" ! HOUSE OF REPRESENTATIVES 107TH CONGRESS

2d Session

REPORT

107–768

Union Calendar No. 483

PROBLEMS WITH THE PRESIDENTIAL GIFTS

SYSTEM

SEVENTH REPORT

BY THE

COMMITTEE ON GOVERNMENT REFORM

together with

MINORITY AND ADDITIONAL VIEWS

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

PROBLEMS WITH THE PRESIDENTIAL GIFTS SYSTEM

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

82–234 PDF

" ! HOUSE OF REPRESENTATIVES 107TH CONGRESS

2d Session

REPORT

2002

107–768

Union Calendar No. 483

PROBLEMS WITH THE PRESIDENTIAL GIFTS

SYSTEM

SEVENTH REPORT

BY THE

COMMITTEE ON GOVERNMENT REFORM

together with

MINORITY AND ADDITIONAL VIEWS

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

OCTOBER 28, 2002.—Committed to the Committee of the Whole House

on the State of the Union and ordered to be printed

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

BOB BARR, Georgia

DAN MILLER, Florida

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

DAVE WELDON, Florida

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

C.L. ‘‘BUTCH’’ OTTER, Idaho

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

JOHN SULLIVAN, Oklahoma

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

JANICE D. SCHAKOWSKY, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

ROBERT A. BRIGGS, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON ENERGY POLICY, NATURAL RESOURCES AND REGULATORY

AFFAIRS

DOUG OSE, California, Chairman

C.L. ‘‘BUTCH’’ OTTER, Idaho

CHRISTOPHER SHAYS, Connecticut

JOHN M. MCHUGH, New York

STEVEN C. LATOURETTE, OHIO

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

JOHN SULLIVAN, Oklahoma

JOHN F. TIERNEY, Massachusetts

TOM LANTOS, California

EDOLPHUS TOWNS, New York

PATSY T. MINK, Hawaii

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

DAN SKOPEC, Staff Director

BARBARA F. KAHLOW, Deputy Staff Director

ALLISON FREEMAN, Clerk

ELIZABETH MUNDINGER, Minority Counsel

LETTER OF TRANSMITTAL

HOUSE OF REPRESENTATIVES,

Washington, DC, October 28, 2002.

Hon. J. DENNIS HASTERT,

Speaker of the House of Representatives,

Washington, DC.

DEAR MR. SPEAKER: By direction of the Committee on Government Reform, I submit herewith the committee’s seventh report to

the 107th Congress. The committee’s report is based on a study

conducted by its Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs.

DAN BURTON,

Chairman.

(III)

C O N T E N T S

Page

I. Summary of oversight findings ..................................................................... 1

II. Report on the committee’s oversight ............................................................ 2

Chart I–A.—Disclosure of retained gifts valued by White House at

$260 or more ....................................................................................... 10

Chart I–B.—Gifts from Borsheim’s Fine Jewelry and Gifts .................. 30

Chart II.—Undisclosed retained gifts valued by White House at

$240–$259 ........................................................................................... 48

Chart III–A.—26 examples of undervalued fair trade gift items .......... 58

Chart III–B.—109 Baccarat, Cartier, Ferragamo, Gucci, Hermes,

Steuben, Tiffany and Waterford gifts retained by the Clintons ..... 70

Chart III–C.—Examples of probably undervalued non-fair trade gift

items .................................................................................................... 79

Chart IV–A.—All gifts in the White House Database from Monica

Lewinsky ............................................................................................. 83

Chart IV–B.—30 examples of ‘‘misplaced’’ or ‘‘lost’’ gift items .............. 85

Chart V.—Some White House gifts rulings by White House counsel:

1993–2000 ........................................................................................... 91

Chart VI.—Status of 45 furniture gifts valued by the White House

at $260 or more .................................................................................. 100

Chart VII.—Total gifts disclosed by Presidents George H.W. Bush

and William Clinton: 1989–2000 ...................................................... 115

Chart VIII.—22 of 125 gift certificate gifts ............................................. 117

Chart IX.—Gifts to the Clintons from selective sources ........................ 125

Chart X.—Some of the large gifts (each valued over $5,000) to the

archives for the Presidential Library ............................................... 137

Chart XI.—Gifts valued at $250 or more which were sent to GSA

for disposition ..................................................................................... 154

III. Conclusions ..................................................................................................... 161

APPENDIXES

Appendix A.—Selected press reports about gifts to the Clintons ........................ 162

Appendix B.—The subcommittee’s February 2001 to January 2002 correspondence to the agencies, the former head of the White House Gifts

Unit, and former President Clinton, and some agency replies ........................ 185

Appendix C.—President Clinton’s eight Financial Disclosure Reports ............... 197

Appendix D.—GSA’s noncompetitive hiring and then detail of Lori Krause

to head the White House Gifts Unit ................................................................... 246

Appendix E.—Letter to NARA to ensure IRS tax deduction for gift to White

House craft collection and sample NPS letter acknowledging gift of furniture to the Executive residence ....................................................................... 294

Appendix F.—Selected e-mail between NARA and Lori Krause ......................... 296

Appendix G.—White House counsel’s 1993, 1994 and 2000 memoranda about

furniture gifts ....................................................................................................... 298

Appendix H.—Chairman Ose’s February 2002 referral to the Justice Department ...................................................................................................................... 306

Appendix I.—NARA’s June 2002 ‘‘newest’’ procedures ......................................... 308

VIEWS

Views of Hon. Henry A. Waxman, Hon. John F. Tierney, Hon. Tom Lantos,

Hon. Major R. Owens, Hon. Edolphus Towns, Hon. Carolyn B. Maloney,

Hon. Eleanor Holmes Norton, Hon. Elijah E. Cummings, Hon. Dennis J.

Kucinich, Hon. Rod R. Blagojevich, Hon. Danny K. Davis, Hon. Jim Turner,

Hon. Thomas H. Allen, Hon. Janice D. Schakowsky, Hon. Wm. Lacy Clay,

and Hon. Diane E. Watson .................................................................................. 312

Additional views of Hon. Doug Ose ........................................................................ 314

(V)

ABBREVIATIONS

DOI Department of the Interior

DOJ Department of Justice

DOS Department of State

GSA General Services Administration

IRS Internal Revenue Service

NARA National Archives and Records Administration

NPS National Park Service

OGE Office of Government Ethics

(VII)

Union Calendar No. 483

107TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 107–768

PROBLEMS WITH THE PRESIDENTIAL GIFTS SYSTEM

OCTOBER 28, 2002.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. BURTON, from the Committee on Government Reform

submitted the following

SEVENTH REPORT

together with

MINORITY AND ADDITIONAL VIEWS

On October 9, 2002, the Committee on Government Reform approved and adopted a report entitled ‘‘Problems with the Presidential Gifts System.’’ The chairman was directed to transmit a

copy to the Speaker of the House.

I. SUMMARY OF OVERSIGHT FINDINGS

Several laws, involving six Federal offices and agencies, govern

the current system for the receipt, valuation, and disposition of

Presidential gifts. Consequently, no single agency is ultimately responsible for tracking Presidential gifts.

In early 2001, there were numerous press accounts regarding

President Clinton’s decision to accept close to $200,000 in gifts during his final year in office, as revealed in his last financial disclosure report. There was also a great deal of press attention focused

on furniture gifts returned by the Clintons to the White House residence. To prevent future abuses, the Government Reform Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs spent 11 months conducting oversight and gathering empirical

data. The subcommittee investigated how the current system works

and what legislative changes, if any, are needed to prevent future

abuses of the Presidential gifts process.

In March 2001, Chairman Ose introduced H.R. 1081, ‘‘Accountability for Presidential Gifts Act.’’ This bill establishes responsibilVerDate 11-MAY-2000 11:39 Oct 28, 2002 Jkt 000000 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 C:\REPORTS\82234.TXT HGOVREF1 PsN: HGOVREF1
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ity in one agency for the receipt, valuation and disposition of Presidential gifts.

In February 2002, the subcommittee released a 55-page document summarizing the subcommittee’s findings. The subcommittee

identified a host of problems with the Presidential gifts system,

such as consistently undervalued gifts and questionable White

House counsel rulings. Since the current system is subject to abuse

and political interference, there is a need for centralized accountability in one agency staffed by career employees.

II. REPORT ON THE COMMITTEE’S OVERSIGHT

Current System

Several laws, involving six Federal offices and agencies, govern

the current system for the receipt, valuation, and disposition of

Presidential gifts. The White House Gifts Unit is responsible for recording all domestic and foreign gifts received by the First Family

and White House employees, including the valuation and disposition of gifts. Under the Presidential Records Act of 1978 (44 U.S.C.

§ 2201–2207), the National Archives and Records Administration

[NARA] accepts gifts for Presidential archival depositories (libraries) and provides courtesy storage for Presidential gifts that are not

immediately retained by the President but which can be recalled

for possible retention by the President.

Under a second law (3 U.S.C. § 109), the Department of the Interior’s [DOI] National Park Service [NPS] annually prepares a snapshot inventory of public property in or belonging to the White

House residence. In addition, NPS officially accepts gifts for the

White House residence.

Under a third law (5 U.S.C. § 7432(f)), the Office of Protocol in

the Department of State [DOS] annually publishes a listing of all

gifts (both tangible and monetary) from a foreign government to a

Federal employee, including to the First Family. The listing includes gifts to the President and Members of Congress.

Under a fourth law (5 U.S.C. App. § 103(b) and 5 U.S.C.

§ 102(a)(2)(A)), the Office of Government Ethics [OGE] receives annual financial disclosure reports—which are publicly available—

from the President for gifts retained over a reporting threshold

from any source other than a relative. The threshold is currently

set at $260 but it will be raised to $285, retroactive to January 1,

2002.

Last, the General Services Administration [GSA] has detailed career staff to the White House Gifts Unit and is responsible for updating the reporting threshold for gifts (e.g., from $250 to $260)

and for disposing of some gifts which are not retained by the President or sent to NARA. GSA’s regulations require a commercial appraisal for foreign gifts over a reporting threshold that a Federal

employee (including the President) wishes to retain (41 C.F.R.

§ 102–42.40(a)). A recipient may purchase a foreign gift at the appraised value plus the cost of the appraisal (41 C.F.R. § 102–

42.140). In contrast, there is no statutory requirement for a commercial appraisal for domestic gifts over a reporting threshold.

3

Press Reports

In early 2001, there were numerous press accounts detailing gifts

retained by the First Family during calendar year 2000 and January 1–20, 2001. These gifts, valued by the White House at

$190,027, were made public in President Clinton’s last financial

disclosure report, filed on January 20, 2001. For example, a January 25th New York Daily News article included a listing of the gifts

disclosed for this nearly 13-month period. The article stated,

A friend of Sen. Hillary Rodham Clinton helped solicit donors to buy the pricey gifts that the former First Family

took with them as they exited the White House, NBC

News said last night. Clinton had registered her choices

for gifts in November, just like a bride. NBC said Clinton

contributor Rita Pynoos of Beverly Hills, Calif., then urged

potential contributors to send a $5,000 check to the store

quickly, before a Senate ethics deadline that bans senators

from receiving gifts. . . . The former First Lady was registered at Omaha-based Borsheim’s Fine Jewelry and

Gifts, a subsidiary of Warren Buffett’s Bershire Hathaway,

an aide confirmed earlier (1/25/01, New York Daily News,

see Appendix A).

Another example was an article entitled, ‘‘A Shower of Gifts for

Hillary and Bill; Why did the Clintons troll for freebies they can

surely afford?,’’ in the February 5, 2001 edition of Time magazine.

This article also stated that potential donors ‘‘had been contacted

by political supporter Rita Pynoos, who is married to a California

developer, to send the gift registry a $5,000 check’’ (2/5/01, Time,

see Appendix A).

There was another string of press reports in February 2001

about gifts of furniture removed from the White House by the Clintons, which were later returned to the U.S. Government. For example, from February 5th to 10th, the Washington Post ran five stories and one editorial (see Appendix A). Two of these articles were

captioned ‘‘Gifts Were Not Meant for Clintons, Some Donors Say’’

and ‘‘Clintons Shipped Furniture Year Ago; White House Usher

Doubted Ownership.’’ In the former, a previous Commissioner of

the Internal Revenue Service [IRS] was quoted as saying, ‘‘If someone gave something of value to the White House as the White

House and not to the president, that is a gift to the government

of the United States . . . a charitable contribution’’ and the Clintons ‘‘have no business taking it with them. That is conversion of

government property and income to them.’’ The latter begins by

stating,

President Bill Clinton and his wife started shipping furniture from the White House to the Clintons’ newly purchased home in New York more than a year ago, despite

questions at the time by the chief usher about whether

they were entitled to remove the items. The day before the

items were shipped out, White House chief usher Gary J.

Walters said he asked whether the Clintons should be taking the furnishings because he believed that they were

4

government property donated as part of a White House redecoration project in 1993.

Investigation

In February 2001, the subcommittee began an inquiry into this

matter to determine if legislative changes were needed to curb

abuses. This section briefly details steps taken by the subcommittee to gather information.

On February 13, 2001, Subcommittee Chairman Ose faxed a

draft letter to the Acting Director of NPS (see Appendix B). This

letter stated:

The Subcommittee on Energy Policy, Natural Resources,

and Regulatory Affairs is conducting oversight of the National Park Service’s (NPS’s) implementation of 3 U.S.C.

§§ 109–110 relating to public property—including furniture

and furnishings—belonging to the Executive Residence at

the White House. The law requires NPS to annually inventory all such public property, including when purchased,

its costs, condition, and final disposition. Since the 1948

enactment of these provisions, the Department of the Interior (DOI) appears to have not issued codified regulations

governing implementation.

. . . please provide the Subcommittee with each of the annual NPS inventories from June 1992 to present and any

non-codified guidance issued by DOI governing implementation, including internal and external DOI guidance documents. In addition, please provide all correspondence (including e-mails) relating to any furniture and furnishings

which former President Clinton removed from the Executive Residence at any time since January 20, 1993 and all

correspondence (including e-mails) relating to gifts received by the Clintons from November 3, 1992 to January

20, 2001.

On February 22, 2001, subcommittee staff visited NPS to inspect

its annual inventory. There is only one copy of this inventory,

which NPS protects and will not copy. For example, NPS staff used

white gloves to turn pages. NPS had established its own numbering system and its own electronic database, which is not linked to

any other agency’s database.

On February 27, 2001, the subcommittee requested by telephone

that OGE provide a copy of each of the eight financial disclosure

reports filed by President Clinton with OGE. Later that day, OGE

was only able to provide seven of the eight reports due to its 6-year

record retention requirement (see relevant parts of these reports in

Appendix C). As a consequence, on October 29, 2001, Subcommittee

Chairman Ose sent a followup letter to the Archivist, specifically

requesting the remaining, first financial disclosure statement filed

by President Clinton with OGE (see Appendixes B and C, respectively).

On March 1, 2001, at a full committee hearing, entitled, ‘‘The

Controversial Pardon of International Fugitive Marc Rich—Day 2,’’

Subcommittee Chairman Ose questioned former White House officials about their role in the process of receiving and disposing of

5

gifts. For instance, he asked former counsel to the President Beth

Nolan, ‘‘in your role as counsel, Ms. Nolan, have you ever been involved in judgment calls on any of these gifts or setting the policy

or determining . . . what’s a personal gift and what’s for archives?

Have you ever played a part in that?’’ She replied, ‘‘It’s not normally a legal question.’’ Later, Chairman Ose asked, ‘‘How is the

value of the gift that’s received determined?’’ Former White House

chief of staff John Podesta replied, ‘‘By the Gifts Unit, which is

staffed by a career employee, I believe of the General Services Administration, who’s detailed to the White House.’’ Mr. Ose continued, ‘‘is there a check on these valuations?’’ Mr. Podesta replied, ‘‘I

don’t believe there’s any re-review of the career employee’s decision

about what a gift is worth.’’

On March 5, 2001, Subcommittee Chairman Ose sent a letter to

the Archivist of the United States who is head of NARA (see Appendix B). This letter stated:

The Subcommittee on Energy Policy, Natural Resources

and Regulatory Affairs is conducting an investigation of

the laws, codified rules, and noncodified guidance documents governing gifts for the Executive Residence at the

White House, the President, and the Presidential archival

depositories. Under various authorities, the National Archives and Records Administration (NARA) accepts for deposit certain material (familiarly known as ‘‘courtesy storage’’), accepts gifts for Presidential archival depositories,

and deposits Presidential records in Presidential archival

depositories.

. . . please provide the subcommittee by March 20, 2001

with: (a) access to all existing databases (including but not

limited to NARA’s read-only database and the White

House Gifts Unit’s database) about gifts for the President,

Executive Mansion, or The William J. Clinton Presidential

Center (including the Clinton Presidential Library) processed by the White House Gifts Unit from January 20,

1993 to January 20, 2001; (b) copies of the ‘‘green sheets’’

for all items not yet included in these databases; (c) copies

of the deeds of gifts to NARA for all items in the White

House Craft Collection or any other gifts (such as gowns)

accepted by NARA for the Clinton Presidential archival depository and any information related to any of these items

that may have been removed (including loans to the Clintons); (d) copies of the ‘‘green sheets’’ for all items recalled

from November 1, 1999 to January 20, 2001 and any information related to the return of any items to the White

House by the Clintons after January 20, 2001; and (e) any

inventories, correspondence, e-mail or other information

about any Clinton personal material for which NARA provided courtesy storage since January 20, 1993.

In addition, please provide the Subcommittee by April 5,

2001 with: (f) all correspondence and e-mail relating to

gifts received by the Clintons from January 20, 1993 to

January 20, 2001.

6

In a March 7, 2001 e-mail, the subcommittee requested certain

information from GSA (see Appendix B). The e-mail stated:

The House Government Reform Subcommittee on Energy

Policy, Natural Resources and Regulatory Affairs is conducting an investigation of the laws, codified rules, and

noncodified guidance documents governing gifts for the Executive Residence at the White House and the President.

Using special regulatory authority (5 C.F.R. § 315.602), the

General Services Administration (GSA) hired non-competitively an employee working both in the White House Travel Office and the White House Gift Unit and then detailed

her to the White House Gift Unit. She became Director of

the Unit and, thus, she was responsible for the operations

of the Unit, including its receipt, administration, and disposition of the gifts. . . . please provide by March 22,

2001, the Subcommittee with all GSA documents, correspondence and e-mail relating to gifts received for the

Executive Residence at the White House and the President

from January 20, 1993 to January 20, 2001, including but

not limited to the following: all GSA records (including any

authored, received or mentioning GSA employee Lori

Krause), including any relating to receipt, administration

(including evaluation and appraisal) and disposition of

gifts for the Executive Residence at the White House and

the President.

Non-Competitive Hiring of Political Appointee for Career Job

In response to the subcommittee’s inquiry, GSA provided information about the May 24, 1998, non-competitive hiring of Lori

Krause as a career employee and the subsequent detail of her by

GSA to the White House Gifts Unit. Ms. Krause’s prior work experience included only political positions. At the March 1, 2001, hearing, noted above, former White House chief of staff John Podesta

assured the committee that a career employee made the gift valuations.

Ms. Krause’s resume shows no prior experience in gift valuations. It shows that she served as: (a) a staff member in the Correspondence Department in the Clinton/Gore Presidential Transition (from November 1992 to January 1993); (b) a writer in Presidential correspondence (from January to February 1993); (c) an unspecified position in the White House Volunteer Office (from March

to April 1993); (d) director of the Presidential Correspondence Intern Program (from March 1993 to March 1997); (e) an unspecified

position doing advance work for the White House Travel Office

(from October 1994 until her hiring by GSA); and (f) an unspecified

position in the White House Gifts Unit (from April 1995 until her

hiring by GSA).

Appendix D includes: GSA’s posted announcement for intended

competitive hiring of a career employee to be detailed to the White

House Gifts Unit, GSA’s cancellation notice for a competitive selection, Ms. Krause’s resume, and a March 9, 2001, internal GSA

routing slip. This document stated, ‘‘Ms. Krause did not apply for

any announcement. She was noncompetitively appointed on a special hiring authority.’’

7

In response to Chairman Ose’s March 5, 2001, letter, on March

22, 2001, NARA provided the subcommittee with 73 ‘‘Acknowledgment of Gift and Nonexclusive License’’ agreements (also known as

deeds of gift) for items in the White House craft collection. All 73

craft objects were by living artists. NARA’s cover letter states, ‘‘These are the only items that were donated in this manner to the

National Archives and Records Administration (NARA).’’ NARA’s letter also stated, ‘‘With respect to the remainder of your

request, we believe that it would be useful to meet with you to discuss facilitating access to items (a), (b), (d) and (e) and to discuss

narrowing your request for item (f). Responding to item (f) as written, would place an enormous burden on NARA’’ (see Appendix B).

NARA orally informed the subcommittee that NARA provided 8

years of free ‘‘courtesy’’ storage for personal property owned by the

Clintons prior to the start of the Clinton Presidency. In response

to Chairman Ose’s March 5th letter, on April 3, 2001, NARA provided the subcommittee with a copy of the ‘‘Deposit Agreement regarding the Administration of Personal Materials of President William J. Clinton, Hillary Rodham Clinton and Chelsea Clinton In

the President William J. Clinton Library,’’ which was signed by

President Clinton on January 16, 2001 (i.e., at the end of the Presidency) and then co-signed by the Archivist on March 1st. The

agreement provides that NARA ‘‘shall arrange for and bear the expense of shipping the Personal Property from Washington, D.C. to

the temporary library storage facility in Little Rock, Arkansas, and

thereafter, to the Clinton Library once it is constructed,’’ ‘‘Personal

Property may be conveyed to the United States at some future

time,’’ and ‘‘The Owners may from time to time, with permission

of the National Archives, deposit additional Personal Property to be

held and maintained by the National Archives.’’ A 14-page list of personal property items, entitled, ‘‘Curatorial

Inventory of Clinton Gubernatorial Boxes,’’ was attached to this

agreement. The list, with the names of each ‘‘donor,’’ included art

objects and other miscellaneous items but no furniture items.

NARA told the subcommittee staff that this list constituted a small

subset of all of the items covered by the agreement.

Also on April 3, 2001, NARA provided the subcommittee with

backup information about the White House craft collection, including a July 28, 1996, letter to NARA sent on behalf of one of the

donors. This letter sought to ensure that the gift was recognized by

the IRS as a tax deductible contribution to the U.S. Government.

It stated, ‘‘I must provide the IRS with a completed form in order

to document the donation’’ (see Appendix E).

On April 20, 2001, GSA sent an e-mail to the subcommittee (see

Appendix B). It stated:

. . . in response to your request for the disposition of National Park Service (NPS) property that is excess to its

needs, including property within its jurisdiction at the

White House, the Department of Interior (NPS) would report property excess to its needs to GSA for normal disposition. Once the property is reported to GSA as excess

to the Department’s needs, GSA screens the property for

Federal use by other agencies. If no agency has a need for

the property then the property is declared surplus and unVerDate 11-MAY-2000 11:39 Oct 28, 2002 Jkt 000000 PO 00000 Frm 00017 Fmt 6659 Sfmt 6602 C:\REPORTS\82234.TXT HGOVREF1 PsN: HGOVREF1
8

dergoes donation screening by the State Agencies for Surplus Property (SASP). If no SASP claims the property then

the property is sold.

GSA plays no role in the acceptance of gifts by the NPS

under their authorities. GSA recommends that you contact

the NPS directly with any questions you have with respect

to that process.

After officially requesting Presidential records under the Presidential Records Act by a March 5, 2001 letter to NARA, as noted

above, after a May 8th meeting with the former President’s representatives, on May 9, 2001, the subcommittee finally received access to Presidential gift records and the White House Gifts Unit’s

database (see Appendix B). Also, NARA informed the subcommittee

that its March 5th request for ‘‘all correspondence and e-mail relating to gifts received by the Clintons from January 20, 1993 to January 20, 2001’’ could not be processed for many months, if not

years, due to other pending congressional requests. However, on

May 9th, NARA did provide a few e-mails from NARA to the White

House Gifts Unit.

Two of the NARA e-mail exchanges with Lori Krause, head of the

White House Gifts Unit, are provided in Appendix F. They are indicative of a multi-agency system which has problems in tracking

gifts. A January 3, 2000 e-mail from NARA to Ms. Krause says,

‘‘Im afraid we havn’t turned up the clothing from #32 or the sweats

from #131—we had a look again in the boxes indicated, and in adjacent boxes to see if it might have been an easy misfile. No luck.

And they dont show up at all any more in our Domestic database

(records used to be completely deleted when stuff was recalled), so

we have no additional clues as to where they might be.’’ A September 1, 2000 e-mail from NARA to Ms. Krause says about one twopart gift item that it ‘‘got lost in our mounting craziness.’’ As a result of the access restriction noted above, the subcommittee was only able to examine NPS’s annual inventory and other

records for the White House residence, the financial disclosure reports still in OGE’s files and the additional one provided by NARA,

NARA’s database for the former administration, and the White

House Gifts Unit’s database for the former administration.

Findings

The White House gifts system had 94,178 gift records (many of

which included multiple gift items) to the former First Family during the two-term Presidency. The former First Family retained one

or more gift items in 16 percent (14,770) of these gift records. The

former President disclosed on his annual financial statements less

than 2 percent of these retained gifts (227 of 14,770), each valued

at $260 or more. These 227 gifts totaled $361,968. Of that total,

$190,027 in gifts were accepted in the final year of the Clinton

Presidency.

Some Gifts Over the Reporting Threshold Were Not Disclosed

Several charts reveal details of these and other findings. The law

requires the President to disclose each retained gift of $260 or more

on his annual financial statements submitted to OGE. Chart I–A

shows details of the 227 retained gifts valued at $260 or more

9

which were disclosed. This chart also includes an additional 26 retained gifts of $260 or more which were not disclosed; some of

these were gifts which the Clintons intended to purchase from the

U.S. Government. 61 retained gifts of $260 or more were not appraised or otherwise independently valued. Two examples of gift

records (with one donor’s address redacted for privacy) for undis- closed retained gifts over the $260 threshold are provided. They include: a Palm VII palm pilot, which was valued at $449 and for

which no donor name was indicated; and gift of a Baccarat crystal

sculpture and a shirt, which were valued at $255 and $40, respectively.

[Chart I–A and gift records referred to follow:]

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1 In the litigation surrounding the President’s Task Force on National Health Care Reform,

which was chaired by the First Lady, the Clinton administration’s Department of Justice argued

that the First Lady was a de facto full-time Federal employee (Association of American Physicians and Surgeons, Inc. et al. v. Hillary Rodham Clinton, et al., 989 F. Supp. 8, D.D.C. 1997).

In reaching its decision, the District Court relied upon a 1993 decision of the D.C. Circuit Court

of Appeals that found that the First Lady was the ‘‘functional equivalent’’ of a full-time Federal

officer or employee and that the Task Force was, therefore, exempt from the Federal Advisory

Committee Act (AAPS v. Clinton, 997 F.2d 898, D.C. Cir. 1993). In its opinion, the Court of Appeals concurred with the Justice Department’s assertion that, ‘‘the traditional, if informal, status and ‘duties’ of the President’s wife as ‘First Lady’ gives her de facto officer or employee status’’ (Id. at 904).

Retained gifts of $260 or more included a variety of items, rang- ing from a $38,000 glass sculpture and a $25,350 Lenox crystal

bowl to $172,926 in art objects and books, $68,770 in furniture

(sofas, chairs, carpets, etc.), and $39,875 in china and silver to

$25,955 in golf items, $23,798 in clothing, $5,975 in jewelry, and

other types of items.

Some Gifts Were Solicited

OGE’s rules state that a Federal employee 1 shall not solicit a

gift (5 C.F.R. § 2635.202(c)(2)). Nonetheless, in December 2000 (i.e.,

after the former First Lady was elected a U.S. Senator but before

her term began), the former First Lady received $38,617 in china

and sterling silver gifts purchased from Borsheim’s in Omaha, NE

(see Chart I–B).

[Chart I–B follows:]

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March 10, 2000 press report revealed that the First Lady was in

Omaha, NE the day before (on March 9th) and that ‘‘[Warren]

Buffett spent two hours with HRC [Hillary Rodman Clinton] during her 5 1/2 hour visit, most of it at his store [Borsheim’s] where

she shopped for china and silverware for her new home’’ (3/10/00,

the National Journal’s Hotline, see Appendix A). In a December 24,

2000 op-ed, Maureen Dowd stated in the New York Times, ‘‘Lissa

Muscatine, Mrs. Clinton’s spokeswoman, says that the first lady’s

silver and china patterns can be found at Borsheim’s. Hillary

shopped there when she was in Omaha last March to raise campaign money, with Mr. Buffett’s help. I clicked onto Borsheim’s

bridal registry on the Web to sample the merchandise. What would

Mrs. Clinton like? Just some basics to get her started. Place settings for 40, including oyster forks and marmalade spoons?’’ (12/24/

00, the New York Times, see Appendix A).

It is clear that the former First Lady was registered at

Borsheim’s and that she solicited these gifts because, unlike gifts

from Tiffany’s, Neiman Marcus and other fancy retailers which

only require the name of the intended gift recipient to see his or

her gift registry, Borsheim’s Web site says ‘‘Friend’s Wish List— View a friend’s wish list (You will need their e-mail address and

wish list password).’’ Three Web pages from the Tiffany’s and

Borsheim’s Web sites reveal how their respective gift selection

processes work (see three graphics). This means that the 11 donors

who purchased these gifts from Borsheim’s needed to know both

the former First Lady’s personal e-mail address and personal password to purchase items from her ‘‘wish list.’’ All 11 of these gift

records (with the donors’ addresses redacted for privacy) are provided.

[The graphics and gift records referred to follow:]

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2There is no evidence of a standard protocol in use by the White House to determine when

a gift needs to be commercially appraised to ensure proper valuation.

Many Gifts Were Undervalued 2

In addition, the former First Family retained thousands of other

gifts valued at less than $260, which were not required to be disclosed. Chart II includes an additional $24,012 of retained gifts,

which were each valued at $240 to $259, which is just below the

threshold. 49 percent of these gifts were not appraised or otherwise

independently valued. Two examples of gift records (with the donors’ addresses redacted for privacy) are provided. They include a

Yves Saint Laurent men’s suit, which the White House ‘‘estimated’’

at $249, and a framed John Quincy Adams signed original land

grant from 1826, which the White House ‘‘estimated’’ at $240. Both

appear to be significantly undervalued.

[Chart II and gift records referred to follow:]

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Charts I and II account for about 2 percent of all gifts retained

by the former First Family. The remaining 98 percent of the retained gifts (14,445 gift records) were each valued by the White

House at $239 or less.

From calls to retailers and Web searches, the subcommittee

found that 69 percent of certain fair-trade gifts (i.e., brand name

goods widely sold) were undervalued. Many fair-trade items were

not appraised or otherwise independently valued. Many were valued by the White House at less than $260 and, thus, not subject

to disclosure. Chart III–A includes 26 examples of undervalued

items. Some of these gifts, if properly valued (i.e., valued at or over

$260), should have been included in the former President’s annual

financial disclosure reports or increased in value.

[Chart III–A follows:]

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Five examples of gift records (with the donors’ addresses redacted for privacy) are provided. These include: a Ferragamo coat,

which the White House valued at $800 but which is actually valued

at $1,600 to $2,000; a Coach large leather travel bag, which the

White House ‘‘estimated’’ at $200 but which is actually valued at $498 to $698; a Tiffany 16 inch silver link necklace, which the

White House valued at $150 but which Tiffany’s valued at $450 to

$1,000; a Tiffany engraved 7 inch by 8 inch silver frame, which the

White House ‘‘estimated’’ at $40 but which Tiffany’s valued at $250

to $375 plus engraving; and a Steuben crystal heart, which the

White House ‘‘estimated’’ at $185 but which is actually valued at $245 to $495.

[Gift records referred to follow:]

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Chart III–B includes information about 109 Baccarat, Cartier,

Ferragamo, Gucci, Hermes, Steuben, Tiffany and Waterford gifts

retained by the former First Family. 50 percent were not appraised

or otherwise independently valued. 69 percent were, in fact, undervalued. Examples include the Ferragamo coat, Tiffany 16 inch silver link necklace, Tiffany engraved 7 inch by 8 inch silver frame,

and Steuben crystal heart.

[Chart III–B follows:]

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Chart III–C includes examples of non-fair trade items which

were probably undervalued, such as various collector’s items. Two

examples of gift records (with the donors’ addresses redacted for

privacy) are provided. They include a French coin circa 1793, which

the White House ‘‘estimated’’ at $10, and a 1815 bronze collector’s

coin from Great Britain, which the White House ‘‘estimated’’ at

$22.

[Chart III–C and gift records referred to follow:]

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Some Gifts Were Not Included in the White House Database

Some known gifts to the First Family were not included in the

White House gifts database. Therefore, the database is incomplete.

For example, the independent counsel’s report stated, ‘‘By her estimate, [Monica Lewinsky] gave [President Clinton] about 30 items.’’

Chart IV–A includes the only three gift records in the database for

gifts from Monica Lewinsky.

[Chart IV–A follows:]

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Some Gifts Were Lost

Some gifts were ‘‘misplaced’’ or ‘‘lost.’’ Chart IV–B includes 30 examples of them, including a 7 foot 3 inches by 6 foot 2 inches oriental rug (valued at $1,200) and an inscribed Tiffany silver box

(valued at $271), both of which were ‘‘on loan in the Residence’’ but

later ‘‘Misplaced by Staff Member, Never Conveyed to the President.’’ Even though both gifts were physically in the Executive residence, they were never officially accepted by NPS for the Executive

residence so neither appears on any NPS annual inventory. An example of a gift record (with the donor’s address redacted for privacy) is provided.

[Chart IV–B and the gift record referred to follow:]

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3OGE’s regulations, entitled, ‘‘Standards of Ethical Conduct for Employees of the Executive

Branch,’’ govern all Federal employees, including the President (see 5 C.F.R. Part 2635). Subpart B, Gifts From Outside Sources, details General Standards and Exceptions.

Questionable White House Counsel Rulings

Despite former counsel to the President Beth Nolan’s March 1,

2001 testimony, noted above, that treatment of gifts is not usually

a legal question, the White House counsel made some unusual rulings relating to gifts, which were oddly reflected in the treatment

of gifts (see Chart V). For example, in 2000, counsel advised ‘‘it

would be a bad idea to accept’’ 10 shares of General Electric stock

and thus the gift was returned to the sender. However, the former

First Family retained a 1997 gift of 15 shares of Coca-Cola stock,

valued at $1,027. Both of these gift records (with the donors’ addresses redacted for privacy) are provided. Publicly-traded stocks

are cash equivalents. Cash gifts cannot be accepted.3

[Chart V and gift records referred to follow:]

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Furniture

The former First Family received 45 furniture gifts, valued at

$94,365. Six of these gifts were never disclosed in the former President’s annual financial disclosure reports. The accounting of the 45

furniture gifts is remarkable in its complexity (see Chart VI). Usually, the chief usher for the Executive residence decides if items

should be accepted for the Executive residence and then NPS sends

an official thank you letter as proof for the donor of his or her contribution to the Federal Government. However, on March 24, 1993

(i.e., 2 months after the inauguration), deputy counsel to the President, Vince Foster, directed the chief usher that certain items already received by the White House and certain items not yet received (such as two sofas valued at $8,750 each and a $4,600 coffee

table) were to be accepted by NPS for the Executive residence (see

Appendix G). As noted above, Appendix E included a letter which

sought to ensure that a gift to the U.S. Government was recognized

by the IRS as a tax deductible contribution. Mr. Foster’s memorandum ensured that the noted furniture gifts for the Executive residence could be recognized by the IRS as tax deductible contributions to the U.S. Government. A sample NPS letter acknowledging

one of these furniture gifts—sent in July 1993 for the two sofas not

yet received when Mr. Foster directed their acceptance in March

1993—is also provided in Appendix E.

[Chart VI follows:]

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Then, on April 22, 1994, associate counsel to the President,

Cheryl Mills, contradictingly wrote the director of the White House

Gifts Unit about the three items discussed above and many others

(see Appendix G). Ms. Mills stated:

The National Park Service initially thought these gifts to

the President were to be accepted for the permanent White

House collection; it therefore sent thank you letters to each

of the donors. Upon discovering that the President had indicated a desire to have these items go to the Clinton Presidential library, the National Park Service elected not to

accept these items; therefore, the Park Service never declared these gifts as accepted for the permanent White

House collection.

All three of the furniture items in this example were taken from

the White House Residence by the former First Family and then

returned to the NPS in February-March 2001.

Some U.S. Property Was Taken

It is illegal to remove U.S. Government property. Therefore, after

unfavorable press reports, in February-March 2001, the former

First Family returned 25 furniture items to NPS. However, in September 2001, NPS apparently returned two of these items (a $1,725

easy chair and a $675 ottoman) back to the former First Family

since neither had been officially accepted by NPS for the White

House Residence. A copy of the gift record (with the donor’s address redacted for privacy), which includes these two items, is provided. Also, four furniture gifts (such as a $9,600 TV armoire and

a $3,895 gaming table) were never disclosed on the former President’s annual financial disclosure reports since the White House

counsel’s office in a January 3, 2000, memorandum stated that

they were ‘‘accepted’’ prior to the inauguration even though they

were not received in the White House until July 20, 1993 (i.e., 6

months after the inauguration) (see Appendix G). How can you ‘‘accept’’ a gift not yet in hand? And, why did the White House counsel

opine in 2000 on gifts received 7 years before? A copy of the four

gift records (with the donors’ addresses redacted for privacy), which

include these four items, are provided.

[Gift records referred to follow:]

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The former First Family still has 21 more furniture items, none

of which ever appeared in NPS’s White House annual June snap- shot inventory. 19 of these items, valued at $38,328, were received

on December 1, 2000, i.e., after the former First Lady was elected

a U.S. Senator but before her term began on January 3, 2001. A

graphic revealing the history of the furniture gifts to the Clintons

is provided.

[The graphic referred to follows:]

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Most Furniture Gifts Were Coordinated

Last, the gift records reveal that the Clintons’ interior decorator,

Kaki Hockersmith from Arkansas, ‘‘coordinated’’ 43 of the 45 furniture gifts received during the 8-year Presidency—largely at the

beginning of the administration and in December 2000. Her coordination ensured that there was only one dining room table, one

chandelier, etc.

Comparison

Chart VII reveals that President George H.W. Bush received

41,779 gifts in 4 years in office, which is an amount similar in magnitude to President Clinton’s 94,178 gifts in 8 years in office. During George H.W. Bush’s Presidency, the reporting threshold was

$100; the threshold increased to $250 before the start of the Clinton Presidency. As noted above, Chart II includes an additional

$24,012 of gifts to the Clintons valued just below the new threshold. The value of gifts to the Clintons from $100 to $240 was not

totaled. As a consequence, it is impossible to directly compare the

total value of gifts retained by these two Presidents. However, it

should be noted that there is no evidence of improper gift acceptance, valuation or retention by the former Bush administration.

[Chart VII follows:]

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The subcommittee’s investigation was intended to reveal whether

there is a problem that needs a legislative solution. Some may ask

why the subcommittee chose only to explore in-depth the 94,178

gift records (many of which included multiple gifts) from the most

recent 8-year period. The subcommittee’s 1-year examination clearly demonstrated that the current system is broken. Examining indepth 41,779 additional gift records for the previous 4-year Presidency was unnecessary to accomplish the purpose of the investigation.

Other Findings

Some Gift Certificates Were Accepted

After the subcommittee’s February 12, 2002, hearing, the subcommittee compiled three additional charts. Chart VIII includes information about 22 of the 125 gift certificate gifts. The Clintons retained 11 of these gifts, totaling $940 in estimated value. For example, in a 10-day period at the end of the second term, four White

House staff members (including assistant to the President and deputy counsel to the President, Bruce Lindsay, and personal secretary

Maggie Williams) each gave the President a $100 gift certificate to

the Sharper Image, all four of which he retained. These appear to

be ‘‘coordinated’’ gifts. The four gift records (with the donors’ addresses redacted for privacy) are provided. Chart VIII also shows

that some gift certificates were returned to the donor. For example,

the gift record for a $200 gift certificate to Casual Corner states,

‘‘return to sender—the White House can not (sic) accept money as

mail.’’ Also, the gift record for a $25 gift certificate to B. Dalton

Bookseller confirms that gift certificates are not allowed to be retained; it states, ‘‘files—Money mail cannot be accepted by the

White House.’’

[Chart VIII and gift records referred to follow:]

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Chart IX includes gifts to the Clintons from selective sources, including: 13 gifts from Denise Rich; 15 gifts from Ron and Beth

Dozoretz; 44 gifts from Walter and Selma Kaye; 12 gifts from Rita

and Morris Pynoos; 11 gifts from Iris, Gerald, and Rusty Cantor;

5 gifts from Judith Leiber; 3 gifts from James Riady; 4 gifts from

Johnny Chung; 2 gifts from Charlie Trie; 1 gift via Pauline

Kanchanalak; 5 gifts from William Fugazy; 1 gift from Michael

Milken; 1 gift from Global Crossing; 1 gift from Bernard Schwartz;

1 gift from the Enron Executive Committee; 1 gift from Bruce Lindsay; 3 gifts from Harry and Linda Bloodworth-Thomason; 6 gifts

from David and Mark Edwards; 2 gifts from Vernon Jordan; 3 gifts

from Terry McAuliffe; and 2 gifts from officials with Tyson Foods.

[Chart IX follows:]

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4 How can a Truman originally-signed letter be valued at $90,000 but a John Quincy Adams

originally-signed land grant (retained by the President) be ‘‘estimated’’ at only $240?

Denise Rich’s former husband Marc Rich received a last-day

(January 20, 2001) pardon from the President. The 44 gifts from

the Kayes totaled $19,255 in estimated value. Denise Rich, the

Dozoretzs, and the Kayes gave furniture gifts to the Clintons in December 2000. The Pynoos and Cantors gave china/silver gifts from

Borsheim’s to the Clintons in December 2000. The following donors

were investigated by this committee in its campaign fundraising investigation: James Riady, Johnny Chung, Charlie Trie, and Pauline

Kanchanalek. William Fugazy also received a last-day Presidential

pardon.

Huge Gifts to the Presidential Library

Chart X includes some of the large non-monetary gifts (each val- ued over $5,000) for the Presidential library. For example, Malcolm

S. Forbes gave a $90,000 framed handwritten letter by President

Truman.4 This chart includes gifts which total nearly $1 million in

value.

[Chart X follows:]

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Proposed Legislation and Hearings

On March 15, 2001, Subcommittee Chairman Ose introduced

H.R. 1081, the ‘‘Accountability for Presidential Gifts Act.’’ This bill

establishes responsibility in one agency for the receipt, valuation

and disposition of Presidential gifts.

On February 12, 2002, the subcommittee held a hearing entitled, ‘‘Accountability for Presidential Gifts.’’ The subcommittee presented

results from its 1-year investigation and received comments on

H.R. 1081. At the hearing, Chairman Ose released a 55-page document summarizing the subcommittee’s findings. Witnesses included: Scott Harshbarger, president and chief executive officer,

Common Cause; Paul Light, director, Center for Public Service, the

Brookings Institution; Gregory S. Walden, former associate counsel,

White House Counsel’s Office, President George H.W. Bush and

former ethics counsel for President-Elect George W. Bush’s transition, currently of counsel, Patton Boggs LLP; and William H. Taft

IV, Legal Advisor, DOS. Both Bruce R. Lindsey, former assistant

to the President and deputy counsel to the President and current

designated representative for President Clinton, and Lori Krause,

former head of the White House Gifts Unit during the Clinton administration, declined to testify about the Clinton administration

(see Appendix B for letters inviting them to testify and the reply

from former President Clinton’s Office).

Messrs. Harshbarger, Light, and Walden—either in their written

statements or in response to Member questions—all recommended

that Subcommittee Chairman Ose refer this matter for criminal investigation by the Department of Justice [DOJ]. Therefore, on February 13th, Chairman Ose sent the Attorney General evidence relating to the solicitation, receipt, failure to report, or conversion of

Presidential gifts by the former President and First Lady (see Appendix H). One of the documents forwarded was Mr. Walden’s written statement. In a section captioned ‘‘Evidence of widespread or

systemic failures should be investigated,’’ he concluded that such

evidence could form the basis for a DOJ investigation of possible

violations of 18 U.S.C. § 1001 (regarding false statements), 18

U.S.C. § 641 (regarding conversion of Federal property) and 5

C.F.R. § 2635.202(c)(1), (2), (j) (regarding solicitation of a gratuity).

Additionally, witnesses recommended that H.R. 1081 be amended

to: (a) disclose all gifts received over a minimal threshold, (b) cap

gifts (except personalized, honorific awards and gifts from relatives

or foreign officials) over a certain threshold, (c) prohibit acceptance

of gifts in certain periods, and (d) prohibit the solicitation or coordination of gifts.

On June 18, 2002, the Government Reform Subcommittee on

Government Efficiency, Financial Management and Intergovernmental Relations held a hearing on H.R. 1081. Witnesses included:

John W. Carlin, Archivist of the United States, NARA; P. Daniel

Smith, Special Assistant to the Director, NPS, DOI; and Messrs.

Harshbarger, Light, and Walden. The subcommittee also orally invited the current White House to have a witness testify at the

hearing but the Bush administration declined to do so.

The hearing revealed that, to date, only minor changes have been

made by the new Bush administration to address the problems revealed in February 2002. These include a new requirement for a

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statement of intent from the donor for each furniture gift intended

for the White House residence, and some changes by NARA.

NARA’s ‘‘newest’’ procedures now include separately tracking each

part of a gift record which includes multiple gifts, and tracking

both gifts which are recalled by the President for additional consideration for retention and recalled gifts which are returned to NARA

after the President’s additional review. A copy of NARA’s ‘‘newest’’ procedures which were appended to the Archivist’s testimony is

provided in Appendix I (see page 4). It is unclear if they will protect against other items lost in the transfer from the White House

Gifts Unit to NARA (see Appendix F).

Again, witnesses recommended that H.R. 1081 be amended to:

(a) disclose all gifts received over a minimal threshold—possibly

using the same rules as apply to Members of Congress, (b) cap gifts

(except personalized, honorific awards and gifts from relatives or

foreign officials) over a certain threshold, (c) prohibit acceptance of

gifts in certain periods, and (d) prohibit the solicitation or coordination of gifts.

Additionally, Mr. Harshbarger recommended that more information be provided about each donor, including possibly his employer

and occupation. He also stated, ‘‘Reform is further necessary to preclude White House Counsels from having too much leeway in interpreting standards (as they do under the status quo)’’ (page 4, written statement). Mr. Light added, ‘‘To the extent possible, valuation

should be independent, consistent, and based on a clearly transparent methodology’’ (page 3, written statement). Mr. Walden concurred, stating, ‘‘If there are no written guidelines on how to conduct a valuation, including when it is necessary to obtain a commercial or independent appraisal, guidelines could be written after

consultation with other appraisal experts’’ (page 3, written statement). Mr. Walden also recommended that the NPS inventory be

a continuing inventory rather than an annual event, and ‘‘as a first

step the Archivist and Park Service should adopt a common database’’ (page 4, Walden’s written statement). He elaborated in his

oral statement, saying, ‘‘Perhaps we should explore how the Park

Service database and the Archivist’s database and the White House

gifts office database can be harmonized’’ (page 59, transcript).

Last, in answer to a question from Chairman Horn (‘‘do you

know what changes the White House gifts office has made to improve its controls?’’), both NARA and NPS were unable to provide

any information (pages 86–87, transcript). The Archivist stated, ‘‘I

cannot speak specifically to exactly what has gone on . . . It is

clear they have made adjustments’’ (page 87, transcript).

On July 24, 2002, the subcommittee invited staff from all six

agencies involved in the Presidential gifts system to a July 31st bipartisan work session to determine what other changes, if any,

were made by the Bush administration to address the problems

identified by the subcommittee in the Presidential gifts system.

The meeting time was established to accommodate and ensure the

participation of NARA. Nonetheless, after the White House declined to attend, NARA also decided not to attend. In the end,

three of the six agencies—the White House, NARA and DOS—

chose not to attend. The other three—GSA, OGE and NPS—attended.

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These three agencies revealed only one additional change since

January 20, 2001: GSA has not detailed any staff—career or otherwise—to the White House Gifts Unit. The agencies also confirmed

that: (a) since January 20, 2001, there has been no interagency

meeting or other coordination (such as via e-mail) between the six

agencies; (b) there is still no unified database system in use by the

six agencies for the receipt, valuation and disposition of Presidential gifts, i.e., the White House, NARA, NPS and GSA continue

to each have their own separate electronic systems; (c) there is no

single numbering system for Presidential gifts, i.e., GSA cannot

track the Presidential gifts presented by the White House Gifts

Unit to GSA for disposal; and (d) there is no standard protocol for

uniformity in handling Presidential gifts, including for valuation

and appraisals. In an August 2nd telephone conversation, NARA

confirmed these facts.

Also, after the meeting, GSA confirmed that it only tracked— using its own numbering system—all or parts of 44 of the 334 gift

records in the White House gifts database with a disposition as

purchased from GSA or with GSA for disposal. All but two of these

gifts were to a White House staff member. Seven were purchased

by the recipient from the Federal Government, including an $800

gift purchased by the former President and a $2,800 gift from Yasser Arafat purchased by Sandy Berger. Four examples of these gift

records (with the domestic donors’ addresses redacted for privacy) are provided. They include these two purchases, a $13,700 gift to

a White House staff member, and a $450 1.2 ounce solid gold coin

in a presentation box from Charlie Trie to Mark Middleton. Chart

XI includes information on the 56 gifts (from the 334) valued at

$250 or more which were sent to GSA for disposition. The chart reveals that the ultimate disposition is unknown for many of these

gifts.

[Gift records referred to and Chart XI follow:]

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III. CONCLUSIONS

The committee finds that the American people have the right to

know what gifts were received and retained by their President. Donors should receive no unfair advantage in the policymaking process or other governmental benefits.

The committee also finds that the subcommittee’s investigation

revealed startling information about retained gifts, valuation of

gifts, missing gifts, legal rulings about gifts, and other findings.

The total value of gifts retained by the former First Family creates at least an appearance problem. The fact that so many gifts

were undervalued raises many questions. The fact that gifts were

misplaced or lost shows sloppy management and maybe more. The

fact that U.S. Government property was improperly taken is troubling. And, the fact that, after the former First Lady’s election to

the U.S. Senate and before she was subject to the Congress’ very

strict gift acceptance rules, the former First Family accepted nearly

$40,000 in furniture gifts and the First Lady solicited nearly

$40,000 in fine china and silver is at the very least disturbing.

Public servants, including the President, should not be able to enrich themselves with lavish gifts.

The current system is clearly broken and needs to be fixed.

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APPENDIXES

APPENDIX A.—SELECTED PRESS REPORTS ABOUT GIFTS TO THE

CLINTONS

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APPENDIX B.—THE SUBCOMMITTEE’S FEBRUARY 2001 TO JANUARY

2002 CORRESPONDENCE TO THE AGENCIES, THE FORMER HEAD OF

THE WHITE HOUSE GIFTS UNIT, AND FORMER PRESIDENT CLINTON, AND SOME AGENCY REPLIES

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APPENDIX C.—PRESIDENT CLINTON’S EIGHT FINANCIAL DISCLOSURE

REPORTS

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APPENDIX D.—GSA’S NONCOMPETITIVE HIRING AND THEN DETAIL

OF LORI KRAUSE TO HEAD THE WHITE HOUSE GIFTS UNIT

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APPENDIX E.—LETTER TO NARA TO ENSURE IRS TAX DEDUCTION

FOR GIFT TO WHITE HOUSE CRAFT COLLECTION AND SAMPLE NPS

LETTER ACKNOWLEDGING GIFT OF FURNITURE TO THE EXECUTIVE

RESIDENCE

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APPENDIX F.—SELECTED E-MAIL BETWEEN NARA AND LORI

KRAUSE

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APPENDIX G.—WHITE HOUSE COUNSEL’S 1993, 1994 AND 2000

MEMORANDA ABOUT FURNITURE GIFTS

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APPENDIX H.—CHAIRMAN OSE’S FEBRUARY 2002 REFERRAL TO THE

JUSTICE DEPARTMENT

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APPENDIX I.—NARA’S JUNE 2002 ‘‘NEWEST’’ PROCEDURES

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(312)

1 Clintons Set to Return Some Gifts, Wall Street Journal (Feb. 6, 2001).

VIEWS OF HON. HENRY A. WAXMAN, HON. JOHN F.

TIERNEY, HON. TOM LANTOS, HON. MAJOR R. OWENS,

HON. EDOLPHUS TOWNS, HON. CAROLYN B. MALONEY,

HON. ELEANOR HOLMES NORTON, HON. ELIJAH E.

CUMMINGS, HON. DENNIS J. KUCINICH, HON. ROD R.

BLAGOJEVICH, HON. DANNY K. DAVIS, HON. JIM TURNER,

HON. THOMAS H. ALLEN, HON. JANICE D. SCHAKOWSKY,

HON. WM. LACY CLAY, AND HON. DIANE E. WATSON

Gifts to Federal employees can give the appearance of corruption.

Even if there is no quid pro quo, confidence in the government

erodes if there is an appearance of influence. For this reason, reviewing the issue of Presidential gifts is important. Unfortunately,

instead of working to produce a bipartisan bill, the majority has

chosen to produce a partisan report.

One of the main problems with the report is that it looks only

at gift problems during the Clinton administration. It is true that

President and Mrs. Clinton accepted numerous gifts. President

Clinton accepted gifts totaling an average of $28,093 annually, adjusted for inflation, which is a very large amount to the average

American.

But former President Bush accepted $39,614 annually—far more

than President Clinton. Yet there is no examination of abuses during the first Bush administration. And of course, there is no examination of the current Bush administration either.

Former President and Mrs. Reagan accepted a $2.5 million

ranch-style house from friends for their retirement.1 President and

Mrs. Reagan eventually paid back their friends, but this report

does not even mention the $2.5 million house or the timing of its

purchase, 2 years prior to the Reagans leaving the White House.

Nor does this report address whether the friends of President and

Mrs. Reagan received a benefit for their generosity.

If the committee wanted to conduct a fair investigation into the

problem of Presidential gifts, it would have looked at the practices

of both Democratic and Republican administrations.

In addition to failing to review the gift-giving practices of both

Democratic and Republican administrations, this report strikes a

partisan note by singling out President Clinton’s records for disclosure. The majority chose not to disclose the records of President

George W. Bush, former President Reagan, or former President

George H.W. Bush.

The current Bush administration has been justifiably criticized

for applying one standard to the release of documents from the

Clinton administration and another standard to the release of its

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2 Bush Policy on Releasing Records Differs in Case of Clinton Ones, New York Times (Feb.

1, 2002). 3Majority report, at 6.

4Where are They Now, St. Petersburg Times (Sept. 20, 2001).

own documents and documents from the Reagan administration.2

This committee should not be making the same mistake.

Furthermore, this report scrutinizes the employment history of

one Clinton White House employee but fails to review the resumes

of Republican administration employees. The report emphasizes

that a certain Clinton employee’s ‘‘prior work experience included

only political positions’’ and she had ‘‘no prior experience in gift

valuations.’’ 3 Yet a review of the resume of President Bush’s director of the White House Gifts Office suggests that just like the Clinton employee discussed in the report, the Bush employee’s ‘‘prior

work experience included only political positions’’ and she had ‘‘no

prior experience in gift valuations.’’ 4

The vast majority of those giving gifts to the President are wellmeaning, honest people: the young schoolboy who wants the President to have a t-shirt with his elementary school logo on it, the

grandmother who wants the President to have a needlepoint she

made.

Yet some who give gifts want to gain influence and access to policymakers. That is why reforms to the Presidential gift process are

needed. Two subcommittees held hearings on the issue of gifts to

the President. At those hearings, witnesses made suggestions such

as placing limitations of the value of gifts to the President, limiting

when a President could accept a gift, and enhancing public disclosure of gifts.

Regrettably, these important reform proposals were not seriously

considered in this report.

HON. HENRY A. WAXMAN. HON. JOHN F. TIERNEY. HON. TOM LANTOS. HON. MAJOR R. OWENS. HON. EDOLPHUS TOWNS. HON. CAROLYN B. MALONEY. HON. ELEANOR HOLMES NORTON.

HON. ELIJAH E. CUMMINGS.

HON. DENNIS J. KUCINICH. HON. ROD R. BLAGOJEVICH. HON. DANNY K. DAVIS.

HON. JIM TURNER. HON. THOMAS H. ALLEN.

HON. JANICE D. SCHAKOWSKY.

HON. WM. LACY CLAY.

HON. DIANE E. WATSON

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ADDITIONAL VIEWS OF HON. DOUG OSE

The minority views section of this report, unfortunately, mixes

apples and oranges in its comparison of the average-sized gift retained by Presidents George H.W. Bush and Clinton. Chart VII reveals that President George H.W. Bush received 41,779 gifts in 4

years in office, which is an amount similar in magnitude to President Clinton’s 94,178 gifts received in 8 years in office. However,

gifts retained by the First Family are only a subset of gifts received

by them. There is only aggregate dollar information on gifts retained by each President over the reporting threshold established

by law at the time. The report explains that, during George H.W.

Bush’s Presidency, the reporting threshold for gifts retained by the

First Family was $100. This threshold increased to $250 before the

start of the Clinton Presidency and was then increased to $260 for

the last 2 years of the Clinton Presidency. The report explains, ‘‘As

a consequence, it is impossible to directly compare the total value

of gifts retained by these two Presidents.’’

In fact, the Clintons retained one or more gifts in 14,770 of the

94,178 gift records. The subcommittee only added the value of the

227 gift records with a retained gift over the reporting threshold

(totaling $361,968) (Chart I) and the 98 gift records with a retained

gift from $240 to the threshold (totaling $24,012) (Chart II). Added

together, these 325 gift records account for only 2 percent of

records with one or more gifts retained by the Clintons. At the subcommittee’s February 12, 2002, hearing, several 10′′ x 15′′ x12′′

boxes were displayed. These boxes included hundreds of individual

gift records for additional gifts each over $100 which were retained

by the Clintons. The subcommittee did not sum the value of the

gifts retained by the Clintons from $100 to $240. This additional

number would need to be added to the Clinton total to allow a direct and valid comparison between the two Presidents.

The minority views section also criticizes the investigation for focusing on Clinton’s Presidential records. The report explains, ‘‘The

subcommittee’s investigation was intended to reveal whether there

is a problem that needs a legislative solution. . . . The subcommittee’s 1-year examination clearly demonstrated that the current system is broken. Examining in-depth 41,779 additional gift records

for the previous 4-year Presidency was unnecessary to accomplish

the purpose of the investigation.’’ The minority views section of this report also states, ‘‘Yet some

who give gifts want to gain influence and access to policymakers.

That is why reforms to the Presidential gift process are needed.

. . . Regrettably, these important reform proposals were not seriously considered in this report.’’ In fact, the report presents the results of the subcommittee’s investigation and a summary of the recommendations made by witnesses at two hearings in 2002 on my

bill, H.R. 1081. In fact, I strongly believe that reform of the PresiVerDate 11-MAY-2000 11:39 Oct 28, 2002 Jkt 000000 PO 00000 Frm 00324 Fmt 6604 Sfmt 6604 C:\REPORTS\82234.TXT HGOVREF1 PsN: HGOVREF1
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dential gifts system is essential; as a result, I intend to introduce

a revised version of my reform proposal early in the next Congress.

This version will be responsive to the thoughtful suggestions not

only by the hearing witnesses but also later by the minority. I welcome bipartisan support for my initiative. My legislation will allow

my colleagues to match their calls for reform with action.

Since the committee’s October 9, 2002 business meeting, questions were raised about the status of DOJ’s response to Subcommittee Chairman Ose’s February 13th referral (Appendix H). This referral was recommended by the witnesses in the subcommittee’s

February 12th hearing. A copy of DOJ’s May 2nd reply is attached

to these additional views. It indicates that the matter was referred

internally within DOJ to the Department’s Criminal Division. DOJ

also requested additional information. Since that time, the subcommittee met with the Public Integrity Section of DOJ’s Criminal

Division and provided additional information.

Since the committee’s business meeting, the subcommittee became aware of two additional factors. First, former Presidents and

their families can borrow gifts from NARA that were not retained

by a First Family but ended up with NARA for a Presidential archival library. Second, NARA has provided written acknowledgments to certain donors for use in receiving tax deductions for

Presidential gifts that the First Family did not choose to retain. Instead, these gifts ended up with NARA for a Presidential archival

library.

As a consequence, on October 15th, Subcommittee Chairman Ose

sent another letter to NARA, a copy of which is attached to these

additional views. In the letter, the subcommittee requested: (a) copies of NARA’s acknowledgments (including on IRS forms) for gifts

since January 20, 1989 that ended up with NARA for a Presidential archival library, i.e., covering the Presidencies of George

H.W. Bush, Bill Clinton and George W. Bush; and (b) the identification of all loans (except to libraries, museums, and Federal

agencies) from the 12 Presidential libraries, starting with the

Harry S. Truman Library and ending with the not-yet-open William J. Clinton Library. This information may shed light on another avenue for possible influencing by donors of Presidential

gifts, i.e., gifts that were not retained per se by a First Family but

which ended up in a Presidential library, subject to being used for

indeterminate periods by the President and First Family.

HON. DOUG OSE.

[The letters referred to follow:]

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