Some of the teamsters suggest that if something was done wrong, let us know, and if there has been no wrongdoing and no promise of prosecution, then I think that even the trustees that resigned, that this cloud ought to be removed from over their heads and something said.

But so far, we just have the press release, and I assume that after hearing all of the questions that there has been no change and that the matters still remain unclear and unanswered. You still would maintain that an executive session is the only vehicle for more information to be revealed?

Secretary MARSHALL. Of course, that agreement has not been consummated, and it is possible that we will still have to go to court. Mr. RANGEL. That would be a civil action.

Mr. MARSHALL. Yes. I am not a lawyer, either, so I don't understand all of the reasons. My natural inclination is to say what I think, and to make all the statements, and I have nothing to be ashamed of in this case. My sole interest is not in trying to evade or to avoid making information available to the public or to anybody else.

My sole interest in it, and I also think that you are right, that the public has a right to know, that the people who are protected by these funds have a right to know. I also think that we have to consider the impact of full disclosure now on the protection of those funds. If we did have lawsuits and I am informed by Attorney General Bell himself, Mr. Pickle, who gave me the information about what I ought to do and ought not to do-it wasn't through anybody else in the Justice Department-that it would be better if I did not testify publicly about those matters now.

Now, of course, when we get ready to make, to consummate the case, then I think it would be appropriate for us to make a full disclosure of everything that went into that; but I think that the basic problem right now is that much of the information that we have could be used in both criminal and civil cases, which had nothing to do with this particular negotiation, but is related to it.

That is to say, what we did here was what we thought was in the best interests of preserving those funds right now.

In order to answer your question about why they stepped down now, I would have to know what was in their mind. I can tell you why, we agree to it, now, it was because we thought that this was a good arrangement and that we could do no better by any other procedure open to us to conserve those funds; and that was the best option open to us; and that is the reason we took it.

Now, what I am concerned about, of course, is the only reason that I would be reluctant to disclose it, and it is on the advice that I have had from the Attorney General and others that if information relating to this case got publicized, it might jeopardize evidence that we would use in civil and criminal investigations, and maybe even in trying to enforce the arrangement that we have agreed to at this point.

Mr. PICKLE. Mr. Secretary, last summer, the other body held a halfday public hearing, and, I think, 112 days in executive session, and the information they got in that executive session was kept largely to themselves. I don't charge that that executive session was a dog and

pony show, but it was information that they had, and we couldn't get it short of a pack of bloodhounds and a police escort.

Now, we don't want to go into an executive session of 112 days. If we go into executive session, I think our session will be short and to the point, and get such information as you think you can give us without trying to put within our committee two or three volumes of testimony. This is because we don't want to receive a lot of testimony on matters that we think we can comment on otherwise but that we would be prohibited from talking about because we went into executive session.

Secretary MARSHALL. I understand that, and I think whatever you say about the case doesn't jeopardize our lawsuit that we have, but what I say about it might.

Mr. PICKLE. Mr. Chairman, I move we go into executive session. Mr. GIBBONS. Before that, I will call on Mr. Bafalis.

Mr. BAFALIS. I don't understand, Mr. Secretary, how a question regarding whether Mr. Fitzsimmons would be in control of the Fund would jeopardize the cases.

But the Secretary has told us, Mr. Chairman, that on April 30, an agreement is going to be final, and he will then make public the information; and I don't then see the urgency that this committee has to discover the information now.

Because of that I will vote against going into executive session.

Mr. GIBBONS. Is there any further debate on Mr. Pickle's motion? If not, the Clerk will call the role. Those in favor of going into executive session will signify by saying "aye". Those opposed will signify by saying "no".

The Clerk will call the vote.

The CLERK. Mr. Pickle?

Mr. PICKLE. Aye.

The CLERK. Mr. Rangel?

Mr. RANGEL. No.

The CLERK. Mr. Stark?
Mr. STARK. I pass.

The CLERK. Mr. Gephardt?

Mr. GEPHARDT. Aye.

The CLERK. Mr. Bafalis?

Mr. BAFALIS. No.

The CLERK. Mr. Martin?

Mr. MARTIN. Aye.

The CLERK. Mr. Chairman?

Mr. GIBBONS. Aye.

Mr. BAFALIS. Mr. Chairman, are proxies of people

Mr. GIBBONS. If you have them and they are written.

Mr. BAFALIS. I have one. Mr. Crane votes no.

Mr. GIBBONS. Mr. Crane votes no

The CLERK. Mr. Stark, did you want to vote?

Mr. STARK. I will continue to pass.

The CLERK. The vote is four to three in favor of the motion.
Mr. GIBBONS. The motion is carried.

All spectators will please clear the room.

I would ask the chief representatives of the agencies to dismiss anyone with them who doesn't need to be in here, and we will likewise scale down our staff so that there will be two majority staff members and one minority member.

The Chair will say that we will resume this hearing at 11:10 a.m. Mr. RANGEL. Mr. Chairman, I would like to state for the record that I don't want to be a part of potentially impeding what would be a criminal investigation; I would like to be excused from the executive

session.

Mr. BAFALIS. I also would like to be excused, Mr. Chairman.

[Whereupon, at 11:10 a.m., the subcommittee proceeded into executive session.]

TEAMSTERS' CENTRAL STATES PENSION FUND AND GENERAL ERISA ENFORCEMENT

TUESDAY, JULY 19, 1977

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON OVERSIGHT,

COMMITTEE ON WAYS AND MEANS.

Washington, D.C.

The subcommittee met at 8:35 a.m., pursuant to notice, in the committee hearing room, Longworth House Office Building, Hon. Sam Gibbons (chairman of the subcommittee) presiding.

Mr. GIBBONS. Good morning. This resumes the hearing of the Ways and Means Subcommittee on Oversight, and now that we are all assembled, I have a little opening statement to make.

We are here to continue our review of the progress made by the Internal Revenue Service and Department of Labor in their investigations of the Teamsters' Central States Pension Fund (the fund)-the first major enforcement effort under the Employee Retirement Income Security Act of 1974 (ERISA).

Our primary purposes are to review the numerous actions and developments since our first series of hearings on this matter last March and April, and to assess them in light of the basic intent of Congress in enacting ERISA to preserve and protect employee pension rights and benefits.

Tomorrow, we will be stepping back from the Central States matter and taking broader look at agency enforcement and compliance efforts under the ERISA program. At that time, we hope to gain some insights into the IRS and DOL policies and operations in administering the pension reform law.

To quickly review the series of event that have occurred in this case to date, over a year ago the IRS revoked the tax-exempt status of the Central States Pension Fund. That letter is being released today.

At the outset of our recent hearings on this matter, held in March and April of this year, the IRS and Labor Department announced a series of out-of-court agreements and reforms to be undertaken by the fund which would permit the tax-exempt status to be restored. The agencies said at that time that certain asset management and benefit administration issues "have been resolved in a manner that meets the Government's objectives."

At the heart of this blueprint for reform were various commitments relating to the management of the fund's investment assets. The trustees agreed, first, to transfer the control of all the assets to independent money managers and, second, to allow outside professionals to review all the loans and transactions since February 1965.