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WITHDRAWAL SHEET
Ronald Reagan Library
Collection: CICCONI, JAMES: Files
Archivist: ggc/rfw
File Folder: Memos - Office of Management and Budget (OMB)
Date: 2/1/99
[2 of 2] Box 9112 5
DOCUMENT
SUBJECT/TITLE
DATE
RESTRICTION
NO. AND TYPE
1. Memo
Mike Horowitz to Cicconi Re: Social Security
11/9/82
P5
3p /P
2
-
9/30/81
-
P5
- Memo -
Hozowitz to DAVE StockmAN, 2p
3
2. Memo
Fay Iudicello to Jim Tozzi, Nat Scurry Re: HCFA
10/21/82
D5
Proposal (partial, p4), 4p
11
3. Memo
Joseph Wright to Cicconi Re: Copyright legislation
6/22/82
P5
(partial, p2), 2p
5
4. Memo
Mike Horowitz to Cicconi Re: Indian Land Claims
3/25/82
PS 86
Bill, 1p
6
5. Letter
Alfred Regnery to Robert McConnell Re: Indian
3/9/82
P5 B6
Lands Claims Settlement Act2 4p 3p
7
chronology
IP
N.d.
25
the (NdiAN Bill,
RESTRICTION CODES
Presidential Records Act [44 U.S.C. 2204(a)]
Freedom of Information Act [5 U.S.C. 552(b)]
P-1 National security classified information [(a)(1) of the PRA].
F-1 National security classified information [(b)(1) of the FOIA].
P-2 Relating to appointment to Federal office [(a)(2) of the PRA].
F-2 Release could disclose internal personnel rules and practices of an agency [(b)(2) of the
P-3 Release would violate a Federal statute [(a)(3) of the PRA).
FOIA].
P-4 Release would disclose trade secrets or confidential commercial or financial information
F-3 Release would violate a Federal statue [(b)(3) of the FOIA].
[(a)(4) of the PRA).
F-4 Release would disclose trade secrets or confidential commercial or financial information
P-5 Release would disclose confidential advice between the President and his advisors, or
[(b)(4) of the FOIA].
between such advisors [(a)(5) of the PRA].
F-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the
P-6 Release would constitute a clearly unwarranted invasion of personal privacy [(a)(6) of
FOIA].
the PRA].
F-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of
the FOIA].
C. Closed in accordance with restrictions contained in donor's deed of gift
F-8 Release would disclose information concerning the regulation of financial institutions
[(b)(8) of the FOIA].
F-9 Release would disclose geological or geophysical information concerning wells ((b)(9) of
the FOIA].
WITHDRAWAL SHEET
Ronald Reagan Library
Collection: CICCONI, JAMES: Files
Archivist: ggc/rfw
File Folder: Memos - Office of Management and Budget (OMB)
Date: 2/1/99
[2 of 2] box 9112
DOCUMENT
SUBJECT/TITLE
DATE
RESTRICTION
NO. AND TYPE
1. Memo
Mike Horowitz to Cicconi Re: Social Security (p 1-3),
11/9/82
P5
3p
2. Memo
Fay Iudicello to Jim Tozzi, Nat Scurry Re: HCFA
10/21/82
P5
Proposal (partial, p4), 4p
3. Memo
Joseph Wright to Cicconi Re: Copyright legislation
6/22/82
P5
(partial, p2), 2p
4. Memo
Mike Horowitz to Cicconi Re: Indian Land Claims
3/25/82
P5
Bill, 1p
5. Letter
Alfred Regnery to Robert McConnell Re: Indian
3/9/82
P5
Lands Claims Settlement Act, 4p
RESTRICTION CODES
Presidential Records Act [44 U.S.C. 2204(a)]
Freedom of Information Act [5 U.S.C. 552(b)]
P-1 National security classified information [(a)(1) of the PRA]
F-1 National security classified information [(b)(1) of the FOIA].
P-2 Relating to appointment to Federal office [(a)(2) of the PRA).
F-2 Release could disclose internal personnel rules and practices of an agency [(b)(2) of the
P-3 Release would violate a Federal statute [(a)(3) of the PRA].
FOIA].
P-4 Release would disclose trade secrets or confidential commercial or financial information
F-3 Release would violate a Federal statue [(b)(3) of the FOIA].
[(a)(4) of the PRA].
F-4 Release would disclose trade secrets or confidential commercial or financial information
P-5 Release would disclose confidential advice between the President and his advisors, or
[(b)(4) of the FOIA].
between such advisors [(a)(5) of the PRAJ.
F-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the
P-6 Release would constitute a clearly unwarranted invasion of personal privacy [(a)(6) of
FOIA].
the PRAJ.
F-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of
the FOIA].
C. Closed in accordance with restrictions contained in donor's deed of gift.
F-8 Release would disclose information concerning the regulation of financial institutions
[(b)(8) of the FOIA].
F-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of
the FOIA].
onsmine
OF THE
THE
RESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
UNITED
OFFICE OF MANAGEMENT AND BUDGET
STATES
WASHINGTON, D.C. 20503
December 16, 1982
MEMORANDUM FOR JIM CICCONI
FROM: FRED KHEDOURI 71
SUBJECT: Information on Non-Attainment Areas
As it turns out, EPA has not quite finished drafting the Federal Register
submission for the proposed SIP disapprovals.
Their current plan calls for publication of disapprovals for carbon monoxide
and ozone with the next week. Disapprovals based on non-attainment for sulfur
dioxide, particulates, and oxides of nitrogen will follow in early January.
The attached list of proposed disapprovals would be published in the FR
as just that: a list of proposed disapprovals. States would have 30 days in which
to comment (or pass I&M legislation, if that is the problem).
Unresolved at this point is a very important aspect of the proposed notice.
EPA could include a list of proposed sanctions; they could also wait until after
the comment period and combine issuance of a final notice with identification of
sanctions. The construction ban on new sources is mandatory; the other sanctions
are discretionary.
(3)
1982 SIP's--PROPOSED DISAPPROVALS
SIP
Bases for Disapproval **
submittal
Affected
Attainment
Control
Region
State
Area
status
pollutant(s)
demonstration
I/M
measures
RFP
Other
Comments
I
CT
Statewide
Draft
03. 03. CO CO
X
Air quality data - Missing RACT regulations on
CTG sources and 100-ton
sources hot covered by CTG
- Need commitments/schedules
to correct deficiencies
II
NY New York City Final
03, CO 03, CO
X
X
- Do not demonstrate attain-
ment by 1987
- No plan for CO
- Missing RACT regulations
on CTG sources and 100-ton
sources not covered by CTG
III
PA Philadelphia Final
03. 0₃. co
x
X
X
- Shortfall of 25 TPD for VOC's
& Pittsburgh
- Missing RACT regulations for
100-ton sources not covered
by CTG
- State legislature acted to
prohibit I/M
DC Metro.
Draft
03. CO 03,
See comments
- Draft 0, plan presents 3
Washington
scenarios for attainment;
need firm measures and
commitments
MD Baltimore and Final
0₃. co 03.
- I/M start-up July 1. 1983
Metro.
Washington
IV
KY
Louisville
Final
0₃. co 03.
x
- Expect adoption of I/M regu-
lations by January 5, 1983,
that would permit start-up
by July 1. 1983
TN Memphis
Final
CO
X
- I/M schedule has slipped In
Memphis
Nashville
Final
CO
X
- Nashville will not commit
to I/M
V
IL Chicago
Draft
0₃, CO 03,
X
x
X
- Numerous technical concerns
with attainment demonstrations
East St.
X
X
Louis
Draft
X
for 0, and CO
0₃
- Insufficient reductions for
0, attainment by 1987
- Missing RACT regulations for
CTG sources and other 100-ton
sources
1982 SIP's--PROPOSED DISAPPROVALS
SIP
** Bases for Disapproval **
submittal
Affected
Attainment
Control
Region
State
Area
status
pollutant(s)
demonstration
I/M
measures RFP Other
Comments
V
IN
Metro.Chicago Metro.
Draft
03. 0₃. CO
X
X
X
- Do not demonstrate attain-
and Metro.
ment in southeast Wisconsin
Louisville
- Problems with CO attainment
area
demonstration
- Missing RACT regulations on
100-ton sources not covered
by CTG
- I/M proposed only as a
contingency measure
MI Detroit
Draft
0₃. CO 03,
X
X
X
- Need commitments to I/M, RACT
on 100-ton sources of VOC
and additional control
measures for CO
WI Milwaukee
Draft
03. CO
X
X
X
- Modeling demonstration for
0, based upon range of emis-
sion reduction targets
- Start-up date proposed for I/M
is April 1, 1984
- Need commitments for RACT on
other 100-ton sources
VII
MO
St. Louis
Draft
03
X
X
x
X
- Plan lacks necessary commit-
ments and key elements for
I/M
- Technically invalid attain-
ment demonstration
- Failure to demonstrate attain-
ment by 1987
- Plan does not demonstrate that
RACT required for all major
sources of VOC
VIII
CO Denver
Final
CO
X
X
- Control measure necessary to
demonstrate attainment is
unapprovable
UT Salt Lake City Final
03. CO
X,
- State legislature has failed
to provide legal authority
for I/M
1982 SIP's--PROPOSED DISAPPROVALS
SIP
** Bases for Disapproval **
submittal
Affected
Attainment
Control
Region
State
Area
status
pollutant(s)
demonstration
I/M
measures
RFP
Other
Comments
IX
CA
Los Angeles
Draft
03, CO
X
X
- For areas indicated, draft
area
SIP fails to demonstrate
attainment by 1987
Fresno
Draft
03, CO
X
X
- I/M proposed for
disapproval because Imple-
Sacramento,
Draft
03
X
X
mentation date beyond
Ventura
December 31, 1982
San Diego
Draft
03. 03. CO CO
X
NV
Las Vegas
Final
CO
X
X
X
- SIP fails to adequately
and Reno
demonstrate attainment of
CO for Reno by 1987
- Las Vegas implementation
date for 1/M is July 1983
16
TO
Tx Huston
17
all proposels
61 R. A.
STATUS OF RULEMAKING ACTIONS ON 1982 SIP'S
That Have Completed 10-day Review
(December 1, 1982)
Notices of Proposed Rulemaking
Area (Pollutants)
Federal Register Status
Proposed Action
OR - Portland (03/CO)
Published 7/21/82
Approval
OR - Medford (CO)
AA Office
Approval
WA - Vancouver (O3)
TO FRO 9/17/82
Approval
WA - Seattle (03/CO)
Published 10/19/82
Approval
NH - Manchester (co)
Published 9/13/82
Approval
MA - (03/CO)
Region submitted revised
Approval
package 12/1/82
NM - Bernalillo Co. (CO)
Published 11/10/82
Approval
CO - Denver (03/CO)
10-day review ended
Approval except
Greely, Fort Collins,
11/29/82
for Denver CO plan
Colorado Springs (co)
AK - Anchorage (CO)
AA Office
Approval
Notices of Final Rulemaking
Area
Federal Register Status
Action
OR - Portland (03/CO)
Published 10/7/82
Approval
WA - Vancouver (03)
10-day review ended
Approval
12/1/82
STATUS OF 1982 SIP SUBMITTALS
(December 1, 1982)
SIP Status
Public
Projected Date
Region
State
δ
8
Hearing
for Final
Comments*
I
RI
Final
N.R.
Shows attainment by
12/31/82 - Proposed
for approval
MA
Final
Final
Proposed for approval
CT
Draft
Draft
10/82
1/83
Proposed for disapproval
NH
N.R.
Final
NPRM published 9/13/81 -
(approval)
II
NY
Final
No sub-
Proposed for disapproval
mittal
NJ
Draft
Draft
10/82
12/82
Parallel processing -
approval
III
PA
Final
Final
Proposed for disapproval
(I/M)
DE
Final
N.R.
Proposed for approval -
MD
Final
Final
Proposed for disapproval
(I/M)
DC
Draft
Draft
12/82
12/82
Proposed for disapproval
VA
Draft
Draft
9/82
12/82
Parallel processing
-
approval
IV
GA
N.R.
Final
Proposed for approval -
KY
Final
Final
No. Kentucky: approval
Louisville: disapproval
(I/M)
NC
N.R.
Final
Parallel processing
approval
TN
Final
Final
Proposed for disapproval
(I/M)
N.R. - None required
Final - State adopted and effective
*SIP's with proposed disapproved I/M programs are shown in parenthesis.
Public
Projected Date
Region
State
δ
8
Bearing
for Final
Comments*
V
MI
Draft
Draft
9/82
12/82
Proposed for disapproval
(I/M)
WI
Draft
Draft
10/82
12/82
Proposed for disapproval
(I/M)
IL
Draft
Draft
9/82
12/82
Proposed for disapproval
(I/M)
IN
Draft
Draft
10/82
1/83
Proposed for disapproval
(I/M)
OH
Final
Final
Shows 1982 attainment
-
for ozone - proposed
for approval
VI
NM
N.R.
Final
NPRM published 11/10/82 -
(approval)
TX
Draft
N.R.
7/82
12/82
Proposed for approval
-
VII
MO
Draft
Draft
8/82
12/82
Proposed for disapproval
x
(I/M)
VIII
8
Final
Final
Denver CO plan proposed
for disapproval - NPRM
x
in Headquarters
UT
Final
Final
Proposed for disapproval
(I/M)
IX
CA
Draft
Draft
8/82
11/82-
Proposed for disapproval:
1/83
1982 SIP's for Fresno,
Sacramento, Ventura and
Los Angeles (do not show
1987 attainment for O3):
I/M for all of above plus
San Diego
NV
N.R.
Final
Proposed for disapproval-
x
Las Vegas (I/M)
X
ID
N.R.
No submittal
Draft being prepared
OR
Final
Final
Portland: NFRM published
10/7/82 (approval)
Medford: I/M problem
WA
Final
Final
Seattle NPRM published
10/19/82 (approval)
AK
N.R.
Final
I/M problem
N.R. - none required
Final - State adopted and effective
14
7
*SIP's with proposed disapproved I/M programs are shown in parenthesis.
17
A
31
OMB
THE
RESIDENT
OFFICE
OF JO
THE
EXECUTIVE OFFICE OF THE PRESIDENT
UNITED
OFFICE OF MANAGEMENT AND BUDGET
STATE
AND
SERVICE
WASHINGTON, D.C. 20503
MEMORANDUM
February 18, 1983
To:
Jim Cicconi
From:
Mike Horowitz M4
Subject:
H.R. 100
The testimony put me to sleep - which I gather to be one of
its objectives. (On the other hand, the Cabinet Council
presentation was also --- I hope unintendedly -- rather
soporific.)
Given our time limitations, I have suggested modest changes
which I think will move us away from what is likely to play as
a phony plea for study time. By ducking issues on the basis
of the claim that we haven't studied matters enough, we leave
ourselves open to the charge that we have not been serious in
our efforts to date.
CC: Jim Murr
Draft #5
2-18-83
DRAFT
STATEMENT OF T. TIMOTHY RYAN, JR.,
SOLICITOR OF LABOR,
U.S. DEPARTMENT OF LABOR
BEFORE THE
SUBCOMMITTEE ON COMMERCE, TRANSPORTATION, AND TOURISM
COMMITTEE ON ENERGY AND COMMERCE
U.S. HOUSE OF REPRESENTATIVES
February 22, 1983
Mr. Chairman and Members of the Subcommittee:
I appreciate this opportunity to come before your
Subcommittee today. I am accompanied by Diane E. Burkley,
who serves as my Special Assistant, and Peggy Connerton,
a Senior Economist at the Department. They have served
as key staff members on the Administration's Working Group
on Equal Pension Benefits. This hearing and H.R. 100 focus
on discrimination in all forms of insurance, I will primarily
address a more limited matter which is of extreme importance
to this nation's working women and their families, retirement
equity.
The inclusion of "sex" as a prohibited basis of employment
discrimination in Title VII of the Civil Rights Act of
1964 has been the paramount tool for ensuring that women
have the opportunity to realize their rightful--equal--
place in the American workforce.
The Executive Order 11240
program relating dayment opportunity by Federal
contractors has similarly given the Department of Labor
the ability to ensure that these contractors often some
- 2 -
of the largest corporations in the country treat
women equally.
This Administration is extremely concerned about equity
in pension plans because this issue affects the standard
of living of millions of men and women in their retirement
years. However, this is an extremely complex matter which
does not lend itself to easy answers or approaches. There
are many factors involved each in themselves presenting
many complicated variables which need to be addressed
severally and jointly.
It would helpful for me to take a minute or two to
describe some of the background of the Federal government's
involvement in this area. In 1970 the Labor Department
issued regulations providing in effect that it was not
necessary for men and women to receive equal benefits from
a Federal contractor's pension program so long as the contractor's
contributions are the same for each sex. In contrast,
in 1972 the Equal Employment Opportunity Commission adopted
a Title VII guideline requiring that pension benefits be
equal. Both the Ford and Carter Administrations formed
working groups which attempted to resolve this contradiction
and to develop a unified approach to the question. Unfortunately,
these attempts were not successful, and the conflict was
not resolved.
- 3 -
In 1978 the Supreme Court issued its decision in City
of Los Angeles V. Manhart. This case held that Title VII
prohibits employers from requiring women to make larger
contributions in a pension fund than men, even though the
differential was based on the fact that women as a group
have a longer life expectancy than men and as a result
tend to receive larger total pension benefits over their
lifetimes. Manhart gave us only half a loaf; it dealt
solely with the questions of contributions to a benefit
plan. It did not address the issue of equality of benefits.
The lower courts have reached different conclusions on
this latter question.
Faced with this lack of clarity, in June 1982 this
Administration's Cabinet Council on Legal Policy, chaired
by the Attorney General, established a Working Group on
Equal Pension Benefits which I was asked to head. Other
members of the Group have included representatives of the
Offices of the President and Vice President, the Council
of Economic Advisers, the EEOC, the Departments of Treasury,
Justice, and Defense, the Veterans Administration, and
the Office of Personnel Management. We have been working
on the extremely difficult and complex legal and actuarial
questions for almost nine months. In addition to the efforts
of dozens of staff members, the Working Group has met about
twenty times to discuss and debate the issues.
- 4 -
One result of our deliberations was that the Government
recently filed a memorandum in the Supreme Court in response
to a petition for review in TIAA-CREF (Teachers Insurance
and Annuity Association and College Retirement Equity Fund)
V. Spirt. The Government took the position that the employer
in question violated Title VII by its use of sex-based
actuarial tables resulting in unequal pension benefits
to males and females.
You should also be aware that the Supreme Court has
granted review of another equal benefits case, Arizona
V. Norris. The question presented by Norris is whether
Title VII permits employers to provide employees the option
of selecting one of several pension payment forms, some
providing equal benefits and some providing unequal payments
comparable to those available on the open-market. We did
not address the viability of this so-called "open-market
exception" in our response in Spirt .
Based on our efforts to date, we agree that legislation
is needed to address the issue of pension equity. In fact,
the President in his State of the Union message in January
Lated that the Administration will submit legislation
to remedy inequities based on sex discrimination in employer
pension systems. Although the Supreme Court is considering
the issues presented in Norris, there are other matters
made clear
- 5 -
which are ripe for legislative consideration, such as the
effects of maternity or paternity leave on length of service
and divorce on beneficiary rights.
understand
In fashioning legislation, it is necessary
competing
that
Insurance and pension programs are guided by a focus on
group characteristics. The use of generalizations, such
as actuarial tables, the accepted norm. However, in
the nondiscrimination sphere, employment related and otherwise,
the focus is on the individual, and each person is to be
has
been
treated on the basis of his or her own modical. These principles
have been translated into statutes enacted to effectuate
them, specifically the Employee Retirement Income Security
Act (ERISA) and Title VII of the Civil Rights Act.
Before discussing the various specific options which
might be open to us, I believe it would be helpful for
characherises
provide you with a brief overview of the pension
universe. I will touch upon the scope of that universe,
and
the forms of benefit payments normally available, and the
abrlities.
types of plans that are offered.
There are presently 46 million participants in 460,000
pension plans nationwide, both private and public--that
is, government sponsored. The present value of all of
these plans is $560 billion. I would further note that
- 6 -
this figure is estimated to balloon to an almost unbelievable
figure of $3 trillion by 1995, a mere twelve years from
now.
These participants receive their retirement incomes
normally in one of three forms. The first is a life annuity
whereby the individual receives periodic payments for life,
normally on a monthly basis. Secondly, there is is a joint
and survivor annuity which is similar to the life annuity;
however, upon the participant's death, another, normally
the spouse, continues to receive benefits for the remainder
of their life. Finally, there is a lump sum payment.
These various benefit forms can be offered by either
of two basic types of plans: defined benefit plans and
defined contribution plans. Under a defined benefit plan,
an employer undertakes to provide its employees with a
specified level of retirement benefits in a particular
form. Twenty-nine percent of the private plans in operation
are defined benefit plans, and ninety percent of the workers
covered by private plans receive their sole or primary
benefit from them.
Under a defined contribution plan the employer does
not undertake to provide a specific benefit level. Rather,
annual contributions are made by the employer to individual
accounts established for each participating employee.
- 7 -
Upon retirement, the employee is usually entitled to receive
the balance in his or her account normally in the form
of a lump sum distribution. Seventy-one percent of the
private plans in operation are defined contribution plans,
and thirty-five percent of the workers in the private pension
system receive some benefits from these plans.
There is nothing inherently discriminatory about either
type of plan. The problem arises when payments are determined
using mortality tables
Unequal
treatment mainly occurs when these tables are used to convert
the original form of benefits (called the "normal form")
into optional benefit forms. Approximately million
based
employees are in plans which use sex-based for this conversion.
on
Mr. Chairman, I am now going to ask Ms. Burkley to
set.
explain to you how discrimination occurs in the pension
area and various options that are being considered to address
the problem.
The the
MS. BURKLEY:
this issue
In order to understand
h
it is necessary to look at the
two types of plans separately, for the one is the mirror
image of the other. In defined contribution plans, women
receive less money when sex-based tables are used. But
- 8 -
in defined benefit plans, men are the ones who may receive
lower benefit payments.
Defined
contribution
present
the
Situation
most
of
they
think
of
discrimination
in
permiens
The normal form of benefit
theou plans,
as Mr. Ryan
indicated, is a lump sum equaling the amount that has accumulated
in the individual's account. Assuming equal contributions
are made for men and women, as is typically the case, this
under
benefit will be equal for similarly situated individuals
regardless of their gender. Therefore, no sex discrimination
defined
problem arises. The same cannot be said, however, when
the plan provides an annuity option or when only an annuity
conti-
is offered. In these instances, the equal lump sum will
trutin
be converted into a life annuity on the basis of its actuarial
value, measured by the life expectancy of the beneficiary.
plans
Because women as a group live longer, their benefits are
projected to be spread out over a longer period of time.
Accordingly, the single life annuity that can be purchased
by an equal lump sum provides lower monthly benefits for
women than for men
Conversely, the normal benefit form provided by defined
benefit plans is a single life annuity. Despite the fact
that a given periodic benefit will cost more for a woman
than for a similarly situated man, employers generally
theavera fe, receive the same 10/20
- 9 -
on theaverage
have provided equal monthly payments to both sexes. Thus,
the employer is subsidizing women's annuity benefits.
The difference in treatment occurs when the plan provides
additional, optional benefit forms based on the life annuity's
actuarial present value. Because women live longer, female
employees receive larger lump sum payemnts than men; they
will also receive larger joint and survivor annuity payments.
The reason men receive smaller lump sums is fairly
on
the
easy to understand. Because their lifespan is shorter,
they would have received a smaller number of periodic payments
average
over their lifetime. Let me refer you to Chart
In
the example set forth there, the woman would receive $5,000
more than the man since she would be expected to live five
years longer, continuing to receive $1,000 each year.
The reason why male retirees receive smaller payments
when a joint and survivor annuity is more complicated.
Because
man
a shorter lifespan, the female surviving
spouse of a male retiree will generally receive a greater
portion of the total benefits than will the male survivor
of a female retiree. The male retiree's payments
with
are
Inarder
therefore
reduced
to fund the payments his
on have average
spouse will atve
The
is compounded by
the fact that the present value of the annuity is worth
more to the woman to begin with.
This sparety
in 6avor of men
- 10 -
So, in our Chart example, if Mr. A and Mrs. B both
-
have 65 year old spouses, it can be predicted that Mr.
A's spouse would outlive him by five years. Therefore,
his annuity payments would be reduced from $1,000 to $800
per year in order to fund the $400 his wife is likely to
receive. Mrs. B, on the other hand, is probably going
to outlive her spouse. But since some husbands will outlive
their wives, there is also a small statistical probability
that Mr. B will outlive Mrs. B. For this reason, Mrs.
B's payment will be reduced a little, to perhaps $900 a
year. Mr. B, if he outlived his wife, would then receive
$450 a year.
In the aggregate, the impact of men being disfavored
under the lump sum option is fairly small because only
two percent of male retirees in defined benefit plans select suchan
option. But the scope of the joint and survivor annuity
problem is large--30% of male retirees select this option.
The significance of this statistic is of course magnified
by the fact that 90% of retirees receive their sole or
primary pension from defined benefit plans.
resissues,
Having defined
the Working Group next examined the numerous options available
to address the problem. We found that there are three
basic questions which need to be addressed in selecting
a solution: Who? How? What?
- 11 -
The first question is who will be covered by remedial
legislation? Will it cover future retirees only or will
it cover all retirees, past and future?
Second, how will the new, non-discriminatory level
of benefits be established? There are two options available.
The first is called "topping up," whereby the benefits
of the currently disfavored sex are raised to the level
of the other. The second method is the use of a sex-neutral
table which takes into account the mortality of both men
and women. This approach would permit plans to set a benefit
level in-between what the sexes now receive, probably as
a weighted average which takes into account the proportion
of men and women in the plan.
Third, what benefits will be affected by the non-discri-
minatory requirements? At one end of the spectrum, even
past payments could be affected. Alternatively, the payments
made in the future could be totally equalized. While this
approach is, properly characterized as prospective in the
sense of when the payouts are made, it also has a retroactive
aspect due to the way pension plans are structured and
regulated under Federal law. That is, a payment made tomorrow
has actually been funded, and has accrued, over the course
of the worker's career. If purely prospective application
is desired, the requirement could be limited to benefits
which accrue in the future, the third possible alternative.
- 12 -
With these considerations in mind, we have identified
several possible options for implementing an equal benefits
requirement, which are set forth on Chart . Let me say
at the outset, Mr. Chairman, that we have not included
the possibility of affecting past payments, of a taking
a case-by-case approach because these did not seem appropriate
for legislative responses.
The first two options both involve topping up total
future benefit payments. They differ only in whether the
requirement is applied to all retirees (Ia), or only to
future retirees (Ib). As we understand it, H.R. 100 takes
the first of these approaches.
The next two options simply substitute a sex-neutral
approach for topping up; total benefits would still have
to be equalized. Again, the provision could be applied
to all retirees (IIa), or limited to future retirees (II).
Finally, equalization could be mandated only for benefits
accruing in the future, through the use of sex-neutral
tables (III). Theoretically, this could be applied to
workers already retired (IIIa). But because you have to
be working to accrue benefits, it would only actually affect
future retirees (IIIb).
- 13 -
existing
MR. RYAN:
Mr. Chairman, let me now explain, some of the economic
ramifications of these options. Estimates of the costs
of equalizing pension benefits for similarly situated men
and women vary all over the spectrum. For the approach
taken by H.R. 100, they range between $0 and $5.5 billion
per
year in additional funding costs to plans.
To eliminate some of the resulting uncertainty and
to contribute, we hope, in a positive fashion to resolution
of the critical sex equality issue, the Department of Labor
conducted its own study of the short-term costs of various
measures for equalizing pension benefits. The study examined
a multitude of options and covered the entire pension plan
universe.
Because of the highly technical nature of pension
plans, the methodology is somewhat complicated and is described
in the report, so I will not describe it in detail at this
time. We recognize that the methodology has some limitations
and can be further refined. However, we believe that it
provides a reasonable ballpark estimate of the economic
impacts expected in the short-run. To account for the
large uncertainty that must necessarily exist, the analysis
provides a range of estimates, rather than a single "best
estimate."
- 14 -
Now turning to chart , I will highlight some of
the major cost findings.
First, the short-run costs of H.R. 100 could be substantial,
upwards to $1.7 billion annually if employers are required
to top up total payments for all retirees.
Second, costs of the unisex option are relatively
inexpensive in comparison. For example, annual costs to
equalize total payments for future retirees with unisex
tables are only twenty percent of "topping up" costs.
Third, application to past accrued benefits also increases
the costs substantially. For example, the chart shows
that application of unisex tables to total payments nearly
doubles the costs to plans.
Fourth, coverage of past retirees can also add substantial
costs. For example, the chart shows that including all
retirees increases employer costs to top up total payments
by about fifty percent.
Finally, for each method of equalizing pension benefits,
men as a group receive higher payments. The principal
reason, as I mentioned earlier, is that men are currently
disfavored under the joint and survivor options in defined
benefit plans. An additional reason can be found in men's
higher earnings. In the aggregate, women tend to do relatively
better under toppping up than under a unisex approach.
- 15 -
This is because the increased payments to women in defined
contribution plans are more than offset by decreases in
their joint and survivor payments in defined benefit plans.
Let me emphasize, Mr. Chairman, that these estimates
reflect only the direct costs to plans. The cost estimates
do not include indirect costs arising out of lost investment
opportunities or from increases in short-term deficits
with the introduction of unisex tables because of "adverse
selection" which can occur because there are winners and
losers under unisex tables which will affect a selection
of form of payment.
It is clear that there will be some increased uncertainty
over the likely costs in the short-run. However, these
costs will not continue in perpetuity. Over the long-run,
most of these costs will be shifted to current or future
participants in the form of smaller increases in pension
benefits. The only dispute is how fast they can be passed
on to employees. However, costs for past retirees reflect
nontransferable losses to employers.
CONCLUSION:
Mr. Chairman, all the options, facets of options, and
costs and conflict with present statutory language must
be considered in depth, as we are presently doing, before
- 16 -
canhe
final decisions on the appropriate approach
made. There
are two matters upon which decisions from the Administration's
standpoint have been made. First, we need to address not
only equality of benefit programs, but other aspects of
may
the pension system which work to the detriment of women.
Senator Dole has introduced S. 19; we are examining his
and others' recommendations in developing our legislative
marking more,
package.
scruting. be
Second, we believe that the pension matter should
treated separately from others relating to differential
treatment in other forms of insurance. Various Administrations
and the Congress have been studying the issue for at least
eight years. Other types of insurance- life, health, automobile--
same nicense Scrutiny,
believe
that
the
the
Branc
h
information that is itally to address
these
matters
in-a
reconsible
The
16 these insurance areas
issues presented must be subjected to the
this
same
though
analysis
that
pension
is
undergoing
specially since the impact of an equal treatment rule
may differ depending on the contaxt: FOT example, young
womendsivers may have to pay more for than
they now do.
OVER
would, under sender-mential plans
appear to increase
costs to women and
lower costs to men. such an outcand
we believe, CODE could create
real disadvantates busine --
handly an appro priate outrome
where the objective is to
decrease descrimination
afainst usiner.
- 17 -
a Gradset
The Administration believes both sexes should be
treated fairly and intends to vigorously
address all forms
of discrimination in insurance.
handevelop
For
therena
of
It
should
be kept in aind pensions, insurance 15 amissure
has traditionally left to quation
Mr. Chairman, allow me to conclude this presentation
by reiterating the Administration's determination to remedy
sex based inequities in pension systems.
-continuation
of wable, and will our
utmost to see that it is eradicated in a fair and equitable
any
to all concerned? We commend you for your interest
in this issue as well as other members of the House and
Senate who have voiced concern. Any resolution of the
problem will out of necessity and out of merit demand coopera-
tion between the Congress and the Executive Branch. I
trust that this cooperative effort will result in beneficial
consequences to the millions of people adversely affected
by sex-based discrimination in pension plans.
This concludes our formal presentation. We will be
pleased to attempt to answer any questions you may have.
Thank you.
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Pages To Follow
AM 6887 Q6 (Rev. 1-00) PRINTED IN U.S.A. (7-82)
JAB
There's nothing here that
was not in my earlier
memo (which you showed
to the President).
I've asked Joe to check
on whether GSA is indeed
reviewing SSA's purchase,
if anything can be done, etc.
T2/8
TIVE OFFICE OF THE PRESIDENT
CE OF MANAGEMENT AND BUDGET
STRUITIVE
a
STATE
WASHINGTON D.C. 20503
February 7, 1983
OFFICE OF
THE DIRECTOR
NOTE FOR:
Jim Baker
Ed Meese
FROM:
Joe Wright M
At a recent Senior Staff meeting you asked about
the purchase of Hitachi Computers by GSA - attached
is an explanation.
OFFICE wine PRESIDENT SEATES THE UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
February 7, 1983
MEMORANDUM FOR:
Joe Wright
THRU:
Ken Clarkson
Ka
FROM:
Keith Fontenot
H
SUBJECT:
Social Security Administration (SSA) Purchase of Hitachi
Computers
Recent news articles have focused on the contrast between an SSA decision to
purchase Hitachi computers and an FBI decision to purchase from IBM, even though
Hitachi machines were the cheapest in both cases. The SSA purchase was made
through an American vendor, the VION Corporation. GSA has reviewed SSA's
procurement decision and concluded that it "appears both reasonable and in
accordance with appropriate regulations."
SSA and GSA advise us that procurement regulations required SSA to purchase from
VION since their bid was nearly $4 million cheaper over the life of the system
than the nearest competitor. They note that the Trade Agreement Act of 1979
specifically designates Japanese companies as eligible to sell to the U.S.
Government, providing an exception to the Buy American Act. SSA was aware that
Hitachi was under investigation; they checked weekly with GSA to ensure Hitachi
had not been suspended from conducting business with the U.S. Government.
Privately, SSA officials are bewildered by the FBI's decision not to purchase
from the lowest bidder, since their consultations with both GSA and HHS' General
Counsel indicated that procurement law and regulations require purchases from
the lowest responsible bidder.
Facts
Request for proposals issued June 18, closed August 2, 1982.
Two firms within competitive range.
Negotiations from August 25 through November 22, 1982.
Best and final offers on December 3, 1982.
Award made December 13, 1982 to VION Corporation. Contract purchase price
for FY83 $5,497,193. Purchase price evaluated over systems life of
$6,953,263.
Award made based on lowest overall cost to the government, price and other
factors considered, for the systems life. VION bid $3,870,000 lower over
systems life than nearest competitor.
Attachment
THE WASHINGTON TIMES
January 26, 1983
nothing to do with the alleged theft of
Hitachi sells two computers to U.S.
trade secrets.
IBM was runner-up in competition
for the computer contract for Social
Associated Pross
Security's telccommunications net-
The Social Security Administration
The FBI apparently came to the
uals last June on charges of conspiring
work between its headquarters outside
has purchased two multimillion-dollar
opposite conclusion last July when it
to transport stolen property. Hitachi
Baltimore and its 1,300 field offices.
computers made by Japan's Hitachi
awarded to International Business
allegedly had paid an undercover FBI
ViON won with its National Advanced
Ltd., which faces federal charges of
Machines Corp. a $18.8 million com-
agent $622,000 for what was purported
Systems model 9060, made by Hitachi.
computer piracy.
to bc stolen technical data on IBM
ViON is a dealer-distributor for
computers.
The powerful computers that Social
National Advanced Systems, which is a
Security bought for $7 million through
A federal grand jury
Japan's Mitsubishi Electric Corp.
subsidiary of National Semi-Conductor
a U.S. dealer are the same type equip-
and four individuals were indicted on
indicted Hitachi last
Corp. NAS imports its large-scale com-
ment that the FBI decided not to buy
similar charges for allegedly paying
puters from Hitachi.
last summer, even though Hitachi's
June on charges of
$26,000 to obtain trade secrets. A judge
IBM won the FBI contract with its
vendor also was the low bidder in that
later dropped charges against three of
top-of-the-line 3081K processor. IBM
instance.
conspiring to transport
the defendants.
has filed a civil suit for damages
Top officials of Social Security and
stolen property.
No date has been set for the Hitachi
against Hitachi that stem from the
the General Services Administration,
or Mitsubishi trials. Both firms have
alleged piracy. Irwin Schorr, a spokes-
the government's purchasing agency,
acknowledged making payments to the
man in IBM's Washington office, said,
puter contract - the biggest in FBI
FBI front organization called Glenmar
"We feel that because of this current
say that federal regulations left them
history - despite a bid from ViON that
Associates for computer information,
litigation, it would bc inappropriate to
no choice but to award the contract for
comment.'
the Hitachi equipment to VION Corp.,
was $1.1 million cheaper.
but they deny trying to steal any
Neither ViON, NAS nor Hitachi has
a private firm that specializes in com-
A federal grand jury in San Jose,
secrets.
been suspended or debarred from
puter sales to the federal government.
Calif., indicted Hitachi and 17 individ-
FBI officials have said ViON had
doing business with federal agencies:
OMB
FRESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF THE OF MANAGE STATES AND BUDGET & UNITED
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
January 19, 1983
MEMORANDUM FOR JIM CICCONI
FROM: FRED KHEDOURI- 71
SUBJECT: Farmer's Home
I have attached a revised version of the SOTU passage on farm credit.
You might be interested to know that my staff unearthed the following
facts:
USDA estimated total farm debt at the close of 1982 at $215 billion;
Farmers Home holds $23.7 billion of this, or 11 percent.
-Farmers Home estimates that it has 270,000 current borrowers.
--We have no current estimate of the total number of borrowers; at the
last survey point (1/1/80), there were 1,270,000. At that time there
were only 170,000 FmHA borrowers, or 13.3 percent of the total.
The USDA analysts responsible for credit surveys believe that there is
no reason to assume any significant change in the total number of farm
borrowers. If this is the case, the FmHA share would have risen to
21.3 percent.
foms. OMB memos THE F ESIDENT*
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE THE UNITED OFFICE OF STATE
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
COUNSEL TO THE DIRECTOR
MEMORANDUM
November 9, 1982
To:
Jim Cicconi
From:
Mike Horowitz
M4
Per our discussion, for your confidential use, I am attaching the
memo earlier sent to Dave re Stan Ross. As indicated, Dave wanted
him on the Commission, but Schweiker felt otherwise.
In any event, I believe you will find ROSS to be informative and
helpful.
MEMORAHDUM
September 30, 1981
To:
Dave Stockman
From:
Mike Horowitz
Subject:
Social Security Blue Ribbon Task Force
I received a call this morning from Stan Ross. For the reasons
indicated, I believe that our hopes for leadership in the entire
Social Security area can and should be built around him.
As you know, he supports substantial reform and this morning's
call indicated a clear willingness to assume a central
leadership role on the Blue Ribbon Task Force. Stan has both
impeccable technical/professional credentials as well as vest
political credentials sufficient to box out the objections that
Ball, Cohen, et al. would love to raise against him. (Ball and
Cohen have no personal objections against Ross, but have
described him as their principal intellectual adversary.)
Among his professional credentials are the following:
He served as Carter's Social Security Administrator.
Before that appointment, he served as Chairman of the
Advisory Council on Social Security, the Council that
issued the last report under Democratic auspices.
He served on Johnson's domestic White House staff during
the period of expanded Social Security benefits.
He was a key member on the Treasury staff involved in the
Kennedy tax bill.
In addition to what can be noted from the above, the following
are his political credentials:
He is Joe Califano's law partner and closest friend and
that friendship will serve to neutralize the potential
opposition of O'Neill to his leadership, and might even
engage Califano for a possible national leadership role
in support of significant Blue Ribbon Panel
recommendations.
He, Califano and his firm are, at present, exceedingly
close to Howard Baker.
He is exceedingly close to Jake Pickle on a personal and
professional basis. Ross can be expected to serve as a
pressure force on Pickle to resurrect Pickle's earlier
reform proposals that the House leadership has now
gutted.
He worked closely with Dole and Long on the $1 billion
disability reform act of 1930. Ross is well liked and
respected by Dole and Long, as well as the relevant Hill
staffs.
He has already testified in favor of major Social
Security changes - indeed for more cost saving changes
than we have proposed. At the same time, his credibility
as a critic of this Administration is clear in that he
testified against our proposal for its too-rapid
reduction of 62-65 benefits. (On this score, he testifed
in favor of a total elimination of 62-65 benefits, but on
a slower basis.)
In my opinion, Ross is prepared to cash all of his chips,
including all of his heavy Democratic credentials, to provide
national leadership on Social Security.
His interest in and preparedness to assume this leadership role
makes the Blue Ribbon Task Force a substantially more promising
vehicle than anything that can presently be expected.
I urge you to call Ross for advice on the Blue Ribbon matter as
well as to determine for yourself if we should --- as I believe
-- place our bets on him.
fome OF THE
EXECUTIVE OFFICE OF THE PRESIDENT
STATE OF SECUTIVE UNITED OFFICE OF : 30
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
October 25, 1982
MEMORANDUM FOR JIM CICCONI
FROM:
CHRIS DEMUTH
SUBJECT:
Medicare Reimbursement of Optometrists
A subsequent round of critical letters from Dr. Paton and other
leading opthalmolgists, and a personal conversation with a good
friend who is Chief of Opthalmology at the University of
Pennsylvania, inspired me to look further into the matter of
reimbursing optometrists for post-surgical examination of aphakia
patients. A briefing paper prepared by my staff is attached.
I am now convinced that the HHS proposal is not unreasonable, and
I intend to clear the final rule (perhaps with some clarification
in the preamble) when it comes over to me next spring.
Attachment
OFFICE OF THE OFFICE THE MANAGE PRESIDENT STATES AND THE UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
MEMORANDUM FOR CHRIS DeMUTH
my
in
JT
THRU:
JIM TOZZI
NAT SCURRY
VST
FROM:
FAY IUDICELLO
SUBJECT:
Ophthalmologists Opposition to HCFA Proposal to
Expand Medicare Coverage of Optometrists Services
Issue
HCFA NPRM proposes an expansion of Medicare coverage which will
allow optometrists to be reimbursed for examination services
furnished to aphakic patients to the same extent that previous
policy allowed ophthalmologists to be reimbursed for these
services.
Background
On June 22, 1982, an NPRM expanding Medicare coverage for
services furnished by optometrists was published in the Federal
Register. This proposal implements Section 937 of the Omnibus
Reconciliation Act of 1980 which expands Medicare coverage of
optometrists' services beyond dispensing services and authorizes
"services related to the condition of aphakia." ("Aphakia" means
the absence of the natural lens of the eye due to surgery or to
natural causes.) In defining these services as examination
services, HCFA relied on language in the House Budget Committee
Report and the Committee on Ways and Means Report.
HCFA has proposed that examination services include the
following:
Case history (the determination of changing visual performance
as it related to the condition of aphakia) ;
External examination (the inspection with illumination and
magnification of eyelids and surrounding areas of the eye) ;
Ophthalmoscopy (the inspection with illumination and
magnification of the internal structure of the eye) ;
o Biomicroscopy (the inspection of frontal tissues of the eye,
using illumination and magnification) ;
2
Tonometry (the measurement of the internal pressure of the eye,
visual fields, and evaluation of the control and peripheral
field of vision) ;
Ocular mobility (the determination of the ability of the eye to
move efficiently) ;
Binocular function (an evaluation of the ability of the eye to
obtain single, clear, two-eyed vision; and
Evaluation for contact lenses and the provision of ophthalmic
prosthesis and services.
Under the proposal, an optometrist may receive Medicare
reimbursement for these services only to the extent that the
optometrist is licensed to perform them in the State in which the
practice occurs.
The American Academy of Ophthalmology (AAO) strongly opposed the
legislation and is currently seeking congressional repeal. In
addition, they are attempting to convince HHS/HCFA staff to
interpret the statutory provision narrowly. The AAO views the
HCFA proposal as deficient in several areas. First, AAO believes
the proposal will result in duplicative payments for similar
diagnostic procedures. The rationale for this concern is that in
many areas of the country a surgeon's global fee covers up to
three months of postoperative treatment. If a patient seeks
examination services from an optometrist during this
postoperative period, Medicare will be reimbursing twice for the
same service. Second, AAO believes that the proposal will result
in poorer quality care because an optometrist is not trained to
treat post-surgical complications, patients with intraocular
lens implants ("pseudo-aphakics"), and aphakic patients using
perma lens.
Presumably, an area of additional concern to the AAO is the fact
that many states have expanded the types of services which
optometrists are licensed to perform. Some of these states
permit a wider scope of optometric practice than proposed by
HCFA. Medicare reimbursement of services related to aphakia
could contribute further to the expansion of optometric practices
as well as result in increased utilization of services.
Discussion
A perception which contributed to the passage of the original
legislation was that there was a shortage of ophthalmologists in
various parts of the country. Consequently, expanding Medicare
coverage to include optometric treatment of certain indications
appeared to be in the best interest of a previously unserved
3
population. In fact, ophthalmologists appear to be well
distributed throughout the country. Despite the absence of its
original justification, the legislation is not in any danger of
repeal. In the draft Report to the Congress on
Legislative Recommendations on Optometric Services, HCFA
recommends no additional changes, either repeal or extension of
benefits, in the coverage for optometric services under Medicare
at this time. This, along with Senator Robert Dole's alleged
support of this provision, will no doubt undermine any fledgling
repeal effort which the ophthalmologists hope to get started.
Although the final rule is not scheduled to be published until
next spring (third quarter FY 83), the ophthalmologists have been
successful in generating considerable interest in this proposal.
Representatives of the AAO met with the Secretary, HCFA
Administrator and other HCFA policy staff before the NPRM was
published. Two weeks ago, representatives met with the Under
Secretary on their objections to the proposal.
Despite this high level discussion, there does not appear to be
any interest within the Department to reconsider the original
technical staff recommendations. Viewing the AAO's position as
"protective" of the profession, HHS/HCFA staff are reluctant to
take any regulatory action to restrict optometrists in the
delivery of services to aphakics for several reasons:
o Coverage of examination services by optometrists during the
postoperative period is consistent with other Medicare coverage
policies which permit coverage of certain services delivered by
a podiatrist after foot surgery or services delivered by a
chiropractor after orthopedic surgery. While HHS/HCFA staff
agree that such treatment does not constitute good medical
care, they do not consider it appropriate for Medicare to
withhold coverage and reimbursement if a patient elects to seek
services from such a provider.
o Duplicate reimbursement during the postoperative period as a
result of variant fee structures is a reccuring problem in all
types of surgery. While administrative mechanisms, i.e.
carriers, should be able to catch duplicate billings in the
same area, this is not usually possible where the billing is
done through different carriers from different geographic
locations. This same situation applies to services currently
being delivered by different ophthalmologists. HCFA maintains
that the amount of money in question is minimal and would not
justify the administrative costs of increased vigilance.
O HHS/HCFA staff do not agree that optometrists are not trained
to deliver services to pseudo aphakics" and aphakic patients
wearing perma-lens. The first issue is temporarily moot
4
since only a few of these medical devices have received FDA pre-
market approval for use only by the investigator who is
presumably an ophthalmologist.
Alternatives
The following options are open to OMB:
1. Seek repeal of the original legislative provision
2. Clear the final rule when we receive it next spring
3. Negotiate now with the Department to make certain
modifications
4. Require certain modifications as a condition of OMB clearance
during our review period
Recommendation
We would recommend selecting alternative #2. While we question
the appropriateness of "nonphysician" care during the
postoperative period and the attendant duplicate reimbursement,
we are not convinced that OMB should be advocating additional
regulatory restrictions. However, we believe that clarifying
language in the preamble of the regulation could lay out the
Department's intent, even discourage the delivery of
postoperative care by optometrists, without codifying such a
prohibition in regulation. This may appease AAO to some degree.
OMB memoo THE
OFFICE OF THE OFFICE OF MANAGE RESIDENT STATES BUDGET OF THE UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF management AND BUDGET
WASHINGTON, D.C. 20503
JUN 22 1982
MEMORANDUM TO: James W. Cicconi
FROM:
Joseph W. Wright
Subject:
Copyright Legislation Home Video and Audio
Recording
Commerce, Justice, and the Arts Endowment are scheduled to
testify on Thursday, June 24, 1982, on legislation (H.R. 5705)
that would levy a copyright royalty fee on home audio and video
cassette recorders (VCRs) and blank tapes as a means of
compensating copyright holders of material recorded for private
use.
The legislation stems primarily from a suit brought by Universal
City Studios and Walt Disney Studios against Sony (maker of
"Betamax" VCR), in which they argued that home taping of video
programs violates copyright, and that Sony is liable for
contributing to this infringement. The District Court decided in
favor of Sony; the Appeals Court decided in favor of Universal.
On June 14, 1982, the Supreme Court agreed to hear the case in
its coming session.
The arguments for and against the legislation are both
convincing. Royalty fee proponents argue:
o It is unfair for home tapers to use programs without copyright
holders being compensated, and a royalty fee is the most
practical form of compensation.
o When a viewer plays back a tape he can "fast forward" through
commercials to avoid watching them; advertisers will pay less
for viewers who have this option than for "live" viewers.
o Home tapers can save programs for future replay, reducing the
audience and revenue for all future showings of the program on
television, in theatres, etc.
o These revenue losses will hurt actors, technicians, and others
whose salaries are paid from program revenues, and will hurt
consumers because fewer new programs will be produced.
Opponents of royalty fees argue:
0 A viewer can set his VCR to record a program while he is away,
and then play it back whenever he wants, SO the audience size
and advertising revenue for some programs will increase.
2
O VCR owners have a higher demand for pay television services
than non-owners, so more VCRs will result in increased
payments to copyright holders for letting their programs be
shown on pay television.
O A royalty fee will raise the prices of VCRs and tape, although
royalty fee proponents claim most of the fee will be absorbed
by VCR and tape manufacturers. There is no reason to think
consumers are better off with slightly more programs and
artifically high prices for VCRs and tape than with slightly
fewer programs and cheaper VCRs and tape.
O Division of the royalty fee pool among copyright holders can
at best roughly approximate the value of each program to
consumers. Thus, even if the royalty encouraged the
production of more programs, it would not be very effective in
encouraging production of programs consumers prefer.
As I see it there are three options:
1. Support the bill on the grounds that this is basically a
"user pays" issue and consistent with the Administration
commitment to encourage private sector support for the arts.
2. Oppose the bill on the grounds that economic harm to the
video industry has not been demonstrated (although a case of
economic harm can be made for the audio industry) and the
royalty fee is an inefficent way to encourage the production
of more programs.
3. Await the decision of the Supreme Court, which has agreed to
hear the case -- while acknowledging that the arguments both
for and against a royalty fee have merit.
Given the options available, we intend to instruct the agencies
to adopt a postion in their testimony along the lines indicated
in the third option.
CC: Chris DeMuth
OMB number BE -
3/1
ciccoNi
STATE MANAGE PRESIDENT STATE a UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
JAB not seen
OFFICE OF MANAGEMENT AND BUDGET
will he need
WASHINGTON, D.C. 20503
for leg. strategy
suggest discussion
MEMORANDUM
February 24, 1982
w/ JAB
To:
GAO Opinion on M Library Rescission
James A. Baker III
From:
David A. Stockman
Subject:
The opinion reverses past GAO rulings and its settled
understandings with OMB and Congress.
Issue is not our ability to impound but whether the
Impoundment Control Act is applicable; according to GAO
we cannot reserve library funds during 45-day statutory
period that Congress considers our rescission proposal.
If Congress refuses to endorse our proposed rescission
during the 45-day period of the Act, the funds will be
released.
GAO opinion is precedent for much more than the library
statute; it could seriously affect the President's
ability to send up large numbers of rescission and
deferral proposals.
Peyser dispute is not so much with Administration as with
Congress; question is whether Congress can reconsider its
spending priorities during carefully defined periods
during which the appropriated funds will not lapse.
(Impoundment Control Act was a Congressional initiative
designed to protect Congress' options to reconsider
spending.)
The Comptroller General will shortly be acknowledging
that the issue posed is a close question on which
reasonable parties can disagree.
f OMB memoo
JAB has aser
STATE STATE UNI PRESIDENT STATES UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
Copiis sent to:
WASHINGTON, D.C. 20503
April 7, 1982
Sprikers
grigsn
Cribb (Meese)
gc/
42
MEMORANDUM FOR JAMES BAKER
(iDole)
FROM:
Chris DeMuth CO
SUBJECT: Handicap Regulations
Summary
The regulations governing non-discrimination in federally
funded programs are being revised for the Task Force on
Regulatory Relief. The existing regulations are extremely
costly, inflexible, and inconsistent. The Vice President's
office, OMB, and DOJ are in essential agreement on appropriate
revisions, but are being resisted by the career staff in DOJ's
Office of Civil Rights. Yesterday's wire story was based on
leaked documents over a month old, which have already been
discussed extensively in the press. Yesterday's story was
particularly inaccurate and biased; the source, who is from
one of the handicapped groups, has called Boyden Gray to
apologize and claim he was misquoted. The handicapped groups
have been consulted extensively during the revision process
and generally are not opposed to our revisions, which will be
issued for formal public comment.
Detail
The Department of Justice is responsible for developing
"generic" regulations to implement Section 504 of the
Rehabilitation Act, which requires non-discrimination on
the basis of handicap. Transportation and other agencies
develop specific 504 regulations for their programs, based
on the DOJ regulations.
Last year the Task Force on Regulatory Relief targetted
the Section 504 regulations for review because of numerous
complaints from State and local governments and institu-
tions of higher education.
In January 1982, DOJ provided a draft of the revised regu-
lation to OMB and the Vice President's office for review.
At the same time, DOJ sent copies of the draft to other
Federal agencies. This was contrary to our agreement to
limit distribution and discussion to EOP and DOJ.
-2-
In early March OMB and the Vice President's office pro-
vided DOJ with suggested revisions to its draft. Our re-
visions:
- Made the rules less prescriptive.
- Included "safe harbors" of assured compliance to
state and local governments.
- Deleted references to employment discrimina-
tion on the basis of handicap, since that
responsibility is outside Justice's
jurisdiction.
- Limited the number of routine compliance
reviews.
- Deleted references to elementary and secondary
education, deferring to the Department of
Education to cover those requirements in their
regulations implementing the Education of All
Handicapped Children Act.
- Expanded on the concept of "reasonable accom-
modation" of the handicapped, in accordance with
a recent Supreme Court decision.
The EOP revisions leaked from somewhere in EOP, not DOJ.
We know this because Brad Reynold's office obtained a copy
of our revisions before we gave them to him. I have been
unable to determine the circumstances of the leak.
The DOJ draft and our revisions have both been around town
for several weeks now and have been picked up in several
newspaper articles, including the Post in early March.
Yesterday's story was, however, far more biased and inac-
curate than earlier ones.
CC: C. Boyden Gray
Joe Wright
Don Moran
RONALD W. REAGAN LIBRARY
THIS FORM MARKS THE FILE LOCATION OF ITEM NUMBER 5-6 LISTED ON THE
WITHDRAWAL SHEET AT THE FRONT OF THIS FOLDER.
ACT
Prace
years
PREDUCTION OFFICE UNITED OF STATES
EXECUTIVE FFICE OF THE PRESIDENT
FFICE OF MANAGEMENT AND BUDGET
WASHINGTON, .C. 20503
November 17, 1981
MEMORANDUM FOR:
James A. Baker III
FROM:
Glenn Jhon
SUBJECT:
Justice Testimony on Foreign Corrupt
Practices Act
In connection with your question at this morning's staff meeting,
OMB staff tell me that the subcommittee has explicitly requested
that Justice testimony be largely confined to an accounting of
Justice's enforcement of the Act.
A copy of these testimony Jonathan Rose is scheduled to deliver
tomorrow is attached.
The testimony does conclude (pages 13-15) by reiterating
Administration policy: that the current law needs revision and
that the Administration supports legislation along the lines of
the Chafee-Rinaldo proposal (S. 708, H.R. 2530). Briefly, those
bills would:
Simplify the accounting standards of the Act and add a
scienter requirement to make clear that only a knowing failure
to comply with accounting standards will form a basis for
liability;
Replace the Act's vague "reason to know" standard, under which
a U.S. concern may be held liable for an illegal payment, with
standards specifying liability where a corrupt payment is made
and the U.S. concern directs or authorizes, either expressly
or by a course of conduct, that the payment be made;
Clarify the extent of responsibility of a U.S. concern for the
accounting standards of a partially-owned subsidiary;
Consolidate enforcement of the Act's anti-bribery provisions
in the Department of Justice; and
Sanction the issuance of guidelines for compliance with the
Act, to be issued by the Attorney General in consultation with
other interested Federal agencies.
has
READ
J.Cicconi
Attachment
CC: Dick Darman
Craig Fuller
Fred Fielding
JAB
FYI
11/18
MOT
DRAFT
STATEMENT
OF
JONATHAN C. ROSE
ASSISTANT ATTORNEY GENERAL
OFFICE OF LEGAL POLICY
DEPARTMENT OF JUSTICE
CONCERNING DOJ ENFORCEMENT
OF THE
FOREIGN CORRUPT PRACTICES ACT
BEFORE
THE COMMITTEE ON ENERGY AND COMMERCE
SUBCOMMITTEE ON TELECOMMUNICATIONS, CONSUMER
PROTECTION AND FINANCE
OF THE
UNITED STATES HOUSE OF REPRESENTATIVES
November 18, 1981
R
ECEIVI
DRAFT
NOV 161981
Mr. Chairman, I am very pleased to have the opportunity
to appear before the Subcommittee this morning to participate in
its oversight hearings on the Foreign Corrupt Practices Act.
You have asked me to describe the past and current
enforcement efforts of the Department of Justice relating to
bribery of foreign government officials by American companies.
These efforts began more than a year before the enactment of the
Foreign Corrupt Practices Act (FCPA) and have continued since
December 1977 when that Act was signed into law. With your
permission, I will describe our pre-FCPA cases, as well as our
enforcement actions under the Foreign Corrupt Practice Act
itself.
I.
THE DEPARTMENT OF JUSTICE'S INVESTIGATIONS WHICH PRE-DATED
THE ENACTMENT OF THE FOREIGN CORRUPT PRACTICES ACT
As many of you may recall, it became public knowledge
in the mid-1970's that a number of American corporations had
engaged in possibly illegal practices involving domestic and
foreign payments. I use the words "possibly illegal" advisedly
because there was genuine uncertainty at the time over whether
the foreign payments were in fact illegal. In response to those
revelations, the Securities and Exchange Commission developed a
program under which publicly held corporations voluntarily made
generic disclosures, in public filings at the Securities and
Exchange Commission, of their past practices involving such
overseas and domestic payments. In connection with this
voluntary disclosures program, a substantial number of American
- 2 -
corporations undertook internal investigations to determine the
nature and extent of these practices.
In October 1976, the Department of Justice established
its own Task Force to examine the facts underlying the voluntary
corporate disclosures which had been made to the Securities and
Exchange Commission, in order to determine whether any criminal
statutes had been violated. At the time the Task Force was
established, about 70 corporations had made voluntary disclosures
to the SEC about various payments made at home and abroad. By
summer 1977, the number of corporations which had made voluntary
disclosures had risen to more than 400. It soon became apparent
that if the facts underlying the corporate disclosures were to be
reviewed by Justice Department prosecutors in a thorough and
even-handed manner, the Task Force effort, as originally con-
ceived, had to be expanded and intensified.
In the summer of 1977, 15 prosecutors were assigned
full-time to the Task Force. Special Agents from the United
States Customs Service -- first 25 part-time and later 7 full-
time -- participated in the Task Force effort. In addition, the
Federal Bureau of Investigation was asked to conduct a survey of
the relevant public filings. Initially, the Department sought to
identify those corporations whose activities warranted more
thorough investigation. Eventually the prosecutors assigned to
the Task Force in Washington conducted investigations into
disclosures made by approximately 90 corporations. Various
United States Attorney's Offices conducted investigations into
- 3 -
disclosures made by another 140 corporations. Since there have
been substantial misconceptions about the nature of the voluntary
disclosures that were made by American corporations in the mid-
1970's, it might be useful for me to take a moment to outline
generally the results of the Department's review of those
disclosures.
We found that relatively few of these corporations had
actually disclosed to the Securities and Exchange Commission that
their employees and officials had bribed foreign government
officials. Apparently, many corporations, acting upon the advice
of counsel, disclosed any questionable practices they found,
which practices, in themselves, might not have constituted either
domestic or overseas bribery. For example, approximately 25
corporations disclosed that they had been engaged in illegal
ocean freight rebating. Publicly held ocean carriers had been
engaged in the practice, in violation of the rate schedules
regulated by the Federal Maritime Commission, of rebating to
shippers a portion of the fees that the carrier charged for
transporting the shippers' goods. This type of rebating had
absolutely nothing to do with bribery of foreign officials.
However, it led to the successful criminal prosecution of a
number of carriers on the grounds that they had engaged in a
criminal conspiracy to defraud the Federal Maritime Commission.
These prosecutions were conducted by the United States Attorney's
offices in Cleveland, Ohio and Newark, New Jersey.
- 4 -
The Department's review also disclosed that many of the
corporations which had made voluntary disclosures had engaged not
in bribery of foreign government officials, but rather in a
practice known as "accommodation overinvoicing". Corporations
selling goods to foreign customers engaged in this practice in
order to assist the customer in avoiding the tax and currency
control laws of the customer's home country. For example, at the
request of an overseas customer, a company would send an invoice
for goods which indicated that the goods were worth $120,000 when
in fact the actual sales price for the goods had been $100,000.
The overseas customer would make a $120,000 payment to the
American corporation which would, in turn, remit the excess
$20,000 to the overseas customer's bank account either here in
the United States or in some third country. In this way the
overseas customer was able to maintain a U.S. dollar account
which would be hidden from the authorities in his own country in
violation of his country's currency control laws. The overseas
customer would also thereby obtain documentation, in the form of
falsely inflated invoices, to support a claim of increased costs
which would reduce his tax liability in his own country. We
found, in a number of instances, that the American companies
which were supplying the inflated invoices would file Shipper's
Export Declarations with the United States Customs Service and
the Department of Commerce which reflected the higher invoice
amount. Some of those cases were referred to the Department of
Justice's Civil Division which brought civil actions against the
- 5 -
American companies enjoining them from the further filing of
false Shipper's Export Declarations.
To illustrate how far afield certain of these disclo-
sures were from the foreign bribery area, I would like to point
to a few other examples. Some of the larger liquor companies
disclosed to the Securities and Exchange Commission that they had
been making illegal rebates in the United States to domestic
liquor distributors. The Department also learned that a number
of corporations had declared possible violations of the Federal
Elections Campaign Act which prohibited corporate contributions
in federal election campaigns.
The Department further discovered that a substantial
number of companies disclosed, as "questionable" payments,
commissions which had been paid to independent foreign sales
agents. These commissions were often disclosed whenever the
company had some indication that the commission appeared to be
unusually large or was for some other reason possibly
"questionable". In many such instances, there was no evidence
that any portion of the commission had actually been passed on to
a foreign government official.
The Department also discovered that certain companies
had engaged in a practice of making payments to petty officials
in connection with their performance of ministerial functions.
The nature of these payments led the Department to conclude that
investigations of this type of activity were not warranted.
- 6 -
Similarly, in a number of corporate disclosures, the amounts of
payments were de minimis and, on that basis alone, did not
warrant further investigation.
Finally, the Department identified a limited number of
companies which had paid bribes to foreign government officials.
In the vast majority of instances, it was discovered that the
payments had been made by overseas corporate subsidiaries without
any territorial connection to the United States. Since no vio-
lations of federal criminal law were found, the investigations
were closed without prosecution. In ten instances, the
Department was able to identify situations in which corporations
had bribed foreign government officials and in the process
violated an existing federal criminal law. In those cases, the
appropriate federal criminal charges were filed.
Thus, the Department's review of the disclosure to
the Securities and Exchange Commission made clear that far
fewer than 400 companies had disclosed that they had engaged in
bribery of foreign government officials. In several instances,
the Department brought public prosecutions against companies
which had paid bribes to foreign government officials and in
connection therewith had made false filings with an agency of the
United States Government in violation of 18 U.S.C. $1001. In
other instances, the Department initiated prosecutions of
corporations which, in the process of paying bribes to foreign
government officials, had violated the Currency and Foreign
- 7 -
Transactions Reporting Act.*/ In several instances, an extension
of the so-called Isaacs-Kerner theory of mail fraud was utilized
to prosecute companies for the act of bribery itself. See United
States V. Isaacs, 493 F.2d 1124 (7th Cir. 1974). Under that
theory, a person paying a bribe to a government official can be
prosecuted under the mail fraud statute on the ground that he
engaged in a scheme to defraud the public, or the employing
government, of the honest services of the recipient of the bribe,
in violation of the recipient's fiduciary duty.
For the convenience of the Subcommittee, I have
attached to this statement a list of the prosecutions resulting
from the coordinated enforcement efforts of the Department of
Justice in this area. The list indicates the office which
brought the prosecution, the penalties paid by the defendants and
the statutes under which the charges were brought. The pre-FCPA
program has thus far resulted in the successful prosecution of
six individuals and eighteen corporations which have paid a
total of $7,662,000 in criminal fines, civil penalties and civil
settlements.
/ The Currency and Foreign Transactions Reporting Act makes it
an offense for anyone to transport into or out of the United
States $5,000 or more in currency or bearer instruments
without reporting certain information to the United States
Customs Service.
- 8 -
II. THE DEPARTMENT OF JUSTICE'S ENFORCEMENT PROGRAM
UNDER THE FOREIGN CORRUPT PRACTICES ACT
The pre-FCPA enforcement effort, which as I stated
began in the summer of 1977, is only now being completed. With
the enactment of the Foreign Corrupt Practices Act in December
1977, the same group of prosecutors responsible for investigating
and prosecuting pre-FCPA violations were also charged with the
responsibility for investigating and prosecuting violations of
the new statute. Because of the highly sensitive nature of these
cases arising from their potential foreign policy and national
security implications, the United States Attorney's manual has
been amended so that most of the Foreign Corrupt Practices Act
investigations are being conducted by Justice Department prose-
cutors in the Fraud Section of the Criminal Division here in
Washington rather than by the various United States Attorneys'
offices. Investigations are conducted here in Washington to
maintain close supervision of these cases and to minimize the
adverse foreign policy consequences that any one of these
cases can produce.
Thus far, the Department has completed 29 investiga-
tions into allegations of violation of the Foreign Corrupt
Practices Act. These completed investigations have led to two
public prosecutions by the Department of Justice. The first such
prosecution was a civil injunctive action in United States V. Roy
J. Carver, et al. In that case, Mr. Carver had disclosed to the
United States Ambassador to Qatar that he and his associate had
- 9 -
obtained an oil concession in Qatar, prior to the effective date
of the Foreign Corrupt Practices Act, by paying a $1.5 million
bribe to Qatar's Director of Petroleum. After the Act became
effective, Mr. Carver and his associate sought the assistance of
the Ambassador in identifying an official of Qatar who could be
paid to renew the concession. Our enforcement action resulted in
the defendants being enjoined from future violation of the Act.
The second public prosecution by the Department of
Justice under the Foreign Corrupt Practices Act was brought
against the Kenny International Corp. and its owner Finbar B.
Kenny. In that case, the defendants had paid $337,000 to the
Prime Minister of the Cook Islands. The payment took the form of
a contribution to the political party of the Prime Minister in
return for an agreement from the Prime Minister that if
re-elected he would renew an exclusive stamp distribution
contract which Mr. Kenny had with the Cook Islands government.
The corporation pled guilty to a criminal violation of the
Foreign Corrupt Practices Act and paid criminal fines of $50,000.
Both Mr. Kenny and the corporation consented to a civil
injunction under the Act and made restitution of $337,000 to the
Cook Islands Government.
The Department of Justice is currently conducting
approximately 57 investigations of allegations of Foreign Corrupt
Practices Act violations. Some of these investigations have
continued for as long as three years. Many are difficult
and complex. As is often the case in white collar crime
- 10 -
investigations, the Department, in some instances, has had to
review hundreds of thousands of documents, interview dozens of
witnesses and adduce testimony before the Grand Jury from dozens
more.
Added to the difficulties of ordinary complex
investigations are some considerations unique to the Foreign
Corrupt Practices Act which the Department has come to understand
better as it has gained enforcement experience under the Act. It
may be useful to share with you some of these considerations.
In an ordinary domestic bribery case, the offense is
usually committed by two parties, i.e., the citizen who pays the
bribe and the public official who receives the bribe. Since
ordinarily neither of these two parties is willing to testify
voluntarily about the transaction, a standard approach used by
prosecutors to investigate domestic bribery is to offer one of
the two consenting parties immunity or a favorable plea agreement
in return for testimony against the other party. Generally, the
government offers such a favorable disposition to the citizen who
paid the bribe on the theory that there is a greater public
interest in successfully prosecuting and removing from office the
corrupt public official than there is in pursuing the person who
paid the bribe.
The Foreign Corrupt Practices Act is, however, a
bribery statute which is quite different from domestic bribery
laws. The Congress clearly intended that prosecution of the
corrupt foreign official be left to his or her own government.
- 11 -
Under the Foreign Corrupt Practices Act, therefore, only the
conduct of the United States citizen or entity paying the bribe
is criminalized. For obvious reasons, we cannot and have not
attempted to obtain the testimony of the corrupt foreign official
who has received the bribe for use against the Americans who may
have made the payment. Thus, in order to prosecute American
companies or citizens for violation of the Foreign Corrupt
Practices Act we have had to develop evidence of the violation
without the cooperation of either the offeror or the recipient
of the bribe.
Another investigative limitation which results from
the nature of the Foreign Corrupt Practices Act is that the
Department has been unable to utilize some of the more tradi-
tional international evidence gathering tools, such as Interpol.
Interpol, as you know, functions through local foreign law
enforcement agencies. When our law enforcement authorities make
a request for assistance through Interpol, local law enforcement
agencies in the foreign country conduct the investigation.
Because allegations of violation of the Foreign Corrupt Practices
Act often involve allegations of corrupt payments to senior
foreign government officials, we have been of the view that it
would usually be inappropriate to ask foreign law enforcement
agencies to conduct investigations on our behalf into the activ-
ities of their own government officials.
Still another limitation on how we conduct investiga-
tions of Foreign Corrupt Practices Act violations is imposed by
- 12 -
a peculiar feature of bribery cases. Our experience has shown
that all too often criminal confidence men operating as middlemen
overseas, in order to induce their victims to part with their
money in a transnational transaction, will suggest to the victim
that extra money is essential in order to bribe a foreign govern-
ment official. Although he may even identify the foreign govern-
ment official, the confidence man may have no intention of
bribing that government official and that government official may
have no knowledge of the confidence man's representations to the
victim. This situation can occur, not only when an independent
operator attempts to defraud his victim, but also when a renegade
employee attempts to defraud his own employer and embezzle the
money.
Finally, soon after the enactment of the Foreign
Corrupt Practices Act, the Department recognized that there was a
growing and legitimate concern in the private sector and among
many lawyers over what were perceived as ambiguities in language
in the Foreign Corrupt Practices Act. In response, the
Department established the Foreign Corrupt Practices Act Review
Procedure, which is modeled after the Antitrust Division's
Business Review Procedure, under which a company can submit for
the Department's review a written description of a proposed
transnational commercial transaction. After reviewing the
transaction, the Department will inform the company whether or
- 13 -
not it will take any enforcement action under the FCPA if the
transaction proceeds.
The Department had hoped that the establishment of the
Review Procedure program would provide a mechanism which would
eliminate doubts about the meaning and application of the
Foreign Corrupt Practices Act and thereby prevent any unnecessary
losses of exports due to perceived uncertainty about the Act.
Unfortunately, relatively few companies have taken advantage of
the Procedure. Thus far, the Department has published only four
releases describing our actions under the Procedure. Three
additional requests are pending. In part, we believe this
underutilization of the review procedure results from a concern
that confidential business information provided to the Department
of Justice as part of the program would ultimately be publicly
disclosed under the Freedom of Information Act.
The Department of Justice is very concerned that the
Act be interpreted and enforced in a predictable and uniform
manner. Our concern stems from what we believe are problems with
the existing Act's clarity. We believe that in some respects the
Act is overly broad, sometimes confusing, and often unnecessarily
uncertain in its application. These problems ought to be cor-
rected. We also share with the Office of the Special Trade
Representative, the Department of Commerce, the Department of
State, and the Treasury Department a deep concern over the effect
of the difficulties reported under the current law on trade
competitiveness.
- 14 -
This Administration has carefully and thoroughly
reviewed the difficulties encountered under the Foreign Corrupt
Practices Act at the Cabinet-level, with involvement by all
interested agencies, and has agreed upon specific legislative
reforms. We believe that U.S. interests at home and abroad would
be better served by the adoption of the Administration supported
reform legislation.
The Department believes that surely the Congress can
draft a law that is carefully designed to proscribe the conduct
at issue. When any new law is passed, a period of experience
with the law often reveals problems which the Congress must and
generally does correct.
In this area, in particular, we believe that legisla-
tive reforms are imperative if we are to have an effective law
prohibiting foreign bribery that does not result in unnecessary
and unintended harm to our national economic interests. In addi-
tion, in as much as our nation is engaged in seeking an interna-
tional solution to the problem of illicit payments, reform of the
FCPA becomes that much more important in demonstrating to the
world that it is possible to enforce a law of this kind without
unnecessary harm to competitiveness.
I recognize, however, that the Committee has not
invited testimony on how the language of the existing law should
be changed. Rather, we have been asked here today to report
on how the existing law is being enforced. We will honor the
limits of that invitation and not take up the Committee's time
- 15 -
with a set of recommendations which we believe deserve full and
separate consideration. We would hope to have a return invita-
tion very soon to explore with the Committee ways in which the
law should be improved. As you know, the Senate has already
recognized the need for change and has undertaken some very use-
ful steps in this area. The Administration strongly supports
legislation along the lines of the Chafee-Rinaldo proposal, and
urges this Subcommittee to take legislative action on this
matter.
I would be pleased to answer any questions the
Subcommittee may have.
CMB
comemos
EXECUTIVE OFFICE OF THE PRESIDENT
Kate
STATE OFFICE UNITED OFFICE THE
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
FYI &follow up
March 24, 1981
File clean Air
Act
MEMORANDUM FOR FRANK HODSOLL
FROM:
FRED KHEDOURI 7NK
SUBJECT:
Status of Clean Air Act Working Group
The Clean Air Act Working Group, composed of representatives selected
by the Secretaries of the Cabinet Agencies that belong to the Cabinet
Council on Natural Resources and the Environment, conducted its first
meeting yesterday afternoon. Secretary Watt came to the meeting and
presided. He assigned a number of studies to the various agencies.
These reports are due next Monday.
On another front, Secretary Watt, Anne Gorsuch, and I met with the
Vice President to discuss the role of the Vice President's Task Force
on Regulatory Relief in the development of Clean Air Act proposals.
Secretary Watt has also asked that I prepare a strategy paper laying
out a schedule and a plan for developing support for Administration
proposals in this area. I will provide you with a copy of this when
it is ready.
Indian Bill
Jan. 6.
Call from Horowitz of OMB, telling me that Gary Lee
was drafting bill to solve Indian Land Claims in New
York and S. Carolina, that he wanted to introduce it
as soon as possible after Congress came back, and asked
me to see that we got our comments back to OMB as
quickly as possible.
I thereupon related same to Hughes, and asked him
to get me a copy of the bill as soon as it came in.
Jan. 8.
We received bill from OLA. Deadline to return was
Jan. 14.
Jan. 12-15 (approximately) call from Mike McConnell at OMB to ask
if progress had been made, I had not seen anything
yet; checked with Hughes, who reported it was being
worked on but not yet ready.
Jan. 14.
Harris at PLSL talked to OLA and asked them to send the
bill to OLC right away so that we could get their
answer quickly.
Week of Jan 18. I started meeting regularly with Harris of
PLSL to work out our letter, and to try to streamline
the process.
Jan. 22
First phone call with Mike McConnell of OMB on
substance I reiterated our problems to him. Several
phone calls followed over next several days.
Jan 19.
Spoke to Tidwell at DOI about several technical problems
we had with the Legislation that involved Interior.
Feb. 1
Met at Interior with McConnell, Tidwell and Mike Nazzolio
of Congressman Lee's Staff. Went through the bill line-
by line to discuss each of our problems and try to work
out problems.
Week of Feb. 1 - several phone calls with McConnell about specific,
substantive problems.
Feb. 2.
One, perhaps two phone calls from Nazzolio about
particular substantive problems - I don't remember
what.
Feb. 3
Conference call with Tidwell, McConnell and Nazzolio
regarding Cong. Lee's new draft, which Nazzolio had
prepared after our Feb. 1 meeting. Discussed each change
can. 14.
Harris at PLSL talked to OLA and asked them to send the
bill to OLC right away so that we could get their
answer quickly.
Week of Jan 18. I started meeting regularly with Harris of
PLSL to work out our letter, and to try to streamline
the process.
Jan. 22
First phone call with Mike McConnell of OMB on
substance I reiterated our problems to him. Several
phone calls followed over next several days.
Jan 19.
Spoke to Tidwell at DOI about several technical problems
we had with the Legislation that involved Interior.
Feb. 1
Met at Interior with McConnell, Tidwell and Mike Nazzolio
of Congressman Lee's Staff. Went through the bill line-
by line to discuss each of our problems and try to work
out problems.
Week of Feb. 1 - several phone calls with McConnell about specific,
substantive problems.
Feb. 2.
One, perhaps two phone calls from Nazzolio about
particular substantive problems - I don't remember
what.
Feb. 3
Conference call with Tidwell, McConnell and Nazzolio
regarding Cong. Lee's new draft, which Nazzolio had
prepared after our Feb. 1 meeting. Discussed each change.
Feb. 5.
Called Don Baker at OLA and told him to call OLC to
speed up the process, since Lee wanted to introduce
bill Feb. 10.
Feb. 8.
Calls with McConnell about progress; he asked me to
speed process up. I called Larry Simms, who said he
would check on it. He called me back to say that Ted
Olson had it, was working on it himself and wouldn't
be done until at earliest Monday Feb. 15. I called Olson,
who told me the same. I related that to Mike McConnell.
Nazzolio called me late in afternoon to beg me to speed
it up and get him the letter Feb. 9. I told him I couldn't.