    [House Hearing, 107 Congress]
    [From the U.S. Government Publishing Office]

            H.R. 1081, THE ACCOUNTABILITY FOR PRESIDENTIAL GIFTS ACT

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

                                    HEARING

                                   before the

                     SUBCOMMITTEE ON GOVERNMENT EFFICIENCY,
                            FINANCIAL MANAGEMENT AND
                          INTERGOVERNMENTAL RELATIONS

                                     of the

                         COMMITTEE ON GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                   H.R. 1081

     TO AMEND TITLE 44, UNITED STATES CODE, TO DIRECT THE ARCHIVIST OF THE
       UNITES STATES TO MAINTAIN AN INVENTORY OF ALL GIFTS RECEIVED FROM
      DOMESTIC SOURCES FOR THE PRESIDENT, THE EXECUTIVE RESIDENCE AT THE
               WHITE HOUSE, OR A PRESIDENTIAL ARCHIVAL DEPOSITORY

                                   __________

                                 JUNE 18, 2002

                                   __________

                               Serial No. 107-204

                                   __________

           Printed for the use of the Committee on Government Reform

      Available via the World Wide Web: http://www.gpo.gov/congress/house
                          http://www.house.gov/reform

                                     ______

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                                WASHINGTON : 2003
    ____________________________________________________________________________
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                         COMMITTEE ON GOVERNMENT REFORM

                         DAN BURTON, Indiana, Chairman
    BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
    CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
    CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
    ILEANA ROS-LEHTINEN, Florida         EDOLPHUS TOWNS, New York
    JOHN M. McHUGH, New York             PAUL E. KANJORSKI, Pennsylvania
    STEPHEN HORN, California             PATSY T. MINK, Hawaii
    JOHN L. MICA, Florida                CAROLYN B. MALONEY, New York
    THOMAS M. DAVIS, Virginia            ELEANOR HOLMES NORTON, Washington,
    MARK E. SOUDER, Indiana                  DC
    STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
    BOB BARR, Georgia                    DENNIS J. KUCINICH, Ohio
    DAN MILLER, Florida                  ROD R. BLAGOJEVICH, Illinois
    DOUG OSE, California                 DANNY K. DAVIS, Illinois
    RON LEWIS, Kentucky                  JOHN F. TIERNEY, Massachusetts
    JO ANN DAVIS, Virginia               JIM TURNER, Texas
    TODD RUSSELL PLATTS, Pennsylvania    THOMAS H. ALLEN, Maine
    DAVE WELDON, Florida                 JANICE D. SCHAKOWSKY, Illinois
    CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
    ADAM H. PUTNAM, Florida              DIANE E. WATSON, California
    C.L. ``BUTCH'' OTTER, Idaho          STEPHEN F. LYNCH, Massachusetts
    EDWARD L. SCHROCK, Virginia                      ------
    JOHN J. DUNCAN, Jr., Tennessee       BERNARD SANDERS, Vermont
    JOHN SULLIVAN, Oklahoma                  (Independent)

                          Kevin Binger, Staff Director
                     Daniel R. Moll, Deputy Staff Director
                         James C. Wilson, Chief Counsel
                         Robert A. Briggs, Chief Clerk
                     Phil Schiliro, Minority Staff Director

        Subcommittee on Government Efficiency, Financial Management and
                          Intergovernmental Relations

                       STEPHEN HORN, California, Chairman
    RON LEWIS, Kentucky                  JANICE D. SCHAKOWSKY, Illinois
    DOUG OSE, California                 MAJOR R. OWENS, New York
    ADAM H. PUTNAM, Florida              PAUL E. KANJORSKI, Pennsylvania
    JOHN SULLIVAN, Oklahoma              CAROLYN B. MALONEY, New York

                                   Ex Officio

    DAN BURTON, Indiana                  HENRY A. WAXMAN, California
              J. Russell George, Staff Director and Chief Counsel
                           Henry Wray, Senior Counsel
                            Justin Paulhamus, Clerk
                         Michelle Ash, Minority Counsel

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on June 18, 2002....................................     1
        Text of H.R. 1081............................................     3
    Statement of:
        Carlin, John W., Archivist of the United States; P. Daniel
          Smith, Special Assistant to the Director, National Park
          Service, Department of the Interior; Scott Harshbarger,
          president and chief executive officer, Common Cause; Paul
          C. Light, director, center for public service, the
          Brookings Institution; and.................................    23
        Maloney, Hon. Carolyn B., a Representative in Congress from
          the State of New York......................................    16
        Mink, Hon. Patsy T., a Representative in Congress from the
          State of Hawaii............................................    19
        Ose, Hon. Doug, a Representative in Congress from the State
          of California..............................................     7
    Letters, statements, etc., submitted for the record by:
        Carlin, John W., Archivist of the United States, prepared
          statement of...............................................    26
        Harshbarger, Scott, president and chief executive officer,
          Common Cause, prepared statement of........................    44
        Light, Paul C., director, center for public service, the
          Brookings Institution, prepared statement of...............    54
        Maloney, Hon. Carolyn B., Representative in Congress from the
          State of New York, prepared statement of...................    18
        Mink, Hon. Patsy T., a Representative in Congress from the
          State of Hawaii, prepared statement of.....................    21
        Ose, Hon. Doug, a Representative in Congress from the State
          of California, prepared statement of.......................    12
        Smith, P. Daniel, Special Assistant to the Director, National
          Park Service, Department of the Interior, prepared
          statement of...............................................    35
        Walden, Gregory S., esquire, Patton Boggs LLP, prepared
          statement of...............................................    66

            H.R. 1081, THE ACCOUNTABILITY FOR PRESIDENTIAL GIFTS ACT

                                  ----------

                             TUESDAY, JUNE 18, 2002

                      House of Representatives,
      Subcommittee on Government Efficiency, Financial
            Management and Intergovernmental Relations,
                                Committee on Government Reform,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10:04 p.m., in
    room 2154, Rayburn House Office Building, Hon. Stephen Horn
    (chairman of the subcommittee) presiding.
        Present: Representatives Horn, Ose, and Maloney.
        Staff present: J. Russell George, staff director and chief
    counsel; Bonnie Heald, deputy staff director; Henry Wray,
    senior counsel; Justin Paulhamus, clerk; Chris Barkley,
    assistant; Michael Sazonov, Sterling Bentley, Freddie Ephraim,
    and Joe DiSilvio, interns; Barbara Kahlow, deputy staff
    director, Subcommittee on Energy Policy, Natural Resources and
    Regulatory Affairs; Michelle Ash, minority counsel; and Earley
    Green, minority assistant clerk.
        Mr. Horn. A quorum being present, the Subcommittee on
    Government Efficiency, Financial Management and
    Intergovernmental Relations will come to order.
        Today, the subcommittee will consider a bill drafted by our
    colleague, Mr. Ose from California. The bill is H.R. 1081, the
    Accountability for Presidential Gifts Act. As its name implies,
    the purpose of this bill is to improve accountability over the
    thousands of gifts that are given to the President, to the
    executive residence at the White House, or a Presidential
    archival depository.
        Currently, six different government agencies have a hand in
    recording and managing Presidential gifts. That multiplicity of
    duties involving these gifts can lead to confusion and create
    unwarranted problems. Indeed, an investigation conducted by Mr.
    Ose's Subcommittee on Energy Policy, Natural Resources and
    Regulatory Affairs found very serious problems involving the
    Presidential gifts during the Clinton administration. The
    problems that Mr. Ose's subcommittee identified affected
    virtually every aspect of gift administration, including
    tracking and reporting on gifts, establishing their value,
    determining whether they were intended as personal gifts or as
    gifts to United States, and ensuring their proper disposition.
    H.R. 1081 would require the National Archives and Records
    Administration to maintain a comprehensive inventory of all
    Presidential gifts from sources other than foreign governments.
    All information in the inventory would be subject to public
    disclosure. Mr. Ose will describe the flaws in the existing
    systems and how his bill will correct them.
        Administration officials and others believe that
    legislation is not needed at this time. They maintain that the
    current administration has already changed the process to
    address the problems of the past.
        In addition, they raise concerns about whether the National
    Archives should be responsible for administrating an inventory
    of Presidential gifts. Our witnesses today will present a full
    range of views on H.R. 1081. I welcome each of you, and I look
    forward to your testimony. And, Mr. Ose, the author.
        [The text of H.R. 1081 follows:]

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        [GRAPHIC] [TIFF OMITTED] T6825.002

        [GRAPHIC] [TIFF OMITTED] T6825.003

        [GRAPHIC] [TIFF OMITTED] T6825.004

        Mr. Ose. Thank you, Mr. Chairman.
        Mr. Horn. The author. And, please proceed.
        Mr. Ose. Thank you, Mr. Chairman. I do have a lengthy
    statement. I would beg the chairman's indulgence.
        Mr. Horn. Take your time. The ranking member is not here,
    and she also would like to speak on this.

     STATEMENT OF HON. DOUG OSE, A REPRESENTATIVE IN CONGRESS FROM
                        THE STATE OF CALIFORNIA

        Mr. Ose. All right. Mr. Chairman, as always, you have
    convened a hearing that is important to our ability as a
    country to govern. The American people have a right to know
    what gifts were received and retained by their President.
    Donors of those gifts should receive no unfair advantage in the
    policymaking process or other governmental benefits by virtue
    of their gift. Several laws involving six Federal offices and
    agencies govern the current system for the receipt, valuation,
    and disposition of Presidential gifts. Unfortunately, no single
    agency or person is ultimately responsible for tracking
    Presidential gifts.
        In early 2001, there were press accounts of President
    Clinton's last financial disclosure report and furniture gifts
    returned by the Clintons to the White House residence. To
    prevent future such abuses, I drafted a bill and asked Mr.
    Waxman to become an original cosponsor. At his suggestion, the
    Government Reform Subcommittee on Energy Policy, Natural
    Resources and Regulatory Affairs, which I chair, spent 11
    months gathering the empirical data to support this legislative
    effort. The subcommittee investigated how the current system
    works and what legislative changes, if any, were needed to
    prevent future abuses of the Presidential gifts process.
        In March 2001, I introduced H.R. 1081, the Accountability
    for Presidential Gifts Act. This bill establishes
    responsibility in one agency for the receipt, valuation, and
    disposition of Presidential gifts. On February 12th of this
    year, my subcommittee held a hearing to present the results of
    its 1-year investigation and to receive comments on the bill.
    At the hearing, I released a 55-page document summarizing the
    subcommittee's findings.
        Mr. Chairman, I ask that you include my February 12th
    opening statement and that particular document in today's
    hearing record.
        Mr. Horn. Without objection, it is so ordered.
        Mr. Ose. Today I would like to summarize the following: How
    the current system works, my subcommittee's investigation, and
    findings and recommendations made in my subcommittee's hearing.
        Here is how the current system works. The White House--you
    are going to have to pay attention because it's complicated.
    The White House Gifts Unit is responsible for recording all
    domestic and foreign gifts received by the First Family,
    including the valuation and disposition of gifts. Under the
    Presidential Records Act of 1978, the National Archives and
    Records Administration--which we are going to refer to as NARA
    from now on--accepts gifts for Presidential libraries and
    stores Presidential gifts that are not immediately retained by
    the President but which can be recalled for possible retention
    by the President.
        Under a second law, the Department of the Interior's
    National Park Service annually makes a snapshot inventory of
    public property in or belonging to the White House residence.
    In addition, the National Park Service initially accepts gifts
    for the White House residence.
        Under a third law, the Office of Protocol in the Department
    of State annually publishes a listing of all gifts, both
    tangible and monetary, from a foreign government to a Federal
    employee, including to the First Family.
        Under a fourth law, the Office of Government Ethics
    receives annual financial disclosure reports from the President
    for gifts retained over a reporting threshold. That threshold
    is currently set at $260 in value from any source other than a
    relative.
        Last, the General Services Administration has staff
    assigned to the White House Gifts Unit, and is responsible for
    updating the reporting threshold for gifts and for disposing of
    some gifts which are not retained by the President or sent to
    NARA. General Services Administration's regulations require a
    commercial appraisal for foreign gifts over a reporting
    threshold--that is, a certain value--that a Federal employee,
    including the President, wishes to retain.
        In contrast, there is no statutory requirement for a
    commercial appraisal for domestic gifts over a reporting
    threshold. So, you see one difference there between foreign
    versus domestic gifts.
        In its investigation, my subcommittee examined the National
    Park Service's annual inventory and other records for the White
    House residence, the financial disclosure reports still in the
    Office of Government Ethics' files, NARA's data base for the
    former administration, and the White House Gifts Unit data base
    for the former administration. The investigation revealed
    startling information about retained gifts, valuation of gifts,
    missing gifts, legal rulings about gifts, and other findings.
        The White House gifts system had 94,178 gift records--many
    of which had more than one item on them--to the former First
    Family during the two-term presidency that they served. The
    former First Family retained one or more gifts at 16 percent of
    these gift records. That would be 14,770 such records.
        The former President disclosed on his annual financial
    statements less than 2 percent of these retained gifts. Of
    those--just to be exact, Mr. Chairman, of the 14,770 that were
    retained, 227 of them were disclosed on the annual financial
    statements, and each of those 227 were valued at $260 or more.
    These 227 gifts that were disclosed had a total valuation of
    $361,968. That's according to the disclosure statements.
        An additional 26 retained gifts of $260 or more were not
    disclosed on these annual financial statements.
        The former First Family was not required to disclose an
    additional 98 retained gifts which were each valued just below
    the threshold--that would be in the $240 to $259 range. These
    98 gifts totaled just over $24,000 in value; 49 percent of
    these gifts--of these 98--were never appraised or otherwise
    independently valued.
        The subcommittee found that 69 percent of certain fair
    trade gifts--that is, brand name goods widely sold--were
    undervalued. Chart 3-C, which is right over here, includes
    examples of non-fair trade items which were probably
    undervalued, such as various collector's items. Some gifts were
    misplaced or lost. Let me repeat that. Some gifts were
    misplaced or lost. For example, a seven-foot, three-inch by
    six-foot, two-inch oriental rug valued on the disclosure form
    at $1,200, and an inscribed Tiffany silver box valued at $271,
    were both, ``on loan in the residence,'' but later, ``misplaced
    by a staff member, never conveyed to the President.'' I think
    we have a gift record on display over there to quantify that.
        The White House Counsel made some unusual rulings relating
    to gifts, which, frankly, were oddly reflected in the treatment
    of the gifts. For example, in the year 2000, counsel advised,
    ``it would be a bad idea to accept,'' 10 shares of GE stock;
    and, as a result, the gift was returned to the sender. However,
    in 1997, there was a gift of 15 shares of Coca-Cola stock
    valued at $1,027 that the First Family chose to retain.
        The Office of Government Ethics' rules state that a Federal
    employee shall not solicit a gift. I can cite you, Mr.
    Chairman, the actual place where it is, if you would like.
        Nonetheless, in December 2000, after the former First Lady
    was elected a U.S. Senator but before her term began and she
    would be subjected to the Senate's gift rules, the former First
    Lady received $38,617 in china and sterling silver gifts
    purchased from Borsheim's in Omaha, NE. If you will look over
    here at Chart 1-B, you will see them listed. Unlike gifts from
    Tiffany's or Neiman Marcus or other fancy retailers which only
    require the name of the intended gift recipient to see his or
    her gift registry, Borsheim's Web site says, ``Friends Wish
    List. View a friend's wish list. You will need their e-mail
    address and wish list password.'' We have three more charts
    over there on display just to give you some sense of that.
        What this means is that a donor who purchased these gifts
    from Borsheim's needed to know both the former First Lady's
    personal e-mail address and personal password to access the
    registry and purchase items from her wish list.
        $94,365 in 45 furniture gifts are especially remarkable in
    their complexity. We have another chart down here that goes
    through those. Usually, the chief usher for the executive
    residence decides if items should be accepted for the executive
    residence, and then the National Park Service sends an official
    thank-you letter as proof for the donor of his or her
    contribution to the Federal Government. However, in March 1993,
    the deputy counsel to the President directed the chief usher--
    this is unbelievable--directed the chief usher that certain
    items already received by the White House and certain items not
    yet received were to be accepted by the National Park Service
    for the executive residence. So, in effect, we were accepting
    gifts that hadn't yet been offered.
        It is illegal to remove U.S. Government property. For
    instance, Mr. Chairman, you and I can't take our chairs home
    from where they sit behind our desks. After unfavorable press
    reports in February and March 2001, the former First Family
    returned 25 furniture items to the National Park Service.
    However, in September of that year, the National Park Service
    apparently returned two of these items back to the former First
    Family since neither had been officially accepted by the
    National Park Service for the White House residence. This
    points out a particular flaw in that we receive them and then
    for some reason or another the National Park Service didn't get
    the acceptance done, so in effect they legally remain the
    property of the First Family.
        The question really then arises as to who got credit for
    giving them.
        In addition, four furniture gifts were never disclosed on
    the former President's annual financial disclosure reports
    since the White House Counsel's Office stated that they were,
    ``accepted,'' prior to the inauguration--that would be in
    January 1993--even though they were not received in the White
    House until July 20, 1993, 6 months after the inauguration.
        So here we had a counsel saying you have to accept these
    gifts that haven't yet been offered, and then we have a second
    counsel saying it was a mistake to accept these gifts.
        Last, the former First Family still have 21 more furniture
    items, none of which ever appeared in National Park Service's
    White House annual June inventory. Nineteen of these items,
    valued at $38,328, were received on December 1, 2001. That is,
    after the former First Lady was elected a U.S. Senator but
    before her term began.
        The recommendations in the February hearing were as
    follows--and were received from these individuals as follows:
    Scott Harshbarger as President and CEO of Common Cause; Paul
    Light, the Director of Center for Public Service at Brookings
    Institute; Gregory S. Walden, a former associate counsel in the
    White House Counsel's Office, a former associate counsel in the
    White House Counsel's Office for President Bush, President Bush
    41, and former ethics counsel for President-Elect George W.
    Bush's transition. And he is currently of counsel to Patton
    Boggs LLP, and the Honorable William H. Taft, IV, at the
    Department of State.
        All three witnesses on panel one, that is, Messrs.
    Harshbarger, Light, and Walden, in their written statements or
    response to Member questions recommend that I refer this matter
    for criminal investigation by the Department of Justice.
        On February 13th, I sent the Attorney General evidence
    relating to the solicitation, receipt, failure to report or
    conversion of Presidential gifts by the former President and
    First Lady. One of the documents I forwarded was Mr. Walden's
    written statement in a section captioned, ``Evidence of
    widespread or systemic failures should be investigated,'' he
    concluded that such evidence could form the basis for a
    Department of Justice investigation of possible violations of
    18 U.S. Code, Subsection 1001 regarding false statements, 18
    U.S. Code, Subsection 641 regarding conversion of Federal
    property, and 5 CFR Subsection 2635.202(c)(1), (2), and (j)
    regarding solicitation of a gratuity.
        Additionally, witnesses recommended that H.R. 1081 be
    amended to, first, disclose all gifts received over a minimal
    threshold; cap gifts over a certain threshold, excepting
    therefrom personalized honorific awards and gifts from
    relatives or foreign officials; prohibit acceptance of gifts
    during certain periods, and prohibit by statute the
    solicitation or coordination of gifts. After today's hearing, I
    intend to prepare amendments to my bill for consideration at a
    future markup.
        In conclusion, the total value of gifts retained by the
    former First Family creates an appearance problem. The fact
    that so many gifts were undervalued raises many questions. The
    fact that gifts were misplaced or lost shows, at best, sloppy
    management and maybe something more. The fact that U.S.
    Government property that is the taxpayers' property, was
    improperly taken is very troubling. And, the fact that, after
    the former First Lady's election to the U.S. Senate before she
    was subject to the Congress' strict gift acceptance rules, she
    managed to schedule the acceptance of nearly $40,000 worth in
    furniture gifts, and that she participated in what appears to
    be a solicitation for $40,000 in fine china and silver, is
    disturbing at best. The fact of the matter is, public servants,
    including the President, including the members of the First
    Family, should not be able to enrich themselves with lavish
    gifts at any time whatsoever.
        Mr. Chairman, the current system is broken and needs to be
    fixed. I believe that H.R. 1081 is a necessary first step, and
    I commend it to the committee. Thank you.
        [The prepared statement of Hon. Doug Ose follows:]

        [GRAPHIC] [TIFF OMITTED] T6825.005

        [GRAPHIC] [TIFF OMITTED] T6825.006

        [GRAPHIC] [TIFF OMITTED] T6825.007

        [GRAPHIC] [TIFF OMITTED] T6825.008

        Mr. Horn. I thank the gentleman. And now I am delighted
    that this morning we have Mrs. Maloney of New York and former
    ranking member on this subcommittee. And we are glad to see her
    back. So we are glad to see you.

        STATEMENT OF HON. CAROLYN B. MALONEY, REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEW YORK

        Mrs. Maloney. Thank you, Mr. Chairman. And I really want to
    go on record in thanking you for your leadership and dedication
    in protecting the public's interests. I regret that you have
    made a decision not to run for reelection, but you have
    provided extraordinary leadership in this Congress and campaign
    finance reform and protecting families, working families, and
    just being plain fair to the minority and to the people of
    America.
        But today it's an important hearing, and we will hear from
    experts from the executive branch as well as representatives
    from good, government watchdog organizations on the
    effectiveness or lack thereof of the current Presidential Gift
    Reporting Act.
        From the beginning, Presidents and their families have
    received gifts. Take examples from the last three Presidents
    and--just to mention some of the gifts that they received:
    According to press accounts, the Reagans were given a $2.5
    million retirement home in Bel Air. President George and Mrs.
    Barbara Bush were given a barbecue pit for their home. And
    china and furniture was given to the Clintons.
        I am really not surprised by the generosity of American
    citizens. The First Family in many ways is loved and admired by
    millions of Americans and really watched like goldfish in a
    bowl. Today we will review whether or not the First Family have
    the right to accept gifts personally, and do they have some
    rights to privacy? What do and when should gifts be accepted on
    behalf of the U.S. Government and the American people? What are
    the limits? What triggers a personal gift or a gift to the
    Nation?
        I support measures that add clarity to a confusing system.
    It is unfair to past presidents and the current occupant of the
    White House to require our Nation's leader to comply with a
    system that is flawed and unclear.
        The Clintons had the White House ushers and curators
    offices' review and approve everything they removed from office
    or removed from the White House; yet, we saw a torrent of bad
    press stories last year when they left the White House.
        I am deeply interested in today's testimony regarding Mr.
    Ose's bill. At this point I don't know whether Mr. Ose's bill
    or Mrs. Mink's bill is the correct fix, if more aggressive
    oversight by Congress is the answer, or if internal changes or
    modifications by the White House or Archivist's Office will
    suffice. I look forward to hearing the testimony of today's
    witnesses.
        Again, a system is not a functioning system if the First
    Family follows the rules but still manages to be hurt by them.
    Bad policy not only impacts the President and First Lady, but
    helps to undermine the confidence of the American people in our
    government.
        And I would like to just respond to some of the allegations
    that Mr. Ose made in his 56-page report and in his opening
    comments. He alleged that the gifts to the past President and
    First Lady were undervalued. Yet, the White House Gift Unit of
    past administrations used certified appraisers, and the Clinton
    administration followed the same practice. The White House Gift
    Unit has for the Clintons and past administrations used donor
    or store information from which the item was purchased as a
    basis for gift valuation where the cost of the item is
    available. No First Family in recent times has been responsible
    for gift valuation. It's done by the House Gift Unit. So if
    it's undervalued, then the person or the organization that made
    the mistake is the House Gift Unit.
        The House Gift Unit has not needed to appraise items such
    as hats, t-shirts, coffee mugs, handkerchiefs, hairbrushes, or
    calendars, as they are obviously below the reporting threshold.
        And one thing that was missing from the report that,
    despite the fact that the prior administration followed the
    rules that are in place--I'm not saying that the rules might
    need to be changed. But they followed the rules that were in
    place, and they still took the unprecedented step of paying
    back--according to press accounts--$86,000 for gifts in 2000,
    including china and silver, for which they really, under the
    present gift guidelines, were not obligated to pay.
        But I look forward to the testimony, and I thank the
    chairman for his leadership on so many important issues in this
    Congress. And I wish you would run for reelection, Mr.
    Chairman. We are going to miss you.
        [The prepared statement of Hon. Carolyn B. Maloney
    follows:]

    [GRAPHIC] [TIFF OMITTED] T6825.009

        Mr. Horn. You are welcome to the precinct in Long Beach,
    California. You'd have to see the legislature and use your
    charm on them.
        Mrs. Mink. She is on panel one. And we are delighted to
    have the distinguished Member from Hawaii. And she has a bill
    here, and we want to hear it.

      STATEMENT OF HON. PATSY T. MINK, REPRESENTATIVE IN CONGRESS
                        FROM THE STATE OF HAWAII

        Mrs. Mink. Thank you very much, Mr. Chairman, and members
    of the subcommittee. I introduced H.R. 4776 a few months ago,
    and that bill actually is the product of an earlier hearing
    that I was privileged to attend in which this whole matter of
    Presidential gifts was discussed and testimony taken with
    respect to the flaws in the current system and things that
    needed to be corrected.
        I am not really here to oppose our colleague Mr. Ose's
    bill, but to really advocate that we could avoid all of this
    embarrassment to the White House in the future if you would
    consider the bill which I proposed, which would literally make
    it impossible for the White House or the First Lady to accept
    any gift that was more valuable than $50, which is the current
    Senate rule.
        It seems to me that if you go through the process of trying
    to streamline the current system, you only create and aggravate
    the situation. So I have come to the conclusion that, really,
    the White House, the President is such an enormous figure in
    our society and our form of government, and as the world looks
    upon the greatest power and the greatest leader that the world
    has, to trivialize the office by having to discuss from time to
    time flaws in the gift recording procedure or how much a gift
    was valued or should they accept it or should they not, I think
    is an affront to that high office.
        So it would seem to me much more appropriate that the White
    House not be permitted to accept any. That's not to say that
    gifts are banned, because I think it is in the nature of our
    free society to give gifts, but to follow the procedures which
    we all abide by, and that particularly in the Senate which
    limits the value. So if the value of a gift exceeds the $50
    limit, then it becomes the property of the United States. It
    can be recorded, it can be chronicalized in some file or
    whatever. But the point is, the gifts that are more higher
    value than $50 ought to be immediately considered property of
    the United States. It can be given to other departments or
    other entities or organizations, but it should not be
    considered the private property of the occupant of the White
    House. And I think that if we could enact a bill like mine, we
    could certainly avoid in the future any of this consternation
    over whether gifts of a certain nature ought to have been
    accepted in the first place.
        So I would hope that this committee, in considering the
    bills that are pending before this committee, would look at the
    rules that apply to everybody else in the Federal Government--
    Federal employees, Members of the House, Members of the Senate.
    I don't think that we ought to use the word ``gifts'' are
    banned, because that is against the nature of a loving, caring,
    appreciative society. So people can give whatever they want to
    give; but, once given, it should become the property of the
    United States if it is valued in excess of $50.
        I think typically we see the statistics that the White
    House receives over 15,000 gifts a year. It's an enormous
    number. I don't want to say that there should be less giving,
    but I think that a pronouncement of policy that the gifts that
    exceed the value of $50 belong to the people of the United
    States for such disposition as the law may allow would
    certainly eliminate this contention after the end of every
    presidency.
        So I would hope that this bill would be added to the table
    for discussion, and I ask now that my testimony be inserted in
    the record at this point. Thank you.
        Mr. Horn. Without objection, it will be in the record at
    this point. Thank you very much for your presentation.
        Mrs. Mink. Thank you very much.
        Mr. Horn. When we consider this for markup, we certainly
    will have H.R. 4776 before us.
        Mrs. Mink. Thank you very much.
        Mr. Horn. You are quite welcome.
        [The prepared statement of Hon. Patsy T. Mink follows:]

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        Mr. Horn. We will now go to the panel two: The Archivist of
    the United States, John W. Carlin; the Special Assistant to the
    National Park Service, Department of the Interior, Mr. Smith;
    the president and chief executive officer of Common Cause,
    Scott Harshbarger; Paul C. Light, the director, Center for
    Public Service, the Brookings Institution; and we will conclude
    this panel two with Gregory S. Walden, esquire, of Patton
    Boggs, LLP, who is thoroughly knowledgeable in this under
    previous administrations.
        So, as you know, we do swear in witnesses.
        [Witnesses sworn.]
        Mr. Horn. Are there any assistants in back of you that will
    be giving testimony? If that's the case, we will swear them in
    now so we don't have to be disruptive. Anybody in the Archives?
        Mr. Carlin. Not directly, but I may consult with them on a
    detailed question.
        Mr. Horn. That's OK. Just as long as you mouth it. It might
    be his brain, but--OK. We are delighted to have the Archivist
    of the United States here, the Honorable John W. Carlin. OK,
    Governor, it's all yours.

     STATEMENTS OF JOHN W. CARLIN, ARCHIVIST OF THE UNITED STATES;
     P. DANIEL SMITH, SPECIAL ASSISTANT TO THE DIRECTOR, NATIONAL
     PARK SERVICE, DEPARTMENT OF THE INTERIOR; SCOTT HARSHBARGER,
     PRESIDENT AND CHIEF EXECUTIVE OFFICER, COMMON CAUSE; PAUL C.
       LIGHT, DIRECTOR, CENTER FOR PUBLIC SERVICE, THE BROOKINGS
     INSTITUTION; AND GREGORY S. WALDEN, ESQUIRE, PATTON BOGGS LLP

        Mr. Carlin. Mr. Chairman, Mrs. Maloney, Mr. Ose, I am John
    Carlin, Archivist of the United States; and I certainly thank
    you for the opportunity to share the views of the National
    Archives and Records Administration on H.R. 1081, the
    Accountability for Presidential Gifts Act.
        Before proceeding, Mr. Chairman, I want to take a moment to
    thank you, you personally, for all the work that you have done
    over the years to serve scholarship and support the foundation
    of freedom that we preserve and serve every day from the
    National Archives. There are few in public service that
    understand our mission from the perspective of both the scholar
    and the public servant, and we would put you first in that
    category. We certainly wish you the best as you go to your
    other challenges and look forward to your transition from being
    a custodian of our services to again being a customer of our
    services.
        As we are here to today to discuss the Presidential gift
    legislation, I would like to just take a moment to reflect on
    the importance of the Presidential gift collections. The gifts
    that are on deposit and display in the Presidential libraries
    add to the public's understanding of the President and of the
    Presidency, and they document in a way that records cannot the
    stages of a President's life, the important policy decisions of
    his administration, various world and national events, and
    topics of historical or current interest. We approach the
    subject from the perspective of the agency that can attest to
    the ongoing worth and historical significance of these
    collections.
        As to H.R. 1081, Mr. Chairman, we appreciate that you share
    our view of the importance of the Archives' role in preserving
    the Presidential gift collections and that Mr. Ose and his
    staff recognize the important mission carried out by the
    National Archives for the American people. Any archives has to
    consider first and foremost the accountability and authenticity
    of what it preserves and makes available for research. However,
    one way to protect that accountability and integrity is to
    argue against expansion of our mission into areas that are the
    proper purview of others, that we would argue are currently
    being handled in a proper and appropriate manner.
        Mr. Chairman, while we appreciate your concern with the
    importance of an accountability in the gift process and your
    trust in our ability to carry it out, the National Archives and
    Records Administration feels that this legislation goes beyond
    what is necessary and that the improvements made in the current
    system have already corrected the deficiencies identified in
    the findings section of the bill. In fact, some of the
    improvements we have implemented in this system have come about
    due to Mr. Ose's attention to this matter and our agreement
    that incremental change was in order. It is the necessity for
    additional change with which I respect fully disagree.
        I would like to outline our five principal concerns with
    the approach taken in the proposed legislation and submit for
    the record a summary of the current system that we administer
    in providing courtesy gift and record storage for the White
    House.
        First, H.R. 1081 would require the Archivist of the United
    States to staff or supervise functions wholly duplicative of
    those currently being performed. As the Addendum explains in
    detail, inventories of Presidential gifts are already
    maintained by the National Archives and the White House Gift
    Office, who both play a distinct and important role in the
    handling and disposition of Presidential gifts. So we do not
    see a practical need for the additional inventory that the
    legislation contemplates.
        Moreover, there is a significant practical problem with the
    proposal that the Archivist maintain a current inventory of all
    Presidential gifts. While the National Archives maintains a
    inventory of gifts deposited by the White House with NARA for
    courtesy storage, the only way that the National Archives can
    ensure the accuracy of the required inventory of all
    Presidential gifts would be to staff the entire chain of
    custody from receipt by the President to ultimate disposal. In
    other words, the Archivist would be required to completely
    duplicate the functions of the current White House Gift Office
    and possibly both the National Park Service and GSA units as
    well, depending on one's interpretation of the legislation.
    This approach seems neither prudent nor practical and would
    constitute a significant intrusion on the White House's
    traditional role in managing the gift process for the
    President.
        Second, section 2 of the proposed bill specifies that the
    Archivist of the United States must report to Congress each
    proposed disposition of a Presidential gift with a value
    greater than $250. Although this may not be the legislative
    intent, as written it appears to require the Archivist to make
    a report to Congress before the President can personally accept
    any gift. This process would add layers of complexity to the
    current process and cause unnecessary confusion about which
    agent has custody of each gift before the disposition has been
    reported to Congress. Equally important, it would unnecessarily
    and inappropriately intrude on the President's traditional
    prerogative.
        Third, as currently drafted, H.R. 1081 does not address the
    existing framework of controlling statutes and regulations in
    the traditional necessary distinctions among personal gifts to
    the President, official gifts accepted by the President on
    behalf of the American people, and gifts received by the
    National Park Service for the permanent White House collection.
    This complex system of controlling laws, while partially based
    on the appraised value of the gift or the intent of the donor,
    also recognizes that in many cases it is the decision of the
    President that determines the route and final disposition of
    the gift. As a practical matter, the administration of such a
    system can only appropriately be managed in the Executive
    Office of the President and under the current delegations of
    authority.
        As well, the National Archives believes that the procedures
    and management controls associated with our current
    responsibilities for White House gifts are sufficient and do
    not require legislative change. Over the last several years,
    NARA has undergone an independent Inspector General review of
    our gifts operation, updated and formalized written procedures
    for the National Archives courtesy storage unit, added a new
    staff of professionals to ensure proper handling and
    preservation of gifts in our custody, and regularly reviewed
    our management controls.
        Finally, we would question whether the central
    accountability problem assumed in the legislation exists today.
    It has been our experience that the current administration is
    paying careful attention to management controls associated with
    such functions and that proper procedures are currently in
    place to mitigate risk of reoccurrence.
        Mr. Chairman, this administration shares your commitment to
    the importance of ensuring that adequate rules and procedures
    exist to manage and account for Presidential gifts.
    Responsibility for that process must be and is shared under the
    current system by the White House, the National Archives, and
    the Office of Government Ethics, among others. For the reasons
    I have explained, we do not believe the H.R. 1081 is a
    necessary or appropriate means of furthering that goal.
        Mr. Chairman, I would like to submit as an addendum to my
    testimony a summary of the procedures currently in place at
    NARA to administer the gifts and courtesy storage for the White
    House; and, obviously, I would be happy to respond to any
    questions at the appropriate time.
        Mr. Horn. Without objection, that document will be in the
    record at this point.
        Mr. Carlin. Thank you.
        [The prepared statement of Mr. Carlin follows:]

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        Mr. Horn. We now move ahead to P. Daniel Smith, Special
    Assistant to the Director of the National Park Service,
    Department of the Interior.
        Mr. Smith, we are glad to have you here.
        Mr. Smith. Thank you, Mr. Chairman. I would like to submit
    my entire testimony for the record and summarize it.
        Mr. Horn. It's automatically in the minute I call on you.
    Everything is put in right then.
        Mr. Smith. Mr. Chairman, thank you for the opportunity to
    appear before your committee to present the views of the
    Department of the Interior on H.R. 1081. The Department does
    not believe that the provisions in this bill pertaining to the
    National Park Service are necessary at this time. Existing
    authorities provide adequate processes for the National Park
    Service to accept donations for the White House and to maintain
    an annual inventory.
        The National Park Service accepts donations for the White
    House pursuant to two different legal authorities. The first
    authority allows the Director of the National Park Service,
    when authorized and directed by the White House Chief Usher or
    Curator, to accept donations of works of art, furnishings, and
    historic materials for the executive residence of the White
    House to become the property of the U.S. Government. The
    Director of the National Park Service has held this
    responsibility since 1933 under executive order; and this
    responsibility to accept donations for the White House on
    behalf of the United States was further authorized by Congress
    on June 25, 1948, under U.S.C. Title 3, Section 110, whereby
    the Director of the National Park Service was authorized and
    directed, with approval of the President, to accept donations
    of works of art, furnishings, and historical materials for use
    in the White House.
        Section 109 of this same act also directed the Director of
    the National Park Service to complete an annual inventory to be
    submitted to the President for approval.
        Since 1948, the National Park Service has accepted
    donations and performs its responsibilities in accordance with
    this legislation. The National Park Service accepts gifts only
    on behalf of the United States for use in the executive
    residence of the White House and does not accept gifts that are
    donated personally to the President. This is the responsibility
    of the White House Gift Office.
        The National Park Service staff has worked closely with the
    White House Chief Officer and Curator on procedures for
    accepting donations for the White House and for inventorying
    this property. When the National Park Service receives a
    request from the White House Curator--for museum-related
    donations--or the Chief Usher--for non-museum property
    donations--to accept a donation for the executive residence of
    the White House, the Park Service sends an official letter to
    the donor acknowledging and accepting this donation to the
    White House on behalf of the U.S. Government to become
    government property. The Curator and Chief Usher receive copies
    of the official letter of an acceptance sent to the donor.
        In addition, for donations to the White House museum
    collection, the chair of the Committee for the Preservation of
    the White House, a position held by the Director of the
    National Park Service, sends a Committee for the Preservation
    of the White House Certificate of Appreciation to the donor.
        The staff at the White House Curator's Office enters the
    information for donated items into the White House museum and
    inventory system. The National Park Service and the Office of
    Curator staff physically inventory all items donated to the
    White House museum collection and other property donated to the
    Executive Residence at the White House during the annual
    inventory process as required by U.S. Code, Title 3, Section
    109. That process is beginning this month at the White House.
        As a result of concerns raised last year, the Office of the
    Curator at the White House took the lead on reviewing the
    donation procedures and did so in consultation with the
    National Park Service. This review resulted in detailed,
    specific, written procedures pertaining to what actions are
    required, beginning with when a donation is offered to the
    Chief Usher or the Curator until it is accepted by the National
    Park Service and becomes property of the U.S. Government,
    either as part of the White House Museum Collection or as
    property of the Executive Residence at the White House.
        Under the revised donation procedures developed by the
    Office of the Curator, the National Park Service now receives
    copies of the documentation for museum-related donations and
    for non-museum property donations. That documentation now
    includes a letter of intent from the donor and a copy of a,
    ``Acknowledgment of Donation,'' form issued by the Curator or
    Chief Usher. The documentation is used to prepare the National
    Park Service letters of acceptance. The National Park Service
    acceptance letter to the donor makes it explicitly clear that
    the National Park Service accepts the donation to become the
    property of the United States.
        A second manner in which the National Park Service may
    receive donations for the benefit of the White House is through
    the National Park Service's general donation authority, which
    is found in U.S.C. Title 16, Section 6.
        In summary, the well-established system for the National
    Park Service to receive donations to the Executive Residence of
    the White House provide ample safeguards to ensure proper
    accountability for these donations. The Department also shares
    the concerns by the National Archives and Records
    Administration and the Office of Government Ethics that various
    features of the proposed legislation are wholly duplicative of
    current functions required under statutes and unnecessary to
    ensure sufficient and appropriate oversight of the gift
    donation process.
        Mr. Chairman, this completes my prepared statement. I look
    forward to answering any questions you or the committee members
    may have.
        Mr. Horn. I thank you.
        [The prepared statement of Mr. Smith follows:]

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        Mr. Horn. Our next presenter is Scott Harshbarger,
    president and chief executive officer of Common Cause. We are
    delighted to have you here.
        Mr. Harshbarger. Thank you very much, Mr. Chairman,
    Representative Maloney, Representative Ose. I would like to
    join with every one here in thanking you, Mr. Chairman, for
    your exceptional service. It is with great regret that we see
    you go, particularly since you have been a leader on major
    reform issues both before my time in Common Cause and continued
    to, particularly into late winter and spring. We are very
    grateful to you for that.
        We are here today because Common Cause has been focused on
    issues of ethics and public life. Since its creation, it has
    been, a national leader as an advocate on these issues in
    pushing for the highest ethical standards for public officials.
    We understand that the vast majority of public officials are
    honest, upstanding, decent individuals. Ethics rules, however,
    have been put in place to help illustrate and prove to the
    public this is so, even though that is a hard sell to the
    elected officials; and, having come from that world, I
    understand that.
        But if the goal is to eliminate the appearance and
    suspicion of corruption, the reality is today we ought to
    recognize that if our private sector counterparts had similar
    rules that might have been as strict, rigid, perhaps even
    uneven or viewed as unfair, we may not have had some of the
    major breakdown in corporate and other ethics that we have seen
    in Enron, Andersen, Global Crossing, and a whole range of other
    issues that have now tested investor confidence in the
    marketplace.
        So Common Cause comes to this with the view that this is an
    issue that is very similar to the other appearances of
    conflicts of interests or ethical issues, not simply as a
    question of accounting or as a question of whether or who is
    the best way to record the gifts. Because the most important
    issue here is, what is the gift? Is the gift to the President
    as President of the United States or is it a personal gift?
        It's that personal gift arena that brought us here last
    February. We spoke of the Presidential gifts as part of the
    ethical cloud looming over Washington in which special
    interests are able to wield power in the policymaking process
    by purchasing influence, access and, ultimately, policy itself.
    We are certain the public could have perceived that.
        It is also obviously now clear that times of transition
    among administrations tend to lead to breakdowns of even the
    best of self-regulatory processes as these transitions occur.
    It was, after all, the transitional period and what the
    President would do as he left office that caused the difficulty
    or certainly the perceptions of difficulty by the American
    people in terms of the conduct of President Clinton and then
    Senator Clinton in this issue; and that's true in almost every
    Presidential transition.
        So that, as we look at this, we see that this is an
    opportunity to take one more step, not as important as the
    gigantic step that we took toward cleaning up politics with the
    passage of the Bipartisan Campaign Act of 2002, which President
    Bush signed into law in March. That was a very important step,
    even though just a small step, in moving forward; and we thank
    you and the Members here and Congressman Ose as well for his
    support of that.
        Taking action to prevent special interests from using gifts
    to buy influence and access and ultimately a whole new policy
    would be a strong complement to that.
        In terms of the actual inventorying of issues, it does seem
    that fixing it in one place makes sense, much of the same sense
    that, while everybody may have done their job well, we had a
    major election problem in the year 2000 because we didn't have
    just one election or even 50 elections, we had 13,000 different
    elections; and somehow individual problems tended to create a
    constitutional crisis. In many respects, that same issue is
    posed here. It is not a question of the professionalism or
    competence of each of the agencies involved. It is, in fact,
    the reality that there are five or six or seven different
    agencies involved in this that poses the potential for the
    problem to exist.
        Therefore, whatever else we do, as we look at this we ought
    to think about centralizing it. We had a couple suggestions
    that we made about how, as you look simply as an inventorying
    process, you might want to make clear the type of description
    and the identity of donors and exactly what the intent was, but
    other people have talked about that a bit.
        It does seem, however, that the best and the easiest way to
    approach this is to go further, however, and that is actually
    to adopt the position that Congresswoman Mink just stated. In
    fact, that's been our view, that the simplest and most logical
    way to enact new clear gift rules for the President is to apply
    the congressional gift ban to the President and Vice President.
    And that's not a ban. It simply is a limit, a very specific
    limit. That would be the solution. That would cure all kinds of
    bureaucratic or possible misinterpretations by different White
    House counsels over the use of discretion.
        The reality would be we would see if, in fact, the American
    people are giving, or whether in fact once in a while people
    actually give more because they are trying to gain some sort of
    insider access, as opposed to giving to the President. the
    reality is that using the congressional gift ban would
    eliminate almost every one of those problems--$50 in any one
    gift, and no more than $100 from any source in the calendar
    year. All the rest would go to the people of the United States
    in some format. That would eliminate some of the greatest
    problems of distinguishing between gifts of state and personal
    items.
        It seems that we cannot ignore that if you are expected to
    adhere by your conduct to set examples and represent the
    highest ideals of public service. Surely the President of the
    United States needs to lead by example and be subject to the
    highest standards of ethical conduct. It is, in fact, because
    their office is so powerful and because it's so important that
    the public has an interest in preventing personal gifts that
    are corrupting or at least creating the appearance of
    corruption, or to have any doubt about why somebody is giving a
    gift. It might be interesting to see if in fact these gifts
    couldn't be given, whether as many different people would give
    them as do now. But that's another issue.
        The reform is essential to eliminate different standards
    that White House counsels may apply, standards that different
    agencies apply. It also is important, we think, to have a law
    requiring more disclosure, not just upon request. These should
    be regular filings, much the same way that now campaign finance
    reports are made on a regular basis, simply a quarterly basis.
    They are out there. No need for people to request them. It is
    very important.
        In conclusion, the giving of Presidential gifts create an
    appearance of corruption that's harmful to the public's
    confidence in the Presidency, public officials, and government
    in general. Even if the act of taking a gift does not corrupt
    the public official's judgment, the appearance of corruption
    undermines citizens' faith in their leaders and their
    government. Both the Clinton and Bush administrations accepted
    vast amounts of gifts which have been detailed. But while the
    intentions of H.R. 1081 are good and we commend it, it needs to
    do more.
        Reforming the process to rid it of the gift-produced
    corruption can and should happen; and we urge you to take that
    additional step, not just centralizing and having uniformed
    standards but also limiting and applying the congressional gift
    ban at a minimum to the President of the United States for all
    the reasons and because it is the Presidency of the United
    States, not somebody's individual office from which they in any
    way should or appropriately can or could receive personal
    inurement. To some extent in this day and age, maybe that comes
    later, after the person leaves the Presidency.
        Mr. Horn. We thank you for that presentation.
        [The prepared statement of Mr. Harshbarger follows:]

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        Mr. Horn. And we now go with Dr. Light of the Brookings
    Institution, and the person who we have had on many bits of
    good government. And he comes here in his good government role.
        So, Dr. Light, go ahead.
        Mr. Light. I am delighted to be here, especially before
    this subcommittee. I totaled it up. Roughly two-thirds of my
    testimony before Congress has appeared before this
    subcommittee; and I think that you should take care of your
    former witnesses as you move on--kind of have us transferred to
    another subcommittee someplace that will keep us active.
        It has always been a joy to testify before you, Mrs.
    Maloney. This has been a wonderful subcommittee to work with.
    The subcommittee has done tremendously important work over the
    last years: your work on Y2K, on the Government Performance and
    Results Act, on the Office of Inspector General, your
    authorship of the Presidential Transitions Act with its
    orientation program for Presidential appointees. The list of
    legislation where this subcommittee and the chairman have made
    a difference in improving government performance is profound,
    and we are going to miss you.
        Not everybody can tolerate the scintillating, exiting
    subject matter that this subcommittee has dealt with over those
    many years. So now I appear to talk a little bit about
    Presidential gifts and also to urge the chairman to climb one
    last hill before he leaves, and it is a big one. The need for
    action on Presidential gifts, I think, is absolutely clear.
        Our reading of the public opinion data on trust in
    Government suggested that is no such thing, in the public's
    mind, as a Presidential gift, that the American public believes
    that every gift is given for a reason, and the reason is to
    curry influence with the President.
        It doesn't matter how well the National Archives does or
    the Park Service does, the public believes, unfortunately, that
    the gifts given to the President or given to the Park Service
    or inventoried by National Archives and Records Administration
    are not gifts given out of the goodness of the American
    public's heart, but are out of the desire for influence.
        The question before us today, I think, is not whether
    legislation is called for, but what kind of legislation ought
    to be enacted. The White House is working hard, I think, to
    improve the process. But White House reform is temporary, and I
    think my colleague from Common Cause makes the point, well,
    that it is the final 3 or 4 months of an administration in
    which the gift-giving flood occurs and in which the breakdowns
    of accountability are most apparent.
        Legislation not only clarifies accountability, it creates
    an integrated system. It is the coin of the realm for
    reassuring the public that something is being done. Just as we
    have now learned that we may need to bring together the
    homeland security agencies into a coordinated whole, frankly, I
    think that we can do the same for Presidential gifts at a much
    lower level of legislative detail.
        We must cure the appearance problem. There is continued
    confusion over who is responsible for gifts, and much as I feel
    that the White House is right to be concerned about the insult
    embedded in such legislation, this is not about the Bush
    administration. It is not about the Clinton administration. It
    is about the public's confidence in Government.
        Can technology be part of the answer? Absolutely. I think
    my colleague to my left will talk a little bit about
    technology. Unified data bases in which we can monitor and keep
    track of gifts, I think, are right in the right direction.
        Three months ago when I testified before Mr. Ose, I argued
    that we should not have a ban on gifts to the President. In
    thinking and listening to the testimony of my colleagues from
    the administration, I am starting to wonder whether or not we
    ought to do it.
        If the Park Service is comfortable that they are doing the
    best that they can, if the Archives is comfortable that it is
    doing the best that it can--and I am not to dispute them--then
    something must be done to restore confidence at the very center
    of the gift-giving process which is in the White House. And it
    may well be that we have reached the moment in time where we
    must put the same limits on gifts to the President that we have
    on gifts to Senators and other legislators.
        Let me just talk briefly about the tenuous connection
    between Presidential gift-giving and a pay increase for
    executive, legislative and judicial officers.
        I titled my testimony here, ``Deliver Them Not into
    Temptation,'' because I think it is time for us to consider the
    very real and serious pay/gap that we have created at the very
    top of our executive, legislative and judicial salary
    structure.
        We are now at a point where the pay structure encourages a
    future in which only three types of individuals will likely
    seek office--the very wealthy, who have nothing to lose; the
    hyperzealous, whose low pay is proof positive of their
    commitment to the cause; and the easily corruptible. I believe
    that just as this subcommittee led the charge 2 years ago to
    double the President's salary, it was a tough issue to take on.
    It was a difficult issue to sell. I got more hate mail because
    of my testimony before you at that hearing than I have received
    on any other testimony I have given.
        But it is time to consider the issue of raising
    legislative, judicial and executive salaries again. We doubled
    the President's salary, thereby increasing the distance between
    Members of Congress, judges, and senior executives and the
    President. Ironically, we have done nothing to alter the pay or
    the gift-giving system so that Presidents not only receive a
    doubling in salary, they face no limits on the gifts they can
    receive.
        It is wonderful opportunity, and I would encourage the
    chairman in his final months in office here to consider the
    possibility that we ought to remedy the implied imbalance of
    power that we created by doubling the President's salary
    without addressing executive, legislative and judicial
    salaries. I suspect I will get plenty of hate mail on this. Our
    polling data, which I have attached to my testimony, suggests
    that the only thing that the public dislikes more than a
    Presidential pay increase is a congressional pay increase.
        Mr. Chairman, there is no way to write a public opinion
    question under which we can create public support or implied
    public support for a congressional pay increase. No matter how
    we wrote the question, roughly 54 percent of the American
    public is strongly opposed to a pay increase for Members of
    Congress. There is slightly higher support for a pay increase
    for Supreme Court justices and members of the Federal
    judiciary.
        It is a tall hill to climb, but I think it is one well
    worth climbing. I don't know what legislation you can attach it
    to. I don't know how you are going to do it. I don't know when
    you are going to do it. But you have only got 4 or 5 months
    left of legislative time in which to try. You have got my
    strong support for doing so. I will testify to this effect,
    should you bring forward legislation--probably one of my last
    times to testify in coming years.
        Let me conclude by again noting what a pleasure it has been
    to be a witness before you. It is a delight to be playful and
    to be encouraged to be playful, but we are all serious at the
    end of the conversation.
        I am congratulating you for your time here on Capitol Hill.
    You may remember, and I hope you do, that at an earlier point
    in career you spent some time at Brookings. Should you decide
    that you would like to have another tour of duty at that fine
    and distinguished think tank at 1775 Massachusetts Avenue, I am
    sure that we can arrange it.
        Thank you very much.
        [The prepared statement of Mr. Light follows:]

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        Mr. Horn. Well, I thank the gentleman. And is that a gift?
        Mr. Light. You would have to raise your own money.
        Mr. Horn. I know that bit.
        Mr. Harshbarger. We pay less.
        Mr. Horn. Well, now the gentleman we have last as a
    presenter here has been before this committee and done a
    wonderful job, and is probably Mr. Ethics and Mr. Attorney for
    numerous administrations. And it is Gregory S. Walden, counsel,
    of Patton Boggs.
        Mr. Walden. Thank you, Mr. Chairman, members of the
    committee. This morning, I will briefly touch on the problems
    with the current Presidential gift system that require
    correction, outline the reforms I believe would materially
    improve the system, and explain why I think those reforms can
    be obtained and achieved administratively and not
    legislatively.
        H.R. 1081 correctly identifies the two major problems of
    the current system: lack of accountability and confusion as to
    the status of some gifts. The bill pins the lack of
    accountability on the fact that several agencies play a role in
    the system.
        Now, it is true that gift review, acceptance, reporting and
    disposition authorities are spread among the White House, the
    GSA, OGE, the Archives, State Department and the Park Service;
    but I don't believe it is the multiplicity of agencies that is
    the root of the accountability problems. Rather, I see it as a
    lack of transparency and a lack of external compliance control.
        I think the problems in the past were not the Park
    Service's problems, not the Archivist's problems, not the GSA's
    problems, not the State Department's problems; they were White
    House Office problems.
        Under current law, many gifts to the President are not
    required to be reported publicly, and the review and approval
    process takes place largely outside of public view. But I don't
    think this is altogether a bad thing because of the privacy
    interests at stake when talking about gifts to the President
    and the First Family.
        Now, Congress recognized those privacy interests when it
    set a reporting threshold, and raised the reporting threshold
    to $250, then $260; that is the reporting threshold for
    financial disclosure reports for Members of Congress and for
    executive branch officials. But without accountability that
    would come with transparency, you need something else.
    ``Compliance control'' is what I would call it--review,
    auditing, and enforcement; they must assume greater importance.
        The energy policy subcommittee's report in February showed
    four major failures in the gift system in the last
    administration: a failure to register gifts; a failure to
    report gifts that should have been reported on the financial
    disclosure report, but were not; improper removal of gifts that
    had been accepted as government property; and improper
    solicitation of gifts.
        Now, there are laws currently on the books addressing gift
    reporting requirements, conversion of Federal property and
    restrictions on solicitation. But the legal compliance controls
    on the review, the acceptance, the reporting and the
    disposition of gifts are inadequate. So any bill that seeks to
    improve the integrity of the gift system should address these
    problems.
        Concerning the failure to register gifts in the first
    place, I am not certain that assigning the responsibility to
    the National Archives or any other agency is the answer. Even
    if the Archivist were to take over this responsibility, he
    would need to rely on the diligence and the compliance of the
    White House Office staff, as the White House Gift Office does
    so now, unless you were to create a duplicate staff or assign
    additional Archives staff and put them inside the White House
    Office.
        As effective, and perhaps more so, would be to adopt a set
    of written procedures to be followed by all White House staff,
    to ensure that every gift given to the President and the First
    Lady is reported within a very short period of time and done so
    electronically. Now, it appears from reading the prepared
    statements of the Archivist and the Park Service that this
    White House has put in place some of those procedures.
        Regarding valuation, how can we ensure that each gift is
    properly valued? Well, I do not doubt that every
    administration, every White House, has had some sort of written
    procedures, but they didn't work last time. They didn't work.
    And so, even if you have a set of written procedures showing
    how you go to an independent appraiser, you need some sort of
    outside review, I would suggest, on a regular and random basis;
    but I wouldn't put that review outside of the Executive Office
    of the President. I would keep it inside the White House
    Office, assign the White House counsel or perhaps the Office of
    Administration to do that.
        Now, the advantage of having the White House Counsel's
    Office do this audit function is to preserve the legitimate
    privacy interests of the President and the First Family. And
    the White House Counsel's Office, I would submit, is in a
    better position to determine whether the donor of the gift or
    the circumstances of the gift raise appearance problems such
    that the gift should be declined and returned.
        Also, when reviewing the financial disclosure report that
    is filed by the President, it is my experience--and I believe
    it is done so now--that the President's personal attorney and
    the White House Counsel's Office review the financial
    disclosure form in draft before it is submitted; so that if any
    gifts appear on that form that would raise an appearance
    question, they are rejected.
        I would submit that the White House Counsel's Office ought
    to review the entire White House gifts data base, assuming one
    is created or maintained or put in place. And that would,
    again, should assure that there is not improper valuation.
        As for the risk of improper removal of government property,
    conversion of government property, I am encouraged by the
    testimony of the Park Service that there seems to be an
    immediate labeling done of property that is given to the
    President and accepted on behalf of the United States. This
    labeling should be done also as to gifts that have not yet been
    formally accepted by the President or personally or by the
    United States that are on display in the White House for the
    duration of the Presidency.
        H.R. 1081 would require the Archivist to maintain an
    inventory. I think this is a sound requirement. I would just
    suggest that the White House Gift Office data base could be
    that inventory. And as for property that is accepted under the
    Park Service's authority, that the Park Service data base could
    be maintained. Perhaps we should explore how the Park Service
    data base and the Archivist's data base and the White House
    Gift Office data base can be harmonized so as not necessarily
    to avoid any problems, but at the same time to preserve the
    privacy interests of the President.
        So, as you can see, all of these actions I believe can be
    taken administratively. Some of them have already been taken
    based on the prepared testimony we have heard today.
        Undoubtedly, the gift system broke down in the last
    administration, but I am not resigned to the fact that we need
    legislation to prevent its recurrence. So at this time, I would
    say, legislation is premature. We ought to give this White
    House and this executive branch an opportunity to disclose to
    this committee its written procedures and protocols, and hope
    that will be sufficient.
        Now, the bill would exempt from the required report to
    Congress gifts from relatives of the President, and gifts under
    $250, but these gifts would still be recorded in the
    Archivist's data base, which information would be available to
    the public upon request. I know other witnesses believe that
    these gifts ought to be disclosed to the public. But I would
    suggest that when gifts are accepted personally, and they are
    under the threshold that Congress has set, then there is not a
    corresponding public interest, a countervailing public
    interests that trumps the President's privacy interest.
        Now, Congress can certainly exercise its oversight
    authority, which it did in February and it is doing today and
    bring before it government officials to explain the protocols
    and procedures. And perhaps even to ensure that any audit done
    within the White House Office is done and performed properly.
        But regardless of whatever reform is enacted, whether by
    law or administratively, no statute or set of procedures will
    render a gift system impervious to simple error or even
    corruption, because, in the end, the integrity of any
    Presidential gift system, like any operating system which
    involves individuals, depends on the competent
    conscientiousness and judgment of officials who are entrusted
    with the responsibility.
        Thank you.
        [The prepared statement of Mr. Walden follows:]

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        Mr. Horn. Thank you.
        We will now start the questioning, and we are going to do
    it 5 minutes apiece. And we will keep rolling around, and we
    will share it between parties. And I am going to start out on a
    few questions for the Archivist of the United States.
        Governor Carlin, can you give us an idea of what staffing
    and funds the Archivist would need to carry out the new
    responsibilities under H.R. 1081, which proposes to--what do
    you think? Have you done some budget thinking on what it would
    cost you in manpower, womenpower, whatever?
        Mr. Carlin. We have not done any detailed analysis from a
    budget point of view. To do so, we would have to, with the
    committee, get a clearer understanding of intent, so that we
    would be producing a budget that would carry out what the
    committee desired to actually have happen.
        It is clear it would take more resources. How much more
    would depend upon to what extent you would expect us to really
    duplicate what other existing agencies are now doing.
        For an example, as I mentioned in my testimony, if we are
    to report to Congress every gift over $250, at what part in the
    process should that take place? If it is at the very front end,
    we would have to be at the front end, and that would require
    staff. It would also require resources to do appraising that we
    do not do at this point.
        Obviously, with clarification on the exact implementation
    you would want us to do, we could certainly produce a budget.
        It would require more. I don't think that is the issue, pro
    or con. We would not argue against the legislation because it
    would cost money. Our points are as we stated in my testimony.
        Mr. Horn. How about the Interior? How much space do you
    take up now in these various gifts that are given to the
    Presidency?
        Mr. Smith. Mr. Chairman, I don't know the square footage of
    that. But I do know that we have offsite locations for that. I
    can certainly provide that for the record.
        Mr. Horn. Well, I just wonder--I am not holding you to the
    inches. I am just--getting a feeling.
        Do you have a room like this that would take, during a 4-
    year administration, and they all have these things in this
    kind of space?
        Mr. Smith. Mr. Chairman, again, I don't know the details.
    It would be larger than that. It would be a museum type of
    quality space. And there are press reports of how they go back
    and forth and look for furniture, especially the First Ladies
    do that. So it would be what you would expect to be, an
    accredited type of storage space for that.
        So it would be quite a bit of storage space. I would
    provide that for the record.
        Mr. Horn. I am interested particularly in the furniture and
    the paintings which people generously give to the White House
    and--starting with Ms. Kennedy and the Curators there. It would
    seem that certainly is what we want turned back. We want it to
    be part of the people's museum when they go through the White
    House.
        Do you have quite a bit of that during the course of a
    year?
        Mr. Smith. As I understand it, there is, especially in the
    early stages of that, as the First Family would look to see how
    they would like to set up the various rooms in the White House.
    But, again, I would like to assure the committee that where
    that storage space is located, offsite, it is first-class,
    fully accredited, fire controlled, humidity controlled. Those
    collections are protected as you would expect a gift to the
    White House and the Nation should be.
        Mr. Horn. That is good to know.
        I now yield 5 minutes to the gentlewoman from New York.
        Mrs. Maloney. Thank you, Mr. Chairman. And thank you--and I
    welcome all of the panelists and thank you for all of your hard
    work, and particularly Scott Harshbarger with whom I worked on
    what I consider one of the most important bills that has passed
    during my time here in Congress, campaign finance reform. And
    your organization played a tremendous role in that for decades,
    literally decades.
        And when I came here as a freshman in 1992, one of the
    first bills that I introduced, along with my freshman class,
    was the congressional gift ban, which became law.
        But I am not as clear on Presidential gifts. I don't think
    I support a ban, particularly for foreign gifts. I think some
    nations would consider it rude if we said we don't want to
    accept their gift, and some of their presents have helped
    create better communication between our two countries.
        I would say that the gift of the pandas to our country was
    a wonderful gesture that has improved education and
    understanding of our young people, more, of China. I know my
    daughter has a map of where the pandas live, and she comes
    every year to see them at the Washington Zoo.
        What exactly is the delineation between a gift to the
    President and a gift to the American people or the White House?
    What are the guidelines for that? Is every gift from a foreign
    nation a gift to the country? When is it a gift to the White
    House?
        And I would say that many of these gifts end up in
    Presidential libraries as part of their museums if they are not
    part of the White House itself.
        So are there guidelines when it is a Presidential museum
    gift, a Presidential gift or a gift to the Nation? Is every
    gift from a head of state a gift to the Nation when they give
    it to our President?
        What is the delineation? Does anyone know the exact
    delineation?
        Mr. Walden. $260, if the value of the gift is over $260, it
    is automatically deemed the property of the United States. This
    is under the Foreign Gift and Decorations Act as implemented by
    the State Department through regulations.
        If it is under $260, it can be accepted as a sign of
    courtesy if its rejection or declination would be an
    embarrassment to the foreign relations of the United States.
    That is a paraphrase.
        Mrs. Maloney. How is the delineation of what goes to
    Presidential libraries? Everything over $260 belongs to the
    White House, it cannot go to a Presidential library; or is
    there some consideration?
        Mr. Carlin. Those that are given with the intent that they
    go to the White House collection obviously would--the Park
    Service would take care of.
        But, yes, we have many, many foreign gifts that end up in
    individual Presidential libraries. In fact, I think the vast
    majority of foreign gifts do end up in Presidential libraries.
        Mrs. Maloney. So it is the intent of the giving country?
    They will say, I want this for the White House or the
    Presidential library. Who determines where this gift goes?
        Mr. Carlin. I think that is decided by the White House.
        Mr. Harshbarger. I just want to stress, you are in the
    middle of some very important distinctions here. Our point is
    that none of these gifts would be precluded at all. It would
    simply be that it is disclosed, who gave it, what it was. That
    is one whole level, disclosure.
        The second is, they would not be the personal property of
    the inhabitants of the office. That is--that is the distinction
    that we are seeking to make, which actually we believe to be
    the intent of the congressional gift ban, perhaps it shouldn't
    be a ``gift ban.'' It is a ``limit.'' It just simply says that
    over a certain amount we are not going to have to do all of
    this discussion about it. We are simply going to say, This
    goes; this is no longer the property of the individual who
    inhabits. It may be of the White House, it may be of the Office
    Of the Presidency, it may be these other distinctions that
    people who are--can make.
        But I think that is the distinction we are trying to make.
    That is where people have the problem.
        Mrs. Maloney. What I would like a clarification to, what
    about a personal gift? Say Mrs. Bush was my next-door neighbor,
    and I gave her a book of poetry that was worth $300? Could she
    accept this book of poetry and read it every night, if she so
    chose?
        And also I know that many cultural institutions invite the
    First Families to come to their openings or to their opera or
    ballet. Say the First Family went to the Metropolitan Opera; is
    that a gift? What if they go out to dinner with friends, and
    the friend wants to pay for the dinner? Is that a gift that
    must be disclosed?
        Could you clarify--is there--how are personal, close
    personal friends--say a college friend wanted to send the
    President some books that he thought were inspiring. Could he
    do that? Could the President keep them, or do they have to go a
    Presidential library that he can't even look at them.
        And I would like the Archivist and Mr. Smith from the
    museum to answer first.
        Mr. Carlin. Well, let my first explore your specific with
    the book for Mrs. Bush.
        If it was appraised at $300, first of all, she could accept
    it. If the intent was that it would be a personal gift for her,
    she could accept. And because it is above the limit, on an
    annual basis it should be part of the report that goes in for
    the ethics and, ultimately, whatever tax implication that might
    have.
        I would yield to my colleague, Mr. Walden, on the specifics
    as far as when it gets down to the details of what you are
    making reference to--a night at the Kennedy Center or at the
    Metropolitan Opera--because we have no experience as an agency
    on receiving those kinds of gifts.
        Mr. Walden. Well, right now the President and the First
    Lady are not subject to any statutory restriction on gifts.
    There is only a reporting obligation if the value of the gift
    is $260, or the aggregate of gifts received from any one source
    in a period of a year is $260 or more.
        The Office of Government Ethics regulations specify that
    for entertainment, you look at the ticket price. If a night at
    the opera is $100--or $200; I have not been at the opera
    recently, I am not sure if I am in the ball park there--then if
    it is over $260, it would have to be reported on the financial
    disclosure report. A gift to the First Lady that is independent
    of her relationship to the President, because perhaps you went
    to college with the First Lady, and you give a gift to the
    First Lady, that does not have to be reported on the financial
    disclosure report.
        Mrs. Maloney. But if I gave it to the President, it would
    have to be?
        Mr. Walden. If it is over $260.
        Mrs. Maloney. What about a dinner with their friends? Their
    next-door neighbors come to Washington; they want to take them
    out to dinner. Can they go out to dinner?
        Mr. Walden. Yes.
        Mrs. Maloney. Are we getting so that our First Ladies and
    Presidents can't even talk to people because there are so many
    laws that say--I don't know.
        Mr. Light. What if one of your friends comes to town and
    wants to take you to dinner?
        Mrs. Maloney. I don't go to dinner. I just work all of the
    time.
        No, seriously, my husband thought that going to Washington
    was going to be fun. He came up here two or three times. I get
    out of the office past 12 o'clock; we are on the floor at 1 or
    2 o'clock in the morning.
        I take them to dinner in the Members' dining room. That is
    what I do.
        But I am just curious, because everybody is--as Scott said
    earlier in his testimony, everybody wants to be honest. I
    certainly believe that every President and First Lady is of the
    highest moral ethics; you would not get to that position
    without it. But you want to make sure that the laws are clear
    so that you don't--you know, you can go out to dinner with your
    college buddy and violate a law.
        Mr. Harshbarger. This is a problem that exists with the
    ethics laws generally. I mean, it is one you face; it is one
    that every person here faces to make that distinction. It may
    well be, rightly or wrongly, part of the double standard that
    applies to being in public life.
        I make a--not a facetious remark, that we might be better
    if people holding private positions of power adhered to some of
    those standards as well.
        But the other side of it is, the reason we have tended to
    do--have tended to have these rules and limits is for clarity,
    for purposes of clarity.
        Mrs. Maloney. But tied to that was the statement by Mr.
    Walden that you want to consider privacy. And if you could,
    elaborate on that. If you have to disclose everyone you are
    having dinner with, everyone you are going out to see--the
    Kennedy Center, if you take your daughter, you are going to
    be--or your two daughters, you are going to be over the gift
    ban. You are going to be over $200.
        So you have to disclose everything--every person you are
    talking to, every place you go, everything that your college
    buddy sends you--you know, the 15 books he thinks are going to
    inspire you; please read them--you are going to have to
    disclose all of this.
        Now, who has access? You have no privacy on what you are
    reading, where you are going, who you are talking to. How is
    the privacy there when everything has to be disclosed?
        I refer to the attorney on the panel, Mr. Walden. How do
    you balance the privacy aspect?
        Mr. Walden. Well, Congress has set a threshold, a reporting
    threshold. And under that threshold, gifts to the President and
    the First Lady are not reported, and they are not disclosed
    even if there were a Freedom of Information Act request on the
    White House, because the White House office is not subject to
    FOIA.
        So the privacy interests are respected by having a
    threshold of reporting at $260, it used to be $100, fairly
    recently, in the last 10 or 12 years.
        So it is set legislatively. This Congress obviously has the
    authority to reduce or lower the reporting threshold. I would
    not advocate it, to lower it, which would require more
    reporting, but I think would erode some legitimate privacy
    interests of all Federal employees.
        Mrs. Maloney. My time is up.
        Mr. Horn. I thank the woman. More than that, so Mr. Ose
    will get 15 minutes on questioning.
        Mr. Ose. Thank you, Mr. Chairman. I apologize. At 12 or
    shortly thereafter I am managing a bill from the larger
    committee on the floor, and I will have to depart. So I will
    move expeditiously.
        I am particularly interested in Mr. Harshbarger's, Mr.
    Light's and Mr. Walden's answer to the question: Do you
    support--the three witnesses on the right, on the right-hand
    side of the table, the answer to the question: Do you support
    disclosure of all gifts or only gifts over a certain threshold?
    And depending on your answer as to whether there is a
    threshold, what threshold do you recommend?
        Mr. Harshbarger.
        Mr. Harshbarger. I think there should be a threshold.
        Mr. Ose. You have got to keep in mind that I've got to
    leave in, like, 15 minutes.
        Mr. Harshbarger. Very quickly, I think the key thing is to
    have an amount, whether it is $50 or $100. I mean, what that
    limit should be should be clear. And it--the position that we
    have asserted here is that I would like to have a strong reason
    why it shouldn't be the same limits that apply to
    congressional--House and Senate.
        Mr. Ose. Mr. Light.
        Mr. Light. I think there should be a disclosure limit. I
    think it should be the same as for Members of Congress.
        Mr. Walden. There should be a threshold limit. And the
    President, as an elected official, should have the same amount
    or threshold as Members of Congress.
        Mr. Ose. Mr. Harshbarger has recommended regular posting of
    gifts information on the Internet, which I think is a great
    advantage, I think.
        Governor, what is your reaction to that? I know what Mr.
    Harshbarger's position is. I want to ask the other four. Do you
    believe we should have a regularly posting on the Internet of
    gifts that have been received at the White House?
        Mr. Carlin. It would be our position to implement the
    policy that you pass. We have got enough challenges without
    taking positions on what thresholds should be or not be.
        Mr. Ose. You are for or against posting?
        Mr. Carlin. Obviously, as an agency, we are for access. But
    in terms of the specific policy that this would be different
    than our normal operating procedure, we would yield to you.
        But, generally, yes, we are for access to information. That
    is what we are all about.
        Mr. Smith. The Park Service would defer to Archives on
    that. We do not deal with the personal gifts you are talking
    about.
        Mr. Ose. Mr. Light, do you think we ought to post this
    information on the Internet?
        Mr. Light. NARA has got one of the best sites in the
    Federal Government, and this would only augment its drawing
    power. Yes, I am in favor of it.
        Mr. Ose. With what frequency do you recommend them posting?
    Daily? Weekly? Monthly? Quarterly?
        Mr. Light. We have the technology to do this almost
    instantaneously.
        Mr. Ose. OK.
        Mr. Walden, any observations?
        Mr. Walden. For foreign gifts, I would support putting on
    the Internet all foreign gifts that are deemed property of the
    United States.
        For gifts accepted for the libraries, gifts accepted by the
    Archives under its authorities, or gifts accepted by the Park
    Service, I would support a data base. For personally accepted
    gifts, I would not.
        The financial disclosure report that everone files, all
    public officials file, must be destroyed after 6 years. And if
    the information is put on the Net, then it is permanent. If the
    policy on destroying financial disclosure reports is to be
    changed, then maybe I would revisit that.
        Mr. Ose. I will tell you that was one of the difficulties
    that we had in trying to quantify the extent of the problem,
    because we could not go back in the records we no longer had.
    It was a difficulty for us. And, we have been attacked because
    we only had records for one administration, but that was
    reality.
        Mr. Harshbarger has got a lot of recommendations. I mean, I
    know what your written testimony is, but I am going to ask the
    others. I think these two gentlemen are going to say, we will
    follow the will of Congress, whether or not the President signs
    any bill.
        Mr. Light, what is your view of the need for the donor's
    occupation and employer?
        Mr. Light. We require the occupation and employer of all
    transition team members, for example. It is a very simple flag
    to mark, and I don't see any problem with including it.
    Certainly the employer is a de minimis requirement, I would
    think.
        Mr. Ose. Now that is not a piece of information that is
    currently collected on these gift forms. So you think it ought
    to be added?
        Mr. Light. Yes. What we have across all of those laws for
    campaign disclosures, for transition participation, are a
    patchwork of different requirements, depending on what time of
    year you happen to be involved or what you are giving.
        I think this subcommittee could do everyone a favor by
    rationalizing the reporting requirements across the different
    kinds of things we give to our political leaders.
        Mr. Ose. Mr. Walden, do you agree?
        Mr. Walden. On one's financial disclosure report, I think
    it would help to know the employer or the business with which
    the donor is affiliated. I also think it might assist the White
    House's job to ask that any gift be accompanied by donor
    identity so that the counsel's office could adequately
    determine whether any gift would pose an appearance problem.
        Mr. Ose. OK.
        Now, we talked about the maximum cap. If I understand, Mr.
    Harshbarger and the two of you believe the standards for the
    executive branch should be the same as for the legislative
    branch. Whatever it is, it is X; am I correct?
        Mr. Walden. On disclosure, yes.
        Mr. Ose. Yes.
        Do you support a cap on either the individual value of the
    gift or the aggregate value of the gift?
        If I understand your testimony, it is that you do support a
    cap of $50 on the individual gift and $100 in the aggregate; is
    that correct?
        Mr. Light. No. That depends on who you are talking to.
        Mr. Ose. Mr. Harshbarger, is that your testimony?
        Mr. Harshbarger. In terms of the individual gifts, our view
    was, it would be exactly the same as the congressional.
        Mr. Ose. Whatever the House and Senate is?
        Mr. Harshbarger. Whatever the House and Senate is. Any
    other size gifts can be received. They can be received. They
    just become--they are just very clearly the property of, you
    know----
        Mr. Ose. This is the point I am trying to get at. There is
    no prohibition on a gift being received. It is whether or not
    the individual can keep it.
        Mr. Harshbarger. That is right. That is the limit that we
    are trying to--I think you were trying to--that is what we are
    trying to draw here as well.
        Mr. Ose. Let me go to a different subject.
        A question arose in the last administration as it relates
    to when gifts were received. There was a window after the
    election before a member of the First Family was sworn into
    office.
        Mr. Light, your testimony indicated that you thought there
    may be merit in prohibiting gift-taking during certain periods.
    I want to ask Mr. Harshbarger, Mr. Light, Mr. Walden whether or
    not they support including prohibited periods within this
    legislation?
        Mr. Harshbarger.
        Mr. Harshbarger. Yes. When we talked about this before, I
    mean it--first of all, it is likely to be a fairly rare
    circumstance. But on the other side, the better course seemed
    to be, very clearly, that there was that window that caused the
    problem for everybody's purposes.
        So I would think that it is reasonable to have a period in
    which, in that transition, you have limitations; or at least
    you have limitations apply that are the same, that apply to
    everybody else in those circumstances.
        Mr. Ose. So if you are a Member-elect kind of thing, you
    would be subject to those?
        Mr. Harshbarger. I would think that you should be subject
    to those precisely because you are a Member-elect, and that
    there shouldn't be a distinction between you at that point and
    then the office that you are--that you are about to hold.
        Mr. Ose. Mr. Light, do you agree with that?
        Mr. Light. You know, we cover everyone in the transition
    coming into office with very clear disclosure and bans on
    acceptance of gifts and so forth.
        You know, I wish it weren't true. I wish we weren't having
    this hearing. I wish you hadn't dug up all of this data. I wish
    it wasn't out there.
        Mr. Ose. This is very tawdry.
        Mr. Light. But, you know, the fact is that we are at a
    moment now where we have to cure a problem in the public's
    mind; and it is particularly serious in the last months of an
    administration. The appearance problems that came out of one,
    single administration I think have tainted public attitudes for
    future Presidents; and we may have to do this as a matter of
    course no matter how difficult it is to us.
        Mr. Ose. So you would broaden it beyond just the Member-
    elect issue, even if someone in the administration or the First
    Family was not--you would still have that blackout period?
        Mr. Light. I think you should have a blackout period.
        Mr. Ose. Mr. Walden.
        Mr. Walden. On the transition coming in, I would support
    disclosure of gifts. I would not support a ban or a restriction
    on gifts.
        Mr. Horn. If my colleague will permit me, before you leave,
    what rules apply to gifts to the Vice President and the spouse,
    and do they need to be changed? What do we do now in terms of
    the Vice Presidency?
        Mr. Walden. The Vice President has the same exception that
    the President enjoys from the gift restrictions. So the Vice
    President may accept any gift. That does not mean the Vice
    President accepts all gifts; any gift can always be declined.
        Same reporting requirements: $260 aggregate from one source
    in a reporting period must be disclosed.
        Mr. Horn. How about foreign gifts? It would seem to me that
    he has got to spend a lot of time when the President is not in
    town and so forth.
        Mr. Walden. All foreign gifts, whether given to a junior
    executive branch employee or the President or the Vice
    President, fall under the Foreign Gifts and Decorations Act. So
    if the value is $260 or more, it automatically becomes the
    property of the United States.
        Mr. Horn. Thank you.
        Mr. Ose. Thank you, Mr. Chairman.
        Mr. Harshbarger, Mr. Light, Mr. Walden, do you support
    amending H.R. 1081 to include a legislative prohibition on
    solicitation or coordination of gifts to the First Family?
        Mr. Harshbarger. Just--I didn't hear.
        Mr. Ose. Do you support a legislative--statutory as opposed
    to regulatory--prohibition on solicitation or coordination of
    gifts to the First Family?
        Right now, it is a regulatory issue that says, well, you
    shouldn't do it. I am asking you whether or not you think we
    ought to put that in statute.
        Mr. Harshbarger. You know, strangely, from this discussion
    before, I don't disagree with Greg's position that it would be
    wonderful if we could assume, you know, the regulatory action
    of--the actions of individuals would apply here.
        But I think when--it is inevitable when you have a
    particular problem, if there--you know, that the legislation
    becomes one way in which you try to deal with it; I don't think
    that will solve every problem.
        We obviously have gone through this discussion on campaign
    finance reform. People are going to think of other ways around
    it. But just that the law doesn't solve every problem doesn't
    mean we don't pass it and try to do--we do a lot of crimes and
    conduct like this.
        So I think here you have an example of what was--if it was
    a loophole, I agree with Mr. Light that this was a unique
    circumstance that highlighted a major problem that clearly has
    assisted in undermining people's confidence. It is not a focus
    on Democrats or Republicans. It is the issue. And I think that,
    therefore, carefully crafted legislation that would address and
    remedy, at least fill these loopholes would be helpful.
        And, you know, I think if you had the limit already, then
    you add that, you can't do--if you can't do directly these
    kinds of things, you shouldn't be able to do them indirectly or
    through agents or through some other kind----
        Mr. Ose. I take that as a yes.
        Mr. Light, do you support a statutory prohibition?
        Mr. Light. It depends. If you put a ban on acceptance of
    gifts, you know, you are almost--it is redundant to say, don't
    solicit gifts that you can't take. But it depends on how the
    legislation goes.
        If you are not going to adopt a variation of Representative
    Mink's proposal, along with yours, then I would say, yes, ban
    coordinated solicitation, although it is distasteful that we
    have to say in statute that you shouldn't do the obviously
    unethical thing. You know what I mean?
        Mr. Ose. Yes.
        Mr. Walden, any thoughts?
        Mr. Walden. I would not oppose codifying the ban on
    solicitation that is found in regulations. But I would not
    favor putting it in Title 18, making it a criminal provision.
    As a general matter, this is a much larger subject, I don't
    favor criminalizing ethics rules. But codifying it just as a
    civil statute, I would not oppose.
        Mr. Ose. OK.
        Now, the--Mr. Light, your testimony states, ``Valuation of
    gifts should be independent, consistent and based on a clearly
    transparent methodology.''
        And Mr. Walden states, ``If there are no written guidelines
    on how to conduct the valuation, including when it is necessary
    to obtain a commercial or independent appraisal, guidelines
    could be written after consultation with other appraisal
    experts.'' Then he adds that ``I concede that assigning a
    valuation process to an entity outside of the White House would
    ensure proper valuation.''
        Mr. Harshbarger, what is your view of the need for
    independent valuation or appraisals of nonminimal-valued gifts,
    that is, those above or subject to the threshold question?
        Mr. Harshbarger. I mean, I respect very much Mr. Walden's
    position.
        I want to echo one thing. I think one thing we do need to
    be careful about is criminalizing this conduct, because I think
    that it tends to make it very hard as a prosecutor to prosecute
    these cases. Therefore, you tend not to do them. So civil
    violations can sometimes serve the same purpose. I just wanted
    to echo that.
        We do a lot of that, making things that make it hard for
    lots of purposes, for juries----
        Mr. Ose. How about on the valuation?
        Mr. Harshbarger. Now on this one, I would say--I think
    White House counsel, it would be great if White House counsel
    performed these functions independently.
        We now have enough examples--and I hate to go back to this
    because it dates me, the 30th anniversary of Watergate. We
    ought to--at a certain point, to rely upon the discretion of an
    official who holds his or her job by virtue of simply the
    pleasure of the person that they are charged with regulating.
    We ought to see and understand that even though they are
    supposed to be independent, they are supposed to be
    professionals, first and foremost.
        We see it in the White House. But it is not just public
    service. We now see it in corporations all over this country.
    Therefore, independent, outside audits at a certain--at regular
    points would be, I think, beneficial to the integrity of the
    professionals inside; would give them more ability to be
    independent and to be credible inside, because you knew the
    outside thing was there to validate it.
        Mr. Ose. All right.
        Mr. Light, clearly, I take your comment to be supportive of
    independent valuation?
        Mr. Light. We would probably want to steer clear of an
    auditing firm that starts with the letter A. But other than
    that, yeah, we could figure that one out.
        Mr. Ose. Mr. Walden.
        Mr. Walden. Independent of the White House Gift Office, but
    inside the White House. I think OGE and, to some extent, GAO
    could conduct some oversight as to the job the White House
    Counsel's Office is doing.
        But in the first instance, I would entrust the
    responsibility to the White House counsel.
        Mr. Ose. Mr. Chairman, I am sorry. I have to go to the
    floor to manage this bill. I have a number of questions that
    remain. I can submit them for the record.
        Mr. Horn. Well, we can ask some of them.
        Mr. Ose. I appreciate that. This is a very serious issue.
        I think the witnesses' comments that this is an unfortunate
    thing to have to discuss are accurate. It is--the issue we are
    trying to deal with has no reference whatsoever to who or who
    may not be in this or that White House during this or that
    time. This is an issue about giving the people of this country
    the opportunity to have faith that the decisions being made at
    the highest levels of government are not being inordinately
    influenced.
        Mr. Horn. OK. Let me pursue some of these questions.
        Mr. Smith, Governor Carlin, do you know what changes the
    White House Gifts Office has made to improve its controls?
        Mr. Carlin. I cannot speak specifically to exactly what has
    gone on, other than in our workings with them back and forth.
    It is clear they have made adjustments and are operating in a
    way from where we can observe in a very appropriate way.
        Mr. Horn. By law, Mr. Smith, the Park Service conducts a
    so-called ``snapshot inventory'' of all property belonging to
    the Executive Residence, including gifts in June of each year.
    Would it not be better for the Park Service to maintain a
    current and ongoing inventory of all gifts it accepts for the
    Executive Residence as it receives them?
        Mr. Smith. The documentation, as it receives it, is
    coordinated with either the Curator or the Chief Usher. The
    annual count is to actually inventory what is there.
        Mr. Chairman, this includes such things as pieces of
    flatware and china and that type of thing. So it is an ongoing
    count to account for what is on the record.
        Mr. Horn. Do you know what changes in the White House gifts
    office have been made to improve its controls?
        Mr. Smith. Not in the gifts office, Mr. Chairman. Again,
    that deals with personal donations of the President. The change
    that was made in coordination with the White House Curator's
    office and the White House Chief Usher is that the
    documentation, the coordination of what either the Curator or
    the Chief Usher requests the Park Service to accept, either for
    the museum collection or for the residence, is that there has
    been a very key clarification made of the intent of the donor,
    meaning that it is going to be for the U.S. Government, and
    that is acknowledged back to the donor, and there is a better
    recordkeeping process between the Park Service and the White
    House offices.
        Mr. Horn. Moving ahead, Mr. Harshbarger, Mr. Light,
    unfortunately, many of the recent problems with Presidential
    gifts apparently stemmed from outright violations of the
    existing statutory requirements and administrative controls.
        How will imposing additional requirements and controls
    solve those kinds of problems?
        Mr. Harshbarger. I think the answer is that enforcement, as
    has been mentioned, is key to this. I mean, if you have no
    credible expectation or credible threat that rules or
    regulations or laws are going to be enforced, then there--the
    sanction value isn't there.
        I think there is a certain measure--I think we have always
    believed that public disclosures and public scrutiny tend to
    add measures of enforcement that have a useful effect.
        The reality here is, I think, that you have--you are hoping
    that by having some measures of independence come into the
    process that will facilitate it, having some measures of public
    disclosure that don't now exist will also help serve as an
    antiseptic.
        But I think if you also look at what the actual remedy is,
    if the remedy is going to, more than this congressional gift
    ban, limit restriction, I think that, in and of itself, will
    have significant benefit, because then any violations will be
    much clearer.
        I mean, the very problem we have here is that what exactly
    is a violation or what isn't is almost as complicated. Once
    that becomes very difficult, it is very hard to have credible
    and consistent enforcement.
        Mr. Light. The current system is such a mess in terms of
    allocating, making decisions, and valuing gifts that one could
    easily violate it without knowing. I am not willing to say that
    mistakes made in the last few months of the previous
    administration were deliberate or not. It is hard to tell.
    There appears to be on these charts a pattern of picking and
    choosing the gifts that would fit best with the President's
    future property needs.
        But the system is such a mess that H.R. 1081 and other
    efforts to kind of rationalize it should improve performance
    right away, just by making it clear exactly where the lines are
    drawn.
        Mr. Horn. Is it basically--well, the Archivist points out
    from his agency, he couldn't assure that inventory is, in fact,
    comprehensive.
        Now, only the White House could provide that assurance; and
    in view of this, do you believe the White House should have
    responsibility to maintain the inventory? What do you think?
        Mr. Light. Well, the gifts come in the front door at the
    White House--or the back door or the side door or whatever it
    is, but they came to the White House. They are not sent to the
    Archives. Somebody has got to log the gifts someplace.
        The beauty of an outright ban above a certain level is that
    you eliminate the logging process. Basically, you are saying
    that if it is above a certain level, it goes back if it is a
    personal gift.
        But, I don't see how you can transfer--well, I suppose you
    can, technically. But Americans who want to give the President
    a gift send it to the White House at 1600 Pennsylvania Avenue.
    Now, whether you want to put all of those in the back of a
    truck and take them down to Archives, I don't know.
        Mr. Harshbarger. This problem is not unique to the White
    House. I mean, every public official has to have some system by
    which he or she does screening and reviewing of gifts in a
    variety of ways. Nothing like what comes to the White House,
    obviously, but I think the reason it comes at that level is
    because people are giving those gifts.
        I hope they are giving those gifts not to get favor or
    curry favor, or to get influence and access, but they are
    giving them as sort of a tribute. It seems to me that,
    therefore, you want to have at every entry point an inventory
    method, but you need to get it to some centralized place so
    that it can be reviewed.
        So--I mean, the White House clearly is going to have to--
    continue to have to play functions. The White House counsel is
    going to have to play major functions under any system. It
    seems to me that having some clarity as to what is expected is
    crucial.
        Mr. Horn. Mr. Walden, your testimony spells out a series of
    internal controls that the White House should adopt to improve
    the administration of Presidential gifts. Would you favor
    legislation that simply requires the White House to institute
    and maintain these controls?
        Mr. Walden. Not at this time.
        I think that there should be a very compelling showing
    before Congress legislates the internal operations of the
    executive office of the President. Although the record is
    replete with errors and mistakes made by the prior
    administration, I don't believe that there is enough of a
    factual predicate to demonstrate that this White House should
    be saddled with a legislative requirement that those reforms be
    done.
        However, I think that Congress does have enough oversight
    authority to ensure that the White House does those reforms.
        Mr. Horn. You also state that accountability problems over
    the Presidential gifts stem in part from the lack of public
    disclosure and transparency. Yet you also state that
    legislation on this subject should not compromise legitimate
    privacy interests of the First Family.
        Mr. Walden. That's right. I think this is just the price
    that the public pays to respect--to give the Presidency just a
    modicum of privacy that otherwise is stripped from the First
    Family upon election.
        Mr. Horn. Do you believe H.R. 1081 goes too far in making
    gift information available to the public?
        Mr. Walden. Yes, I do. I don't know whether it was the
    intent of the bill to supersede FOIA, but the Freedom of
    Information Act has an exception from disclosure for personnel,
    medical, or similar records, the disclosure of which would
    clearly constitute an invasion of personal privacy--that's 5
    U.S.C. 552(b)(6)--and H.R. 1081 does not have any such
    limitation on the public disclosure of any gift information.
        Mr. Horn. Are there any other comments you would like to
    make after you have heard your colleagues' comments? I have
    lawyers there, and they don't want to go further?
        Fine.
        Well, here is my last question, Governor. I am concerned
    about the ability of researchers and others to gain access to
    copies of e-mails within the custody of the National Archives.
    Is this a valid concern? You know, we had all these e-mails
    floating around over the last 2 years; and I must say that gave
    me a good idea that I ought not have an e-mail. Because some of
    the silly things I saw floating around the previous
    administration, just seemed to me that it didn't help the
    President, and I don't think it helped the country. It was just
    sort of, you know, a bunch of kids playing another bunch of
    kids.
        I'm just curious, to what extent could the Archives deal
    with that? I know we are putting a lot of things on you; but in
    a new era, if people are going to use e-mails and they are
    Government documents, can the Archives handle it?
        Mr. Carlin. Well, I think we have little or no choice
    because e-mail--those are records. The format, the medium does
    not determine whether they are a record, whether it is on paper
    parchment or electronic. So our responsibility is just to deal
    with them as records, treat them as we would regardless of the
    format.
        Obviously, with the technology issue involved, it does make
    things very complex, as we learned from the last administration
    where we were dealing with 40 million e-mails. Now the
    challenge of providing access to them--not to the public,
    because, by law, the public at this point in the timeframe does
    not have access, but for you folks and the courts, we are
    spending a lot of time and energy locating and finding the
    specific e-mails to which there has been a request for.
        Mr. Horn. What procedures do you have now for providing
    copies? Can you--if someone under the Freedom of Information
    law said, I would like to see the particulars, either
    personnel, Presidential personnel--I don't know if that's open.
    But what are the rules for who can get access to e-mails that
    are in the custody of the Archives?
        Mr. Carlin. It would be governed by the Presidential
    Records Act, like any other records. So it would depend upon
    whether we are in the first 5 years, the first 12 years, and
    all the exceptions that have been a discussion point with this
    committee as it relates to the act itself.
        Mr. Horn. Well, this deserves, obviously, further time than
    we have this morning, but I just wanted to see that, because we
    are in a technological age and we need to handle it just like,
    as you said, all the other things that people have written over
    the years.
        Mr. Carlin. Mr. Chairman, I take this opportunity to point
    out that the even greater challenge for us at the Archives is
    to be able to preserve these digital records over time, several
    generations of technology later, and be able to produce
    electronically an authentic record. That is the huge challenge
    that we are working with partners around the entire world to
    try to deal with, and we have confidence in the next few years
    we will be able to develop that capacity so that 50 or 100
    years from now that digital record can be pulled up
    authentically on a much later generation of technology.
        Mr. Horn. Will you still have space for the gifts of the
    White House?
        Mr. Carlin. Well----
        Mr. Horn. Or is that pushing it out?
        Mr. Carlin. Space is an issue with gifts, and there are a
    lot of complicated issues involved, not just the ones discussed
    here this morning.
        Mr. Horn. Well, I thank you for coming; and I thank the
    staff that's put this together: Russell George, our Staff
    Director and Chief Counsel, right behind me; Bonnie Heald, the
    Deputy Staff Director, next to him; Henry Wray, right to my
    left, your right, and he is the Senior Counsel for this
    session; and the majority Clerk is Justin Paulhamus. Chris
    Barkley is a member of the subcommittee staff; Michael Sazonov,
    the same, intern; Sterling Bentley, intern; Freddie Ephraim,
    intern; Joe DiSilvio, intern.
        The minority staff: Michelle Ash, Professional Staff;
    Earley Green, minority Clerk.
        Other staffs were Barbara Kahlow, Deputy Staff Director for
    Mr. Ose's Subcommittee on Energy Policy, Natural Resources and
    Regulatory Affairs; and we thank the court reporters, Mark
    Stuart and Desirae Jura. We thank you for all your hard work.
        With that, we are adjourned.
        [Whereupon, at 12:07 p.m., the subcommittee was adjourned.]
        [Additional information submitted for the hearing record
    follows:]

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