[Senate Hearing 107-118]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-118
 
           THE STATE OF THE PRESIDENTIAL APPOINTMENT PROCESS
=======================================================================







                                HEARINGS

                               before the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION


                               __________

                          APRIL 4 AND 5, 2001

                               __________

      Printed for the use of the Committee on Governmental Affairs











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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
SUSAN M. COLLINS, Maine              CARL LEVIN, Michigan
GEORGE V. VOINOVICH, Ohio            DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            ROBERT G. TORRICELLI, New Jersey
JUDD GREGG, New Hampshire            MAX CLELAND, Georgia
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
                                     JEAN CARNAHAN, Missouri
             Hannah S. Sistare, Staff Director and Counsel
                      Dan G. Blair, Senior Counsel
                        Robert J. Shea, Counsel
                       Johanna L. Hardy, Counsel
     Joyce A. Rechtschaffen, Democratic Staff Director and Counsel
                  Susan E. Propper, Democratic Counsel
                     Darla D. Cassell, Chief Clerk
















                            C O N T E N T S

                                 ------                                
                                                                   Page

Opening statements:
    Senator Thompson............................................. 1, 49
    Senator Akaka................................................     2
    Senator Voinovich............................................     3
    Senator Carper...............................................    12
    Senator Cochran..............................................    62

                               WITNESSES
                        Wednesday, April 4, 2001

Hon. Sean O'Keefe, Deputy Director, Office of Management and 
  Budget.........................................................     5
Hon. Robert J. Nash, Former Director, White House Office of 
  Presidential Personnel.........................................    14
Paul C. Light, Vice President and Director of Governmental 
  Studies, The Brookings Institution.............................    15
G. Calvin Mackenzie, Distinguished Presidential Professor of 
  American Government, Colby College.............................    26
Scott Harshbarger, President and Chief Executive Officer, Common 
  Cause..........................................................    28
Patricia McGinnis, President and Chief Executive Office, Council 
  for Excellence in Government...................................    31
Norman J. Ornstein, Resident Scholar, American Enterprise 
  Institute......................................................    33

                        Thursday, April 5, 2001

Hon. Amy L. Comstock, Director, Office of Government Ethics......    50
Hon. Nancy Kassebaum Baker, Former U.S. Senator from Kansas, and 
  Co-Chair, Advisory Board, Presidential Appointee Initiative....    53
Hon. Franklin D. Raines, Former Director, Office of Management 
  and Budget, and Co-Chair, Advisory Board, Presidential 
  Appointee Initiative...........................................    56

                     Alphabetical List of Witnesses

Baker, Hon. Nancy Kassebaum:
    Testimony....................................................    53
    Prepared statement...........................................   138
Comstock, Hon. Amy L.:
    Testimony....................................................    50
    Prepared statement with attachments..........................   126
Harshbarger, Scott:
    Testimony....................................................    28
    Prepared statement...........................................    98
Light, Paul C.:
    Testimony....................................................    15
    Prepared statement...........................................    77
Mackenzie, G. Calvin:
    Testimony....................................................    26
    Prepared statement...........................................    92
McGinnis, Patricia:
    Testimony....................................................    31
    Prepared statement with attached letter......................   115
Nash, Hon. Robert J.:
    Testimony....................................................    14
    Prepared statement...........................................    75
O'Keefe, Hon. Sean:
    Testimony....................................................     5
    Prepared statement...........................................    73
Ornstein, Norman J.:
    Testimony....................................................    33
    Prepared statement...........................................   121
Raines, Hon. Franklin D.:
    Testimony....................................................    56
    Prepared statement...........................................   147

                                Appendix

Hon. Gary Hart and Hon. Warren B. Rudman, Co-Chairmen, U.S. 
  Commission on National Security/21st Century, prepared 
  statement......................................................   160
Chart: The Presidential Appointment Process......................   167
Chart: Percentage of Appointees from DC Metro Area by the 
  Presidential Appointee Initiative, referred to by Paul C. Light   168
Wall Street Journal article by Paul C. Light, entitled ``The 
  Glacial Pace of Presidential Appointments,'' dated April 4, 
  2001...........................................................   169
Washington Post article by Richard Cohen, entitled ``What Price 
  Service?'' dated April 3, 2001.................................   170
The Presidential Appointment Process: Reports of Commissions that 
  Studied the Staffing of Presidential Administrations: A Summary 
  of Their Conclusions and Recommendations for Reform............   171
Office of Government Ethics Report entitled ``Report on 
  Improvements to the Financial Disclosure Process for 
  Presidential Nominees,'' April 2001, submitted by Amy L. 
  Comstock.......................................................   195
The White House 2001 Project--Nomination Forms Online--Report No. 
  15: ``In Full View--The Inquiry of Presidential Nominees,'' by 
  Terry Sullivan, The University of North Carolina at Chapel Hill 
  and the James A. Baker III Institute for Public Policy.........   244
``To Form a Government--A Bipartisan Plan to Improve the 
  Presidential Appointments Process,'' The Presidential Appointee 
  Initiative, A project of the Brookings Institution, April 2001.   284
The State of the Presidential Appointment Process, Brookings 
  Review, Spring 2001............................................   305

Post hearing questions and responses:
    Questions submitted by Senator Levin and responses from Amy 
      Comstock...................................................   353
    Questions submitted by Senator Akaka and responses from G. 
      Calvin Mackenzie...........................................   359
    Questions submitted by Senator Akaka and responses from Scott 
      Harshbarger................................................   362
    Questions submitted by Senator Akaka and responses from 
      Norman Ornstein............................................   363










           THE STATE OF THE PRESIDENTIAL APPOINTMENT PROCESS

                              ----------                              


                        WEDNESDAY, APRIL 4, 2001

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:06 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Fred 
Thompson, Chairman of the Committee, presiding.
    Present: Senators Thompson, Akaka, Voinovich, Carper, and 
Cochran.

             OPENING STATEMENT OF CHAIRMAN THOMPSON

    Chairman Thompson. Let's come to order, please. I think we 
better go ahead and get started. I know Mr. O'Keefe has to be 
elsewhere. In fact, we might take your statement and ask 
questions and excuse you, if that is what you need.
    Mr. O'Keefe. Thank you, sir.
    Chairman Thompson. I welcome everyone to this hearing of 
the Committee on Governmental Affairs. Today's hearing is the 
first of two the Committee will conduct on the state of the 
Presidential appointment process. We will hear this afternoon 
from our panel of respected witnesses on the process 
Presidential appointees currently undergo, problems that have 
developed, and whether they are a barrier to public service.
    Tomorrow morning our witnesses will be the Hon. Amy 
Comstock, Director of the Office of Government Ethics; former 
Senator Nancy Kassebaum Baker; and former Director of the 
Office of Management and Budget, Franklin Raines. At that time 
both the Office of Government Ethics and the Presidential 
Appointee Initiative will release their recommendations for 
reform of the system. Senator Kassebaum Baker and Mr. Raines 
will be testifying on behalf of the Presidential Appointee 
Initiative. Ms. Comstock will be presenting to the Committee 
her report examining the current financial disclosure 
requirements and recommendations on streamlining the process.
    When our system of government was designed more than 200 
years ago, the Founding Fathers realized that the work of the 
people would need to be supplemented by the service of non-
elected public servants. Yet they grappled with the question of 
accountability. Since these high-ranking officers would not be 
elected, what would prevent them from abusing their significant 
powers? Thus, our Founding Fathers included in the Constitution 
a requirement that certain high-ranking government officials 
receive the advice and consent of the Senate in order to assume 
their influential positions.
    The theory behind this process is that even though the 
appointees themselves are not elected, the public can hold the 
President and the Congress responsible for the appointee's 
actions while he or she serves the public interest. It is 
incumbent on the President and the Congress to ensure that 
appointees meet exacting standards.
    For certain high-ranking positions, the candidate is 
selected, undergoes background investigations, is nominated, 
and finally undergoes confirmation by the Senate. On the 
surface, this process appears to be simple and straightforward. 
I presume the Founding Fathers intended that the appointment of 
these influential public servants be done quickly. Yet this 
system has evolved into a bureaucratic maze which requires 
potential nominees to bear significant burdens. All too often 
the process becomes mired in politics. Further, nominees face 
burdensome, duplicative, perhaps unnecessary paperwork, and 
confusing ethics laws which may have lost sight of their 
initial purpose.
    In fact, the entire appointment process has become so 
complex that some of the best qualified people are reportedly 
turning down the opportunity for public service. Citing privacy 
concerns, severe post-employment restrictions, and the 
sometimes low public image of government officials, potential 
appointees are reluctant to enter the fray.
    The key to a successful administration is the ability to 
get its people in place in a timely manner. Democracy is 
thwarted when the President's ability to carry out this task is 
hampered by a reluctance to serve and unnecessary delays. From 
most accounts, the ability of the President to appoint good 
people to key positions in government on a timely basis is in 
doubt.
    The Committee on Governmental Affairs is actively 
evaluating the current state of the Presidential appointment 
process and will closely examine all proposals for reform. The 
ability of a President-elect to attract the best to public 
service and then put them to work is obviously of critical 
importance. As early as 1937, a blue-ribbon panel was 
commissioned to study this process. Since 1985, nearly a dozen 
other major studies by highly regarded individuals have 
examined the way we staff a Presidential administration.
    It is worth noting that many of the problems first 
identified in President Roosevelt's 1937 Brownlow Committee 
report continue to exist today. Clearly, there is a strong 
consensus that reform is needed, and each successive study has 
reached agreement that changes in the process are achievable.
    We have an excellent group of witnesses today, and I look 
forward to hearing their ideas on reforming the appointment 
process.
    Chairman Thompson. Senator Akaka.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman. I am 
pleased to be with you here today and welcome the witnesses.
    The Constitution provides that the President shall nominate 
and, by and with the advice and consent of the Senate, appoint 
high government officials. I support this Committee's 
continuing efforts to examine the Presidential appointment 
process. As a cosponsor of the Presidential Transition Act of 
2000, I look forward to receiving recommendations from the 
Office of Government Ethics for streamlining the public 
disclosure requirements along with our witnesses' suggestions.
    The nomination of an appointee by a President triggers a 
series of events before the nominee is confirmed by the Senate. 
These events, as well as certain financial and ethical 
restrictions placed on appointees, are the subject of these 
hearings.
    Last week, I participated in a joint Senate-House hearing 
on the government's human capital crisis and its impact on 
national security. At that time we examined the recruitment and 
retention problems facing the Federal civil service. It is 
appropriate that we also look at the barriers facing the 
recruitment and retention of cabinet secretaries and their 
deputies.
    We know the average number of months it takes a nominee to 
be confirmed is increasing. For the Kennedy Administration, it 
was 2.3 months. For President Reagan, it almost doubled to 4.3 
months. President Clinton's appointees took 8.53 months on 
average to navigate the confirmation waters.
    What is causing this trend and what can the Senate do to 
streamline the process while fulfilling its constitutional duty 
is the question. Is it politics or is it process, or is it 
both?
    The Senate requires a reasonable time to examine a nominee, 
but I think we all agree that close to a year is not 
reasonable. It is not fair to our Chief Executive, and it is 
not fair to the nominees.
    We must determine the proper balance between the Senate's 
constitutional duty, the President's prerogative, and the 
privacy rights of nominees. There is disagreement over whether 
our current ethics rules are too restrictive and unduly 
penalize nominees. Some say that citizens are turning away from 
government service because the disclosure requirements are too 
great. Others believe that strict rules of conduct are 
necessary to prevent abuse of public office for private gain 
and to ensure that individuals who serve the public trust avoid 
conflicts between their personal and public interests.
    Mr. Chairman, I ask that my full statement be placed in the 
record of the hearing.
    Chairman Thompson. All Members' full statements will be 
made part of the record.
    Senator Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Mr. Chairman, I want to thank you for 
holding this hearing on what I consider to be a critical issue 
for our Federal Government. Since I came to the Senate in 1999, 
I have focused a great deal of my attention on changing the 
culture of our Federal workforce. As I have noted many times 
over the last 2 years, the Federal Government is experiencing a 
human capital crisis. One important aspect of that crisis is 
the Presidential appointment process.
    Over the past 16 years, no fewer than 10 commissions and 
task forces have examined this process. Just last week, 
witnesses from the Hart-Rudman Commission testified before the 
Subcommittee on Oversight of Government Management, which 
Senator Akaka referred to and which I chaired, and talked about 
bringing America's most talented people to public service. They 
said it is broken.
    The Commission's final report observes, ``The ordeal to 
which outside nominees are subjected is so great, above and 
beyond whatever financial or career sacrifice is involved, as 
to make it prohibitive for many individuals of talent and 
experience to accept public service.''
    Every other report on this issue since 1985 concurs with 
that dismal conclusion. Not only has the length of the process 
of confirming Presidential appointments quadrupled over the 
past 40 years, but it has become poisoned by an atmosphere of 
distrust and cynicism. Those drawbacks, along with the 
proliferation of ethics rules, excessive post-employment 
restrictions, and the dramatic increase of Presidential 
appointed positions, all have coalesced to prevent the 
President from having his team in place to promote his agenda 
before Congress and the American people.
    In short, it silences each new administration's voice in 
the dialogue that informs public policy, and it absolutely 
inhibits the Federal Government's ability to engage in sound, 
and good management practices.
    Many of the problems in the appointment process were 
exacerbated this year by the 5-week delay in the Presidential 
transition. I know that this administration is very proud of 
the fact that they have moved ahead. But I know from my own 
experience, once the election is over--I have been through many 
transitions--you begin the transition. In this particular case, 
the President-elect was securing the Presidency in Florida. So 
a lot of time was lost, and I don't think anybody will ever be 
able to measure how much that has impacted on this current 
administration.
    Mr. O'Keefe, I would ask you, as you testify, if there is 
anything that we can do immediately to help the Bush 
Administration with the rest of these appointments, something 
that we can do quickly that would help move this process along 
and make up for that lost time. In addition to that, we have to 
make sure that we are not here 4 years from now, Mr. Chairman, 
discussing this same problem. The new administration comes in, 
and they are too busy dealing with their problems, and then it 
gets lost.
    Mr. Chairman, I will summarize my statement to say we have 
enough information to move this process along. You have done a 
great deal of work. I think we should start writing the bill 
now and get it passed by this Congress so we are not sitting 
here 4 years from now talking about the same subject.
    Chairman Thompson. All right. Thank you very much.
    We will hear from two distinguished panels today. At this 
time I would like to recognize our first panel. The first 
witness is the Hon. Sean O'Keefe, Deputy Director of the Office 
of Management and Budget. He will be followed by Robert Nash, 
former Director of Presidential Personnel for President 
Clinton. Both men are very familiar with the process which 
appointees must negotiate. Mr. O'Keefe recently went through 
the process before this Committee. They are joined by Paul 
Light of The Brookings Institution, who will describe his 
recent survey of past political appointees as well as his 
survey of prospective political appointees for their views on 
the appointment process and public service.
    Thank you for being with us, gentlemen. Mr. O'Keefe, would 
you like to proceed with your opening statement?

TESTIMONY OF THE HON. SEAN O'KEEFE,\1\ DEPUTY DIRECTOR, OFFICE 
                    OF MANAGEMENT AND BUDGET

    Mr. O'Keefe. Thank you, Mr. Chairman. I appreciate your 
willingness as well to accommodate what is a rather busy 
schedule with the budget resolution currently being debated 
now. I want to thank you, Senator Voinovich, and Senator Akaka 
for the invitation to participate at this very important 
hearing, and by your opening statements, I am already heartened 
that you are committed to dealing with the very difficult 
problems, and I think that will make this an easier process.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. O'Keefe appears in the Appendix 
on page 73.
---------------------------------------------------------------------------
    The Committee, I believe, is to be commended for their 
thoughtful inquiry into the Presidential appointment process. 
Your collective attention to the challenges provides cause for 
not only optimism that your search of remedies to current 
problems will yield much needed solutions, but the successful 
outcome of your inquiry and subsequent action--and, again, by 
Senator Voinovich's intoning--certainly suggests that this will 
be nothing less than a significant contribution to the quality 
of public governance for the future.
    During the course of my professional life, I have been 
privileged to serve the public in a variety of capacities, 
initially as a career Federal servant, on the professional 
staff of the U.S. Senate, and on three separate occasions now 
as a Presidential appointee following Senate confirmation. It 
has been an honor, and I have been most fortunate in all the 
circumstances.
    But for each of the three Presidential appointments I have 
been honored to receive, I was treated to the most expeditious 
consideration of almost any appointee below the level of 
Cabinet officer. Indeed, this Committee's prompt treatment, 
just a matter of weeks ago, of the President's nomination of me 
to be the Deputy Director at OMB accounted for a very small 
fraction of the no more than 6 weeks of accelerated 
consideration from the date of the President's preliminary 
decision and offer to Senate confirmation and conclusion. My 
previous appointments were, similarly, mercifully brief in the 
consideration phase. So, as such, I am not here to complain by 
way of testimony before this Committee. I have been treated to 
an extremely expeditious process all the way through, and I am 
a very limited and very small cohort of fortunate few in that 
regard. Rather, my objective is to offer observations on how 
this process has become more difficult in the span of my public 
service experience which, in my judgment, has deprived the 
public of talent that would otherwise be called to public 
services.
    In short, all of the parts leading to confirmation, as you 
will certainly hear today as well, have become more extensive, 
more onerous, and more complicated by a factor of at least two 
since I was privileged to be appointed nearly a decade ago the 
second time. And while there is a fair degree of repetition in 
terms of the information required at each level of the process, 
it is more the depth of information and disclosure required 
which is at least intimidating, and at worst, deters candidates 
who might otherwise be disposed to considering service. For 
example, the background investigation process, I have come to 
learn, takes longer if the candidate has been previously 
investigated, and there is considerable reluctance to share 
information between the investigative units. That caught me as 
counterintuitive, but it turns out to be exactly the case. 
These kinds of impediments are thoroughly explored by The 
Brookings Institution's Presidential Appointee Initiative, so I 
won't dwell on them here and risk repetition of testimony the 
Committee has heard or will hear. But on these related matters 
of dealing with the process and all the elements of it, I 
associate myself with the observations expressed by Senator 
Kassebaum Baker and by former OMB Director Raines.
    Mr. Chairman, I would simply conclude with an observation 
of what I believe to be the consequences of this ever more 
difficult process. Fewer and fewer citizens of my comparatively 
modest financial means and geographic diversity are likely to 
respond to the call to public service. In the quest to remove 
conflicts of interest, the process, in my judgment over the 
course of the last 10 years, has reached near perfection in 
leading to the inevitable conclusion that candidates must 
eliminate significant if not all financial interests. To 
eliminate conflicts of interest, the easiest way is to 
eliminate all interests, and that seems to be the manner in 
which this is moving.
    While this is equally onerous for any potential nominee, it 
has a particularly shuddering effect on those of us who can 
least afford to divest interests, particularly at directed 
times, like during a market slump, for example. The consequence 
translates to a diminished standard of living which is acutely 
felt by families. Public service at these levels could tend to 
default to those of more substantial means who can withstand 
the consequences of this kind of policy. Now, this is not my 
condition, to be sure. I don't suffer from an excess in that 
regard. Rather, my presence here is testimonial to the 
extraordinary support, sacrifice, and tolerance--and I mean 
deep tolerance--on the part of my wife and children, despite 
the cost.
    In tandem with the financial impact is the near absence of 
support for any relocation to the Capital City if you weren't 
living here. My family is still in upstate New York now and 
will remain there throughout the course of this year as they 
finish school, and hopefully will join me here this summer. In 
the interim, there is no provision for any kind of transition 
at all. We, nonetheless, have elected to weather that range of 
challenges by virtue of our commitment to the important public 
service task. Many others would not choose to withstand these 
challenges and would find cause to withdraw from further 
consideration. Unfortunately, the effects of these two factors 
could yield a more dominant tendency toward those who can 
either withstand the financial penalty and/or who live in the 
Washington, DC, metropolitan area. The increasingly more 
complicated, intrusive, and lengthy confirmation process 
further compounds this result. In either or both of these 
events, this hardly augurs in favor of attracting Americans 
from all backgrounds, walks of life, and diversity in its 
widest definition to answer the call to public service.
    Again, Mr. Chairman, it is a privilege to be here, and I 
thank the Committee for the opportunity to testify and for your 
consideration of these points.
    Chairman Thompson. Thank you very much. We will go ahead 
and ask you some questions and let you leave, if that is all 
right with everyone.
    Mr. O'Keefe. Thank you, sir.
    Chairman Thompson. Thank you, Mr. O'Keefe, for being here. 
I think that you probably have the freshest insight of anyone 
here, having just gone through the process. How would you 
categorize the problem from your vantage point? We read about 
various categories. We read about the complex, repetitive, 
burdensome nature of the paperwork. We read about the intrusion 
or the disclosure aspects of the paperwork, more or less 
another category. We know about the delays that are growing 
longer and longer.
    To what extent did you experience those categories of 
problems as you worked your way through the process?
    Mr. O'Keefe. Well, again, Mr. Chairman, I am a very 
fortunate circumstance by virtue of the fact that I moved 
through this very quickly. I think the first time I went 
through the confirmation process, it worked all of about 3\1/2\ 
weeks just by virtue of the fact that I think I had a balance 
sheet that was non-existent and so, therefore, had no conflicts 
because I had no interests, and as a result, it made it 
extremely easy to work me through a process. This time it was 
just an inch more difficult, but not much. So, as a result, I 
think I am uncharacteristic of----
    Chairman Thompson. Due to the great work of this Committee, 
I believe you said.
    Mr. O'Keefe. Indeed, sir.
    Chairman Thompson. Was that my interpretation?
    Mr. O'Keefe. That is right. Outstanding. But I think as a 
consequence I am a little uncharacteristic in that regard than 
most nominees you would see.
    Nonetheless, in looking at the elements of that, what I 
found amazing was that the length of time it takes for, again, 
background investigations has expanded dramatically. The 
Federal Bureau of Investigation was very pleased with the fact 
that they put me on an expeditious consideration of about 28 
days, to which I asked whether or not that would be benefited 
at all by the fact that I had full field investigations at 
least three times before my previous experiences. There was an 
update of the security clearances that I had had just by virtue 
of other involvement in other things in private life. It was 
updated as recently as a month before the nomination papers 
arrived, and yet it was explained to me as how all of that 
actually added to the amount of time it would take for 
investigations because they would have to go through the full 
field and then reconcile it to all previous other observations 
and that no current background checks that had been done by any 
other security agency would be accepted because it may not be 
up to the same standard that the FBI would conduct.
    So, as a consequence, those kinds of things add time to the 
equation, and for reasons that I am sure all kinds of law 
enforcement officers and investigative experts will explain as 
to why that is necessary. It baffles me, but it, nonetheless, 
must have some cause to it. But it extends the amount of time 
and consideration to go through that.
    The amount of time it takes now to go through the Office of 
Government Ethics review--and, again, it is made much more 
simple when you don't have a whole lot to review, but it, 
nonetheless, takes a considerable period of back-and-forthing 
as you go through it.
    Even each of the committees, respectively, once the 
nomination papers are submitted, have a different format, 
different set of requirements that all have to be reconfigured 
of the information that is contained in all the other material, 
to be re-presented, and each committee has a different approach 
and different way of doing that.
    So the combination of all those appears to have added, 
again, at least, in my judgment, a factor of at least two to 
the degree of difficulty dive that it takes to move through 
this process independent of any issues that may arise. It is 
more just process oriented than anything else.
    Chairman Thompson. Did you get through with your FBI 
background within the 28 days?
    Mr. O'Keefe. Yes, sir.
    Chairman Thompson. And, of course, your situation was 
expedited because of the nature of the job that you had, the 
No. 2 man at OMB at a time when the President walked in the 
first day and he had a budget he had to come up with, 
practically. And everybody across the board cooperated and 
pushed as much as we could to get that done.
    Mr. O'Keefe. Very much so.
    Chairman Thompson. But you are clearly the exception rather 
than the rule, except--well, even including, I guess, the FBI 
background. But they still had to go through all those paces, 
and if it had been a normal situation, it would have certainly 
taken longer than a month to do all that.
    Mr. O'Keefe. Yes, sir.
    Chairman Thompson. But in the category of the financial 
disclosure part of it, you have a White House personal data 
questionnaire. Then you have the financial disclosure statement 
with the Office of Government Ethics. Then you have the form 
that begins the FBI background investigation. Then you have 
different financial disclosure forms with this Committee. Any 
others? Did you have any national security applications or 
statements that you had to make in addition to that?
    Mr. O'Keefe. Yes, sir. I filled the Form 86, the standard 
procedure across the board, the President's counsel's 
questionnaire that moves through a series of personal 
information, the Committee's personal questionnaire, just a 
range of them.
    Chairman Thompson. How much did you find that to be 
duplicative?
    Mr. O'Keefe. Extensively. The Form 86, the Committee 
questionnaire, and the President's general counsel request for 
information probably covers about 75 percent of the same 
material. So it is simply a matter of reformatting it.
    Chairman Thompson. It didn't cross your mind somewhere 
along the line, well, it looks like those guys could have 
gotten together and come up with something similar?
    Mr. O'Keefe. It is a very interesting observation, Mr. 
Chairman, which I would not disagree with.
    Chairman Thompson. What about the extent of disclosure? I 
got the impression from your brief reference to it in your 
statement that you feel like--well, I am sure you understand 
that disclosure for conflicts of interest purposes are 
necessary.
    Mr. O'Keefe. Yes.
    Chairman Thompson. I got the impression that you felt like 
they were more intrusive than necessary in order to serve the 
purpose of the form. Is that correct?
    Mr. O'Keefe. Yes, sir. What I noticed that changed--and, 
again, this is anecdotal. I am advised that OGE and the 
President's counsel are in the process of trying to work 
through a streamlining proposal and so forth. So that is going 
to be great news. I am sure when Amy Comstock appears here 
there may be some opportunities to explore this further. So my 
anecdotal observation would be that what I recall filling out 
as an appointee in a previous incarnation and then thereafter, 
for a year or two after you leave public service, you continue 
to fill this out, to now is a degree of indenture that is much 
greater, the level of detail you have got to go through.
    There is now an interest, for example, on mutual funds for 
which you have absolutely no controlling influence over how 
those fund managers will make investments, that there be a full 
disclosure of all the things that the fund managers may be 
involved in, which again may be of interest----
    Chairman Thompson. What about the evaluations? Do you have 
to come up with evaluations for those things?
    Mr. O'Keefe. Yes, sir. There is a fair amount of paper that 
is now required for, again, demonstrating--you have to prove 
that you have no controlling influence over something like a 
mutual fund, which is on its face almost self-evident, but it, 
nonetheless, requires now a lot of extensive material on that.
    I don't ever recall the requirements to describe college 
funds, for example, for your children. I have got three of 
them, so now as a consequent, the OGE and everybody else is 
fully aware of how little we have prepared for their potential 
future college education opportunities, despite our best 
efforts to do to the contrary.
    So all that is something that is a much more extensive 
degree of information that I can ever recall being asked to 
deal with in the past. Beyond that, individual stocks and so 
forth, there is no question. I fully understand the reason why 
those disclosures are necessary and why the divestiture rules 
are the way they are.
    Chairman Thompson. Some of the surveys have turned up many 
comments that people over the years have been somewhat critical 
of their White House situation, that they were not kept 
informed, that they were not apprised of what they were in for, 
they were not assisted along the way. I don't assume you are 
here to be terribly critical of the White House, but can you 
think of anything that institutionally could be improved? Some 
have suggested a permanent office of Presidential personnel 
staffing up over there. Of course, as you indicated, you got 
through a lot quicker than most people. But did you come away 
with any thoughts from that standpoint?
    Mr. O'Keefe. That is an important caveat. I certainly knew 
what I was getting into, and that caused lots of friends and 
relatives to question my judgment a lot of times.
    Chairman Thompson. You had been there before.
    Mr. O'Keefe. Exactly. So it was a case where it was pretty 
evident.
    Nonetheless, I think part of the aberration that we are 
dealing with right now--and I think Senator Voinovich put his 
finger on it--is the truncation of the transition period that 
we have just been through made this that much more difficult, 
and with all the moving parts that are required in the process, 
the opportunity for something to fall between the chairs is 
very, very high, particularly in this confusion of everyone 
getting settled and so forth.
    Even here, as quickly as this moved through, there were 
cases where literally moving paper from Desk A to Desk B and 
moving the right material along took a lot of diligence and a 
lot of attention to it, which required my presence here in town 
throughout most of that process almost continuously.
    Chairman Thompson. What is your staffing situation at OMB 
now? What are you lacking? Or how good or bad is it at the 
present time?
    Mr. O'Keefe. I am one of two appointees that has been 
confirmed thus far, and that is it. And we are hopeful that the 
Committee will consider two nominees we have moved up here 
recently.
    Chairman Thompson. What difficulty does that present?
    Mr. O'Keefe. It means Mitch Daniels and myself are 
spreading a much wider portfolio towards just the two of us to 
work through the issues that are involved therein that we would 
dearly love to make sure are in the hands of the individuals 
who hopefully will be nominated and confirmed in the other four 
capacities that the Office of Management and Budget has. So we 
are carrying an awful lot of it right now.
    Chairman Thompson. Thank you very much.
    Mr. O'Keefe. Thank you, sir.
    Chairman Thompson. Senator Akaka.
    Senator Akaka. Thank you very much.
    Mr. O'Keefe, you said that the absence of support for 
relocation reimbursement has a financial impact and that moving 
to Washington may prove a challenge for any appointee. What 
recommendations do you have in this regard?
    Mr. O'Keefe. Well, there are a variety of corporate models 
that have been adopted. Some are extremely beneficial, and I 
certainly wouldn't go as far as that. But I think to cover just 
the modest kinds of expectations of what most people would have 
may take--this is something that Members of this Committee and 
your colleagues throughout the Senate as well as members of the 
other bodys can relate to very well. The issue I am dealing 
with now--and I have a deep appreciation for what each of you 
go through now--of maintaining two residences is quite a 
challenge. It, therefore, poses some serious financial issues 
that I have to sort through.
    There isn't any means to deal with that. No corporation, no 
private interest would tolerate that. And there aren't many 
folks who would be terribly interested in being part of 
corporations that didn't do that.
    So while I don't know exactly what the right formula is, I 
know this one really stinks. This approach is one that I 
believe Members here can relate to very well.
    Senator Akaka. So you are recommending that we look into 
this reimbursement?
    Mr. O'Keefe. It would make life a little easier for those 
who are out of town. Again, for folks in Washington, DC, it 
makes no difference. So as a result, it becomes almost a 
default option that if you have two candidates and one is in 
D.C. and the other one isn't, sometimes it comes down to the 
choice on the basis of the fact that if you have someone who is 
resident here, that almost becomes a matter of convenience. So 
you are selecting based on geography default here.
    Senator Akaka. The Chairman touched on this, and I 
understand your concerns about divesting one's interests during 
a market turndown. What do you feel the government should do in 
this area that would still allow the public to feel confident 
that there would be no conflicts of interest on the part of 
political appointees?
    Mr. O'Keefe. Well, I think there are two approaches that, 
again, in my past incarnations I found to be fairly useful, the 
previous two Presidential appointments that I held that didn't 
seem to pose any real serious challenge, and that was for any 
financial interest that you may have in an individual company 
or stock or portfolio or whatever else for which there might be 
a chance that in your appointed capacity you might have some 
involvement--or I went to the extent that if there was anything 
that any of my family, as in parents, brothers, sisters, my 
wife, anybody--had any interests that may have been related to 
that I recused myself from those particular matters that 
pertained to that.
    In most jobs, most appointed positions throughout the 
Federal Government, that is more than adequate to deal with 
those kinds of questions. Certainly that has been the topic of 
a lot of debate as it pertains to some Cabinet officers, and I 
think that is a difficult challenge there because the span of 
control is so wide in those capacities. But for most 
appointees, recusal from matters that deal with those 
particular issues sometimes is more than enough.
    Blind trusts have been adopted or used in the past. I don't 
have enough that would make it interesting to put into a blind 
trust. I probably couldn't find a trustee who would be 
interested in managing the paltry assets required there. So, 
therefore, it doesn't work in situations like mine. But it 
would for so many other people, I think, be something that 
could be a little more useful or used more frequently. And that 
is not the most encouraged method. You have to inquire about it 
to ask if that is even feasible.
    As a general opening proposition, the Office of Government 
Ethics view is that divestiture is the first and foremost 
appropriate way to deal with the question. That is the default 
option every time.
    Senator Akaka. Mr. Chairman, in the interest of time, I 
will have just one more specific question.
    You suggested some changes such as conforming documents. 
What aspects are important to retain or keep with refinement?
    Mr. O'Keefe. Again, I think the Chairman's observation of 
the duplication between the general counsel review, the Form 
86, the national security questionnaire, and to the varying 
committees of jurisdiction material, again, my guess just off 
the top of my head is somewhere on the order of two-thirds to 
75 percent of that information is fairly standard. And as a 
consequence, everybody is going to want it, everybody is going 
to want to see it; and as a result, trying to conform that in 
some way would make that a little more useful.
    To then thereafter have supplements that are unique to 
individual jurisdictions may be something that could be a 
little easier to deal with. I don't know. But, again, exactly 
what jurisdictions would view one area to be more important 
than another, I wouldn't presume to speak for at this point.
    Chairman Thompson. Thank you.
    Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thanks very much. I just want to say I have 
heard a lot of witnesses over the years in the House and now 
here in the Senate, and I find your testimony especially 
refreshing.
    Mr. O'Keefe. Well, thank you, Senator. I appreciate it very 
much.
    Senator Carper. I hope your financial fortunes improve. 
[Laughter.]
    Mr. O'Keefe. Not in the near term, I don't see that as 
likely.
    Chairman Thompson. But not too soon, no.
    Mr. O'Keefe. That is right.
    Senator Carper. If these interest rates come down, maybe 
you want to think about refinancing one of those two mortgages 
or something.
    Mr. O'Keefe. There is one really delightful part about the 
Presidential appointment order that I have always found just at 
least focusing. It says, ``You shall serve at the pleasure of 
the President for the time being.'' That could be any time now 
you could be moving along. So as a consequence, it focuses your 
attention in that regard. But in that interim period, there is 
no improvement in financial standing, that is for sure.
    Senator Carper. I missed your testimony, and I have got 
some people waiting out here in the conference room to go back 
and to meet with, and let me just--I presume you are leaving 
here?
    Mr. O'Keefe. That is right.
    Senator Carper. I glanced through this document here about 
the Presidential appointment process and noted apparently any 
number of times in the last two decades when we looked at the 
process and tried to figure out how to fix it. And you are 
probably familiar with a number of these studies. But in terms 
of the common threads here represented in these variety of 
studies in the past and what you sort of bring to the table by 
virtue of your own experience, just give me a couple of 
nuggets, just a couple of gems of things that we ought to do 
this, these are no-brainers; whether it is Democrats, 
Republicans, Legislative Branch, Executive Branch, we just 
ought to do these things this year.
    Mr. O'Keefe. I would put that into three areas, two of 
which we have explored a little bit here of conforming some of 
the information. Just that process alone would speed this along 
a lot. And just for example, one of the issues we are working 
in the administration right now is trying to get to the root 
cause of why the various investigative organizations seem to 
have some propriety over the degree of their own investigative 
prowess between and among them. They don't even share the 
information that extensively, best I can tell. So that is an 
opportunity maybe to work through that question and see how 
much more there can be on that side of it to conform the 
information among the investigative units and among the 
jurisdictions or areas that may want the information to be 
revealed. That could help first and foremost.
    The second one, I think, is on the financial disclosure 
side of it, to come up with a more standardized approach with 
this and think in terms of what the consequences may be. There 
are a number of very active proposals. There, again, I believe 
that the Office of Government Ethics and the general counsel's 
office for the President will be offering some view in terms of 
how to sort that tomorrow in testimony here. So I wouldn't want 
to--I don't know enough about the details of that to suggest 
what the mechanics of that would be, but it is an area to look 
at because it is the first constructive idea I have heard in a 
while of trying to standardize that.
    Then the third one is look at the consequence of the ethics 
rules. There are so many different--again, over the course of 
public service time, I could probably trace ever ratcheting of 
the ethics rules to an incident, to a set of circumstances that 
led to changes, to legislative alterations, to rules that have 
modified that to make it that much more difficult. And as a 
consequence of that, it has become, for all kinds of good 
reasons, all that I agree with--I could not quibble at all with 
the standard of ethics both the President expects of me and of 
us who are appointees in his administration as well as the 
standard of ethics that the general public should expect of us. 
I think there was also a requirement for a standard that is 
higher than what you see in any other private life kind of 
condition.
    Nonetheless, it is to the point where in many jobs--I 
fortunately am not in one of these circumstances--where there 
are post-employment restrictions that are so extensive so as to 
preclude the opportunity for anyone with any experience at it 
to then assume a Presidential appointment or public service 
opportunities and then to have any chance of working in that 
kind of field or experiential level again thereafter. Some of 
them are lifetime restrictions, which I was more familiar with 
in my previous job as Secretary of the Navy. I was stunned.
    Senator Carper. What was your previous job?
    Mr. O'Keefe. I was Secretary of the Navy in the Bush 
Administration, at the end of the Bush Administration the last 
time. And as a result, most of the acquisition executives who 
were associated with the Defense Department had lifetime 
restrictions on any involvement with any industry that related 
to any of the things they had contractual interests with. As a 
consequence, it basically was an invitation to flip burgers 
after you leave, and that becomes a rather onerous prospect 
when you're looking at trying to recruit people to want to take 
on that challenge, or it means you have always defaulted in 
favor of inviting people who have reached the very end of their 
professional term, that they would like to give something back 
at the end of that. So, therefore, you are looking at folks 
with incredible experience but who are probably not going to be 
serving for very long because they don't want to put up with it 
for that long a period of time.
    Each of these options, though, on the ethics side of the 
equation narrows the field of the kinds of people that can be 
considered or thought about that you may want to otherwise 
recruit into public service who would not otherwise take it 
because of the nature of those restrictions in aggregate.
    Senator Carper. All right. Again, I didn't know you had 
been Secretary of the Navy. I have been out of touch here for a 
while. I have been a governor for a while. But as governor, I 
was nominated by President Clinton and confirmed by the Senate 
to serve on the Amtrak Board. I love trains. I love passenger 
rail, and it is just something I am crazy about, as I am crazy 
about the Navy. But I want to tell you, the process that you 
had to go through was just--as much as I love trains and 
passenger rail and Amtrak--it was almost enough that I said the 
heck with this, it was just too much.
    Mr. Chairman, my friend from Hawaii, we have got somebody 
who is interested in changing this--not getting into some 
necessary safeguards, but changing this process, it needs to 
be. Thanks very much.
    Mr. O'Keefe. Thank you, Senator.
    Chairman Thompson. We appreciate it very much.
    Mr. O'Keefe, thank you very much.
    Mr. O'Keefe. Mr. Chairman, thank you very much. I 
appreciate it.
    Chairman Thompson. Mr. Daniels is back minding the store by 
himself. You better get on back.
    Mr. O'Keefe. Yes, sir. [Laughter.]
    Chairman Thompson. Thank you very much.
    Gentlemen, thank you for being so patient with us. Mr. 
Nash, would you care to give your statement?

  TESTIMONY OF HON. ROBERT J. NASH,\1\ FORMER DIRECTOR, WHITE 
             HOUSE OFFICE OF PRESIDENTIAL PERSONNEL

    Mr. Nash. Yes, sir. Chairman Thompson and Members of the 
Committee, thank you very much for providing me an opportunity 
to make a few comments and recommendations. I know that future 
nominees and probably some of the current ones will appreciate 
the efforts you are taking.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Nash appears in the Appendix on 
page 75.
---------------------------------------------------------------------------
    As former Director of Presidential Personnel and as an 
Under Secretary of Agriculture--confirmed there--I have a 
unique perspective. I first want to say that it was an honor 
and a pleasure to serve the President and my country. Very few 
people in the country get an opportunity to do it, and I loved 
it. And I would go through it again, all the background check, 
the nomination, all of that. I would do it because of the 
pleasure of serving my country.
    Given the volumes of information published on this subject, 
I won't go into a lot of information because a lot of the 
groups--the Heritage Foundation, the Council for Excellence in 
Government, Brookings, and others--have basically been working 
in a collaborative basis to make a series of recommendations 
which I attribute myself to. But I would like to make just a 
couple of comments about the process.
    It does take too long. In the last 20 years or so, it has 
averaged between 6 to 8 months, depending upon the 
administration you are dealing with. The process also reduces 
the number of qualified applicants who are willing to go 
through the process. We never had a problem with applicants to 
fill jobs, but we had a problem with having what I would call a 
larger number or maybe an adequate number to pick from.
    When the President assumed office on the 20th of January, 
the old President is gone, and hundreds of Senate-confirmed 
appointees leave. They make hundreds of decisions a day, and 
those decisions don't stop on that day. And while some period 
of time--3 or 4 months--is acceptable, 6 to 8 months is not 
acceptable in terms of having people in place to make 
decisions.
    Recommendations that I would make at this point include 
haveing a goal of shortening the average appointment process to 
no more than 4 months.
    Eliminate the full field investigation for most Senate-
confirmed positions that do not deal with defense, national 
security, or Justice issues. You might just limit the 
background to a name check, a tax check, and limited financial 
disclosure.
    Reduce the financial disclosure by 50 percent, and in some 
cases use the Form 450 instead of the Form 278, which is more 
intrusive and more specific. And Mr. O'Keefe mentioned trying 
to detail mutual funds, which is almost impossible to do.
    I also think we should consider reducing the number of 
part-time board and commission members who are confirmed by the 
Senate. That will give the counsel's office, OGE, the Senate, 
and others more time to deal with full-time Senate-confirmed 
positions. Examples could include the National Endowment for 
the Humanities and agencies that don't have security, national 
defense, those kinds of responsibilities.
    And I would also do what I could to limit the number of 
holds on nominees that don't relate to the nominee.
    I will stop right there, and thank you very much for this 
opportunity, and I would be happy to answer any questions you 
might have.
    Chairman Thompson. Thank you very much.
    Mr. Light.

 TESTIMONY OF PAUL C. LIGHT,\1\ VICE PRESIDENT AND DIRECTOR OF 
        GOVERNMENTAL STUDIES, THE BROOKINGS INSTITUTION

    Mr. Light. It is a pleasure to be back before the Committee 
on this important task. I should start by just basically 
stating that I am not speaking here for myself or our project, 
the Presidential Appointments Initiative, but for the people we 
interviewed, the 435 past Presidential appointees from the 
Reagan, Bush, and Clinton Administrations and the 580 potential 
appointees that we talked to: The corporate CEOs from the 
Fortune 500, the presidents of the top-rated universities in 
this country, the executive directors of America's largest and 
most influential non-profit agencies. Even think tank scholars 
were part of this study on the notion that perhaps every once 
in a while you ought to put one in office.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Light appears in the Appendix on 
page 77.
---------------------------------------------------------------------------
    I am here today to just talk to you a little bit about what 
they told us about this process, and I should start also by 
noting that the research that we did was conducted in 
collaboration with Virginia Thomas at the Heritage Foundation. 
She was a joy to work with on this project, and I wish she were 
sitting next to me today.
    There is good news and bad news in these surveys of past 
and potential appointees. The good news is that there is an 
extraordinary desire to serve in this country, just 
extraordinary. I was surprised by the results because we live 
in this town here where there is so much poison and so much 
argument, and we don't sometimes notice just how powerful the 
allure of public service still is outside the Beltway, and 
perhaps inside the Beltway as well.
    Past appointees would recommend a Presidential appointment 
to their friends and families. Bob Nash's story, Sean O'Keefe's 
story--it is familiar. They enjoyed service. They would do it 
again and again.
    Unfortunately, one of the problems in the process is that, 
in fact, we are drawing from a smaller and smaller pool of 
people who have been through the process before, and they seem 
to be the ones who will tolerate the process more now than the 
kinds of potential appointees we interviewed.
    Presidential service is seen as an honor to one's country, 
an opportunity for impact well beyond the impact one can have 
in the private sector. It is also seen as an opportunity to 
make contacts, to develop leadership skills. It is all a net 
positive.
    Americans want to serve. That is the good news. And for 
those of us who care about public service, it is wonderful 
news.
    The bad news before this Committee is also clear. Simply 
stated, the appointments process itself, has become the most 
significant barrier to saying yes when the President calls. To 
paraphrase Bill Clinton's 1992 campaign slogan, ``It's the 
process, Stupid.'' It is a terrible process. It is a process 
that disincents talented Americans from saying yes, that makes 
it as difficult as possible and causes individuals to question 
their own judgment for ever having accepted the President's 
call to service.
    The simple evidence from our surveys is easy to chronicle. 
Potential appointees actually are now much more likely than 
actual appointees to describe the current process as confusing, 
embarrassing, and unfair. Fifty-nine percent of potential 
appointees said the word ``confusing'' described the process 
very or somewhat well. Fifty-one percent said it was 
embarrassing. Only 43 percent of potential appointees, the 
people we want to say yes, calls this a fair process.
    And past appointees give us plenty of evidence of real 
problems. They tell us there is a lack of information on how 
the process works. Many complain that they did not get enough 
information or any information at all about what was to happen 
to them, which is why we authored with the Council for 
Excellence in Government ``A Survivor's Guide for Presidential 
Nominees.'' And who would have thought at the time we titled 
this volume that a survivor's guide was appropriate. But if 
there was ever a time you needed a survivor's guide to get into 
office, now is it.
    Delays are significant and troubling. Fifty-six percent of 
appointees nominated and confirmed from 1984 to 1999 said the 
nomination took more than 5 months compared to just 16 percent 
of nominees who were interviewed from 1964 to 1984. The general 
impression is that every stage of the process is slowed down. 
Every possible breakdown has occurred. And there is blame for 
both ends of Pennsylvania Avenue in all of this.
    Our appointees, both past and potential, said that both the 
Senate and the White House make this process more difficult 
than it needs to be, that there are ways to simplify and 
improve. Luckily, these nominees have ideas for fixing the 
process: Simplify, simplify, simplify.
    There is a key point buried in here about the important 
role that employers play in encouraging their employees to 
serve. The potential nominees here or the potential appointees 
said that too often their employers did not encourage them to 
take a position.
    Let me conclude here by summarizing the good and the bad. 
The good news is that the honor, the desire to serve is still 
present and active in this country. The bad news is that the 
appointment process itself is a barrier. But, luckily, the 
process can be fixed. We can do very simple things to make this 
better.
    Let me conclude by noting that Thomas Jefferson once said 
that there was nothing about which he was so anxious as 
President as Presidential appointments. He said, ``The merit as 
well as reputation of an administration depends as much on 
that''--the appointees--``as on its measures.'' If these are 
indeed posts of honor, as Benjamin Franklin once called them, 
and if we want talented people to serve, all we need to do is 
build a simple, faster process. To change metaphors and 
analogies completely to baseball during this opening week, if 
you build it, they will come. Simplify, accelerate, clarify. It 
will make a big difference. And rarely at the beginning of a 
legislative process do we see such profound and compelling 
evidence that legislation will help.
    That is my statement, and I would like to submit the rest 
of my statement for the record.
    Chairman Thompson. It will be made part of the record.
    Thank you very much.
    Mr. Nash, some have made the recommendation that there be a 
permanent office of Presidential personnel. Is that a good 
idea?
    Mr. Nash. A permanent office of Presidential personnel?
    Chairman Thompson. Statutory.
    Mr. Nash. Statutory. Yes, sir, I think it should be 
seriously considered to have a statutory office of Presidential 
personnel. It is critical to have the capacity to find capable 
and competent people to run the President's programs and 
policies. And I think that should be considered.
    Chairman Thompson. What size was the operation when you 
were there?
    Mr. Nash. The size was 27 people total, all political 
appointees. None of those were career. And it has averaged, I 
believe, over the last 20-some years between no more than about 
35 and no fewer than about 23, I believe.
    Chairman Thompson. Do you think that is adequate, that 
range, to do the job?
    Mr. Nash. I would say that it is--if you can improve some 
of the things we have been talking about, I would say that that 
is fairly adequate. Around 30 individuals would probably be 
adequate; if some of the recommendations that your Committee is 
discussing can be implemented, I would say so, sir.
    Chairman Thompson. We are beginning to talk about whether 
or not the White House could use some of our forms or we can 
use some of the White House's forms. Your PDS, I guess you call 
it there.
    Mr. Nash. Yes, sir.
    Chairman Thompson. Have you ever had any conversations with 
anyone on the Hill about that? To the extent that you have 
thought it through in terms of what might be possible, how that 
might work, who might follow whose lead on that, what is 
practical, do you have any thoughts about that?
    Mr. Nash. I have some thoughts. No, sir, I don't remember 
having any specific conversations. I do think that the Personal 
Data Statement--and we had made some efforts at it--could be 
reduced by about 50 percent by taking some of the questions on 
the Personal Data Statement that are also on the financial 
disclosure forms and that are also on the SF-86 and just taking 
them out and reducing the Personal Data Statement questions by 
that much.
    As it relates to combining the forms, I think that there 
could be some effort, yes, sir, to do that. It is obviously a 
lot harder to do than to say, but I think there is some 
potential there for combining those forms.
    Chairman Thompson. I think there is a lot of discussion 
going on right now about that. I think due to the work of some 
of the people in this room, people are beginning to take a look 
really for the first time as to what might be done there.
    You mentioned the financial disclosure requirement. There 
are, as I recall, 43 questions on the PDS, something like that, 
or there used to be.
    Mr. Nash. Yes, the Personal Data Statement I believe has--I 
can't remember the exact number, but it has financial questions 
on it also, and those could be totally eliminated. Plus, if the 
financial questions on the Senate questionnaire are the same, 
maybe those could be eliminated, and the Committee as well as 
the White House Office of Presidential Personnel, as well as 
the Office of Government Ethics gets some part of the same form 
as opposed to the duplication and overlap that I think we have 
now to the degree of about 50 percent.
    Chairman Thompson. Thank you very much.
    Mr. Light, can you tell from your survey how many people we 
are losing to government service because of this process?
    Mr. Light. I don't think we can tell. We have a fairly high 
percentage of respondents, potential appointees, who were 
saying that they are favorable toward service. They don't 
really get down to the nub of what is on the forms and the 
detail of the process. They just think from a distance that the 
process is unfair.
    Chairman Thompson. These are basically people who have not 
gone through the process.
    Mr. Light. They haven't gone through the process. We were 
quite clear----
    Chairman Thompson. The perception is actually even worse 
than reality, which is bad enough.
    Mr. Light. The perception is worse than reality, and I will 
tell you what, there is a serious problem here on the Potomac 
in terms of relocation. And that is why that chart there shows 
that the number of people who are being appointed from inside 
the Beltway has more than doubled since the 1930's, 1940's, and 
1950's.\1\
---------------------------------------------------------------------------
    \1\ Chart referred to appears in the Appendix on page 168.
---------------------------------------------------------------------------
    This is a process that increasingly favors people who are 
here and who are already part of the process, and that is 
clearly not what the Fathers intended. They wanted amateurs of 
a type to come into government who had no permanent interest in 
government and who would move here for a time and then go back 
home.
    Chairman Thompson. It seems like we wanted what you said, 
but then we also wanted expertise and some continuity, the part 
about the civil service movement. And now we have wound up with 
the worst of both worlds. We have a professional governing 
class without necessarily the expertise or the experience.
    Mr. Light. Well, it leads you to sort of pull your hair 
out. You think about the perfect nominee today from the kind of 
testimony you get from the Deputy Director of OMB. The perfect 
nominee is almost ignorant about the job he or she is about to 
take, has no interest, has no history, and that will prevent 
them from being tainted.
    I mean, we have erected a process that is abusive to a 
point and also discouraging to people who really want to serve. 
If you have an expertise in genetic engineering and you want to 
serve as the President's Science and Technology Adviser, you 
want to serve in a senior post, the issue for you is, do you 
know too much? It is just a nonsensical process, and the 
process could only be explained really today, the way it is 
calcified, if you are intending to discourage talent Americans 
from serving.
    Chairman Thompson. What is the source of their perception, 
people who have gone through the process or news media or 
comments that politicians make about bureaucrats?
    Mr. Light. It is really a combination of the experiences of 
their friends who have gone through the process and what they 
see in the media.
    But, as the Bush Administration process unfolded this last 
January and we had the withdrawal of a very senior candidate, 
my argument was that those kinds of incidents no longer make 
any difference. The attitude towards actually coming here, the 
attitude towards the process is so negative that it really 
can't fall much further. It just can't.
    And what you see when you talk about what the President of 
the United States needs to do when he picks up the phone to 
make a call is that he should emphasize, first of all, the 
honor of service, second, the impact that one can make through 
service, and, third, the President should be telling candidates 
he is going to work with you and this Committee and this Senate 
to improve this process and make it fair. That would make a big 
difference in converting these favorably disposed potential 
appointees into actual nominees.
    Chairman Thompson. Do you think their concern is primarily 
the process of getting into place or the quality of life once 
they are in place?
    Mr. Light. These people, these potential nominees, are very 
hard-working individuals already. They believe that coming to 
Washington for a Presidential appointment would give them the 
greatest impact and the greatest achievement of their career. 
They are not concerned about the level of hard work once they 
arrive. They are concerned about the length of time it takes to 
get here and the potential for personal and family 
embarrassment from going through this process and, finally, the 
disruption to their family of moving here to the Potomac. But 
these are very, very high-end, high-quality people who know 
what it is to work hard and they want to help their country.
    Chairman Thompson. Well, clearly, improvement in this 
process is going to have to come from several sources. All the 
recommendations kind of fall into three categories, and that is 
the Senate, the White House, and the Office of Government 
Ethics. And there are some other things in there, too.
    But a very broad question. You have been in this area for a 
long time and know a lot about it. When you think about the 
coordinating that the committees here would have to do, about 
the things that the committees here might be asked to give up 
in terms of setting deadlines on themselves or restricting 
holds and so forth, you are asking the White House, a new 
President to come in and give up some positions that his 
predecessor had and narrow that group of people that he has 
friendship with and some control over. Office of Government 
Ethics, is just waiting for the next scandal so they can get 
criticized for just having liberalized the rules a little bit.
    I don't mean to depress you here.
    Mr. Light. Yes, I was wondering when you were going to say 
something---- [Laughter.]
    Chairman Thompson. What are your overall observations? 
Clearly, we are going to have to do something. One of the most 
remarkable things about government that I have found in my 
brief time is how often we have to be told about something 
before it sinks in and we do anything about it. We just 
finished, Joe Lieberman and I, the Government Information and 
Security Act we got passed a couple of years ago and trying to 
improve our computer security and so forth. If we look back, we 
had, I think, 15 GAO reports talking about what a disaster our 
system was. I didn't know that. I don't know if anybody knew 
that. We had them stacked up there somewhere. I had no idea 
that we had all these reports talking about these same things, 
making essentially the same recommendations. So it is not a 
matter of intelligence or lack of intelligence. It is a matter 
of will.
    What do you think is practical, doable? What are the 
dynamics of getting something done here?
    Mr. Light. I think that the Majority and Minority Leader 
and the Chair and Ranking of this Committee have to sit down 
with the President's senior counsel and develop a deal. It has 
gotten to the point now where I think we have passed a tipping 
point, where I think we have serious questions about the 
leadership of these agencies of government. You saw it in the 
Los Alamos situation where it was not a lack of leaders and it 
was not a lack of layers that caused that problem, and you saw 
it at IRS with taxpayer abuse.
    I think we have reached a tipping point where you just need 
to sit down and say, look, we either have to expand the 
pipeline--you can only put 20 to 30 people through this 
pipeline every week, and if you have got 450 or 500 to do, you 
do the math. We have either got to expand the pipeline, make it 
faster, or we have got to reduce the number. We have got to 
come to agreement. But it really involves a sit-down between 
the senior leadership of the two institutions most involved and 
an agreement over what each one is going to give up.
    You may want to create as part of the Senate clerk's office 
some sort of a new mechanism for moving nominations through 
faster. You know how this place works. You know how the 
committees are designed. There are lots of things you can do to 
improve the process. But it has got to involve a sit-down 
between the two branches to say, look, it doesn't serve either 
branch well to have basically a neck-less government, which is 
what we have got here. We have got Cabinet secretaries in all 
the departments. We have got a couple of deputy secretaries. 
And then we have nobody. It is not a head-less government. It 
is a neck-less government. And that doesn't serve 
accountability. That doesn't serve computer security. That 
doesn't serve performance measurement.
    You have got to sit down, I think, with the other 
institution and work out----
    Chairman Thompson. You get it done, and then the average 
service is like 2 years, and you start all over again.
    Mr. Light. That is right. And, I am just thinking, because 
my colleague Cal Mackenzie here behind me has been working this 
for 30 years, I feel like I am a piker. I have only been doing 
it for 15. We issued a report in 1984, a real table-pounder: We 
have got to fix the system, the delays are up to 4 months, it 
is a travesty, we can't get people into office, too many 
appointees. There were 350 of them. Anybody in this room would 
give their eyeteeth for that system right now. Can't we just 
roll back to 1984, I think, is the hope.
    Chairman Thompson. Thank you.
    Senator Akaka.
    Senator Akaka. Thank you, Mr. Chairman.
    Mr. Nash, you have served well in your position with 
President Clinton.
    Mr. Nash. Thank you, sir.
    Senator Akaka. And I am sure you have gone through the 
process of trying to improve whatever you were doing. In your 
capacity as Director of Presidential Personnel, what steps did 
you take to shorten the appointment and confirmation process? 
And a side question to that is: Were you frustrated in your 
efforts to do so?
    Mr. Nash. Thank you, sir. The answer to the first question 
is I will give you a couple of examples. For individuals who 
have not gone through this process, it is very confusing and 
complicated. So what we attempted to do, even as we were 
considering applicants for Senate-confirmed positions, is I 
sent out what I would call a plain-language description of the 
kinds of things that you would need to try to compile: Where 
you lived, all of your relatives' addresses and birth dates, 
where you have traveled, the kind of financial information--
this is something I prepared, not the actual forms, because you 
don't really send the forms out to an individual unless they 
have been selected. So one of the things I did was to give them 
an idea before they actually were selected, and in some cases, 
they said, ``I don't want to go through this.''
    One individual said to me, ``I have been the chief 
operating officer for a major corporation, over more people and 
more money than this office you are asking me to serve in, and 
they didn't even ask me for this much information.''
    Now, my response to that was, ``Sir, this is different.'' 
We are talking about a position of public trust and spending 
taxpayers' money as opposed to a private corporation, which is 
not to say the information should not be reduced. So that is 
one example.
    Another example that we did is we tried to work closer 
with, in this case, Senator Lott's office and his staff on 
trying to work through the confirmation process, and we had 
some success there, and also had some difficulties sometimes. 
But that was the second thing. It was very useful to do that.
    The third thing is we attempted to start working on the 
vacancy before the vacancy occurred. For an example, if you 
have a member of the Securities and Exchange Commission or the 
Federal Trade Commission and you know that that individual's 
term is going to be up in 12 months, you don't wait until the 
12th month to start working on it. We start trying to decide 
are you going to try to keep this person or get somebody else.
    Those are some examples of some things that we tried.
    Senator Akaka. Many nominees complain about the FBI's 
security clearance process. I know some of today's witnesses 
believe that FBI full field background investigations should be 
reserved strictly for national security positions.
    These investigations are required for all Senate-confirmed 
positions as a result of an Executive order issued by President 
Eisenhower.
    My question has two parts. Do you know if any 
administration since Eisenhower's has reviewed the need for 
these extensive investigations to determine if they are 
necessary for all positions? And would you support customizing 
background investigations to the nature of the position such as 
a part-time adviser or commissioner versus the Director of the 
CIA?
    Mr. Nash. Yes, sir, Senator, I would absolutely support 
that. I do not think it makes sense for an Assistant Secretary 
for Public Affairs at the Department of Housing and Urban 
Development to go through the same kind of full field 
investigation involving several agents traveling to different 
cities, knocking on neighbors' doors and former coworkers' 
doors, as it would for--not even as extensive--not the head of 
the CIA, even maybe the Assistant Secretary of Defense for 
Technology, you would. But I would absolutely support that.
    To answer your first question, I am not aware of anyone who 
has made a specific recommendation or suggestion or effort to 
change it. I have agreed with the Council for Excellence in 
Government and Brookings and Heritage and others on the need to 
reduce the number of individuals subjected to full field 
investigations. I think name checks, tax checks, and a Lexis-
Nexis might be sufficient for the majority of those that don't 
involve national security, defense, or probably certain 
positions at Justice.
    Mr. Light. May I respond just ever so briefly? We did 
reduce the lookback requirement in the FBI national security 
form so that now on most questions you are only required to 
identify your residences, your employment, the places and 
purposes of your foreign travel for the past 15 years, and that 
was an advancement.
    I don't know what the agency does, what the FBI does, and 
whether FBI agents feel this is an honor to go out and do the 
field investigation for the Assistant Secretary for Public 
Affairs at HUD. I don't think it is a career enhancer, and I 
think to put two and two together with Senator Voinovich's 
concerns about retention, it may well be that reducing the 
background checks might improve retention of FBI agents. I 
can't imagine that it is considered good duty at the end of the 
day.
    Senator Akaka. Mr. Light, in reference to Chairman 
Thompson's question, I understand that an appointee serves 
about 2 years, and I am following up on the Chairman's 
question. Is this length of time changing? Are there reasons 
why a little over 2 years is average for length of service?
    Mr. Light. I think that the vacancy rate problem is a 
serious issue for this Committee. It has been, and that is why 
this Committee and Congress revised the Vacancies Act in the 
last Congress.
    There is really no explanation for the high velocity. We 
know that about 2 years from now the vacancy rate in the Bush 
Administration will probably approach 25 to 30 percent, and 
there is just a velocity there with people coming and going as 
they are cashing out the pay levels now in Federal service for 
significant positions. The chief information officers in the 
departments, which I think are arguably some of the most 
important jobs in government right now, are paid at the 
$125,400-a-year rate, and it is only so long that you are going 
to stay with that.
    I mean, the burden of service, the inconvenience of 
service, is certainly expected, but it may be a mixture of pay, 
it may be a mixture of just the 70- to 80-hour weeks. We don't 
know. We don't conduct exit interviews with Presidential 
appointees, and actually, we don't conduct exit interviews with 
Federal civil servants when they leave.
    But, we have got a vacancy rate running at 25 to 30 percent 
while the White House is saying that you can't get rid of any 
political appointees because every last one is essential to the 
functioning of government. But then, again, we have got a 
vacancy rate of 25 to 30 percent.
    Senator Akaka. The length of the confirmation process has 
been a concern. I have heard a number of recent nominees 
complain about the appointments process. I notice that in your 
survey you found that it took appointees from the past 
administration 2 months longer to enter office than appointees 
in the two previous administrations.
    Do you know why the period was longer? And do you expect 
additional time to be added to the process for current 
administration appointees?
    Mr. Light. Well, every administration since Kennedy--and 
this is data collected by Professor Mackenzie behind me, and 
you can talk to him a little bit about it. Every administration 
has seen an increase, and that is in part connected to the 
rising number of political appointees that you are pushing 
through this concrete pipe that can only handle to 20 to 30 
nominees a week.
    You know, we have a more and more intense scrutiny of 
nominees as they are moving through the process, more of a fear 
of making a mistake at both ends of the avenue. We want to 
subject appointees to the toughest scrutiny possible, and 
something has got to give. We have got to decide just how far 
and how deep we want to look as we are looking at our nominees.
    But I think part of it is just the fact that every time we 
have had a scandal, we have added new questions and new 
concerns to the investigations without getting rid of any. I 
challenge somebody in this room to tell me why you need to give 
the date and place of birth of your mother- and father-in-law 
and why that information is somehow a national security 
concern. But it is on the questionnaire.
    You have to provide information dating back to questions 
written during the McCarthy era for national security reviews 
that is just not relevant. But we never get rid of anything. 
Does that sound like a familiar refrain? I mean, we add and we 
add and we add and we add, and we never take away. And I think 
that just shows itself in the increased delays.
    Senator Akaka. Mr. Chairman, my final question is to Mr. 
Light. Most of the news articles dealing with the appointment 
process tend to focus on high-profile positions which makes us 
forget the less visible confirmable slots. I was interested to 
learn if your survey found that nominees at the assistant 
secretary level had more difficulty in the nomination process 
than nominations at higher levels. And if so, why is that?
    Mr. Light. Well, part of it is that we have got so many of 
them. We have got 220 assistant secretaries to push through the 
process, more or less, over the next few months, and in all 
candor, they just don't draw the attention of the White House 
and the OGE and the FBI. You draw those investigations to do at 
the FBI, it is not--I mean, you want to be the FBI agent 
assigned to do Donald Rumsfeld's field investigation. You don't 
want to be the agent assigned to do the deputy assistant 
secretary's review for him in his Department. It is just a 
function of the fact that the lower down you go in the pecking 
order, the less attention the positions get. And by the time 
you are getting down to the Executive Level III, IV, and V, 
this concrete pipe is filled with nominees in front, and people 
are getting clogged up, and OGE is turning over information and 
going through files. It is a clogging, bureaucratic sediment 
problem as well. They just get lost in the process.
    Chairman Thompson. Thank you very much.
    Senator Carper.
    Senator Carper. Thanks, Mr. Chairman.
    I just want to say especially to Bob Nash welcome. It is 
nice to see the guy you talked to on the phone all those years 
when you were working for the President. I would say for 
everybody here, I used to tell him that he had the worst job in 
government. But it is great to see you. What are you doing now?
    Mr. Nash. I am going to the Midwest in about a month to 
work for a bank.
    Senator Carper. All right. Well, good luck.
    Mr. Nash. Thank you.
    Senator Carper. Have you gone through their interview 
process and background checks? [Laughter.]
    Mr. Nash. They did not require a background check. They did 
require financial disclosure, though.
    Senator Carper. All right. I have perused your testimony, 
and you said in your testimony--I am not going to be 
redundant--a number of recommendations, and you give us some 
good recommendations. And I appreciate them very much.
    Mr. Nash. Thank you.
    Senator Carper. I am a baseball fan, and baseball games--
you talk here about how the process has stretched out and give 
actually some pretty good data on how much longer the process 
takes for confirmations and appointments. In baseball, baseball 
games have gotten too long as well.
    I was at a spring training game, and there was a guy 
actually there running a stopwatch on how long different things 
were taking during the course of the game in an effort to try 
to take the fat out and keep fan interest there. And I am not 
going to suggest we take that kind of approach here, but we 
clearly need interest at this level and at the Executive Branch 
to take some of the time out. And I think your recommendations 
are right on, and I am grateful for them.
    Mr. Nash. Thank you.
    Senator Carper. And good luck in the banking business.
    Mr. Nash. Thank you.
    Chairman Thompson. Thank you very much.
    Gentlemen, thank you very much. I appreciate your help in 
this and look forward to working with you very much. Maybe we 
can get something done and overcome all those hurdles we 
identified.
    We have a vote on. I am going to run and do that and be 
right back. We have an excellent panel coming up. I am really 
sorry we are having to ask you to wait, but we will adjourn and 
be back hopefully in just a few minutes. So we are recessed.
    [Recess.]
    Chairman Thompson. Let's come to order, please.
    I would like to ask our second panel to come forward. This 
panel is comprised of noted scholars and commentators who have 
studied this process, reflected on its purposes, and identified 
its many problems. Our witnesses are Scott Harshbarger of 
Common Cause; Calvin Mackenzie of Colby College; Pat McGinnis 
of the Council for Excellence in Government; and Norman 
Ornstein of the American Enterprise institute. We are very 
pleased to have you with us today.
    Mr. Mackenzie, would you make any opening statement you 
care to, please?

TESTIMONY OF G. CALVIN MACKENZIE\1\, DISTINGUISHED PRESIDENTIAL 
        PROFESSOR OF AMERICAN GOVERNMENT, COLBY COLLEGE

    Mr. Mackenzie. Thank you, Mr. Chairman, and thank you very 
much for inviting me to testify here today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Mackenzie appears in the Appendix 
on page 92.
---------------------------------------------------------------------------
    For almost 30 years, I have been a student of the 
Presidential appointments process. In that time, I have had 
frequent conversations with almost everyone who served as a 
principal adviser to Presidents on personnel back to the Truman 
Administration. I have spent many days up here on the Hill 
attending confirmation hearings and debates on the floor. I 
have talked with many Senators and staff members here about 
this. I have served on or directed virtually all of the 
previous studies that have been referred to today, including 
one chaired by two distinguished former Senators, Mac Mathias 
and John Culver.
    What has carried me through all of these years is a very 
simple notion, and that is that in a democracy the purpose of 
an election is to form a government. Those who win elections 
should be able to govern.
    But in a democracy as large and complex as ours, no one 
leader can govern alone. Presidents need the help of hundreds 
of people possessed of courage and stamina and creativity. It 
is fundamental and essential that victory in a Presidential 
election should be swiftly followed by the recruitment and 
emplacement of the talented leaders who will help a President 
to do the work the American people elected him or her to do.
    That is to say, simply, there ought to be a Presidential 
appointments process that works--swiftly, effectively, and 
rationally. Nothing could be more basic to good government.
    But we do not have a Presidential appointment process that 
works. In fact, we have in Washington today a Presidential 
appointment process that is a less efficient and less effective 
mechanism for staffing the senior levels of government than its 
counterparts in any other industrialized democracy. In this 
wonderful age of new democracies blooming all around us, many 
have chosen to copy elements of our Constitution and the 
processes that serve them. But one process that no other 
country anywhere in the world has chosen to copy is the one we 
use to staff the senior levels of our government, and for good 
reason. Even those untutored in democracy, Mr. Chairman, know a 
lemon when they see one.
    How did we get into this mess? The answer isn't simple, but 
there is one explanation we can reject out of hand. No one 
planned this appointment process. No one designed it. No one 
approved it. I can tell you that in the several decades of 
conversations I have had with Presidents, their personnel 
advisers, Senators, their committee staffs, and appointees 
themselves, I have never heard a single person praise the 
appointments process. I have heard many, however, who would 
like to bury it.
    Can you imagine in your wildest fantasies any group of 
rational people designing a process like the one we have now 
for staffing the senior levels of our government? No rational 
body would design such a process, and none did. The 
Presidential appointment process was one of the great 
inventions of American political genius. We Americans early on 
rejected the notion that government was an enterprise best left 
to a governing class, turning instead to what was a radical and 
new idea: That government should be the responsibility of the 
finest of our citizens, people drawn from real lives in the 
real world of affairs.
    And for much of our history it was that, as men and women 
like Josephus Daniels and Henry Stimson and Herbert Hoover and 
Frances Perkins and John Foster Dulles set aside their private 
pursuits, often at great financial sacrifice, to lend their 
estimable talents to the service of their country.
    In those times, transitions were swift and smooth. The 
White House called, the candidate accepted the job, he or she 
was at work in Washington a few weeks later. Investigations, 
questionnaires, hostile confirmations, the bludgeoning of 
reputations all were largely unknown. Public service was an 
honor, and to most of those who undertook it, it felt that way.
    But those are past times, and increasingly--and 
distressingly--these days we find that our appointments process 
is hostile and alien to the very Americans we would like to 
welcome to public service. So instead of a steady flow of 
leaders in and out of the private sector and from all over the 
country, we have instead a process that relies heavily on the 
Washington community and on people already in government or 
lobbying the government as its major source of personnel.
    We have come perilously close now to relying on the very 
governing class that our Founders and most previous generations 
of Americans rejected.
    Have we done this because, after careful and thoughtful 
consideration, we decided to junk our old system and debunk our 
old notions and replace them with a new approach to staffing 
the highest levels of government? Of course not. Change 
occurred unintentionally because we let our appointments 
process fall into a desperate state of disrepair so that now it 
often undermines the very purposes it was designed to serve. It 
doesn't welcome talented leaders to public service; it repels 
them. It doesn't smooth the transition from the private to the 
public sector; it turns it into a torture chamber. It doesn't 
speed the start-up of new administrations; it slows the process 
almost to a standstill.
    All of us who have allowed this to happen should be 
ashamed. We deserve better, we need better, and we once had 
better. Then we let it slip away.
    But hope is not lost, Mr. Chairman. The appointment process 
is not irreparably broken, not by a long shot. And what it will 
take to restore this uniquely American idea to high gloss is 
clear and, I believe, highly possible.
    Tomorrow, the leaders of the Presidential Appointee 
Initiative will testify here and will present some proposals 
for fixing the appointment process. These are not very complex, 
and most of them are not very new.
    What is needed now is common sense, some commitment to 
undertake this task, and, most importantly, some leadership.
    I hope these hearings will be the incubator for these 
reforms and that this Committee will be their shepherd. That, 
Mr. Chairman, is noble and very important work.
    Chairman Thompson. Thank you.
    Mr. Harshbarger.

    TESTIMONY OF SCOTT HARSHBARGER,\1\ PRESIDENT AND CHIEF 
                EXECUTIVE OFFICER, COMMON CAUSE

    Mr. Harshbarger. Thank you, Senators, and Mr. Chairman. 
First of all, to segue from the close of the preceding remarks, 
what we heard in terms of the characteristics necessary for 
reform occurred in this Senate just over the past 2 weeks, and 
I congratulate you and thank you for your leadership on 
campaign finance reform, McCain-Feingold. It was exactly that 
that made it happen, and we are grateful to you, and many 
people are as well.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Harshbarger appears in the 
Appendix on page 98.
---------------------------------------------------------------------------
    Second, for me it is a great honor to be here for the first 
time in this role and with a panel of incredibly real experts 
and people who have studied this and whose proposals by and 
large I urge you to adopt. To some extent, I come here in two 
capacities, primarily being asked to talk about the history and 
importance of the financial disclosure laws for Presidential 
appointees as the Committee looks at this appointment process 
for the Executive Branch, and also because of the possibility 
that negative aspects of the appointment process are deterring 
good people from serving in Federal Government positions which 
is a real and legitimate public concern. The efforts of this 
Committee and others to explore reforms to the appointment 
process are worthwhile and commendable and essential.
    As I said, I was asked to focus my comments on public 
financial disclosure, primarily because Common Cause has long 
been an advocate of these laws, dating back to the 1970's when 
we pushed to replace confidential disclosure rules with a 
public disclosure apparatus, and the late 1980's when Common 
Cause fought against weakening the Ethics in Government Act. 
And in my own State of Massachusetts, being the first general 
counsel to the Ethics Commission in the late 1970's when, in 
fact, the States also adopted similar kinds of rules and having 
been a district attorney and attorney general throughout, I 
have had an opportunity to look at this from several different 
perspectives as a public employee and elected official as well.
    From that perspective, it is my view that public financial 
disclosure laws are essential safeguards against both 
corruption in government and the appearance of corruption. 
Public disclosure of personal financial interests reveals and 
can reveal potential conflicts of interest among government 
officials. It is essential to assure the public that 
individuals are not using their public office for personal gain 
or making public policy decisions on any basis other than the 
public interest. Any changes regarding current public 
disclosure rights should be made with great caution and should 
not damage the ability of OGE or agency officials to 
meaningfully gauge real, potential, or perceived conflicts of 
interest that create the appearance of corruption.
    In exploring the possibilities for reform and listening to 
what we heard in the first panel, listening to what we have 
heard here and what you will hear, I think it is very clear 
that there may be many problems with the appointment process, 
but very few of them are caused at all by the existence of 
public financial disclosure requirements and the statements of 
these interests. Numerous studies on this show that the worst 
problems do not come from that but, rather, come from the 
politicization of appointments, the media frenzies, a whole 
range of other issues. Many of these incidents, such as the 
``nanny scandals,'' are unrelated to financial disclosure 
forms. Therefore, financial disclosure should not become the 
scapegoat, nor is it the reason for these problems.
    The biggest problems, in fact, have been identified: 
Increased polarization of the process, long delays in 
nomination due to senatorial holds, political games and 
bureaucratic inefficiencies, high-profile media frenzies 
surrounding scandals that are unrelated to financial 
disclosure, an excessive amount of Federal appointees subject 
to this process, and lackluster protection of sensitive FBI 
files, including issues that should be addressed in terms of 
professional performance by law enforcement agencies and 
investigators rather than attempting to deal with it through 
weakening background checks and the way in which they are 
conducted.
    There are also complaints with the ways financial 
disclosure is administered that can be resolved without 
eliminating necessary disclosure questions. The process is 
often called confusing. There is extensive duplication we have 
all heard about. There is no need for that. Therefore, the 
problems in the appointment system can generally be said to be 
rooted in three P's: Politics, paperwork, and press coverage. 
And for the sake of the public interest, the problems can and 
should be addressed without gutting disclosure laws.
    There are also several reform proposals that can be 
implemented without weakening these proposals. The process can 
be streamlined, and there is a whole range of software that can 
be used to help deal with this, having administrations begin 
planning early and take action to assist potential nominees. We 
can enhance and streamline and professionalize the FBI 
investigative process. We can clarify the laws and procedures. 
We can make fewer political appointments, and we can set the 
limit on senatorial holds and so on.
    But, specifically, in terms of the process of disclosure, 
we think that some of the changes proposed are unnecessary and 
would, in fact, increase the likelihood of potential corruption 
and the appearance thereof, including, for example, while the 
original President Clinton's 5-year revolving-door restriction 
may have been a bit too long, 1 year is not enough in most of 
these positions, and taking away criminal penalties, in my own 
experience and view, as part of the range of potential 
penalties would decrease the incentive to be honest.
    Now, I will discuss in a minute several things. I know 
there is limited time here, but the history of this, which we 
were asked to talk about, is incorporated in my statement, and 
I will leave it for that purpose. The history, I think, 
demonstrates that the process, as exhibited by Professor Cox's 
comments, by former Senator Douglas and others, makes very 
clear that this process can be a very helpful experience for 
the nominees and for the appointees. It also does disclose 
major kinds of potential problems that would not otherwise be 
disclosed.
    But for this purpose, I think the major issue that we want 
to stress is essentially that in order to streamline this 
process, it is vital that no reform prevents disclosure from 
being public, that infringes on the ability to determine 
conflicts of interest, that substantially reduces categories of 
value or weakens the penalties for false disclosure. Public 
disclosure is necessary because confidential disclosure is not 
truly disclosure at all. And, in fact, some of the disclosures 
for the lesser positions, not the public information officers 
at HUD but, for example, assistant secretaries, may be even 
more important because they are less focused upon than the 
secretarial positions by the media and others. So, to some 
extent, it becomes a very important prophylactic effect that is 
very important to the nominee and others.
    The disclosure form needs to contain all the information 
necessary to identify potential conflicts. It does not need to 
be a net worth statement. It should never be that, but it does 
need to identify potential interests that may or may not exist.
    Also, from my own experience, if categories of value are 
too broad, it actually harms honest officials because the press 
always assumes the highest number in any category, not the 
lowest number. And, frankly, in terms of the range of 
penalties, I think the issue is to some extent what the 
guidelines ought to be and who ought to be administering and 
enforcing these laws rather than limiting the range of 
potential penalties from those who innocently violate in good 
faith to those who intentionally set out to falsely disclose in 
order to gain or to game.
    Now, my final point is simply that we think that the 
present process should not weaken public financial disclosure. 
Streamlining the process is a worthy endeavor. Gutting the 
process would prove disastrous. My own experience and the 
position of Common Cause is that the vast majority of public 
officials are decent, honest, honorable people who have and 
will have nothing to hide and will survive any kind of an 
examination in the performance of their duties and in the 
screening. But public financial disclosure, while not a 
panacea, is often in their best interest as well as the public 
interest as a whole. And I think and hope that you will 
continue to uphold the financial disclosure requirements while 
streamlining this process and making it far easier for good 
people to serve in these wonderful jobs.
    Chairman Thompson. Thank you very much.
    Ms. McGinnis.

    TESTIMONY OF PATRICIA McGINNIS,\1\ PRESIDENT AND CHIEF 
    EXECUTIVE OFFICER, COUNCIL FOR EXCELLENCE IN GOVERNMENT

    Ms. McGinnis. Thank you. Thank you, Mr. Chairman, for the 
opportunity to be here to talk about the state of the 
Presidential appointments process. From my vantage point, as 
the head of an organization whose mission is excellence in 
government, I have to say that the state of the appointments 
process is far from excellent. In fact, it is going in the 
wrong direction in terms of the time it takes for appointees to 
get through the process--you see the numbers--in terms of the 
toll it takes on many highly qualified people who sometimes 
unknowingly become pawns in a complicated and often obscure set 
of political games, and in terms of the dampening effect that 
it has on attracting excellent people around the country to 
government. You also see the numbers about how many more people 
are coming into these positions from Washington than from 
elsewhere in the country.
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    \1\ The prepared statement of Ms. McGinnis appears in the Appendix 
on page 115.
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    I know that you and your colleagues on the Committee are 
concerned about public trust in government, which is today 
about half of what it was in the 1960's. An appointments 
process that gets well-qualified people on the job in a 
reasonable period of time to manage the public business and 
does so in a professional and respectful manner I think will go 
a long way toward restoring confidence in government.
    In the mid-1960's, it took just over 2 months to get a 
person confirmed, on average. That number has risen--you can 
see the chart--to about 8\1/2\ months during the Clinton 
Administration. I think that if we can return to the 2\1/2\-
month time frame of the 1960's, maybe we can also approach the 
levels of confidence in government that we saw then. In 1964, 
76 percent of the American people said they trusted the Federal 
Government to do the right thing all or most of the time. In 
2000, that number was 30 percent. I think that is a matter of 
some concern.
    You are bringing many organizations and individuals to 
these hearings to discuss their work and their findings and 
their recommendations over the years. This issue has been 
studied and studied, and if you pile up the reports, they would 
rise probably above Scott Harshbarger's glasses. So a lot of 
work has been done. We have been very pleased to partner with 
the Center for the Study of the Presidency, for example, in 
exploring barriers to public service. We have been delighted to 
work with the Transition to Governing Project, Norm Ornstein, 
and the Presidential Appointee Initiative at Brookings, and I 
want to particularly commend that initiative and Paul Light, 
Nancy Kassebaum, and Frank Raines for conducting this research 
and providing these insights that we hope will set the stage 
for reform.
    The Council for Excellence in Government's work most 
recently includes putting together this survivor's guide for 
Presidential nominees. It looks a bit like a phone book, and 
that was not intentional. But this describes all the steps, all 
the people who are involved, and it also has an appendix, which 
is quite lengthy, which contains the forms.
    We did it to help people through the process. What I have 
heard in comments and feedback on this unfortunately is that 
many people have looked at these forms and been discouraged and 
less interested in the process.
    The council has also looked at this appointments process in 
our ``1997 Prune Book'' extensively and made some 
recommendations. A group of our members, chaired by Elliot 
Richardson, also developed a set of ethical principles for 
public service which we published, which I would say, rather 
than some of the very detailed restrictions, is a more positive 
and powerful and important statement of public service as a 
public trust.
    The striking characteristic that we have noticed in all the 
past studies of the appointment process is the bipartisan 
consensus across the board. There are some patterns here, and I 
think we can build on those. The one that we have focused on 
extensively is the work of the American Bar Association's 
Committee on Government Standards. I am sure you have looked at 
their recommendations, and we have built upon those in a letter 
that we prepared for Amy Comstock and the Office for Government 
Ethics, which was also signed by David Abshire from the Center 
for the Study of the Presidency, and Sally Katzen, who chaired 
that ABA committee, and Boyden Gray, who I believe coined the 
phrase ``innocent until nominated.'' That work is both powerful 
in its recommendations, very practical, but I think if you look 
at the people who were involved in making those 
recommendations, you see conservatives, you see liberals, you 
see Republicans, you see Democrats. And I think that we should 
not say at this point that we can't improve on those 
requirements without eliminating them.
    Before coming here today, I polled the 650 members of the 
Council for Excellence in Government who are leaders in the 
private sector who have served in government to get their views 
of the appointments process and their comments about their 
service in government. It very much fits with the picture that 
Paul Light gave you. What we see in their comments is a pattern 
of people who value public service as a chance to make a 
difference. They see it as one of the most rewarding 
experiences of their professional careers--one person gave it a 
10 on a scale of 1 to 5, and 5 was the highest--but who in most 
cases found the appointments process to be, ``too long, too 
extensive, too often inappropriate, and too intrusive.''
    Ironically, most would go through the process again for the 
opportunity to serve, but these are people who have served and 
they know the rewards of public service. The question is: Can 
we expect this response in the future from talented people 
around the country who have no government experience? And on 
the basis of PAI's research and the council's own surveys, I 
would say no. I see little interest, especially among talented 
young people, in government service or running for office. The 
demeaning of people in government obviously goes beyond the 
appointments process, but in this case, the problems are clear 
and we know what to do. What we need now is the leadership to 
do what is necessary to improve the process. We need a system 
that judges nominees on their qualifications for the jobs they 
are being asked to do.
    The financial disclosure and ethics regulations need to be 
streamlined and refocused on promoting public service as a 
public trust, not creating a stranglehold of regulations and 
restrictions in what I think is a futile attempt to legislate 
ethical behavior.
    The Senate and Executive Branch should work together to 
streamline, shorten, and in some cases combine their paperwork 
and investigative processes. You have heard about that from 
other witnesses here. The management of the vetting and 
clearing of nominations in the Executive Branch needs re-
engineering to expedite the process and keep nominees informed 
every step of the way.
    And, finally, the Senate and the Executive Branch should 
agree on principles that will govern the confirmation phase of 
the appointments process, and obviously an important principle 
should be the timely handling of nominations with a commitment 
to vote them up or down within a reasonable period, say 60 to 
90 days as a target.
    Thank you very much for your leadership to ensure that the 
insights and proposals you are hearing this week will turn into 
real reform.
    Chairman Thompson. Thank you very much.
    Mr. Ornstein.

TESTIMONY OF NORMAN J. ORNSTEIN,\1\ RESIDENT SCHOLAR, AMERICAN 
                      ENTERPRISE INSTITUTE

    Mr. Ornstein. Thank you, Mr. Chairman. I, too, want to 
thank you for your leadership on this and the splendid campaign 
finance reform debate of the last week. It is an honor to be 
here testifying with this remarkable group of people.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Ornstein appears in the Appendix 
on page 121.
---------------------------------------------------------------------------
    I have been interested in issues of public service 
throughout my professional career, became more directly 
involved as I helped to create the National Commission on 
Public Service and then served on it with Chairman Paul Volcker 
and up through my current involvement as co-director of the 
Transition to Governing Project. It is interesting to go back 
through our recommendations, the recommendations that preceded 
it, the ones that have come since in all of these reports and 
see the remarkable consensus on what ought to be done here. The 
consensus there that is perhaps only matched by the lack of 
action through various administrations and various Congresses, 
and we can lay the blame all over the place.
    One of the problems, frankly, is that I think we have had a 
bunch of Presidents who have not understood the importance for 
their own administrations and their own ultimate success in 
having their team in place at an early stage and used some of 
their political capital early to try and effectively move this 
process along and streamline the process. But it also extends 
almost everywhere else, including throughout the culture, and I 
want to spend at least a couple of minutes talking about some 
of the things that have not been addressed as directly today in 
the Senate, which I think is an important part of this, and 
some of it may not be directly in the jurisdiction of the 
Committee, but it is in the jurisdiction of individual Senators 
and it is quite important.
    We clearly have a terrible problem on our hands, a problem 
now that was reflected by the comments of Mr. O'Keefe. Imagine 
going through a budget with two people in position at OMB. But 
then imagine where we are throughout the rest of the 
administration where basically you have a Cabinet officer 
sitting there at the top with maybe one or two personal 
assistants and only a couple of instances with a deputy 
secretary and nobody else, a group of career civil servants 
waiting for policy direction but nobody who can give them that 
policy direction, and in many instances, only one person who 
can sign a whole slew of forms to make things happen or not 
make them happen. Paul Light called it a neck-less government. 
It is really a hollow government at this point. And it is not 
likely to change in any substantial way for a while.
    We often use the benchmarks of the first 100 days, coming 
up in another month, the first 180 days, the first 6 months of 
an administration, to look for those concrete accomplishments. 
And what we are going to find, I am afraid, is that by the end 
of the first 100 days we will have very few additional people 
in the key departments able to actually move across an array of 
important policy areas begin to get things in place, and that 
will be almost as true after the first 180 days. So this is 
reaching a level where it is having a serious impact, not just 
on getting good people to come in and serve but the actual 
functioning of government and making policy.
    Now, you are going to hear some recommendations that 
reflect the consensus in more detail tomorrow. We have heard 
about some of the problems. I would like to highlight a couple 
of things that haven't been addressed as much as well and maybe 
focus on one or two others that have.
    This goes back to the pre-election period as well. We have 
had a culture that basically says that it would be presumptuous 
for Presidential candidates to do anything openly about 
planning to take over government and do something with it. 
Anything that is done to plan for a new administration is done 
surreptitiously, by and large, and often such removed from the 
candidates that when the eventual winner moves towards a 
transition, the people who know something about getting a team 
in place are isolated from the actual process of getting the 
administration moving.
    I am not sure how much formally or structurally we can do 
here, but there are some things that can be done. Last year, 
you passed a very good piece of legislation amending the 
Transitions Act. It would be nice if some of the money that is 
used for transitions was specifically allocated and almost 
mandated for pre-election planning. And you should seriously 
think about perhaps a permanent office, one that at least could 
build in the most powerful computer systems so that you could 
move those resumes up online, move them through, and have an 
easier and streamlined way of getting those potential nominees 
into the mix a little bit earlier. Because, of course, one of 
the problems is that when an election is over, everybody is 
exhausted. The winner wants to bask in the glow. There is 
infighting going on over who is going to be a decisionmaker, 
and you can lose easily the first month or two. It is quite 
remarkable and commendable of Clay Johnson and the other people 
around President Bush that, having lost half their transition, 
they have still managed to move as swiftly as somebody coming 
in without those kinds of problems, but, still, where we see 90 
percent of the Senate-confirmable people not yet in place, and 
many of them not nominated or not even close.
    There has been some talk of the FBI checks. That was an 
Executive order. Presumably an Executive order could change it. 
Presumably we could work through and maybe with the assistance 
of the Committee a sliding scale, maybe you don't need just 
simply full field investigations for every confirmable 
appointee or a very simple process for many and then the most 
complex for others. We may be able to develop categories of 
people where you could go from a simple computer scan right up 
through the full field investigation. But here I would also 
mention that one of the problems is that the Congress has 
insisted, the Senate has insisted more and more over the last 
20 years that taking positions that were never thought to be 
Senate-confirmable ones and added them to the list.
    Paul had mentioned this is a problem, and it is something 
that is not easily curable. But I would hope at some point we 
would look back and see that it does not serve the public 
interest to have a bunch of assistant secretaries or even 
deputy assistant secretaries having to go through a full Senate 
confirmation hearing and having them to be caught up in the web 
of all kinds of other requirements that come with that status. 
A lot of them like that status. It is certainly an additional 
aura that goes about the nominee. But it slows the process 
down.
    The forms streamlining I think is doable, some of it by 
Executive action. We will see Amy Comstock, I hope, talk about 
some of that tomorrow, some perhaps as well by Executive order. 
Some may require legal changes. The fact that many of these 
forms have to be filled out on a typewriter is just another 
element of the water torture that we put people through, and 
that means that when you go to update, you have got to go back 
to the beginning.
    We in our Transition to Governing Project have presided 
over the creation of a piece of software, which was done by a 
couple of very good political scientists--Martha Kumar, who is 
here in the room, Terry Sullivan--called Nomination Forms 
Online, which we hoped would be the equivalent of a Turbo Tax 
program for Presidential appointees. It is almost ready to go. 
It can't at this point be implemented because we don't have the 
Presidential data statement, the Personal Data Statement in the 
form that can make it usable. But it may require some changes 
that you could contemplate to at least enable nominees to go 
through an easier process, and that might even be easier than 
eliminating some of the forms, if you can have the data 
automatically travel to where it belongs.
    There are criminal penalties for any kinds of misleading or 
inaccurate statements on these forms. Having filled them out 
myself, I know that when you go back and you have to write down 
every foreign trip you have taken, every world leader or 
foreign leader you have met, with no clear definition of who 
those are, every speech you have given, it is almost impossible 
for anybody who has been around a little bit not to make some 
inadvertent mistakes. And we ought to think through what kinds 
of penalties are appropriate in this area.
    Finally, let me just talk for a minute or two about the 
Senate. When we look at these tables looking at the percentage 
of appointees from the D.C. metropolitan area--and the number 
is going up, the fact that we are turning more and more to 
Beltway insiders--certainly a part of that problem is the costs 
of relocation. But let's face it. The hold, as it has been 
practiced in the Senate, is a major contributing factor.
    If you think about anybody going from a position in the 
corporate world to another across the country or going from 
academic life from one place to another, the complications of 
selling a house and buying a new house, of trying to time it so 
that your children finish a school year and then are in place 
in time to meet a new school year are tough enough. Then 
imagine if you have to go through this process of months before 
your appointment is announced, all the time before you can be 
formally nominated, and then you sit perhaps twisting in the 
wind for 3 months, 6 months, a year, or longer because of a 
hold that may have been instituted not because of anything you 
have done or are alleged to have done, but as you are being 
held hostage for some completely extraneous matter.
    Now, this is not a matter of changing the Senate rules, as 
you know. This is not in the rules anywhere. It is a practice 
that has been around for a century that was designed as a 
measure of convenience for Senators when something of 
importance came up to give them an opportunity to prepare for 
it, to make sure that they could be there on the floor if there 
was something else that created a conflict for them for a very 
brief period of time. And it has now morphed into something 
very, very different.
    We have made a slight change. In theory, these holds are 
now public. In practice, they often are not. In theory, they 
are only supposed to be for a fixed period of time. In 
practice, they often are not. We ought to really--Senators 
ought to look at themselves in the mirror and leaders ought to 
think about whether using a hold for anything other than a 
legitimate concern about an individual nominee is an 
appropriate use of a power.
    I know that is out of the jurisdiction of the Committee, 
but it seems to me that the way in which the Senate has handled 
the confirmation process is at least as significant a problem 
here for many nominees and a chilling factor in terms of 
whether people are going to serve as they see what others have 
gone through, as many of the other areas that we can perhaps 
correct by Executive action, Executive order, or a change in 
the law.
    Thank you very much.
    Chairman Thompson. Thank you very much.
    In listening, a couple of you made comments about campaign 
finance reform, and I drew the parallel with what we are 
dealing with here today in that there, too, regardless of what 
you feel about the legislation, you had a system that developed 
without anybody having developed it. It just arrived 1 day. We 
went from a system of anything over $1,000 contribution being 
illegal to unlimited, without Congress ever having passed a 
different law. And that is the system we have got here today. 
Nobody ever devised it. Nobody created it. Nobody would. Nobody 
would take credit for it. And yet we have it, but we see it has 
been very difficult to change it. Maybe by focusing the 
attention on it that we are going to, maybe that can help.
    What I would like to do, we have an awful lot of expertise 
and years of experience here before us. I would like to take a 
lot more time than we have. But I guess what I would be 
interested in mostly is how you would rank the problem areas in 
terms of significance, and I guess specifically in terms of 
unreasonable delay.
    I guess the paperwork would be one whole category. Within 
that, it would be the simplification issues, and another 
category, perhaps the financial disclosure issues. Then you 
would have the Senate, the FBI, the White House, etc. Pick your 
own categories.
    But assuming that we might not be able to do everything, if 
we could only do one or two things, what do you think that 
should be? Mr. Mackenzie.
    Mr. Mackenzie. Well, I think they have all been discussed 
here, Senator, today. The simplification, of course, is part of 
the obvious answer to your question, that these forms have 
grown like topsy; nobody decided it made sense to have 233 
questions that appointees have to answer. We need to deal with 
that. And I think there is some movement in that that is 
desirable.
    I don't think enough has been said about the FBI full field 
investigation, although we have touched on it. You may have had 
in your Senate experience some occasion to look at FBI files on 
nominees. I have never looked at one, but I have talked to 
virtually everybody who has been in the White House counsel's 
office who had responsibility for those. I have never, ever had 
a person say to me that there was a useful piece of information 
in those files. And the amount of both government staff time 
that goes into creating them and the agony that appointees and 
others have to go through in enduring them simply is not 
justified by any valuable information that comes out of them.
    So I think the kinds of suggestions, some of which you have 
heard today, some of which you will hear tomorrow, about how to 
rationalize the FBI full field investigation, which consumers a 
very substantial portion of the time in this process, are good 
ideas.
    The third area, it seems to me, is what Norm Ornstein was 
suggesting. I think some effort in this body to not reduce its 
deliberation about appointments, not reduce the intelligence 
with which it makes confirmation decisions, but to discipline 
the time that it takes to do those things.
    I think having talked to hundreds of appointees over the 
years, one of the great terrors for them in this process is 
uncertainty. If you are a partner in a law firm and you are 
blessed with a call from the President of the United States 
asking you to take a high-level job in the government, you 
quickly realize first you have got to go through your client 
list and decide which clients you have to shed right away 
because keeping them as clients is going to be a conflict of 
interest for the job you are going to hold. And then you have 
got to prepare to come to Washington and make this transition, 
but you don't know how long that is going to take. And we know 
these days it can take 6 months, 8 months, a year, or more. Do 
you take on new clients? Do your partners start looking at you 
saying, ``You are not making any rain in this law firm. Why are 
we even keeping your office open around here anymore?'' There 
are questions about whether you can stay on your health 
insurance, what happens to your retirement, and so on.
    It seems to me a good deal of that uncertainty can be 
reduced by some time limits here.
    Chairman Thompson. How can you do that? Perhaps you can 
have a range, say absent unusual circumstances, how do you 
foresee a member--let's say we even make some changes with 
regard to holds, with regard to the amount of time we normally 
take. How can you foresee an individual Senator thinking that 
something is more significant maybe than others on the panel 
might think and it requires more investigation and it requires 
special treatment or something? It seems like that happens all 
the time, and you certainly can't predict that.
    How much certainty could you interject in the system 
realistically and still have everybody have their say, as they 
must in the process?
    Mr. Mackenzie. Well, I think it is important to wonder, 
maybe even to ask: What has happened here in the last 20 years? 
In 1981, the Senate spent an average of 30 days from the time a 
nomination came to the Senate to the time it confirmed that 
nominee. In 1993, the first year of the Clinton Administration, 
it was 41 days. In 1999, it was 87 days. So it is now three 
times longer for Senate action on a nominee than it was 20 
years ago.
    Is Senate deliberation three times better as a consequence 
of that? Is the quality of people being confirmed three times 
better? I suspect the answer to those questions is no, although 
we can't measure those things.
    How do we go back to where we were? It does seem to me that 
the question of holds has become significant in some cases. And 
while I don't think anybody is going to recommend that the 
practice of a hold be eliminated--and if we did, we would be 
laughed at, of course, for that. But it does seem to me that 
the Senate could make some decisions collectively about putting 
a time limit overall on the length of time that a nominee could 
be under a hold, so that if a Senator did have a question about 
the particular nominee, he or she would have time to explore 
that question and resolve it and then move on with the 
nomination.
    It does seem to me that there is some sort of target figure 
on the number of days post official nomination before there is 
a vote on confirmation that could be agreed to in practice with 
some kind of escape hatch if there clearly was a problem that 
came up perhaps late in the confirmation process that wasn't 
known at the beginning that required further exploration.
    But I think establishing some guidelines, some targets, is 
a good idea. You know this body has asked an awful lot of 
agencies in this government to establish targets for things 
that it does. That doesn't seem to be an unreasonable request 
for it to ask itself about a process as important as this one.
    Mr. Harshbarger. On that, I would just--the last point was 
particularly interesting to me as a former prosecutor and 
former attorney general. We have had many legislatures decide 
that arrest to trial ought to occur within 90 days and 60 days, 
and we have come up and said there are plenty of problems with 
these, how do you get around this. And, in fact, people have 
figured out how to do that with appropriate exceptions. So it 
does seem----
    Chairman Thompson. Not to mention mandatory sentencing.
    Mr. Harshbarger. Right. And I won't go into the whole line 
here about how you can, in fact, streamline something when, in 
fact, as a legislative framework you decide to approach it that 
way, still allowing discretion, however, which I think was a 
very important point here.
    If you took all of the recommendations that people have 
made here, the expertise, there may be some disagreements, and 
we could discuss those issues. But the uniformity of agreement 
about how you could streamline and simplify is not partisan in 
any way. It is really how would the system best operate. I 
would argue even for the Senators it would help sort out a 
great deal.
    Let me say the second point, and I speak to your background 
as well. This issue of background checks, I mean, there is no 
reason in the world that you shouldn't leave the delegation of 
this to appropriate officials who are experts at doing this, 
which is, you know, either the FBI or somebody--the categories 
that could be worked in here in terms of both time limits on 
background checks and other kinds of things are done in many 
other capacities in any other investigative capacity that we 
have, and the people who do it are held accountable for it.
    Chairman Thompson. Should this be within the purview of the 
Executive Branch?
    Mr. Harshbarger. Well, it certainly seems to me the 
Executive Branch could easily decide how to do this in a 
different way.
    Let me tell you a third piece. The point of public 
disclosure years ago was to eliminate a lot of the need for 
that kind of investigation, that is, the theory being that if 
the people themselves had to disclose things publicly, somebody 
would review it, that sort of has its own antiseptic effect. Of 
course, it has problems. But one of the theories of a lot of 
the disclosure laws was you were letting the public disclosure 
serve the purpose that usually detailed background checks used 
to deal with. And then later on, you always have the subsequent 
review process if there had been major discrepancies. But I do 
think that there is a way within the framework through 
administrative efficiencies and other kinds of policy 
considerations, instead of mandating some of these things, to 
allow the discretions to exist within the people charged with 
doing the job.
    Chairman Thompson. Do we want to give the President 
complete discretion in deciding which top-level appointments 
should have an extensive background check?
    Mr. Harshbarger. I think you could draw those. In one 
category--obviously people here are much more focused on the 
Federal law. In the State laws generally, you have categories 
called major policymakers which are subject to certain things. 
It seems to me there are categories of officials that could be 
subject to broader kinds of reviews. You may decide security 
checks in certain highly sensitive situations ought to have it 
regardless. You may then decide, as I think everybody here has 
mentioned, different categories for different positions.
    But I think even so, Senator, putting the pressure on in 
terms of time puts it on the investigators as well as the 
process itself, and I think that has a lot of merit.
    Ms. McGinnis. Can I build on the issue of Senate holds and 
the time frame? I think that is exactly right, and there should 
be some exceptions, some escape hatch. But this is not just 
about holding nominations to get more information. 
Unfortunately, I think the larger problem is holding 
nominations for another reason related to the department or 
agency to which that person----
    Chairman Thompson. Or to kill them altogether.
    Ms. McGinnis. Right. And so this issue of the purpose of 
holds has to be part of the consideration in terms of 
establishing the principle that the focus will be on the 
qualification of the nominee to do the job. And then my second 
area would be in the Executive Branch, looking at the FBI 
investigations. We have talked about that, developing some 
categories, streamlining those, and there are a lot of things 
that can be done in the Executive Branch with no legislation in 
terms of setting time frames, keeping nominees informed, 
consolidating the paperwork, building on the Turbo Tax model, 
etc. And that should and I hope will be done.
    And then the third category we are going to hear more about 
tomorrow when Amy Comstock comes after extensive study and 
gives some recommendations on financial disclosure, and I think 
that we should all look at those carefully and see if we can 
agree and move them forward.
    Mr. Ornstein. I would make a couple of specific 
suggestions, Mr. Chairman. While holds are not anywhere in the 
rules, I think it is time for a Senate rule that basically 
would put a specific time limit on a hold for a nomination and 
would have a discharge feature that after 60 days, which is a 
more than reasonable time, at maximum, that a nomination would 
automatically go on to the calendar and move towards the floor 
for a vote. There ought to be at least--you can't eliminate 
uncertainty, and you can't eliminate the possibility or the 
prospect of killing nominations. Sometimes it happens just in a 
committee by not acting on it. That is OK, too. But you can 
take away some of the torturous aspects of this.
    I wrote a piece in ``Foreign Affairs'' on this issue which 
led with the story of Peter Burleigh, who had been nominated to 
be Ambassador to Indonesia, and he and another Foreign Service 
officer, whom I have known, just a superb public servant, sat 
twisting in the wind for more than a year. Meantime, the United 
States did not have representation in Indonesia at a time of 
enormous turmoil, this huge and important country, all because 
of a completely extraneous matter, a whistleblower who a 
Senator thought was being mistreated in the State Department. 
It had nothing to do with these two individuals or their 
qualifications or any kind of a problem with them. And, 
eventually, Mr. Burleigh just basically said enough of this, 
and he retired from the Foreign Service. Not a good outcome.
    There are a lot of those stories, and it may be time to 
consider a rules change.
    The second thing that I would do is this apropos of the 
notion of who should be responsible for making these kinds of 
decisions about FBI checks. It is probably time for the two 
Senate leaders to sit down with the President before that 
happens, for you, perhaps you and Senator Lieberman, to sit 
down with the chief of staff and work out some understandings 
on some of these things. You could easily, I think, work on an 
understanding of which officials should be subject to full FBI 
background checks that really does involve a consensus in both 
branches, and then you can have action that would take place, 
and maybe even a compact that would include some assurances 
ultimately from the Senate to move to try and expedite some of 
these things in return for an administration streamlining its 
own processes and being open and forthcoming. That may be a 
good way to do some of these things.
    Chairman Thompson. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman. I want to 
be brief with the questions, and this is along the line of the 
questioning now.
    As Ms. McGinnis noted, political appointees unknowingly 
become pawns in complicated and often obscure political games 
because of issues unrelated to the person's position. And you 
suggested that the Senate vote up or down on a nomination in a 
reasonable length of time. Others echo this view and some 
recommend that the Senate limit its tradition of placing holds 
on nominations.
    We just went through a period of years where many 
nominations to the Federal bench were held up for political 
reasons by the Senate. I know the career of an attorney from 
Hawaii languished for nearly 2 years on hold for fear of 
accepting cases that could pose a conflict of interest once she 
was confirmed.
    My question is for anyone on the panel. Would you extend 
limiting holds to all nominations, including Federal 
judgeships?
    Mr. Mackenzie. Can I take a crack at that? And I am sure 
others will as well, Senator.
    The discussion we have had today, I think, has been mostly 
about executive appointments. Clearly, there is a difference 
when you are talking about appointments that are for life, as 
judicial appointments are.
    And so the importance of Senate scrutiny and care and 
deliberation in those appointments, I think, is magnified in 
those circumstances. But I think the principle of fair 
treatment applies in both cases, that the human beings who are 
willing to submit themselves to this process to be public 
servants deserve to be treated fairly and openly and not to be 
used as pawns in someone else's game. I think if there is a 
legitimate question that has not yet been resolved about the 
fitness of a particular person to be a Presidential appointee 
to the bench or to the Executive Branch, this body is entitled 
to take the time it needs to resolve that question. But if that 
question is not pending and the issue is only how can we use 
this appointment to get some leverage for some other kind of 
deal we would like to make with the administration or with some 
other Senator, that is unfair treatment of the appointee and we 
shouldn't do that.
    Mr. Harshbarger. My view would be, from both Common Cause 
and my former life, is your goal here, it strikes me, is having 
enough review but also accountability. And I think the present 
process frees the Executive, if you will, from accountability. 
Because if you really had a system of measuring this and you 
couldn't get your people appointed, you could say, well, it is 
not my fault that this isn't getting done. So a sense of 
accountability here I think helps a lot.
    In the judicial process, I think you do have a third branch 
of government and a constitutional separation issue that is 
very important in that level of review. On the other hand, when 
you are dealing with jobs that everybody would say--I mean, 
there is an old saying from a former Attorney General teaching 
other Attorneys General: Remember, when you are trying to 
recruit people for the low salaries you are asking them to 
perform for the least amount of possible lucrative return, to 
remind young lawyers that the least interesting thing that you 
do in public life is more interesting than the most interesting 
thing that you do in private practice, is one of the ways that 
you are attracting people here. And this long delay process is 
the intangible that I think sours deeply that entire experience 
more than any other single factor that I can imagine.
    Mr. Ornstein. I would just say this, Senator. I can see 
having a different set of standards for judicial appointees for 
the same reason that Cal Mackenzie said. They are lifetime 
appointees. At the same time, I don't think that it was ever 
intended by the Framers that the confirmation process should 
give an individual Senator a veto over an Executive's nominee. 
This is something that should be done by a majority of the 
institution.
    And so if you wanted to make that time period longer for a 
judicial nominee, 90 days before it was brought to the floor 
from holds, as opposed to 60, there would be some justification 
for it. I don't see any justification for having a process 
where somebody's nomination can effectively be killed by one or 
two or three people without having at least an opportunity for 
a vote. And when you leave people twisting in the wind for this 
length of time, over the long term it is going to have an 
enormously corrosive effect on people's willingness to serve. 
And that is true across the board.
    One of the things we have seen, and what I hope will not 
happen here as well, is we have gone through--part of the 
reason we haven't done anything about this is we have been 
through these cycles where one side sees its own nominees 
shafted, and then lose an election, and the attitude is, all 
right, you stuck it to our people, now we are going to show you 
and we will stick it to you. And we have been through that 
cycle more than once. It is time to end it, and it is time for 
a broader consensus across parties, because ultimately it is 
going to benefit everybody.
    Ms. McGinnis. I think the principle of an up or down vote, 
making a decision, applies in both cases, maybe with some 
different standards. And I just want to add that the way this 
game is played in some cases fuels the public cynicism about 
government and creates, I think, an aura that makes it 
difficult to do the public's business and has a tremendous 
dampening effect on particularly young people's interest in 
coming into government.
    Senator Akaka. Well, thank you very much. Thank you, Mr. 
Chairman.
    Chairman Thompson. Thank you.
    Let me ask you one additional question or category and ask 
you to talk about it for a minute. You may even have a little 
disagreement here on this.
    Mr. Harshbarger was talking about financial disclosure, as 
we asked him to, and I think we are all in agreement that we 
need disclosure. And as you said, private disclosure is no 
disclosure at all. I think the question is: Disclosure of what 
and how much?
    I have read quite a few different views on that, some from 
your organization, Ms. McGinnis. It seems that we started off 
with the idea that we are going to identify conflicts of 
interest. Now the newspapers get a hold of it even, I think, I 
learned that we ask questions more directed toward a net-worth 
situation. And I am not sure it is anybody's business. Do we 
need to redraw the line somewhere? Do we need to focus in on 
what we are trying to get, what we have a right to get for the 
protection of the public, to the extent that is reasonable? 
Underlying all of this, of course, is the understanding that 
you can never totally guarantee that someone is not going to be 
a wrongdoer or supply false information. Disclosure is no 
panacea. But it is the best we can do, and we have to do it.
    So what about the financial disclosure aspect of this? And 
we are going to get some recommendations on that tomorrow. But 
I was wondering about, even before that, and perhaps before you 
know what that is, some general principles you think that we 
might look at or areas that we might consider some changes in. 
Do we need the limits that we have now, the categories? Are the 
categories correct, and are the limits within the categories 
correct? How much flexibility are you willing to give us on 
that, Mr. Harshbarger?
    Mr. Harshbarger. Well, I want to be sure that Common Cause 
maintains its tradition of being totally rigid. [Laughter.]
    And as immovable as possible on any issue that we have 
taken a position on sometime in our past. But with new 
leadership, I think we----
    Chairman Thompson. We will see. [Laughter.]
    Mr. Harshbarger. I am still in that period that you used to 
be as an elected official. You can still blame it on the past.
    No, I think we are very interested in looking at what 
really works. I mean, the principle I wanted to establish here 
and that I think our interest was in making it clear that this 
not become--and nobody has suggested that--that financial 
disclosure and those issues become sort of the scapegoat here, 
sort of the reason for a lot of the problems that people 
identified, and that it ought to be dealt with a little bit 
differently because I don't think it is a major part of the 
problem that you are identifying.
    The second point is my own experience has been--and this is 
always a problem when you do this--that most of us in public 
life in this last 25 years are used to a process by which you 
identify your interests, not just the conflict, you are 
identifying financial, personal, and other interests----
    Chairman Thompson. We are interested in getting new people 
who are not used to this process. That is part of our problem.
    Mr. Harshbarger. But I think I would just make the point 
that I do think some of these--and I have talked to people who 
haven't been in government that actually for who this has 
helped identify some issues they wouldn't have thought about. 
They wouldn't understand why it was relevant until they had to 
do some examination.
    Now, you don't need to put them through a torture chamber 
to get that to happen. You can have good technical assistance 
provided by a lot of groups. I think the survivor's guide and 
things like that are terrific to help people who are new to 
this to explain the positive aspects of something, not just 
that this is viewed as an unnecessary obstacle.
    Looking at the categories, my only point about this, I have 
never thought and Common Cause has never taken the view that 
these should be net-worth statements. In fact, it is actually 
an unnecessary intrusion to make them that. The idea was, the 
concept was identify the interests, and then if there is a 
reason to pursue it further, that gives somebody who has an 
appropriate power to pursue it, usually confidentially, who 
wants to pursue that further.
    My experience has been, though, Senator--and I ask you as 
you think about this, Mr. Chairman--that one of the problems we 
have now is if you say that the category and interest should 
just be identify that you have above values--in Massachusetts, 
above $1,000, above $5,000, in, for example, various kinds of 
stock or other assets. What people do is all they have to do is 
identify those.
    The general report, if somebody wants to do it, that comes 
out is to show that you own--I had to go through this myself 
when we were involved in the tobacco litigation. I had Fidelity 
stock identified. One report came out and said a major holder, 
here he is suing the tobacco companies while he is a major 
holder of Philip Morris. Well, why? Because Fidelity had a 
huge--I mean, now, I thought that was unfair, was improper, 
that they were wrong, I mean, all those terrible things that 
they did in that context.
    My point was that it was much easier for me--and I tended 
to take a practice of identifying exactly what the amounts 
were. And I found more people tended to want to go that route 
because it was always overinflated rather than underinflated.
    And the other point is, of course, everybody--I think how 
you make a distinction in people's minds between somebody who 
owns a huge amount of a stock, relatively speaking, compared 
with a small identification, it is a very--in public, that is 
not always--the distinction is not always made.
    My point here is I think we would be very glad to discuss 
flexibility here around the concept of principles we are trying 
to do, and our biggest concern was in the short term, at least, 
that as we look through this, we not overemphasize the problem 
that the financial interest and disclosures are causing, or 
from my view from a law enforcement perspective, or that the 
penalty provisions are the problem here. I mean, there is no 
prosecutor that I know of that has authority that doesn't make 
the kinds of distinctions, and when you look at this, the 
penalty provisions I think are appropriate to have a range as 
long as you assume some legitimacy, independence, and 
professionalism in the prosecutorial function.
    So that is our concern rather than--and I would be very 
interested in discussing some of the other points.
    Chairman Thompson. Well said.
    Mr. Mackenzie.
    Mr. Mackenzie. I have a different view, Senator. I don't 
have a different view about public disclosure. I think that 
following Dr. Johnson's dictum, nothing is so conducive to good 
behavior as the knowledge you are being watched, public 
disclosure makes sense.
    The principle I would offer is something like this: That we 
ought to have the minimum disclosure necessary to protect the 
public interest, that beyond that we get into a prurient 
interest, and that shouldn't be what we are about here.
    I don't know why--and I have served on a number of these 
blue-ribbon commissions over the years that have made a 
recommendation that says simply we ought to establish a level 
above which you have a potential conflict of interest. And when 
you have a holding that is worth more than that level, then it 
ought to be identified as a holding that is worth more than 
that level.
    The SF-278, the current personal financial disclosure form, 
is a monstrosity, an embarrassment to this government, in my 
view.
    Chairman Thompson. You leave it up to the individual to 
decide what is----
    Mr. Mackenzie. No. There would be a de minimis established 
in law, and I don't know what wise people can decide whether it 
is $1,500 or $10,000 or $25,000. And if you have a holding that 
is worth more than that, you would disclose that.
    On the SF-278 that we use today, we have multiple 
categories of value. One of the great frustrations to 
appointees in this process is that the value of their holdings 
changes every day and flips from one category to another. So it 
is a moving target they are trying to stay on top of, and we 
have got criminal penalties if they file this incorrectly. So 
it scares the bejusus out of them, and they go out and they 
spend a lot of money on an accountant and an attorney to help 
them do this so at least they have got some cover if the 
numbers come out wrong.
    Nobody has ever, in my view, anybody who has ever worked 
with these form, found any particular value in having all those 
different categories. Amy Comstock will be here tomorrow, and I 
urge you to ask her about these. I think previous Directors of 
the Office of Government Ethics have told me that they wish 
they had fewer categories rather than more. These are, however, 
statutory. These are required by law. This is not the work of 
OGE. And they serve no particular purpose.
    So I think that we can facilitate this process and reduce 
its invasiveness and still meet the public interest needs here 
of knowing what Presidential appointees that might be a 
potential conflict of interest.
    Chairman Thompson. Ms. McGinnis.
    Ms. McGinnis. I agree with Cal that we should be looking 
for a standard of what the public needs to know, and I think 
that Amy Comstock--I know that the Office of Government Ethics 
has spent a great deal of time and has a lot of experience over 
the years, and what they are going to come tomorrow with is a 
set of recommendations that are based on practical experience. 
So I look forward to seeing those.
    The conflicts of interest should--the focus there should be 
on areas where there is an interest related to the position 
that the person is going to assume. And I think in terms of the 
criminal penalties, we need to look carefully to make sure that 
there is the common sense and flexibility so that people would 
not risk being penalized for unintentionally----
    Chairman Thompson. I think Mr. Harshbarger is right. Nobody 
is going to get prosecuted for some of the things that we are 
talking about. He and I know that, but the applicant doesn't.
    Ms. McGinnis. That is right.
    Chairman Thompson. And that is what is important.
    Ms. McGinnis. It is a very----
    Chairman Thompson. It has what you would call a chilling 
effect.
    Ms. McGinnis. I am showing Scott the form, and all the 
instructions----
    Mr. Harshbarger. And I have had to fill out this kind of 
form. Those who have gone through it--I think a very 
interesting point about the whole survey was the people who 
have been through it understand and can go through it and see 
perhaps how that works. It is people who don't. And we had that 
years ago, and everybody has their apocryphal story that is 
true, which is the State senator in Massachusetts, a wonderful 
State senator, Republican William Saltenstahl, just before 
the--after the passage of the 1978 financial disclosure laws, 
resigned from State service, believing that he would have to 
disclose all of his family's trusts and other aspects to that. 
There was in the law very broad categories. It was to be left 
to interpretation and the enforcing agency. But we were also 
able to use it to prove that, as interpreted, they would never 
have had to disclose anything that jeopardized him.
    But that story remained in existence for a long period of 
time, regardless of the application of the law. And I think the 
second, the prosecutorial issue here that you raised, Senator, 
is that you do need to have in an agency the capacity--because 
the danger of this kind of thing always is that a small 
percentage of people who will intentionally use the good-faith, 
technical exceptions to justify what is essentially terribly 
dishonest and corrupt conduct, and they will hide behind the 
same mantle as the good-faith unintentional error. And so that 
is why you give your prosecutors, I think, whoever they are, 
absent being independent counsel, which I happen to have 
separate views about, but somebody can be held accountable as a 
prosecutor. That is what you give them the discretion and 
expect them to act professionally and with discretion in terms 
of trying to make those distinctions. And a very, very small 
percentage ever have to face this kind of a problem.
    Chairman Thompson. Ms. McGinnis, did you have anything else 
on this?
    Ms. McGinnis. No.
    Chairman Thompson. Mr. Ornstein.
    Mr. Ornstein. Having been through the independent counsel 
era, the term ``responsible prosecutor'' rings just a little 
hollow for me, I am afraid, ``reasonable prosecutor.'' I think 
there were instances in which--and there are instances in which 
prosecutors, to get something, threaten something else, and 
they will use technicalities often to squeeze out other things.
    And so I am a little more uneasy about having criminal 
penalties for some of these things without a clearly 
established intent to deceive. At the same time, I think Cal 
has a very reasonable way to deal with this, and I would make 
it explicit. My own judgment would be that the categories here 
are if you have a holding that represents either 10 percent or 
more of your net worth or over $25,000, pick a threshold 
amount, then that should be disclosed as a holding, something 
that really would involve a genuine conflict. We can probably 
argue about or settle amounts, but having all of these 
categories serves only a voyeuristic interest. And we know 
people in the press and people elsewhere love to rummage 
through this stuff just to see what people have made and what 
they are doing. It serves no other purpose than potentially to 
embarrass individuals.
    At the same time, we know that there is another level of 
problem. We have some forms that require disclosure of one's 
own assets, some forms that require disclosure of a spouse's 
assets, other forms that require independent children's assets. 
And they don't all agree in this area either. So we need to 
synchronize those and figure out what has to be disclosed.
    And, finally, let me say I would really think through some 
of these divestiture requirements as well, not in every 
instance----
    Chairman Thompson. That was going to be my final question. 
Elaborate on that, if you would a little bit. Have we gone too 
far in that respect? We have all read about the recent 
instances and so forth. Frankly, I am not sure how much is 
required and how much is a matter within the discretion of the 
nominee and how much some ethics officers tells them that is 
what I think you ought to do, and that is a de factor 
requirement, you might say. Talk about divestiture for a 
minute.
    Mr. Ornstein. Well, a lot of this is not statutorily 
required, but it is a part of our culture now, that is, a part 
of either Boyden Gray's ``guilty until nominated'' or the 
broader ``guilty until proven innocent.'' And it seems to me in 
some of these areas, what we need to do while maintaining 
vigilant ethical standards is to move back toward a variation 
of the old broken windows thesis, that we had a culture that 
encouraged criminal behavior, and we took a few small steps to 
try and suggest we are not going to tolerate that anymore. We 
have a culture now that basically uses nominees and political 
figures as pinatas, and we need to take a few steps to say we 
have maybe gone a little bit too far here and we need to 
rationalize these things to take away some of that pressure. So 
we ought to go back to it.
    I think, frankly, if you have somebody like Mr. Rumsfeld, 
who clearly made decisions based on a belief that he would 
never again take government service, who didn't come in because 
he wanted to feather his own nest, has created a lot of very 
complex trusts that are almost impossible to get rid of, that 
to push him to do so when there is no reason to believe that he 
will make any decision based on his own financial holdings, 
goes too far.
    We had an enormous amount of pressure on Sandy Berger when 
he was the National Security Adviser because his wife had a 
small holding--what began as a very small holding in Shell Oil 
that was a family thing given to her by a grandfather, I 
think--to get rid of it.
    We had Jim Baker with a longstanding family holding in 
Chemical Bank, pressure to get rid of it.
    Disclosure of those things is utterly appropriate. But in 
most instances, I think we have to start with an assumption 
that we are dealing with honorable people here, and you don't 
need to go very far towards forcing people to make much deeper 
financial sacrifice than the simple act of public service 
makes.
    Mr. Harshbarger. Let me simply distinguish between what the 
law requires and what, in fact, other reasons require. The law 
is limited in what it can do either way here. This is not--
almost every one of those, I believe, could have proceeded by 
recusal, could have proceeded by any other method. I don't 
think the law required any of that action to be taken. It is, 
yes, we can blame the media, we can blame the public, blame the 
talk shows, blame the political partisanship. But it is a 
part--the law can't be looked at and say if we fix the law here 
we will eliminate that problem. And I think that there is an 
aspect that the laws have been passed here to deal with 
specific issues.
    So my only disagreement--it isn't a disagreement that this 
is an issue, but the fact is it was not the law that required 
that. It was not the Office of Government Ethics. It was not 
the ethical requirements that often get blamed for this thing 
that caused that to occur. So I think that that is what I would 
simply distinguish. I think the positive piece that is going 
on, I think the Council of Excellence is engaged, and I would 
hope that Common Cause would come to be engaged again, in a 
much broader purpose, which is how do you reinforce people's 
confidence in public service, how do you find ways through 
education and other devices to get people more--to see public 
service in a much more noble light.
    I don't believe that--I think there is nothing wrong with 
re-examining financial disclosure issues. I just urge people 
not to think and not to fall into the trap that changing this 
form here and that category there and these minor things will 
actually deal with the problem that we are here to address and 
that you are asked to consider or think that we have solved it 
if we have done that.
    Chairman Thompson. Thank you very much.
    Anything else on divestiture?
    Mr. Ornstein. There is just one other small item to keep in 
mind, which is that I don't think we have dealt effectively or 
adequately with stock options, which is a subject that has 
arisen really in a very different way in the last few years, 
and you just need to think that one through and modernize those 
rules.
    Mr. Harshbarger. Thank you very much for giving us your 
time.
    Ms. McGinnis. Thank you.
    Chairman Thompson. Thank you very much. This has been 
excellent, very helpful. I look forward to working with all of 
you.
    We are adjourned until tomorrow. Senator Kassebaum Baker, 
Mr. Raines, and Ms. Comstock will give us recommendations of 
the Office of Government Ethics.
    We are adjourned.
    [Whereupon, at 4:51 p.m., the Committee was adjourned.]












           THE STATE OF THE PRESIDENTIAL APPOINTMENT PROCESS

                              ----------                              


                        THURSDAY, APRIL 5, 2001

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:25 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Fred 
Thompson, Chairman of the Committee, presiding.
    Present: Senators Thompson and Cochran.

             OPENING STATEMENT OF CHAIRMAN THOMPSON

    Chairman Thompson. Let us begin, if we may.
    I want to welcome everyone this morning. We have an awful 
lot going on today, unfortunately; several Members have 
expressed great interest in this hearing but were pulled in 
many different directions even more than usual today. But I do 
want to thank everyone for attending and especially our 
witnesses today.
    We are engaged in something very important. I cannot think 
of anything much more important than getting the right kind of 
people into government service. As government grows larger and 
gets more complex, we are oftentimes losing the very kind of 
people to public service that we need.
    I think that after our hearing yesterday, it became obvious 
that the process of getting people to take out a little time 
from their lives and come into government service and give a 
little something back to their country is becoming much more 
difficult; the process is taking much longer than ever before. 
It is much more complex, it is much more intrusive, it is much 
more expensive than it needs to be. It is a system that no one 
thought up and no one constructed. It is like a lot of other 
things around here--you wake up 1 day, and you have something 
that no one ever thought to put together--it just happened and 
evolved.
    That is what has happened with our process in terms of the 
way we bring people into the top levels of government service. 
It is clear that we are going to have to look at things a 
little differently and with regard to several different 
entities of government. The White House can certainly improve 
in the way that it addresses the issue with regard to its forms 
and process and coordination. Certainly the Senate needs to 
take a very close look at various aspects, from the timing to 
the hold policy to our own forms. Every committee up here has 
different forms and different requirements in terms of how far 
you go back with regard to information, the dollar level that 
certain requirements kick in, and so on. There is really no 
reason for that.
    The Office of Government Ethics, and the Transition Act--we 
asked them to come up with some ideas, and we have some 
excellent ones here today.
    So as Paul Light wrote in The Brookings Review, ``The most 
significant selling point for service is that it is a post of 
honor in which individual citizens can make a difference for 
their country.''
    Today we have several witnesses who can remind us of the 
nobility of public service and the difference that one can 
make. We welcome Amy Comstock, Director of the Office of 
Government Ethics; former Senator Nancy Kassebaum Baker; and 
former Director of the Office of Management and Budget, 
Franklin Raines.
    Ms. Comstock will present the report of the Office of 
Government Ethics in response to this Committee's request that 
the OGE review the current financial disclosure requirements 
and make recommendations on streamlining the process.
    The Presidential Transition Act of 2000 included specific 
provisions designed to address the growing concerns regarding 
the barriers to service embedded in the current Presidential 
appointments process. I appreciate the work that OGE has put 
into this report under a very tight time schedule, I might add.
    I also commend Senator Kassebaum Baker and Mr. Raines and 
the Presidential Appointee Initiative for their dedicated 
efforts to improve public service. I look forward to receiving 
their recommendations that they are releasing today.
    Fortunately throughout all of this, we have had the benefit 
of excellent, public-spirited people addressing this issue. I 
learned just recently that we have had 12 to 15 major reports 
over the last several years, all reminding us that the system 
is becoming more and more broken as we go along, and all 
basically coming to many of the same recommendations.
    So finally, perhaps the cumulative effort of that, capped 
off by what we are doing here now, can have some effect.
    I have just been told that there was another vote, and that 
I left before I voted. Some things never change, Nancy.
    Excuse me. I will be right back. Do not go away.
    [Recess.]
    Chairman Thompson. Thank you very much for being so patient 
this morning.
    Let us begin with opening comments. Ms. Comstock, would you 
care to make your opening comments?

   TESTIMONY OF HON. AMY L. COMSTOCK,\1\ DIRECTOR, OFFICE OF 
                       GOVERNMENT ETHICS

    Ms. Comstock. I would be happy to.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Comstock appears in the Appendix 
on page 126.
---------------------------------------------------------------------------
    Mr. Chairman and Members of the Committee, thank you for 
the opportunity to appear today. I am here to discuss the 
report issued by the Office of Government Ethics in response to 
Congress' request under the Presidential Transition Act of 
2000.
    The confirmation process has grown increasingly complex and 
is viewed by many as being unduly burdensome for those being 
considered for Presidential appointments. Congress asked OGE to 
provide recommendations for streamlining the public financial 
disclosure requirements for Presidential nominees. I am happy 
to be here today to present OGE's recommendations for improving 
this process.
    As we began our review, it was important to reevaluate the 
original purposes of public disclosure to see if they had 
changed. In general, public financial disclosure was originally 
intended to enable the public to judge the performance of 
public officials in light of personal financial interests and 
to deter conflicts of interest from arising. We do not believe 
that the original purposes of public disclosure have changed.
    Moreover, we believe that the concept of public disclosure 
is generally not considered to be unduly burdensome. It is an 
accepted condition of government service that the public must 
be able to assure itself that government officials will act 
impartially. Rather, what is considered frustrating and unduly 
burdensome is the requirement to obtain and disclose excessive 
detail regarding financial interests, the redundancy among the 
various forms used in the process, and the intrusion into a 
nominee's personal finances beyond what appears to be necessary 
for a conflicts analysis or public confidence.
    We believe that these concerns are valid, and OGE's report 
recommendations address them.
    To streamline financial disclosure and reduce the burden, 
OGE offers specific recommendations to reduce valuation 
categories, shorten reporting periods, raise reporting 
thresholds, reduce unnecessary details, and eliminate redundant 
reporting. I will not go through each of the proposed changes 
in these remarks, although I would be happy to walk through 
them later if you wish.
    I would like to comment here on one of the concerns that 
was raised yesterday. I understand that a concern was raised 
that the public financial disclosure system not be weakened. I, 
too, believe that the public financial disclosure system should 
not be weakened. What the recommendations in this report 
represent are the determinations of OGE and many agency ethics 
officials of the information that is not generally used or 
necessary for a conflicts analysis.
    I am not here today to support a lessening of the ability 
to assess potential conflicts of interest of public officials.
    In preparing this report, OGE considered the question of 
whether the financial disclosure process results in an 
unnecessary intrusion into personal finances. To do that, we 
first looked back to the original purpose of the system. While 
the system was intended to be a way to ensure impartiality of 
public officials, it has come to be used for more than that. 
The disclosure form itself is now used as a way to gauge the 
net worth of public officials. This was never intended to be 
the purpose of the system, nor should it be.
    One of the changes that we are recommending to the public 
disclosure system is to reduce the valuation categories so that 
the top category would be over $100,000. This is a significant 
change from current law, which now requires that asset 
valuation be declared in much greater detail. We believe that 
this change will preserve the ability to evaluate potential 
conflicts and provide sufficient information regarding the 
significance of an asset without unduly intruding upon the 
financial privacy of the filer.
    Addressing the concern about the redundancy of forms 
involves more entities than OGE. This Committee heard yesterday 
of the many forms that nominees must complete. Our comparison 
of just the SF-278, the financial disclosure form, the SF-86, 
the FBI background form, and Senate Committee forms identified 
extensive overlaps, many in the area of financial information.
    OGE offers to serve as a resource to those working to 
reduce redundancy in these forms.
    In preparing this report, many issues were also raised 
beyond the issue of financial disclosure. For example, it was 
suggested that the criminal conflict of interest statutes be 
revised. OGE agrees that the conflicts laws may be complex. 
Nevertheless, they provide essential safeguards for the 
integrity of government.
    It is possible, however, that these laws can be simplified 
without sacrificing the protection that they provide. The 
revision of these laws is no easy task, and we are not prepared 
today to make detailed recommendations for change. We are 
prepared to undertake a thorough review of these laws with an 
eye toward modernization and improvement, and we have already 
been in contact with the Department of Justice to begin that 
process.
    In addition, as you will see from our report, OGE is 
currently discussing with the Department of the Treasury 
expansion of OGE's Certificate of Divestiture authority to 
better address the kinds of private sector compensation 
packages that many nominees bring with them today. This 
generally addresses the issue of stock options.
    Finally, I am pleased to inform the Committee that as part 
of the process of preparing this report, OGE looked at changes 
and improvements that we could make to the process that would 
not require any amendment to current law. We found that we 
could have an immediate impact by streamlining our own 
procedures and interpretations in certain areas.
    I am pleased to say that we have already been able to 
lessen the burden imposed on some filers and will continue to 
do so wherever we can.
    In closing, I would like to reiterate that OGE is ready to 
do whatever it can to make the appointment process smoother and 
less burdensome for all. In the 5 months that I have been 
Director of OGE, I have been very impressed by the commitment 
of the OGE staff to ensure that our ethics program, of which 
financial disclosure is a large part, serves its important 
public purpose with as little personal pain and intrusion as is 
reasonably possible.
    I would be happy to answer any questions that you may have.
    Chairman Thompson. Thank you very much. I appreciate that.
    Senator Nancy Kassebaum Baker.

TESTIMONY OF HON. NANCY KASSEBAUM BAKER,\1\ FORMER U.S. SENATOR 
    FROM KANSAS, AND CO-CHAIR, ADVISORY BOARD, PRESIDENTIAL 
                      APPOINTEE INITIATIVE

    Senator Kassebaum Baker. Mr. Chairman and Senator Cochran, 
it is a great pleasure to testify here this morning. I know it 
is a busy time, but I am happy to be here with my co-chairman 
Frank Raines for the Advisory Committee on the Presidential 
Appointee Initiative.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Kassebaum Baker appears in 
the Appendix on page 138.
---------------------------------------------------------------------------
    You had an important hearing yesterday, and we very much 
appreciate the interest of this Committee in the report of the 
Office of Government Ethics and our report in trying to improve 
the process. And as you stated, Mr. Chairman--and I can only 
say that I agree with everything you said--it has been done 
before. There have been many reports. Lloyd Cutler and others 
have been engaged in commissions and advisory boards to send 
forward initiatives. So it is not going to be easy to 
accomplish what I think is important, and we stand ready to be 
helpful in any way that we can.
    I would like to ask that my full report be made a part of 
the record.
    Chairman Thompson. All statements will be made a part of 
the record.
    Senator Kassebaum Baker. I will just summarize. I think 
that what we seek to do with this report is to present a 
pragmatic agenda of reforms that might improve the speed and 
the fairness and the integrity of the appointment process.
    I might add that it is not just Presidential appointments. 
I think that as the model is developed here, many States are 
doing the same thing, so it is reaching all levels of 
government at a rate that I think causes us and should cause us 
some concern.
    So we are hoping to be able to engage, because we are 
convinced that the current process does desperately need 
reform.
    Little did I know, Mr. Chairman, when I started out in 
this, that I would be more involved in the confirmation process 
than I had realized. I am reminded of a bit from ``Alice in 
Wonderland'' where she fell down the rabbit hole and asked the 
Cheshire cat which way she should go, and the cat said: ``Well, 
it depends on where you wish to get to.''
    I think we know where we would like to get to, but getting 
there is not going to be easy. As I said, we have all tried it 
before. But where we want to get to is being able to attract 
the best and the brightest to give some time to public service, 
and doing so here is an important role, of course, from the 
Senate standpoint, and that is what I wish to speak to, and 
then Frank Raines will speak to the Executive Branch, because 
it is both sides of Pennsylvania Avenue, as they would say, 
which matter.
    As I think you know from the testimony yesterday, an 
extensive survey has been done, and while all steps in the 
appointment process can and should be streamlined and improved, 
I think that particular attention could be focused on the 
Senate at this time. The Senate received particularly low marks 
for its handling of the process in the two surveys that were 
done by the Presidential Appointee Initiative.
    That was launched almost a year ago, and we released the 
results of the survey of 435 appointees from the Reagan, Bush, 
and Clinton Administrations. Nearly half of the appointees 
surveyed said the Senate has made the appointment process a 
real ordeal, and almost one-third said the same about the White 
House.
    I think that that indicates a lot of the frustration which 
we all know. As the survey's co-authors, Paul Light of The 
Brookings Institution, and Virginia Thomas of The Heritage 
Foundation, noted in the survey report, ``Familiarity with the 
process breeds a certain level of understanding and acceptance 
that is harder to embrace from afar.'' As we have gotten used 
to it, we sort of accept it and go on with it, without being 
willing to challenge it and say it should not be this way.
    It is my hope that we can begin to recognize that we will 
lose attracting those whom we most would like to give some time 
to come and serve.
    I would like to focus on the Senate and suggest some of the 
things that we believed were important for us to consider in 
the Senate.
    I would just say that since 1978, when I was elected, and 
when I retired at the end of 1996, I saw real change. Senator 
Cochran and I came to the Senate at the same time in the class 
of 1978, and I think that through that period of time it began 
to change. In many ways, it was done to address flaws that 
occurred, so we created more paperwork to try to answer that.
    I think that we are losing sight of the forest for the 
trees and that we need to recognize that asking more questions 
will not necessarily give us the type of representation that we 
need.
    So it has become to a certain extent more contentious, but 
in many ways, I think it is just the laborious work of the 
paper process that has made it so distasteful.
    One of the recommendations that we make is that ``Congress 
should enact legislation providing that Senate confirmation 
only be required of appointments of judges, ambassadors, 
executive-level positions in the departments and agencies, and 
promotion of officers to the highest rank in each of the 
service branches.''
    I am a strong supporter of advice and consent--I think we 
all are--but the application of the confirmation requirement 
now extends to many thousands of positions, only a relatively 
small number of which benefit from the full attention or 
careful scrutiny of the Senate.
    I think this would lessen the time that would be taken. By 
the time one arranges hearings, the paperwork comes through, 
there are a number of appointments that then take up an 
enormous amount of time of the hearing committees.
    So we think that a simpler, more focused set of 
confirmation obligations can only yield a more efficient and 
more consistent performance of the Senate's confirmation 
responsibilities.
    The second recommendation deals with the use of holds: 
``The Senate should adopt a rule that limits the imposition of 
holds by all Senators to a total of no more than 14 days on any 
single nominee.''
    I support holds--I think we all do. The intent of a hold is 
to allow a Senator the time to feel her or she has gotten all 
the answers to any questions they may have; to make sure that 
they were present on the floor or in the Committee for a 
hearing when they want questions answered. But what I think is 
a serious mistake, Mr. Chairman, is when holds are used as 
leverage to gain advantage in other endeavors. It is unfair to 
the nominee. We know that nominees are sometimes on hold for 
months and months and months, to the point that they withdraw 
rather than put families through the uncertainty of whether 
they will be moving to Washington or not, for instance.
    So it seems to me, while this may be one of the more 
contentious of the recommendations presented, that it does 
allow the time given without simply destroying the process.
    The third recommendation addresses the length of time it 
takes to vote on nominations: ``The Senate should adopt a rule 
that mandates a confirmation vote on every nominee no later 
than the 45th day after receipt of a nomination. The rule 
should permit any Senator at the end of 45 days to make a point 
of order calling for a vote on a nomination. A majority of the 
Senate may postpone the confirmation vote until a subsequent 
date.''
    We all know that the average length of time required to 
confirm Presidential appointees has been growing steadily in 
recent years. I know that former Senator and Vice President 
Mondale said it took him 11 months from the time President 
Clinton nominated him to be Ambassador to Japan before he was 
confirmed as the Ambassador. It is hard to believe, but we all 
know that indeed when we stop and think about it, it takes 
months and months once a name has been suggested and all the 
paperwork is completed--all the additional paperwork that then 
may be required by a Senate hearing committee----
    Chairman Thompson. I wonder when you found that out. 
[Laughter.]
    Senator Kassebaum Baker. Well, I thought it was such a good 
example, I would have used it anyway.
    We have all heard the stories about the length of time it 
takes and the number of lawyers it takes to help fill out some 
of these forms and so forth.
    So you know it even better than I do now, because it has 
not improved through the years, and it has only become, I 
think, extremely difficult not only for the nominee but for 
families concerned.
    So we believe that this is an appropriate time for the 
Senate to impose a firmer discipline on the process; that a 
nomination would receive a confirmation vote by the full Senate 
in no later than 45 days, but under this procedure, any Senator 
could call for a vote at that time, a vote that could be 
postponed only by a vote of the majority of the Senate.
    The final recommendation is that ``The Senate should adopt 
a rule that permits nominations to be reported out of committee 
without a hearing upon the written concurrence of a majority of 
committee members of each party.''
    For most of our history, nominations were reported to the 
floor of the Senate without any formal hearings by its 
committees. The practice of holding hearings began to emerge in 
the second half of the 20th century. Even then, it was common 
for hearings to occur in executive session without the nominee 
present. The current practice of formal public confirmation 
hearings on nearly all appointments, with the nominee present, 
is a relatively recent development.
    It was the belief of many who have studied this that unless 
there was information that was important to be forthcoming in a 
hearing, which often can be the case, there are other times 
when a hearing really is not necessary; and again, if there is 
a concurrence of views on the Committee that that is the case, 
why not just go ahead and approve it without trying to spending 
the time to figure out a hearing schedule on a nomination that 
may be difficult to set up under the press of business. We have 
seen just this morning how difficult it does become when it is 
a busy time with voting on the floor and trying to get 
everybody together.
    So we believe that no good purpose is served by the rituals 
of believing that everyone needs to have a confirmation 
hearing, and certainly not one that justifies the delays this 
often imposes on confirmation. So that would be a suggestion 
that we would have.
    In conclusion, Mr. Chairman, a number of the reform 
recommendations that we are putting forth today would involve 
changes in the way the White House and the Executive Branch 
handle the nomination process, and as I said, Frank Raines will 
talk about the executive side.
    I would just like to conclude by saying that we believe 
these recommendations are important and worthy of your 
attention. You have stated that, and we are very appreciative 
of the attention that this Committee has given to this. Those 
of us who are supporting these reforms feel strongly that our 
effort to strengthen and streamline the appointment process 
truly will enhance good governance. That is why I think we need 
to stick with this, to finally cross the final hurdle which we 
have come up to so many times but have never really been able 
to put in place.
    I thank you, Mr. Chairman. Just know that we stand prepared 
to do whatever we can to assist in seeing this reach a 
conclusion which we think would be useful for public service 
and good governance.
    Thank you, Mr. Chairman.
    Chairman Thompson. Thank you very much.
    Mr. Raines.

   TESTIMONY OF HON. FRANKLIN D. RAINES,\1\ FORMER DIRECTOR, 
OFFICE OF MANAGEMENT AND BUDGET, AND CO-CHAIR, ADVISORY BOARD, 
               PRESIDENTIAL APPOINTEE INITIATIVE

    Mr. Raines. Thank you, Mr. Chairman, and thank you, Senator 
Cochran, for being here today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Raines appears in the Appendix on 
page 147.
---------------------------------------------------------------------------
    Thank you for this opportunity to appear today with Senator 
Nancy Kassebaum Baker. As her co-chair of the Presidential 
Appointee Initiative, my role today is to speak from the 
perspective of the Executive Branch.
    And thank you, Mr. Chairman, for admitting my written 
statement to the record, and let me just summarize the main 
points.
    It was my honor to be confirmed by this Committee as 
Director of the Office of Management and Budget in 1996. I 
appreciate how hard the Committee worked to make my 
confirmation both rigorous and fair, and I also applaud the 
speed with which the White House moved in processing my 
nomination. Yet even my relatively noncontroversial appointment 
took 5 months from the time it was first announced by the 
President, and as you know, most nominations take even longer.
    As Senator Kassebaum Baker made clear, a good experience 
with the appointment process is not always the rule, but it 
should be. Public service is a noble calling, and if the 
appointment process cannot also be ennobling, at the very 
least, it should be painless.
    To that end, let me briefly offer the Initiative's six 
recommendations for improving the White House and Executive 
Branch nomination process.
    First, to improve the operations of the White House 
Personnel Office, we recommend that Congress enact legislation 
to establish a permanent Office of Presidential Personnel in 
the Executive Office of the President. Congress would authorize 
staff levels sufficient to recruit the President's appointees 
efficiently and to provide them with transition assistance and 
orientation. This should include some career employees who 
retain appropriate records from one administration to the next 
and who are experts in the operation of all aspects of the 
appointment process.
    One thing that I think is not generally known is that when 
a new President comes to the White House, there is no one 
there. The only permanent offices in the White House are the 
Office of Management and Budget; the National Security Council 
has a staff that ensures from one administration to another; 
and the Office of Administration. Every other office is 
literally vacant, and to start from scratch with a White House 
Personnel Office with no help, no records, no knowledge of the 
process, only puts every President at a disadvantage.
    I believe this would not be an intrusion into the 
Presidency, but a big help, to have some permanent office with 
some permanent employees there to facilitate a new 
administration.
    Second, to streamline and simplify the confusing welter of 
forms and questionnaires that appointees need to fill out and 
submit, we recommend that the President order all departments 
and agencies to simplify and standardize the information-
gathering forms used in the Presidential appointment process. 
We would also recommend that the Senate should require that its 
own committees do the same. We also urge the President to 
direct the General Services Administration to develop and 
maintain on-line, interactive access to all such forms and 
questionnaires for persons who are going through the 
Presidential appointment process.
    I know that the Office of Government Ethics had to suffer 
through my forms being in my handwriting since I did not have 
access to a typewriter, which is becoming more and more 
difficult for people. Indeed, my children on seeing a 
typewriter ask me ``What is that?''
    We also recommend that the President issue an Executive 
order reducing the number of positions for which FBI full-field 
investigations are required. The Executive order would also 
adapt the length and deputy of full-field investigations to the 
legitimate security concerns of each position where they 
continue to be required.
    Third, to ensure that the burdens of the current ethics 
safeguards and procedures have not come to outweigh the 
benefits, we recommend that Congress undertake a comprehensive 
review of the ethics requirements for political appointees. The 
goal, we believe, should be to strike an appropriate balance 
between legitimate concerns for the integrity of those who hold 
these important positions and the need to eliminate 
unnecessarily intrusive or complex requirements that deter 
talented Americans from entering public service.
    Disclosure should not degenerate into voyeurism.
    Fourth, to ensure that the salaries of Presidential 
appointees do not continue to fall behind the cost of living, 
we recommend that Congress amend the Postal Revenue and Federal 
Salary Act of 1967 to ensure annual changes in executive-level 
salaries equal to changes in the Consumer Price Index.
    Our fifth and sixth recommendations address concerns about 
the burgeoning number and levels of political appointments. We 
recommend that Congress enact legislation requiring each 
department and agency to set forth a plan for reducing the 
number and layers of political appointees by one-third. Such 
reductions, wherever feasible, would limit political 
appointments requiring Senate confirmation to the assistant 
secretary level and above in each department and to the top 
three levels only in independent agencies. Schedule C and other 
non-confirmed political appointees should be similarly reduced 
in number.
    We realize that this reduction will also require 
improvements in the senior civil service system, because these 
appointees have been occupying senior executive positions.
    Finally, we recommend that Congress grant the President 
renewed executive reorganization authority for the limited and 
specific purpose of de-layering the senior management levels, 
both career and political, of all executive departments and 
agencies.
    Mr. Chairman, it was one of the great privileges of my life 
to serve in the Executive Branch as Director of the Office of 
Management and Budget. The most powerful and enduring 
impression of my tenure was not my confirmation process or even 
the chance to be part of the first balancing of the Federal 
budget in a generation. It was seeing and working with so many 
bright, talented and committed public servants in all branches 
of government.
    Public service in America is made even nobler by the women 
and men who have dedicated themselves to it. Improving the 
appointment process will help to ensure that public service 
continues to be a positive experience for these appointees as 
well as for the Nation.
    Thank you very much.
    Chairman Thompson. Thank you very much, Mr. Raines. We 
really appreciate your work in this.
    Let me ask Ms. Comstock a few questions--and I will be just 
skimming the surface, because you have an awful lot of material 
here, and you have an excellent report, and I want to 
congratulate you for that. I know that it is probably somewhat 
risky for any of us to be doing anything that might be 
interpreted as making the standards easier or liberalizing them 
somewhat--the next scandal that comes along, somebody is going 
to point their finger at us for sure. But it is clear that this 
needs to be done, and I think you have faced up to that in your 
recommendations here with some good, common sense approaches.
    Just to highlight a few of them--in the first place, you 
recognize that there are some non-legislative changes that you 
can make within OGE. Can you summarize those?
    Ms. Comstock. I would be happy to. First, I agree with 
you--some of them are just common sense, practical things that 
we were able to do. We are dealing with people here who are 
looking to get a new job, and we tried to look at it from that 
perspective.
    Chairman Thompson. The encouraging thing about this process 
is that just by focusing attention on it and getting good 
people to focus on it, everybody starts thinking--I have looked 
at our own Committee rules and have been surprised to find out 
that we have a $100 threshold, which is ridiculous----
    Ms. Comstock. I remember. [Laughter.]
    Chairman Thompson. Well, that happened after the Burt Lance 
hearings, I think. Every committee has its own threshold in 
terms of how far back you look. We go back 3 years and $100; 
some go back 1 year and $500; some go to $1,000. You can almost 
look at the rule with regard to the hearings that they have had 
with regard to some scandal or alleged scandal.
    Ms. Comstock. That is right.
    Chairman Thompson. I did not mean to interrupt you, but I 
think that this is bringing about a reevaluation right at the 
beginning and is causing some things to happen that do not even 
require major rule changes or legislation.
    Ms. Comstock. That is right. We started with let us see 
what we can do at home first.
    From a very practical approach, the first thing we did, 
looking at it from the nominee's perspective, was very simple--
we tried to consolidate within our office the number of times 
we had to go back to the nominee with information. It sounds 
like a small thing, a simple thing; but if you think of it from 
the nominee's perspective and you get 10 phone calls from one 
office asking for financial information, you think they are 
disorganized, crazy, and you are really upset. However, if you 
get one call with a list of organized questions, it seems like 
a logical approach. It is a simple thing, but I think it has 
made a big difference.
    From a legal perspective, we analyzed the financial 
disclosure requirements for situations where nominees have 
power of attorney for someone else's assets situations where 
someone serves as executor of an estate; situations where they 
have investments in limited partnerships that then turn around 
and invest in limited partnerships. These are all situations 
where----
    Chairman Thompson. It is impossible to get an evaluation of 
that, isn't it?
    Ms. Comstock. That is right. These are situations where, 
under the conflict of interest statute, you would not have a 
personal conflict of interest, but there had been prior 
interpretations of this law stating that those assets might 
need to be disclosed. Again, this is where the person does not 
have a beneficial interest in these assets. We have gone back 
and looked at those and made, I think, some very common sense 
determinations about where we can draw a line and say that that 
information no longer needs to be reported.
    We are still in conversations with the Department of 
Justice on situations where a nominee has a non-beneficial 
interest in a trust, and we are hopeful that we can resolve 
that one in a less burdensome way as well.
    Chairman Thompson. You made some recommendations to the 
Senate. You pointed out that officials who serve for less than 
60 days and/or are not highly paid are not required by law to 
file a Form 278, yet many Senate committees ask them to do so.
    Ms. Comstock. That is correct.
    Chairman Thompson. We need to take a look at that. OGE 
recommends that all the committees request only an OGE Form 450 
from individuals who are nominated to a part-time position on a 
board, commission, or committee and who would not otherwise be 
required to file a public report. This OGE Form 450 is a more 
simplified version.
    Ms. Comstock. The OGE Form 450 is a much more simplified 
version of the SF-278, and I would like to add that some of 
these people are uncompensated. They are volunteering their 
services for the Federal Government, and it is a bit awkward to 
ask them to fill out a SF-278 if it is not even required by 
law. They are volunteering--the ultimate public service. I 
would very much like to see what we can do to make that process 
as simple as possible for them.
    Chairman Thompson. You have also recommended some changes 
in the law. The Ethics in Government Act, actually, would have 
to be amended.
    Ms. Comstock. That is right.
    Chairman Thompson. A lot of people do not realize that 
these categories are actually in the black-letter law.
    Ms. Comstock. It is a very detailed law.
    Chairman Thompson. And what you have done is to reduce the 
11 categories of asset values to 3; is that correct?
    Ms. Comstock. That is correct.
    Chairman Thompson. Can you elaborate on that just a bit?
    Ms. Comstock. I would be happy to. Currently there are, as 
you indicated, 11 categories of asset value. The fact is that 
when I, as an ethics official, am looking at a nominee's form 
to determine if there is any conflict of interest, the 
information I basically need is what is the asset. The value is 
generally not needed for the initial determination of whether 
there is a conflict. So to be quite frank with you I can 
generally just gloss right over the 11 categories of value. I 
think it is burdensome on filers to ask them to come to fairly 
detailed determinations, because some of these categories are 
narrow, and the filers are trying to fill the form out 
correctly.
    We have been able to reduce the 11 categories to 3. We did 
not eliminate asset valuation or recommend its elimination, 
because the substantiality of an asset is still of significance 
in terms of the appearance of a conflict in the public's 
assessment. The reality is the public does care whether an 
asset is worth $16,000 or over $100,000 in terms of determining 
whether there is a conflict. We have reduced our categories to 
under $1,000, which is the reporting threshold; between $1,000 
and $15,000, which is the regulatory de minimus exemption that 
we are proposing to raise to $15,000--for the ethics officials 
and nominees, it is important to know if the nominees' assets 
fall under the regulatory de minimis exemption; and then, 
whether the asset value is over $100,000, which is what we 
determine to be an asset of significance.
    Chairman Thompson. Right now, we go to over $50 million.
    Ms. Comstock. We do. It is not a commonly used category.
    Chairman Thompson. Really? I want to know who checks that 
off. [Laughter.]
    So your point is that you are looking for conflict of 
interest.
    Ms. Comstock. Exactly, we are looking for conflict of 
interest.
    Chairman Thompson. And it is more important that you know 
what the asset is than the value of the asset initially.
    Ms. Comstock. Right.
    Chairman Thompson. And then, if there is a conflict, if it 
is a de minimis situation, you need to know that. But if it 
comes to a certain dollar amount, you know it is a problem, it 
is a conflict, regardless of whether it is $100,000 or $1 
million.
    Ms. Comstock. Correct.
    Chairman Thompson. All right. You also reduce the current 
11 categories of income amount to 3. Could you elaborate on 
that a bit?
    Ms. Comstock. Absolutely. Income categories are areas that 
are a little bit more complicated. Once nominees are confirmed 
and enter public service, they are under outside earned income 
limitations which are tied to the pay scale. Currently, they 
cannot earn more under law than about $21,000 a year. It is 
extremely important while they are in Federal service that they 
adhere to those limitations, and ethics officials know if there 
is an issue that they need to counsel the employee about.
    So it is particularly important for us to be able to 
ascertain if there is earned income. That is the explanation 
for the categories we have. We have a de minimis threshold for 
reporting of $500; then $500 to $20,000, to make sure we 
capture the outside earned income; and then $20,000 to 
$100,000, to capture something of significance.
    Those categories are, of course, keyed to the kind of 
income. You will see on what we offered as a mock form that one 
has to check and continue to distinguish whether income is 
earned income or investment income.
    There are circumstances where investment income is reported 
over $100,000 but the asset has been valued between $15,000 and 
$100,000. This is something that we would want to follow up on.
    Chairman Thompson. You reduce the current categories of 
liabilities from 11 to 3. You shortened certain reporting time 
periods, and you do not require disclosure for certain amounts 
below--I think current law is $200, and you move that to $500.
    Ms. Comstock. Five hundred dollars. Correct?
    Chairman Thompson. Perhaps we will have time a little later 
on to go into some of the other categories, but I am going to 
relent right now and express my appreciation to Senator Cochran 
for being here and ask him for any questions he might have.

              OPENING STATEMENT OF SENATOR COCHRAN

    Senator Cochran. Thank you very much, Mr. Chairman.
    Ms. Comstock, are these changes that you are recommending, 
or are these changes that you have the power to make right now?
    Ms. Comstock. No, Senator; these are changes that we are 
recommending. They would have to be amendments to the Ethics in 
Government Act.
    If I may offer, it is a very detailed statute, and these 
are recommendations that we propose to the public financial 
disclosure reporting system. We have not drafted proposed 
legislation; but as we move forward, if these recommendations 
are well-received, a conversation I would propose that we 
engage in is whether the Office of Government Ethics could have 
a little more authority to establish by regulation things such 
as thresholds.
    As you indicated, Mr. Chairman, the income reporting 
threshold right now is $200. It has been at that level for a 
long time, so the reality is that every year the reporting 
threshold is going down.
    I would be interested in having conversations about whether 
there are certain areas where we could have regulatory 
authority.
    Senator Cochran. It would seem to me that that would be 
appropriate. I also think that the forms that we fill out and 
file periodically as Members of the Senate should be consistent 
with the Office of Government Ethics' rules as well. If changes 
are made there, they should be the same in the Senate, it seems 
to me. I recall that what we do is just about what is required 
under the Ethics in Government Act, or is close to it.
    Ms. Comstock. Right now, the Ethics in Government Act 
covers all three branches. I would like to emphasize actually 
two things. One is that the proposals that we make here are 
intended for the Executive Branch. The way the ethics system is 
structured in the three branches, I cannot claim to have any 
expertise on Legislative Branch disclosure systems. We would 
certainly be happy to work with and assist others. But the 
proposals here are tied to our expertise in the Executive 
Branch.
    I also just want to add, to make sure I do not lose the 
point, that attached to my written testimony. I offer a mock 
form that is for discussion purposes, so it is formatted almost 
exactly like the old form. I am not offering that a new form 
would in fact look like this, but for ease of review, I thought 
it would help you all.
    Senator Cochran. Mr. Chairman, I think these hearings are 
very important, and I commend you and thank you for undertaking 
to organize them. Also, I think we owe a debt of gratitude to 
those who have served, Senator Kassebaum Baker and Mr. Raines, 
for doing the work of going through the questions and the 
issues and coming up with some very thoughtful recommendations, 
in my view. All of you have done a great job on this.
    There is no question in my mind after hearing the things 
you have said and reflecting on the issues that there are some 
very burdensome requirements that in some cases are unnecessary 
for officials who are Presidential appointees. We need to 
modernize the conflict of interest laws. I am glad you are 
proceeding already without any legislation to review and assess 
the current laws and see what changes can be made to simplify 
and make better sense of the laws that we have.
    I think the pragmatic program that is suggested by Senator 
Kassebaum Baker to improve the speed, fairness, and integrity 
of the process is commendable. I hope we get busy and do some 
of these things and not just let the hearing record sit here--
and I know the Chairman will not, but we need to enlist the 
support and hard work and cooperation of other Members of this 
Committee as well as others in the Senate to get these things 
done.
    I think it may be more troublesome, frankly, in changing 
the Senate Rules than anything else. Regarding those 
suggestions that were made about holds, a lot of people do not 
understand what a hold is. It is really just a request from a 
Member to the Leader to be notified if something is going to be 
called up, whether it is a nomination or a bill or an 
amendment. It gives a Senator an opportunity to be heard on the 
subject, to object if he wants to, or to make a long speech or 
a short speech, or to have the opportunity to vote against it, 
whatever it is. That is all that a hold is. A Senator does not 
have the power to stop anything by himself or herself. You can 
stand there and talk until you run out of breath--that is 
protected, but that does not stop a nomination. If it is the 
will of the Senate to take action, the Senate will take action. 
Sixty votes may be required to shut off debate, but it can be 
done.
    What happens, though, as a practical matter is that the 
Leader is confronted by somebody who wants to be heard, and he 
finds out that what they really want to do is kill the 
nomination or delay it. The Leader may just move on to other 
things and not call that up as a matter of independent judgment 
about the importance of the matter as it relates to the 
importance of other things that are on the agenda.
    So the hold should not be exaggerated in terms of its power 
or described in any evil way, other than what it really is. It 
is abused by some, and it has been, but because it has been and 
Leaders have allowed Senators to abuse it, that is why it has 
become a difficulty. But a Leader can put a stop to a hold by 
simply calling it up. That is all that you need to do in many 
cases. And then, the Senator can object and make a speech or do 
whatever he wants to do.
    Well, I am not going to get into the long, detailed version 
of that, but I do thing it is important for the leaders of the 
Senate to assume the responsibility to help ensure that these 
confirmations are handled in an expeditious way, and the 
chairmen of committees have that responsibility as well for 
confirmations that are subject to hearings in their committees.
    I like the idea of not having hearings. That is a very 
refreshing suggestion. I know that I have been over here and 
had to preside, and we take turns doing these things, because 
one person cannot handle the great volume of confirmation 
hearings. And nobody is here attending the hearings, except the 
family and a few people who maybe want a job in that agency. We 
read these statements that are prepared and that have been in 
existence for 20 years or so, and I get tired and bored reading 
the same thing. I improvise and usually read my own so that I 
can stay awake or at least stay interested. And I should not be 
belittling the process like I am, because it reflects an 
earnest and sincere desire to be sure that we discharge the 
responsibilities of advice and consent under the Constitution, 
and it is a constitutional responsibility of the Senate. The 
Senate did not dream this up and just decide that we are going 
to have to confirm all the nominees, whether it is to Executive 
Branch positions or to the Federal Judiciary Branch. That is 
what the Constitutional requirement is. The Senate shares with 
the Executive Branch the selection of people to serve in high-
level positions of responsibility in the Executive and the 
Judicial Branches. So we have to take it seriously, but because 
it has been abused, it is in need of improvement, and I am 
delighted the Chairman is spending this time on it. I think we 
will see improvements made. I want to pledge myself to the 
effort and will cooperate with the Chairman in whatever way he 
decides we need to proceed after the hearings to make some 
improvements.
    I talked a lot longer than I expected to, but I appreciate 
very much the opportunity, Mr. Chairman.
    Chairman Thompson. We appreciate your historical 
perspective and your wisdom on it. You are absolutely right. I 
think the problem with the duties and responsibilities of the 
Senate and the balance of powers that we have is similar to the 
problem that we have in other areas--we are always adding on, 
and we never take anything away. And we are not just dealing 
with things that we were originally supposed to be dealing 
with; we are adding on more and more nominees of lesser and 
lesser significance in terms of our constitutional 
responsibility, and we never pay anything back. We just keep 
adding on and view it as a reflection on our authority or a 
diminution of our power if we ever cut anything back. I hope we 
can change this.
    Senator you were here for a good while. What is your read 
on the dynamics of that? I know that we can count on you and 
Mr. Raines and the Initiative and on others who have been here 
to help us with this, but maybe we just need a better lobbying 
effort with regard to the Senate on this and bringing this to 
everyone's attention in a little bit more detail. We all 
understand it to a certain extent. And now we have a new 
administration, and people are undergoing this--they have a 
skeletal crew over there. We had the No. 2 person at OMB here, 
and he had to hustle back because he and Mitch Daniels were the 
only guys over there. People do not realize that. It takes just 
about a year now to get your team together--one-fourth of your 
term of office, you do not have your team together.
    So we really need to bring this to the attention of 
Members, and I think we can do something, but it is 
institutional. I was not aware that hearings for everyone was 
of fairly recent vintage, for example. I think most people 
consider it to be a problem with the media more than anything 
else, that you were not taking your job seriously if you did 
not have hearings on everybody.
    Anyway, having listened to us for a while, what thoughts 
come to your mind?
    Senator Kassebaum Baker. Well, I think that you are right, 
Mr. Chairman. It is interesting, because in many ways, you do 
not realize how burdensome the process has grown. As you said, 
you looked into the requirements from the standpoint of 
reporting for the Office of Government Ethics for this 
Committee. I think one of the best points was made by Frank 
Raines about making the personnel office in the White House 
permanent so you have continuity and some process that is at 
work.
    But I tell you we really do not know what is taking place 
and some of the requirements for those who are serving and not 
receiving compensation on special boards and commissions who 
are even required to go through full-field investigation. 
Former Governor Tom Kean of New Jersey was co-chairing a 
commission and had to go back and report all honoraria he had 
ever received. And there are other requirements that just do 
not seem necessarily important for giving some certain amount 
of time to a special commission or board that, as Amy Comstock 
pointed out, is frequently without compensation, and these 
people are asked to give some time and serve.
    I do not think any of us really realize how often that 
occurs, and unless you are talking to someone who has gone 
through it, you do not realize what is involved. And how to 
improve it, as you say, is sort of like adding barnacles to the 
ship of State, so to speak. We just add on, and we never 
realize what could be removed and changed.
    That is what we hope to do, and I sensed, Senator Cochran, 
from your observations that the recommendation on holds might 
be one that would be a little difficult to get approved. And as 
you said, it is not necessary to put it in legislation, really, 
because it is the responsibility of the chairman or the 
leadership in the Senate. But on the other hand, I hope that we 
can be supportive in any way, and maybe people will realize 
some of these stories that we can use about what has been part 
of the process is an important story.
    I can just tell you that I was asked to serve on the new 
Kansas Hospital Board, which was set up as a State board. The 
forms that I was required to fill out were the same, really, as 
those required for an extensive government position here. I 
told my friend, Governor Graves of Kansas, sorry--I did not 
have a typewriter to do it, either, nor did I have any 
assistants who could look back to my high school records and so 
on. I do not want to bother, and I did not.
    So that somewhere, I think we have to find the means of 
making it something that we can do, that we can answer the 
questions that the public has, and provide a sense of one of 
the responsibilities that we have and yet not make it such a 
laborious process.
    Chairman Thompson. I know that you do not want to 
personalize this too much, but as everyone knows, Senator 
Howard Baker, my mentor and all of our friend, is going to be 
nominated to be Ambassador to Japan. Have you gotten into the 
process yet, and were you surprised by anything? How daunting 
is it?
    Senator Kassebaum Baker. Well, as you well know, it 
requires a couple of lawyers and so on to go back through 
records, and as we all know, you have to report everybody whom 
you have visited with abroad in the last 7 years or something 
like that. Some of us have really not even kept good records. I 
do not think I would make it through the process.
    You have to wonder just at what point it is important, and 
I think that that is what we need to stop and think through--is 
anybody even reading the paperwork. I always wonder where it 
goes.
    Ms. Comstock. We do read it.
    Senator Kassebaum Baker. You do, but some of it just piles 
up. I think that what we would like to find is a sensible way 
that ensure that we can answer questions that need to be 
answered so that we can really provide a structure that will 
give us the participation----
    Chairman Thompson. The obvious just occurred to me, and 
that is that it does not really matter whether you are a 
citizen who has never been in government before or a former 
Senator or an advisor to the President, who has access to the 
most sensitive secrets that the Nation possesses. I guess the 
process is essentially the same. Governor Kean is another 
example.
    Senator Kassebaum Baker. Yes. So maybe it is getting those 
stories out and finding some people who are willing to document 
what they have gone through that would help us to better 
understand--and you have pointed out some of the things that 
you realized, too. If we can perhaps make these case studies of 
what people have had to go through--and should they for that 
particular position. A standardized form, as has been pointed 
out, would be helpful and somehow working to make sure that 
once you go through what the White House form is, what the 
agency's form is, what the Senate committee's forms are, we 
have run through quite a few different loops, and that may be 
useful, to have a better understanding of what really takes 
place.
    Chairman Thompson. Mr. Raines, on the Permanent Office of 
Presidential Personnel, what would they do once a President 
came in and the first year, let us say, was over with? Would 
they have a staff much greater than they would need for the 
balance of that term? How would that work?
    Mr. Raines. The experience of most White House Offices of 
Personnel is that they are in a constant state of flux.
    Chairman Thompson. Excuse me. We heard yesterday that the 
average stay now is something like 2.1 years.
    Mr. Raines. Yes, that is of the appointees. Within the 
Office of Presidential Personnel, it is probably less than a 
year, because many people who go into that office go there 
hoping that they will go to another office at some point. But 
given the volume, much of the work that was done there in the 
last administration was done by volunteers or interns, because 
every President comes into office and says, ``I am going to 
make the White House staff smaller,'' and when they look around 
as to where to make it smaller, they will take people out of 
Personnel, out of the Correspondence Unit, so that what you 
have is typically a group of volunteers with very few senior 
people whom the President brought with him, but that office is 
constantly seeing people coming and going.
    The suggestion here is simply for an office that is 
authorized a small number of career employees that will ensure 
that it will be able to continue not only between 
administrations but during an administration, because if you 
have ever been an appointee, and you try to find out who it is 
that is processing your forms even in the administration, that 
person can change typically over the course of months from the 
time that they first start to seek an appointee; and then, when 
they agree to the appointee and move him through the process, 
you might have three or four or five different people within 
the Office of Presidential Personnel who are supposed to be the 
ones in charge of your nomination.
    So there is nothing like the Office of Management and 
budget where, when you come in, there is a career staff, and 
they have been there with the last President, they will be 
there with this President, and they will be there for the next 
Director, and all of that institutional memory continues--there 
is none of that within the Office of Presidential Personnel 
because it had never been thought to be the kind of office that 
required that kind of continuity.
    One thing you learn heading a company is that the most 
important thing that you do is choose people. You ask people 
when they take on these jobs, and they list a lot of grand 
things that they would like to do and how they are going to 
spend their time, and when you ask them when they leave the 
job, all of them say that the most important thing they did was 
work on people--picking people, developing people, promoting 
people--that had the biggest impact on the institution. But we 
rarely focus on that in the government, and in a government 
that has such a short tenure among its appointees in office, 
and where I think at the end of the Clinton Administration, 
there was a 25 percent vacancy--and I do not think that varies 
very much from the time an administration gets going that you 
will probably have at any given time 20 to 25 percent of the 
senior positions unfilled.
    Chairman Thompson. Well, you can extrapolate that for the 
government as a whole. GAO now has put the human capital 
problem on the high risk list. About half of our employees will 
be eligible for retirement in about 5 or 6 years, and of 
course, we are losing the very kinds of people that we need to 
be keeping. So we are concentrating just on the tip of the 
iceberg here, but it is a major government-wide problem.
    With regard to the changes in the FBI full-field 
investigations, this really started in its comprehensive form 
during the Eisenhower Administration. Is it your understanding 
that this is something that could be corrected by Executive 
order? Would that be the way to do it if the President decided 
that he wanted to cut back on the kinds of positions where you 
would have the full-field?
    Mr. Raines. Yes. We believe that the full-field 
investigations should be reserved for national security 
questions. It should not be a form of generalized background 
check on appointees. Then, the FBI could do a better job on 
those fewer cases where the person will be dealing with 
national security information and which would be appropriate to 
that kind of investigation.
    Chairman Thompson. But it is within the President's power, 
and you think that that is the way it should remain--should the 
President make that decision, I guess is what it boils down.
    Mr. Raines. I think the President should make that 
decision. I think that a recommendation, for example, from this 
Committee that the President should consider that would give 
the President an ability to take it on without anyone 
wondering, particularly if it were a bipartisan recommendation, 
whether he somehow was limiting the process for his own people.
    This is a problem that again faces all administrations, and 
it raises a particular concern--and Nancy alluded to this a 
little bit--that I am very concerned with. The full-field 
investigation and the ethics forms require a level of precision 
that puts innocent people at jeopardy of violating the law 
without any recourse. In the full-field investigation, for 
example, last month, I took a trip to Europe to visit 
investors. In the course of a week, I saw about 150 investors 
and made 28 separate presentations in five different cities in 
Europe. And I will do a similar trip in Asia.
    If I were asked to undertake another full-field 
investigation, by the terms of that form, I should fill out 
each and every meeting I had, each and every person who was at 
that meeting, and the topic. Over a course of time, anyone who 
has international business dealings will have met with 
thousands of people and have almost no recollection of what 
cities they have been in--but technically, you are required to 
put each and every one of those trips and meetings and the 
substance of the conversation onto a form.
    Well, particularly in countries where the government may 
have investment units where there may be a financial 
institution, for example, that is owned by the government, and 
where it says a government entity, that legally is required. 
Almost no business person now could literally fill out that 
form and abide by each and every one of those requirements.
    Chairman Thompson. The real question is for what purpose. 
If you are a business person, I can hardly think of you being 
in a room with anybody that you had no control over their being 
there would be a major problem in and of itself. You would 
think the idea would be that if you happened to have met with 
someone--let us take the worst-case scenario--who was known to 
be recruiting spies for another country or something like that, 
that that would be checked out, that each of those individuals 
you listed would be checked out. But do you think that that is 
happening--it would take years instead of months, I suppose, if 
you were really going to use that information that you were 
submitting, wouldn't it?
    Mr. Raines. Exactly. And when you think of people who are 
not going to be exposed to national security information, you 
wonder why are we using up the FBI's resources there, whereas 
on the other hand, someone who is going to be dealing with top 
secret, compartmentalized information, you would expect there 
to be a very extensive investigation that probably would go 
beyond a paper form to get more of a qualitative information.
    But the FBI devotes a lot of resources to these efforts, 
and currently, this administration is ahead of schedule in many 
ways in terms of proposing people, but there are only so many 
people who can go through the FBI pipe.
    So we think that the FBI full-field investigation has been 
extended far beyond its useful purpose, and it really should be 
reserved for significant national security positions, and not 
just simply people who may be exposed to any information that 
may be, for example, secret. As you know, Senator Moynihan 
spent quite a bit of time trying to limit the amount of 
information that was classified. But it really should be things 
where there is a concern about national security. We think that 
that would speed up the process enormously, because a number of 
people would be out of that process, and for everyone who had 
to go through it, more FBI resources could be expended on that 
smaller group, and it could be done much more quickly.
    Chairman Thompson. ``Review of the ethics requirements 
currently imposed on appointees.'' Do you have anything in mind 
there particularly that you think might be particularly onerous 
or unnecessary?
    Mr. Raines. We have not had a chance to discuss this, 
because we have not discussed the report in the Initiative 
directly, but the proposals that the director was just 
outlining, I think are a terrific step forward.
    Limiting the amount of information that is not relevant to 
an ethics determination should be the key. You indicated the 
absurdity, Mr. Chairman, of asking for the distinctions between 
assets that we currently inquire--we put equal emphasis on 
assets between $200 and $1,000, and then we ask them ``over $1 
million,'' ``between $1 million and $5 million,'' ``between $5 
million and $25 million,'' ``$25 million and $50 million,'' and 
``over $50 million.'' I would have thought that the conflict 
problem would have emerged somewhere earlier than that stage. 
[Laughter.] But these provisions are in law, and indeed, as I 
recall, the top category used to be ``over $1 million,'' but 
then there were some appointees who came in for whom they could 
not exactly determine their net worth, so they added provisions 
to go up higher. Well, this should not be about determining 
what the net worth of an appointee is. It should be when does a 
conflict of interest kick in.
    Now, I am even more radical. I may be the most radical 
person here. I believe that you should simply ask people to 
state any asset above ``X'', whatever you determine could cause 
a conflict.
    Chairman Thompson. Conflict-level.
    Mr. Raines. ``X''--as far as I am concerned, it could be $1 
or it could be $1,000 or it could be $10,000--just list them. 
Now you know that these are things that you have to pay 
attention to. And then, if someone would like a waiver or 
something, you can ask them for additional information; but 
those are going to be in special cases where you would not have 
burdened thousands of people with gathering information that 
typically will only be of interest to Freedom of Information 
requests when the newspapers do their annual update on the net 
worth of the members of the Cabinet and Members of Congress.
    Chairman Thompson. You mentioned, as others have, the need 
for executive reorganization and the layering and that every 
deputy assistant has an assistant deputy. This is so obvious, 
and I suppose it is a question without an answer--but how do 
you convince any chief executive that he ought to be the one to 
deprive himself of a number of political appointees that others 
have not? I mean, do you make it become effective the next 
time, or what? Clearly, everybody has got to understand this 
problem, but is there anything you can point to to highlight 
the fact that it would be more advantageous to the Executive 
Branch than disadvantageous to do that? It is a political-
personal kind of difficulty, I guess, more than it is anything 
else.
    Mr. Raines. Well, I think the number of patronage jobs at 
some point becomes far less important than actually running the 
agency. I am one who believes that the layering has occurred 
not so much from a desire to create more patronage but that 
executives come in, and they want to gather their team around 
them, and they have lost quite a bit of faith in the senior 
executives in the civil service to have the management skills 
or the capabilities or the loyalty to carry out the executive 
responsibilities. I think this is true of every administration; 
it is not a partisan question.
    So I think it has to have two pieces. One, there should be 
greater flexibility in being able to choose your team among the 
career civil service. Political executives should be able to 
quite freely move around career civil servants to meet their 
needs, which will then keep them from layering on top of the 
career civil servants more and more people to supervise them.
    Chairman Thompson. Aren't they free to do that now if they 
choose?
    Mr. Raines. There is some freedom, and that was the theory 
of the senior executive service, that there would be tremendous 
movement within the senior ranks of senior civil servants. But 
in reality, there is almost none; there is almost none in 
reality, and the ability to move and choose whom you would like 
without having significant limitations I think is part of what 
causes them to say, ``Well, if I cannot have the right person I 
want there in the civil service, I will get a political 
appointee, and then I will have the civil servants report to my 
political appointee.'' And then that political appointee says, 
``I cannot do this by myself,'' and they then need to have a 
cadre of people to help them supervise the civil servants. I 
think that that has as much to do with it as patronage. I think 
the average senior executive could do with a lot fewer 
political appointees if they had greater flexibility in the 
career service, particularly in being able to move people in 
and out of these senior management jobs who are political only 
because we call them that, but they may simply be an expert.
    Let me give you one example. When I was in the government, 
there was a big concern about the operation of the Guaranteed 
Student Loan Program and how could it be made to function more 
effectively. We had a big discussion, and we said let us hire 
an executive who knows something about running a big financial 
program, because that is what this is--it is a very large 
financial program. Let us go into industry and hire someone to 
do that.
    It was very difficult to do, because in order to really 
bring them in directly, you had to make them a political 
appointee, you had to find an appropriate slot for that 
political appointee. They became associated with that 
administration rather than being someone who was brought in 
because of their inherent expertise. They had no knowledge of 
how long they might be there, because if the Secretary changed, 
they could be moved out of there as a political appointee. So 
it became a big negotiation over this one job of how do we just 
get someone in who knows something about running a big 
financial program.
    No one had a patronage person that they wanted to put in 
the job; it was all agreement--this had to be a substantive 
person.
    Well, we have not spent much time on this intersection 
between the career civil service and the political appointees, 
and we tend to think of them in totally separate batches, but 
they do impact each other. I think that that is where the 
layering comes from.
    In our recommendation, we simply say give the President the 
reorganization authority. We are not making him do it. Give him 
the authority. Have Congress set a goal of a reduction by one-
third--Congress not telling him exactly where to do it--and 
then let the President use this to try to manage better, and 
then the Committee can monitor how the President is doing. And 
I think in some ways, the way that you did with the 
Accountability Act and with the audit program, you can get a 
competition going as to who has done the best job, why haven't 
you been able to do more. That has as big an impact as a law, 
and I think that what this Committee has done on following up 
on those had as big an impact as going in and trying to tell 
them in detail how you should implement an audit, how you 
should implement future planning.
    So we are not trying to mandate here how this 
administration or any administration does it, but we think that 
administrations in their own interest will want to do this in 
quite a few cases.
    Chairman Thompson. Thank you very much.
    It is almost noon. Are there any parting comments?
    Ms. Comstock. I did want to respond to one thing that was 
mentioned earlier. The question was raised rhetorically, does 
anyone even read these forms. In fact, of course, we read them 
for conflicts purposes, but the others who read these forms are 
also behind some of our recommendations. These public financial 
disclosure forms are requested regularly, often by the media, 
but by others as well. So our recommendations include the 
balance, the best we could offer to you, of minimizing the 
intrusion into privacy issues with what we needed for conflicts 
purposes. It was very important to us to maintain as much 
privacy as we could, because our forms are read. And as Mr. 
Raines indicated, there is the annual posting in the newspapers 
of the best estimate of net worth. So that is one of the 
theories behind it.
    Chairman Thompson. I think a better question is who reads 
all the full-field investigations material. Senator Lieberman 
and I have to--some of it--but quite frankly, it has become 
very much pro forma in most cases.
    Anyway, thank you all very much. This has been excellent. I 
look forward to working with all of you, and hopefully, we can 
do some good.
    Thank you. We are adjourned.
    [Whereupon, at 11:57 a.m., the Committee was adjourned.]
                            A P P E N D I X

                              ----------                              

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