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                                                       Calendar No. 207
107th Congress                                                   Report
 1st Session                                                     107-88



                              R E P O R T

                                 of the


                          UNITED STATES SENATE

                              to accompany

                                S. 1202

                        THROUGH FISCAL YEAR 2006

                October 30, 2001.--Ordered to be printed


99-010                     WASHINGTON : 2001
             For sale by the Superintendent of Documents, 
                   U.S. Government Printing Office 
   Internet:  Phone: toll free (866) 512-1800; 
                (202) 512�091800 Fax: (202) 512�092250 
           Mail: Stop SSOP, Washington, DC 20402�090001


               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
MAX CLELAND, Georgia                 PETE V. DOMENICI, New Mexico
THOMAS R. CARPER, Delaware           THAD COCHRAN, Mississippi
JEAN CARNAHAN, Missouri              ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota               JIM BUNNING, Kentucky
           Joyce A. Rechtschaffen, Staff Director and Counsel
                       Lawrence B. Novey, Counsel
         Hannah S. Sistare, Minority Staff Director and Counsel
                 Dan G. Blair, Minority Senior Counsel
                     Darla D. Cassell, Chief Clerk
                                                       Calendar No. 207
107th Congress                                                   Report
 1st Session                                                     107-88




                October 30, 2001.--Ordered to be printed


 Mr. Lieberman, from the Committee on Governmental Affairs, submitted 
                             the following

                              R E P O R T

                         [To accompany S. 1202]

    The Committee on Governmental Affairs, to whom was referred 
the bill (S. 1202) to amend the Ethics in Government Act of 
1978 (5 U.S.C. App.) to extend the authorization of 
appropriations for the Office of Government Ethics through 
fiscal year 2006, having considered the same, reports favorably 
thereon and recommends that the bill do pass.


 I. Purpose and Summary...............................................1
II. Background and Need for Legislation...............................1
III.Legislative History...............................................4

IV. Regulatory Impact Statement.......................................5
 V. Congressional Budget Office Cost Estimate.........................5
VI. Changes to Existing Law...........................................6

                         I. Purpose and Summary

    The purpose of S. 1202 is to continue programs that foster 
high ethical standards for employees in the Executive Branch by 
extending the authorization of appropriations for the Office of 
Government Ethics (OGE) through the end of the 2006 fiscal 

                II. Background and Need for Legislation

    OGE was established by Title IV of the Ethics in Government 
Act of 1978 (Ethics Act), 5 U.S.C. App., to provide ``overall 
direction of executive branch policies related to preventing 
conflicts of interest on the part of officers and employees of 
any executive agency.'' OGE's role has subsequently expanded by 
statute and executive order. In addition to its programs 
relating to prevention of conflict of interest, OGE now 
provides interpretive guidance, training, and administrative 
support on a number of other requirements related to employee 
conduct, such as potential misuse of one's official position 
and the rules governing gifts between employees. More recently, 
in light of the corrosive effect of corruption upon certain 
foreign governments and economies, U.S. foreign-policy agencies 
have called upon OGE to provide technical assistance to foreign 
governments regarding methods for preventing conflict of 
interest and other ethics violations as part of broader anti-
corruption efforts.

 a. creation and past authorizations of the office of government ethics

    In response to a 1976 General Accounting Office report to 
Congress identifying a number of problems with the federal 
government's ethics system, President Carter submitted draft 
legislation in 1977 proposing the creation of OGE. The 
following year, on October 26, 1978, the Ethics Act was signed 
into law as Public Law 95-521. (For a more detailed history of 
the creation and past authorizations of OGE, see Senate Report 
No. 106-216, issued by this Committee on November 5, 1999, 
regarding S. 1503, 106th Cong.)
    OGE was originally established within the Office of 
Personnel Management (OPM) and was authorized for five years, 
through September 30, 1983. In 1983, OGE was reauthorized for 
another five years pursuant to Public Law 98-150. This law 
extended OGE's authorization through September 20, 1988, gave 
OGE additional powers and responsibilities, and granted it 
greater independence from the rest of OPM. OGE was again 
reauthorized in 1988, this time for six years, through 
September 30, 1994, by Public Law 100-598. The 1988 law made a 
number of additional enhancements in OGE's authority and 
established OGE as an independent agency, separate from OPM.
    During the period of 1988 to 1994, the executive branch 
ethics program and OGE's responsibilities increased as a result 
adoption of the Ethics Reform Act of 1989 (Public Law 101-194), 
which included extensive ethics reform provisions, and two 
Executive Orders. Executive Order 12674 (April 12, 1989) 
required the promulgation of comprehensive Standards of Ethical 
Conduct for Executive Branch Employees and Executive Order 
12834 (January 20, 1993) created new post-employment rules for 
political appointees.
    After a two-year lapse of authorization, in 1996 OGE was 
reauthorized by Public Law 104-179 for three years, through 
September 20, 1999. In the 106th Congress, the Committee 
reported out S. 1503 on November 3, 1999, to reauthorize OGE 
for four years, and the Senate passed S. 1503 on November 19, 
1999. The House of Representatives also passed a four-year 
reauthorization bill, H.R. 2904, on November 8, 1999. Neither 
bill was enacted, however, so the authorization of 
appropriations remains lapsed. During this period, funding for 
OGE's activities has continued to be provided by appropriations 
legislation enacted for FY 2000, Public Law 106-58, and for FY 
2001, Public Law 106-554, and would be provided for FY 2002 by 
the conference report on H.R. 2590, H. Rept. No. 107-253, which 
was filed October 26, 2001.


    The statutes and the basic elements of the ethics program 
administered by OGE have not changed dramatically since the 
Office was last reauthorized in 1996, and OGE has focused on 
improving how it provides its ethics services and on evaluating 
the impact of the program.\1\
    \1\ This description of developments since OGE's last 
reauthorization is based largely on briefings and documents provided by 
OGE to the Committee.
    In the last four years, OGE has expanded its desk officer 
program, which assigns OGE staff to specific agencies to 
provide more direct and consistent services to those agencies. 
OGE has enhanced the employee training materials it produces 
for use by agencies and has designed new courses for educating 
agency ethics officials, including those located outside of the 
Washington, D.C., area. It has recently redesigned its web site 
( to make ethics information more easily 
accessible to ethics officials as well as to the public. And it 
developed a CD-ROM containing all of the basic resource and 
reference materials important to carrying out its program. It 
also developed the software used in the completion of the 
confidential financial disclosure forms filed by more than 
250,000 employees in the Executive Branch.
    In time for the transition of administrations following the 
2000 election, OGE completed the development of software 
necessary to complete, save the data on, and print the public 
financial disclosure form, the SF 278. This form must be filed 
by all senior officials in the Executive Branch, including 
those individuals who are nominated by the President for 
Senate-confirmed positions. OGE is required to review and 
certify the financial disclosure forms of those nominees. From 
January 1996 through September 2001, OGE has reviewed more than 
1,600 of these nominee forms, including approximately 460 
during the period from January 2001 through September 2001. OGE 
also reviews certain of the financial disclosure forms that 
senior employees file annually and upon termination, and, from 
January 1996 through September 2001, OGE reviewed approximately 
5,600 of these annual and termination reports. Furthermore, OGE 
has continued to provide interpretive guidance on the criminal 
conflict of interest statutes and to review and update its 
regulations for the Standards of Ethical Conduct.
    In 2000, OGE, working with an international consulting 
firm, conducted its first survey of Executive Branch employees 
in order to begin developing a way to measure the effectiveness 
of the ethics program and assess employee perceptions of the 
ethical culture of the agencies for which they worked. Key 
survey findings and recommendations included: (1) employees are 
generally aware of the ethics program and are familiar with and 
use the ethics resources in their agencies; however, improved 
communication to employees may help reduce the number whose 
needs have not been met; (2) the frequency of ethics training 
is related to the perception of a positive ethical culture; 
therefore, providing additional ethics training may lead to 
improved employee perception of the ethical culture and 
increased employee awareness of an agency's ethics program; and 
(3) supervisory and executive leadership attention to ethics 
are important factors in creating and maintaining a positive 
ethics culture; therefore, efforts to get supervisorsand agency 
leadership to play a more active and visible role in the promotion of 
an agency's ethics programs may be critical to program success. The 
survey results also provide a benchmark against which future program 
changes may be measured.
    Finally, in response to a requirement proposed by this 
Committee in the Presidential Transition Act of 2000, Public 
Law 106-293, OGE conducted a study and issued a ``Report on 
Improvements to the Financial Disclosure Process for 
Presidential Nominees.'' That report led OGE to propose 
amending the public financial disclosure requirements for 
Executive Branch officials under the Ethics in Government Act. 
OGE Director Amy Comstock testified before the Committee on 
April 5, 2001 in support of these proposals. OGE's research 
also identified potential overlap and redundant questions on 
the various disclosure forms that must be completed by 
Presidential nominees to Senate-confirmed positions, and OGE 
shared these findings with the Senate committees that consider 
nominations. OGE has also committed to undertaking a study of 
the criminal conflict of interest laws.
    Recently, as attention has focused on the important effects 
of corruption on certain governments and economies outside of 
the United States, OGE has been called upon by U.S. foreign 
policy agencies to provide technical assistance to other 
governments regarding the elements of a preventative program as 
one part of any government's overall anti-corruption efforts.

                      C. OGE'S BUDGET AND STAFFING

    Since OGE's last reauthorization in 1996, its budget and 
staffing levels have been as follows:

                  Fiscal year                     Funding       staff
1997..........................................   $8,078,000           87
1998..........................................    8,265,000           84
1999..........................................    8,492,000           84
2000..........................................    9,114,000           84
2001..........................................    9,663,000           82
2002..........................................  \2\ 10,117,           82
\2\ This funding level for FY 2002 would be provided by the conference
  report on H.R. 2590, H. Rept. No. 107-253, filed October 26, 2001.


    S. 1202 would reauthorize OGE's appropriations through the 
end of the 2006 fiscal year. This time span accommodates OGE's 
preference that a reauthorization process not occur during the 
first or fourth year of Presidential term, when the agency's 
resources are significantly devoted to matters arising from 
election and transition activities.

                        III. Legislative History

    S. 1202 was introduced by Senator Lieberman, for himself 
and Senator Thompson, on July 19, 2001, and referred to the 
Committee on Governmental Affairs. Senior staff of OGE made a 
comprehensive presentation to Committee staff with regard to 
OGE's recently completed and ongoing programs, its future 
program plans, and its role in the current transition process. 
No hearings were held on the legislation.
    S. 1202 was considered by the Committee at its business 
meeting on August 2, 2001, and was ordered reported favorably, 
without amendment, by voice vote. Committee members present 
were: Senators Levin, Akaka, Torricelli, Carper, Dayton, 
Thompson, Collins, Cochran, and Lieberman.

                    IV. Regulatory Impact Statement

    Paragraph 11(b)(1) of rule XXVI of the Standing Rules of 
the Senate requires that each report accompanying a bill 
evaluate the ``regulatory impact which would be incurred in 
carrying out this bill.'' Carrying out S. 1202 would have no 
regulatory impact.

                 V. Congressional Budget Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, August 9, 2001.
Hon. Joseph I. Lieberman,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1202, the Office of 
Government Ethics Authorization Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).

S. 1202--Office of Government Ethics Authorization Act of 2001

    Summary: S. 1202 would reauthorize the Office of Government 
Ethics (OGE) for fiscal years 2002 through 2006. Assuming 
appropriation of the necessary amounts, CBO estimates that 
implementing S. 1202 would cost $56 million over the 2002-2006 
period. This estimate assumes adjustments for anticipated 
inflation. Without such adjustments, we estimate that 
implementation would cost $49 million over the 2002-2006 
    Because the bill would not affect direct spending or 
receipts, pay-as-you-go procedures would not apply. S. 1202 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act (UMRA) and would 
not affect the budgets of state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1202 is shown in the following table. 
For this estimate, CBO assumes that the necessary amounts will 
be appropriated by the start of each fiscal year and that 
outlays will follow the historical spending pattern of the OGE. 
Estimated authorization levels for 2002 through 2006 are based 
on the 2001 appropriation for the OGE, and $10 million. The 
costs of this legislation fall within budget function 800 
(general government).

                                                                     By fiscal year, in millions of dollars--
                                                                   2001    2002    2003    2004    2005    2006
                                        SPENDING SUBJECT TO APPROPRIATION

OGE Spending Under Current Law
    Budget Authority \1\........................................      10       0       0       0       0       0
    Estimated Outlays...........................................      10       1       0       0       0       0
Proposed Changes
    Estimated Authorization Level...............................       0      11      11      11      12      12
    Estimated Outlays...........................................       0      10      11      11      12      12
OGE Spending Under S. 1202
    Estimated Authorization Level \1\...........................      10      11      11      11      12      12
    Estimated Outlays...........................................      10      11      11      11      12      12
\1\ The 2001 level is the amount appropriated for that year.

    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: S. 1202 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Mark Grabowicz. Impact 
on State, Local, and Tribal Governments: Susan Sieg Tompkins. 
Impact on the Private Sector: Patrice Gordon.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                      VI. Changes to Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 1202 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

                           UNITED STATES CODE


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Sec. 405. Authorization of appropriations

    There are authorized to be appropriated to carry out this 
title such sums as may be necessary for each of fiscal years 
[1997 through 1999] 2002 through 2006.