    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

    MERIT SYSTEMS PROTECTION BOARD, OFFICE OF GOVERNMENT ETHICS, AND OFFICE
                       OF SPECIAL COUNSEL REAUTHORIZATION

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                             GOVERNMENT OPERATIONS

                                     OF THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               December 16, 2015

                                   __________

                               Serial No. 114-151

                                   __________

    Printed for the use of the Committee on Oversight and Government Reform

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

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                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                         JASON CHAFFETZ, Utah, Chairman
    JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland,
    MICHAEL R. TURNER, Ohio                  Ranking Minority Member
    JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
    JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of
    TIM WALBERG, Michigan                    Columbia
    JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
    PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
    SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
    TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
    BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
    CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
    THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
    MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
    RON DeSANTIS, Florida                TED LIEU, California
    MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
    KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
    MARK WALKER, North Carolina          MARK DeSAULNIER, California
    ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
    JODY B. HICE, Georgia                PETER WELCH, Vermont
    STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
    EARL L. ``BUDDY'' CARTER, Georgia
    GLENN GROTHMAN, Wisconsin
    WILL HURD, Texas
    GARY J. PALMER, Alabama

                        Sean McLaughlin, Staff Director
                        Andrew Dockham, General Counsel
      Jeff Post, Government Operations Subcommittee Deputy Staff Director
                        Sharon Casey, Deputy Chief Clerk
                     David Rapallo, Minority Staff Director
                                     ------

                     Subcommittee on Government Operations

                     MARK MEADOWS, North Carolina, Chairman
    JIM JORDAN, Ohio                     GERALD E. CONNOLLY, Virginia,
    TIM WALBERG, Michigan, Vice Chair        Ranking Minority Member
    TREY GOWDY, South Carolina           CAROLYN B. MALONEY, New York
    THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of
    MICK MULVANEY, South Carolina            Columbia
    KEN BUCK, Colorado                   WM. LACY CLAY, Missouri
    EARL L. ``BUDDY'' CARTER, Georgia    STACEY E. PLASKETT, Virgin Islands
    GLENN GROTHMAN, Wisconsin            STEPHEN F. LYNCH, Massachusetts

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on December 16, 2015................................     1

                                   WITNESSES

    The Hon. Susan Tsui Grundmann, Chairman, U.S. Merit Systems
      Protection Board
        Oral Statement...............................................     4
        Written Statement............................................     6
    The Hon. Walter M. Shaub, Jr., Director, U.S. Office of
      Government Ethics
        Oral Statement...............................................    15
        Written Statement............................................    17
    The Hon. Carolyn N. Lerner, Special Counsel, U.S. Office of
      Special Counsel
        Oral Statement...............................................    27
        Written Statement............................................    29

                                    APPENDIX

    Response from the Hon. Susan Tsui Grundman to Questions for the
      Record.........................................................    58
    Response from the Hon. Walter M. Shaub to Questions for the
      Record.........................................................    69
    Response from the Hon. Carolyn N. Lerner to Questions for the
      Record.........................................................   112

    MERIT SYSTEMS PROTECTION BOARD, OFFICE OF GOVERNMENT ETHICS, AND OFFICE
                       OF SPECIAL COUNSEL REAUTHORIZATION

                                  ----------

                          Wednesday, December 16, 2015

                      House of Representatives,
                 Subcommittee on Government Operations,
                  Committee on Oversight and Government Reform,
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 11:10 a.m., in
    Room 2154, Rayburn House Office Building, Hon. Mark Meadows
    [chairman of the subcommittee] presiding.
        Present: Representatives Meadows, Jordan, Walberg, Buck,
    Carter, Grothman, Chaffetz, Connolly, and Norton.
        Mr. Meadows. The Subcommittee on Government Operations will
    come to order. Without objection, the chair is authorized to
    declare a recess at any time.
        Today's hearing will examine the reauthorization of three
    important agencies for our Federal workforce, specifically the
    Merit Systems Protection Board, the Office of Government
    Ethics, and the Office of Special Counsel. The authorizations
    of the MSPB and the OGE and the OSC all expired at the end of
    fiscal year 2007. However, given the important work that each
    of these agencies perform, their funding has continued.
        Still, in the nearly 10 years since their authorizations
    have expired, there has been little opportunity for even the
    most basic and needed reforms at these agencies. So, today, we
    will begin to have this conversation about reform and
    reauthorization for these agencies.
        I'd like to highlight that as we go into a different type
    of appropriations season next year, this becomes even more
    critical and thus the reason for this hearing today. During
    this hearing, we'll have the opportunity to learn more about
    the MSPB and its efforts in overseeing the Federal Merit
    System; obviously, the OGE and its oversight role of the
    executive branch ethics program; and OSC and its efforts to
    protect Federal workers and applicants from prohibited
    personnel practices, especially the retaliation for
    whistleblowing. All three organizations have a very important
    role for the executive branch agencies and Federal employees.
        As part of the reauthorization of these agencies, we will
    also examine and discuss the agencies' proposals for changes in
    some of their procedures and operations. We will hear testimony
    from the Chair of the MSPB, Susan Tsui Grundmann. Chairman
    Grundmann can provide information on the current state of the
    MSPB accomplishments made by the agency and the challenges
    ahead.
        And the Director of OGE, Walter Shaub, will update us on
    the OGE's oversight and leadership role of the executive branch
    ethics program and prevention of the conflict of interest. In
    addition, Director Shaub, on the outline of OGE's preparation
    for the upcoming Presidential transition.
        From OSC, Special Counsel Carolyn Lerner joins us today.
    Special Counsel Lerner can provide us with information on OSC's
    role in protecting Federal employees from prohibited personnel
    practices and its efforts at investigating allegations of
    whistleblower retaliation, evaluating disclosure cases,
    enforcing and evaluating complaints under the Hatch Act, and
    protecting members of the armed services under the Uniformed
    Service Employment and Reemployment Rights Act.
        We look forward to hearing from all of our witnesses and
    obtaining a better understanding of the proposed
    reauthorization language.
        So I now recognize Mr. Connolly, the ranking member of the
    Subcommittee on Government Operations, for his opening
    statement.
        Mr. Connolly. Thank you, Mr. Chairman.
        And thank you for holding this hearing in the last 2-1/2
    days of the first session of the 114th Congress.
        I have three hearings today. I belong to two committees
    that passionately believe no human challenge, no human problem
    cannot be improved with another hearing. So we are glad we are
    getting around to this one.
        These three agencies in front of us, the Merit Systems
    Protection Board, the Office of Government Ethics, and the
    Office of Special Counsel, are among the smallest agencies in
    the Federal Government, but their work has a tremendous impact
    on the Federal workforce.
        The authorizations for each of these agencies unbelievably
    expired 8 years ago, in 2007, Mr. Chairman. And they have been
    sustained by annual appropriations, so congressional action,
    including by this committee, is long overdue. It's especially
    important given the critical work that these agencies perform.
        I want to thank our witnesses for being here today.
    Particularly, I want to commend them for the vitally important
    work they do and their staffs perform to ensure that the
    Federal civil service is merit-based, not subject to political
    influence or ethical conflicts of interest, and free of
    prohibited personnel practices, such as retaliation for
    whistleblowers, as you pointed out, Mr. Chairman.
        MSPB's 200-person staff is charged with adjudicating
    appeals relating to adverse employment actions, such as
    removals and suspensions over 14 days, veterans' and
    whistleblowers' rights, and Federal disability and retirement
    claims.
        MSPB is seeking 5-year reauthorization through fiscal year
    2020 and is proposing that the Office of Personnel Management
    and other agencies assist it in conducting employee surveys. I
    look forward to a discussion of this as we proceed.
        I also would like to hear about MSPB's efforts to address
    recent challenges, including adjudication of 32,000 appeals
    filed by Federal employees who were furloughed in the shutdown
    in 2013 due to sequestration, budget cuts, and implementation
    of 2014 Veterans Access, Choice and Accountability Act.
        The Office of Government Ethics employs 80 individuals who
    prepare and issue standards of ethical conduct for the fellow
    workforce and oversee agency ethics programs. OGE seeks its 7-
    year reauthorization, which follows previous congressional
    practice to avoid the need to seek reauthorization during the
    first and last year of Presidential terms. I'd like to better
    understand the steps that the agency has taken to implement the
    2012 Stop Trading on Congressional Knowledge Act, or STOCK Act.
    I would also like to hear about the agency's preparations for
    the next Presidential transition.
        The Office of Special Counsel's primary mission is to
    protect Federal employees from prohibited practices. It serves
    as the frontline of defense and protection for whistleblowers
    who disclose government wrongdoing, something particularly
    important to this committee and our subcommittee. The agency
    seeks a 5-year reauthorization. It is proposing several
    legislative changes that would, among other things, enhance its
    access to Federal agency information, increase agency
    accountability and whistleblower disclosure cases, and modify
    procedural requirements for certain prohibited personnel
    practices.
        I am pleased that OSC has achieved settlements in numerous
    cases on behalf of Veterans Administration employees who were
    retaliated against because they stepped forward to blow the
    whistle on both the backlog and the lack of quality of care for
    some of our veterans.
        OSC was also instrumental in drawing congressional
    attention to the disclosures by Department of Homeland Security
    employees regarding the abuse of administratively
    uncontrollable overtime. Those disclosures caused DHS to stop
    the improper use of these payments and resulted in the passage
    of legislation establishing a new pay system for Customs and
    Border Patrol agencies.
        Mr. Chairman, the fact that these agencies have now gone 8
    years without being reauthorized is a terrible abrogation of
    our responsibility, congressional responsibility. And I
    certainly pledge to work with you in trying to rectify that
    situation.
        Thank you for holding this hearing.
        Mr. Meadows. I thank the gentleman.
        I'll hold the record open for 5 legislative days for any
    member who would like to submit a written statement.
        We will now recognize our panel of witnesses. I'm pleased
    to welcome Honorable Susan Tsui Grundmann, Chair of the U.S.
    Merit Systems Protection Board; the Honorable Walter Shaub,
    Jr., Director of U.S. Office of Government Ethics; and the
    Honorable Carolyn Lerner, special counsel at the U.S. Office of
    Special Counsel.
        Welcome to you all.
        And pursuant to committee rules, all witnesses will be
    sworn in before they testify. So if you would please rise and
    raise your right hand.
        Do you solemnly swear or affirm that the testimony you are
    about to give will be the truth, the whole truth, and nothing
    but the truth?
        Thank you. Please be seated.
        Let the record reflect that all witnesses answered in the
    affirmative.
        In order to allow time for discussion, please limit your
    oral testimony to 5 minutes, but your entire written statement
    will be made part of the record.
        And, Ms. Grundmann, you are recognized for 5 minutes.

                           WITNESS STATEMENTS

            STATEMENT OF THE HONORABLE SUSAN TSUI GRUNDMANN

        Ms. Grundmann. Thank you. Good morning, Mr. Chairman,
    Ranking Member Connolly, Chairman Chaffetz, and distinguished
    members of this committee.
        On behalf of MSPB and our 220 employees, thank you, Mr.
    Chairman, for bringing us all together.
        It has been both an honor and a privilege to serve as the
    Chairman of the MSPB and its dedicated workforce for the last 6
    years; the last 3 of which have been among the most eventful
    and challenging in our history. These years have also been
    among the most rewarding.
        We are proud of what our agency, through its employees, has
    accomplished during incredibly trying times and the role that
    we have played in a variety of matters related to the overall
    operation of the Federal civil service.
        During the last 4 fiscal years, our agency has issued over
    61,000 decisions. Over 54,000 of them were issued by our 65
    administrative judges, the other over 6,200 were issued by the
    three, now two, board members in headquarters.
        Our numbers are staggering due largely to, as you say, the
    32,000 furlough appeals we received during the summer of 2013
    as a result of sequestration budget cuts. In a normal fiscal
    year, our agency processes about 6,000 to 7,000 in the regions
    and about 700 to 800 in headquarters.
        The last 2 years have been anything but normal with a
    workload five times a regular fiscal year. And while processing
    times have been adversely impacted, I am proud to report two
    significant accomplishments. We have completed almost 97
    percent of our furlough cases. And while we have quantity in
    abundance, the quality of our decisions is ever constant. Our
    affirmance rate by our reviewing court, the U.S. Court of
    Appeals for the Federal circuit, is at a 4-year high, holding
    steady for a second year in a row at 96 percent.
        And with performance at an all-time high, our employee
    commitment and satisfaction reflected in our employee viewpoint
    survey results have dramatically improved from last year as
    well. With a 72-percent response rate, we showed improvement,
    sometimes dramatic, in the 71 of the 72 core EVS questions,
    with the greatest positive responses in communication from
    leaders, high rates of motivation, commitment to the work, and
    the agency's purpose, which is to safeguard, protect, and
    promote the nine merit principles.
        And while we do not know what the future holds for us in
    terms of factors and resources impacting our workload, this
    year's results are particularly encouraging as they come at a
    time when workload is at its peak, but employee morale and
    commitment did not falter. This year, we jumped eight slots
    from last year's rankings. And it is this commitment as
    recently as last week that the Partnership for Public Service
    recognized by ranking us eighth among small agencies in best
    places to work and the fifth most improved small agency in
    2015.
        I understand that you, Mr. Chairman, have been paying
    visits to the agencies that have been doing well. I hereby
    cordially invite both you and Ranking Member Connolly to pay us
    a visit one day soon.
        Even though a great deal of our agency time has been
    dedicated to our adjudication function, our statutory studies
    function continues to produce high-quality, relevant reports
    that are significant to the deliberations of this subcommittee.
    Unlike our adjudication function, which looks backwards in time
    at events passed, our studies function is forward-looking,
    garnering a series of best practices that can and often become
    the basis of legislative or regulatory reform.
        Some of our past reports have been uncanny in terms of
    their timing with respect to this committee's work, such as our
    barriers to whistleblowing, issued in 2011, which we believed
    helped assist in the passage of the Whistleblower Protection
    Enhancement Act in 2012; our veterans' rights report in 2013;
    our Federal due process report, published earlier this year
    during the dialogue in the VA Accountability Act; and our new
    SES training report, which we will release this week, and we
    hope that will assist in the discussion and development of
    initiatives by OPM following the new executive order on SES
    training and development just issued last night.
        Mr. Chairman, we welcome this occasion for reauthorization.
    We welcome this opportunity to tell our story. But as you note,
    we have only one legislative proposal solely dedicated to our
    studies function, which I will be happy to discuss with you. In
    the meantime, our work continues, but things are going well.
    Thank you.
        [Prepared statement of Ms. Grundmann follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

           Mr. Meadows. Thank you so much.
        Director Shaub.

            STATEMENT OF THE HONORABLE WALTER M. SHAUB, JR.

        Mr. Shaub. Chairman Meadows, Ranking Member Connolly, and
    Chairman Chaffetz, and members of the subcommittee, thank you
    for the opportunity to testify on behalf of the reauthorization
    of the Office of Government Ethics. I'm happy to be here with
    my colleagues from OSC and MSPB.
        OGE was established by the Ethics in Government Act of
    1978, which came out of the same committee in the same month as
    the Inspector General Act.
        Congress established OGE as part of a broader framework for
    integrity which is coordinated among a variety of executive
    branch entities. Among others, this includes OSC, MSPB, and the
    14,000-member inspector general community. The language of the
    Ethics in Government Act makes clear that the primary mission
    and objective of the ethics program is one of prevention. The
    program works to prevent conflicts of interest so that the
    American people can be confident that public servants make
    decisions based not on their own financial interest but on the
    interests of the public. Congress designed this program to be
    decentralized, with OGE setting ethics policies and agency
    ethics offices carrying out day-to-day operations.
        Our strategic goals focus on the three pillars of
    uniformity, continuity, and transparency. OGE's work includes a
    wide range of activities for a small agency of about 70
    employees. Much of that work can be grouped into the following
    general areas: Nominations and support for Presidential
    transitions; regulations and guidance; oversight of agency
    ethics programs; development of an electronic filing system;
    assistance to stakeholders; ethics education; and engaging
    leaders in ethical compliance and ethical culture.
        My written testimony details OGE's accomplishments in these
    areas. I'll just highlight a few. Since I became Director in
    January 2013, we have leveraged technology to deliver more
    training, with our classes going from 1,400 attendees a year to
    7,500 attendees in 2015. And 90 percent of customers surveyed
    said the training helped them to do their jobs better.
        Through innovative new approaches, we've also cut costs.
    For example, we hosted our 2014 national ethics summit for less
    than 1 percent of the cost of OGE's traditional conferences. In
    2015, we showed 59 reports in our oversight reviews of agency
    ethics programs, and we are on pace to review all agencies
    before the end of my 5-year term.
        We have improved our financial disclosure program by going
    paperless and cutting review times for annual reports from 180
    days to 30 days. As required by the STOCK Act, we developed an
    electronic filing system for financial disclosure. In less than
    a year, we have registered about 10,000 employees and, as of
    yesterday, 90 agencies in that system. And 90 percent of agency
    administrators who operate the system for their agencies were
    surveyed and rated the system favorably.
        In 2015, we responded to about 2,000 requests for
    assistance from agencies. And 91 percent of agency ethics
    officials surveyed said our assistance helped them do their
    jobs. We received another 700,000 requests from outside the
    government.
        Since our last authorization expired, we have issued over
    100 legal advisories. This year, 98 percent of responders to
    our survey said these advisories helped them in their work. We
    also actively support the enforcement community. As Director, I
    am statutory member of CIGIE, the Council of the Inspectors
    General on Integrity and Efficiency, as well as CIGIE's
    Integrity Committee. OGE also provides IG staffs and
    prosecutors with legal advice and training.
        Looking forward, our next big challenge will be the
    Presidential transition. A Presidential transition is a
    critical time when the Nation is vulnerable with the potential
    for man-made, natural, and economic disasters to strike while
    the government's top positions are vacant. OGE makes sure that
    nominees are free of conflicts of interest so that top
    leadership positions can be filled quickly.
        During a transition, our nominee work triples in volume and
    increases in complexity. The challenge is nothing short of
    extraordinary, and it requires a full commitment of resources.
    We're doing everything possible to be ready for the transition
    because we know how important it is.
        Finally, we have submitted a legislative proposal to amend
    this Ethics in Government Act. Because the systems in place are
    working, the proposal is limited to technical corrections.
        We are also seeking reauthorization through 2022 so that
    the next reauthorization does not coincide with a Presidential
    transition, when OGE's resources will be stretched thinnest,
    but we are more than happy to talk to you at any time in
    between.
        So thank you for the opportunity to testify today.
        [Prepared statement of Mr. Shaub follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you for your testimony.
        Ms. Lerner, you are recognized for 5 minutes.

              STATEMENT OF THE HONORABLE CAROLYN N. LERNER

        Ms. Lerner. Thank you, Chairman Meadows, Ranking Member
    Connolly, and members of the subcommittee.
        Thank you for the opportunity to testify today about the
    U.S. Office of Special Counsel. I also want to thank Chairman
    Chaffetz for your being here today and for your ongoing
    interest in OSC's work. Under your leadership and with Ranking
    Member Cummings, we reformed the Hatch Act in 2012 and, last
    year, in response to whistleblower disclosures and your
    oversight, prompted changes to overtime at the Department of
    Homeland Security, saving hundreds of millions of dollars a
    year. So thank you for being here.
        I am also pleased to be here today with Chairman Grundmann
    and Director Shaub. I appreciate the committee's interest in
    reauthorizing OSC. The Office of Special Counsel provides a
    safe and secure channel for government whistleblowers who
    report waste, fraud, and abuse, and threats to public health
    and safety.
        OSC also protects veterans and servicemembers from
    discrimination under the Uniformed Services Employment and
    Reemployment Rights Act, or USERRA, and we enforce the Hatch
    Act, which keeps partisan political activity out of the
    workplace.
        By nearly every statistical measure, OSC is operating more
    efficiently and effectively than at any time in its history.
    For example, in 2015, OSC received and resolved approximately
    6,000 cases, a 55-percent increase since I took office in 2011.
        We are also getting better results for whistleblowers. For
    instance, in 2015, OSC secured 268 favorable actions, up from
    only 29 favorable actions a few years ago.
        Beyond statistics, our successes in individual, high-impact
    cases show how OSC promotes better and more efficient
    government. For example, our work with whistleblowers has
    prompted improvements at VA medical centers across the country.
    It has saved hundreds of millions of dollars every year in
    overtime payments at the Department of Homeland Security. And
    we helped the Air Force fulfill its sacred mission on behalf of
    fallen servicemembers and their families.
        We are promoting integrity through a robust enforcement of
    the Hatch Act, and we are protecting the jobs of returning
    servicemembers and members of the Reserves and Guard.
        Many of our recommendations for OSC reauthorization would
    help to ease the burden resulting from the increased demand for
    our services. In addition to reauthorizing OSD for 5 years, we
    have some recommendations.
        First, we ask Congress to streamline OSC's access to agency
    information. This will assist our investigations of retaliation
    and reviews of whistleblower disclosures. Statutory access to
    agency records would be similar to the authorities provided to
    the inspectors general and the Government Accountability
    Office. It will help avoid unnecessary and duplicative
    government investigations and lead to quicker and better
    results.
        Second, we ask that Congress increase agency accountability
    in whistleblower disclosure cases. Over the last 3 years,
    agencies substantiated 90 percent of the allegations that we
    referred to them for investigation. Typically, the agency will
    commit to taking corrective actions to remedy the misconduct.
    But sometimes the corrective plans are insufficient or their
    actions are incomplete at the time that I send my final report
    to the President and to Congress.
        When there is substantiated misconduct, we recommend that
    Congress require agencies to provide an explanation if they
    fail to take an action, including disciplinary action. And for
    any agency action that is planned but not yet implemented, OSC
    should have statutory authority to request detailed followup
    information.
        Third, Congress should consider reducing the procedural
    requirements imposed on OSC in certain prohibited personnel
    practice cases. The current requirements are onerous and
    unnecessary. In every case, regardless of the merits, title V
    requires OSC to take several procedural steps before closing a
    file. These requirements are unique to OSC and use a large
    amount of our resources. The proposed changes would allow us to
    generate more positive outcomes on behalf of whistleblowers and
    the American taxpayers.
        Fourth, OSC recommends that Congress eliminate the annual
    survey requirement that was passed as part of a prior OSC
    reauthorization. In addition to having little statistical or
    informational value, the survey is costly and time-consuming,
    and it takes away from our other duties. We recommend that
    Congress eliminate this requirement so OSC can dedicate our
    limited resources to actual case work.
        Finally, my written testimony includes some additional
    proposals that are of a technical nature.
        I want to thank you for considering these options to
    improve OSC's authorities. I would be very happy to answer any
    questions that the committee may have.
        [Prepared statement of Ms. Lerner follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you, Ms. Lerner.
        The chair will recognize himself for 5 minutes for a series
    of questions.
        Thank you for the invitation. I can tell you we'll take
    note of that. One of the things that the ranking member and I
    enjoy doing is actually reaching out to a number of the Federal
    agencies. I've been concerned, I guess, and very surprised to
    find that many times as we have made the visit, it is sometimes
    the first time a Member of Congress has ever shown up at an
    agency. So shame on us. I am committed, along with my ranking
    member, to make sure we change that. So thank you for the
    invitation.
        Let me focus real quickly on the whistleblower aspect
    because I think we've got, Ms. Grundmann and Ms. Lerner, two
    different kinds of areas that address that. But as we look at
    whistleblowers, one of the reoccurring themes that has been
    very disconcerting to me has been the retaliation against
    whistleblowers and, in even in highlighting that, that it
    continues to go on. And so what happens is it has a chilling
    effect on those who are willing to speak up. We did an email
    address here which was a ``Tell Mark'' email address, and we
    started getting all kinds of whistleblower information, but the
    overriding concern, in fact, I've gotten from the Secret
    Service, a number of agents who have called me from New York to
    California and in between, is that they want to do it
    anonymously because there has been retaliation in real terms,
    whether it be with lack of promotion--sometimes it is more
    subtle. How do we work with your two agencies to make sure that
    we correct that? Anybody want to weigh in on that?
        Ms. Lerner?
        Ms. Lerner. Sure, well, they would start with us. And if an
    employee has a complaint, either a disclosure of waste, fraud,
    or abuse, or a health or safety issue, which we've been seeing
    in greater increasing amounts from the VA especially, they can
    come to us and say they want to do it anonymously.
        Mr. Meadows. But here is what I'm finding is, is as they do
    that, the minute they raise that profile, what happens is, is
    somehow the information leaks out. I guess my question is, is
    there any special intervention that the special counsel does
    when we see it trying to undermine the very rules that we have
    in for whistleblower protection?
        Ms. Lerner. Sure. We have a very robust Investigation and
    Prosecution Division that if there is any instance where a
    whistleblower believes that they are being retaliated against
    after having come to our agency and making disclosure, we can
    start with the agency by requesting an informal stay of any
    personnel actions. So if someone is threatened with their job
    or even threatened with like a demotion or a move, we can go to
    the agency and say: You need to stop; we think there is a basis
    here.
        If they won't agree voluntarily to stop the adverse action,
    we can go to the Merit Systems Protection Board and formally
    ask them to do it.
        I should tell you: Whenever we make a disclosure or send a
    disclosure over to an agency, we include in our referral sort
    of a warning that says, ``You need to make sure and take active
    steps to make sure there is no retaliation against the
    whistleblower.''
        Mr. Meadows. So which agencies would you say have the worst
    track record as it relates to protecting whistleblowers.
        Ms. Lerner. Well, in terms of pure numbers, we get the most
    complaints--in the last 2 years--from the Veterans
    Administration.
        Mr. Meadows. But they feel a protection because it has been
    high profile. So outside of Veterans, who would it be?
        Ms. Lerner. Our second--well, I'm not sure that they do
    feel protection. I mean--I'm sorry, the whistleblowers feel
    protection, or the VA does?
        Mr. Meadows. No. Which agencies have the poorest record of
    protecting the whistleblowers? For example, giving retaliation
    in such a way that may not be direct retaliation, but it's
    indirect retaliation in that they get transferred or they don't
    get to move up because the retaliation is a lot more subtle a
    lot of times than what we're seeing. How do we address that?
        Ms. Lerner. I think the first way is to send a strong
    message, has to start from the top of the agency that says:
    Retaliation isn't going to be----
        Mr. Meadows. I guess what I am looking for is for this
    committee, what would be the three agencies we would need to
    look at closest as it relates to whistleblower retaliation?
        Ms. Lerner. In terms of pure numbers, the VA is first.
        Mr. Meadows. Okay. Who's second?
        Ms. Lerner. Second is the Department of Defense. And I
    should note that the Department of Defense has double the
    number of civilian employees as the VA.
        Mr. Meadows. And who would be third?
        Ms. Lerner. Department of Homeland Security is probably----
        Mr. Meadows. So all big, big----
        Ms. Lerner. The large agencies have the largest numbers. I
    should say that the one agency where we have received a
    surprisingly small number of complaints is from the Secret
    Service.
        Mr. Meadows. I can tell you that's very troubling because
    they have found my phone number, and I'm getting--you may get
    the smallest amount, but I can tell you also--and I know that
    he slipped you the note that you have got the smallest amount.
    I can give you a plethora of complaints as it relates to that.
        One of the instances that I'm very concerned about is that
    once a whistleblower had made one particular comment, that
    there was an interview of almost every single employee trying
    to find out who that person was, and that's the kind of
    draconian management style that this committee is not going to
    adhere to. I'll go ahead and recognize the ranking member for 5
    minutes for his questions, a generous 5 minutes.
        Mr. Connolly. Thank you, Mr. Chairman.
        Ms. Grundmann--if we can hold on time.
        Ms. Grundmann?
        Ms. Grundmann. Yes. I just want to chime in very quickly.
    We have essentially two answers for you. The first is we come
    on the back end after OSC has done their work. So we are the
    adjudicator in this process. The front end part is actually in
    our studies program, and if you look at our report on
    whistleblowing and barriers to whistleblowing, we actually ask
    people: Are you seeing prohibitive personnel practices? What
    happens when you see them? And what happens if you disclose? Is
    there retaliation? So through the studies program, we get a
    plethora of answers--some of them multiple choice, some of them
    essay--that will talk about this anonymously and that we can
    analyze and then we can also publish. Thank you.
        Mr. Connolly. Thank you, Mr. Chairman.
        Chairman Grundmann, why has it taken 8 years to get to the
    point where we're hopefully going to consider reauthorization?
        Ms. Grundmann. There was an attempt previously to do, so it
    just sort of fell off the wagon, I guess, and was forgotten.
        Mr. Connolly. Congress fell off the wagon?
        Ms. Grundmann. Not Congress, but it never came to fruition,
    if you will.
        Mr. Connolly. Director Shaub, same question, from your
    perspective.
        Mr. Shaub. I don't actually have an answer for that. We
    have not had an authorization hearing since 2006.
        Mr. Connolly. 2007.
        Mr. Shaub. That's right. It ran out at the end of 2007. We
    have requested that from time to time. So I'm very pleased that
    you're holding the hearing this year, and we're thankful for
    being here.
        Mr. Connolly. Well, we didn't rush into it. We have 2-1/2
    days left in this session, but all right.
        Special Counsel Lerner, your perspective.
        Ms. Lerner. When I was nominated in 2011, I was told that
    the agency hadn't been reauthorized.
        Mr. Connolly. I can't hear you. I'm sorry.
        Ms. Lerner. Sorry. My mic is on.
        Mr. Connolly. Yeah, but you've got to speak into it.
        Ms. Lerner. When I was nominated to be special counsel in
    2011, I was told that the agency hadn't been reauthorized in a
    few years. And, frankly, it gave me a little bit of a pause to
    take the job because not knowing whether the agency was going
    to be around. But I was assured that it would be; we just
    needed to have a reauthorization process started. And it's
    something that we've been asking for periodically since I
    became special counsel. I'm really pleased that we're here
    today. Thank you.
        Mr. Connolly. Well, we've got sort of a different spirit on
    this committee, the leadership of Mr. Chaffetz, and hopefully
    we'll use that spirit on a bipartisan basis to try to rectify
    that situation. I mean, there is just no excuse for going 8
    years without a reauthorization.
        Chairman Grundmann, in your testimony, you raised concerns
    about the Veterans Access, Choice, and Accountability Act of
    2014 that allows the VA Secretary, at his or her discretion, to
    fire a senior executive without prior notice or the opportunity
    to respond if the Secretary determines performance of the
    individual warrants its action. The act provides an expedited
    appeal process but after the determination.
        What's the nature of your concern about that?
        Ms. Grundmann. On the constitutional side?
        Mr. Connolly. Whatever you want to share with us.
        Ms. Grundmann. In the operations?
        Mr. Connolly. Speak as colorfully as you have already;
    Congress falling off the wagon is a great image.
        Ms. Grundmann. That's dangerous.
        Mr. Connolly. Cartoonists heed. All right.
        Ms. Grundmann. Twofold. The constitutionality of that
    particular law is being litigated right now in the Federal
    circuit. No doubt we will have a decision in some course of----
        Mr. Connolly. And that is about due process.
        Ms. Grundmann. It is about due process. It is also about
    the appointments clause in the Constitution. The argument is
    that if you eliminate three Presidentially appointed board
    members from the process all together and delegate that
    authority to a, quote, ``not a principal employee'' and have
    that decision be final without board review, without court
    review, that is a violation of Article II, Section 2, of the
    appointments clause.
        There is the constitutional argument on due process as
    well, and due process is prior notice and an opportunity to
    respond. That is also being litigated.
        Mr. Connolly. Well, is that a constitutional issue, or is
    that just a practice? I mean, in the private sector, you're not
    entitled to those protections. I mean, if the boss decides
    you're not performing, you're an at-will employee, and you can
    be terminated.
        Ms. Grundmann. You're absolutely right. But according to
    Supreme Court case law, Loudermill has told us repeatedly that
    Federal employees have a property interest in continued
    employment, the depravation of which must be accompanied by
    opportunity--advanced notice and opportunity to respond,
    nothing more, nothing less.
        You raise a really good point, and this gives me an
    opportunity to talk about how that act has impacted our
    operations. So far, we've only seen seven cases under the VA
    Accountability Act.
        Mr. Connolly. So abuse of that new authority is not yet a
    problem holding in abeyance the merits of those seven.
        Ms. Grundmann. Well, two of them were withdrawn. It's not
    the abuse of the authority; it is how it impacts our
    operations. What the law says is that once an employee files,
    he or she is entitled to a full hearing. And that hearing for
    us means discovery, motions, the opportunity to raise
    affirmative defenses, a full hearing, prehearing conferences,
    along with a written decision. And if you look at some of the
    decisions that we have issued--and we have only issued two
    written decisions--they are about 60 to 70 pages long. It is
    not a summary decision.
        Mr. Connolly. But let's remember the genesis of the bill:
    It was a growing frustration on the part of veterans, of the
    public, of this Congress. And the inability to assign
    accountability to Veterans Administration officials--everyone
    was kind of pointing somewhere else, and meanwhile, the backlog
    grows; falsification of medical records expanded; treatment was
    inadequate and, in some cases, nonexistent; getting an
    appointment became, in some places, very difficult. And these
    are our veterans. And there was deep outrage up here, and we
    had to weigh expediting the process determination to hold
    people accountable against process. And while no one wants to
    make light of due process, that was the balancing act we were
    looking at. Your comment on that?
        Ms. Grundmann. Yeah, I understand completely the genesis of
    this bill. And let me just share with you a question, a
    thought. When these cases come to us, and this is not just the
    VA, but any case, the employee is off the payroll. They are not
    being paid during the time they are litigating before us. We
    wonder--and it's a question--whether or not the bill is
    actually doing what it's supposed to do. Agencies may act--the
    VA, I don't know this, may actually be taking longer to prepare
    for these cases because they have to finish the case in
    essentially 18 days.
        Mr. Connolly. Yeah.
        Ms. Grundmann. During the time they are investigating and
    preparing their case on the front end, the employee is still on
    the payroll. So is it having the same effect? Shortening the
    processing period doesn't get rid of the employee faster;
    they've already been removed. It just determines whether or not
    the removal was proper.
        Mr. Connolly. Well, we look forward to working with you on
    this. I think it is a conundrum.
        Ms. Grundmann. Yes.
        Mr. Connolly. And no one wants to trample overdue process
    and the rights of Federal employees, but we do not want to
    sacrifice accountability, especially in the case of men and
    women who put on the uniform and serve the country.
        Ms. Grundmann. In order for us to get involved, an agency
    has to act first.
        Mr. Connolly. Yeah. Okay. I wish I had more time because I
    think this is a very important issue.
        Thank you, Mr. Chairman.
        Mr. Meadows. I thank you.
        The chair recognizes the chairman of the full committee,
    Chairman Chaffetz, for a series of questions.
        Mr. Chaffetz. Thank you. I thank--to all three of you for
    your good and important work.
        Mr. Shaub, I want to direct my comments to you, if I could.
    You work with some very important issues dealing with ethics.
    You work with some 4,500 ethics officials in more than 130
    different agencies. I want to focus on honorarium, particularly
    as it relates to public appearances and speaking. Can a
    government official act as an official agent for a charity or a
    foundation?
        Mr. Shaub. There's no specific prohibition on the types of
    outside employment you can have in that regard, but we have to
    distinguish between the types of government official we're
    talking about.
        Mr. Chaffetz. If it is a Senate-confirmed position, can you
    act as an agent for a foundation?
        Mr. Shaub. Certainly not for pay and certainly not as a
    representative to the government. There's an outside earned-
    income prohibition in a longstanding executive order so they
    can't earn honoraria, and they can't represent anyone back to
    the government, so it would have to be an outside activity
    where they would speak for free, but they----
        Mr. Chaffetz. But what if there is compensation to a
    foundation?
        Mr. Shaub. A government official themselves--I--could not
    speak for any compensation without violating the earned-income
    ban, even if they subsequently donated it to someone else.
        Mr. Chaffetz. What if somebody went and spoke and then that
    money was directed or given to a foundation----
        Mr. Shaub. Right.
        Mr. Chaffetz. Do they have to disclose that?
        Mr. Shaub. The disclosure depends on whether the money was
    paid to them as an individual speaker and then they chose to
    donate it to a charity, or whether you're acting as an agent of
    some sort of charity. A comparable example would be, for
    instance, if you were working for a car dealership and you sold
    a car, you would not report the income from the sale of the car
    because that's income of the car dealership.
        Mr. Chaffetz. Let's go back. Can you be an agent, a Senate-
    confirmed person, can they be an agent of a foundation?
        Mr. Shaub. Not if they are representing the foundation to
    the Federal Government, but there is no legal prohibition on
    serving as an agent for an outside entity in an outside
    activity.
        Mr. Chaffetz. Do you have to disclose that?
        Mr. Shaub. Your role as an agent?
        Mr. Chaffetz. Yeah.
        Mr. Shaub. If you have a position with an outside entity,
    that would be disclosable on the form.
        Mr. Chaffetz. So you have to disclose that.
        I want to bring up--there have been--there has been a lot
    of controversy with Secretary Clinton and the lack of candor in
    her financial disclosures. I will go back to the Wall Street
    Journal article in May of this year. The spokesperson, Mr.
    Salamone, who works for you, commented directly on that case.
    Did you review that case?
        Mr. Shaub. I'm hoping I'm remembering the correct one. The
    one I recall was a question not about Secretary Clinton's
    speaking activities but about her husband--the former
    President's speaking activities. The question Mr. Salamone was
    asked, if I'm recalling correctly, was, would he be--would she
    be required to report honoraria paid in compensation for his
    speaking if he was acting as an agent for a foundation as
    opposed to acting in a personal capacity. And Mr. Salamone
    correctly answered, consistent with our longstanding view of
    government financial disclosure requirements, that that would
    not be required to be disclosed if he was acting as an agent
    for the foundation, in contrast to a situation where he went
    out on his own, gave a speech, and then donated the funds to a
    charity.
        EDTR ROSEN
        Mr. Chaffetz. How could he not be an agent for the Clinton
    Foundation? It is under his own name.
        Mr. Shaub. I think our understanding was he was an agent,
    so that's why it was not required to be disclosed.
        Mr. Chaffetz. So where is that found in the rules?
        Mr. Shaub. The statute is a very long, very detailed
    statute.
        Mr. Chaffetz. I have it in front of me, and I went on your
    Web site. He is what your Web site says, ``Do I report payments
    donated or directed to charity?'' Yes, you must report
    honoraria as usual.
        Mr. Shaub. Right.
        Mr. Chaffetz. And then if You look at the code, it goes on
    saying that filers are expected to, and I quote, ``the source,
    date, amount of honoraria from any source received during the
    preceding calendar year aggregating $200 or more in value,
    effective January 1st, 1991. The source, date, amount of
    payments made to charitable organizations in lieu of honoraria.
    And the reporting individual shall simultaneously file with the
    applicants supervising ethics office.''
        Mr. Shaub. Right. So that's interpreting section 102(a) of
    the appendix to Title V under the Ethics in Government Act.
        Mr. Chaffetz. Correct.
        Mr. Shaub. That is a provision that applies to your own
    earnings if you go out and speak on behalf as your own
    individual, on your own behalf, earn it and subsequently donate
    it. And we have been very consistent in requiring. But it is
    not even a close call as to whether it would be reportable if
    you're acting as an agent of a foundation. It is not even a
    close call. I can tell you unambiguously, that's not
    reportable.
        Mr. Chaffetz. Why isn't it reportable? I don't understand.
        Mr. Shaub. Well, it is for the same reason as the car
    dealership example. Another example is, we've had nominees--you
    know, I've handled nominee reports personally under both the
    Bush administration and the Obama administration. I have been
    doing this for a long time. We've had a lot of nominees over
    the years who have been attorneys. They have to follow nominee
    incoming financial disclosure reports. So although while they
    are an appointee, they would be covered by outsider and income
    ban, and there would be no income or honoraria to report;
    nominees are the perfect comparison to a Presidential candidate
    or the appointee who has a spouse doing outside speaking, as in
    this case, where they do have income to report. And, so, they
    report their earnings from the law firm, but they do not report
    each individual payment from each individual client. It is
    simply not required by the financial disclosure laws. Now you
    have within, you know, within your power to change those laws,
    but it is not----
        Mr. Chaffetz. I'm not understanding where the rule or where
    you can point to in the law, where you have this
    distinguished--Mr. Salamone said, quote, ``Disclosure of
    speaking fees is not required when the public filer or the
    filer's spouse is acting as agent of an organization, and
    payment it made directly to that organization.'' Where is that
    found in the rule?
        Mr. Shaub. 5 U.S.C. appendix section 102(a).
        Mr. Chaffetz. Okay. We may be looking at that differently
    than you are, but I would really love to have some details. Why
    wouldn't we have that disclosed? I just--if you're trying to
    maintain the maximum amount of transparency which you report to
    do, it says the OGE makes sure that the nominees and
    Presidential candidates have complied with extensive
    requirements for financial disclosure under the Ethics in
    Government Act. Have you investigated this situation with
    Secretary Clinton?
        Mr. Shaub. The--so that's a two-part question. I'll answer
    the first question first, why don't we pursue maximum
    disclosure?
        Mr. Chaffetz. Yeah.
        Mr. Shaub. Anything that could be potentially relevant or
    interesting to anyone. And it is simply because we're a Nation
    of laws, and OGE is specifically regulated by an extremely
    detailed, highly prescriptive statute. Congress left us almost
    no discretion in terms of interpreting this statute. We apply
    it uniformly to everyone across the board, highly detailed.
    It's not the statute that I would have written, as evidenced by
    the fact that OGE has a confidential financial disclosure
    system where Congress left us the ability to write our own
    rules. We wrote very different rules for those.
        But we are bound by the laws as they are written, this has
    been OGE's long-standing interpretation across the board,
    whether you're a car salesman, an attorney, a Member of
    Congress. Anybody coming into the executive branch, you
    disclose income paid to you that you earned yourself, act in
    your own capacity, or you disclose income from an entity, but
    you don't disclose every payment to that entity. We've been
    absolutely uniform, it is not even a close call.
        Mr. Chaffetz. So when you show up and give a speech, is
    that--I mean, that seems like a direct payment. There is a
    reason why the University of California, Los Angeles, paid
    $250,000 to the Clinton Foundation it is because Secretary
    Clinton showed up and gave a speech.
        Mr. Shaub. I have no doubt that they paid that money
    because he gave a speech?
        Mr. Chaffetz. She gave that speech, she gave a speech.
        Mr. Shaub. Sorry, I misunderstand.
        Mr. Chaffetz. She did. She was Secretary of State.
        Mr. Shaub. Okay.
        Mr. Chaffetz. And that's why is I'm curious: Is she an
    agent for the Foundation? Is she the Secretary of State? How do
    you determine what's what?
        Mr. Shaub. Well, I can say for sure she did not have a
    position, but that does not preclude----
        Mr. Chaffetz. She didn't have a position what?
        Mr. Shaub. She did not have--she did not hold a formal
    position with the Foundation while she was in the government
    but----
        Mr. Chaffetz. But--so she wasn't an agent?
        Mr. Shaub. No. Those are different questions. The question
    of whether somebody holds a formal position, Vice President,
    President----
        Mr. Chaffetz. Right.
        Mr. Shaub. --Secretary, is very different from whether
    you're acting as an agent. There is an entire----
        Mr. Chaffetz. So was she an agent or not an agent?
        Mr. Shaub. Well, we don't investigate their reports so I
    can tell you if----
        Mr. Chaffetz. Wait. Why don't you investigate their
    reports?
        Mr. Shaub. Well, we don't have the authority.
        Mr. Chaffetz. That's not what you said in your testimony.
        Mr. Shaub. Well, I believe it was.
        Mr. Chaffetz. Your testimony said, OGE makes sure that the
    nominees and Presidential candidates have complied with the
    extensive requirements for financial disclosure under the
    Ethics in Government Act.
        Mr. Shaub. That's exactly what we do.
        Mr. Chaffetz. Well, how do you do that if you don't
    investigate it?
        Mr. Shaub. We have to take the facts as they are asserted
    at face value, and then using those facts, we determine whether
    they've complied with requirements. The reason Congress made
    these reports public----
        Mr. Chaffetz. How can you do that without investigating?
    You don't ask any questions?
        Mr. Shaub. It is the same practice as the House Committee
    on Ethics when they review your financial disclosure report.
    They don't bring you in for an audit and conduct an
    investigation. We don't do that either. We follow the industry
    standards of the Senate Ethics Committee, the House Ethics
    Committee, the Office of Congressional Ethics, the Ethics
    Office for the judicial branch.
        Mr. Chaffetz. Do you do any investigations?
        Mr. Shaub. In the 37 years that OGE has existed, it has not
    done a specific investigation. We haven't had, to, because we
    have a 14,000-member inspector general community. We work
    extremely closely with them. We have been involved in
    investigations, though not leading them. We assist them, in
    great detail, in understanding these highly complex ethics
    laws, the conflicts of interest laws, the standards of conduct,
    we work closely with them.
        We also get calls frequently from prosecutors when they
    prosecute these cases. We work with them to help them
    understand it. We also conduct training for both of them.
        So as I said, OGE gets part of the larger framework for
    integrity in the executive branch. We have our role to play,
    which is strictly laid out by statute and we adhere to our
    role, but it is one important piece in a framework consisting
    of multiple executive branch entities.
        Mr. Chaffetz. And I'm just suggesting that you're just
    shuffling paperwork. If you are just taking everything at face
    value and then reprinting it and putting it up on the shelf--
    what good are you? Why should we even have you if you're not
    going to actually review them, hold people accountable, and do
    any investigation? I mean, what is it that they would actually
    do? Let me read what you had written. This is your testimony
    today.
        OGE makes sure that the nominees and Presidential
    candidates have complied with the extensive requirements for
    financial disclosure under the Ethics in Government Act. These
    requirements are highly complex, and ensuring full compliance
    is labor intensive. OGE's goal, with regard to a nominees's
    disclosure, is to ensure that the Senate receives a complete
    accounting of relevant financial interest in order to
    facilitate its advice and consent role in considering the
    President's nominees.
        The goal as to Presidential candidate is to provide the
    electorate with similar information. That's a bit of a stretch,
    isn't it?
        Mr. Shaub. It is not a stretch at all. This is----
        Mr. Chaffetz. You do no investigations. You--I question,
    Mr. Chairman, why we have such an agency, because if they are
    just taking it at face value, and then putting it in a file,
    what if you saw something that was askew?
        The Wall Street Journal said that Secretary Clinton's
    disclosure--not included in the disclosure were payments for at
    least five speeches that Mrs. Clinton directed to her family's
    Foundation. So----
        Mr. Shaub. Unfortunately, the House is not involved in our
    Senate confirmations work, so you're not as familiar with it.
        Mr. Chaffetz. It's a Presidential candidate, it's
    different. There is if no Senate confirmation. We understand
    that.
        Mr. Shaub. Well, it was a multipart question. I was
    answering the earlier question about what we do with nominees.
        Mr. Chaffetz. I'm asking about Presidential candidates. And
    there is a lot of controversy swirling around here, and you're
    trying to parse words by saying, well, if you're an agent, you
    have to disclose, if you're not an agent, you don't have to
    disclose it. I don't know how you distinguish whether somebody
    is an agent or not, because on the one hand, the Foundation's
    in Secretary Clinton's name. On other hand, she, definitively,
    according to you, is not an agent of a Foundation, or she
    doesn't have a title within that organization. I don't know
    what good you are if you don't do this kind of work.
        Mr. Shaub. Well, that's an incorrect characterization of my
    statement. I did not say we concluded she is not an agent. We
    said she did not hold a formal position within. Those are two
    different things.
        Your question on how you determine whether someone's an
    agent, there is an entire body of law and the law of agencies
    that's well-established in the common law.
        Mr. Chaffetz. I've gone way over my time. In the case of
    Secretary Clinton speaking, for instance, at UCLA, did you do
    any sort of investigation to figure out whether or not she was
    an agent?
        Mr. Shaub. We did not investigate the factual circumstances
    that she reported.
        Mr. Chaffetz. So, and the problem I have is, you go out and
    comment as the authority leading one to believe that, quote,
    ``disclosure of speaking fees is not required when a public''--
    and to comment on a specific case when you have not
    investigated it, I think is wrong.
        Mr. Shaub. We reported on the legal requirement and where
    you've compared factual analysis with legal analysis. You have
    to take the facts at face value, that's why the reports are
    public, so that they can be challenged. This is a good decision
    for the public to have. It is a good conversation----
        Mr. Chaffetz. It is good information to have.
        Mr. Shaub. --for Congress to have. But our role is legal in
    this respect; we can tell you that if the facts are that they
    are an agent, the information is not disclosable on part A of
    the form.
        Mr. Chaffetz. Help us understand what an agent actually is.
        Mr. Shaub. An agent?
        Mr. Chaffetz. Yeah.
        Mr. Shaub. An agent is someone who acts on behalf of
    another. That's the simplest statement; the body of law fills
    treatises, but the simplest statement is someone acting on
    behalf of another.
        Mr. Chaffetz. So it says, quote, ``the rule is different
    when the speaking is done in a personal capacity and the fees
    that are directed are donated to a charity, in which case
    disclosure would be required.''
        Mr. Shaub. These are the same rules that applied to Members
    of Congress and to Senators and to Presidential----
        Mr. Chaffetz. Don't confuse your branches here for a
    second. We're talking about executive here.
        Mr. Shaub. There is one statute that applies to all three
    branches. Congress has been very firm in wanting parity among
    the branches, so they passed only one statute that is
    applicable to all three branches. We have regular meetings with
    our colleagues in the House and Senate and the Judicial Ethics
    Office to make sure we're all on the same page and we are
    interpreting these. We have a regular three-branch forum. It is
    three branches, but it is actually four offices, because you
    also have the Office of Congressional Ethics.
        We meet as a group, we talk about the interpretations of
    laws and regulations. And OGE has a great deal more experience
    than they do, simply because we handle a much higher volume. So
    we often take the lead in helping others to understand how we
    interpret----
        Mr. Chaffetz. You shuffle paperwork. There is no
    consequence. There is no accountability. There is no review and
    there is no investigation. Why do we need you? If the law is
    crystal clear, you know, I--well, if you're an agent, you don't
    have to disclose; if you're not an agent, you do have to
    disclose. Your name's on the Foundation, and yet, they weren't
    disclosed. Does that really add up to you?
        Mr. Shaub. Sir, I don't think we just push papers. The work
    of reviewing these financial disclosures----
        Mr. Chaffetz. What do you do when you review it? Is there
    an analysis?
        Mr. Shaub. There is an intensive analysis of every----
        Mr. Chaffetz. Where is the conclusion of that analysis?
        Mr. Shaub. The conclusion is the certification by the
    director of the Office of Government Ethics, or the chair of
    Senate Ethics Committee, or the chair of the House Ethics
    Committee.
        Mr. Chaffetz. In the case of a Presidential candidate, do
    you certify?
        Mr. Shaub. I certify the reports. And I can tell you, there
    isn't a major party candidate whose reports we didn't require
    substantive changes on. Our detailed analysis we went back to
    every single Republican or Democrat who was running for
    Congress right now and made them make significant changes on
    their----
        Mr. Chaffetz. I'm talking about Presidential candidates,
    I'm talking about Presidential candidates, you keep trying to
    get--you said congressional candidates.
        Mr. Shaub. No, I'm sorry, if I said congressional----
        Mr. Meadows. I think you just misspoke.
        Mr. Shaub. I'm sorry. I apologize. I was talking
    Presidential candidates. There isn't a major party candidate
    whose reports we haven't gone back to. And it is a very
    intensive back-and-forth process. We ask them questions. We
    say, have you fully disclosed this? Is there more information
    on this? Do you understand that the law requires that? These
    are very detailed interactions. I don't think there is a
    Presidential candidate out there right now who has great love
    for us, because we've made them do so much work on their
    reports.
        Mr. Chaffetz. And is all that information, if somebody
    submitted a FOIA, can they get all that information?
        Mr. Shaub. You don't even have to submit a FOIA. They're on
    our Web page. And we have them annotate--we made the candidates
    themselves initial each change on the report. So every page
    that has changes, you can see the initials. You could see the
    reports as they were certified by the Federal Election
    Commission, which receives the reports. They do the first line
    review. Their focus is mostly on getting the right people to
    file the right reports by the right deadline. Then they get
    them to us, and we get involved in the substantive work. We
    roll up our sleeves. We spend a lot of time. I'm sure these
    candidates are appreciative of the work we do, but I'm sure
    they also would have rather spent their money on something
    other than having to make all the changes we've sent them back
    to do. But we felt we were obligated by the law to hold them
    accountable to meet the financial disclosure requirements.
        Now, if there are factual discrepancies, that's the reason
    they're publicly available. So that they can go through the
    rigorous scrutiny of the press, the American people, Congress.
    There are plenty of eyes looking at these reports. And some of
    them may have information that they can contradict the factual
    assertions. But we make sure they're legally compliant.
        Mr. Chaffetz. I have lots more questions, but I will yield
    back.
        Mr. Meadows. I thank the chairman.
        Let me go ahead and follow up on a little bit of this.
        Ms. Grundmann, one of the things that I would like, as we
    look at the reauthorization of your particular agency, is if
    you would look quantitatively, and maybe a little bit more
    forward thinking in terms of what are the type of reforms that
    you say: Golly, I wish this were happening, or that were
    happening. Because as we relate to that, sometimes we get used
    to the laws and the rules that we have grown up under. And just
    like Director Shaub was just talking about a few things that he
    would have written differently, those are the kind of things
    that as we look to reauthorize what we'd like to do is not only
    look at the reauthorization, but perhaps other legislation that
    needs to accompany that.
        And before the ranking member left, we agreed we're going
    to let him take the lead on one of those. I think he chose your
    particular group that he's going to take the lead on. I'm going
    to take the lead on the other two, as we start to work towards
    that. But are you willing to provide that to the committee?
        Ms. Grundmann. We are always willing to provide assistance,
    with one tiny caveat. That----
        Mr. Meadows. Those little caveats are always the troubling
    pebble in the shoe. But go ahead.
        Ms. Grundmann. Kind of like a footnote. If these laws would
    come to us for interpretation, you know, we're the adjudicator
    in the case. That's the only caveat.
        Mr. Meadows. We understand that. And so we'll keep that in
    mind----
        Ms. Grundmann. Call us.
        Mr. Meadows. --and be sensitive to that.
        Ms. Lerner, I want to come back. You mentioned earlier
    about getting rid of a survey. Which survey were you talking
    about?
        Ms. Lerner. Sure. It's an annual survey that was put into
    effect during a prior reauthorization. It requires that we----
        Mr. Meadows. What's the name of it?
        Ms. Lerner. Hold on.
        Mr. Meadows. It's not the employee satisfaction survey, is
    it?
        Ms. Lerner. No. No. It's--I don't have the--I have a copy--
    --
        Mr. Meadows. Okay. You can get that to me later. I can see
    them, you know, with puzzled looks behind you. And so as we
    look at that, and I say that in a kind way. What I'd love to do
    is you said it was statistically not valid.
        Ms. Lerner. Yeah.
        Mr. Meadows. Why is that?
        Ms. Lerner. Because it has an incredibly low response rate.
        Mr. Meadows. Does it have an incredibly low response rate
    because you do nothing with it?
        Ms. Lerner. No. No. No. We have to, by statute. We send it
    to----
        Mr. Meadows. I know, but you only fill out surveys if you
    think that they're making a difference. So I guess that's what
    I'm saying is, is do the people who will fill them out see no
    value in it because nothing happens with it, it just gets put
    on a shelf?
        Ms. Lerner. Not sure why they fill it out or why they
    don't. I can tell you that we mailed out 3,500--over 3,500 in
    fiscal year 2014. Three hundred and fifty-five people returned
    them. These are folks who have come to our agency and asked for
    help. And we can't help everybody who comes to us. And the fact
    is that, you know, the folks who returned the survey, we had a
    10 percent response rate. And of the 10 percent who responded,
    very few of them feel like they got what they asked for. And
    it's not statistically significant if we're only getting a 10
    percent response rate.
        Mr. Meadows. Well, statistically some would argue contrary
    in terms of that response rate, but in terms of what you do
    with that. Here's what I would ask for. If you would get us the
    survey that you're talking about. Obviously, what has happened
    historically and what has not happened historically with that.
    If you would get that to the committee, and we'll look at that
    as we look at the reauthorization. I'm one that, you know, if
    you're just doing busy work, I'm all for streamlining. I think
    that was in your testimony about streamlining some of that. And
    I'll be glad to look at that.
        Ms. Lerner. We are taking some actual concrete steps to be
    responsive and be better about customer service. We just
    finished a study of everyone who participated in our mediation
    and alternative dispute resolution program.
        Mr. Meadows. So do you participate, as Ms. Grundmann--and
    congratulations on being fifth most improved, did you say?
        Ms. Grundmann. Fifth most improve in small agencies.
        Mr. Meadows. Okay. Do you participate in the public/private
    partnership surveys?
        Ms. Lerner. Yes.
        Mr. Meadows. Okay. All right. And so----
        Ms. Lerner. That's a different--that's completely
    different. This is the folks--this survey is the folks who come
    to OSC with----
        Mr. Meadows. And they're evaluating you?
        Ms. Lerner. Yes. The agency. The results that they got at
    the agency.
        Mr. Meadows. And so you're saying that those results, they
    say they don't get helped. Is that what you said?
        Ms. Lerner. Well----
        Mr. Meadows. Is that 10 percent of the people say that they
    don't get helped. Is that your testimony?
        Ms. Lerner. No. We get a response rate of 10 percent.
        Mr. Meadows. But the majority of those I think you said
    feel like they didn't----
        Ms. Lerner. That's right. They did not get what they were
    seeking when they came to our agency. That's right.
        Mr. Meadows. So based on that 10 percent response rate and
    those survey results, what have you changed operationally?
        Ms. Lerner. What we've done is tried to actually get some
    concrete feedback from the people who come to our agency. For
    example----
        Mr. Meadows. All right. So if we were to do away with the
    survey and say that's no longer a requirement, how would you
    evaluate whether you're doing a good job or not? How would you
    know whether you're getting a A or an F?
        Ms. Lerner. Well, I think our results really speak for
    themselves in terms of the number of corrective actions that
    we've gotten. Before I came, they were in around 20 a year
    corrective actions for complainants. Last year they were around
    280.
        Mr. Meadows. So would you be willing----
        Ms. Lerner. I would say that those are pretty substantial--
    --
        Mr. Meadows. So would you be willing to put forth a matrix,
    kind of a dashboard of sorts, so we can evaluate? Because, you
    know, it's one thing with you there and you're taking it on
    personally. It would be another when there's a new special
    counsel there. How do we compare apples to apples and----
        Ms. Lerner. Look at our actual results. Look at--look at
    the cases that we are bringing to you.
        Mr. Meadows. Right. And I guess that's what I'm saying. I'm
    willing to look at that matrix if you can come up with a
    reporting standard that reports to this committee and says:
    Okay. Here is a matrix on how we decide whether we're getting--
    you know, doing a good job or a bad job. And we're willing to
    look at that. I'll get with minority staff and see about
    changing that. But I want to make sure it's quantifiable. You
    know, it's kind of like we've done with FITARA. You know, most
    of the agencies got Fs and Ds. But that was a good start. It
    set a benchmark for where we needed to go. And I guess what I'm
    needing is the same thing from you on how we determine whether
    you're doing a good job or not.
        Ms. Lerner. Yeah. Look at our cost per case, which has gone
    down significantly.
        Mr. Meadows. That's what I'm saying. If you'll get that to
    committee, we're willing to evaluate that.
        Ms. Lerner. Very happy to work with you on that.
        Mr. Meadows. Does that make sense?
        Ms. Lerner. Sure thing.
        Mr. Meadows. So Director Shaub, let me finish with you.
    Because you've mentioned the inspector generals in CIGIE and
    your close relationship, I guess, is the way that you just
    characterized it with Chairman Chaffetz in terms of working
    with them. How, in that passing of the baton, between you and
    the inspector general, or inspectors general, who do you leave
    it up to for enforcement? Because we get an IG's report, and it
    depends on, you know, what chairman, what subcommittee
    chairman, whether there's a hearing, and whether it gets
    highlighted. How do you pass the baton? Because I think in your
    testimony with Chairman Chaffetz, you said that you don't
    investigate. You leave that up to the IG. Is that correct?
        Mr. Shaub. That's correct.
        Mr. Meadows. All right. So if the IG finds something that
    is egregious, what happens?
        Mr. Shaub. Well, at that point, assuming it was a criminal
    violation, we would----
        Mr. Meadows. No. Let's say it's ethical. Let's say it's
    ethical and not criminal.
        Mr. Shaub. Okay.
        Mr. Meadows. Okay? So what happens?
        Mr. Shaub. So if, for example, it was the standard of
    conduct and it was a violation of a provision that was not
    criminal, the next mechanism that would need to come in place
    would be disciplinary action. IGs will write reports. Sometimes
    they'll recommend action. Other times they'll state
    conclusions, and those will go back to the agency----
        Mr. Meadows. So how many IG reports have you gotten to have
    action? Would you be the one that would do the action?
        Mr. Shaub. No. The agencies each have the authority to take
    individual action against the employees.
        Mr. Meadows. All right. Then let's assume it's the head of
    the agency.
        Mr. Shaub. Right.
        Mr. Meadows. What happens?
        Mr. Shaub. Well, if it's the head of the agency, then a
    decision's not going to be made by the agency. The President's
    the only one with the authority to----
        Mr. Meadows. All right. Well, let me--so how often is the
    President going to do that with one of his nominees?
        Mr. Shaub. Well, I hope every time that----
        Mr. Meadows. Yeah. I would hope so, too, but I'm not as
    confident as you are that that would happen. So let me quit
    beating around the bush and share one particular issue that I'd
    like you to look into and report back to this committee.
        It was an IG report that was done by an Inspector General
    Roth. It was a very scathing report of Mr. Mayorkas as it
    relates to EB-5, the potential ethical bounds of interference
    in terms of visa applications. You know, there were some
    allegations of interference at the very highest level, which
    would include some elected officials in very nearby States.
        I read it. I could not believe it, because normally, the
    inspectors general are not that scathing in their report. And
    as I read this particular issue, it really is something that
    was troubling. Obviously, Mr. Mayorkas didn't agree with that.
    But being where he is in that particular agency, so the only
    person that could hold him accountable would be the President?
    Is that what you're saying? So you don't have the authority to
    do that?
        Mr. Shaub. You know, I have to beg your pardon. I remember
    reviewing Mr. Mayorkas' financial disclosure report----
        Mr. Meadows. Yeah, and this is not financial disclosures.
    This really has to do with the fact that he was intervening on
    behalf GreenTech Automotive, one where Mr. Clinton, President
    Clinton, had given a speech. All of a sudden, there was money
    that came over. I mean, it was--you know, I'm not a conspiracy
    theory kind of guy, but when you look at connecting the dots,
    it was very troubling. And the fact that the inspector general
    would look at that and have employees, whistle blowers, within
    the agency that said they felt like Mr. Mayorkas had acted
    improperly, where does that go? Because the inspector general
    felt like he had done his job. And so does it come to us, or
    who would investigate that?
        Mr. Shaub. So the reason I mention his report is I was
    going to tell you I can't remember his exact position, his
    position title. Was he assistant secretary? Under Secretary?
        Mr. Meadows. I don't recall either. So----
        Mr. Shaub. In any event, he works, then, for the State
    Department and would report----
        Mr. Meadows. Well, this would--well, so who----
        Mr. Shaub. It wouldn't be the President. It could be--the
    head of the agency could take some action.
        Mr. Meadows. So your agency has no role in that whatsoever?
    Should you have?
        Mr. Shaub. When an IG is conducting an investigation, we
    don't want to step on the IG's toes. We're very respectful of
    IG jurisdiction. So during the investigative phase, absolutely
    not.
        Mr. Meadows. Yeah, I was passed a note. He was then the
    director of USCIS. Now he's the DHS deputy director.
        Mr. Shaub. Okay. So either the President or somebody who's
    in charge of his agency at a higher level can take some action.
    Only the President could take removal action. So something like
    that actually would be well within your jurisdiction if you're
    asking whether you could, obviously.
        Mr. Meadows. Well, we've got all these other ethics groups
    out there, Congressional Ethics. You mentioned some of those
    that they're your sister--they actually take action. Are you
    the only one that just does financial disclosure with no
    actions?
        Mr. Shaub. No. We don't just do financial disclosure. But
    we're the prevention piece of the framework. This is a broad
    framework----
        Mr. Meadows. So who's the enforcement piece? Because it's
    not the IG.
        Mr. Shaub. No. That would come to agency management or the
    White House to take action against a Presidential appointee.
        Mr. Meadows. Do you not see an ethical dilemma that you put
    yourself in when you have someone that is a nominee having to
    be held accountable by the person who nominated them?
        Mr. Shaub. Well, that's the framework the Ethics in
    Government Act established. But we do have the separation of
    powers issue where Congress has the ability to ask the very
    questions you're asking about an individual. And you could
    certainly have a hearing on that investigative----
        Mr. Meadows. So do you think that your agency needs to have
    expanded authority to be able to investigate?
        Mr. Shaub. I don't think so. I think that there----
        Mr. Meadows. You don't want it?
        Mr. Shaub. Well, I don't think we should have it. What I
    might want one way or the other is not as relevant as what
    would be the right thing. And what's the right thing is that we
    have a broad framework with a number of different, very
    specialized entities that perform very important roles. The
    inspectors general have investigative authority. Agencies can
    take disciplinary action. In whistle blower cases, you
    mentioned whistle blower in this example, the Office of Special
    Counsel can initiate an action against them. And I won't speak
    for what's within your power, but they then take a case before
    the MSPB.
        So there are--everybody has their individual roles. We, for
    instance, don't adjudicate the disciplinary cases. The MSPB has
    the authority to do that. So ours is the prevention piece of
    the program.
        Mr. Meadows. So if the employees--what you're saying, is if
    the employees in that particular situation feel like that they
    have been thwarted, then either special counsel or--I guess it
    would be special counsel first?
        Ms. Lerner. No. I don't believe we would have jurisdiction
    over these matters.
        Ms. Grundmann. Are we talking about----
        Mr. Meadows. I'll tell you what I'll do, is let me do this:
    I'll get that particular IG's report. I'll get it to all of you
    and then let you weigh in before we go forward. How about that?
        Ms. Grundmann. Are you talking--just to be clear, you're
    talking about a political appointee who's not the head of the
    agency?
        Mr. Meadows. Right. Yeah, he would have been. That's
    correct.
        Ms. Grundmann. Okay. We wouldn't have jurisdiction.
        Mr. Meadows. But there was employees that felt like they
    were wronged that were rank-and-file employees underneath.
        Mr. Shaub. Yeah. I'm sorry. I was talking about the whistle
    blower complaints of the individual level employees----
        Mr. Meadows. Okay. All right. So basically other than our
    oversight, we need to have a hearing on that if I care about
    it.
        Mr. Shaub. Well, the Constitution has set up Presidential
    appointments, Senate confirmation process. I think I saw talk
    of an impeachment proceeding in the news about one Federal
    official. So there are constitutional mechanisms. But at the
    level you're talking, that's--we're getting into the
    constitutional area.
        Mr. Meadows. Okay. Well, I want to thank each one of you
    for your testimony. I know that this is sometimes like going to
    the dentist and you're just glad it's over. And so--but I would
    say this, is if you will get those follow-ups that counsel's
    been taking notes, if you would get those follow-ups, we'll be
    expeditious in our return in terms of information to you, and
    hopefully work with you on the reauthorization language, or any
    caveats that might need to be addressed legislatively.
        And if there's no further business, the subcommittee stands
    adjourned.
        [Whereupon, at 12:24 p.m., the subcommittee was adjourned.]

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