CFTC Enforcement: Actions Taken to Strengthen the Division of Enforcement
(Letter Report, 08/28/1998, GAO/GGD-98-193).

An internal review of the Commodity Futures Trading Commission's (CFTC)
Division of Enforcement, completed in March 1995, found weaknesses in
the division's overall management. This report discusses the changes
that CFTC made in response to the internal review and whether these
changes had their intended effect. Because CFTC lacked data that could
be used to assess the impact of the changes, GAO (1) provides
information on the changes made to the division, including the views of
enforcement staff on areas in which such changes were made; (2)
identifies further opportunities for improvement in these areas; and (3)
provides other available information that might indicate CFTC's
commitment to its enforcement program.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-98-193
     TITLE:  CFTC Enforcement: Actions Taken to Strengthen the Division
	     of Enforcement
      DATE:  08/28/1998
   SUBJECT:  Federal agency reorganization
	     Human resources training
	     Securities regulation
	     Surveys
	     Law enforcement information systems
	     Job satisfaction surveys
	     Futures
	     Fair employment programs
	     Training utilization
	     Independent regulatory commissions
IDENTIFIER:  Equal Employment Opportunity Program

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GAO/GGD-98-193

Cover
================================================================ COVER

Report to Congressional Requesters

August 1998

CFTC ENFORCEMENT - ACTIONS TAKEN
TO STRENGTHEN THE DIVISION OF
ENFORCEMENT

GAO/GGD-98-193

CFTC's Division of Enforcement

(233548)

Abbreviations
=============================================================== ABBREV

  CEA - Commodity Exchange Act
  CFTC - Commodity Futures Trading Commission
  EEO - Equal Employment Opportunity
  CEA - Commodity Exchange Act
  PCIE - President's Council on Integrity and Efficiency

B-278746

August 28, 1998

The Honorable Robert F.  Smith
Chairman
Committee on Agriculture
House of Representatives

The Honorable Thomas W.  Ewing
Chairman
Subcommittee on Risk Management
 and Specialty Crops
Committee on Agriculture
House of Representatives

An internal review of the Commodity Futures Trading Commission's
(CFTC) Division of Enforcement, completed in March 1995, found
weaknesses in the division's overall management.  In response, the
CFTC chairperson began several initiatives to strengthen the division
but resigned in January 1996 before completing them.\1 In August
1996, the current chairperson took office.  Based on your continued
interest in ensuring the effectiveness of the division, you initially
asked us to determine what changes CFTC made in response to the
internal review and whether such changes had their intended effect.
Because CFTC did not have data available that could be used to assess
whether the changes had their intended effect, we agreed with your
offices to (1) provide information on the changes made to the
division, including the views of enforcement staff on areas in which
such changes were made; (2) identify further opportunities for
improvement, if any, in these areas; and (3) provide other available
information that might indicate CFTC's commitment to its enforcement
program.

--------------------
\1 See our related testimony, CFTC/SEC Enforcement Program:  Status
and Potential Impact of a Merger (GAO/T-GGD-96-36, Oct.  25, 1995).

   RESULTS IN BRIEF
------------------------------------------------------------------  :1

Following the completion of CFTC's internal review, the Division of
Enforcement made numerous organizational, operational, and other
changes related to the review findings.  These changes included
reorganizing headquarters and two of its three regional offices,
providing additional training, expanding written guidance on
investigations and litigation, revising the review process for
recommendations made to the Commission, increasing communication
between management and staff, emphasizing the importance of equal
employment opportunity (EEO), and modernizing recordkeeping systems.
Our survey of a judgmentally selected sample of about half of the
division's headquarters and regional office professional staff showed
that, in areas where changes were made, the surveyed staff viewed the
division's current organization and operations more positively than
negatively.  However, the views of headquarters staff were
consistently more positive--notably more so in some areas--than those
of regional office staff.

While we could not assess whether the division's changes had their
intended effect, further opportunities exist to strengthen the
division in two areas where changes were made.  First, although the
division has provided additional training to staff, it does not have
a mechanism to ensure that staff training needs are systematically
assessed and addressed.  That is, the division does not have a formal
training plan for identifying the areas in which training is needed,
providing such training, and tracking the training staff receive.
Second, the division has reviewed and updated its procedures manual,
but the manual does not address all of the major policies and
procedures related to the division's investigation and litigation
processes.

In addition to the division's changes, available information
indicates that CFTC is committed to its enforcement program.  For
example, the current chairperson has made strengthening the division
a priority--requesting an increase in the agency's fiscal year 1999
budget to support additional enforcement staff.  Also, industry
officials we contacted view the agency as taking a more aggressive
stance against violators of the Commodity Exchange Act (CEA).\2
Finally, a substantial majority of the surveyed enforcement staff
viewed the division as operating effectively and efficiently as well
as producing quality work.

--------------------
\2 7 U.S.C.  ï¿½ï¿½ 1-25.

   BACKGROUND
------------------------------------------------------------------  :2

CFTC is an independent agency with a mandate to regulate contracts
for future delivery, called futures,\3 and commodity options.\4 The
agency is to have five commissioners who are appointed by the
President and confirmed by the Senate to serve staggered 5-year
terms.  The Commission develops and implements agency policies and
direction.  One of the commissioners is designated by the President
to serve as chairperson.

The Division of Enforcement investigates and prosecutes alleged
violations of the CEA and CFTC regulations.  Violations may involve,
among other things, infractions of the CEA and of CFTC regulations
related to the trading of futures or options on U.S.  futures
exchanges, marketing of commodity contracts, rendering of commodity
trading advice, as well as the selling of illegal instruments.  The
division, at the direction of the Commission, litigates complaints
before the agency's administrative law judges or in U.S.  district
court.  Alleged criminal violations of the CEA or violations of other
federal laws that involve futures trading may be referred to the
Justice Department for prosecution.  The division also provides
expert help and technical assistance with case development and trials
to U.S.  Attorneys Offices, other federal and state regulators, and
international authorities.

The Division of Enforcement is the largest of CFTC's five major
operating units.\5 The division has staff in the agency's
headquarters office, located in Washington, D.C., and in three
regional offices, located in Chicago, IL; Los Angeles, CA; and New
York, NY.  In fiscal year 1997, the division had 159 authorized staff
years, accounting for about 27 percent of the agency's staff, and a
$16 million budget, accounting for about 29 percent of the agency's
total budget.  Of the division's authorized staff years, 72 were in
headquarters, 39 were in the Chicago regional office, 21 were in the
Los Angeles regional office, and 27 were in the New York regional
office.

--------------------
\3 Futures are contracts to purchase or sell a commodity for delivery
in the future:  (1) at a price that is determined at the contract's
initiation, (2) which obligates each party to fulfill the contract at
the specified price, (3) which is used to assume or shift price risk,
and (4) which may be satisfied by delivery or offset.

\4 Commodity options are unilateral contracts that give the buyer the
right to buy or sell a specified quantity of a commodity at a
specific price within a specified period, regardless of the market
price of that commodity.

\5 The other major operating units are the Division of Economic
Analysis, Division of Trading and Markets, Office of the General
Counsel, and Office of the Executive Director.

   SCOPE AND METHODOLOGY
------------------------------------------------------------------  :3

To accomplish our three objectives, we discussed the Division of
Enforcement's organization and operations with officials from its
headquarters as well as Chicago and New York regional offices.  We
also reviewed, among other things, the division's policies and
procedures as well as training manuals and the President's Council on
Integrity and Efficiency's (PCIE)\6 quality standards for
investigations.  In addition, we used a structured questionnaire to
survey about half of the division's professional staff in
headquarters and the Chicago, Los Angeles, and New York regional
offices to obtain their views on the division's organization and
operations in areas where changes were made.  We judgmentally
selected a cross-section of staff to include varied locations,
positions, grades, and employment dates.  Our survey results reflect
only the views of the enforcement staff we surveyed who said they had
a basis to judge.  Because CFTC had not done a similar survey as part
of its internal review, we lacked a baseline against which to compare
our survey results to determine whether staff views changed from the
period when the internal review was conducted.  (See app.  III for a
copy of the survey and results.) Finally, we interviewed futures
exchange and other industry officials to discuss their views on the
effectiveness of the division.  (See app.  I for a more detailed
description of our objectives, scope, and methodology.)

We did not verify the accuracy of the documentation and other
information provided to us.  We did our work between November 1997
and July 1998 in accordance with generally accepted government
auditing standards.  We obtained written comments on a draft of this
report from CFTC.  These comments are reprinted in appendix II.  CFTC
also provided us with technical comments on the draft report, which
were incorporated as appropriate.

--------------------
\6 PCIE is an interagency committee established by Executive Order
No.  12805, 57 Fed.  Reg.  20,627 (1992).  PCIE's members include the
Deputy Director of the Office of Management and Budget, Associate
Deputy Director for Investigations of the Federal Bureau of
Investigations, and all civilian presidentially appointed inspectors
general.  PCIE's functions included identifying, reviewing, and
discussing areas vulnerable to fraud, waste, and abuse in federal
programs and operations.

   REORGANIZATION OF THE DIVISION
   OF ENFORCEMENT
------------------------------------------------------------------  :4

Following the completion of CFTC's internal review in March 1995, the
Division of Enforcement made organizational changes in headquarters
and two of its three regional offices.  Of the staff surveyed, most
were satisfied with the division's current organizational structure
and indicated that it provided a clear chain of command.

      REORGANIZATION OF
      HEADQUARTERS
----------------------------------------------------------------  :4.1

CFTC's internal review found that the Division of Enforcement did not
operate as a cohesive unit in which information and resources were
shared and used to achieve a common goal.  Rather, each headquarters
unit and, to a lesser extent, each regional office specialized in
investigating certain types of cases.\7 The internal review concluded
that this specialization limited flexibility and made it difficult to
staff investigations and cases efficiently.  The internal review also
found that the division lacked clear lines of authority, causing
confusion among attorneys and investigators about their roles and
responsibilities.

Following the completion of the internal review, CFTC started to
reorganize the division in headquarters.  CFTC appointed a new
division director in August 1995 and made other organizational
changes that were completed in fiscal year 1996.  First, in October
1995, the division reorganized headquarters staff into four general
investigation/litigation teams, eliminating two of its three
specialized headquarters units\8 and the Southern Regional Office.
It also moved the other specialized headquarters unit, International
Operations, to the Office of Chief Counsel.  In addition, the
division created associate director positions to head each of the
four general teams.  Each team is to have two senior attorneys that
report to an associate director and are responsible for supervising
investigations and enforcement cases assigned to the team.

Second, as part of its reorganization of headquarters, the division
eliminated two of the three deputy directors.  Previously, the
division's headquarters units and regional offices reported to one of
three deputy directors.  Now they report to a single deputy director
and, ultimately, to the director.  The deputy director is now
responsible for, among other things, reviewing referrals about
potential investigations and allocating them to headquarters teams
and regional offices based, in part, on their workloads.

Third, the division made other changes in headquarters.  It created a
counselor to the director position to assist with the review of
division recommendations to the Commission.  It designated the Office
of Chief Counsel to handle all appeals to the Commission--a task
previously handled by the team that was responsible for the initial
litigation.  Lastly, the division assigned the management analysis
officer responsibility for supervising all administrative staff.

As a result of the reorganization, the division has an almost
entirely new management team in headquarters.  Besides its new
director, the division has a new deputy director, chief counsel,
counselor to the director, and two associate directors.

--------------------
\7 Before August 1995, the division's operating units were organized
into three sections.  The sections were (1) Western Operations,
comprised of the Central Regional Office in Chicago and the Western
Regional Office in Los Angeles; (2) Eastern Operations, comprised of
the Eastern Regional Office in New York and the Southern Regional
Office in headquarters; and (3) Manipulation and Special Operations
in headquarters.

\8 The Division of Enforcement's Manipulation and Special Operations
section consisted of three specialized units:  the Manipulation and
Trade Practice Unit, the State/Federal Liaison Unit, and
International Operations.  The Manipulation and Trade Practice and
State/Federal Liaison Units were eliminated.

      REORGANIZATION OF REGIONAL
      OFFICES
----------------------------------------------------------------  :4.2

In March 1995, CFTC announced a plan to restructure the regional
offices by creating regional director positions to head the Chicago
and New York offices.  Each regional director was to coordinate all
of the office's substantive functions and report directly to the
chairperson.  In June 1995, the chairperson reassigned the
headquarters division director as the New York regional director.\9
According to CFTC officials, the chairperson took no other steps to
implement the plan before resigning, and her successor did not
implement it.  The officials said that the current chairperson
concluded that implementing the plan would be an inefficient use of
resources and would impair the Commission's ability to function; in
December 1996, the Commission eliminated the regional director
positions.  The division, nonetheless, made other organizational
changes in the regional offices.

The division reorganized staff in two of its three regional offices
and made key staff changes in all three regional offices.  In January
1996, the division reorganized enforcement staff in the New York
regional office into teams.  Under this structure, all attorneys and
investigators working on a particular matter report to a team leader,
who reports, in turn, to the regional counsel.  Previously,
enforcement staff in the New York regional office were not organized
in teams.  In late 1997, the Chicago regional office similarly
integrated investigators into investigation/litigation teams.  Under
this new structure, all attorneys and investigators working on a
particular matter report to a single team leader.  Before this
change, investigators worked on teams but reported to a chief
investigator.  According to CFTC officials, staff in the Los Angeles
regional office were not organized into teams because of the
relatively small number of enforcement staff assigned to the office.
Finally, in each of its three regional offices, the division replaced
the regional counsel, who supervises all regional enforcement staff.

--------------------
\9 The New York regional director resigned in September 1996 and was
not replaced.

      ENFORCEMENT STAFF VIEWS ON
      THE CURRENT ORGANIZATIONAL
      STRUCTURE
----------------------------------------------------------------  :4.3

We surveyed staff on how satisfied or dissatisfied they were with the
Division of Enforcement's current organizational structure.  Of the
65 staff surveyed, about 50 percent responded that they were
generally or very satisfied with the division's current
organizational structure, while 30 percent responded that they were
generally or very dissatisfied.\10 However, the 25 headquarters staff
responses were substantially more positive than those of the 40
regional office staff.  Seventy-six percent of headquarters staff
responded that they were generally or very satisfied with the
division's current organizational structure, while 12 percent
responded that they were generally or very dissatisfied.  In
contrast, 35 percent of the regional office staff responded that they
were generally or very satisfied, while 41 percent responded that
they were generally or very dissatisfied.

We also asked staff to assess the extent to which the division's
current organizational structure provides a clear chain of command.
Of the staff surveyed, 79 percent responded that the current
structure provides a clear chain of command from a moderate to a very
great extent, while 6 percent responded that the current structure
provides a clear chain of command to little or no extent.\11 Again,
proportionally more headquarters staff reported positively than
regional office staff.  Ninety-two percent of the headquarters staff,
compared with 73 percent of the regional office staff, responded that
the division's current organizational structure provides a clear
chain of command from a moderate to a very great extent.

--------------------
\10 For staff satisfaction questions, the response options were (1)
very satisfied, (2) generally satisfied, (3) neither satisfied nor
dissatisfied, (4) generally dissatisfied, and (5) very dissatisfied.

\11 The response options were (1) to a very great extent, (2) to a
great extent, (3) to a moderate extent, (4) to some extent, and (5)
to little or no extent.

   EXPANSION OF TRAINING
   OPPORTUNITIES
------------------------------------------------------------------  :5

Following the internal review, the Division of Enforcement developed
an annual in-house training conference to address training
weaknesses.  Of the staff surveyed, most indicated that their
training needs were being met by all the training they receive,
including the annual training conference.  However, the division's
training program did not have a formal training plan to help ensure
that staff possess the critical skills needed to effectively
investigate and litigate enforcement matters.

      DEVELOPMENT OF AN ANNUAL
      IN-HOUSE TRAINING CONFERENCE
----------------------------------------------------------------  :5.1

The internal review found that the Division of Enforcement had no
formal program for training its staff.  Rather, the division relied
almost exclusively on external training that offered little with
respect to investigating CFTC-specific cases and was of limited use
in training entry-level attorneys.  According to the internal review,
the lack of adequate training hampered the enforcement staff's
ability to investigate and litigate the wide variety of cases before
the Commission.

To begin addressing training weaknesses, the division developed a
2-1/2 day in-house training conference that was to be provided
annually to all enforcement attorneys and investigators.  The first
conference was held in September 1995.  The division has continued
holding the annual in-house training conference, with the most recent
one being held in September 1997.  According to CFTC officials, this
conference focused on strengthening and reinforcing the skills used
to investigate and litigate cases.  They said that extensive written
materials were distributed at the conference, such as materials on
legal developments in Commission law and significant cases filed by
the division.  In addition, the conference included panel discussions
on emerging themes in Commission law and handling of bankruptcy
issues as well as workshops on specific investigation and litigation
skills, such as interviewing witnesses and examining experts.

According to CFTC officials, the division also relies on other
internally and externally provided training to meet staff training
needs.  The officials told us, for example, that senior staff in
headquarters conducted a series of workshops in 1996 for headquarters
and regional office staff that focused on practice-related topics,
such as conducting investigations, drafting subpoenas, and taking
testimony.  They also said that regional offices and headquarters
teams are encouraged to conduct their own individually tailored
training.  In terms of external training, the officials said that
some staff have attended industry seminars and annual conferences as
well as courses provided by the National Institute for Trial
Advocacy.  Finally, the officials told us that all staff had access
to various computer software training.

      STAFF VIEWS ON THE TRAINING
      PROGRAM
----------------------------------------------------------------  :5.2

We asked staff to assess the extent to which the division's most
recent annual in-house training conference met their training needs.
Of the staff surveyed, 62 percent responded that the most recent
in-house training conference met their training needs from a moderate
to a very great extent, while 10 percent responded that it met their
needs to little or no extent.  Although views differed between
headquarters and regional office staff, the difference was less
pronounced than for other questions.  Sixty-nine percent of
headquarters staff responded that the most recent in-house training
conference met their training needs from a moderate to a very great
extent, while 57 percent of the regional office staff responded in
this manner.

We also asked staff to assess the extent their training needs were
being met by the combination of all the training they receive.  Of
the staff surveyed, 64 percent responded that their training needs
were being met from a moderate to a very great extent, while 9
percent responded their needs were being met to little or no extent.
Headquarters staff responses, however, were proportionally more
positive than those of regional office staff.  Seventy-nine percent
of headquarters staff responded that their training needs were being
met from a moderate to a very great extent, while 55 percent of
regional staff responded similarly.  Conversely, none of the
headquarters staff responded that their training needs were being met
to little or no extent, while 15 percent of the regional office staff
responded in this manner.

      THE DIVISION LACKS A FORMAL
      TRAINING PLAN
----------------------------------------------------------------  :5.3

Although the Division of Enforcement has taken action to address
weaknesses in its training program, the division does not have a
mechanism for ensuring that staff training needs are systematically
assessed and met.  According to the quality standards for
investigations issued by PCIE,\12 investigative agencies should
establish a training program to provide staff with proper
preparation, training, and guidance.  To facilitate this effort, the
guidance noted that the program should have a training plan and
indicated that the plan should (1) identify the areas in which
staff--based on their position, grade, or other relevant
factors--should receive training, (2) provide staff with formal or
on-the-job training in the identified areas at the appropriate time,
and (3) track and assess whether staff are receiving such training.
Although this quality standard specifically applies to investigators,
we believe attorneys could also benefit from such a training plan,
especially since attorneys are required to conduct investigations.

CFTC officials told us that the division does not have a formal
training plan for identifying areas in which staff need training,
providing staff with this training, and tracking the training staff
receive.  According to CFTC officials, supervisors are primarily
responsible for tracking and assessing the training needs of assigned
staff.  The officials said that staff are reviewed twice a year by
their supervisors, which provides both parties with an opportunity to
discuss whether additional training is needed.  However, without a
divisionwide training plan, supervisors may lack a clear and
consistent basis for assessing staff training needs and an efficient
way of providing them with needed training.  Additionally, without
such a training plan, the division may not be able to ensure that
staff acquire the critical skills they need to effectively conduct
investigations and litigation.  Furthermore, in response to our
survey, several staff commented that the division could use more
training on investigative techniques--in part due to the decline in
the number of investigators and the increasing need for attorneys to
do more investigative work.

--------------------
\12 The quality standards for investigations are guidelines
applicable to investigations conducted by criminal investigators
working for the Offices of Inspector General affiliated with PCIE.
They are adaptable to the investigative responsibilities of other
organizations within the federal government.

   DEVELOPMENT OF ADDITIONAL
   WRITTEN GUIDANCE
------------------------------------------------------------------  :6

Following the completion of the internal review, the Division of
Enforcement reviewed and expanded its formal procedures manual and
other written guidance.  Of the staff surveyed, more were satisfied
than dissatisfied with the written guidance available on
investigations and enforcement actions.  Although the division
recently updated its procedures manual, the manual does not cover all
of the division's major policies and procedures for investigations
and litigation.

      DEVELOPMENT OF A FORMAL
      PROCEDURES MANUAL
----------------------------------------------------------------  :6.1

The internal review found that the Division of Enforcement did not
have a formal handbook containing policies or procedures that covered
such topics as basic techniques for conducting investigations and
taking testimony.  In response to the finding, the division has been
reviewing and expanding its enforcement procedures manual--intending
to provide staff with additional formal guidance, such as guidance on
maintaining case files and complying with privacy act requirements.
The division most recently updated its procedures manual in March
1998.

The division has also developed a guide to taking testimony and
distributed it to staff at the 1997 in-house training conference.
The guide is designed to provide enforcement staff with information
on taking testimony--serving as a quick reference tool when problems
or questions arise during testimony.  Additionally, the division
recently updated its two-volume reference manual, which contains an
overview of the CEA and division activities as well as case
summaries.

      STAFF VIEWS ON WRITTEN
      GUIDANCE
----------------------------------------------------------------  :6.2

We surveyed staff on how satisfied or dissatisfied they were with the
written guidance currently available to assist them in conducting
investigations.  Of the staff surveyed, 53 percent were generally or
very satisfied with the written guidance available to assist them in
conducting investigations, while 27 percent were generally or very
dissatisfied with the guidance.  However, headquarters staff were
proportionally more positive than regional office staff.
Seventy-nine percent of headquarters staff were generally or very
satisfied with the written guidance for conducting investigations,
while 8 percent were generally or very dissatisfied.  In contrast, 38
percent of the regional office staff were generally or very
satisfied, while an equal percentage were generally or very
dissatisfied.

We also surveyed staff on how satisfied or dissatisfied they were
with the written guidance currently available to assist them in
conducting enforcement actions.  Of the staff surveyed, 40 percent
were generally or very satisfied with the written guidance, while 22
percent were generally or very dissatisfied.  However, as with the
above question, headquarters staff were proportionally more positive
than regional office staff.  Fifty-four percent of headquarters staff
were generally or very satisfied with the written guidance, while 9
percent were generally or very dissatisfied.  In contrast, 31 percent
of regional office staff were generally or very satisfied, while 28
percent were generally or very dissatisfied.

      THE DIVISION'S PROCEDURES
      MANUAL LACKS KEY PROCEDURES
----------------------------------------------------------------  :6.3

Although the Division of Enforcement recently updated its procedures
manual, the manual does not cover all of the division's major
policies and procedures for investigations and litigation.  For
example, the manual does not include policies and procedures for
handling and tracking referrals from other than public customers,
such as referrals from futures exchanges, other CFTC divisions, and
other federal and state authorities; planning investigations,
including developing an investigative plan and requesting orders of
investigation;\13 and making action recommendations to the Commission
to initiate enforcement action.

According to CFTC officials, the division's procedures manual is a
compendium of important procedures relating to investigations and
litigation.  They said the manual reflects the evolution of the
division--new procedures are added and existing ones are revised or
rescinded, as needed.  CFTC officials told us that they also orally
communicate changes in policy and procedures to staff and that other
written guidance on investigations and litigation is available to
assist staff.  Such written guidance includes the two-volume
reference manual and guide to taking testimony, discussed above, as
well as annotations on the Commission's rules of practice and copies
of recently approved forms and memoranda.  In addition, the officials
told us that certain procedures, such as requesting orders of
investigation, are basic to the investigation or litigation
processes.  They said that, as a result, such procedures are quickly
learned by staff without the need to include them in the procedures
manual.

A complete policies and procedures manual is a key tool for
establishing the standards that management expects staff to follow in
performing investigations and litigation.  Such a manual provides a
framework for ensuring that staff's work meets agency standards and a
means by which to add or revise policies and procedures and
communicate them to staff.  Without a complete policies and
procedures manual, the division may not have an effective tool for
ensuring that staff have a clear and consistent understanding of the
division's standards or an efficient means for communicating changes
in policies and procedures to staff.

--------------------
\13 Orders of investigation authorize staff to issue subpoenas,
administer oaths, take evidence, and require the production of
records.  In many investigations, a complete record cannot be
developed without exercising this authority.

   REVISION OF THE REVIEW PROCESS
   FOR INVESTIGATIONS AND
   LITIGATION
------------------------------------------------------------------  :7

Following the completion of the internal review, the Division of
Enforcement made policy, procedural, and other changes to its process
for reviewing recommendations made to the Commission.  Of the staff
surveyed, more were satisfied than dissatisfied with the timeliness
of the review process.

      POLICY, PROCEDURAL, AND
      OTHER CHANGES IN THE REVIEW
      PROCESS
----------------------------------------------------------------  :7.1

The internal review found that the progress of investigations and
litigation was substantially delayed by CFTC's review process for
action recommendations (requests for the Commission to issue orders
of investigation, initiate subpoena enforcement actions, and initiate
civil or administrative actions).  The internal review found that the
process involved sequential review and revision of key enforcement
documents at various agency levels before the Commission decided on
enforcement matters.

The Division of Enforcement has made policy and procedural changes to
the review process for obtaining orders of investigations.  According
to CFTC officials, the division has adopted the practice of seeking
orders of investigation as soon as investigators believe that such
orders are necessary to advance investigations.  The officials said
that the division, with the Commission's concurrence, has informed
staff about the form and content of these requests so that the
memoranda for seeking orders now rarely exceed 10 pages.  According
to the officials, the chairperson, at the division's recommendation,
expedited the review process as it involved other operating divisions
in July 1997.  Memoranda seeking orders of investigation are to be
provided to other operating divisions for a period of 2 business
days; absent objection within this time, the memoranda are forwarded
to the Commission.  Previously, such memoranda were circulated to
other divisions for review and sign-off for at least a week before
being submitted to the Commission.  Finally, the number of other
operating divisions to which the memoranda are circulated was reduced
by eliminating the Office of the Executive Director from the review
process.

According to CFTC officials, the division also has made a similar
procedural change to the review process for other action
recommendations, such as those to initiate civil or administrative
actions and to accept offers of settlement.  These action
recommendations are generally subject to the same review process as
orders of investigation.  Like orders of investigation, they are no
longer circulated to the Office of the Executive Director for review.
Unlike orders of investigation, these recommendations are to be
circulated to other operating divisions for a 5-business-day review
and comment period before being forwarded to the Commission.

Lastly, as part of the review process within the division, action
recommendations are now reviewed by the deputy director and/or
counselor to the director after they are approved by an associate
director or regional counsel.  As discussed above, the division
eliminated two of three deputy director positions and added the
position of counselor to the director to assist in the review.

      STAFF VIEWS ON THE
      TIMELINESS OF THE REVIEW
      PROCESS
----------------------------------------------------------------  :7.2

We surveyed staff on how satisfied or dissatisfied they were with the
timeliness of the current review process.  Of the staff surveyed, 49
percent responded that they were generally or very satisfied with the
timeliness of the review process, while 35 percent responded they
were generally or very dissatisfied.  However, staff views differed
substantially between headquarters and regional office staff.
Seventy-four percent of the headquarters staff were generally or very
satisfied with the timeliness of the review process, while 13 percent
were generally or very dissatisfied.  In contrast, 33 percent of the
regional office staff were generally or very satisfied, while 49
percent were generally or very dissatisfied.  In response to our
survey, several staff commented that the review process had too many
levels of review.

   INCREASED COMMUNICATION BETWEEN
   MANAGEMENT AND STAFF
------------------------------------------------------------------  :8

CFTC's internal review found that communication within the Division
of Enforcement was inadequate in both headquarters and the regions.
It established that the division did not hold divisionwide staff
meetings or provide a forum to discuss ongoing cases, current legal
developments, or policy shifts.

According to CFTC officials, the director and deputy director now
meet regularly with senior headquarters and regional office staff.
The officials said that these meetings provide an opportunity to
recommend and discuss changes in policy and clarify any uncertainty
regarding existing policy.  The senior staff, in turn, pass on the
information obtained to staff through, among other means, routine
staff meetings.

In addition, CFTC officials told us that the division communicates
important information to staff in several ways--none of which is new,
but all of which are used more extensively than in the past.  For
matters of immediate importance or urgency, they said that the
division uses electronic mail.  For important but less urgent
matters, they said the division communicates with staff through
general distribution of physical documents.  Among the materials
regularly circulated are all substantive opinions of the Commission
and its administrative law judges, important orders or opinions
stemming from Commission injunctive actions, and judicial opinions in
areas of law that affect the division's work.

      STAFF VIEWS ON COMMUNICATION
      BETWEEN MANAGEMENT AND STAFF
----------------------------------------------------------------  :8.1

We asked staff to assess the extent to which the division's
management currently communicates policy-related information to them
in a timely manner.  Of the staff surveyed, 70 percent responded that
management communicates such information in a timely manner from a
moderate to a very great extent, while 8 percent responded that
management communicates such information in a timely manner to little
or no extent.  However, headquarters staff were more positive than
regional staff.  Eighty-four percent of headquarters staff responded
that management communicates information to them in a timely manner
from a moderate to a very great extent, while 60 percent of regional
office staff responded in the same manner.

   EMPHASIZING THE IMPORTANCE OF
   EEO
------------------------------------------------------------------  :9

CFTC's internal review concluded that Division of Enforcement needed
to address EEO.  The internal review noted that the division should
emphasize its commitment to a nonhostile work environment by ensuring
that staff understand their rights under the law and their
responsibilities toward their colleagues.

In May 1997, the chairperson issued an agencywide policy statement on
EEO.  In addition, the chairperson has emphasized CFTC's commitment
to providing equal employment opportunities to all persons and has
challenged the futures industry to do the same.  According to CFTC
officials, information regarding employees' EEO rights and
obligations is generally provided to all divisions through the Office
of Human Resources.  Through this channel, all newly hired division
staff are given materials describing the Commission's employee
diversity policy, and all CFTC employees are provided the names of
EEO counselors.  In addition, CFTC officials said that the agency
recently consolidated all of the different appraisal systems used by
each division into one system.  This system covers all employees and
has an EEO standard that is applicable to supervisors--GS-15s and
above.  According to the officials, the EEO standard being used is
not new, but is similar to the one the division had been using since
the early 1980s.

      STAFF VIEWS ON EEO
----------------------------------------------------------------  :9.1

We surveyed staff on how satisfied or dissatisfied they were with the
current work environment with respect to appreciation of diversity.
Of the staff surveyed, 45 percent responded that they were generally
or very satisfied with the current work environment with respect to
appreciation of diversity, 38 percent responded that they were
neither satisfied nor dissatisfied, and 17 percent responded that
they were generally or very dissatisfied.  While a large percentage
of staff were neither satisfied nor dissatisfied with the current
work environment with respect to appreciation of diversity, some of
the comments provided by such staff were similar to those provided by
staff who were generally or very satisfied.  For example, such
comments included that the division is committed to EEO and values
staff diversity.

Although headquarters staff were more positive than regional office
staff about EEO, the difference between them was not as pronounced as
in the previous questions.  Forty-six percent of headquarters staff
were generally or very satisfied with the current work environment
with respect to appreciation of diversity, while 38 percent of the
regional office staff were generally or very satisfied.

   MODERNIZATION OF RECORDKEEPING
   SYSTEMS
-----------------------------------------------------------------  :10

The internal review found that the Division of Enforcement did not
have an on-line database of matters under investigation or related
information.  According to CFTC officials, the division is working
with CFTC's Office of Information and Resource Management to
consolidate several of its information-tracking systems, which were
developed over the years to track various investigative and
litigation data.  This modernization project is intended to provide a
comprehensive database that tracks matters from point of referral
through the investigation and litigation phases.  It is also intended
to provide staff with on-line access to certain forms and templates
commonly used in investigations and litigation.  According to CFTC
officials, the Office of Information and Resource Management has
recently completed the first phase of the project and is not
scheduled to complete the final phase until after September 1999.

We did not solicit staff views on the modernization of recordkeeping
systems.  Because the system was not fully implemented, it was too
early to obtain meaningful feedback from staff.

   INDICATORS OF CFTC'S COMMITMENT
   TO ITS ENFORCEMENT PROGRAM
-----------------------------------------------------------------  :11

In addition to the changes made to the Division of Enforcement, we
looked for other indicators of CFTC's commitment to its enforcement
program.  As one indicator of such commitment, we found that the
current CFTC chairperson, similar to the previous chairperson, has
made strengthening the division a priority.  For example, CFTC has
increased the division's staff years and budget each year for fiscal
years 1995 through 1997--expanding the division's authorized staff
years from 142 to 159 and its budget from $12.8 million to $16
million.  Most recently, the chairperson requested a fiscal year 1999
budget increase to support, among other things, 10 additional
enforcement staff.  According to the chairperson, this allocation
would complete the division's reorganization, which began in fiscal
year 1995, and bring the division's employment to its highest level
since fiscal year 1992.

Another indicator of CFTC's commitment to its enforcement program is
the extent to which the futures industry views CFTC as having an
effective market presence.  Although disagreeing over the
appropriateness of CFTC's actions, futures industry officials said
that CFTC appears to be taking a more aggressive stance against CEA
violators by imposing more severe sanctions and penalties.  For
example, officials of the National Futures Association said that CFTC
appears to be imposing steeper fines and seeking customer restitution
more frequently.  Likewise, officials from two futures exchanges said
that CFTC appears to be imposing larger monetary fines and longer
trading bans.  Consistent with the views of these officials is CFTC's
recent settlement with Sumitomo Corporation for $150 million, of
which $125 million was a civil penalty for violating the CEA and $25
million was to provide restitution to those injured by the
corporation's conduct.  Similarly, exchange officials said that the
Commission appears to be imposing increased sanctions in cases it has
reviewed on appeal.  Our review of such cases showed that, between
May 1996 and March 1998, the Commission reviewed 26 administrative
law decisions on appeal and imposed increased sanctions in 15 of the
cases, or about 58 percent.\14

We also surveyed enforcement staff to obtain their overall views on
the effectiveness and efficiency of the Division of Enforcement.  Of
the staff surveyed, 72 percent responded that the division is
operating effectively and efficiently from a moderate to a very great
extent, while 13 percent responded that the division is operating in
such a manner to little or no extent.  Headquarters staff were still
more positive than regional office staff.  Ninety-six percent of the
headquarters staff, compared with 57 percent of regional office
staff, responded that the division is operating effectively and
efficiently from a moderate to a very great extent.

Finally, we surveyed enforcement staff on how satisfied they were
with the quality of work currently being done by the division.  Of
the staff surveyed, 79 percent responded that they were generally or
very satisfied with the quality of work being done by the division,
while 11 percent were generally or very dissatisfied.  As in the
above question, headquarters staff were more positive than regional
office staff.  All of the headquarters staff surveyed were generally
or very satisfied with the quality of work done by the division,
while 66 percent of regional office staff were generally or very
satisfied.

--------------------
\14 CFTC's administrative law judges render decisions in enforcement
cases brought by the Division of Enforcement.  All parties to an
administrative hearing have the right to file an appeal of the
administrative law judge's decision with the Commission.

   CONCLUSIONS
-----------------------------------------------------------------  :12

CFTC's Division of Enforcement has made numerous changes to improve
its efficiency and effectiveness.  Although data were not available
to determine whether such changes have had their intended effect, the
enforcement staff that we surveyed generally viewed the division's
current organization and operations more positively than negatively.
However, in each of the areas covered by our survey, differences
consistently existed between the views of the headquarters and
regional office staff that were surveyed.  These differences were
most pronounced in three areas--the division's organizational
structure, written guidance on investigations, and review process for
action recommendations.  Although not explained by our survey, these
differences in enforcement staff views raise questions for us about
the effectiveness of CFTC's changes at the regional office level.

In addition, further action to improve its efficiency and
effectiveness are possible in at least two areas where changes were
made.  First, the absence of a formal training plan may limit the
division's ability to ensure that all staff training needs are
addressed.  A formal training plan should be a more effective and
efficient mechanism for achieving this goal and should be
particularly valuable, given the influx of new staff and the
introduction of teams that must respond to a broader range of
matters.  Second, the division's lack of a complete policies and
procedures manual may limit the division's ability to ensure that all
staff have a clear and consistent understanding of the standards to
be followed in doing their work.  A more complete manual should be a
more effective and efficient tool for achieving this goal and should
be particularly valuable, given the division's organizational and
operational changes--including a new management team--and the absence
of a formal training plan.

Based on our observations, CFTC appears committed to a strong
enforcement program.  In addition to the changes planned or made, the
chairperson has been successful in increasing division resources, the
industry views the agency as acting more aggressively against CEA
violators, and most of the surveyed staff believe the division is
operating well and producing quality work.

   RECOMMENDATIONS
-----------------------------------------------------------------  :13

We recommend that the Chairperson, CFTC,

  -- assess the reasons behind the differences in views between
     Division of Enforcement headquarters and regional office staff
     in the areas where changes were made to determine whether
     opportunities exist for further improvements;

  -- develop a formal training plan for the Division of Enforcement
     that includes a strategy for (1) identifying areas in which
     staff need training, (2) providing staff with this training, and
     (3) tracking and assessing the training staff receive; and

  -- expand the Division of Enforcement's procedures manual to
     include all of the division's major policies and procedures
     applicable to its investigative and litigation processes.

   AGENCY COMMENTS AND OUR
   EVALUATION
-----------------------------------------------------------------  :14

Written comments from CFTC on a draft of this report are contained in
appendix II.  CFTC generally agreed with the facts and conclusions
and agreed to consider the recommendations in the draft report.  The
Director of the Division of Enforcement also provided technical
comments on the draft report, which were incorporated as appropriate.

---------------------------------------------------------------  :14.1

We are sending copies of this report to the Ranking Minority Members
of your Committee and Subcommittee; the Chairperson, CFTC; and other
interested parties.  We will also make copies available to others
upon request.

Please contact me at (202) 512-8678 or Cecile O.  Trop, Assistant
Director, at (312) 220-7600 if you or your staff have any questions.
Major contributors to this report are listed in appendix IV.

Richard J.  Hillman
Associate Director, Financial Institutions
 and Markets Issues

OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

Our objectives were to (1) provide information on the changes that
CFTC made in response to its internal review of the Division of
Enforcement, including enforcement staff views on areas in which such
changes were made; (2) identify further opportunities for
improvement, if any, in these areas; and (3) provide other available
information that might indicate CFTC's commitment to its enforcement
program.

To accomplish our first two objectives, we discussed the Division of
Enforcement's organization and operations with officials from its
headquarters as well as Chicago and New York regional offices.  We
also reviewed documentation on the CFTC internal review; division
policies and procedures, training manuals, and other written
guidance; Securities and Exchange Commission and Department of
Justice policy and procedures and training manuals; and quality
standards for investigations issued by the President's Council on
Integrity and Efficiency.

To obtain enforcement staff views on areas in which changes were
made, we used a structured questionnaire to survey 65 investigators
and trial attorneys--about 50 percent of the Division of
Enforcement's professional staff.  These staff were located in CFTC's
headquarters office in Washington, D.C., and its regional offices in
Chicago, IL; Los Angeles, CA; and New York, NY.  To obtain the views
of a cross-section of enforcement staff, we judgmentally selected
staff based on their location, position, grade, and employment
date--distinguishing between those hired before and after March 31,
1995 (the approximate time that the internal review was completed).
Of the staff surveyed, 43 were hired before March 31, 1995, and 22
were hired after that date; 40 were from the regions and 25 were from
headquarters.

To administer the structured questionnaire, we sent a copy to the
selected staff in April 1998 and then met individually with them to
obtain and discuss their responses.  To encourage candor, we did not
retain identifiers on individual responses, and we reported the
responses in the aggregate only.  For some questions, surveyed staff
indicated that they did not have adequate knowledge or experience on
which to base their answers.  Such responses were recorded as "no
basis to judge" and were not included when calculating the percentage
of staff that gave a particular response to a survey question.  Our
survey results reflect only the views of the enforcement staff that
we surveyed.  (See app.  III for a copy of the structured
questionnaire and survey results.)

Because CFTC had not done a similar survey as part of its internal
review, we lacked a baseline against which to compare our survey
results to determine whether staff views changed from the period when
the internal review was conducted.  In an attempt to obtain staff
views on the effectiveness of the changes made, we asked staff hired
on or before March 31, 1995, whether their responses to certain
questions represented an improvement over the period prior to March
31, 1995.  Staff responses to these questions did not provide a clear
indication of whether staff viewed the changes as being effective.
As a result, they are not discussed in this report.

In the absence of specific data on the changes made, we reviewed the
division's performance measures for fiscal years 1993 through
1997--the period before and after CFTC's internal review.  The
performance measures included the number of investigations and
enforcement cases opened, closed, and pending; the number and amount
of penalties assessed; and the amount of restitution ordered.  Our
review did not provide a basis for assessing whether the changes had
their intended effect.  That is, the performance measures did not
clearly indicate a difference in the division's effectiveness or
efficiency that could be linked to the changes made.  As a result,
our review of the division's performance measures are not discussed
in this report.

To accomplish our third objective, we reviewed the agency's budget
data, fiscal year 1999 appropriation testimony, strategic and annual
performance plans, and annual reports.  We also interviewed
representatives of the Chicago Board of Trade, Chicago Mercantile
Exchange, New York Mercantile Exchange, Futures Industry
Association,\15 and National Futures Association\16 to discuss their
views on the effectiveness of the division.

We did not verify the accuracy of the documentation and other
information provided to us.  We did our fieldwork between November
1997 and May 1998 in accordance with generally accepted government
auditing standards.

(See figure in printed edition.)Appendix II

--------------------
\15 The Futures Industry Association is the national trade
association of the futures industry.

\16 The National Futures Association is a self-regulatory
organization that is responsible, under CFTC oversight, for
qualifying commodity futures professionals for registration and
regulating the sales practices, business conduct, and financial
condition of member firms.

COMMENTS FROM CFTC
=========================================================== Appendix I

(See figure in printed edition.)

GAO SURVEY OF CFTC'S DIVISION OF
ENFORCEMENT STAFF AND THE SURVEY
RESULTS
========================================================= Appendix III

United States General Accounting Office

Survey of Commodity Futures Trading Commission Division of
Enforcement

INTRODUCTION

GAO is reviewing the initiatives CFTC has taken since early 1994 to
reorganize its enforcement program.  As part of this review, we are
interviewing Division of Enforcement staff to obtain their views on
aspects of the enforcement program's operations.  Responses will be
kept confidential and will be reported only in the aggregate.

If you have any questions, please call Rich Tsuhara or Patrick Ward
at (312) 220-7600.

BACKGROUND

Interviewee number:  ___________________________________________

Position and grade:  ____________________________________________

Years at CFTC:  _______________________________________________

Note:  Totals do not always sum to 100 percent because of rounding.
Also, "no basis to judge" responses were not included in the
percentage calculations.

I.  Organizational Structure

1.To what extent, if any, does the Division of Enforcement's current
organizational structure contribute to your ability to conduct
investigations?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              5     20%       0      0%       5      8%
B. To a great extent                  11      44      11      28      22      34
C. To a moderate extent                6      24       9      23      15      23
D. To some extent                      3      12      12      30      15      23
E. To little or no extent              0       0       8      20       8      12
--------------------------------------------------------------------------------
1A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 1 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              0      0%       1      3%       1      2%
B. To a great extent                   6      46       3      10       9      21
C. To a moderate extent                1       8       8      27       9      21
D. To some extent                      2      15       4      13       6      14
E. To little or no extent              4      31      14      47      18      42
--------------------------------------------------------------------------------
2.  To what extent, if any, does the Division of Enforcement's
current organizational structure contribute to your ability to
conduct litigation?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              2     10%       0      0%       2      4%
B. To a great extent                  11      55      10      27      21      37
C. To a moderate extent                5      25       7      19      12      21
D. To some extent                      1       5      10      27      11      19
E. To little or no extent              1       5      10      27      11      19
F. No basis to judge                   5      --       3      --       8      --
--------------------------------------------------------------------------------
2A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 2 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              0      0%       0      0%       0      0%
B. To a great extent                   5      50       2       7       7      18
C. To a moderate extent                0       0       4      14       4      11
D. To some extent                      1      10       4      14       5      13
E. To little or no extent              4      40      18      64      22      58
F. No basis to judge                   3      --       2      --       5      --
--------------------------------------------------------------------------------
3.To what extent, if any, does your team's current organizational
structure provide enforcement staff with a clear chain of command?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent             13     54%       7     18%      20     31%
B. To a great extent                   6      25      14      35      20      31
C. To a moderate extent                3      13       8      20      11      17
D. To some extent                      2       8       7      18       9      14
E. To little or no extent              0       0       4      10       4       6
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
3A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 3 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              2     17%       3     10%       5     12%
B. To a great extent                   2      17       3      10       5      12
C. To a moderate extent                4      33       2       7       6      15
D. To some extent                      2      17       7      24       9      22
E. To little or no extent              2      17      14      48      16      39
F. No basis to judge                   1      --       1      --       2      --
--------------------------------------------------------------------------------
4.  How satisfied or dissatisfied are you that the person who
completes your performance appraisal form is aware of your abilities
and contributions?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                     12     48%       5     13%      17     26%
B. Generally satisfied                 9      36      16      40      25      38
C. Neither satisfied nor               1       4       9      23      10      15
 dissatisfied
D. Generally dissatisfied              2       8       1       3       3       5
E. Very dissatisfied                   1       4       9      23      10      15
--------------------------------------------------------------------------------
4A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 4 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              3     23%       2      7%       5     12%
B. To a great extent                   1       8       2       7       3       7
C. To a moderate extent                3      23       1       3       4      10
D. To some extent                      1       8       2       7       3       7
E. To little or no extent              5      38      22      76      27      64
F. No basis to judge                   0      --       1      --       1      --
--------------------------------------------------------------------------------
5.  How satisfied or dissatisfied are you with the current definition
of the roles and responsibilities of investigators?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      2      8%       2      5%       4      6%
B. Generally satisfied                12      48      10      25      22      34
C. Neither satisfied nor               5      20      10      25      15      23
 dissatisfied
D. Generally dissatisfied              3      12       9      23      12      18
E. Very dissatisfied                   3      12       9      23      12      18
--------------------------------------------------------------------------------
5A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 5 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              1      8%       0      0%       1      2%
B. To a great extent                   2      15       0       0       2       5
C. To a moderate extent                1       8       4      13       5      12
D. To some extent                      1       8       2       7       3       7
E. To little or no extent              8      62      24      80      32      74
--------------------------------------------------------------------------------
6.  How satisfied or dissatisfied are you with the current definition
of the roles and responsibilities of attorneys?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      5     21%       0      0%       5      8%
B. Generally satisfied                11      46      14      35      25      39
C. Neither satisfied nor               6      25      14      35      20      31
 dissatisfied
D. Generally dissatisfied              2       8       7      18       9      14
E. Very dissatisfied                   0       0       5      13       5       8
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
6A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 6 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              1      8%       0      0%       1      2%
B. To a great extent                   3      25       1       3       4      10
C. To a moderate extent                0       0       5      17       5      12
D. To some extent                      3      25       3      10       6      14
E. To little or no extent              5      42      21      70      26      62
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
7.  How satisfied or dissatisfied are you with the current
organizational structure of the Division of Enforcement?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      6     24%       2      5%       8     12%
B. Generally satisfied                13      52      12      30      25      38
C. Neither satisfied nor               3      12      10      25      13      20
 dissatisfied
D. Generally dissatisfied              3      12      13      33      16      25
E. Very dissatisfied                   0       0       3       8       3       5
--------------------------------------------------------------------------------
7A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 7 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              2     15%       1      3%       3      7%
B. To a great extent                   4      31       4      13       8      19
C. To a moderate extent                1       8       5      17       6      14
D. To some extent                      2      15       3      10       5      12
E. To little or no extent              4      31      17      57      21      49
--------------------------------------------------------------------------------
II.Training and Guidance

1.  To what extent, if any, are your training needs being met by any
periodic training you receive, other than the annual training
conference?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              1      4%       4     10%       5      8%
B. To a great extent                   8      33       5      13      13      20
C. To a moderate extent                5      21       9      23      14      22
D. To some extent                      4      17      11      28      15      23
E. To little or no extent              6      25      11      28      17      27
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
2.  To what extent, if any, did the Division of Enforcement's most
recent annual in-house training conference meet your training needs?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              1      5%       3      8%       4      7%
B. To a great extent                   7      32       7      19      14      24
C. To a moderate extent                7      32      11      30      18      31
D. To some extent                      6      27      11      30      17      29
E. To little or no extent              1       5       5      14       6      10
F. No basis to judge                   3      --       3      --       6      --
--------------------------------------------------------------------------------
3.  To what extent, if any, are your training needs being met by the
on-the-job training you receive?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              3     12%       4     10%       7     11%
B. To a great extent                  10      40       7      18      17      26
C. To a moderate extent                6      24       9      23      15      23
D. To some extent                      3      12       8      20      11      17
E. To little or no extent              3      12      12      30      15      23
--------------------------------------------------------------------------------
4.  To what extent, if any, are your training needs being met by the
combination of all the training you receive?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              2      8%       2      5%       4      6%
B. To a great extent                   7      29      10      25      17      27
C. To a moderate extent               10      42      10      25      20      31
D. To some extent                      5      21      12      30      17      27
E. To little or no extent              0       0       6      15       6       9
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
4A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 4 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              2     15%       1      3%       3      7%
B. To a great extent                   1       8       4      13       5      12
C. To a moderate extent                4      31       7      23      11      26
D. To some extent                      2      15       5      17       7      16
E. To little or no extent              4      31      13      43      17      40
--------------------------------------------------------------------------------
5.  How satisfied or dissatisfied are you with the written guidance
that is available to assist you in conducting investigations?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      7     29%       0      0%       7     11%
B. Generally satisfied                12      50      15      38      27      42
C. Neither satisfied nor               3      13      10      25      13      20
 dissatisfied
D. Generally dissatisfied              1       4      11      28      12      19
E. Very dissatisfied                   1       4       4      10       5       8
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
5A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 5 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              3     23%       0      0%       3      7%
B. To a great extent                   1       8       4      13       5      12
C. To a moderate extent                3      23       7      23      10      23
D. To some extent                      2      15       5      17       7      16
E. To little or no extent              4      31      14      47      18      42
--------------------------------------------------------------------------------
6.  How satisfied or dissatisfied are you with the written guidance
that is available to assist you in conducting enforcement actions?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      6     27%       0      0%       6     10%
B. Generally satisfied                 6      27      12      31      18      30
C. Neither satisfied nor               8      36      16      41      24      39
 dissatisfied
D. Generally dissatisfied              2       9       7      18       9      15
E. Very dissatisfied                   0       0       4      10       4       7
F. No basis to judge                   3      --       1      --       4      --
--------------------------------------------------------------------------------
6A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 6 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              1      8%       0      0%       1      3%
B. To a great extent                   2      17       3      11       5      13
C. To a moderate extent                3      25       2       7       5      13
D. To some extent                      2      17       5      18       7      18
E. To little or no extent              4      33      18      64      22      55
F. No basis to judge                   1      --       2      --       3      --
--------------------------------------------------------------------------------
III.  Review Process for Action Recommendations

1.  How satisfied or dissatisfied are you with the guidance that you
currently receive on making action recommendations?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      6     26%       1      3%       7     11%
B. Generally satisfied                12      52      11      29      23      38
C. Neither satisfied nor               3      13       8      21      11      18
 dissatisfied
D. Generally dissatisfied              2       9       9      24      11      18
E. Very dissatisfied                   0       0       9      24       9      15
F. No basis to judge                   2      --       2      --       4      --
--------------------------------------------------------------------------------
1A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 1 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              1      8%       0      0%       1      2%
B. To a great extent                   4      33       2       7       6      14
C. To a moderate extent                1       8       2       7       3       7
D. To some extent                      3      25       4      13       7      17
E. To little or no extent              3      25      22      73      25      60
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
2.  How satisfied or dissatisfied are you with the timeliness of the
current review process for action recommendations?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      2      9%       1      3%       3      5%
B. Generally satisfied                15      65      12      31      27      44
C. Neither satisfied nor               3      13       7      18      10      16
 dissatisfied
D. Generally dissatisfied              3      13       9      23      12      19
E. Very dissatisfied                   0       0      10      26      10      16
F. No basis to judge                   2      --       1      --       3      --
--------------------------------------------------------------------------------
2A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 2 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              1      8%       1      3%       2      5%
B. To a great extent                   4      33       3      10       7      17
C. To a moderate extent                1       8       4      13       5      12
D. To some extent                      2      17       3      10       5      12
E. To little or no extent              4      33      19      63      23      55
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
IV.  Communication Within the Division of Enforcement

1.  How satisfied or dissatisfied are you with the guidance that the
Division of Enforcement currently provides on the types of violations
that you should pursue?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              4     16%       5     13%       9     14%
B. To a great extent                  11      44      13      33      24      37
C. To a moderate extent                5      20       8      20      13      20
D. To some extent                      3      12      11      28      14      22
E. To little or no extent              2       8       3       8       5       8
--------------------------------------------------------------------------------
1A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 1 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              3     23%       1      3%       4      9%
B. To a great extent                   2      15       4      13       6      14
C. To a moderate extent                1       8       2       7       3       7
D. To some extent                      2      15       4      13       6      14
E. To little or no extent              5      38      19      63      24      56
--------------------------------------------------------------------------------
2.  To what extent, if any, does Division of Enforcement management
currently communicate policy-related information to you in a timely
manner?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent             10     40%       4     10%      14     22%
B. To a great extent                   8      32       8      20      16      25
C. To a moderate extent                3      12      12      30      15      23
D. To some extent                      3      12      12      30      15      23
E. To little or no extent              1       4       4      10       5       8
--------------------------------------------------------------------------------
2A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 2 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              4     33%       2      7%       6     14%
B. To a great extent                   3      25       4      13       7      17
C. To a moderate extent                2      17       5      17       7      17
D. To some extent                      2      17       4      13       6      14
E. To little or no extent              1       8      15      50      16      38
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
V.  Equal Employment Opportunity Activities

1.  How satisfied or dissatisfied are you with the current work
environment with respect to equal opportunities to develop your job
skills?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      8     32%       5     13%      13     20%
B. Generally satisfied                 8      32      17      43      25      38
C. Neither satisfied nor               6      24       6      15      12      18
 dissatisfied
D. Generally dissatisfied              1       4       6      15       7      11
E. Very dissatisfied                   2       8       6      15       8      12
--------------------------------------------------------------------------------
1A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 1 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              0      0%       0      0%       0      0%
B. To a great extent                   1       8       0       0       1       2
C. To a moderate extent                1       8       5      17       6      14
D. To some extent                      1       8       4      13       5      12
E. To little or no extent              9      75      21      70      30      71
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
2.  How satisfied or dissatisfied are you with the current work
environment with respect to equal opportunities for promotion?\1

A.  Very satisfied
B.  Generally satisfied
C.  Neither satisfied nor dissatisfied
D.  Generally dissatisfied
E.  Very dissatisfied

2A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 2 represent an improvement over
the period prior to March 31, 1995?\2

A.  To a very great extent
B.  To a great extent
C.  To a moderate extent
D.  To some extent
E.  To little or no extent

3.  How satisfied or dissatisfied are you with the current work
environment with respect to appreciation of diversity?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                      7     28%       7     18%      14     22%
B. Generally satisfied                 7      28       8      20      15      23
C. Neither satisfied nor               8      32      17      43      25      38
 dissatisfied
D. Generally dissatisfied              1       4       4      10       5       8
E. Very dissatisfied                   2       8       4      10       6       9
--------------------------------------------------------------------------------
3A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 3 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              0      0%       0      0%       0      0%
B. To a great extent                   2      18       2       7       4      10
C. To a moderate extent                0       0       1       3       1       2
D. To some extent                      2      18       6      20       8      20
E. To little or no extent              7      64      21      70      28      68
F. No basis to judge                   2      --       0      --       2      --
--------------------------------------------------------------------------------
VI.  Overall Assessment

1.  To what extent, if any, is the Division of Enforcement operating
in an efficient and effective manner on an overall basis?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              4     16%       1      3%       5      8%
B. To a great extent                  10      40      10      26      20      31
C. To a moderate extent               10      40      11      28      21      33
D. To some extent                      1       4       9      23      10      16
E. To little or no extent              0       0       8      21       8      13
F. No basis to judge                   0      --       1      --       1      --
--------------------------------------------------------------------------------
1A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 1 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              2     17%       0      0%       2      5%
B. To a great extent                   3      25       7      23      10      24
C. To a moderate extent                4      33       2       7       6      14
D. To some extent                      1       8       6      20       7      17
E. To little or no extent              2      17      15      50      17      40
F. No basis to judge                   1      --       0      --       1      --
--------------------------------------------------------------------------------
2.  How satisfied or dissatisfied are you with the quality of work
being done by the Division of Enforcement on an overall basis?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. Very satisfied                     11     44%       5     13%      16     25%
B. Generally satisfied                14      56      21      53      35      54
C. Neither satisfied nor               0       0       7      18       7      11
 dissatisfied
D. Generally dissatisfied              0       0       6      15       6       9
E. Very dissatisfied                   0       0       1       3       1       2
--------------------------------------------------------------------------------
2A.  IF RESPONDENT HIRED BEFORE 3/31/95:  To what extent, if any,
does your answer to question number 2 represent an improvement over
the period prior to March 31, 1995?

                                   Headquarters      Regions         Combined
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
                                  Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
A. To a very great extent              2     15%       1      3%       3      7%
B. To a great extent                   3      23       5      17       8      19
C. To a moderate extent                3      23       3      10       6      14
D. To some extent                      3      23       3      10       6      14
E. To little or no extent              2      15      18      60      20      47
--------------------------------------------------------------------------------

--------------------
\1 Responses are omitted because surveyed staff generally did not
interpret the question in an EEO context.  From our follow-up
interviews, we learned that staff typically answered the question in
the context of how satisfied they were with their opportunity to be
promoted, regardless of EEO.

\2 See footnote 1.

MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV

CHICAGO FIELD OFFICE

Cecile O.  Trop, Assistant Director
Richard S.  Tsuhara, Senior Evaluator
Patrick A.  Ward, Senior Evaluator

GENERAL GOVERNMENT DIVISION

Carl M.  Ramirez, Senior Social Science Analyst

OFFICE OF THE GENERAL COUNSEL

Rosemary Healy, Senior Attorney

*** End of document. ***