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August 3, 1994 - Part 2
(11:50:40) If that is the case, even if its dissolution is only three months away, let's get him confirmed by the Senate, and then in the process get him the instructions to guarantee that there will be separation between the RTC and the Treasury. Because we have had testimony here Secretary BENTSEN, Senator, I think that is a good idea. And let me see if I can get that done. You know I have tried for a long time to get somebody in that job and was not able to do it. Senator BENNETT. Well you have somebody in that job. Send him up, and then if you talk Mr. Simons or whoever into taking it later 37 on, he can always resign, but let's get somebody who is doing the job confirmed and let's do it as quickly as we can. Now Mr. Secretary, I have not had an opportunity to review the report of the Office of Government Ethics until this morning. And I must say to you, I appreciate the way you deal with this in your testimony because you say, right up front, that the report was troubled by some of the contacts, and then you lay out those areas of trouble. One of the things we have constantly heard from Mr. Altman was "the OGE cleared it." Well the OGE says there is nothing wrong. No, the OGE says I am OK We got that flavor again and again. And now that I have the report and can read it, I realize that there are a number of areas that the OGE says need work. And I am struck by the statements on their cover letter. They say to you, the Office of Government Ethics is not an investigative agency, And then it goes on and says, it is of course your responsibility to make any necessary determinations. This is a report to you of what they found, but it is laced with statements like, you could conclude, you should examine, you do this, you do that, and so on. And the fact that you have highlighted, in your testimony, that the OGE says there is a possible lack of appreciation of the difference between a Treasury function and the one belonging to the RTC, and what rules apply, there is a misconception about the standard on the use of public information, a misconception on the function of recusal. I am quoting, not from the report, but from your testimony Secretary BENTSEN. That is correct. Senator BENNETT [continuing]. To emphasize how grateful I am to you that you are willing to be up front about the fact that there needs to be some things done. Just as an editorial comment, I had had this before. Let me get the right page here so I quote it exactly. I am just kind of amused by the OGE's comment. While we would never find fault with an individual sensitivity to conflict or appearances of conflicts, Mr. Altman's actions in this regard are somewhat confusing. I find that a bit of an understatement, but I am delighted to have that. So might I suggest to you that your guiding star should be to go through this report, make as strong a series of changes as you possibly can, but as I say, your guiding star should be the separation between the RTC and the Treasury Department, because we have had testimony here under oath saying that the RTC has been politicized more heavily under these circumstances in this Administration than at any other time. Now you may disagree with that characterization, and I'm sure that that is Secretary BENTSEN. I do. I do. Senator BENNETT [continuing]. That is possible, but at least it exists. It has been testified to by Mr. Katsanos. Mr. Roelle's testimony to me, seemed to corroborate that, The perception is strongly there. 38 And if you want recommendations from this Committee, my recommendation would be, do whatever you can to see that that perception is erased. Secretary BENTSEN. I appreciate that, Let me say to you, Senator, I have spent approximately 30 years in public service, and my reputation is something I treasure. The first meeting I had of the top officials in Treasury was on ethics. And that was, as I recall, I think it was the day after I was sworn in. And I called them together, and I had the top career ethics attorney present to us what could and what could not be done, and what our responsibilities were on ethics.
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August 3, 1994 - Part 2
(11:55:53) Let me say that in all the years I was in the Senate, I never accepted, for me, an honorarium, not once. I can remember Dale Bumpers talking about coming up to my office, because I had a management consulting firm work on the organization of my office. And I think we had a reputation for having an efficient one. And he said, he was interested if the telephone operator was taking down and checking calls to see which of them were my personal calls, so I could reimburse for them. So I have worked at that one, and that is why I made it the first meeting that we had in Treasury. Time and time again, I consult with the ethics office in Treasury, can we do this, or cannot we do this. And I appreciate your counsel. Senator BENNETT. Thank you, Mr. Chairman. The CHAIRMAN. Senator Bryan. OPENING COMMENTS OF SENATOR BRYAN Senator BRYAN. Thank you very much, Mr. Chairman. Mr. Secretary, welcome. It is nice to have you with us this morning. I must say that I wish we were discussing some other issues, because under your leadership the Department of Treasury has been most, most helpful in dealing with some of the regulatory paperwork burdens on the CTRs in terms of our credit crunch and the situation we have in my own State in dealing with 6(a), and I think that that is a result of your leadership. I want to acknowledge that publicly and commend you for what I consider a very refreshing approach in dealing with a number of these issues. Secretary BENTSEN. Thank you. Senator BRYAN. I want to ask you a question about a structure, if I may, first. Without going into all of the things that occurred and some of the contacts which are troubling for us all, I think those of us on this Committee that worked on the FIRREA. legislation back in 1989 had an understanding that we were being much more clear than in fact the law is in establishing a separation in terms of the independence of the operation of the RTC and the Treasury. Mr. Ryan has commented, for example, that when he first came aboard that he was-I do not think "surprised" was his word, but are less clear. My question, Mr. Secretary, is prospective, not retrospective. That is, have you undertaken the establishment of any guidelines to make sure that that separation that you have testified to and that was the import of it that the lines of authority 39 that I think is so important, that there are some guidelines that are clear in terms of the contact between Treasury and the RTC as these cases may be developed and processed? Secretary BENTSEN. I have had them call the Attorney General's Office to tell them that we are going to ask for their guidance and their advice and their counsel. I will do the same thing with the Office of Government Ethics. I will do that with the Inspector General. And such counsel as you have for us, we will be happy to have. Then, we will be working to have better guidelines and more clarity in that regard. Senator BRYAN. I would like Secretary BENTSEN. Now let me further state that one of the big problems was having the Deputy Secretary having to serve as the Chief Executive of the RTC at the same time. Now that will not be the case anymore. But somebody else made the point about the Vacancy Act. I think we should do some things there, too, to further assure that this or other agencies do not have that kind of a problem. Senator BRYAN. And I have acknowledged in my opening statement, as well as in my discussion yesterday with Mr. Altman, that I do think that he was placed in an untenable position because of the inherent responsibilities both of those positions involved. That is unique. It will not occur again, I am sure.
August 3, 1994 - Part 2
(12:05:40) Secretary BENTSEN. To the best of my knowledge it was followed. To the best of my knowledge, it was followed, Senator ROTH. But in other words, after those instructions went out, it would have been improper for any Treasury official to discuss the specific matter of Whitewater with the White House? Secretary BENTSEN. It would have been in violation of my instructions. Senator ROTH, It would have been a violation of your instructions. The same would be true of any telephone calls or contacts as well between Treasury and the White House? Secretary BENTSEN. Oh, yes. Yes. Senator ROTH. Mr. Secretary, let me ask you this: When someone recuses themself from a case, that means they have nothing further to do with the case? Isn't that correct? Secretary BENTSEN. That means, yes, they have nothing to do to influence the decision on that case from that point on, yes. Senator ROTH. In other words, they don't attend Secretary BENTSEN. That is the way I would interpret it. Senator ROTH. They don't attend meetings. They don't get briefings. They don't give briefings. They don't make or receive telephone calls about the case. Is that correct? Secretary BENTSEN. Senator, I leave that to the lawyers. I don't know the detail of that. Senator ROTH. Well let me ask you, since these individuals were being asked to recuse themselves, would that be your general understanding? Secretary BENTSEN. I am sure not trying to avoid you on that, Senator. I just don't know-I don't know the legal standing of that. Senator ROTH. Well the reason, Mr. Secretary, I raise that, is yesterday Mr. Altman claimed that he had effectively informally recused himself from Madison Guaranty even before his formal recusal, by indicating he would follow the recommendation of the RTC General Counsel. But at the same time, he was attending meetings and getting and giving briefings and phone calls. So at least in this Senator's judgment that is not tantamount to a de facto recusal. Do you have any comment? 42 Secretary BENTSEN. No, I don't. That's for the attorneys to decide. Senator ROTH. Mr. Secretary, I would like to ask you a couple of general questions not based on the facts, but to try to glean what we can learn from the experience we have had. One of my questions is: Would you agree or disagree that, as a general rule, it is advisable for a Federal employee to recuse himself or herself from an investigation involving the President if the individual is a personal friend of the President? Secretary BENTSEN. I think what you have in the situation is: Is there a conflict of interest? And, how do you think you can satisfy yourself that you have been impartial? I think that you are in a position, a difficult position, and that one of the ways that you can bring it to an end is to recuse yourself. As I heard and found out the facts and all, to the extent I have them, subsequent to his asking me for my counsel and advice on it-and I am speaking of Mr. Altman-I would recuse myself. Senator ROTH. Well that certainly makes good sense to me. Let me just point out that to me it seems consistent with the Nussbaum memorandum of February 22nd, the one that Senator Sasser referred to.
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August 3, 1994 - Part 2
(12:00:13) That is in no way meant to indicate that I do not have some serious problems with some of the things, and contacts, and statements that were made. Mr. Secretary, let me ask you this question: The report sent to you from the Office of Government Ethics makes this statement On the basis of our review, we believe that you might-referring to "you" as the Secretary to whom this report is addressed-that you might reasonably conclude that the conduct detailed in the report of officials presently employed by the Department of Treasury did not violate the standards of ethical conduct for employees of the Executive Branch. My question to you, Mr. Secretary, is: Have you yourself reached a conclusion? If so, would you share it with us? Secretary BENTSEN. Oh, yes. I agree with that. I do think that office goes on to state, as I stated in my testimony, that there are some troubling things still there in spite of that, and that they should be addressed. Senator BRYAN. Senator Shelby asked a question about depositions, and I want to get just a little clarification. You indicated as you talked with Mr, Cutler that you wanted to make sure that none of the depositions be released to any of the deponents until after all depositions were taken in conjunction with the Inspector General? I believe that is your testimony, was it not? Secretary BENTSEN. Yes. That is correct. Senator BRYAN. My question to you is, if you know-because Mr. Altman has testified that he had access to his deposition to prepare his own testimony before us-do you know if any of those depositions taken by the Inspector General were released prior to our 40 own Counsel of this Committee taking the depositions of the individuals? Secretary BENTSEN, Oh, to the best of my knowledge, none of them were released until Counsel for this Committee had concluded their depositions. Now I must say to you, as I stated earlier, Senator, this Committee then requested that they be able to hold those and that they not be exchanged among witnesses until they were ready. Now that is an unusual request, I understand, and I was told I had no legal obligation to do that. But as a matter of cooperation with this Committee and trying to help in the oversight that they are doing, I acceded to that and agreed to that. Senator BRYAN. So not only did they not have access to the other depositions before taking their deposition before the IG, they did not have access to those depositions until after our Counsel had concluded taking their depositions for purposes of this Committee? Secretary BENTSEN. That is my understanding. Senator BRYAN. Mr. Chairman, I hope I will not be penalized in the future, but I am going to yield back the balance of my time and hope that our C-SPAN junkies will understand our need to conclude this thing as early as possible. Thank you very much, Mr. Secretary. The CHAIRMAN. Very good. Senator Roth. OPENING COMMENTS OF SENATOR ROTH Senator ROTH. Mr, Secretary, it is always a pleasure to welcome you. Secretary BENTSEN. Thank you, Senator. Senator ROTH. I have to tell you, I would prefer to be talking about IRA's with you [Laughter.] Senator ROTH [continuing]. Rather than the Secretary BENTSEN. You know, that is funny. I was talking about IRA's yesterday. Senator ROTH. Well, I will be happy to discuss that further with you at your earliest convenience. Let me start out by saying that I do appreciate the sensitivity you have shown in your conduct to avoid conflicts of interest. I only wish that some of your subordinates perhaps had demonstrated the same sensitivity. I was interested in your answer to a question by Senator Sasser a few minutes ago when he asked you about a White House memo limiting contacts with Government agencies. If I understood you properly, I heard you tell Senator Sasser that you had advised Treasury employees not to have contact with White House officials about specific cases. Is that correct? Secretary BENTSEN. About this issue; yes. Senator ROTH. About this particular issue. Secretary BENTSEN. Yes. Senator ROTH. Was that instruction put in writing, or orally? And if so, when? 41 Secretary BENTSEN. Well that was done, as I recall, at approximately the time that I called for the Office of Government Ethic to make their examination, their study. I believe that was done orally. Senator ROTH. It was done when, sir? Secretary BENTSEN. I think it was done approximately the time that I asked for the Office of Government Ethics to make their ex amination. Senator ROTH. And when was that? Secretary BENTSEN. I think that was on March 3rd. Senator ROTH. Has that advice been followed since? Have there been any further contacts on this specific matter with the White House since that time?
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