[Congressional Record Volume 140, Number 70 (Wednesday, June 8, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                   THE WHITE HOUSE'S INSIDE OUTSIDERS

  (Mr. WOLF asked and was given permission to address the House for 1 
minute and to revise and extend his remarks.)
  Mr. WOLF. Madam Speaker, when we vote on the FY 1995 Treasury, Postal 
appropriations, I will ask for the support of the body for an amendment 
to require financial disclosure filings by political consultants with 
White House passes which would cover Republican and Democratic 
administrations.
  Let me read, if I can, from the book by Bob Woodward called ``The 
Agenda.''

       Howard Paster was in a slow burn as he listened to 
     Greenberg . . . It was outrageous that the outside 
     consultants were providing the president with major policy 
     option papers in confidential memos that Paster often never 
     saw or saw only too late. If lobbyists with business clients 
     had this kind of relationship with the president, it would be 
     a giant scandal. The consultants had clients, some 
     businesses, some politicians like Senator Moynihan, who paid 
     big fees for their work. Paster wasn't sure the political 
     consultants were that different from other outside 
     businesses. He resented their influence and was sure they 
     presented Clinton with a potentially serious liability. 
     Valuable inside information and conflicts abounded. . . .

  Madam Speaker, I would ask the body, Members on both sides, to 
support this amendment, which will say that anyone who has a White 
House pass now has to file financial disclosures, and this would cover 
all administrations, both Democrat and Republican.
  Madam Speaker, when we vote on the FY 1995 Treasury Postal 
Appropriations bill shortly, I ask for your support for an amendment to 
require financial disclosure filings by political consultants with 
White House passes. This amendment would apply to this Administration 
and all future Administrations both Democrat and Republican.
  The Washington Post has commended this amendment as a start. As The 
Post notes, political consultants with White House passes have 
``comparable and often greater ability to influence policy . . . 
indeed, they are hired by the outsiders precisely because of their 
presumed inside access. Yet there is no regulation of them.''
  Various editorials are reprinted below.

                [From the Washington Post, May 31, 1994]

                              Ins and Outs

       Rep. Frank Wolf has pointed usefully [op-ed, May 23] to a 
     weak spot in the disclosure and other rules meant to protect 
     against conflict of interest in the conduct of government 
     business. It involves the White House consultants who cluster 
     around every modern president just as surely as does the 
     White House staff. Because the consultants aren't government 
     employees, they aren't subject to the same reporting and 
     other such protective rules as other presidential aides. Yet 
     they have comparable and often greater ability to influence 
     policy. They can and frequently do represent major outside 
     interests with business before the government even as they 
     also represent the ultimate inside client, the president 
     himself. Indeed, they are hired by the outsiders precisely 
     because of their presumed inside access. Yet there is no 
     regulation of them.
       Mr. Wolf has tried to add a regulatory amendment to an 
     appropriations bill, requiring that at least those 
     consultants with White House passes disclose their clients. 
     He has lost in the appropriations committee on pretty much 
     party-line votes, and it may even be that this is not a fit 
     subject to be dealt with by legislation. The Republican 
     congressman is nonetheless right about the problem, which, to 
     his credit, he also raised in the Bush administration. The 
     question is what to do about it.
       There are people on the periphery of every administration 
     who have close ties and easy access to the president and 
     White House staff while representing outside interests. 
     Surely not every such outsider, every private friend or 
     confidant of the president needs to make formal disclosure. 
     Where and how do you draw the line? Mr. Wolf would extend the 
     requirement to those with White House passes, in part because 
     that's a pretty good indicator of continuing stafflike 
     participation and influence (though hardly perfect) and in 
     part because it's as far as the appropriations process allows 
     him to reach; no appropriated funds shall be used to issue 
     passes to people who fail to disclose their outside 
     interests, is his proposal.
       But what's needed in this murky area is less a law than a 
     policy. It ought to emanate from the president, and apply at 
     least to his principal and paid advisers whether they have to 
     call ahead to get into the White House or not. The president 
     should say that in order to maintain public confidence he 
     wants these paid advisers to disclose their outside clients 
     and to forbear from certain conduct in the clients' behalf. 
     There are all kinds of ways to determine who should be on the 
     list--degree of access, roaming privileges in the White 
     House, whether the political consultancy is close to full-
     time etc. Above all, the list should cover those whose advice 
     has to do not just with the selling of policy but the making 
     of it.
       A presidential order of this kind would have the requisite 
     cleansing effect without the difficulties inherent in writing 
     a law that is meaningful yet doesn't overreach in what 
     remains an area of partly private conduct. What better way 
     for an administration that came to office saying it was 
     determined not to do business as usual?

                [From the Washington Post, May 23, 1994]

                   The White House's Outside Insiders

                           (By Frank R. Wolf)

       Their paid employment includes working for corporations, 
     political candidates and even foreign political parties in 
     Greece and South Africa. One of them even managed to snag two 
     multimillion-dollar accounts on the North American Free Trade 
     Agreement and health care. But you can regularly find them at 
     1600 Pennsylvania Ave. working for their top client, Bill 
     Clinton.
       This team, which includes James Carville, Paul Begala, 
     Mandy Crumwald and Stan Greenberg, operates (with the 
     approval of the White House) without the restrictions that 
     apply to the rest of the White House staff. This policy gives 
     them the best of both worlds--constant access and policy 
     input with no limits or accountability on their finances or 
     conflicts.
       Last week I offered an amendment to the FY '95 Treasury 
     appropriations bill to rein in this situation. The amendment 
     would require that these individuals, who have more influence 
     with the Clintons than many, if not most, senior staffers, 
     file the same financial disclosure information required of 
     their campaign colleague, George Stephanopoulos, for example. 
     The amendment is simply about accountability. The recent GAO 
     Travelgate report noted that the access that Hollywood 
     producer and Clinton friend Harry Thomason had to the White 
     House during the White House travel office debacle conveyed 
     ``the appearance of influence and authority . . . 
     unrestricted access of nongovernment employees creates an 
     opportunity for influence without the accountability.''
       No one is accusing these individuals of any wrongdoing; we 
     are just asking them to provide the same financial 
     information required of other senior advisers with 24-hour a 
     day White House access passes. I was disappointed that the 
     subcommittee failed to recognize that this issue is not a 
     partisan maneuver, but a responsible, good government action. 
     We are trying to make public policy to ensure public 
     accountability for this White House and any White House in 
     the future, whether occupied by a Democrat or a Republican.
       In recent news reports on these ``outside insiders,'' Chuck 
     Lewis of the Center for Public Integrity has said: ``You have 
     an adjunct kind of shadow government that is exploiting a 
     gray area. There is this yuppie arrogance: `We're the good 
     guys, don't bust our chops.''' Ellen Miller, the director of 
     the Center for Responsive Politics says, ``The fact that they 
     have a close relationship with the White House while 
     maintaining outside clients raises the specter of conflict of 
     interest.'' A Democratic activist identifies the bottom line: 
     ``People are buying a name and a connection.''
       The White House ensures that these individuals have been 
     advised on conflict matters. But why the secrecy? Mandy 
     Grunwald has said, ``We asked for information from the White 
     House and [Democratic National Committee] counsel about laws 
     that governed us. . . . We found out there were very few. So 
     we decided to make our own rules.'' Why not just follow the 
     same rules as everyone else at the White House instead of 
     making up non-binding rules in secret?
       Furthermore, there may in fact be rules that do apply to 
     this situation, and they are not ``do you own thing'' 
     conflict rules. Title 18, United States Code, Section 202(a), 
     defines the term ``special Government employee'' as an 
     officer or employee of the executive or legislative branch of 
     the United States or of the District, who is ``retained, 
     designated, appointed, or employed to perform, with or 
     without compensation, for not to exceed one hundred and 
     thirty days . . . temporary duties either on a full-time or 
     intermittent basis.''
       Carville and friends could, in fact, be special government 
     employees (if they work fewer than 130 days per year at the 
     White House) or regular government employees (if they work 
     more than 130 days). If they are regular government 
     employees, they are not allowed to earn outside income. The 
     White House argues that because these individuals have not 
     been formally appointed, the rules don't apply to them, and 
     the White House refuses to respond to inquiries regarding how 
     many days these advisers work at the White House. Yet as the 
     statute clearly indicates, appointment is not dispositive.
       During Lloyd Cutler's previous Democratic administration, 
     the Carter Justice Department issued a memorandum opinion for 
     the attorney general stating that ``an identifiable act of 
     appointment may not be absolutely essential for an individual 
     to be regarded as an officer or employee in a particular case 
     where the parties omitted it for the purpose of avoiding the 
     application of the conflict of interest laws.''
       The significant criteria cited in the Carter era memo 
     regarding an individual's status as a special government 
     employee or regular government employee include: Is the 
     person's advise solicited frequently? Is it sought by one 
     official, who may be a personal friend, or impersonally by 
     a number of persons in the government agency that needs 
     expert counsel? Do meetings take place during office 
     hours? Are they conducted in the government office? The 
     Office of Government Ethics has stated that the status of 
     an employee depends upon ``the specific facts of if, and 
     how, the White House officially requested his services and 
     for what purposes.''
       Thus far, the only guidance the White House has provided 
     about what these four do is the following broad statement: 
     ``what ever issues on which the president, the vice 
     president, the First Lady or members of their staffs request 
     them to consult.'' Given this board portfolio, don't the 
     American people at least have a right to know the outside 
     interests of the ``outside insiders'' before they consult on 
     ``whatever''?
       So far the White House has been short on the facts when 
     Congress has asked questions about these matters, Admittedly, 
     more information is needed to determine the actual status of 
     these advisers. I will continue to move this issue forward in 
     the House. As a top Democratic consultant stated in a 
     Business Week article, ``They should disclose their clients 
     and their faces . . . that's a common-sense way to avoid 
     potential problems in the `90s.''
       In addition, the status of these individuals as special 
     government employees or regular government employees needs to 
     be determined based on facts--facts, thus far, the White 
     House has refused to disclose. Sunshine is the best 
     disinfectant to clean up this problem. This amendment could 
     very well reduce headaches for this and future 
     administrations. Those who claim to ``work hard and play by 
     the rules,'' should have no problem with it.

                [The Wall Street Journal, May 20, 1994]

                           Disclosure Deficit

       During what Bill Clinton derisively refers to as the ``last 
     12 years'' of the Reagan and Bush administration, financial 
     disclosure for people in and around public life in Washington 
     became an obsession. Not anymore.
       We've written here recently about the disclosure deficits 
     at the Ron Brown Commerce Department. Meanwhile, Rep. Frank 
     Wolf, a Virginia Republican, is finding that disclosure is a 
     stumbling block in his efforts to straighten out the 
     administration's policy over White House passes. In 
     particular, Mr. Wolf wants clarification about the status of 
     four key Clinton political aides who roam inside the White 
     House, but who chose not to join the White House staff, for 
     whom restrictive conflict-of-interest rules apply.
       Stanley Greenberg, the president's pollster, says he has 
     ``organized'' his Democratic National Committee contract ``so 
     I can spend all my time working'' for President Clinton.
       James Carville talks constantly with the White House and 
     frequently visits to map strategy.
       Paul Begala, Mr. Carville's consulting partner, turns up at 
     early morning White House staff meetings, polishes Clinton 
     speeches and frequently travels with the president.
       Media consultant Mandy Grunwald has spent countless hours 
     honing the President's health care message. She also controls 
     the DNC's $3 million health care ad budget, much of it raised 
     from corporate sources.
       White House officials have said the four work there on an 
     ``irregular basis.'' Each, however, has a coveted White House 
     blue pass giving unrestricted, 24-hour-a-day access because 
     they provide ``regular services.'' Here's the rationale for 
     that: Because the four provide ``regular'' services, they are 
     permitted access comparable to full-time staffers, but for 
     the purposes of the legal requirements of government service 
     they are only ``irregular'' troubleshooters.
       At March hearings, Patsy Thomasson, the White House's top 
     administrator, promised Rep. Wolf that the four consultants 
     would be ``required to file all the necessary paperwork as if 
     they were employees of the White House.'' For senior staffers 
     this includes stiff financial disclosure filings. Now the 
     White House has changed its tune.
       It says Mr. Carville and company have agreed only to an FBI 
     background check. Yet White House Counsel Lloyd Cutler agrees 
     that an FBI check is ``only one of the steps that persons 
     must go through to get a permanent pass.'' So this must be a 
     special dispensation?
       Not to worry, say the Fab Four (as they're known around 
     Capitol Hill). They're self-policing themselves by avoiding 
     lobbying for corporations or foreign governments. ``We asked 
     for information from the White House and DNC counsel about 
     laws that governed us,'' Ms. Grunwald told Business Week. 
     ``We found out there were very few. So we decided to make our 
     own rules.'' Remind us again what former Reagan aide Lyn 
     Nofziger's ethics problem was all about.
       The White House says that because Ms. Grunwald and the 
     others haven't been formally appointed, ethics rules don't 
     apply. But in 1977, when Lloyd Cutler first served as White 
     House Counsel, the Carter Justice Department found that an 
     actual appointment ``may not be absolutely essential for an 
     individual to be regarded as an officer or employee'' if 
     someone is trying to avoid conflict of interest laws. The 
     opinion listed ways to judge if an outside adviser is covered 
     by ethics rules, including the number of times advice is 
     sought and whether meetings take place during office hours 
     and in a government building.
       Rep. Wolf thinks it's only prudent these ``off the books'' 
     advisers (among whom we would include Clinton friends and 
     lobbyists Betsey Wright and Susan Thomases) reveal their 
     clients and outside income. Democrats in Congress disagree. 
     On Wednesday a House subcommittee rejected his idea on a 6-
     to-3 party-line vote. Rep. Wolf will try again Tuesday before 
     the full committee.
       Let's be clear: The charge here is not that Mr. Clinton's 
     free-lance aides are committing ethical breaches. The point 
     is that the disclosure standards, the ones established ``the 
     last 12 years,'' are being flouted by the Clinton people. If 
     Ronald Reagan had parceled out key White House tasks to a 
     small group of outside advisers and friends with no effort at 
     public accountability on their financial activities, the 
     uproar would have been deafening. So we'll paraphrase Mr. 
     Reagan: Mr. Carville and the rest should be trusted to do the 
     right thing, but it's best to verify that they are.

                   The White House's Inside Outsiders

       ``They work on whatever issues on which the President, the 
     Vice President, the First Lady, or members of their staff 
     request them to consult.''--White House response to questions 
     from Treasury, Postal Appropriations Committee, May 1994.
       ``No one is granted a permanent White House pass before a 
     full field FBI background investigation has been completed. 
     The time required for such investigations varies, and is 
     often a good deal longer than 45 days. Moreover, such as 
     investigation is only one of the steps that a person must go 
     through to get a permanent pass. Other steps include 
     attending training in ethics and security matters, completed 
     financial disclosure forms, and undergoing IRS and other 
     checks.''--Lloyd Cutler in a March 18, 1994, letter to 
     Congressman Frank Wolf.
       [Note: Carville, Begala, Grunwald and Greenberg had passes 
     before going through this process.]
       In hearings before the Treasury Postal appropriations 
     subcommittee in March, White House witness, Patsy Thomasson, 
     stated that Carville, Begala and others would ``be required 
     to file all the necessary paperwork as if they were an 
     employee of the White House.''
       ``We asked for information from the White House and DNC 
     counsel about laws that governed us . . . We found out there 
     were very few. So we decided to make our own rules.''--Mandy 
     Grunwald, Business Week, November 15, 1993.
       ``I organized my DNC contract so I can spend all my time 
     working for him [the President].''--Stanley Greenberg as 
     quoted in Business Week, November 15, 1993.
       ``Begala spends hours at the White House polishing Clinton 
     speeches. He also travels with the President to major 
     events.''--Business Week, November 15, 1993.
       ``On health reform, Mandy spend hours refining the 
     language, fine-tuning the names of things, so people would 
     get it,'' says White House Communications Director Mark 
     Gearan.''--Business Week, November 15, 1993
       ``Howard Paster was in a slow burn as he listened to 
     Greenberg . . . it was outrageous that the outside 
     consultants were providing the President with major policy 
     option papers in confidential memos that Paster often never 
     saw or saw only too late. If lobbyists with business clients 
     had this kind of relationship with the president, it would be 
     a giant scandal. The consultants had clients, some 
     businesses, some politicians like Senator Moynihan, who paid 
     big fees for their work. Paster wasn't sure the political 
     consultants were that different from other outside 
     businesses. He resented their influence and was sure they 
     presented Clinton with a potentially serious liability. 
     Valuable inside information and conflicts abounded . . . .--
     The Agenda: Inside the Clinton White House by Bob Woodward, 
     p. 247.
       ``The fact that they have a close relationship with the 
     White House while maintaining outside clients raises the 
     specter of conflict of interest.''--Ellen Miller, Center for 
     Responsive Politics
       ``You have an adjunct kind of shadow government that is 
     exploiting a gray area. They will do whatever they need to do 
     to help Bill and to also remain robust in the private sector. 
     There is this yuppie arrogance: `We're the good guys, don't 
     bust our chops' . . . . The DNC and its advisers have become 
     an adjunct wing of government--with no accountability to 
     government.--Charles Lewis, Center for Public Integrity U.S. 
     News & World Report, March 28, 1994.
       ``If Ronald Reagan had parceled out key White House tasks 
     to a small group of outside advisers and friends with no 
     effort at public accountability on their financial 
     activities, the uproar would have been deafening. So we'll 
     paraphrase Mr. Reagan: Mr. Carville and the rest should be 
     trusted to do the right thing, but it's best to verify that 
     they are.--Wall Street Journal, May 20, 1994.
       ``Rep. Frank Wolf has pointed usefully to a weak spot in 
     the disclosure and other rules meant to protect against 
     conflict of interest in the conduct of government business. 
     It involves the White House consultants who cluster around 
     every modern president just as surely does the White House 
     staff. Because the consultants aren't government employees, 
     they aren't subject to the same reporting and other such 
     protective rules as other presidential aides. Yet they have 
     comparable and often greater ability to influence policy.''--
     The Washington Post, Editorial of May 31, 1994.

                          ____________________