conflict of Interest Act".
? 42. Effective date
This Act shall take effect ninety days after
the date of its enactment, except that sec-
tion 37 shall not take effect until the effec-
tive date of the regulations issued by the
President pursuant to section 8(e).
RECOMMENDATIONS
The committee recommends a thorough
reconstruction of the entire legal and admin-
istrative machinery for dealing with the
problem of conflict in interest in the execu-
tive branch of the Government. A- sum
mary of its! principal reconlmendationa ap-
pears below:
RECOMMENDATION 1
"Conflict-of-interest problems should be
recognized and treated as an important
t
progression. The first of the six substantive
restraints deals with action by a Govern-
ment employee in his official capacity in a
matter in which he his a personal interest.
The second deals with action by a Govern-
ment employee in hit: private capacity in
furtherance of an interest adverse to the
Government. The third deals with receipt
of pay; from outside sources. The fourth
deals with respect of gifts from outside
sources. The fifth coals with action as
a Government official designed to induce
payments from outside sources. The sixth
deals with postempl )yment activities in
furtherance of an interest adverse to the
Government.
As an example of the close integration
of these sections, the second and sixth pro-
hibition are almost precisely parallel in
their application to the intermittent Gov-
ernment employee and the recent former
employee, reflecting the basic similirity of
the two situations :rom the conflict-of-
interest viewpoint.
The points in the total statutory scheme
where it is important to supplement the
statutes by regulation. are clearly identified.
A few archaic statutory restraints super-
seded by the new at -would be repealed.
Others of the existing statutes would be
amended to exclude -Torn their coverage all
executive branch employees (i.e., those cov-
ered by the new act).
Fourteen special exemption provislops
contained in present law for members of
various advisory committees and persons
holding other part-time posts would be re-
pealed, as being unn:cessay in the light of
the realistic approach of the new act to the
intermittent -employ to problem. (See rec-
ommendation 6 below.)
Such a unified act would be more en-
forceable and more rational in its applica-
tion. It would, by its very drafting,
remedy many ofthe fundamental shortcom-
ings of the present 11 W.
RECOMMENDATION 3
not to be a "claim" within the scope of the
statute.
The proposed act- would expand present
offenses in other respects. To cite a few
examples, present law forbids a governmental
employee to transact business as an agent of
the Government with any "business entity"
In the pecuniary profits of which he is inter-
ested. The comparable rule in the proposed
act would apply not only to business trans-
actions with business organizations, but to
any kind of transaction with any kind of
entity in which the employee has a substan-
tial economic interest. Furthermore, unlike
the present law, the statute specifies a num-
ber of specificsituations where the employee
is deemed to hold an economic interest, such
as where that Interest is in fact owned by his
wife or child, or where he has an under-
standing as to future employment with a
private person or firm.
RECOMMENDATION 4
"Certain important restraints now covered
in regulations or not at all should be in-
cluded in the basic statutes, particularly
restraints relating to receipt of gifts and co-
ercive use of office."
Present law would be further strengthened
by the addition of two important areas of
conduct heretofore treated only in regula-
tions or not at all.
The first would forbid an employee of the
Government to receive a thing of economic
value as a gift, gratuity, or favor from any-
one who the employee hasreason to believe
would not give the gift but for the employee's
office or position with the Government. Fur-
thermore, regular Government employees are
forbidden to receive gifts or favors from any-
one who does business with or is regulated by
his agency. Someroom is left in the statute
for minimal exceptions to be provided for in
regulations.
The second new offense would forbid a
Government employee to use his office or
-position with the Government in a manner
intended to Induce or coerce a person or
company doing business with him to provide
him with any thing of economic value.
RECOMMENDATION 5
"The statutes should permit the retention
by Government employees of Certain security-
oriented economic interests, such as con-
tinued participation in . private pension
plans."
Hallmarks of modern American society
are the pension plan, the group insurance
plan, and other kinds of security-oriented
arrangements. They are the basis of long-
range economic planning by millions. Under
present conflict-of-interest laws-passed
when no such plans existed-there is some
doubt whether an employee of the Govern-
ment may legally continue as a member of
some plans maintained by his former em-
ployer, at least if contributions to the plan
by the employer are regularly made which
benefit the Government employee. This
overhanging doubt falls hard upon the non-
- -
complex, and independent subject of a
tention and concern in the management of "The restraints contained in the present
the governmental establishment." statutes should be g:?eatly expanded in their
Up until the present time, the subject of scope by making thaw applicable to essen-
conflict in interest in the executive branch tially all matters in which the public deals
has been conceived of and dealt; with only with the modern Federal Government."
peripherally as an aspect of the general -Six of the seven ,;onflict-of-interest stat-
problem of ethics in Goverment. The fact utes on the books today have their roots
is that its unique and complex nature and in the problems of a century ago; they are
the variety of 'difficult problems it raises, directed primarily a;;ainst corruption in the
particularly the problem of recru)tment, de- prosecution of clad is against the Govern-
mands that it be isolated and identified as ment and the proc ass of letting contracts
an independent subject of governmental con- by the Government. Claim prosecution and,
tern. Until it receives the consideration to a lesser degree, procurement procedures
and attention which it deserves, the problem have, however, beer. brought largely under
of conflict in interest cannot be adequately control by strativestdvices statutes. t In
resolved.
the other risks
RECOMMENDATION 2 their. draftsmen have of grown
statutes t did
"The present scattered and uncoordinated the foresee and provide for. The proposed
statutes relating to conflicts of interest not act strikes hard at those deficiencies.
should be cqnsolidated into a single unified
act, with a commonppro ch. Archaic itiprvisions flitThe -of--iinterrest restraint to every the kind of
should con-
consistent
be nt repeea a pled." transaction in which today's Government
ment of the
se
i
t
g
e
va
One of the principal shortcomings of the engages with the pr
present law is that it is composed of many economy. The tern z "transaction involving The proposed act permits Government
diverse elements scattered throughout the the Government" i? broadly defined as "any employees to. continue -their participation
statute books and containing inconsistencies, proceeding, application, submission, request in certain private plans under some circum-
overlapping and exemptions. The chaotic for a ruling or other determination, con- stances and with adequate safeguards. For
nature of the law is an impediment to tract, claim, case or other such particular example, it would permit a Government remai ment. and a deterrent to recruit atter" which will
action. The e-efthe fectuofathisfbrad g oup inn ance ornothera main-
ent. te em The proposed ft would unify the ompre- definition restraints would be very scope of the tained
- long as the eh mployer makesano contribution
law conflict t o of interest in one - present y
hensive statute. basic terms would be de be de- In this respect r:cornxnendation3 is con- to mthe entlservicebeSimilarly the Gov
fined and then used consistently through- sistent with one me do by the Justice Depart- ern to ee conic coSimila to belong to cent
out. Examples of key terms, carefully ment to -Congress several years ago in re- emp y
-
defined at the outset and then, used con- sponse. to a court lecislon holding that the t in of t dhese oes plans
e cent if the former em-
sistently throughout the proposed act, in- present postemplc yment restraints apply ployer alified un-
elude: "Government action"; "transaction only to assisting in the prosecution of claims hhal alf, tthe long as the plan Codare uali so long
involving the Government"; "assist"; "par- against the Government for money or prop-
ticipate" and "responsibility". erty. In that case- an application for a pre- as the payments by the former employer
The proposed act would treat the basic merger clearance ruling from the Antitrust continue for no longer than 5 years of Gov-
forms of conflict of interest in a logical Division of the Justice Department was held ment service.
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RECOMMENDATION 8
"Wherever it is safe, proper, and essential
from the viewpoint of recruitment, the stat-
utes should differentiate in treatment be-
tween regular employees and citizens who
serve the Government only intermittently,
for short periods, as advisers and consult-
ants,"
To an ever-increasing extent the Govern-
ment is dependent for information and ad-
vice-for learning not only how to do it, but
what to do-upon part-time, temporary, and
intermittent personnel. These serve indi-
vidually, or as members of committees, but
that service is in addition to their regular
private work as scientists, technicians,
scholars, lawyers, businessmen and so on.
Technically, they are, however brief their
service, employees of the Government and at
present, all of the conflict-of-interest stat-
utes apply to them. This fact has brought
about both refusals to serve and conscious
or unconscious ignoring of the statutes by
those who do serve. It has also resulted in
a welter of special statutory exemptions.
The proposed act distinguishes, in a few
key places where it is safe and proper, be-
tween rules for regular full-time Govern-
ment employees and rules for what are de-
fined as "intermittent employees. Under
the proposed act, an "intermittent em-
ployee" is anyone who, as of any particular
date, has not performed services for the
Government on more than 52 out of the im-
mediately preceding 365 days. For such
individuals, there are certain special rules
under the proposed act. For example, regu-
lar full-time employees are forbidden to
assist private parties.for pay in transactions
involving the Government; intermittent em-
ployees, who have to earn a living in addi-
tion to their occasional Government work,
are allowed to assist others for pay in such
transactions, except in cases where the par-
ticular transaction is, or within 2 years has?
been, under the intermittent employee's
official responsibility or where he partici-
pated in the transaction personally and
substantially on behalf of the Government.
Similarly, since intermittent employees, by
definition, are employed by organizations In
addition to the Government, they are not
subject to the rule forbidding their Gov-
ernment pay to be supplemented from pri-
vate sources in return for personal services.
Finally, the rules as to receipt of gifts are
different for the two classes of employees.
RECOMMENDATION 7
"Regular, continuing, and effective en-
forcement of the law and regulations should
be assured by emphasizing administrative
remedies, rather than the clumsy criminal
penalties of present law."
The basic purpose of a system of conflict-
of-interest restraints is to help maintain
high ethical behavior in the executive
branch of the Government. It is the judg-
ment of this conunittce that the flexible and
multiple weapons of the modern administra-
tive process are more fitted to that task than
the criminal law.
Because the present statutes rely on crim-
inal sanctions, they are rarely enforced..
They are, in many respects, too harsh for
offenses they declare. Furthermore, enforce-
ment by criminal law is difficult, expensive
and time consuming. Accordingly, the pro-
posed act relies basically on ordinary disci-
plinary procedures, including dismissal, for
its sanctions. These procedures are sup-
plemented by civil remedies particularly apt
for former employees and nonemployees
dealing with the particularly agency-such
as bans against appearances before the
agency and civil, damage actions.
The proposed act retains classical criminal
penalties for the most flagrant violations:
those committed "knowingly" or "pur-
posely." The definitions of these terms are
adopted from a draft Model Penal Code pre-
pared by the American Law Institute.
RECOMMENDATION 8
"The statutes should create the framework
for active and effective administration of the
system of conflict-of-interest restraints,
headed up with clear responsibility In the
President. The President should designate,
pursuant to the proposed act, an Adminis-
trator to assist him in this function."
One of the greatest deficiencies in the pres-
ent statutes is their' failure to recognize the
importance of a continuing administrative
structure to deal with the problem of con-
flict-of-interest. The proposed act would
specifically provide for such an administra-
tive machinery.
Clear overall responsibility would be placed
upon the President "for the establishment
of appropriate standards to protect against
actual or potential conflicts of interest on
the part of Government employees and for
the administration and enforcement of this
act and the regulations and orders issued
hereunder."
To assist the President in carrying out
this responsibility, the act calls for the
designation by him, from within the Execu-
tive Office of the President, of an "Admin-
istrator." He would be answerable directly
to the President. He is given a series of
coordinating, consultative and advisory
functions under the act. He would work
closely with the Department of Justice and
agency heads or their designees, but his
would be a small office, and in no sense
charged with centralized operation or en-
forcement of conflict-of-interest restraints.
RECOMMENDATION 9
"In addition to the statutes themselves,
there should be a `second tier' of restraints,
consisting of Presidential regulations ampli-
fying the statutes, and, a 'third tier,' con-
sisting of agency regulations tailored to the
needs of particular agencies. The responsi-
bility of day-to-day enforcement of the
statutes and regulations should rest upon
agency heads."
The proposed act contemplates the issu-
ance by the President of a set of regulations
extending, supplementing, implementing and
interpfeting the provisions of the act. The
act also visualizes another set of regulations
at the next lower level-that of the agency
heads. The Presidential regulations would
take precedence over any regulations issued
by agency heads.
Agency regulations would tend to follow
the present pattern, namely, particularized
rules adapted to the special risks of the par-
ticular agency. For example, some agen-
cies may have special rules on use of con-
fidential information available within the
agency. Others may adopt special post-
emplowment restraints which go beyond the
statutory provision. This diversity and par-
ticularization is realistic and desirable.
RECOMMENDATION 10
"At all levels of administration potential
conflict-of-interest problems should . be
headed off by preventive action, such as, for
example, orientation programs for all new
employees to acquaint them with the ap-
plicable conflict-of-interest rules, and peri-
odic reminders as to such rules."
Much can be done to fight the conflict-of-
interests problem by preventive measures.
Section 11 of the proposed statute makes
several suggestions. New employees can be
required to certify that they have read the
conflict-of-interest rules and to report on
their outside employment. In particular, an
effective orientation program would be help-
ful. Agents and attorneys appearing before
agencies can also be required to file an affi-
davit stating that they are not, by such
appearance, violating any conflict-of-interest
law.
"There should be more effective prohibi-
tions and penalties applicable to persons
outside Government who induce or partici-
pate in conduct by Government employees
In violation of the conflict-of-interest laws."
Not infrequently a Government employee
is found in a conflict-of-interest situation
and penalized for it while the person respon-
sible for placing him in the situation re-
mains unscathed.
The proposed act contains a new and
broad section making it a violation for a
person to make a payment (or transfer any
other thing of economic value) to a Gov-
ernment employee while "believing or having
reason to believe that there exist circum-
stances making the receipt thereof a viola-
tion of" certain sections of the act. This
prohibition also covers the making of gifts
in the situations corresponding to the situa-
tions in which an employee may not receive
a gift.
Both administrative and criminal sanc-
tions are, applicable to these violations by
persons dealing with Government em-
ployees.
RECOMMENDATION 12
"Each committee of the Senate considering
a presidential nominee for confirmation
should be given the benefit of a full analysis,
prepared by the Administrator in consulta-
tion with the Department of Justice, of any
conflict-of-interest problems the nominee's
particular situation may present. The con-
firming committee should give due consid-
eration to this analysis and to the protec-
tions afforded by a modern and effectively
administered overall scheme of conflict-of-
interest restraints, if one is put into effect."
There is substantial evidence that the
Government's efforts to recruit top-level ex-
ecutives have been impeded by the require-
ments of stock divestment imposed by the
Armed Services Committee of the Senate.
This problem cannot be dealt with by
statute. The confirmation power is a con-
stitutional prerogative. However, this prob-
lem should be a subject of joint concern and
increased cooperation between the executive
branch and the Senate. There is some evi-
dence that recently the executive depart-
ments have taken more pains to prepare
their nominees for confirmation. Legal
opinions have on occasion been furnished by
the Justice Department; plans have been
worked out in advance of hearing as to
what need be sold and what could be kept,
and representatives of the appointing de-
partment or agency confer in advance of
hearing with appropriate authorities of the
committee.
If the proposed act were passed, the "Ad-
ministrator" would become the central re-
pository for all information concerning con-
flict-of-interest, and he would be expected
to assist the executive branch In working
out regular procedures for preparing nomi-
nees for confirmation. He could, in Cooper-
ation with the. Department of Justice and
general counsel to the agency in question,
prepare a full analysis of the conflict-of-
interest problems of the particular nominee.
Over a period of time, these analyses might
be given substantial weight by the confirm-
ing committees.
Furthermore, if a modern and effective
system of statutory restraints is adopted
by Congress and implemented by active exec-
utive branch administration, the confirming
committees might be willing to place greater
reliance on the statutory rules and pro-
cedures. One clear example is the procedure
for disqualification recognized by the pro-
posed act where a Government official holds
a particular economic interest In a private
RECOMMENDATION 19
"The Congress should initiate a thorough
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Members of Congress and employees of the
legislative branch of the Federal Govern-
ment."
Primarily because of their representative
function, Members of Congress and legisla-
tive branch employees are, in matters of
conflict of interests, in a significantly dif-
ferent position from that of executive branch
employees. As such, Congress must be con-
sidered separately.
A fresh examination of these problems by
Congress, or by a study group initiated
by Congress, is needed. However, such a
study should in no way deter immediate
action with respect to the executive branch
along the lines of the proposed act.
The committee's proposed program can be
best assessed against the background of the
more general discussion, analysis, and find-
the Mercury-man-in-space-program,
and for improving tracking facilities.
Both of these objectives are sound. In
voting against this; supplemental ap-
propriation, I do not wish my vote to be
interpreted as opposition to the value
of either of these-pr( jects.
However, in this i roubled world, I am
concerned at the pe spective with which
we view and approalh issues. I happen
to feel that the need for education is so
fundamental, and s i seriolts; that I be-
lieve it deserves th( top priority in the
Nation. I believe t deserves an even
higher priority thar the money author-
ized or appropriates i for either our na-
tional defense or. sp: ice programs.
Therefore, I am leiuctantly opposing,
and will oppose in the future any au-
thorizations or appropriations in the
fields of national defense or the space
SUPPLEMENTAL APPROPRIATIONS, program until the passage of an ade-
1960, NATIONAL AERONAUTICS quate general education bill.
(Mr. HECHLER asked and was given
permission to extend his remarks at this
point in the RECORD.)
Mr. HECHLER. Mr. Speaker, on Feb-
ruary 23, when this body passed House
Joint Resolution 621 appropriating $23
million in the supplemental appropria-
tion for the fiscal year 1960 for the Na-
tional Aeronautics and Space Adminis-
tration, I would like the RECORD to show
that I was present and voted "No" on
the voice vote.
I wish to make it clear why I voted
against the NASA appropriation.
My personal feeling, deepened and re-
inforced by my work on the House-Com-
mittee on Science and Astronautics, is
that education constitutes the very
foundation of both national defense and
our progress in the space effort. With
Admiral Rickover, :[ believe that the
whole question of the importance of edu-
cation, must be placed in perspective. It
does little good to purchase military
hardware today or put a man in space
tomorrow if we do not train the brains
to produce better hardware and im-
proved technology in the future.
Therefore, I have come to the conclu-
sion that the most important single is-
sue facing this country today is how to
train the young people who will lead and
keep America strong in the future.
When people stress the value of basic
research, I say that to produce basic
research you need trained and educated
people.
Of course we are going to need people
trained in the natural' sciences. But we
are also going to need social scientists
who can point the wayfor mankind to
reduce human poverty and suffering, to
secure disarmament and better inter-
national understanding-and ultimately
to maintain a lasting peace.. And as
automation produces more and more
leisure time, we shall need more people
trained in the humanities as well. Per-
haps better training in the humanities
would help raise the moral tone of our
society too. It certainly could use some
improvement.
What does all this have to do with a
supplemental appropriation for the Na-
tional Aeronautics and Space Adminis-
tration? These funds will be used for
PRESIDENTIAL I EADERSHIP AND
NATIONAL SECURITY-II
(Mr. HECHLER i,sked and was given
permission to. extend his remarks at this
point in the RECORD.)
Mr. HECHLER. Wr. Speaker, on Feb-
ruary 18, I addressed the House on the
issue of- presidential leadership, urging
thePresident to ex(:rcise his full powers
to arouse the Nati In to the threat it
faces. The people ire yearning for the
leadership which- .he President alone
could supply. As i he occupant of the
most powerful omc; in the free world,
the President has a rare opportunity for
leadership in these most critical times
when America faces a great watershed of
history.
I was impressed y ~sterday by the testi-
mony of two outstal:ding Americans who
called attention to t] ie nature of the crisis
we face.
Dr. William Pickering, Director of the
Jet Propulsion Laboa-atory, California In-
stitute of Technolo? y, testified February
24 before the House; Committee on Sci-
ence and Astronal:tics. Dr. Pickering
repeated what President Eisenhower has
declined to state, d(spite the unanimous
opinion of the President's top adminis-
trators. In Dr. F ickering's own ex-
pression:
In other words, we should frankly admit
what the rest of the world knows-that we
are indeed in a rac( with the U.S.S.R. in
space. One can come to no other conclusion.
I would also like to call attention to
an excellent statement pn February 24
by Robert C. -Sprag ae, Chairman of the
Federal Reserve B; nk of Boston, who
was- cochairman of the Gaither Com-
mittee. Mr. Sprag .le describes himself
as a conservative Republican. He pulls
no punches in calling on the President
to exert the leader ship to awaken the
American people to the nature of the
current threat.
The statement fo lows:
STATEMENT or ROBERT C. SPRAGUE TO THE
SENATE SUBCOMMIP1EE ON NATIONAL POLICY
MACHINERY, FEBRUA iY 24, 1960
Mr. Chairman, I-we'come this opportunity
to talk to your committee. The subject you
have asked me to ccver is one to which I
have given a great den~l of prayerful thought
during the past 7 years and concerns matters
about which I feel very strongly.
Advancing -military technology is rapidly
precipitating us into an unstable security
position. The problems we now face and,
will increasingly face in the years ahead,
make it most important that some signifi-
cant changes be made in our organization
for security. -
In my prepared statement, -I wish to em,
phasize six major points:
First, the Nation faces a clear and immi-
nent threat to its survival, but we have not
yet fully awakened to this very unpleasant
fact.
Second, the Nation can and should do
much more to put its back into the job of
meeting the threat. We certainly have the
resources to do those things required for our
survival, provided we allocate them wisely.
Third, key officials concerned with our
national security frequently do not have
all the facts they need to make many im-
portant decisions, or they have the wrong
facts.
Fourth, I -believe our key officials, par-
ticularly the Secretary of Defense, need bet-
ter staff assistance for securing objective
military advice. -
Fifth, the Congress should, by appropriate
legislation, give the President and the Sec-
retary of Defense more flexibility in assign-
ing roles and missions to the three Services
and to the Marines.
Sixth, the Congress could and should play
a more active role in stiffening four response
to the Communist challenge.
On the first and second points:
I do not wish to speak at length about
the challenge we face. This is a subject
on which others have expressed themselves
with great authority before this subcom-
mittee.
It is said, with some justice, that gen-
erals prepare for the last war, especially
if they happened to be on the winning
side. Civilians may make the same mistake.
I suggest that Mr. Khrushchev does not
make the same distinctions between peace
and war that we do. The Communist views
life as a struggle to be waged all the. time
until final victory has been achieved. He
chooses his weapons in light of his oppor-
tunities. If it is advantageous, he will use
military force. But if a means short of mil-
itary force seems more advantageous, he will
use that means.
One of our basic problems today stems
from the failure of most Americans to real-
ize that we have actually been at war- with
the Communists, in their sense of the word,
since 1946. We find it comfortable to think
that peace is the norm, that situations like
Korea and Berlin are variations from the
norm. The truth is that since 1946 war has
been the norm. Weare very slow to appre-
ciate that very distasteful fact. And that
is why, although we have done much, we
have not done a great deal that urgently
needs to be done.
World war III, in the sense of a thermo-
nuclear holocaust, may never come. Indeed,
to be prepared for it is the best means to
avoid it. - But if the test of war is not
whether there is shooting, but whether some-
one is trying to defeat us, we are fighting
world war III right now-and we could lose
it without a shot being fired on either side.
I think that Mr. Khrushchev has a very
simple view of history. It can be put into
three words: -Power is supreme. He plans
to win by being more powerful-militarily,
economically, psychologically.
This ambition is supported by:
(1) A high degree of centralized control
and great power over the Soviet people
achieved by the small, ruling group in Rus-
sia-probably the greatest such control over
a vast population In history.
(2) The obvious ruthlessness with which
the Russians hierarchy is willing to act to
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