U.S. GOVERNMENT PRINTING OFFICE

65–381 cc WASHINGTON : 2000

S. Hrg. 106–571

NOMINATION OF AMY L. COMSTOCK

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

ON THE

NOMINATION OF AMY L. COMSTOCK, TO BE DIRECTOR OF THE OFFICE

OF GOVERNMENT ETHICS

MAY 12, 2000

Printed for the use of the Committee on Governmental Affairs

(

For sale by the Superintendent of Documents, Congressional Sales Office

U.S. Government Printing Office, Washington, DC 20402

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

FRED THOMPSON, Tennessee, Chairman

WILLIAM V. ROTH, Jr., Delaware

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

ARLEN SPECTER, Pennsylvania

JUDD GREGG, New Hampshire

JOSEPH I. LIEBERMAN, Connecticut

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

JOHN EDWARDS, North Carolina

HANNAH S. SISTARE, Staff Director and Counsel

DAN G. BLAIR, Senior Counsel

MICHAEL L. LOESCH, Counsel,

International Security, Proliferation, and Federal Services Subcommittee

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel

PETER A. LUDGIN, Minority Professional Staff Member

NANCI E. LANGLEY, Minority Deputy Staff Director,

International Security, Proliferation, and Federal Services Subcommittee

DARLA D. CASSELL, Administrative Clerk

(III)

C O N T E N T S

Opening statements: Page

Senator Thompson ............................................................................................ 1

Senator Collins ................................................................................................. 7

Senator Lieberman ........................................................................................... 11

Senator Levin .................................................................................................... 13

WITNESS

FRIDAY, MAY 12, 2000

Amy L. Comstock, to be Director of the Office of Government Ethics:

Testimony .......................................................................................................... 2

Biographical information ................................................................................. 17

Pre-hearing questionnaire ............................................................................... 24

Letters of recommendation from:

Lamar Alexander .............................................................................................. 34

Arthur B. Culvahouse, Jr. ............................................................................... 35

Jeffrey C. Martin .............................................................................................. 36

Patricia McGinnis ............................................................................................. 37

Stephen D. Potts ............................................................................................... 38

Edward C. Stringer .......................................................................................... 40

Information submitted by Senator Collins ............................................................ 41

Information submitted by Senator Levin .............................................................. 43

(1)

1The biographical information and pre-hearing questions referred to appear in the Appendix

on pages 17 and 24 respectively. 2The letters referred to appear in the Appendix on pages 34 to 40.

NOMINATION OF AMY L. COMSTOCK

FRIDAY, MAY 12, 2000

U.S. SENATE,

COMMITTEE ON GOVERNMENTAL AFFAIRS,

Washington, DC.

The Committee met, pursuant to notice, at 10:08 a.m., in room

SD–342, Dirksen Senate Office Building, Hon. Fred Thompson,

Chairman of the Committee, presiding.

Present: Senators Thompson, Collins, Lieberman, and Levin.

OPENING STATEMENT OF CHAIRMAN THOMPSON

Chairman THOMPSON. Senator Lieberman has been delayed, so

we will go ahead and start.

This morning we will be considering the nomination of Amy

Comstock to serve as the Director of the Office of Government Ethics. The rules of the Committee on Governmental Affairs mandate

that an inquiry be conducted into the experience, qualifications,

suitability, and integrity of the nominee to serve in the position to

which she has been nominated. The Committee has received all the

required information.

In addition, the nominee has responded in writing to prehearing

questions submitted by the Committee concerning issues that are

relevant to the position for which she has been nominated. Copies

of the nominee’s biographical information and prehearing responses

will be placed in the record as part of this hearing and are available upon request. The financial statements are available for inspection by the public in the Committee offices.1

In addition, I have received several letters of support for the confirmation of Ms. Comstock, and I would ask that they be included

in the Committee record as well.2

Committee staff has reviewed all of the information. In addition,

staff has examined the financial disclosure report submitted by the

Office of Government Ethics. The Committee’s Ranking Member

Senator Lieberman and I have reviewed the FBI background investigation report.

Committee rules require that all nominees be under oath while

testifying on matters relating to their suitability for office, including the policies and programs which the nominee will pursue if

confirmed.

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So would you please stand and raise your right hand? Do you solemnly swear to tell the truth, the whole truth, and nothing but the

truth, so help you, God?

Ms. COMSTOCK. I do.

Chairman THOMPSON. Please be seated. Thank you.

Welcome to the Committee, Ms. Comstock. At this time would

you like to acknowledge any members of your family that you

might have in the audience today?

Ms. COMSTOCK. I would, Senator. Thank you. My husband, Patrick Morris; my daughter Andrea Morris; my son Daniel Morris;

and my mother, Jean Comstock.

Chairman THOMPSON. Thank you. I have a son Daniel myself, so

I will remember him.

Would you like to make an opening statement at this time?

TESTIMONY OF AMY L. COMSTOCK, TO BE DIRECTOR OF THE

OFFICE OF GOVERNMENT ETHICS

Ms. COMSTOCK. I would. Thank you, Mr. Chairman.

Twelve years ago, I made the decision to build a career in the

Federal Government. I regarded public service as an honorable career and was hoping that I would find it rewarding as well. I have,

in fact, found it to be both.

As someone who believes in the ideal of public service, it is a particular honor to be before you today participating in the appointments process that was established over 200 years ago, and I have

to confess to also being more than a little pleased that my children

are here to see their mother participate in that process.

As you already know, I have worked in the field of government

ethics for many years. I believe that it is important for the government as a whole and for the success of each agency for there to be

a strong Executive Branch ethics program. A strong ethics program

is a key component to assuring the taxpayers that the government’s business is, in fact, being conducted with impartiality and

with integrity. A strong ethics program is equally important for the

employees themselves. The vast majority of the people with whom

I have worked genuinely want to do the right thing and to follow

the rules. But given the sometimes complicated issues that can

arise, they need a good ethics program to help them do that.

I have worked closely with the Office of Government Ethics during these years, and I believe that they have done a tremendous

job of establishing a program through both regulations and guidance that allows each agency to have its own ethics program tailored to its unique issues and needs, while still ensuring that all

Executive Branch employees are held to the same standards and

rules.

Growth and change are a part of life, however, and as I indicated

in my prehearing questionnaires, I believe that there are some

areas where the Executive Branch ethics program can be strengthened and fine-tuned.

If I am confirmed as Director, I am quite aware that I will be

beginning my tenure at a very busy time for OGE and the government. The transition season begins for OGE before the election,

with many employees preparing to leave government service. While

I feel a little bit like a tax lawyer joining a new law firm on April

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1, I view this timing as a real opportunity for me, if confirmed as

Director, and for OGE. This is a time to take a leadership role to

further foster the belief that ethical considerations must be incorporated into the work that agency officials do each and every day

and to work through the transition to ensure that each agency has

in place a strong ethics program that is utilized by all employees.

Once again, Mr. Chairman, Senator Collins, it is an honor to

have been nominated for this position and to be here today.

Chairman THOMPSON. Thank you very much.

The Committee has a few standard questions that we ask of all

of our nominees for the record. Is there anything that you are

aware of in your background which might present a conflict of interest with the duties of the office to which you have been nominated?

Ms. COMSTOCK. No.

Chairman THOMPSON. Do you know of any reason, personal or

otherwise, that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you

have been nominated?

Ms. COMSTOCK. No.

Chairman THOMPSON. Do you agree without reservation to respond to any reasonable summons to appear and testify before any

duly constituted member of Congress if you are confirmed?

Ms. COMSTOCK. Yes.

Chairman THOMPSON. At this time I have a few policy questions

I would like to ask you.

I understand you recently attended a symposium hosted by the

Brookings Institution and the Heritage Foundation which served to

launch the Presidential Appointee Initiative. It is a matter that

many of us have been concerned about, especially on this Committee. Many of us have been concerned about the current Presidential appointment process as being too lengthy and too complex.

And one aspect of the appointment process is your agency’s review

of the nominee’s finances in order to determine whether or not

there are any conflicts of interest, obviously a very important matter.

But the question has arisen as to whether the requirements that

we put on these people who want to come forward for a few years

of public service, have gotten so onerous and so complex that we

are actually deterring qualified people from entering public service.

Do we require too high of a level of financial disclosure for these

nominees, in your opinion?

Ms. COMSTOCK. In my opinion, there are really two parts to that.

In order to ascertain whether there’s a conflict of interest, I do believe that the Executive Branch financial disclosure form, as I indicated in my questionnaires, asks, in places, for a level of detail that

is not needed for a determination, at least at the first cut, of

whether there’s a conflict of interest, and that information can be

difficult to obtain.

Having also been on both sides of this process, being a nominee

as well as having reviewed forms for a number of nominees, I think

many of the questions that are asked by the administration, the

Senate, and on the financial disclosure form ask for the same general information but are asked in slightly different ways or for

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slightly different time periods, so that the filer essentially has to

dig up and recount, re-evaluate information three times. I think

that the process could be streamlined and coordinated.

My experience with the Office of Government Ethics is that they

are extremely timely in their review, but in the financial disclosure

forms they are implementing statutory requirements. If I’m confirmed as Director, I would like to work with the Office of Government Ethics to see if there are areas where we think we could

lessen the burden of financial disclosure without diminishing the

information that we need for conflicts analysis and help to coordinate and certainly be a significant party at the table with the

White House and the Senate to see if we can find a way to coordinate those forms without lessening the unique needs of each of

those entities.

Chairman THOMPSON. Well, this Committee is working on legislation that is designed to raise some of the issues that were raised

in this symposium that I referred to, and one proposal is to ask the

Office of Government Ethics to provide Congress with its recommendations for streamlining the process, avoiding unnecessary

reporting requirements and duplication and that sort of thing.

Would you be supportive of such a request of your office, if confirmed?

Ms. COMSTOCK. I would be very supportive of such a request, Mr.

Chairman. I believe that it’s very important to do what we can to

move the process forward. I would—I have discussed this with the

Office of Government Ethics. There is some concern in terms of

timing because, as you know, we’re entering what might be viewed

as their peak season, and this is an extremely important request.

And in order to do justice to it, we wouldn’t want either changes

midstream in the peak season and we are concerned about timing.

So I would just ask if we could work with your Committee in terms

of timing. But I’m very interested in this issue and believe that we

could streamline—we could provide you with some good solid recommendations.

Chairman THOMPSON. Well, good. We will look forward to working together on that.

Just very generally, you will be heading an agency charged with

providing overall guidance on a wide variety of ethics issues in the

Executive Branch. Do you have a sense of what your priorities will

be and the challenges you will be facing? In particular, in this

Committee, we are interested in the Federal civil service. Has the

Office of Government Ethics, if you know at this point, been able

to sufficiently recruit and retain qualified employees in the number

that is needed? We are seeing a problem government-wide in this

regard. We have just had hearings with regard to cyber terrorism,

for example, and the attacks on our computers, and obviously we

all know what has been going on around the country there.

One of the things that we are facing—of course, the government

has a bigger problem than anybody. People say, What is the government going to do about private industry? First of all, the government can clean up its own house. We are a long way from doing

that. Part of that problem is the difficulty in retaining qualified

people, getting qualified people to start with and then retaining

them. We are coming into an era of specialization. OGE is a difVerDate 11-MAY-2000 11:14 Jul 25, 2000 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 65381.TXT SAFFAIRS PsN: SAFFAIRS
5

ferent kind of situation, but the same general principles and, I

think, questions arise.

Have you had a chance to get a handle on that yet? I know you

haven’t been there, but you have been liaison with them and I

know have dealings with them.

Ms. COMSTOCK. Yes, Mr. Chairman, actually, as you indicated, I

have not asked for information that would otherwise not be available to me except in my liaison role. But my experience with the

Office of Government Ethics is that they, in fact, have had a fabulous retention record with their employees.

I have worked most closely with the Office of General Counsel

in the agency, and I believe they do have strong retention. I don’t

know for other positions where I might not have as much direct

contact, I don’t know what their—whether they have recruitment

problems. But I do share your concerns about civil service government-wide. That’s something I care about.

Chairman THOMPSON. All right. Let me ask you about the wellknown mortgage guarantee of the President and the First Lady. To

summarize it, it appears that at a particular point in time last fall

there was a loan guarantee or the offer of a loan guarantee by a

private individual to the President and the First Lady for a home

in Westchester, New York. The First Lady and her people, and perhaps the President, indicated at the time that they had run this

matter by the Office of Government Ethics and it was permissible

for them to accept this loan guarantee.

Mr. Potts, the Director of the Office of Government Ethics, said

publicly: We never did pass on that issue as to whether or not it

was acceptable for them to accept this loan guarantee. What we

passed on was the question of whether or not it was to be disclosed.

Our understanding is you were the intermediary, perhaps, between Cheryl Mills, the White House Legal Counsel, and either Mr.

Potts directly or the Office of Government Ethics in general. Can

you tell us what happened with regard to that?

Ms. COMSTOCK. Yes, sir, I’d be happy to. I was asked to determine with the Office of Government Ethics as part of my liaison

role whether the loan mortgage guarantee arrangement would be

required to be disclosed on the President’s public financial disclosure form.

Chairman THOMPSON. All right. Who asked you to do that?

Ms. COMSTOCK. Cheryl Mills.

Chairman THOMPSON. All right.

Ms. COMSTOCK. And I actually cannot—timing, I’d have to look

back to determine whether she was Deputy Counsel or Acting

Counsel at that time.

Chairman THOMPSON. So what did you do?

Ms. COMSTOCK. So I contacted the Office of Government Ethics.

We discussed it.

Chairman THOMPSON. Who did you talk to over there?

Ms. COMSTOCK. Marilyn Glynn in the Office of the General Counsel. We discussed it probably two times, I think two times, and

came to the conclusion that under the regulations that apply to the

reporting requirements and financial disclosure form that this arrangement did not constitute a gift that needed to be reported,

under the gift reg definition.

6

Chairman THOMPSON. Right. So did you report this back to Ms.

Mills?

Ms. COMSTOCK. Yes, I did.

Chairman THOMPSON. And your report to her basically was that

it was OGE’s opinion it did not need to be disclosed?

Ms. COMSTOCK. On the financial disclosure form.

Chairman THOMPSON. On the financial disclosure forms.

Ms. COMSTOCK. Right.

Chairman THOMPSON. Was there, in fact, any determination by

OGE as far as you knew as to whether or not it was permissible

to accept the loan guarantee at that point?

Ms. COMSTOCK. No, I never discussed that with them.

Chairman THOMPSON. All right. Then you saw the public statements that were made that, in fact, OGE had, in fact, made a determination that it was permissible for them to accept the loan

guarantee, I assume.

Ms. COMSTOCK. I did see them.

Chairman THOMPSON. Then later, I think Mr. Potts said that the

President has great latitude in what he can accept and that there

was no reason to believe why this would not fall under that general

umbrella, I think something along those lines; and if he had been

asked, he would have addressed it more specifically. But he was

not asked.

Ms. COMSTOCK. That is correct, sir. The President is exempted

from the gift acceptance prohibitions by regulation.

Chairman THOMPSON. Do you recall, was Mrs. Clinton officially

a Senate candidate at that time?

Ms. COMSTOCK. No, I do not believe that she was.

Chairman THOMPSON. Because that would raise additional questions. I am not sure what the answer to this is, but it looks to me

like there are certain requirements that a Senate candidate has in

terms of disclosure in addition to those of a President that a greater, perhaps, or certainly different than those of a President. So you

have the situation where one spouse is President and the other one

is a candidate for the Senate.

Ms. COMSTOCK. Right.

Chairman THOMPSON. And the loan guarantee is for both of

them.

Ms. COMSTOCK. That is correct——

Chairman THOMPSON. That would have presented a pretty good

law school question, wouldn’t it?

Ms. COMSTOCK. It would be. My role was obviously only for the

President’s financial disclosure form.

Chairman THOMPSON. But it was being used—well, you saw in

the news accounts that Mrs. Clinton was using that—well, I said

‘‘using’’—was discussing that herself. When you knew that OGE

had only passed on the disclosure question and that among the

First Lady’s spokespeople, anyway, they were saying that OGE had

passed on the question of whether or not it was acceptable, did you

talk to Ms. Mills about that and say there is some disconnect here?

Or was there any discussion about that?

Ms. COMSTOCK. There was discussion, sir. There was actually no

disagreement either between OGE or myself and anyone I talked

to about what the Office of Government Ethics had—the question

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that they had answered. I am not familiar with how it became inaccurately, as far as I know, translated.

Chairman THOMPSON. Did you ever talk to Ms. Mills about it?

Ms. COMSTOCK. Not that I recall.

Chairman THOMPSON. Well, in a position such as that, you are

advising Executive Branch employees with regard to ethics matters. You are dealing with the Office of Government Ethics. So your

responsibility had to do with the President because he was the Executive officer. But OGE’s response was being mischaracterized. I

guess I find it somewhat unusual that there is no discussion about

getting all this straight. Certainly somewhere along the line—I

mean, Mr. Potts said that he wrote his letter complaining about

this after he says that he had informed the White House that this

was incorrect, and they still said it again.

Ms. COMSTOCK. Right. Excuse me, sir. I did—I don’t recall discussing it with Ms. Mills. I did discuss it with other people. And

if I may take a moment to——

Chairman THOMPSON. See, all I am—the point here, I think the

relevant point here has to do with not looking at things too narrowly and having a sensitivity to what is going on around you. You

might have done it a little bit differently, perhaps, if you had it to

do again in terms of questions that you might have asked.

I would have thought, for example, that the question of whether

or not this is permissible would be the logical, the most important

question. I am not sure how something could have been prohibited—or you wouldn’t have to disclose it and still it would not be

permissible. I am not sure how that would work. But I just think

that this is a very sensitive kind of situation and it is fraught with

all kinds of difficulties and political pressures sometimes and back

and forth, and it is very important, as I am sure you know, that

you look at not only the narrow question that has been presented

to you, but the obvious issues and warning flags that may be out

there.

Ms. COMSTOCK. Mr. Chairman, I want to say very firmly that if

I ever think that I see a violation or a possibility of a violation,

that is my obligation to raise that, and I will always do that regardless of who the individual at issue is.

That was not this case. As I indicated, the President is exempted

from the gift acceptance prohibition, so, in fact, whether this financial arrangement would fall within the definition of a gift for the

gift acceptance rules, which is a different definition of gift for the

gift reporting rules, the answer to that was not viewed as relevant

because those regulations do not apply to him.

So what it came down to was two questions: Was it a reportable

arrangement? And was it advisable?

I did work on the question of whether it was reportable, but

other people were participating in the conversations of whether it

was advisable. And I did not see any violations or possible violations that I needed to raise with them. I did not see the need to

second-guess their advising on that.

Chairman THOMPSON. All right. Senator Collins.

OPENING STATEMENT OF SENATOR COLLINS

Senator COLLINS. Thank you very much, Mr. Chairman.

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I want to welcome you, Ms. Comstock, to the Committee, and I

also want to tell you that I know from firsthand experience that

many of the staff members that you will be working with at OGE,

assuming that you are confirmed, are very talented. I see many of

them behind you, and I worked with them, oh, some 15 years ago

when I was Staff Director of the Subcommittee of Governmental

Affairs that had jurisdiction over OGE. And, in fact, we did an extensive oversight hearing on the Office of Government Ethics.

The office plays, in my view, an absolutely key role in ensuring

that public officials uphold the highest ethical standards. The

whole purpose of our ethics laws is to assure the public that Federal officials are making decisions that are free from conflicts of interest. The purpose of the law, thus, is to promote public confidence

in the decisions of government officials.

In that regard, I want to talk to you about the issue of an appearance of a conflict of interest. It is my understanding that the

current regulations require a Federal official to look not only at

whether he or she may have an actual conflict of interest but

whether or not a reasonable person looking at the facts of the case

would doubt that the decision of the Federal official was made free

from any taint of improper influence. Is that accurate?

Ms. COMSTOCK. Yes, Senator. The statute at issue defines what

would be a criminal conflict of interest, and then there are also

government ethics regulations that cover the appearance of a conflict of interest.

Senator COLLINS. And it is my understanding that you have

overseen the ethics programs of some Federal agencies. Did you do

that in the capacity of being the designated agency ethics officer?

Ms. COMSTOCK. No. I have in both places, the Department of

Education and the White House, I have been the alternate designated agency ethics official.

Senator COLLINS. You were the alternate——

Ms. COMSTOCK. Alternate.

Senator COLLINS [continuing]. Designated——

Ms. COMSTOCK. Second.

Senator COLLINS. But you are familiar with the regulations that

govern how an official should deal with the appearance of a conflict

of interest?

Ms. COMSTOCK. Absolutely, and I should say that, especially at

the Department of Education, I directed the programs, but the

structure, the layout was that I was the alternate.

Senator COLLINS. And do you think that the guidance to Federal

officials on how to deal with the appearance of a conflict of interest

is important for public officials to follow?

Ms. COMSTOCK. Yes, I think it’s very important for public officials to follow. The way that I have often viewed these rules and

explained them to people who sometimes are angry with me or

frustrated at the application of them is that, first off, they’re designed—or the attempt is to write them so that they can be applied

consistently and fairly to all employees. But the intent in many

cases is to pull employees out of a situation where they personally

would have to decide what is the right thing to do, what is the

wrong thing to do. They’re designed to keep them from having that

struggle, either having to seek assistance or having to deal with

9

that themselves. So the regulations I think do a pretty good job in

this case on the appearance of a conflict of interest of laying out

examples of scenarios of relationships—‘‘covered relationships,’’ as

they are called—that could appear to be a conflict of interest. A

former employer with whom you’ve worked for the last year, a relative, an organization that you’re—the term is ‘‘active participant’’

with in your personal capacity, or some other entity or person out

there that you have such a close relationship with that if someone,

a non–Federal person, was looking at your Federal dealings with

them, they might say—they would at least have the question: Is

this being done fairly?

And those rules are designed to even keep that question from

ever having to be raised.

Senator COLLINS. I think you have captured exactly what the

purpose and the essence of those rules are. And I want to tell you

about a case that, in my view, was very troubling from the perspective of trying to prevent exactly that kind of concern about whether

or not the decision was made fairly.

Senator Thompson and I recently held hearings on the GAO’s

findings about certain large Medicare overpayment settlements.

GAO found numerous problems with the way these settlements

were reached, and, in fact, the Federal Government recovered only

about a third of the amount due. And none of the three settlements

were handled in the normal course of following the agency’s procedures for settling such overpayment cases.

One of GAO’s findings spoke exactly to the issue of the appearance of a conflict of interest. The head of the Health Care Financing Administration at that time, Bruce Vladeck, previously had

served on the board of directors, twice, of the hospital whose payment—who was having the payment dispute with HCFA.

In fact, Mr. Vladeck had resigned from the board of directors

upon taking his position as the Administrator of the Health Care

Financing Administration. It was only a month lag time.

Now, he had served for some 3 years in the position of the Administrator of HCFA before getting involved in the settlement of

this case, so here we did not have a case where he was violating

the 1-year ban that would apply to an official getting involved in

this case.

But what we have here is the head of an agency playing a highly

unusual role in directing and getting involved in the settlement of

a multi-million-dollar claim in which ultimately the hospital only

paid $25 million of the approximately $155 million in overpayments. So there was a very large discrepancy between the amount

the government felt it was owed and the amount that the case was

ultimately settled for. And this official had very close ties to the

board members of this hospital, to the head, the administrator of

the hospital, and indeed had served on the board of the hospital.

In such a situation—and let me also tell you the important fact

that the testimony we had from lower-level civil servants who were

involved in the settlement is that never before, except in these

three cases, had the administrator gotten involved in directing that

a settlement be reached.

In a case like that, would it be prudent for the head of the agency to seek guidance from the agency ethics official and perhaps deVerDate 11-MAY-2000 11:14 Jul 25, 2000 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 65381.TXT SAFFAIRS PsN: SAFFAIRS
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cide, because of the appearance problem, they recuse themselves

from involvement in the dispute?

Ms. COMSTOCK. I think it’s always appropriate to seek guidance.

One of my goals is to ensure that an ethics program in each agency, that all officials in the agency have enough confidence in that

program so that they don’t view it as a step of last resort but as

normal course of business to reach out and check on many issues.

So I think it’s always appropriate to seek guidance.

In the facts that you laid out, obviously I need to——

Senator COLLINS. I realize you are not familiar with the case.

Ms. COMSTOCK. I’m not familiar with the case, but given what

you’ve told me, I do want to ask: Did he resign from the board position 1 month before? Or you also mentioned a 3-year period.

Senator COLLINS. One month before taking his position as head

of HCFA.

Ms. COMSTOCK. And then 3 years elapsed?

Senator COLLINS. Then 3 years later——

Ms. COMSTOCK. I see. Under the—I still would always advise

someone to seek guidance in that situation because, while the regulations set out a standard for an appearance that a reasonable person with knowledge of all the facts, all the relevant facts, how

would they view this situation, first off, these regulations are only

a minimum of behavior, and I think as Federal officials we can do

better sometimes. And some situations simply aren’t covered by

that.

At the Department of Education, we have, for example, a number

of former superintendents of school districts who now are at the

Department of Education, and I always advise them that if they as

a head of a program at Education would be reviewing a decision

that they made as superintendent—I don’t care if it was 12 years

ago—they need to recuse themselves from that because it simply

will—it will raise more questions than it’s worth.

This situation would not fall within the 1 year, but I think it is

one that should be talked out carefully because, again, the goal is

to not draw into question what might otherwise be correct decisions. We now don’t know whether that was a correct decision, and

that’s the waste of time, really, and the lack of credibility in Federal decisionmaking that we want to avoid.

Senator COLLINS. I think you have hit on the key point. Because

the normal procedures were not followed in many regards with respect to these overpayment settlements, and because of Mr.

Vladeck’s personal relationship with the hospital in question, we

will never know whether or not the government got a good deal.

Now, we know that the General Accounting Office thinks that

the government did not get a good deal, and we know that a lot

of the lower-level HCFA employees felt that the government did

not get a good deal. But it tainted the whole process, and that is

what is of most concern to me. And it also seems to me that even

if a Federal official has received guidance on similar cases in the

past, it is always wise to go back with the facts of that exact case.

Would you agree with that?

Ms. COMSTOCK. I would agree with that. I do need to emphasize,

based on the facts that you laid out, it doesn’t sound like it’s a

technical violation, but this is the reason for having a strong ethics

11

1The information submitted by Senator Collins appears in the Appendix on page 41.

office and a good relationship, because either there are more facts

which justify this person being involved; maybe there are facts that

we don’t understand which would make us feel better about the

scenario. In that case I have given employees guidance in writing

for their protection many times. Knowledge of all of the relevant

facts is an awful lot of facts, and we sat down and worked through

all of them. And I think that’s important for the employee.

So, yes, I think that this is an area—I really want to work with

the DAEO’s and all high-level officials to really encourage them to

have a close working relationship with their ethics officer.

Senator COLLINS. Thank you very much.

Mr. Chairman, I would ask unanimous consent that the section

from the General Accounting Office report that deals with conflict

of interest concerns relating to the case that I discussed in which

the GAO expressed its opinion that Mr. Vladeck should have been

much more concerned about the appearance of his involvement and

sought authorization to participate in the negotiations from the

ethics officials within the agency be entered into the record.1

Chairman THOMPSON. It will be made part of the record, without

objection.

Senator COLLINS. Thank you. Senator Lieberman.

OPENING STATEMENT OF SENATOR LIEBERMAN

Senator LIEBERMAN. Thanks, Mr. Chairman. And, Ms. Comstock,

welcome to you and to your family. Your kids are absolutely adorable.

Ms. COMSTOCK. Thank you.

Senator LIEBERMAN. And irresistible. It is a pleasure to welcome

you here.

I had the pleasure of meeting with this nominee, Mr. Chairman.

I was very impressed in the discussion that we had. I thought I

would take just a moment to put on the record, because I am impressed by it—and I don’t know that we see enough of it these

days—by your own biographical story, which is that you grew up

in Massachusetts, went to Bard College, law degree from the University of Michigan, and then spent a few years in private practice,

but then came into public service, and that is the part that I wanted to describe with appreciation, serving in the Department of Education as an attorney in the Educational Equity Division and since

then have just kept moving up the ladder.

While at the Department of Education originally, Ms. Comstock

won the Younger Federal Attorney Award, which is a national

award given annually to five Federal attorneys under the age of 36

for outstanding service and sustained superior contribution. I presume that was relatively recently based on the age that has

been—— [Laughter.]

Ms. COMSTOCK. Thank you, Senator.

Senator LIEBERMAN. You are welcome. Your husband nodded appreciatively.

Ms. COMSTOCK. He is a smart guy.

Senator LIEBERMAN. Obviously, as we know, currently serving as

senior counsel in the Office of General Counsel at the Department

12

of Education; prior to that, 15 months as Associate Counsel to the

President.

We have broad bipartisan support for your nomination, including

receiving letters from Secretary Lamar Alexander, and we always

want to mention the name here in this Committee when we receive

notification from Senator Howard Baker—I turn graciously to my

left—supporting your nomination.

The short of it is I admire your long commitment to public service, and I appreciate your willingness to take on this assignment.

I thought the line of Senator Thompson’s questions about Mr.

McAuliffe’s guarantee of the mortgage were fair questions, and I

appreciate your answers. I just want to come back to what may

have been your final answer in the series of questions because it

is important, which is to say that, in that case—and I presume

more generally—when asked a specific question, you would, of

course, answer it to the best of your ability, but that in the position

you previously held and, in fact, in some of the Education positions

you have held that involved ethics, but certainly in the position for

which you are nominated, if you saw any ethics violation or any

concern that you had beyond the question that was asked, as I

heard your response to Senator Thompson, you indicated that you

would feel it your responsibility to speak to that concern and that

potential violation.

Ms. COMSTOCK. Absolutely, I would, always.

Senator LIEBERMAN. I appreciate that. I understand in your role

as Assistant General Counsel for Ethics at the Department of Education you were responsible for implementing the ethics program in

that Department. I wonder if you would just take a moment to, if

you will, discuss some of the larger challenges you faced in that

job, what you have learned from those challenges, and how you

think that experience will be applicable to your work as Director

of the Office of Government Ethics, if it would be.

Ms. COMSTOCK. Certainly. I think, in fact, sir, one of the greatest

challenges in the ethics field is to educate and work with employees to have them understand that these are not technical, bureaucratic rules, but that there is a purpose for protecting themselves

as well as protecting the integrity of Federal service, and that is

the reason behind these rules, and that to be viewed just as mere

technical compliance rules does not really serve them well or the

Federal Government.

I believe that the positions that I held at Education especially required a lot of creativity in terms of training and as well in terms

of working with the program offices. The standards of conduct go

primarily to personal behavior and conflicts of interest between

your personal life and your official position, but there are a lot of

issues that also arise in terms of, especially at the Department of

Education, the role of the Federal Government in partnership arrangements, for example, with non-governmental organizations,

and those can be very exciting challenges, and they were at the Department of Education.

I’m a firm believer that two entities with the same goal can

achieve a lot more together than they can separately, which actually goes back also to the effort that we might—I hope we underVerDate 11-MAY-2000 11:14 Jul 25, 2000 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 65381.TXT SAFFAIRS PsN: SAFFAIRS
13

take to streamline and coordinate the nominations process. If we

work cooperatively, we get a lot farther.

I worked very hard on those efforts at the Department of Education, and I think it benefited the ethics program because it incorporated the work of the ethics program into the work of the Department. If it remains a separate office off in the corner that you

only go to when you think you might have a regulatory ‘‘cite the

reg’’ violation, I think it will never be a successful program.

Senator LIEBERMAN. I appreciate the answer. As we all know

who live this life, in this time in our history we are all on notice

that you have got to accept the rules of ethics as more than law

or regulation because the public or the media, at least, will go, may

well go beyond that. So you are absolutely right. It can’t be something over here. It has got to be integrated into the normal conduct

of not only our duties but in these times into our lives. And as a

friend back in Connecticut who is in State Government says, it is

not a question of whether you are doing something illegal. Presumably you were never doing something illegal. It is not a question

of whether you do something unethical. Presumably you would always try not to do something unethical. The question is—and this

is a tough question—whatever you are doing, presuming it is legal

and ethical, can you explain it to the satisfaction of the public

when it turns up on the front page of your local newspaper or on

the evening news?

I do think that is a frame of mind, and so I appreciate your answer very much.

Again, I thank you for your interest. I appreciate the fact that

the Chairman has convened this hearing. I hope we can move your

nomination along expeditiously. I know we have a letter from the

current holder of this position, Mr. Potts, who tells us he is leaving

on August 14, and he hopes that we can confirm you at least certainly before than so there can be a smooth transition. And I share

that hope. Thanks very much.

Ms. COMSTOCK. Thank you, Senator.

Senator LIEBERMAN. Thank you, Mr. Chairman.

Chairman THOMPSON. Thank you. Senator Levin.

OPENING STATEMENT OF SENATOR LEVIN

Senator LEVIN. Thank you, Mr. Chairman. And let me note my

admiration of your many accomplishments, not the least of which

is that you got a law degree from the University of Michigan Law

School.

Ms. COMSTOCK. I did. Wonderful law school.

Senator LEVIN. I have no further questions. [Laughter.]

Over the years, Congress has expressed concern about the unevenness of ethics programs among the various agencies, and we

have taken some steps to try to avoid that unevenness. What is

your opinion about the consistency of ethics programs among the

agencies and whether OGE is doing a good job to try to achieve

that consistency?

Ms. COMSTOCK. I believe there is still some unevenness in the

ethics program. I’m happy to say that the Office of Government

Ethics has often cited the Department of Education as having an

excellent ethics program. I’d like to think I contributed to that.

14

I do believe there is some unevenness, and I think it needs to be

addressed. As a matter of fact, I know there’s some unevenness, in

my own experience.

The way that the Executive Branch ethics program is structured,

obviously the Office of Government Ethics is responsible for overseeing these programs and providing leadership in policies. But the

structure would fall apart without strong programs and strong designated agency ethics officials in each agency and department. It

depends on that.

I believe that we have a few opportunities to work to strengthen

the programs in various agencies. One is with the transition arising, coming forward, the new people coming in. It’s the best opportunity to explain to people coming into the Federal Government

this structure and the need for a strong DAEO, if it’s someone who

is going to be appointed, and for the close working relationship that

they need to establish with that person.

I also believe, in terms of OGE’s regular contact with the agencies, that the program reviews that OGE conducts of agencies every

3 years, I believe—maybe every 4—could address quality issues

more. My experience with it is that they have been more technical

in terms of timeliness, and I would like to see that move towards

providing technical assistance, quality—advice on the quality of advice that the agency offices give to the employees, and those—at

this time those are the two areas that I’m thinking of.

Senator LEVIN. Current law requires a 1-year cooling-off period

for most top-level government officials from lobbying their former

agencies, as reference has been made. The President has required

that his own top officials agree to an additional 4 years.

Ms. COMSTOCK. Correct.

Senator LEVIN. Making this a 5-year cooling-off period relative to

those Presidential appointees.

What is your personal opinion about the 1-year requirement

under current law versus the 5-year requirement required by the

President? And should we amend the 1-year requirement and make

it stricter?

Ms. COMSTOCK. My opinion, based on my own experience as well

as numerous conversations with people who are thinking of coming

into government service, is that the 1-year statutory cooling-off period for high-level government officials, which, depending on their

position, could either apply to their own agency or to high-level

government officials across the Executive Branch, is appropriate.

The 1 year requirement seems to adequately balance the need for

a cooling-off period so that one can’t immediately benefit from the

access and the power you might still have in your former agency

while not being so lengthy that it makes it difficult for you to find

another job in your field, and I don’t think we really want to have

rules that require that the government service be your last position

in life.

So, actually, my opinion is that the 1 year is appropriate.

Senator LEVIN. You have mentioned a number of times in your

answers to prehearing questions some concerns that you have

about the burdens which are imposed on top Federal employees in

filing their financial disclosure forms, including with respect to

evaluation of the value of their assets. The forms don’t require preVerDate 11-MAY-2000 11:14 Jul 25, 2000 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 65381.TXT SAFFAIRS PsN: SAFFAIRS
15

1The information submitted by Senator Levin appears in the Appendix on page 43.

cise amounts at the moment. They use ranges. But there is still in

many instances a burdensome evaluation problem.

Would you take a look at those forms as well as the forms that

have to be filled out by people who have been nominated for office

after you are confirmed, if you are confirmed—which hopefully you

will be promptly? Would you take a look at those forms and recommend where we can, consistent with a high level of ethical concern, reduce the burdens on applicants and on form filers? We try

to do this for the public. We require OMB to go through forms and

try to reduce paperwork requirements, and I think it would be useful here, as well. There is always a fear if we reduce or change any

of these that there will be an accusation that we are weakening our

ethics laws. And I think this Committee surely doesn’t want to do

anything like that, and I don’t want to do anything like that. But

I would like to reduce the burdens where we can consistent with

a high level of ethics.

If you could, after confirmation, go through these forms and

make recommendations as to where forms could be simplified and

make life a little bit easier for people either in office or being considered for office without any reduction of ethical concerns, I think

you would be making a contribution. Could you do that?

Ms. COMSTOCK. I will commit to doing that. If the purpose of the

forms is to highlight areas of potential conflict of interest, I do believe there are places where the Office of Government Ethics could

recommend to this Committee that legislative changes be made

that would not diminish the conflicts analysis.

Senator LEVIN. Thank you.

And then, Mr. Chairman, I just had a request. I understand that

Senator Collins put a portion of a GAO report relative to Dr.

Vladeck in the record, and I think for completeness and fairness,

I would ask that his testimony relative to the recusal request that

he did make on a similar matter be placed in the record where he

was told by his DAEO that he should not have recused himself.1

It was testimony along that line. I don’t remember precisely——

Chairman THOMPSON. I was going to leave the record open for

about 10 days, so within that time, would you like to submit the

relevant portion?

Senator LEVIN. I would. Thank you, Mr. Chairman.

Chairman THOMPSON. All right. That will be made a part of the

record.

Thank you very much.

I may say to both my colleagues while we are here—we discussed

it briefly earlier—on the point Senator Levin was making that I

think it is a very good point. We have talked with Ms. Comstock

about working with us perhaps with some bipartisan legislation to

streamline the nomination process, for example. I think that we

are all coming to the conclusion now that perhaps it is becoming

too burdensome for people who want to do some public service.

We are awfully concerned because we still see these numbers

that in this time of peace and prosperity, the level of public trust

in public institutions is still going down, especially among our

young people. And we have tried to respond to that with ethical

16

rules and disclosure rules, both in the Legislative Branch and the

Executive Branch, and all of that is good. But I think we are coming to the point now where we realize it is a point of diminishing

returns. You can make things so burdensome that you defeat your

purpose, and you are never going to be able to address that overall

public perception issue with paperwork. It is going to be things

more basic than that.

So we have to do what we ought to do, but maybe not more than

what we ought to do. So that is what we look forward to working

with you on and trying to strike that balance. I know much of this,

most of it, is in the form of regulation as opposed to legislation. But

perhaps we can work together on some legislation that will set

some new parameters.

I would suggest we leave the record open for 10 days. Without

objection, we will provide for any additional written questions that

might be submitted for the record. We appreciate your testimony

very much today and your public service, and we look forward to

moving promptly on this nomination.

Senator Lieberman, do you have any further comment?

Senator LIEBERMAN. None at all. I thank the nominee for her interest. I think she is a superb choice for this position, and I do look

forward to working together with you, and with you, Ms. Comstock,

on the overall problem that the Chairman has talked about. I know

you talked about it earlier, which is the way in which we can maintain obviously an appropriate ethical standard and filter, but also

make it easier for people to come into public service. I mean, this

is circular.

Obviously, one of the reasons why the public has this disregard,

particularly young people, is because of their perception that the

standard of ethics is not as high as it should be here.

On the other hand, we have set up some bureaucratic hurdles

that discourage some of the best people from coming in, and I think

together we can overcome those two ironies or difficulties and both

raise up public perception of people in public life, but also encourage thereby more good people to come in.

Ms. COMSTOCK. I hope so.

Senator LIEBERMAN. So thank you very much. I wish you and

your family well.

Ms. COMSTOCK. Thank you.

Senator LIEBERMAN. Thanks, Mr. Chairman.

Chairman THOMPSON. Thank you very much.

The hearing is adjourned.

[Whereupon, at 11:00 a.m., the Committee was adjourned.]

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