August 2, 1994 - Part 1
August 2, 1994 - Part 1
(09:45:31) In January, , 19941 1 read press stories about Madison Guaranty which state that some type of civil claims were being reviewed by the Resolution Trust Corporation. I also specifically remember reading a letter from Senator D'Amato to Mr. Altman, dated January 25, 1994, that referred to civil claims involving Madison, the statute of limitations, and "tolling agreements." Senator D'Amato's letter noted that there was a deadline for action in late February. At that time, someone, I have no recollection as to who it may have been, explained to me that these terms related to normal RTC procedural actions relating to insolvent thrifts. I was told that the civil claims were being reviewed under routine procedures within the RTC. I believe I also read this comment in Mr. Altman's, February 1, 1994, response to Senator D'Amato. I also understood that action on the substance of the civil claims might eventually be presented to the interim CEO for decision, although no proposed action was yet on his desk. This, then, brought up the I he question as to whether Mr. Altman should recuse himself from consideration of the matter, even before it arrived. In late January or early February, Jean Hanson, the General Counsel of Treasury, asked me for my views on whether Mr. Altman should recuse himself because of his friendship with the President. I told her that I had not undertaken any legal analysis to determine whether there was a legal requirement that he recuse, but that my own first reaction was that he should recuse himself, Ms. Hanson commented that she agreed with me, Sometime after our first discussion, Ms. Hanson told me that she had discussed the recusal with Mr. Altman, and that he was "leaning" toward recusal. In mid-afternoon of Wednesday, February 2, Ms. Hanson entered my office and said something like. "we're going over to the White 323 House in a few minutes, Please look at these talking points." I remember scanning the points quickly and recognizing that they noted generally the same procedural points regarding the statute of limitations and tolling agreements that I had seen mentioned previously I in the press and in Senator DAmato's letter. The talking points did not mention anything about the substance of the Madison civil claims. I believe that I said aloud something like, "This is OK this is public information." I based my comment, in general, on information I had seen in the press and in the congressional letters. I did not believe that this was nonpublic information. If it had been I would have considered the matter further in terms of the standards of conduct, particularly Section 5 C.F.R. 2635.703, the Use of Nonpublic Information. The final talking point indicated that Mr. Altman had already decided to recuse himself. I remembered that Ms. Hanson bad told me that he was leaning toward recusal and I questioned whether he had made a final decision. I do not remember Ms. Hansons response, if any. My review of the talking points and the brief discussion with Ms. Hanson lasted no longer &an 2 to 3 minutes and my analysis centered on the public information issue. Based on the talking points I reviewed, I do not believe that the meeting violated any ethics regulation. The Office of Government Ethics has agreed with my conclusion. Based on press comments, there seems to be some confusion about the issue of appearance of impropriety. For there to be an appearance that leads to a violation of the regulations, it is not enough that there is public controversy, or criticism, or even a public uproar. The standard under the regulations is whether a reasonable person with knowledge of the relevant facts would believe that the regulations have been violated. According to the talking points I reviewed, the information to be discussed at the meeting was procedural and generally public. Moreover, to the best of my knowledge, no action was taken relating to the actual handling of the substance of the Madison civil claims themselves. Hence, I do not believe that a reasonable person with knowledge of the relevant facts would believe that the Ethics Regulations were violated. Again, I'm pleased that the Office of Government Ethics reached the same conclusion. On February 3, Mr. Altman received a letter from Congressman Leach, asking him to confer with 'Treasury's General Counsel and Ethics Officers" to consider recusal from the Madison matter. On the evening of February 2 or February 3, Ms. Hanson told me that Mr. Nussbaum thought that 1, as the Treasury Ethics Lawyer, should talk to the Senior Ethics Lawyer for his office, Beth Nolan, about the question of Mr. Altman's possible recusal.