3. Mandatory disclosure of income, assets, and certain transactions. 4. Thorough study of proposed changes in criminal law. 5. Creation of a citizens' organization to work for better government Recommendation: Commission on Ethics in Government_ 3. Situations which give rise to ethical problems___. 4. The development of voluntary codes of professional ethics_ B. Recommended bill to amend the Administrative Procedure Act. C. Recommended bill to require Members of Congress and other Govern- ment officials to disclose income, assets, and dealings. D. Suggested bill to amend criminal laws in reference to bribery and graft, claims against the Government, Government contracts and other E. Memorandum on suggested bill to amend criminal laws. - F. Rules of procedure of the Subcommittee on Administration of the Inter- III PROPOSALS FOR IMPROVEMENT OF ETHICAL STANDARDS IN THE FEDERAL GOVERNMENT INCLUDING ESTABLISHMENT OF A COMMISSION ON ETHICS IN GOVERNMENT -Ordered to be printed Mr. DOUGLAS, from the special subcommittee of the Committee on Labor and Public Welfare, submitted the following REPORT The subcommittee of the Labor and Public Welfare Committee, to which was referred the resolution (S. Con. Res. 21) to establish a Commission on Ethics in the Federal Government, held hearings and received testimony, both oral and written, from a broadly representative group of distinguished witnesses. Many proposals were made in these hearings which, in the subcommittee's opinion, were of such value as to warrant their submission to the full committee and to the Senate for their information. This report is presented to accomplish that objective. PART I. SUMMARY OF RECOMMENDATIONS 1. A COMMISSION ON ETHICS IN GOVERNMENT A Commission on Ethics in Government should be established by joint resolution of Congress. The Commission's function should be twofold, the first to investigate and report to the President and to the Congress on the moral standards of official conduct of officers and employees of the United States; the effect thereon of the moral standards in business and political activity of persons and groups doing business with the Government or seeking to influence public policy and administration; and the moral standards generally prevailing in society which condition the conduct of public affairs or which affect the strength and unity of the Nation. The Commission's inquiry should focus primarily on the legislative and executive branches, but should not exclude the administration of justice, federally supported activities of the States, and such ideas, attitudes, habits, practices, and standards of American society as are relevant to the Commission's functions. 1 The second function of the Commission should be to recommend measures to improve and maintain at a high level moral standards of official conduct in the Federal Government and of all persons who participate in or are responsible for the conduct of public affairs. It should be noted that the Commission would not be concerned with the morals of individuals-governmental personnel or private citizens-except as they are involved in the conduct of public affairs. The Commission should consist of 15 members, 5 appointed by the President, 5 by the President of the Senate (i. e., the Vice President), and 5 by the Speaker of the House. All members should be persons of recognized integrity, judgment, and experience in public or civic affairs. Of the members appointed by the President, two should be public employees, one a career civil servant holding a position not above GS-16, and one holding an office of higher rank. Of the members appointed by the President of the Senate and Speaker of the House, in each case two should be Members of the respective legislative body of the appointing officer, one a Democrat and one a Republican. The Commission should have power to hold hearings and secure. testimony and evidence, authority to employ staff, and funds to carry on its work. It should have 2 years in which to complete its investigation and report, but should place its major recommendations before the President and Congress during the first session of the Eightythird Congress. It should terminate 30 days after submitting its final report. This recommendation is embodied in Senate Joint Resolution 107, which has been reported favorably by the Labor and Public Welfare Committee and is printed in section A of the appendix to this report. 2. AMENDMENTS TO THE ADMINISTRATIVE PROCEDURE ACT The Administrative Procedure Act should be amended to provide that the following practices shall be improper for Federal officials and employees and shall be grounds for summary dismissal from the Federal service: (a) Engaging in any personal business transaction or private arrangement for personal profit which accrues from or is based upon the official position, authority, or confidential information of the official or employee. (b) Accepting any valuable gift, favor, or service directly or indirectly from any person or organization with which the official or employee transacts business for the Government. (c) Discussing future employment outside the Government with a person or organization with which there is pending official business. (d) Divulging valuable commercial or economic information of a confidential character to unauthorized persons or releasing such information in advance of its authorized release date. (e) Becoming unduly involved, for example, through frequent luncheons, dinners, parties, or other expensive social engagements with persons outside the Government with whom they do official business. The Administrative Procedure Act should be amended to prohibit Federal officials who participate in the making of loans, granting of subsidies, negotiation of contracts, fixing of rates, or the issuance of valuable permits or certificates from acting in any official transaction or decision which chiefly concerns a person or organization by which they have been employed previously in the preceding 2 years or with which they have a valuable economic interest. Any violation of this prohibition should be grounds for summary dismissal. The Administrative Procedure Act should be further amended: (a) To provide that former Federal officials and employees shall not appear before agencies in which they were formerly employed in cases which they previously handled or of which they had some direct knowledge as Federal officials or employees and that they shall not participate in the preparation of such cases. (b) To provide that for a period of 2 years following their termination, Federal officials and employees of the ranks GS-15 and above who leave the Government shall not appear before the Federal agencies in which they were formerly employed as the representative of a person or organization doing business with the Government. The penalties of disbarment from practice before a Federal agency and of cancellation of contract in appropriate cases should be authorized to discourage those who would corrupt as well as those who allow themselves to be corrupted. Publicity for findings of improper prac tices would serve as a further deterrent. These recommendations are embodied in S. 2293, printed in section B of the appendix to this report. 3. MANDATORY DISCLOSURE OF INCOME, ASSETS, AND CERTAIN TRANSACTIONS Legislation should be enacted requiring all Members of Congress, all Federal officials receiving a salary of $10,000 or more, or who are in positions of GS-15 and above, or of equivalent rank, and the principal officials of national political parties to disclose their incomes, assets, and all dealings in securities and commodities. The disclosures should be made by filing reports with the Comptroller General on forms provided by him to show income by source and amounts and to identify assets and show their value. These reports should be annual. The revelation of such information will tend to deter individuals from accepting any income, holding any assets, or making any transactions which they believe are questionable. It will encourage public officials and political leaders to judge their own conduct with greater care. It will also provide for the public and for the great majority of such public servants and party officials whose actions and motives rise above personal considerations, the strong ground of truth on which to stand against unfair charges and innuendo. S. 2284, which has been drafted along the general lines of the Morse bill, S. 561, will give effect to these recommendations. It has been printed in section C of the appendix to this report. 4. THOROUGH STUDY OF PROPOSED CHANGES IN CRIMINAL LAW The laws governing conflicts of interest and bribery should be amended to correct inconsistencies, close loopholes, and extend their coverage. The proposed amendments, which the subcommittee recommends for thorough study by executive agencies and appropriate congressional committees and which are set forth in the appendix to |