[Senate Hearing 106-571]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 106-571

 
                     NOMINATION OF AMY L. COMSTOCK

=======================================================================



                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                                 ON THE

    NOMINATION OF AMY L. COMSTOCK, TO BE DIRECTOR OF THE OFFICE OF 
                           GOVERNMENT ETHICS

                               __________

                              MAY 12, 2000

                               __________

      Printed for the use of the Committee on Governmental Affairs



                    U.S. GOVERNMENT PRINTING OFFICE
65-381 cc                   WASHINGTON : 2000

_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
         U.S. Government Printing Office, Washington, DC 20402



                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
                      Dan G. Blair, Senior Counsel
                      Michael L. Loesch, Counsel,
      International Security, Proliferation, and Federal Services 
                              Subcommittee
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
          Peter A. Ludgin, Minority Professional Staff Member
           Nanci E. Langley, Minority Deputy Staff Director,
      International Security, Proliferation, and Federal Services 
                              Subcommittee
                 Darla D. Cassell, Administrative Clerk



                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page

    Senator Thompson.............................................     1
    Senator Collins..............................................     7
    Senator Lieberman............................................    11
    Senator Levin................................................    13

                                WITNESS
                          Friday, May 12, 2000

Amy L. Comstock, to be Director of the Office of Government 
  Ethics:

    Testimony....................................................     2
    Biographical information.....................................    17
    Pre-hearing questionnaire....................................    24

Letters of recommendation from:
    Lamar Alexander..............................................    34
    Arthur B. Culvahouse, Jr.....................................    35
    Jeffrey C. Martin............................................    36
    Patricia McGinnis............................................    37
    Stephen D. Potts.............................................    38
    Edward C. Stringer...........................................    40
Information submitted by Senator Collins.........................    41
Information submitted by Senator Levin...........................    43



                     NOMINATION OF AMY L. COMSTOCK

                              ----------                              


                          FRIDAY, MAY 12, 2000

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:08 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Fred 
Thompson, Chairman of the Committee, presiding.
    Present: Senators Thompson, Collins, Lieberman, and Levin.

             OPENING STATEMENT OF CHAIRMAN THOMPSON

    Chairman Thompson. Senator Lieberman has been delayed, so 
we will go ahead and start.
    This morning we will be considering the nomination of Amy 
Comstock to serve as the Director of the Office of Government 
Ethics. The rules of the Committee on Governmental Affairs 
mandate that an inquiry be conducted into the experience, 
qualifications, suitability, and integrity of the nominee to 
serve in the position to which she has been nominated. The 
Committee has received all the required information.
    In addition, the nominee has responded in writing to 
prehearing questions submitted by the Committee concerning 
issues that are relevant to the position for which she has been 
nominated. Copies of the nominee's biographical information and 
prehearing responses will be placed in the record as part of 
this hearing and are available upon request. The financial 
statements are available for inspection by the public in the 
Committee offices.\1\
---------------------------------------------------------------------------
    \1\ The biographical information and pre-hearing questions referred 
to appear in the Appendix on pages 17 and 24 respectively.
---------------------------------------------------------------------------
    In addition, I have received several letters of support for 
the confirmation of Ms. Comstock, and I would ask that they be 
included in the Committee record as well.\2\
---------------------------------------------------------------------------
    \2\ The letters referred to appear in the Appendix on pages 34 to 
40.
---------------------------------------------------------------------------
    Committee staff has reviewed all of the information. In 
addition, staff has examined the financial disclosure report 
submitted by the Office of Government Ethics. The Committee's 
Ranking Member Senator Lieberman and I have reviewed the FBI 
background investigation report.
    Committee rules require that all nominees be under oath 
while testifying on matters relating to their suitability for 
office, including the policies and programs which the nominee 
will pursue if confirmed.
    So would you please stand and raise your right hand? Do you 
solemnly swear to tell the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Ms. Comstock. I do.
    Chairman Thompson. Please be seated. Thank you.
    Welcome to the Committee, Ms. Comstock. At this time would 
you like to acknowledge any members of your family that you 
might have in the audience today?
    Ms. Comstock. I would, Senator. Thank you. My husband, 
Patrick Morris; my daughter Andrea Morris; my son Daniel 
Morris; and my mother, Jean Comstock.
    Chairman Thompson. Thank you. I have a son Daniel myself, 
so I will remember him.
    Would you like to make an opening statement at this time?

 TESTIMONY OF AMY L. COMSTOCK, TO BE DIRECTOR OF THE OFFICE OF 
                       GOVERNMENT ETHICS

    Ms. Comstock. I would. Thank you, Mr. Chairman.
    Twelve years ago, I made the decision to build a career in 
the Federal Government. I regarded public service as an 
honorable career and was hoping that I would find it rewarding 
as well. I have, in fact, found it to be both.
    As someone who believes in the ideal of public service, it 
is a particular honor to be before you today participating in 
the appointments process that was established over 200 years 
ago, and I have to confess to also being more than a little 
pleased that my children are here to see their mother 
participate in that process.
    As you already know, I have worked in the field of 
government ethics for many years. I believe that it is 
important for the government as a whole and for the success of 
each agency for there to be a strong Executive Branch ethics 
program. A strong ethics program is a key component to assuring 
the taxpayers that the government's business is, in fact, being 
conducted with impartiality and with integrity. A strong ethics 
program is equally important for the employees themselves. The 
vast majority of the people with whom I have worked genuinely 
want to do the right thing and to follow the rules. But given 
the sometimes complicated issues that can arise, they need a 
good ethics program to help them do that.
    I have worked closely with the Office of Government Ethics 
during these years, and I believe that they have done a 
tremendous job of establishing a program through both 
regulations and guidance that allows each agency to have its 
own ethics program tailored to its unique issues and needs, 
while still ensuring that all Executive Branch employees are 
held to the same standards and rules.
    Growth and change are a part of life, however, and as I 
indicated in my prehearing questionnaires, I believe that there 
are some areas where the Executive Branch ethics program can be 
strengthened and fine-tuned.
    If I am confirmed as Director, I am quite aware that I will 
be beginning my tenure at a very busy time for OGE and the 
government. The transition season begins for OGE before the 
election, with many employees preparing to leave government 
service. While I feel a little bit like a tax lawyer joining a 
new law firm on April 1, I view this timing as a real 
opportunity for me, if confirmed as Director, and for OGE. This 
is a time to take a leadership role to further foster the 
belief that ethical considerations must be incorporated into 
the work that agency officials do each and every day and to 
work through the transition to ensure that each agency has in 
place a strong ethics program that is utilized by all 
employees.
    Once again, Mr. Chairman, Senator Collins, it is an honor 
to have been nominated for this position and to be here today.
    Chairman Thompson. Thank you very much.
    The Committee has a few standard questions that we ask of 
all of our nominees for the record. Is there anything that you 
are aware of in your background which might present a conflict 
of interest with the duties of the office to which you have 
been nominated?
    Ms. Comstock. No.
    Chairman Thompson. Do you know of any reason, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Ms. Comstock. No.
    Chairman Thompson. Do you agree without reservation to 
respond to any reasonable summons to appear and testify before 
any duly constituted member of Congress if you are confirmed?
    Ms. Comstock. Yes.
    Chairman Thompson. At this time I have a few policy 
questions I would like to ask you.
    I understand you recently attended a symposium hosted by 
the Brookings Institution and the Heritage Foundation which 
served to launch the Presidential Appointee Initiative. It is a 
matter that many of us have been concerned about, especially on 
this Committee. Many of us have been concerned about the 
current Presidential appointment process as being too lengthy 
and too complex. And one aspect of the appointment process is 
your agency's review of the nominee's finances in order to 
determine whether or not there are any conflicts of interest, 
obviously a very important matter.
    But the question has arisen as to whether the requirements 
that we put on these people who want to come forward for a few 
years of public service, have gotten so onerous and so complex 
that we are actually deterring qualified people from entering 
public service.
    Do we require too high of a level of financial disclosure 
for these nominees, in your opinion?
    Ms. Comstock. In my opinion, there are really two parts to 
that. In order to ascertain whether there's a conflict of 
interest, I do believe that the Executive Branch financial 
disclosure form, as I indicated in my questionnaires, asks, in 
places, for a level of detail that is not needed for a 
determination, at least at the first cut, of whether there's a 
conflict of interest, and that information can be difficult to 
obtain.
    Having also been on both sides of this process, being a 
nominee as well as having reviewed forms for a number of 
nominees, I think many of the questions that are asked by the 
administration, the Senate, and on the financial disclosure 
form ask for the same general information but are asked in 
slightly different ways or for slightly different time periods, 
so that the filer essentially has to dig up and recount, re-
evaluate information three times. I think that the process 
could be streamlined and coordinated.
    My experience with the Office of Government Ethics is that 
they are extremely timely in their review, but in the financial 
disclosure forms they are implementing statutory requirements. 
If I'm confirmed as Director, I would like to work with the 
Office of Government Ethics to see if there are areas where we 
think we could lessen the burden of financial disclosure 
without diminishing the information that we need for conflicts 
analysis and help to coordinate and certainly be a significant 
party at the table with the White House and the Senate to see 
if we can find a way to coordinate those forms without 
lessening the unique needs of each of those entities.
    Chairman Thompson. Well, this Committee is working on 
legislation that is designed to raise some of the issues that 
were raised in this symposium that I referred to, and one 
proposal is to ask the Office of Government Ethics to provide 
Congress with its recommendations for streamlining the process, 
avoiding unnecessary reporting requirements and duplication and 
that sort of thing.
    Would you be supportive of such a request of your office, 
if confirmed?
    Ms. Comstock. I would be very supportive of such a request, 
Mr. Chairman. I believe that it's very important to do what we 
can to move the process forward. I would--I have discussed this 
with the Office of Government Ethics. There is some concern in 
terms of timing because, as you know, we're entering what might 
be viewed as their peak season, and this is an extremely 
important request. And in order to do justice to it, we 
wouldn't want either changes midstream in the peak season and 
we are concerned about timing. So I would just ask if we could 
work with your Committee in terms of timing. But I'm very 
interested in this issue and believe that we could streamline--
we could provide you with some good solid recommendations.
    Chairman Thompson. Well, good. We will look forward to 
working together on that.
    Just very generally, you will be heading an agency charged 
with providing overall guidance on a wide variety of ethics 
issues in the Executive Branch. Do you have a sense of what 
your priorities will be and the challenges you will be facing? 
In particular, in this Committee, we are interested in the 
Federal civil service. Has the Office of Government Ethics, if 
you know at this point, been able to sufficiently recruit and 
retain qualified employees in the number that is needed? We are 
seeing a problem government-wide in this regard. We have just 
had hearings with regard to cyber terrorism, for example, and 
the attacks on our computers, and obviously we all know what 
has been going on around the country there.
    One of the things that we are facing--of course, the 
government has a bigger problem than anybody. People say, What 
is the government going to do about private industry? First of 
all, the government can clean up its own house. We are a long 
way from doing that. Part of that problem is the difficulty in 
retaining qualified people, getting qualified people to start 
with and then retaining them. We are coming into an era of 
specialization. OGE is a different kind of situation, but the 
same general principles and, I think, questions arise.
    Have you had a chance to get a handle on that yet? I know 
you haven't been there, but you have been liaison with them and 
I know have dealings with them.
    Ms. Comstock. Yes, Mr. Chairman, actually, as you 
indicated, I have not asked for information that would 
otherwise not be available to me except in my liaison role. But 
my experience with the Office of Government Ethics is that 
they, in fact, have had a fabulous retention record with their 
employees.
    I have worked most closely with the Office of General 
Counsel in the agency, and I believe they do have strong 
retention. I don't know for other positions where I might not 
have as much direct contact, I don't know what their--whether 
they have recruitment problems. But I do share your concerns 
about civil service government-wide. That's something I care 
about.
    Chairman Thompson. All right. Let me ask you about the 
well-known mortgage guarantee of the President and the First 
Lady. To summarize it, it appears that at a particular point in 
time last fall there was a loan guarantee or the offer of a 
loan guarantee by a private individual to the President and the 
First Lady for a home in Westchester, New York. The First Lady 
and her people, and perhaps the President, indicated at the 
time that they had run this matter by the Office of Government 
Ethics and it was permissible for them to accept this loan 
guarantee.
    Mr. Potts, the Director of the Office of Government Ethics, 
said publicly: We never did pass on that issue as to whether or 
not it was acceptable for them to accept this loan guarantee. 
What we passed on was the question of whether or not it was to 
be disclosed.
    Our understanding is you were the intermediary, perhaps, 
between Cheryl Mills, the White House Legal Counsel, and either 
Mr. Potts directly or the Office of Government Ethics in 
general. Can you tell us what happened with regard to that?
    Ms. Comstock. Yes, sir, I'd be happy to. I was asked to 
determine with the Office of Government Ethics as part of my 
liaison role whether the loan mortgage guarantee arrangement 
would be required to be disclosed on the President's public 
financial disclosure form.
    Chairman Thompson. All right. Who asked you to do that?
    Ms. Comstock. Cheryl Mills.
    Chairman Thompson. All right.
    Ms. Comstock. And I actually cannot--timing, I'd have to 
look back to determine whether she was Deputy Counsel or Acting 
Counsel at that time.
    Chairman Thompson. So what did you do?
    Ms. Comstock. So I contacted the Office of Government 
Ethics. We discussed it.
    Chairman Thompson. Who did you talk to over there?
    Ms. Comstock. Marilyn Glynn in the Office of the General 
Counsel. We discussed it probably two times, I think two times, 
and came to the conclusion that under the regulations that 
apply to the reporting requirements and financial disclosure 
form that this arrangement did not constitute a gift that 
needed to be reported, under the gift reg definition.
    Chairman Thompson. Right. So did you report this back to 
Ms. Mills?
    Ms. Comstock. Yes, I did.
    Chairman Thompson. And your report to her basically was 
that it was OGE's opinion it did not need to be disclosed?
    Ms. Comstock. On the financial disclosure form.
    Chairman Thompson. On the financial disclosure forms.
    Ms. Comstock. Right.
    Chairman Thompson. Was there, in fact, any determination by 
OGE as far as you knew as to whether or not it was permissible 
to accept the loan guarantee at that point?
    Ms. Comstock. No, I never discussed that with them.
    Chairman Thompson. All right. Then you saw the public 
statements that were made that, in fact, OGE had, in fact, made 
a determination that it was permissible for them to accept the 
loan guarantee, I assume.
    Ms. Comstock. I did see them.
    Chairman Thompson. Then later, I think Mr. Potts said that 
the President has great latitude in what he can accept and that 
there was no reason to believe why this would not fall under 
that general umbrella, I think something along those lines; and 
if he had been asked, he would have addressed it more 
specifically. But he was not asked.
    Ms. Comstock. That is correct, sir. The President is 
exempted from the gift acceptance prohibitions by regulation.
    Chairman Thompson. Do you recall, was Mrs. Clinton 
officially a Senate candidate at that time?
    Ms. Comstock. No, I do not believe that she was.
    Chairman Thompson. Because that would raise additional 
questions. I am not sure what the answer to this is, but it 
looks to me like there are certain requirements that a Senate 
candidate has in terms of disclosure in addition to those of a 
President that a greater, perhaps, or certainly different than 
those of a President. So you have the situation where one 
spouse is President and the other one is a candidate for the 
Senate.
    Ms. Comstock. Right.
    Chairman Thompson. And the loan guarantee is for both of 
them.
    Ms. Comstock. That is correct----
    Chairman Thompson. That would have presented a pretty good 
law school question, wouldn't it?
    Ms. Comstock. It would be. My role was obviously only for 
the President's financial disclosure form.
    Chairman Thompson. But it was being used--well, you saw in 
the news accounts that Mrs. Clinton was using that--well, I 
said ``using''--was discussing that herself. When you knew that 
OGE had only passed on the disclosure question and that among 
the First Lady's spokespeople, anyway, they were saying that 
OGE had passed on the question of whether or not it was 
acceptable, did you talk to Ms. Mills about that and say there 
is some disconnect here? Or was there any discussion about 
that?
    Ms. Comstock. There was discussion, sir. There was actually 
no disagreement either between OGE or myself and anyone I 
talked to about what the Office of Government Ethics had--the 
question that they had answered. I am not familiar with how it 
became inaccurately, as far as I know, translated.
    Chairman Thompson. Did you ever talk to Ms. Mills about it?
    Ms. Comstock. Not that I recall.
    Chairman Thompson. Well, in a position such as that, you 
are advising Executive Branch employees with regard to ethics 
matters. You are dealing with the Office of Government Ethics. 
So your responsibility had to do with the President because he 
was the Executive officer. But OGE's response was being 
mischaracterized. I guess I find it somewhat unusual that there 
is no discussion about getting all this straight. Certainly 
somewhere along the line--I mean, Mr. Potts said that he wrote 
his letter complaining about this after he says that he had 
informed the White House that this was incorrect, and they 
still said it again.
    Ms. Comstock. Right. Excuse me, sir. I did--I don't recall 
discussing it with Ms. Mills. I did discuss it with other 
people. And if I may take a moment to----
    Chairman Thompson. See, all I am--the point here, I think 
the relevant point here has to do with not looking at things 
too narrowly and having a sensitivity to what is going on 
around you. You might have done it a little bit differently, 
perhaps, if you had it to do again in terms of questions that 
you might have asked.
    I would have thought, for example, that the question of 
whether or not this is permissible would be the logical, the 
most important question. I am not sure how something could have 
been prohibited--or you wouldn't have to disclose it and still 
it would not be permissible. I am not sure how that would work. 
But I just think that this is a very sensitive kind of 
situation and it is fraught with all kinds of difficulties and 
political pressures sometimes and back and forth, and it is 
very important, as I am sure you know, that you look at not 
only the narrow question that has been presented to you, but 
the obvious issues and warning flags that may be out there.
    Ms. Comstock. Mr. Chairman, I want to say very firmly that 
if I ever think that I see a violation or a possibility of a 
violation, that is my obligation to raise that, and I will 
always do that regardless of who the individual at issue is.
    That was not this case. As I indicated, the President is 
exempted from the gift acceptance prohibition, so, in fact, 
whether this financial arrangement would fall within the 
definition of a gift for the gift acceptance rules, which is a 
different definition of gift for the gift reporting rules, the 
answer to that was not viewed as relevant because those 
regulations do not apply to him.
    So what it came down to was two questions: Was it a 
reportable arrangement? And was it advisable?
    I did work on the question of whether it was reportable, 
but other people were participating in the conversations of 
whether it was advisable. And I did not see any violations or 
possible violations that I needed to raise with them. I did not 
see the need to second-guess their advising on that.
    Chairman Thompson. All right. Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you very much, Mr. Chairman.
    I want to welcome you, Ms. Comstock, to the Committee, and 
I also want to tell you that I know from firsthand experience 
that many of the staff members that you will be working with at 
OGE, assuming that you are confirmed, are very talented. I see 
many of them behind you, and I worked with them, oh, some 15 
years ago when I was Staff Director of the Subcommittee of 
Governmental Affairs that had jurisdiction over OGE. And, in 
fact, we did an extensive oversight hearing on the Office of 
Government Ethics.
    The office plays, in my view, an absolutely key role in 
ensuring that public officials uphold the highest ethical 
standards. The whole purpose of our ethics laws is to assure 
the public that Federal officials are making decisions that are 
free from conflicts of interest. The purpose of the law, thus, 
is to promote public confidence in the decisions of government 
officials.
    In that regard, I want to talk to you about the issue of an 
appearance of a conflict of interest. It is my understanding 
that the current regulations require a Federal official to look 
not only at whether he or she may have an actual conflict of 
interest but whether or not a reasonable person looking at the 
facts of the case would doubt that the decision of the Federal 
official was made free from any taint of improper influence. Is 
that accurate?
    Ms. Comstock. Yes, Senator. The statute at issue defines 
what would be a criminal conflict of interest, and then there 
are also government ethics regulations that cover the 
appearance of a conflict of interest.
    Senator Collins. And it is my understanding that you have 
overseen the ethics programs of some Federal agencies. Did you 
do that in the capacity of being the designated agency ethics 
officer?
    Ms. Comstock. No. I have in both places, the Department of 
Education and the White House, I have been the alternate 
designated agency ethics official.
    Senator Collins. You were the alternate----
    Ms. Comstock. Alternate.
    Senator Collins [continuing]. Designated----
    Ms. Comstock. Second.
    Senator Collins. But you are familiar with the regulations 
that govern how an official should deal with the appearance of 
a conflict of interest?
    Ms. Comstock. Absolutely, and I should say that, especially 
at the Department of Education, I directed the programs, but 
the structure, the layout was that I was the alternate.
    Senator Collins. And do you think that the guidance to 
Federal officials on how to deal with the appearance of a 
conflict of interest is important for public officials to 
follow?
    Ms. Comstock. Yes, I think it's very important for public 
officials to follow. The way that I have often viewed these 
rules and explained them to people who sometimes are angry with 
me or frustrated at the application of them is that, first off, 
they're designed--or the attempt is to write them so that they 
can be applied consistently and fairly to all employees. But 
the intent in many cases is to pull employees out of a 
situation where they personally would have to decide what is 
the right thing to do, what is the wrong thing to do. They're 
designed to keep them from having that struggle, either having 
to seek assistance or having to deal with that themselves. So 
the regulations I think do a pretty good job in this case on 
the appearance of a conflict of interest of laying out examples 
of scenarios of relationships--``covered relationships,'' as 
they are called--that could appear to be a conflict of 
interest. A former employer with whom you've worked for the 
last year, a relative, an organization that you're--the term is 
``active participant'' with in your personal capacity, or some 
other entity or person out there that you have such a close 
relationship with that if someone, a non-Federal person, was 
looking at your Federal dealings with them, they might say--
they would at least have the question: Is this being done 
fairly?
    And those rules are designed to even keep that question 
from ever having to be raised.
    Senator Collins. I think you have captured exactly what the 
purpose and the essence of those rules are. And I want to tell 
you about a case that, in my view, was very troubling from the 
perspective of trying to prevent exactly that kind of concern 
about whether or not the decision was made fairly.
    Senator Thompson and I recently held hearings on the GAO's 
findings about certain large Medicare overpayment settlements. 
GAO found numerous problems with the way these settlements were 
reached, and, in fact, the Federal Government recovered only 
about a third of the amount due. And none of the three 
settlements were handled in the normal course of following the 
agency's procedures for settling such overpayment cases.
    One of GAO's findings spoke exactly to the issue of the 
appearance of a conflict of interest. The head of the Health 
Care Financing Administration at that time, Bruce Vladeck, 
previously had served on the board of directors, twice, of the 
hospital whose payment--who was having the payment dispute with 
HCFA.
    In fact, Mr. Vladeck had resigned from the board of 
directors upon taking his position as the Administrator of the 
Health Care Financing Administration. It was only a month lag 
time.
    Now, he had served for some 3 years in the position of the 
Administrator of HCFA before getting involved in the settlement 
of this case, so here we did not have a case where he was 
violating the 1-year ban that would apply to an official 
getting involved in this case.
    But what we have here is the head of an agency playing a 
highly unusual role in directing and getting involved in the 
settlement of a multi-million-dollar claim in which ultimately 
the hospital only paid $25 million of the approximately $155 
million in overpayments. So there was a very large discrepancy 
between the amount the government felt it was owed and the 
amount that the case was ultimately settled for. And this 
official had very close ties to the board members of this 
hospital, to the head, the administrator of the hospital, and 
indeed had served on the board of the hospital.
    In such a situation--and let me also tell you the important 
fact that the testimony we had from lower-level civil servants 
who were involved in the settlement is that never before, 
except in these three cases, had the administrator gotten 
involved in directing that a settlement be reached.
    In a case like that, would it be prudent for the head of 
the agency to seek guidance from the agency ethics official and 
perhaps decide, because of the appearance problem, they recuse 
themselves from involvement in the dispute?
    Ms. Comstock. I think it's always appropriate to seek 
guidance. One of my goals is to ensure that an ethics program 
in each agency, that all officials in the agency have enough 
confidence in that program so that they don't view it as a step 
of last resort but as normal course of business to reach out 
and check on many issues. So I think it's always appropriate to 
seek guidance.
    In the facts that you laid out, obviously I need to----
    Senator Collins. I realize you are not familiar with the 
case.
    Ms. Comstock. I'm not familiar with the case, but given 
what you've told me, I do want to ask: Did he resign from the 
board position 1 month before? Or you also mentioned a 3-year 
period.
    Senator Collins. One month before taking his position as 
head of HCFA.
    Ms. Comstock. And then 3 years elapsed?
    Senator Collins. Then 3 years later----
    Ms. Comstock. I see. Under the--I still would always advise 
someone to seek guidance in that situation because, while the 
regulations set out a standard for an appearance that a 
reasonable person with knowledge of all the facts, all the 
relevant facts, how would they view this situation, first off, 
these regulations are only a minimum of behavior, and I think 
as Federal officials we can do better sometimes. And some 
situations simply aren't covered by that.
    At the Department of Education, we have, for example, a 
number of former superintendents of school districts who now 
are at the Department of Education, and I always advise them 
that if they as a head of a program at Education would be 
reviewing a decision that they made as superintendent--I don't 
care if it was 12 years ago--they need to recuse themselves 
from that because it simply will--it will raise more questions 
than it's worth.
    This situation would not fall within the 1 year, but I 
think it is one that should be talked out carefully because, 
again, the goal is to not draw into question what might 
otherwise be correct decisions. We now don't know whether that 
was a correct decision, and that's the waste of time, really, 
and the lack of credibility in Federal decisionmaking that we 
want to avoid.
    Senator Collins. I think you have hit on the key point. 
Because the normal procedures were not followed in many regards 
with respect to these overpayment settlements, and because of 
Mr. Vladeck's personal relationship with the hospital in 
question, we will never know whether or not the government got 
a good deal.
    Now, we know that the General Accounting Office thinks that 
the government did not get a good deal, and we know that a lot 
of the lower-level HCFA employees felt that the government did 
not get a good deal. But it tainted the whole process, and that 
is what is of most concern to me. And it also seems to me that 
even if a Federal official has received guidance on similar 
cases in the past, it is always wise to go back with the facts 
of that exact case. Would you agree with that?
    Ms. Comstock. I would agree with that. I do need to 
emphasize, based on the facts that you laid out, it doesn't 
sound like it's a technical violation, but this is the reason 
for having a strong ethics office and a good relationship, 
because either there are more facts which justify this person 
being involved; maybe there are facts that we don't understand 
which would make us feel better about the scenario. In that 
case I have given employees guidance in writing for their 
protection many times. Knowledge of all of the relevant facts 
is an awful lot of facts, and we sat down and worked through 
all of them. And I think that's important for the employee.
    So, yes, I think that this is an area--I really want to 
work with the DAEO's and all high-level officials to really 
encourage them to have a close working relationship with their 
ethics officer.
    Senator Collins. Thank you very much.
    Mr. Chairman, I would ask unanimous consent that the 
section from the General Accounting Office report that deals 
with conflict of interest concerns relating to the case that I 
discussed in which the GAO expressed its opinion that Mr. 
Vladeck should have been much more concerned about the 
appearance of his involvement and sought authorization to 
participate in the negotiations from the ethics officials 
within the agency be entered into the record.\1\
---------------------------------------------------------------------------
    \1\ The information submitted by Senator Collins appears in the 
Appendix on page 41.
---------------------------------------------------------------------------
    Chairman Thompson. It will be made part of the record, 
without objection.
    Senator Collins. Thank you. Senator Lieberman.

             OPENING STATEMENT OF SENATOR LIEBERMAN

    Senator Lieberman. Thanks, Mr. Chairman. And, Ms. Comstock, 
welcome to you and to your family. Your kids are absolutely 
adorable.
    Ms. Comstock. Thank you.
    Senator Lieberman. And irresistible. It is a pleasure to 
welcome you here.
    I had the pleasure of meeting with this nominee, Mr. 
Chairman. I was very impressed in the discussion that we had. I 
thought I would take just a moment to put on the record, 
because I am impressed by it--and I don't know that we see 
enough of it these days--by your own biographical story, which 
is that you grew up in Massachusetts, went to Bard College, law 
degree from the University of Michigan, and then spent a few 
years in private practice, but then came into public service, 
and that is the part that I wanted to describe with 
appreciation, serving in the Department of Education as an 
attorney in the Educational Equity Division and since then have 
just kept moving up the ladder.
    While at the Department of Education originally, Ms. 
Comstock won the Younger Federal Attorney Award, which is a 
national award given annually to five Federal attorneys under 
the age of 36 for outstanding service and sustained superior 
contribution. I presume that was relatively recently based on 
the age that has been---- [Laughter.]
    Ms. Comstock. Thank you, Senator.
    Senator Lieberman. You are welcome. Your husband nodded 
appreciatively.
    Ms. Comstock. He is a smart guy.
    Senator Lieberman. Obviously, as we know, currently serving 
as senior counsel in the Office of General Counsel at the 
Department of Education; prior to that, 15 months as Associate 
Counsel to the President.
    We have broad bipartisan support for your nomination, 
including receiving letters from Secretary Lamar Alexander, and 
we always want to mention the name here in this Committee when 
we receive notification from Senator Howard Baker--I turn 
graciously to my left--supporting your nomination.
    The short of it is I admire your long commitment to public 
service, and I appreciate your willingness to take on this 
assignment.
    I thought the line of Senator Thompson's questions about 
Mr. McAuliffe's guarantee of the mortgage were fair questions, 
and I appreciate your answers. I just want to come back to what 
may have been your final answer in the series of questions 
because it is important, which is to say that, in that case--
and I presume more generally--when asked a specific question, 
you would, of course, answer it to the best of your ability, 
but that in the position you previously held and, in fact, in 
some of the Education positions you have held that involved 
ethics, but certainly in the position for which you are 
nominated, if you saw any ethics violation or any concern that 
you had beyond the question that was asked, as I heard your 
response to Senator Thompson, you indicated that you would feel 
it your responsibility to speak to that concern and that 
potential violation.
    Ms. Comstock. Absolutely, I would, always.
    Senator Lieberman. I appreciate that. I understand in your 
role as Assistant General Counsel for Ethics at the Department 
of Education you were responsible for implementing the ethics 
program in that Department. I wonder if you would just take a 
moment to, if you will, discuss some of the larger challenges 
you faced in that job, what you have learned from those 
challenges, and how you think that experience will be 
applicable to your work as Director of the Office of Government 
Ethics, if it would be.
    Ms. Comstock. Certainly. I think, in fact, sir, one of the 
greatest challenges in the ethics field is to educate and work 
with employees to have them understand that these are not 
technical, bureaucratic rules, but that there is a purpose for 
protecting themselves as well as protecting the integrity of 
Federal service, and that is the reason behind these rules, and 
that to be viewed just as mere technical compliance rules does 
not really serve them well or the Federal Government.
    I believe that the positions that I held at Education 
especially required a lot of creativity in terms of training 
and as well in terms of working with the program offices. The 
standards of conduct go primarily to personal behavior and 
conflicts of interest between your personal life and your 
official position, but there are a lot of issues that also 
arise in terms of, especially at the Department of Education, 
the role of the Federal Government in partnership arrangements, 
for example, with non-governmental organizations, and those can 
be very exciting challenges, and they were at the Department of 
Education.
    I'm a firm believer that two entities with the same goal 
can achieve a lot more together than they can separately, which 
actually goes back also to the effort that we might--I hope we 
undertake to streamline and coordinate the nominations process. 
If we work cooperatively, we get a lot farther.
    I worked very hard on those efforts at the Department of 
Education, and I think it benefited the ethics program because 
it incorporated the work of the ethics program into the work of 
the Department. If it remains a separate office off in the 
corner that you only go to when you think you might have a 
regulatory ``cite the reg'' violation, I think it will never be 
a successful program.
    Senator Lieberman. I appreciate the answer. As we all know 
who live this life, in this time in our history we are all on 
notice that you have got to accept the rules of ethics as more 
than law or regulation because the public or the media, at 
least, will go, may well go beyond that. So you are absolutely 
right. It can't be something over here. It has got to be 
integrated into the normal conduct of not only our duties but 
in these times into our lives. And as a friend back in 
Connecticut who is in State Government says, it is not a 
question of whether you are doing something illegal. Presumably 
you were never doing something illegal. It is not a question of 
whether you do something unethical. Presumably you would always 
try not to do something unethical. The question is--and this is 
a tough question--whatever you are doing, presuming it is legal 
and ethical, can you explain it to the satisfaction of the 
public when it turns up on the front page of your local 
newspaper or on the evening news?
    I do think that is a frame of mind, and so I appreciate 
your answer very much.
    Again, I thank you for your interest. I appreciate the fact 
that the Chairman has convened this hearing. I hope we can move 
your nomination along expeditiously. I know we have a letter 
from the current holder of this position, Mr. Potts, who tells 
us he is leaving on August 14, and he hopes that we can confirm 
you at least certainly before than so there can be a smooth 
transition. And I share that hope. Thanks very much.
    Ms. Comstock. Thank you, Senator.
    Senator Lieberman. Thank you, Mr. Chairman.
    Chairman Thompson. Thank you. Senator Levin.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you, Mr. Chairman. And let me note my 
admiration of your many accomplishments, not the least of which 
is that you got a law degree from the University of Michigan 
Law School.
    Ms. Comstock. I did. Wonderful law school.
    Senator Levin. I have no further questions. [Laughter.]
    Over the years, Congress has expressed concern about the 
unevenness of ethics programs among the various agencies, and 
we have taken some steps to try to avoid that unevenness. What 
is your opinion about the consistency of ethics programs among 
the agencies and whether OGE is doing a good job to try to 
achieve that consistency?
    Ms. Comstock. I believe there is still some unevenness in 
the ethics program. I'm happy to say that the Office of 
Government Ethics has often cited the Department of Education 
as having an excellent ethics program. I'd like to think I 
contributed to that.
    I do believe there is some unevenness, and I think it needs 
to be addressed. As a matter of fact, I know there's some 
unevenness, in my own experience.
    The way that the Executive Branch ethics program is 
structured, obviously the Office of Government Ethics is 
responsible for overseeing these programs and providing 
leadership in policies. But the structure would fall apart 
without strong programs and strong designated agency ethics 
officials in each agency and department. It depends on that.
    I believe that we have a few opportunities to work to 
strengthen the programs in various agencies. One is with the 
transition arising, coming forward, the new people coming in. 
It's the best opportunity to explain to people coming into the 
Federal Government this structure and the need for a strong 
DAEO, if it's someone who is going to be appointed, and for the 
close working relationship that they need to establish with 
that person.
    I also believe, in terms of OGE's regular contact with the 
agencies, that the program reviews that OGE conducts of 
agencies every 3 years, I believe--maybe every 4--could address 
quality issues more. My experience with it is that they have 
been more technical in terms of timeliness, and I would like to 
see that move towards providing technical assistance, quality--
advice on the quality of advice that the agency offices give to 
the employees, and those--at this time those are the two areas 
that I'm thinking of.
    Senator Levin. Current law requires a 1-year cooling-off 
period for most top-level government officials from lobbying 
their former agencies, as reference has been made. The 
President has required that his own top officials agree to an 
additional 4 years.
    Ms. Comstock. Correct.
    Senator Levin. Making this a 5-year cooling-off period 
relative to those Presidential appointees.
    What is your personal opinion about the 1-year requirement 
under current law versus the 5-year requirement required by the 
President? And should we amend the 1-year requirement and make 
it stricter?
    Ms. Comstock. My opinion, based on my own experience as 
well as numerous conversations with people who are thinking of 
coming into government service, is that the 1-year statutory 
cooling-off period for high-level government officials, which, 
depending on their position, could either apply to their own 
agency or to high-level government officials across the 
Executive Branch, is appropriate. The 1 year requirement seems 
to adequately balance the need for a cooling-off period so that 
one can't immediately benefit from the access and the power you 
might still have in your former agency while not being so 
lengthy that it makes it difficult for you to find another job 
in your field, and I don't think we really want to have rules 
that require that the government service be your last position 
in life.
    So, actually, my opinion is that the 1 year is appropriate.
    Senator Levin. You have mentioned a number of times in your 
answers to prehearing questions some concerns that you have 
about the burdens which are imposed on top Federal employees in 
filing their financial disclosure forms, including with respect 
to evaluation of the value of their assets. The forms don't 
require precise amounts at the moment. They use ranges. But 
there is still in many instances a burdensome evaluation 
problem.
    Would you take a look at those forms as well as the forms 
that have to be filled out by people who have been nominated 
for office after you are confirmed, if you are confirmed--which 
hopefully you will be promptly? Would you take a look at those 
forms and recommend where we can, consistent with a high level 
of ethical concern, reduce the burdens on applicants and on 
form filers? We try to do this for the public. We require OMB 
to go through forms and try to reduce paperwork requirements, 
and I think it would be useful here, as well. There is always a 
fear if we reduce or change any of these that there will be an 
accusation that we are weakening our ethics laws. And I think 
this Committee surely doesn't want to do anything like that, 
and I don't want to do anything like that. But I would like to 
reduce the burdens where we can consistent with a high level of 
ethics.
    If you could, after confirmation, go through these forms 
and make recommendations as to where forms could be simplified 
and make life a little bit easier for people either in office 
or being considered for office without any reduction of ethical 
concerns, I think you would be making a contribution. Could you 
do that?
    Ms. Comstock. I will commit to doing that. If the purpose 
of the forms is to highlight areas of potential conflict of 
interest, I do believe there are places where the Office of 
Government Ethics could recommend to this Committee that 
legislative changes be made that would not diminish the 
conflicts analysis.
    Senator Levin. Thank you.
    And then, Mr. Chairman, I just had a request. I understand 
that Senator Collins put a portion of a GAO report relative to 
Dr. Vladeck in the record, and I think for completeness and 
fairness, I would ask that his testimony relative to the 
recusal request that he did make on a similar matter be placed 
in the record where he was told by his DAEO that he should not 
have recused himself.\1\ It was testimony along that line. I 
don't remember precisely----
---------------------------------------------------------------------------
    \1\ The information submitted by Senator Levin appears in the 
Appendix on page 43.
---------------------------------------------------------------------------
    Chairman Thompson. I was going to leave the record open for 
about 10 days, so within that time, would you like to submit 
the relevant portion?
    Senator Levin. I would. Thank you, Mr. Chairman.
    Chairman Thompson. All right. That will be made a part of 
the record.
    Thank you very much.
    I may say to both my colleagues while we are here--we 
discussed it briefly earlier--on the point Senator Levin was 
making that I think it is a very good point. We have talked 
with Ms. Comstock about working with us perhaps with some 
bipartisan legislation to streamline the nomination process, 
for example. I think that we are all coming to the conclusion 
now that perhaps it is becoming too burdensome for people who 
want to do some public service.
    We are awfully concerned because we still see these numbers 
that in this time of peace and prosperity, the level of public 
trust in public institutions is still going down, especially 
among our young people. And we have tried to respond to that 
with ethical rules and disclosure rules, both in the 
Legislative Branch and the Executive Branch, and all of that is 
good. But I think we are coming to the point now where we 
realize it is a point of diminishing returns. You can make 
things so burdensome that you defeat your purpose, and you are 
never going to be able to address that overall public 
perception issue with paperwork. It is going to be things more 
basic than that.
    So we have to do what we ought to do, but maybe not more 
than what we ought to do. So that is what we look forward to 
working with you on and trying to strike that balance. I know 
much of this, most of it, is in the form of regulation as 
opposed to legislation. But perhaps we can work together on 
some legislation that will set some new parameters.
    I would suggest we leave the record open for 10 days. 
Without objection, we will provide for any additional written 
questions that might be submitted for the record. We appreciate 
your testimony very much today and your public service, and we 
look forward to moving promptly on this nomination.
    Senator Lieberman, do you have any further comment?
    Senator Lieberman. None at all. I thank the nominee for her 
interest. I think she is a superb choice for this position, and 
I do look forward to working together with you, and with you, 
Ms. Comstock, on the overall problem that the Chairman has 
talked about. I know you talked about it earlier, which is the 
way in which we can maintain obviously an appropriate ethical 
standard and filter, but also make it easier for people to come 
into public service. I mean, this is circular.
    Obviously, one of the reasons why the public has this 
disregard, particularly young people, is because of their 
perception that the standard of ethics is not as high as it 
should be here.
    On the other hand, we have set up some bureaucratic hurdles 
that discourage some of the best people from coming in, and I 
think together we can overcome those two ironies or 
difficulties and both raise up public perception of people in 
public life, but also encourage thereby more good people to 
come in.
    Ms. Comstock. I hope so.
    Senator Lieberman. So thank you very much. I wish you and 
your family well.
    Ms. Comstock. Thank you.
    Senator Lieberman. Thanks, Mr. Chairman.
    Chairman Thompson. Thank you very much.
    The hearing is adjourned.
    [Whereupon, at 11:00 a.m., the Committee was adjourned.]
                            A P P E N D I X

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