[Congressional Record Volume 140, Number 145 (Friday, October 7, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 7, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
BANNING BONUSES FOR POLITICAL APPOINTEES DURING A PRESIDENTIAL ELECTION 
   CYCLE AND PLACING A COMPLETE BAN ON BONUSES TO EXECUTIVE SCHEDULE 
                                OFFICERS

  Mr. LEVIN. Mr. President, I am pleased that the Senate today 
is passing my amendment banning bonuses to political appointees for the 
6-month period at the end of an administration and placing a permanent 
ban on bonuses to the very top political appointees--Executive Schedule 
I-V and their equivalents who are Senate-confirmed, Presidential 
appointees.
  This amendment is nearly identical to legislation I sponsored in the 
last session of Congress, S. 1070--a bipartisan proposal cosponsored by 
Senators Stevens and Dorgan. S. 1070 passed the Senate last November by 
unanimous consent. It was then referred to the House Post Office and 
Civil Service Committee's Subcommittee on Compensation and Employee 
Benefits chaired by Congresswoman Holmes Norton where it was discovered 
that the legislation's provisions regarding the permanent ban on cash 
bonuses unintentionally covered certain career employees. The amendment 
we are acting on today corrects that error and tightens the bill's 
provisions to ensure that no career employees are affected.
  The need for this legislation was amply demonstrated by the midnight 
bonuses award to political officials at the close of the Bush 
administration. While in 1991, 50 bonuses were awarded to this class of 
Federal employees, in 1992--the end of the Bush administration--that 
figure rose to 133. While this increase on its face did not prove an 
abuse of the system, it certainly raised questions about the purpose of 
these bonuses--especially given the number of top-level political 
officials who received them.
  President Clinton directed the Office of Personnel Management [OPM] 
to conduct a review of these bonuses and report back to him. The review 
looked at monetary awards during the ``Presidential transition period'' 
which was defined as October 1992 through January 1993. OPM's initial 
report was released in late March. The findings of the report are quite 
compelling. The report states,

       In brief, we found that there was a significant increase in 
     the number of awards granted to political appointees during 
     the transition period, creating at least the appearance that 
     they were granted for reasons other than recognition of 
     benefit to the Government. While technical procedures were 
     followed, we believe the spirit and purpose of the awards 
     program was evaded, and that additional safeguards are 
     needed.

  Mr. President, I ask that the executive summary of the OPM report 
from which I quoted be included in the Record immediately following my 
remarks.
  This legislation is an important step in an effort to reassess and 
revise the Federal Government's bonus system to ensure that bonuses are 
not merely rewards for political loyalty but for effective governing 
and a true commitment to public service. As it now stands, the waters 
have been muddied by the bonuses awarded during the final months of the 
Bush administration and the integrity of the bonus system has been 
weakened.
  The legislation places a 6-month ban on cash awards from June 1 prior 
to a Presidential election to the following January 20. This would put 
an end to the bonuses which, at the very least, give rise to the 
appearance that they are rewards for political loyalties at the end of 
an administration rather than for effort.
  The complete ban on cash awards for those top-level officials in the 
Executive Schedule codifies current OPM policy regarding the award of 
cash bonuses to those who are in positions which require Senate 
confirmation. Individuals in the Executive Schedule are making salaries 
which range from $108,200 to $148,400 and serve in very high 
profile positions. Cash bonuses are unnecessary and inappropriate at 
this level. The OPM guidance states that ``(h)onorary recognition is 
considered appropriate in light of the honor, salaries, and perquisites 
associated with such positions, and advisable because of the potential 
for adverse publicity that could result if such officials were to 
receive significant cash awards.'' OPM indicates that at the close of 
the previous administration, this policy guidance was ignored in 
several instances. My legislation would enforce this guidance as law.

  During the Federal Services, Post Office and Civil Service 
Subcommittee's consideration of this legislation, an amendment was 
added by Chairman Pryor to include what are termed ``Executive Schedule 
Equivalents'' under the complete ban on cash awards. These are 
political appointees who are not in the Executive Schedule itself, but 
whose pay rates are equivalent to Executive Schedule employees by law.
  At a time when we are all undertaking efforts to restore faith in the 
integrity of our Federal Government, it makes sense to make appropriate 
changes in our bonus system to eliminate any opportunity for abuse. 
Bonuses can be an effective management tool, but they become 
counterproductive if there is an appearance that they are being awarded 
for political purposes.
  As I indicated before, I see this as a first step in the effort to 
reassess and revise our Federal employee bonus system. An additional 
issue that was raised by the OPM report and which I believe needs to be 
addressed is the award of bonuses to inspectors general [IG's]. OPM 
reports that nine IG's received bonuses during the final days of the 
previous administration. IG's play one of the most significant roles in 
our efforts to increase the effectiveness, efficiency, and the 
integrity of the Government. Their independence and integrity must be 
without question. Bonuses to IG's can become highly questionable when 
they are authorized by the head of the agency over which a particular 
IG holds oversight responsibility.
  I am pleased that the Inspectors General in the current 
administration have signed pledges not to take bonuses. This is an 
important step to address this issue in the short term. However, we 
need to devise a policy for the long term. This is an issue which 
concerns Senator Glenn as the chairman of the Governmental Affairs 
Committee, and his staff is working closely with the IG community to 
devise an effective and equitable pay system for IG's. My staff and I 
will be working with Senator Glenn and his staff to explore ways to 
address this matter in the long term and, therefore, I have decided to 
not address bonuses for IG's in this bill.
  This amendment would eliminate two problems which were identified by 
the OPM report, and it has the support of the administration. Mr. 
President, I ask that a May 31, 1994, Office of Personnel Management 
letter in support of S. 1070 also appear in the Record immediately 
following my remarks.
  I thank my Senate colleagues for their support in passing this 
legislation, and it is my expectation that our colleagues in the House 
will also act quickly to get these important reforms enacted into law.
  The letter follows:

                           Executive Summary

       In response to the President's direction, the Office of 
     Personnel Management (OPM) conducted a review of monetary 
     awards granted during the Presidential transition period.
       The President expressed concern that the granting of large 
     monetary awards as the former Administration departed raised 
     disturbing questions about their timing and amounts. The 
     review focused on awards granted for superior accomplishment 
     (also call special acts) granted at the headquarters of major 
     departments and agencies.


                         purpose of the review

       OPM's review focused on two questions: whether the awards 
     were granted consistent with established criteria and 
     procedures and whether new or revised safeguards are 
     necessary.


                         findings of the review

       There was a substantial increase in the number of awards 
     given to political appointees during the transition period as 
     compared to the same months the year before (from 49 to 133). 
     The number and dollar value of awards granted by each agency 
     reviewed during the relevant periods are presented in 
     attachment 5 to the report.
       Current safeguards clearly were not adequate to prevent 
     misuse of flexibilities in the awards program. The political 
     leadership at several agencies used these flexibilities to 
     grant awards to political appointees that create the 
     appearance they were given as ``political favors'' rather 
     than for their intended purpose.
       Six of the 23 agencies reviewed accounted for two-thirds of 
     awards to political appointees. These were Energy, Education, 
     Agriculture, Justice, Small Business Administration, and 
     Labor.
       Technical procedures were followed, but the evidence 
     indicates that the purpose of the award program was evaded. 
     For example, the justification on a large number of awards 
     was questionable. Superior accomplishment awards should not 
     be given for the performance of regular duties, particularly 
     given the level of the employees involved. Also, there is an 
     indication that some of these awards were given as a means to 
     avoid the limitations on other award categories.
       The review revealed that awards were given to Inspectors 
     General in five agencies. While the awards were legal and in 
     line with previous awards in non-transition periods, we 
     believe the practice of giving awards in non-transition 
     periods, we believe the practice of giving awards to IG's is 
     problematic because it could call into question the integrity 
     and independence of their work.
       The Department of Justice granted several awards to 
     Presidential appointees. These awards contravene explicit OPM 
     guidance in Chapter 451 of the Federal Personnel Manual.*
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     *OPM recommends that: ``Presidential appointees whose 
     appointments require Senate confirmation receive honorary, 
     rather than monetary awards. Honorary recognition is 
     considered appropriate in light of the honor, salaries, and 
     prerequisites associated with such positions, and advisable 
     because of the potential for adverse publicity that could 
     result if such officials were to receive significant cash 
     awards.''
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                          scope of the review

       The Government gives thousands of awards to its employees 
     each year. Of all these, two types have the greatest cash 
     value: ``superior accomplishment'' and ``performance'' 
     awards. This review focused on the superior accomplishment 
     awards because, although a small percentage of the total, 
     these are the ones most likely to be abused--agencies have 
     broad discretion in making them and they can be given at any 
     time.
       The larger group of awards are performance awards. They are 
     based on written standards, given on a scheduled basis, and 
     approved only after a multiple review process. Given the 
     volume of these awards, a manual examination would be a huge 
     and costly undertaking and infeasible within our timeframe. 
     However, when the automated awards data for FY 92 is compiled 
     on a Governmentwide basis later this year, we will be able to 
     conduct a parallel examination to see if our concerns with 
     superior accomplishment awards also apply to performance 
     awards.


                               Conclusion

       Clearly the flexibility granted agencies under the awards 
     program must be exercised responsibly and only for the 
     purpose for which the awards are intended. Our review 
     indicates that this was not the case in all agencies during 
     the recent transition period. Since the awards program is a 
     critical part of the Federal performance management system, 
     used to recognize the outstanding contributions of our many 
     fine employees, maintaining its integrity in both fact and 
     appearance is of great importance.
       The report contains a number of options for providing 
     greater safeguards for the awards program in the future. OPM 
     will further develop these options and take steps to monitor 
     the program more closely. In addition, given the importance 
     of the awards program to the Federal service and to the 
     public's perception of it, we believe the issues surfaced in 
     the report would also be appropriate for consideration in the 
     context of the National Performance Review.


                               Office of Personnel Management,

                                     Washington, DC, May 31, 1994.
     Hon. William L. Clay,
     Chairman, Committee on Post Office and Civil Service, U.S. 
         House of Representatives, Washington, DC.
       Dear Mr. Chairman: This is to offer the views of the Office 
     of Personnel Management on S. 1070, concerning awards for 
     political appointees under Federal employee awards programs. 
     S. 1070 would bar awards during Presidential election periods 
     to noncareer members of the Senior Executive Service and to 
     lower-level political appointees, and would establish a 
     complete prohibition on cash awards to most appointees in 
     Executive Schedule positions or equivalent positions.
       The Office of Personnel Management supports enactment of S. 
     1070. OPM's March 1993 study, conducted at the President's 
     request, found that there was a significant increase in the 
     number of awards granted to political appointees during the 
     preceding transition period. We believe that S. 1070 will 
     provide the additional safeguards needed to ensure that the 
     future operation of the Government's awards programs with 
     respect to political appointees will be free from the reality 
     or appearance of abuse. This Office would be pleased to 
     provide any assistance that may be helpful to your Committee 
     on matters related to S. 1070.
       The Office of Management and Budget advises that, from the 
     standpoint of the President's program, there is no objection 
     to the submission of this report.
           Sincerely,
                                                    James B. King,

     Director.

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