from each other, and although the executive is moving ahead in these areas, it is piecemeal, it is not uniform, and in some cases full disclosure of information is not freely obtained.

Under this proposal, we would use the General Accounting Office as depository.

All outside income, that is to say in a given year, of $100 or more would be reported.

All transactions involving $1,000 or more, whether they be stock, real estate, or whatever, plus a listing of assets are required to be reported. As to questions of income tax returns, we do not provide anything with respect to income tax returns, for two reasons: (1) All of the other information which is divulged pursuant to the bill is adequate, and is really repeated in terms of that income tax return. An income tax return could not yield that much additional information. There is confidential, personal information which is not in the public interest, particularly, concerning an income tax return, so we have not included it.

I personally, in my annual disclosures in the Congressional Record of net worth, and income for the preceeding year, have included the amounts I pay in Federal and State income taxes, because over the past several years, questions have arisen with respect to certain Governors, and as far as the amount of Federal tax filed and paid, and I think that the amount of the payment may be of interest to the citizenry, but we do not require anything in the bill.

As I said, I have cosponsored along with 157 House Members Chairman RIBICOFF. You say you and your colleagues seem to be going in the same direction as Senator Cannon, Senator Scott, and Senator Case?

Representative KASTENMEIER. Yes, Mr. Chairman.

Chairman RIBICOFF. My feeling is that this type of proposal that you gentlemen make is the type of proposal that could pass.

Representative KASTENMEIER. I think it could pass. I know there is some reluctance by some to disclose information, but it will become rather painless in years to come, as we are used to it, and as new people come into office.

We propose the people making $25,000 or more from the Federal Government, or those with GS-16's, plus candidates

Chairman RIBICOFF. In other words, your bill does require a candidate for election to disclose the same type of information as you require from the officeholder who is running.

Representative KASTENMEIER. Yes, Mr. Chairman, 30 days after he announces for office, he too as a candidate for Federal office, must make a similar disclosure.

Thank you, Mr. Chairman.

I can only urge that the Senate, I guess that the press for progress be taken here, and you are holding hearings, will follow your lead. Chairman RIBICOFF. We will try to complete these hearings. I think we are almost finished with the hearings, with the exception of the Justice Department. I would hope after the Justice Department appears, we will start making up this bill, so we would hope to get this bill out. Of course, I do not know what will happen to the legislation in the House, but I do appreciate your coming here, Congressman Kastenmeier, and having the benefit of your testimony.

We will take a short recess, Mr. Cohen, when I come back, it will be your turn.

Representative KASTENMEIER. Thank you.

[The prepared statement of Representative Kastenmeier follows:]

Prepared Statement of Hon. ROBERT W. KASTENMEIER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN

Mr. Chairman, I appreciate this opportunity to appear before the Senate Committee on Government Operations this morning to discuss the need for full public financial disclosure by elected and appointed government officials.

We all are fond of saying that there is nothing so powerful as an idea whose time has come. Such is the case of financial disclosure.

While I do not contend that the fate of the Republic rests on the enactment of financial disclosure legislation, I do believe that full and public financial disclosure by government officials can help alleviate one of the Republic's more pressing and acute problems. That problem, in brief, is the widespread deterioration of the public's confidence in government and in the persons who serve in elected or appointed offices.

Financial disclosure is important, not as a device to prosecute wrongdoing, but as a statement recognizing the public's right to have access to basic information regarding the outside interests of government officials, and the public's right to know what, if any, private influences there are on decision making by public officials. We who hold a public office owe such an accountability to the people we serve, and through financial disclosure, we can take a step toward restoring the faith of those who once had faith in us.

Financial disclosure is of particular importance now since polls indicate that the public agrees with the observation that too many political leaders are "just out for their own personal financial gain." Financial disclosure provides the best assurance to citizens that their government leaders are not using their offices for private gain. Furthermore, it is my belief that most government officials will find that financial disclosure will be a benefit to them for it will relieve them of the burden of suspicion which today so often is attached to public acts.

Support for full public financial disclosure in the Congress has grown slowly but steadily over the years. This year, my bill, H.R. 3249, which is generally similar to the measures introduced by Senators Case, Cannon, Javits and Weicker, has the bipartisan cosponsorship of 157 Representatives, more than one-third of the House membership. In addition, more and more Members of Congress are voluntarily making public disclosures of their personal finances.

Clearly, these are strong signs that the Congress is now ready to move on this issue, and we should begin to seriously consider what we want to be included in a comprehensive financial disclosure law.

I believe that a financial disclosure law should require that every candidate for nomination for or election to Federal office publicly file a disclosure statement. A disclosure law should require an annual uniform financial disclosure statement by each Member of Congress and high ranking officers and employees, including the President and Vice President, of the executive, judicial and legislative branches of the government. A number of the bills pending before this Committee, for example, require that those officers and employees earning more than $25,000 or classified as GS-16 or higher or as pay grade 0-6 of the uniformed service file a disclosure statement.

The disclosure statement should contain a listing, above a certain dollar amount, of each item of income or gift, the identity of certain assets and liabilities and transactions in securities and commodities and the purchase or sale of real property.

In addition, in order to insure that the disclosure statement be effective, I feel strongly that it should include the interests of spouse and dependents since officials of the government are as likely to be affected by such interests as by those held in their own name. Here, as in many other areas of the law, the family should be treated as an economic unit.

Lastly, the disclosure reports should be filed with the Comptroller General and must be available for inspection by the public.

What is the situation in government, today, respecting financial disclosure? The executive branch employees, except for the President and Vice President, are governed by Executive Order which sets forth requirements and guidelines for

the confidential reporting of certain financial disclosure information. However, there is a great need for additional guidance on what is to be disclosed and the reporting system is deficient. The General Accounting Office, in three reports this year, revealed apparent or potential conflicts of interest within the U.S. Geological Survey, the Civil Aeronautics Board and the Federal Maritime Commission. Also, this year, the Secretary of the Navy issued an Administrative Letter of Censure to a retired Vice Admiral and an Administrative Letter of Admonition to a retired Rear Admiral for their roles, while serving in the Navy, in the establishment of a commercial bank at a naval air station.

With respect to the Federal judiciary, the Judicial Conference Code directs Federal judges to file periodic public reports disclosing gifts of more than $100 and income from non-bench work. While the Code applies to all Federal trial and appellate judges, the Judicial Conference cannot force a judge to obey its rules. Further, the Code does not apply to Supreme Court Justices.

Turning to the Congress, disclosure by Members of Congress and congressional employees is partially public and partially confidential. House of Representatives disclosures are made to the House Committee on Standards of Official Conduct. The House requires its Members to make public each source of outside income that exceeds $5,000 or $1,000 if it is from a professional organization. Members also must disclose management or stock worth $5,000 or more in companies that have dealings with the Federal government. Also, honoraria from a single source totaling $300 or more and each creditor to whom an indebtedness of $10,000 or more is owed, is disclosed. The exact amounts of outside income and the value of holdings, however, remain confidential.

The Senate disclosures are made to the Comptroller General. Only gifts in the aggregate amount of $50 or more and the amount and source of each honorarium of $300 or more are publicly divulged. Other financial information is confidential. Despite the abysmal record of the Congress on requiring public financial disclosure for ourselves, we have expected employees of the executive and judicial branches to adhere to disclosure standards that are higher than those which we observe, and, at times, we have imposed public disclosure upon them.

Senate committees have required nominees to high executive branch offices to disclose specific financial interests at the time of their confirmation hearings.

Last year, when the nomination of Nelson Rockefeller to be Vice President was before the House Judiciary Committee, we insisted that the Rockefeller family's financial interests be made public as being a necessary prelude to the Committee's attempt to deal coherently with the conflicts of interest problems which could confront Mr. Rockefeller as Vice President. The Rockefeller family agreed to permit their chief financial advisor, J. Richardson Dilworth, to testify before the Committee in public session and to provide us with information on their financial interests.

Congress, in 1974, passed legislation which was managed on the House side by the Judiciary subcommittee which I chair, providing for judicial disqualification for Federal judges, justices, magistrates or bankruptcy referees. This Act specified a number of circumstances in which, for example, a Federal judge should disqualify himself from participation, including cases in which he or his spouse, minor children, or a person within the third degree of relationship to either of them or the spouse of such a person, had a financial interest that could be substantially affected by the outcome of a proceeding. This law requires that "a judge should inform himself about his personal and fiduciary financial interest, and make a reasonable effort to inform himself about the personal financial interests of his spouse and minor children residing in his household." The Congress defined "financial interest" to include, among other things, "ownership of any legal or equitable interest however small."

Has not the time come for the Congress to start applying to itself the same principles of disclosure that we have asked of others. We must do away with this double standard that we follow. We must get rid of what passes for a financial reporting requirement which, in essence, provides that such disclosure information be filed in safely sealed envelopes. This system must be replaced with public financial disclosure standards such as those which have been proposed here today. There are those in government, however, who do oppose public financial disclosure. One of the often raised objections to disclosure is the question of privacy, and I would like to address myself to that issue. We all cherish and value privacy as one of the most important rights of an individual. While it is true that financial disclosure often makes personal information available to the public, I believe that those of us who have made disclosures of our personal financial interests on

a regular basis feel that it is a small price to pay for the privilege of public service and managing the people's business. As public servants, everything we do is connected with the public interest and the public trust, and there is a compelling public need to know whether or not there are any outside interests which could possibly affect our stewardship. For more than a dozen years, I have voluntarily disclosed my financial interests so as to allow those who elected me to have these facts and to make it possible for them to determine whether or not I am engaging in any possible conflicts of interest. I do not consider such a disclosure to make me a "second-class" citizen.

Another argument made against financial disclosure is that some good people will refuse to enter government service because of their objection to such disclosure. This could be true, and I would regret that someone who could make a contribution to public service would make such a decision. On the other hand, financial disclosure may serve to deter some who should not be entering public service from doing so.

Mr. Chairman, the most serious charge which can be made against a public official is that he betrays the public's trust in him by using his office to advance his own financial interests at the public's expense. All three branches of government have suffered embarrassments through the acts of a few who have abused their offices for the sole purpose of enhancing the wealth of their coffers. Their acts have given government a bad name and they have contributed to the widespread disenchantment the public has with their government leaders.

Financial disclosure would give the public a record of any outside interests their government officers may have. The public could then match this information with the officeholder's record and check it with their estimate of his integrity. For those of us who seek elective office, the public can make its decision in the polling booth.

If we are to start to take those steps necessary to begin to rehabilitate the public image of government so as to establish beyond question the propriety of the public behavior of public servants, then one of those steps we must take is the enactment of financial disclosure legislation.

Chairman RIBICOFF. We will stand in recess.
[Whereupon, the committee was in short recess.]

AFTER RECESS

Chairman RIBICOFF. The committee will come to order.

At this point we will enter into the record, statements of Senator Lowell Weicker, Senator Howard W. Cannon, and Senator Hugh Scott. PREPARED STATEMENT OF HON. LOWELL WEICKER, A U.S. SENATOR FROM

THE STATE OF CONNECTICUT

We, in this Committee, have recently acted to increase the public's access to their Governmental processes by requiring that federal agencies open proceedings to the public. At some time in the not too distant future, I expect that this Committee will also act on Lobby Reform and Disclosure legislation.

These are steps toward letting the sun shine on the executive and private interest groups; but openness and disclosure cannot be a one-way street. If we open executive and legislative proceedings to shed light on the way decisions are made, so, too, should we open our own financial statements to allow the public to properly assess our performance in office.

Recent polls have shown that the public trust and confidence in their leaders has fallen to a new low. It is time that we, in the Congress, act to reinstate the faith of Americans in the integrity of their public officials.

Trust in government can only be restored when elected leaders are up-front about issues and about themselves.

There are those who fear that opening the financial statements of government officials might hold them up to public obloquy. To that I say that the dangers are far greater when founded upon rumor and innuendo, rather than upon fact.

To many, financial disclosure has become associated as one of the Watergate reforms because Watergate demonstrated its need; however, Senator Case has been a long-time proponent of such legislation-introducing his bill ten times since 1958.

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Whether we do or do not consider this legislation as a Watergate reform measure, there is no better place to begin with governmental reforms than by requiring the disclosure of the financial interests of all high-level public officials-including Members of Congress.

PREPARED STATEMENT BY HON. HOWARD W. CANNON, A U.S. SENATOR FROM THE STATE OF NEVADA

Mr. Chairman and Members of the Committee: I welcome the opportunity to appear before you and to express my views in support of legislation calling for the public disclosure of income, assets, and other transactions.

For several years I have introduced proposals, the most recent of which is S. 2295-now pending before the Government Operations Committee. A predecessor bill, S. 366, was passed by the Senate as part of the election bill, S. 372, in 1973 and again in 1974 as part of the bill, S. 3044. The House of Representatives deleted public disclosure of income and assets from the election bill, so I reintroduced the measure this year.

The need for a comprehensive government-wide law is readily apparent when the existing rules, codes of ethics, and executive orders are studied.

The Executive Branch has prescribed certain standards of ethical conduct for government officers and employees for many years, the most recent are included in Executive Order #11222, dated May 8, 1965.

More recently, the Senate adopted a Code of Ethics for its Members, officers and employees which appears in Rules 43 and 44 of the Rules of the House of Representatives.

Prior to the adoption of the Rules of Conduct, the Senate created the Select Committee on Standards of Official Conduct.

Both Congressional committees are charged with oversight and investigative jurisdiction over conduct. Reports required by the Rules of the Senate are filed with the Secretary of the Senate for disclosure to the public, and with the Comptroller General where copies of Federal Income Tax returns are necessary.

All disclosure reports in the House go to the Committee on Standards of Official Conduct, but are divided into parts Ă, public, and B, confidential.

The Federal Judicial system is mixed. There are Canons of Ethics for judges and lawyers, but the highest court in the nation, the Supreme Court, has no disclosure requirement.

During the debate in the Senate chamber on S. Res. 266, the resolution to establish special rules of conduct for the Senate, much thought was given to the concept of a uniform code which would affect all branches of government equally and equitably.

I have always been of the opinion that all officers and employees of the United States, including elected officers, should be treated uniformly. It makes no sense to provide a set of rules for one branch and another set for other branches.

I introduced an amendment to Senate Resolution 266. The amendment, number 616, approved by voice vote, expressed the sense of the Senate that a Code of Ethics should not be a mere resolution of the Senate, but should have the force and effect of law, and that such a law should impose uniform requirements upon all branches of the government.

The existing Executive Order and the Senate and House codes, do not go as far as some would prefer, nor do they provide for the broad public disclosure that some believe to be necessary, but their existence is evidence of a desire to impose reasonable standards upon public officers and employees.

Considerable support has been voiced for the proposition that the Senate and House codes should be given sufficient time for a determination of their effectiveness, and that more experience in this field should be accumulated before considering changes in the existing rules. It has been argued that the various branches are so different that each requires a special approach to codes of ethics. The Senate and House are elective bodies with terms of six years and two years respectively. Running for office requires the continuing effort of Members of the Congress to engage in political activity not only by Members but also by some of their employees as well, whereas the Judicial Branch is not politically oriented and most of the Executive Branch are prohibited from political activity. It is very difficult to draft a meaningful law which would apply uniformly to these equal but very different branches of the government. Some, however, still insist that a code