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26
2
6
2
social Security Nominee Put on Hold
Failure to Offer Plan for Solidifying System Angers GOP Senators
nomination on hold, GOP lawmakers
By Jennifer Dixon
Associated Press
hope to install their own commission-
er should a Republican win the presi-
President Clinton's nominee to
dency in 1996. They also hope the de-
oversee Social Security into the 21st
lay will force Chater to articulate
century has been put on indefinite
politically sensitive cuts even though
hold in the Senate by Republicans an-
the White House has refused to do so.
gered by her refusal to outline ways
Aides to senators from both parties
of shoring up the national retirement
said lawmakers have not pushed for a
system.
vote on her nomination. Simpson, and
Senate Democrats have not jumped
an aide to a Senate Democrat. said
to Shirley Chater's defense, either,
the White House has not pressed
leaving her nomination to run the
them to take up Chater's case.
newly independent Social Security
Chater's chief of staff, Brian
Administration for the next six years
Coyne, said the Clinton administra-
in limbo.
tion "will continue to ask the Senate
Chater, who has been Social Secu-
Finance Committee to move her con-
rity's commissioner since fall 1993,
firmation forward. She was con-
continues to oversee the agency day-
firmed before, and nothing over the
to-day, despite the political uncertain-
last 20 months has raised any issues
ties.
But an advocate for the elderly and
SHIRLEY CHATER
about her character and integrity."
a Republican lawmaker say Social Se-
nominated for six-year term
Yesterday, White House spokes-
curity, the government's largest sin-
woman Ginny Terzano said: "We sup-
gle program and one that touches
back burner." Packwood and other
port her. We want her. We're anxious
most Americans, suffers from the
committee members were frustrated
for her to be confirmed. We're anx-
lack of stable leadership at a time
with Chater when, at her confirma-
ious for this to be voted out of the
tion hearing in February, she refused
committee so the full Senate has the
when it is under pressure to confront
its pending insolvency.
to sketch possible ways of keeping So-
opportunity to vote on the nomina-
Unless changes are made, Social
cial Security solvent as the baby boom
tion."
Security will run out of money in
generation retires.
Coyne said that allowing Chater's
2030.
She has since declined to give the
nomination to languish "undermines
Congress created the six-year term
committee specific recommendations,
the intent of the independent agency
for commissioner when it took Social
despite a tough letter from Packwood
legislation to provide strong and sta-
Security out of the Department of
seeking answers to his questions.
ble leadership. The agency has had 12
Health and Human Services and made
Keeping Social Security from going
commissioners in the last 20 years."
it an independent agency. Under the
bankrupt could involve cutting bene-
Simpson, who has criticized Chater
1994 law, the agency's top executive
fits, raising taxes, lifting the retire-
for not being "forthcoming" about of-
can be dismissed only for serious
ment age, or paring cost of living in-
fering solutions for the agency's fi-
wrongdoing, a move designed to insu-
creases-all politically risky
nancial troubles, said Social Security
late the commissioner from politics.
maneuvers.
suffers while its top leadership is un-
Because Chater has not been con-
"Someone has told her to be care-
certain.
firmed for the new job, she serves at
ful, but by being careful, she may be
Dan Schulder, legislative director
the pleasure of Clinton.
history," said Sen. Alan K. Simpson
for the National Council of Senior Cit-
Sen. Bob Packwood (R-Ore.), chair-
(R-Wyo.), chairman of the Finance
izens, an advocacy organization,
man of the Senate Finance Commit-
subcommittee on Social Security.
agreed. "The entire agency, and the
tee, which oversees Social Security,
Aides to Senate leaders in both
American people, get hurt by instabil-
said Chater's nomination is "on the
parties said that by putting Chater's
ity at the top," he said.
Hazards of Quick Downsizing Cited
Existing Proposals Could Cost More in the Long Run, Study Warns
By Stephen Barr
The first section of the report summarizes 10 tasks
Washington Post Staff Writer
from across the federal government, ranging from air
traffic control to monitoring pension funds to managing
Democratic and Republican drives to downsize the gov-
defense contracts. In the case of the Pension and Welfare
ernment pose the danger of doing more harm than good,
Benefits Administration, Kettl and Dilulio point out that
like a dieter who decides to lose weight by cutting off a leg,
just 621 federal employees oversee $1 trillion in pension
two Brookings Institution analysts contended yesterday.
funds. Tinkering with the agency would produce minus-
University of Wisconsin professor Donald F. Kettl and
cule savings but "potentially weaken the confidence of
Princeton University professor John J. Dilulio Jr. said
employees already rightfully nervous about the future of
current budget-cutting plans aimed at abolishing Cabinet
their retirement income," Kettl and Dilulio write.
departments and restructuring the executive branch
The second section touches on past commissions
would not save money and run against the downsizing
named to reorganize the executive branch and efforts to
THE WASHINGTON POST
TUESDAY, MAY 23, 1995
lessons learned over the last decade by the nation's larg-
restructure private-sector companies. "Managers who
est corporations.
believed they could downsize once, solve their problems,
"No restructuring is cheap," Kettl said. Efforts aimed
and return to normal tended to fail," Kettl and Dilulio
at saving money usually create "short-term mischief"
said. "Managers who built restructuring into a careful
that lower morale, interrupt the delivery of services and
look at their operations, their mission, and how best to
could cause more damage to an organization's perfor-
achieve it tended to succeed far more often. Restructur-
mance than the original problem.
ing, taken as an end in itself, led to failure."
"Downsizing or doing away with government agencies
The two analysts look to Congress to play a pivotal
does not automatically do away with the people they
role if attempts to overhaul the executive branch are to
serve, the public demands they embody, the programs
succeed, in part because they think "the congressional
they administer or the tasks they perform," Dilulio said.
committee that oversees an executive agency is a far
If the government is going to be put on a diet, he said, it
stronger presence than the president or the White
should shed pounds in a way that makes sense and looks
House staff." They predict "little will be accomplished"
to long-term results.
unless Congress decides to consolidate programs as it
Kettl and Dilulio offered their assessments at a luncheon
cuts and merges departments.
where copies of their new study, "Cutting Government,"
The most critical questions of restructuring depend on
was released. The report, one of a series from Brookings
Congress, they write, starting with how many Cabinet de-
Center for Public Management, comes as House and Sen-
partments to have. "While moving from 14 to 10 or even
ate Republican task forces call for the elimination of at least
five departments would create more elbow room around
four Cabinet departments-Energy, Education, Com-
the Cabinet table, such a move does not make government
merce, and Housing and Urban Development.
smaller unless government does less," they said.
SOCIAL POLICY
NOMINATIONS
Foster's Answers Keep His Bid
For Surgeon General Alive
Committee is likely to send nomination to floor;
confirmation prospects remain uncertain
he Senate Labor and Hu-
Foster, an obstetrician-gyne-
T
man Resources Committee
cologist from Nashville who often
appears poised to send the
used humor and personal anecdotes
nomination of Dr. Henry W. Fos-
during his testimony, said he
ter Jr. to be surgeon general to the
wanted to focus on the "full range of
Senate floor. As the spotlight
health challenges" facing the na-
shifts to the full chamber, senators
tion, including cancer, AIDS, heart
will weigh Foster's qualifications
disease, children's and women's
against a backdrop of presidential
health, substance abuse and espe-
politics and the national debate on
cially teen pregnancy.
abortion.
But the political fight over the
At the end of two days of testi-
nomination, which has been brew-
mony before the Labor panel May
ing since February when President
2-3, Republican Sen. James M.
Clinton chose Foster to succeed the
Jeffords of Vermont said he would
controversial Joycelyn Elders, con-
join the panel's seven Democrats
tinued to perk. The committee fo-
in voting in favor of Foster.
cused its questions on Foster's
Jeffords' vote would guarantee at
abortion record, his credibility, and
least an 8-8 split for Foster on the
his participation in controversial re-
committee, and Chairwoman
search projects, illuminating sena-
Nancy Landon Kassebaum, R-
tors' concerns about whether Foster
Kan., said she expected the com-
can serve effectively as the nation's
mittee would send the nomination
leading spokesman on health pol-
to the floor.
icy. (Weekly Report, p. 1182)
She did not say, however, how
Democrats remained con-
she would vote or whether the
vinced that he could. "Dr. Foster
nomination would receive a favor-
has had an honorable and distin-
able recommendation. If the com-
guished career in medicine," said
mittee deadlocked at 88, it could
Edward M. Kennedy, D-Mass.,
then vote to report the nomina-
the panel's ranking member. "He
tion with no recommendation.
has been recognized by his profes-
A vote is expected within three
RICHARD ELLIS
sional colleagues and peers, his
weeks.
Foster defended his record at a May 2 hearing before
community and his patients as
Jeffords and Kassebaum, both
the Senate Labor and Human Resources Committee.
having the highest ability, integ-
moderates, were considered two of
rity and compassion worthy of the
the three Republicans who hold the
schedule a vote on Foster, and one of
post of surgeon general."
key to Foster's future. The other -
his rivals for the 1996 GOP presiden-
Gramm was one of the Republi-
freshman Bill Frist of Tennessee -
tial nomination, Phil. Gramm of
cans who disagreed. "We need a per-
remained publicly noncommittal.
Texas, has threatened a filibuster.
son who has the credibility to bring us
However, during the hearing, Frist ap-
Democrats, in turn, suggested they
together on public health issues,"
peared to come to Foster's defense on
would slow down action on GOP bills
Gramm said. "I think Foster is not
key medical and ethical questions.
if Republicans block a vote on Foster.
capable of doing that. It's nothing per-
If Frist or Kassebaum provides a
On May 3, Minority Leader Tom
sonal. He is the wrong person with the
ninth vote for a favorable recommen-
Daschle of South Dakota told report-
wrong record at the wrong time."
dation, there would be added pressure
ers he "wants to make it very clear
on key Senate Republicans who have
that no vote is not acceptable." Other
The Hearing
threatened to block the nomination.
Democrats, such as Barbara Boxer of
Much of the controversy about
Majority Leader Bob. Dole, R-Kan.,
California and Patty Murray of Wash-
Foster centered on abortions: how
for example, has said he may not
ington, who introduced Foster to the
many he had performed and whether
committee, have made similar threats
performing any should disqualify a
By Colette Fraley
to force a vote.
candidate for surgeon general.
1244 - MAY 6, 1995
CQ
SOCIAL POLICY
In February, the White House re-
pears to be in contradiction to a num-
ported that Foster had performed one
ber of official government documents"
abortion. Foster then said he had per-
suggesting that the Tuskegee medical
formed "fewer than a dozen." Within
community had been informed of the
a week, however, he said he was the
study in 1969.
physician of record on 39 abortions.
Foster vehemently denied that he
At the hearing, he characterized
knew about the experiment or about
the confusion as an "honest" mistake.
treatment being withheld, saying he
"In my desire to provide instant an-
learned about it with the rest of the
swers to the barrage of questions com-
nation.
6909
ing at me, I spoke without having all
"Of all the things that have be-
the facts at my disposal," he said.
fallen this nomination, nothing is
"There was never any intent to de-
more offensive than the litany you put
ceive. I had no reason to do so."
forth," Foster said. "That testimony is
Several senators, including Frist
incorrect. Wrong, wrong, wrong."
and Kassebaum, said the hearing was
Members also questioned Foster
16
not the proper setting for an abortion
about the effectiveness of his highly
debate. And Kassebaum, in part to
touted "I Have a Future" program,
defuse the passions surrounding the
which sought to discourage teen preg-
abortion issue, limited the witness list
nancy by encouraging inner-city youth
to Foster and members of Congress
to avoid sex, stay in school and take
and asked interest groups to submit
responsibility for their lives.
written testimony.
While praising the "I Have a Fu-
Kassebaum said Foster had been
ture" concept, Jeffords questioned
made a "pawn in our abortion de-
whether the program's effectiveness
bates" and said the focus reduced the
had been "oversold" by Foster's sup-
nominee to "little more than a card-
porters. Kassebaum pointed to a criti-
board caricature."
cal analysis showing that the teen
The confusion and misstatements
pregnancy rate among participants
15
gave some opponents, who may have
was not significantly different than
found it unacceptable for a nominee to
that of a control group.
have performed even one abortion, a
Foster did not dispute Kasse-
way to attack Foster without address-
baum's figures, but said the study
ing abortion. Foster defended his
group had been small and the partici-
credibility, which he said had never
pants mobile. He added that he had
been questioned before.
tried to find ways to improve partici-
"I have worked very, very hard to
pation in the program.
establish an impeccable record of
Kassebaum, who called the effort
credibility and ethical conduct," he
worthy even if it changed only two or
said. "It is open to anyone who
three youths' lives, pointedly said the
chooses to scrutinize it."
program "could have used more lead-
The issue of credibility remained
ership."
14-
14
an underlying concern to several of
Mike DeWine, R-Ohio, questioned
the panel's nine Republicans and
Foster about a 1974 case history Fos-
dogged Foster throughout the hearing.
ter had written about the sterilization
Daniel R. Coats, R-Ind., said he
of four young mentally retarded
was concerned about attempts by the
women; DeWine asked whether proper
White House and Foster to "clarify
medical and ethical procedures had
the record" - particularly on abor-
been followed. Foster said the surger-
5053
tion and the Tuskegee syphilis study,
ies had been performed at the parents'
a decades-long project in which in-
request and followed ethical standards
fected African-American men were de-
of the time.
liberately left untreated so govern-
ment officials could study the effects
A Lifetime Under Study
of the disease.
Foster, who was born in Pine Bluff,
?
13
It was the Tuskegee, Ala., project,
Ark., in 1933, was the only African-
brought up numerous times during the
American in his medical school class
hearing, that produced the most pas-
at the University of Arkansas, from
sionate exchanges. Early on, Foster
which he graduated in 1958.
said nothing had offended him more
He served a stint in the Air Force
than suggestions that he knew of the
and practiced in Tuskegee until 1973,
5053 TMY
project before it was publicly disclosed
when he moved on to Meharry Medi-
in 1972 - and that he did nothing to
cal College, a historically black college
stop it.
in Nashville, Tenn. At Meharry, he
Coats brought the issue up again
was chairman of the department of
May 3, saying Foster's testimony "ap-
obstetrics and gynecology, dean of the
RICHARD ELLIS
CQ
MAY 6, 1995 1245
SOCIAL POLICY
Excerpts From Testimony
S
urgeon general nominee
From Written Testimony:
Dr. Henry W. Foster Jr.
faced questions May 2-3
The course of this
nomination resembles a
about his views on abortion,
his credibility and his plans
tent in spring rain. Touch
as surgeon general. Here are
its soggy canvas anywhere
excerpts from his confirma-
and more revelations seep
tion hearing, followed by ex-
through. It is hard to
imagine an individual who
cerpts from written testi-
mony submitted to the
has been implicated in
Labor and Humans Re-
more major public health
controversies than Dr.
sources Committee by vari-
Foster.
ous interest groups.
-Gary L. Bauer, president,
From the May 2 Hearing:
Family Research Council.
He has been made a
RICHARD ELLIS
We must nominate a
pawn in our abortion de-
Kassebaum, left, and Kennedy, shown at an April 24 hearing,
person who will 'Just Say
bates. I believe he deserves
may not be on opposite sides where Foster is concerned.
No' to immoral conduct as
to be judged on his whole
well as drugs, cigarettes
record, his professional credentials and his back-
and cholesterol.
ground, his life experience and his current views.
-California Right To Life Committee Inc.
-Sen. Nancy Landon Kassebaum, R-Kan., chairman of
the Labor and Human Resources Committee.
He is indeed a special human being - in his intel-
lect, fairness, integrity, talent as a medical professional
It is Dr. Foster's opponents who have a credibility
and, as most Americans have recently witnessed, his
problem, not Dr. Foster. They pretend to challenge his
fortitude is exceptional.
credibility on abortion when in reality, as all of us
-Dr. David Satcher, director, Centers for Disease Con-
know, they are trying to make abortion the issue indi-
trol and Prevention.
rectly, in a way that will not embarrass them.
-Sen. Edward M. Kennedy, Mass., the committee's
No physician should be criticized for performing
ranking Democrat.
legal services at the request and in the interest of his or
her patients.
First of all, I am a doctor who delivers babies. My
-Edd Doerr, executive director, Americans for Reli-
life's work has been devoted to bringing healthy lives
gious Liberty.
into this world, and trying to assure that every child
born is a wanted child who has parents that can meet
its needs
While each of us hold privately established beliefs
Now, as to my credibility, let me be clear. When I was
regarding abortion, it should not be the only issue
asked in the middle of a casual conversation, whether I
debated concerning confirmation of a surgeon general.
had ever performed abortions, I said I had and the one
-Aidsand F. Wright-Riggins III, executive director,
that I remember most was a young woman with a
National Ministries.
master's degree that had AIDS, and I went on. Then
later, maybe two days, I was asked if I had performed
[Foster is] a real elitist who knows how to work the
more than one abortion, and I thought it was in jest. I
system against his own people.
said, "Well of course. Most obstetricians who' been out
-Lydia Jones, executive director, Center to Preserve
have." And they asked me how many, and I answered
Black Life, Rochester, N.Y., in criticizing Foster for
based on my memory without reviewing the record. That
performing abortions and for his association with
was a mistake; I should not have guessed.
controversial experiments.
But it was an honest mistake
Now let me be clear, in 22 years at Meharry Medical
The African-American community is once again re-
College, I am listed as the physician of record on 39
minded how the Clinton administration has succumbed
abortion cases. I do regret the initial confusion that
to pressure by removing support for dedicated African-
this caused, but there was never any intent to deceive. I
American public servants. We have not forgotten the
had no reason to do so. I have worked very, very hard
mistreatment of Lani Guinier, Mike Espy and Dr.
and have established an impeccable record of credibil-
Joycelyn Elders.
ity and ethical conduct. It is open to anyone who
-Neal Darby Jr., executive secretary, Nashville Branch
chooses to scrutinize it.
NAACP
-Dr. Henry W. Foster Jr., nominee for surgeon general.
-Compiled by Jeanne Ponessa and Weekly Report staff
1246 - MAY 6, 1995
CQ
SOCIAL POLICY
medical school and, most recently,
medical career - could get him into
Full Senate
acting president of the university.
trouble with abortion opponents who
This year he has been on sabbatical as
supported his 1994 election. And his
Foster's chances in the full Senate
a health policy fellow at the Associa-
vote, if favorable, would put him in
remain uncertain, but several senators
tion of Academic Health Centers in
conflict with the leadership's opposi-
and political observers said an up-or-
tion to Foster.
down vote was more likely after Fos-
Washington.
ter's performance at the hearing.
At the hearing, he spoke movingly
At the hearing, Frist defended Fos-
Blocking a vote could be risky for
of his family, particularly of his par-
ter against charges from Coats that
Dole. "He's now in a situation where
ents; his wife, St. Clair; and his pater-
the nominee had performed 40 not
he escalated expectations of those who
nal grandmother, Grandma Hattie,
39 - abortions. In rapid-fire ques-
opposed Foster and raised the dander
"born just 16 years after slavery
tioning of Foster, Frist made the point
of Foster's supporters,". said Allen
ended," who worked as a domestic to
that a hysterectomy that Foster had
Schick, a visiting scholar at the
send her two children to college.
done to save a woman's life could not
Brookings Institution. "I think he'll
"As a young schoolboy, I wondered
be considered an abortion even though
get shot at from both sides."
why her handwriting was poor,
Larry J. Sabato, a professor
but as I grew older and wiser, I
of government at the Univer-
came to appreciate her great
sity of Virginia, said he thought
intelligence and character,"
Dole eventually would allow a
Foster said. "Grandma Hattie
vote.
was not formally educated, but
"He doesn't need to avoid a
without doubt, she understood
vote, but he does need to pre-
the value and power of educa-
vent Foster from becoming sur-
tion."
geon general," Sabato said. He
He said his parents also
noted that Dole was competing
stressed the importance of hard
with Gramm for the support of
work and education. "As far
conservative GOP activists.
back as I can remember, we
"Dole is strongly suspected
had a copy of the American
of possessing moderate tenden-
Constitution in our home. My
cies, which could prove fatal in
father often told my sister and
the Republican nominating
me that our freedom and jus-
process," Sabato said. "He also
tice were locked inside this doc-
RICHARD ELLIS
needs to prove that he can
ument. And then he would tap
Democrats rally support May 1 for Foster, center, who is
withstand the firestorm of crit-
his temple and say, "The key to
speaking with Sen. Paul Simon. Sen. Dianne Feinstein, right,
icism from both sides whether
unlocking it is an educated
and Vice President Gore and Sen. Patty Murray, left, look on.
he's voted on or whether he's
mind.' He was correct."
voted down."
pathology reports showed later that
Advocates on both sides will now
Pivotal Senators
she was pregnant.
focus on the full Senate, where Foster
With Jeffords, Frist and Kasse-
He also gave Foster a second
would need a majority of votes to win
baum considered the panel's pivotal
chance to say that he had acted in
confirmation and 60 votes to shut
votes, their decisions may provide
accordance with the medical ethics of
down a filibuster.
clues to how the nomination may ulti-
the time in performing sterilizations
But even before the hearing, on
mately fare.
on retarded women.
May 1, Clinton and the Democrats
Before the hearing, Jeffords said
Kassebaum, who praised the nomi-
turned up the heat on Dole and the
he would vote to confirm Foster unless
nee's performance during the eight
Senate with rallies promoting Foster
"the nominee is unqualified for the
hours of questioning, said she had lin-
and a visit to Capitol Hill by Vice
post, either because of a lack of ex-
gering concerns about Foster's leader-
President Al Gore.
perience or ethical or legal problems."
ship of the "I Have a Future" program
"If we can't confirm Henry Foster
Afterward, Jeffords said that Fos-
and about how long the Tuskegee
to be the surgeon general of the
ter had done a "superb job" answering
syphilis victims had to wait for treat-
United States, what kind of person
questions and that he thought the
ment after the project was disclosed.
can we confirm?" Clinton said. "He
committee should recommend con-
However, Kassebaum said she
deserves to be more than a political
firmation.
thought the full Senate should vote on
football in the emerging politics of the
Frist and Kassebaum said Foster
the nomination, which leaves her in a
season."
had satisfactorily answered questions
position of defying her state's senior
about his credentials, but said they
senator, Dole.
still had concerns to resolve before the
But that also could put Dole in an
vote. Frist said he wanted to examine
awkward position. "It shows what
CORRECTION
the documents Coats mentioned about
kind of tightrope Dole is walking,"
the Tuskegee project and to see if any
said Burdett Loomis, a political sci-
Abortion policy. Weekly Report,
other troubling information emerges.
ence professor at the University of
p. 1185, first column, federal employ-
Frist, a heart and lung surgeon
Kansas. "Obviously Kassebaum
ees. Abortion opponents want to rein-
from Nashville, is in a delicate posi-
doesn't want to embarrass Dole, but
state the ban, lifted in 1993, on abor-
tion politically. Even his questioning
conversely does Dole want to embar-
tion coverage by the Federal
of Foster which appeared to offer
rass one of the nicest, most thoughtful
Employee Health Benefits Pro-
the nominee a chance to defend his
people in the Senate?"
gram.
CQ
MAY 6, 1995 1247
02/27/95
17:24
INDIAN AFFAIRS U.S. SENATE 94562604
NO. 540
902
The Art of Turmoil at IAIA
BY ANNE CONSTABLE
"There is no beginning or end to an Indi-
an ceremony is there any end to the
potential for the IAIA
Lloyd New,
Director of the
Institute of American Indian Ats, 1978
hen Lloyd New spoke those
W
words his redrement from
IAJA, the Indian arts school
was weary from its struggle
for survival and recognition.
In some ways, it still is. Although thore have
beensome significant accomplishments OVEL
the last 16 years, the story of LAIA is still one
of potential rather than reality.
The Institute of American Indian Arts
achieved national recognition in 1988
when it was reborn AS R hwn-year, congres-
sionally chartered institution with its own
line in the federal budget. But dreams of Its
own campus and a four-year program
have been frustrated. Since 1981, IAIA has
been a tenant of the College of Santa Fe.
One year after a story in this newspaper
about an identity crisis at the institute, the
school still is troubled by many of the same
problems: the lack of an Indian identity,
cronyism, high turnover at the top, ab.
sence of clearly defined policies and pro-
cedures, low morale, and insufficient ac-
countability for fiscal and management
The
sculptures
of
the
IAIA
are
more
than
the
decisions.
College of Santa Fv.
PHOTO BY M/T -
Last week, the nomination of Catherine
Baker Stetson to the institute's Board of
White House, the current board attempted
point in time."
the termination of vice-president
Trustees was blocked by Congressman
TO introduce legislation that would have al.
The GAO evaluates government pro-
Schuyler Houser, former acting president:
Don Young of Alaska. In recent weeks Stet-
lowed it to appoint its own members.
grams for memberaof Congress. IAIA re-
the incorporation of a new IAIAFULLI-
son has asked serious. and sometimes
ceives more than $12 million annually
dation outside board control;
Three other nominations were ap-
touchy, questions about the operation of
hum the federal government. GAO audits
the loan of $100,000 to the new fund-
proved by members of the Senate Indian
the Institute. She has shared these con-
Affairs Committee last week and forward-
normally are requested by the chairs of
raising foundation;
certs with members of the board, as well
ed to the floor for confirmation. The Sen-
oversight committees. Congressman Bill
inaccuracies in the minutes of board
as with the New Mexico congressional del-
ate is expected to act on them before itre-
Richardson of NewMexico is chairman of
meetings
the House Subcommittee on Native Amer-
the absence of financial policies and
egation.
cesses on Friday. "The people who ask
Young, who is a non-voting member of
questions 300m to be the ones getting pun-
Affairs. but no such request has yet
procedures;
the IAIA board, apparently feels that it was
ished," Stetson says.
been made.
possible conflict of Interest by the di-
inappropriate for her to raise these issues
"This is a wonderful institution," Stet-
rector of administrative services, and
Her concerns prompted Stetson, a
prior to her confirmation and has charac-
non-liidian lawyer whose firm Las June
son says- "It's not necessarily this some-
the cost of a board trip to Alaska in
terized Stetson's questions as "negative"
extensive work for Indian tribes, to suggest
thing is wrong, but I'm determined to ask
September.
and "accucatory."
that the Government Accounting Office
the questions and have the answers."
Blankenship responded this week with
In a six-page letter to U.S. Sen. Jeff
audit the IAIA a step that has been rec-
Stetson expressed her COLLECTED in a
an eight-page reply to Stetson and some
Bingaman, D-N.M., also an ex officio
ommended by numerous other close ob-
Sept. 21 letter to Kenneth Blankenship,
documentation. In his letter, the chairman
member of the IAIA boau J, Stetson has
servers of the Institute. believe we have
chairman of the Board of Trustees. (and
of the IAIA board, a Cherokee from North
asked him to intercede with Congressman
every reason to ask for and expect a GAO
copied to all voting members and nomi-
Carolina, suggested that Stetson should
communicate more with the board. In
Young to release her nomination. She also
audit and a management audit, at the very
nees) She raised serious questions about:
pointed out that after the names of the sev.
least, she says, "That will allow everyone
the decision to discontinue Native Im-
Continued on Prige 17
en new members were released by the
involved to knowwhere we are at this
ages, one of IAIA's four centers;
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02/27/95
17:25
IAIA
INDIAN AFFAIRS U.S. SENATE
94562604
share our culture through art, therewe
which you Have - was
NO. 540
Continued from page 16
903
don't have anything to share."
claim that because of financial problems
creates an "arm's-length" working rela-
Dailing may consider eetting up the Na.
you are closing one of four centers at IA-
tionship between the two entitles.
point of fact, she has done so. Some con-
tive Images center outside IAJA. "Whatever
IA?" Stetson asks.
The new IAIA Foundation plans m ex-
tacts have been helpful: others have not.
the problems at IAIA, I pray for them," she
Although some educational institutions
pand from 25 to 50 directors to increase its
VOWB. "I will continue to work los die Inati-
have independent foundations, a number
fund-raising impact. The foundation's goal
Stetson-and others-are disturbed
tute. The people who do the work there-
of observers raise concerns over this prac-
is to raise money for the new campus of IA-
that that IAIA board made major declaions
the professors, students, staff and alumni
tice. "They can raiso money in our name in
IA. One study conducted by an outside
during itsmeeting in Anchorage in Sep-
are the heart and soul of IAIA. Not the
away we cannot direct and over which we
consultant. however, determined that the
tember when many of the current mem-
politicians, board members and adminis-
have no control," says one.
Institute was too ambitious in thinking It
bers are retiring. In addition to the four
trators."
Others point out that IAJA already has a
could raise $60 million in a national cam-
nominations currently before the Senate,
The decision to fold Native Images for
development office that receive $610,000
paign The consultant said the most IAIA
the terms of three other trustees have ex-
cost reasons raises questions about why
annually from the federal government to
could hope to raise was about $10 million.
pired or are expiring. Together the new
the lame duck board would meet in Alaska.
help raise funds for the institute. That of-
Since the completion of the IAIA muse-
members will comprise a working majority
instead of Santa Fe, during a financial cit-
fice is now directed by Della Warrior, a
um downtown, fundraising has been
of the board andwill be dealingw the
sis. The trip, which included a fishing expe-
friend of Perry Horse's wife.
somewhat dormant. Potential donors,
consequences of these actions.
dition, was estimated by one source to cost
The now foundation was Incorporated
moreover, want to see progress before
The board acted in spite of the wishes of
an extra $15,000. The board itself is report-
June 24, 1994. Robert Best, its vice-chair-
writing checks. The foundation will have to
Stetson and tworother proposed members:
ed in have exceeded its $202,000 budget by
man, has indicated that it will replace an-
convince them that the new campus will
Loren Kleve, an attorney, and Woyneve
$140,000 this year.
other foundation of the same name that
he a reality. A2.7-mile extension of South
Cassidy, in artist. In a letter addressed to
How, too, is the board able to lend
was created by a trust agreement autho-
Richards Avenue has been completed, but
Robert Amee, a member of the Board of
funds to a now foundation incorporated
rized by Congrèss. The new foundation has
no other construction has been undertak-
Trustees, they requested that the incoming
last July? "If you have enough money to
different by-laws and 18 not under the Lon-
on.
trustees be consulted on any major
make a $100,000 loan to afoundation over
trol of the institute. Its directors are negoti-
Continued on Page 18
term decisions. The letter WELS sent Sept. 9.
It was ignored.
Stateon was not necessful in her effort
to persuade the members of the state con-
gressional elegation to draft a joint letter
to the IAIA board asking it to reverse its do
cisien to close the Native Images Center,
block the transfer of funds to the new foun-
dation, andand to take no further major
personnel actions.
Those attending the board meeting, in-
More
cluding some whose terms have expired,
agreed on:
The termination Schuyler Houser:
The board sanctioned the $12,000 buyout
package offered the vice president Houser
has a master's degree in public adminis-
Choices?
tration from the Kennedy School of Gov-
amment at Harvard University and exten-
sive experience in Indian education. Dur-
ing year at IAIA, be served as acting presi-
dent through 8 nationwide search for a
successor to Kathryn Harris Tijerina, who
was dismissed by the board in November
No Problem.
1993. There were no charges of wrongdo-
ing against him.
Perty Horse, a Klowa, was inaugurated
as president last summer. He has said he
played no role in the decision, although he
Lovelace now offers individuals who qualify for Medicare the choice of
did attend the brand meeting in Alaska.
3 comprehensive healthcare plans. As a nationally recognized leader in
The closing of Native Images: The Na-
quality medicine, there are more reasons than ever to choose Lovelace
tional Center for Production of Native Im-
ages was established by IAIA to solicit con-
Plan $0
Plan 11
Plan I
tracts to make videos on Indian themes.
The program was established in 1989, and
Premium
$ 0
$ 25
$ 48
the center was created in 1991. Native Im-
ages produced the Peabody Award-win-
Office Visits
$ 12
$ 10
$ 5
ning film "Surviying Columbus"
The center was funded initially by local
Hospital
$300
$100
$ 0
IAIA funds, rather than federal appropria-
dons. Ultimately, however, the Institute
Prescriptions
$ 12
$ 7
$ 5
hoped that the video production center
would be self-supporting and able to con-
Vision Care
$ 12
$ 10
$ 5
tribute to the development of the new
campus. In fact, Center Director Nedra
Dental Plan
$ 11/mo.
11/mo.
11/mo.
Darling projected a deficit of $90,000 this
(optional)
year.
Darling was aware that members of the
institute's board of trustees did not hold
If you have Medicare Part B benefits, call us. We'll give you all the information you need
video production in the same esteem as
to make decision, with no obligations no kidding. With Lovelace Senior Plan your
fine arts. But she was shocked when Perry
healthcare coverage can be no problem at all.
Home returned from the board meeting in
Alaska and informed her that the trustees
had decided to abollsh the entire center.
Darling charges that she was never allowed
to dafend her program. nor permitted to
attend the Alaska meeting where it was
LOVELACE SENIOR PLAN
discussed. "The Indian way is to listen and
communicate," she says,
Since then, Darling has had to cancel
discussions concerning a film project for
1-800-262-3757
the Department of Agriculture that prob-
ably would have earned the institute
THIS is A SOLIGITATION OF INSURANCE
$30,000.
"This sad for artists in this medium,"
also adve "Ifwe miss any opput tuality to
02/27/95
17:27
INDIAN AFFAIRS U.S. SENATE
94562604
NO. 540
904
IAIA
recently that he is authorized to evaluate
can Indian Arts apparently are attracting
completed the self-study that precedes
Continued from page 17
all programs and LILAL where needed. "Peo-
some congressional attention, although
such inspections. North Central Indicated
ple are deeply demoralized," says a source
members ignored the issues raised in B let-
that It wanted to give the new president a
JoAnn Balzer, currently the director of
close to the school. "They wonder who is in
ter last November from two local histori-
chance to effect change.
development at the Western States Arts
charge and for what reasons."
ans and former employees of LAIA. The let-
These Issues are very upsetting to the
Federation, has been identified as the
David Tobin, the former director of de-
ter alerted them to concerns about
many people who would like to see IAIA
choice of the directors for the position of
velopment at IATA. and an acute observer
whether the students enrolled at the insti-
achieve the promise to students set outin
executive director. She was being congrat-
of its politics, feels that the decision to fold
tiste were getung "the quality education
the enabling legislation by Congress. "If
ulated on the appointment during a recent
Native Images and the incorporation of
they are entitled to."
IAIA continues to be a political football,
visit to the campus, although Best said 10-
the new foundation illustrate that IAIA still
The letter also was sent to the North
then It doesn't have much of a chance,"
cently that no one has yet been hired for
is not an Indian institution. "IAIA has nev-
Central Association of Colleges and
Houser warns. The former vice-president.
the post. Balzer was a member of the origi-
er embraced an Indian soul, never been
Schools. It did not investigate. either. In a
who has been hired to found the Sulish-
nal LATA Foundation. The new foundation
accountable to Indians, never been run by
previous accreditation process, North
Kootenal College in Montana, adds that
will have an initial budget of $100,000 and
Indians. All along the board has been dom-
Central expressed reservations about
the 27 tribal colleges in the U.S. have
willraise money for its own operating
Inated politically by non-Indians," he says.
health and safety issues in IAIA's studios,
thrived on accountability. "Every penny
costs.
Tobin, who has spent many years in the
administrative effectiveness, and planning
and every program has been carefully
On the campus of the College of Santa
non-profit field, believes that the new
and curriculum. It is aware, as well, that
planned, carefully explained and carefully
Fe, where IAIATED space, employees are
foundation will not be successful raising
former vice-president Sky Houser request-
justified," be declares
disturbed by these developments. Many
money unless it does so in way that re-
eda delay the current round. North
Stetson, is optimistic that IAIA can
also fear for their own jobs, particularly in
flects Indian culture.
Central's team was scheduled to visit the
achieve its potential. "Every problem is fix-
light of the enotice given by the president
The problems at the Institute of Ameri-
site in the spring of 1995, but IAIA has not
able," she says. "I got into this to help.'
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PRES. PERSONNEL OFFICE TEL :202-456-6294
Mar
01'95 10:33 No.001 P.02
DON. YOUNG
DISTRICT OFFICES
ONGRESSMAN FOR ALL ALASKA
222 WEBT 7TH AVENUE, #3
ANCHORAGE, ALABKA 99513-7595
WASHINGTON OFFICE
TELEPHONE 907/271-5978
2331 RAYSURN BUILDING
TELEPHONE 202/225-5765
Box10, 101 12TH AVENUE
FAIRBANKS, ALABKA 99701-6275
COMMITTEES:
TELEPHONE 907/458-0210
NATURAL RESOURCES
401 FEDERAL BUILDING
P.O. Box 21647
MERCHANT MARINE AND
JUNEAU, ALASKA 99802-1647
FISHERIES
TELEPHONE 907/588-7400
POST OFFICE AND
CIVIL SERVICE
Congress of the Whited States
109 MAIN STREET
KETCHIKAN, ALASKA 99901-6489
TELEPHONE 907/225-6880
House of Representatives
130 TRADING BAY ROAD
SUITE 350
Washington, B.C. 20515
KENAI, ALASKA 99611-7716
907/283-5808
February 28, 1995
PERSONAL AND CONTIDENTIAL
DETERMINED TO BE AN
ADMINISTRATIVE MARKING
Ms. Peggy A. Clark
Office of Presidential Personnel
INITIALS: JGP DATE: 1/26/18
The White House
1600 Pennsylvania Avenue, N.W.
2018-0141-F
Washington, D.C. 20500
Dear Ms. Clark:
I am one of four congressional representatives to the Board of Trustees of the Institute
of American Indian and Alaska Native Culture and Arts Development (IAIA) and have served
in that capacity since 1988.
During the 103rd Congress, the White House submitted the nomination of four
individuals for confirmation as Board of Trustees, Ms. Catherine Baker Stetson, Ms. LaDonna
Harris, Mr. Loren Kieve, and Ms. Barbara Blum.- I am writing with regard to the nomination
of Ms. Catherine Baker Stetson. At the request of Senator Frank Murkowski of Alaska, Senator
Daniel Inouye of the Senate Committee of Indian Affairs withheld the confirmation of Ms.
Stetson. The Senate did confirm the three other nominees as submitted by the White House and
I look forward to working with the new Board members.
Catherine Baker Stetson's name has again been referred to the Senate Indian Affairs
Committee for confirmation. I offer the following information regarding my concerns over her
confirmation.
The Presidential Appointee's Handbook prepared by The National Academy of Public
Administration clearly outlines the conduct of nominees for Presidential Appointments. Since
her nomination by the White House, certain actions on Ms. Stetson's part regarding IAIA
matters have been highly inappropriate. The Handbook specifically states:
"Reporters or friends and associates may want to know whether an individual is in fact
PRES. PERSONNEL OFFICE TEL 202-456-6294
Mar
01'95
10:33 No 001 P.03
-2-
under consideration for an appointment... "...First, it is wise to let the White House Issue
all public statements about the status of a search...
Ms. Stetson has announced her own nomination and presumed appointment to individuals,
the New Mexico State Bar Association Newsletter, the IAIA Board, the media and others, as
referenced in the attached articles and letters, and by her statement that "My understanding that
the dissatisfaction with some of the things that have happened at IAIA comes from a growing
number of people, including faculty, staff, and other concerned citizens...
Please reference the August 17-23, 1994 Santa Fe Reporter article quote by Ms. Stetson,
"I would have liked a meeting with the new trustees in Santa Fe at the beginning of the school
year," says Kate Stetson, an Albuquerque lawyer who is one of the nominees. It was not
appropriate to discuss any Board of Trustees meetings with Press or other interested parties until
her nomination was confirmed.
It is a result of discussions Ms. Stetson has had with "concerned citizens" regarding her
concerns over the Institute and its leadership, that the Institute has taken a slower approach with
regard to fund raising at the local level. Reference the documented reported comments made
by Ms. Stetson to one of IAIA's major individual-donors - again, totally inappropriate.
N They may even ask the individual's views on policy issues relevant to the job in question.
The attention is flattering and it is hard to say "no comment". But "no comment" is the
prudent answer. No small number of potential nominations have gone awry after untimely
or unfortunate public statements by leading candidates..'
Ms. Stetson's request for records of past Board meetings from the Chairman of IAIA to
"provide a history of the Institute" were provided to her since, according to Ms. Stetson, "we
expect to begin our new terms just as the new school year begins, the need is especially critical
if we are to be optimately responsive... which resulted in several additional letters to IAIA
requesting more detailed information, clarification of materials and decisions made by the Board
on policy issues. Her letter to the Chairman of the Board to change the official minutes to
reflect a favorable record of a presentation by her law firm to do pro-bono work was not
honored. Only a current Board member may request a change to official Board Minutes or
records. Again, a very highly inappropriate request of a Presidential nominee.
"It is better to inform the White House of potential problems early in the process than to
wait until public embarrassment and controversy are unavoidable. Trite though it may
seem to say so, honesty in these matters is a very good policy".
Ms. Clark, based on the above, as a member of the Board of Trustees of the IAIA, I questioned
Ms. Stetson's behavior and intent for coming on board. Her actions and the tone of her letters
PRES. PERSONNEL OFFICE TEL:202-456-6294
Mar 01'95
10:34 No.001 P.04
-3-
questioning decisions made at Board level have offended some Board members and seems
counter productive for a potential board member's first introduction to the Board.
In closing, I must state that Ms. Stetson's actions with regard to her nomination by the
White House is potentially embarrassing to the Administration, especially with the bad press she
has generated in the State of New Mexico, the home of the IAIA Institute. I do not and will not
tolerate any action by a potential Board of Trustee in attempting to set their own policy for the
Board of IAIA without any regard to other Board of Trustees input. It is my feeling that the
Administration and the Board of IAIA would not be positively served by Ms. Stetson. Her
actions clearly indicate that she may have an agenda of her own for IAIA. I look forward to
continuing my involvement and support for IAIA who not only represents the American Indian
population of this country, but the Alaska Natives, and for this reason, have stated my concerns.
Please contact me personally, or my staff assistant, Cynthia Ahwinona can answer any questions;
(202) 226-0382.
I appreciate your attention to this matter.
Sin
DON YOUNG
Congressman for All Maska
DY:caa
THE WHITE HOUSE
WASHINGTON
BBG
65/74
KOROLOGOS - GOP, FEINGOLD, KERRY
(a) BAO LORD - BIDEN
SREICVOLEL (D)
(ai) KIRELAND (1) BIDEN
MAS CANOSA - R
MICHAEL -R
FLEIS UAKER (D) POTUS
WATHANSON (D) - BERMAN
BIDEN
MICA - HAS TO BE ON (FOLEN)
Kozolobos- - NO CBAT
5000
THE WHITE HOUSE
WASHINGTON
BBG
BIDEN- 2 OF 8 SCOTS
LANE KIRKLAND }
BETTY BAO CORD
DOLE- KOROLOGOS. - BIDEN
VERONICA MAY BE CALLING PAT
HOTUS -
KERRY
FENGOLD
NOT HAPPY w BIDEN
PELL
WE MAY NOT HAVE To CAVE
BIDEN'S STAFF DOESN'T HAVE PRIORITIES
DAN MICA - BIDEN WANTS HM
KERRY- BBG
DAVID LEITER
DONT WANT TO FOLD AGAIN
LIKE LAST YEAR. IF IT LOOKS
LIKE A BIDEN-STAGEED BOAKD.
CLINTON LIBRARY PHOTOCOPY
EXECUTIVE OFFICE OF THE PRESIDENT
07-Apr-1995 09:59am
TO:
Ann M. Cattalini
TO:
Erin A. O'Connor
FROM:
Eric K. Senunas
Office of Legislative Affairs
SUBJECT: Railroad Retirement Board
Pat,
I wanted to give you a heads up about a problem (probably minor)
that came up last night on the executive calendar. Two members of
the Railroad Retirement Board who had been nominated for
reappointment to the Board were moved out of Labor last week and
on the exec for last night. About a half an hour before the
Senate did the exec Abby said that there was a problem on the R
side with Virgil Speakman, one of the two nominees for the Board.
She said that the R cloakroom was trying to work it out, but
didn't know if it would go. When the other 40 went, this was the
one guy held up. I spoke with the Leg Affairs person at the
agency last night, and she had not heard of any problems.
Abby is going to try to find out what she can, but last night
neither she nor Nick Littlefield had any idea of what the deal
was.
This morning, Craig Smith called me and told me about a larger
political deal going on with the Board. It seems that there is a
labor/management dispute going on, and that management is trying
to break the union. He had been working with Mikulski's office to
try to get the management guy held, but they didn't hold him up
and the labor guy (Speakman) was held up instead. He should have
told us this, but he didn't (we very easily could have said that
the two noms are a package). My main fear is that labor is going
to see a major conspiracy, and I'm not convinced that that is
what's going on. No one had heard anything on this until 10:15
last night, which makes me think that this might be something more
flakey than suspicious. I told Craig to tell the labor people he
has been speaking with to try not to blow this up before we can
figure out what is really going on. I don't want what might be
something minor becoming something major.
Both nominees are reappointments, so neither's status on the Board
will be effected (they have been hold-overs for almost a year
now). In effect, nothing has changed. Also, we still have the
option of not signing the appointment of the guy who was confirmed
to retain some leverage if someone is trying to pull a fast one.
Craig is going to talk to Podesta about holding the paper on the
management guy. It would have been better to hold them together
in the Senate, and Craig realizes that he should have clued us in
to what was going on.
I just wanted to give you a heads up on this. I don't have any
information yet, but I'll let you know when I do. I'm hoping that
Craig will be able to keep the labor guys from making things worse
by trying to raise hell.
S2238
Kennedy (D-MA)
06/23/94
(292 lines)
Introduced in Senate
Employment Non-Discrimination Act of 1994.
Special typefaces used in this bill version:
//
Italic
!!
!!
Bold roman
Item Key: 12641
103D CONGRESS
2D SESSION
S. 2238
To prohibit employment discrimination on the basis of sexual
orientation.
IN THE SENATE OF THE UNITED STATES
June 23 (legislative day, JUNE 7), 1994
Mr. KENNEDY (for himself, Mr.CHAFEE, Mr.AKAKA, Mr. JEFFORDS,
Mr. BINGAMAN, Mr.PACKWOOD, Mrs. BOXER, Mr. BRADLEY, Mr. DODD,
Mr.FEINGOLD, Mrs.FEINSTEIN, Mr. GLENN, Mr. HARKIN, Mr. INOUYE,
Mr. KERRY, Mr.LAUTENBERG, Mr.LEAHY, Mr.LEVIN, Mr.LIEBERMAN,
Mr.METZENBAUM, Ms.MIKULSKI, Ms.MOSELEY-BRAUN, Mr.MOYNIHAN,
Mrs. MURRAY, Mr. PELL, Mr. .RIEGLE, Mr. ROBB, Mr. SARBANES, Mr. SIMON,
and Mr.WELLSTONE) introduced the following bill; which was read
twice and referred to the Committee on Labor and Human Resources
A BILL
To prohibit employment discrimination on the basis of sexual
orientation.
//Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
!!SECTION 1. SHORT TITLE. !!
This Act may be cited as the "Employment Non-Discrimination
Act of 1994".
!!SEC. 2. FINDINGS AND PURPOSES.!!
(a) FINDINGS. The Congress finds that--
(1) an individual's sexual orientation bears no
relationship to the individual's ability to contribute fully to
the economic and civic life of society;
(2) historically, American society has tended to isolate,
stigmatize, and persecute gay men, lesbians, and bisexuals;
(3) one of the main areas in which gay men, lesbians, and
bisexuals face discrimination is employment;
(4) employment discrimination on the basis of sexual
orientation violates fundamental American values of equality and
fairness;
(5) the continuing existence of employment discrimination
on the basis of sexual orientation denies gay men, lesbians, and
bisexuals equal opportunity in the workplace and affects
interstate commerce;
(6) individuals who have experienced employment
discrimination on the basis of sexual orientation often lack
recourse under Federal law; and
(7) gay men, lesbians, and bisexuals have historically been
excluded from full participation in the political process,
comprise a discrete and insular minority, and have historically
been subjected to purposeful unequal treatment based on
characteristics not indicative of their ability to participate
in or contribute to society.
(b) PURPOSES It is the purpose of this Act--
(1) to provide a comprehensive Federal prohibition of
employment discrimination on the basis of sexual orientation;
(2) to provide meaningful and effective remedies for
employment discrimination on the basis of sexual orientation;
and
(3) to invoke congressional powers, including the powers to
enforce the 14th amendment to the Constitution and to regulate
commerce, in order to prohibit employment discrimination on the
basis of sexual orientation.
!!SEC. 3. DISCRIMINATION PROHIBITED. !!
A covered entity, in connection with employment or employment
opportunities, shall not--
(1) subject an individual to different standards or
treatment on the basis of sexual orientation;
(2) discriminate against an individual based on the sexual
orientation of persons with whom such individual is believed to
associate or to have associated; or
(3) otherwise discriminate against an individual on the
basis of sexual orientation.
!!SEC. 4. BENEFITS. !!
This Act does not apply to the provision of employee benefits
to an individual for the benefit of his or her partner.
!!SEC. 5. NO DISPARATE IMPACT. !!
The fact that an employment practice has a disparate impact, as
the term "disparate impact" is used in section 703 (k) of the Civil
Rights Act of 1964 (42 U. (k) ) on the basis of sexual
orientation does not establish a prima facie violation of this Act.
!!SEC. 6. QUOTAS AND PREFERENTIAL TREATMENT PROHIBITED.
(a) QUOTAS. --A covered entity shall not adopt or implement a
quota on the basis of sexual orientation.
(b) PREFERENTIAL TREATMENT. covered entity shall not give
preferential treatment to an individual on the basis of sexual
orientation.
!SEC. 7. RELIGIOUS EXEMPTION. !!
(a) IN GENERAL. Except as provided in subsection (b), this Act
shall not apply to religious organizations.
(b) FOR-PROFIT ACTIVITIES. This Act shall apply to a religious
organization's for-profit activities subject to taxation under
section 511 (a) of the Internal Revenue Code of 1986 as in effect on
the date of the enactment of this Act.
!!SEC. 8. NON-APPLICATION TO MEMBERS OF THE ARMED FORCES; VETERANS'
PREFERENCES.!
(a) ARMED FORCES
(1) For purposes of this Act, the term "employment or
employment opportunities" does not apply to the relationship
between the United States and members of the Armed Forces.
(2) As used in paragraph (1), the term "Armed Forces" means
the Army, Navy, Air Force, Marine Corps, and Coast Guard.
(b) VETERANS' PREFERENCES. This Act does not repeal or modify
any Federal, State, territorial, or local law creating special
rights or preferences for veterans.
!!SEC. 9. ENFORCEMENT.
(a) ENFORCEMENT POWERS. With respect to the administration and
enforcement of this Act--
(1) the Commission and the Librarian of Congress shall have
the same powers, respectively, as the Commission and the
Librarian of Congress have to administer and enforce title VII
of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) ;
(2) the Attorney General of the United States shall have
the same powers as the Attorney General has to administer and
enforce such title; and
(3) the district courts of the United States shall have the
same jurisdiction and powers as such courts have to enforce such
title and section 309 of the Civil Rights Act of 1991 (2 U.S.C.
1209)
(b) PROCEDURES AND REMEDIES. The procedures and remedies
applicable to a claim for a violation of this Act are as follows:
(1) For a violation alleged by an individual, other than an
individual specified in paragraph (2) or (3), the procedures and
remedies applicable to a claim brought by an individual for a
violation of title VII of the Civil Rights Act of 1964 (42 U.S.C.
2000e et seq.) shall apply.
(2) For a violation alleged by an employee of the House of
Representatives or of an instrumentality of the Congress, the
procedures and remedies applicable to a claim by such employee
for a violation of section 117 of the Civil Rights Act of 1991
(2 U.S.C. 601) shall apply.
(3) For a violation alleged by an employee of the Senate,
the procedures and remedies applicable to a claim by such
employee for a violation of section 302 of the Civil Rights Act
of 1991 (2 U.S.C. 1202) shall apply.
!!SEC. 10. STATE AND FEDERAL IMMUNITY. !!
(a) STATE IMMUNITY. State shall not be immune under the 11th
amendment to the Constitution of the United States from an action in
a Federal court of competent jurisdiction for a violation of this
Act. In an action against a State for a violation of this Act,
remedies (including remedies at law and in equity) are available for
the violation to the same extent as such remedies are available in
an action against any public or private entity other than a State.
(b) LIABILITY OF THE UNITED STATES. The United States shall be
liable for all remedies under this Act to the same extent as a
private person and shall be liable to the same extent as a nonpublic
party for interest to compensate for delay in payment.
!!SEC. 11. ATTORNEYS' FEES. !!
In any action or administrative proceeding commenced pursuant
to this Act, the court or the Commission, in its discretion, may
allow the prevailing party, other than the United States, a
reasonable attorneys' fee, including expert fees and other
litigation expenses, and costs. The United States shall be liable
for the foregoing the same as a private person.
!!SEC. 12. RETALIATION AND COERCION PROHIBITED. !!
(a) RETALIATION. --A covered entity shall not discriminate
against an individual because such individual opposed any act or
practice prohibited by this Act or because such individual made a
charge, assisted, testified, or participated in any manner in an
investigation, proceeding, or hearing under this Act.
(b) COERCION. person shall not coerce, intimidate, threaten,
or interfere with any individual in the exercise or enjoyment of or
on account of his or her having exercised, enjoyed, assisted, or
encouraged the exercise or enjoyment of, any right protected by this
Act.
!!SEC. 13. POSTING NOTICES. !!
A covered entity shall post notices for employees, applicants
for employment, and members describing the applicable provisions of
this Act, in the manner prescribed by, and subject to the penalty
provided under, section 711 of the Civil Rights Act of 1964 (42
U.).
!!SEC. 14. REGULATIONS.
The Commission shall have the authority to issue regulations to
carry out this Act.
!!SEC. 15. RELATIONSHIP TO OTHER LAWS. !!
This Act shall not invalidate or limit the rights, remedies, or
procedures available to an individual claiming discrimination
prohibited under any other Federal law or any law of a State or
political subdivision of a State.
!!SEC. 16. SEVERABILITY.
If any provision of this Act, or the application of such
provision to any person or circumstance, is held to be invalid, the
remainder of this Act and the application of such provision to other
persons or circumstances shall not be affected thereby.
!!SEC. 17. EFFECTIVE DATE. !!
This Act shall take effect 60 days after the date of the
enactment of this Act, and shall not apply to conduct occurring
before such effective date.
!!SEC. 18. DEFINITIONS.
As used in this Act--
(1) the term "commerce" has the meaning given such term in
section 701 (g) of the Civil Rights Act of 1964 (42 U.S.C.
2000e (g) ) ;
(2) the term "Commission" means the Equal Employment
Opportunity Commission established by section 705 of the Civil
Rights Act of 1964 (42 U.);
(3) the term "covered entity" means an employer, employment
agency, labor organization, joint labor-management committee, an
entity to which section 717 (a) of the Civil Rights Act of 1964
(42 U.S.C. 2000e (a)) applies, an employing authority of the
House of Representatives, an employing office of the Senate, or
an instrumentality of the Congress;
(4) the term "employee of the Senate" has the meaning given
such term in section 301 (c) of the Civil Rights Act of 1991 (2
U.S.C. 1201 (c) );
(5) the term "employer" has the meaning given such term in
section 701 (b) of the Civil Rights Act of 1964 (42 U.S.C.
2000e (b) ) ;
(6) the term "employment agency" has the meaning given such
term in section 701 (c) of the Civil Rights Act of 1964 (42 U.S.C.
2000e (c) ) ;
(7) the term "employment or employment opportunities"
includes job application procedures, hiring, advancement,
discharge, compensation, job training, or any other term,
condition, or privilege of employment;
(8) the term "instrumentalities of the Congress" has the
meaning given such term in section 117 (b) (4) of the Civil Rights
Act of 1991 (2 U.S.C. 601 (b) (4) ) ;
(9) the term "labor organization" has the meaning given
such term in section 701 (d) of the Civil Rights Act of 1964 (42
U.S.C. 2000e (d) ) ;
(10) the term "person" has the meaning given such term in
section 701 (a) of the Civil Rights Act of 1964 (42 U.S.C.
2000e (a) ) ;
(11) the term "religious organization" means--
(A) a religious corporation, association, or society;
or
(B) a college, school, university, or other educational
institution, not otherwise a religious organization, if--
(i) it is in whole or substantial part controlled,
managed, owned, or supported by a religious corporation,
association, or society; or
(ii) its curriculum is directed toward the
propagation of a particular religion;
(12) the term "sexual orientation" means lesbian, gay,
bisexual, or heterosexual orientation, real or perceivea, as
manifested by identity, acts, statements, or associations; and
(13) the term "State" has the meaning given such term in
section 701 (i) of the Civil Rights Act of 1964 (42 U.S.C.
2000e (i) )
03/09/95
16:01
INDIAN AFFAIRS U.S. SENATE -> 94562604
NO. 630
904
DANIEL K INDUYE. HAWAII, CHAIRMAN
JOHN McCAIN, AMZONA, VICE CHAIRMAN
DENNIS DECONCINL ANZONA
FRANK H. MURKOWSKI. ALASKA
THOMAS A. DASCHLE SOUTH DAKOTA
THAD COCHRAN, MISSISSIPPI
RENI CORRAD, NORTH DANOTA
6: AND NORTON. WASHINGTON
MARRY REID. NEVADA
PETE V. DOMENICI, NEW MEXICO
PAUL SIMON. ILLINOIS
MANCY LANDON KASSEBAUM. KANSAS
DANIEL K AKAKA, HAWAII
DON NICKLES, OKLAHOMA
PAUL WELLSTONE MINNESOTA
MARK o. HATFIELD. OREGON
RYRON L DORGAN, NORTH DAKOTA
HIGHTHORSE CAMPBELL, COLORADO
PATRICIA M. ZELL
STAFF DIRECTOR/CHIEF COUNSEL
United States Senate
DANIEL N LEWIS. MINORITY STAFF DIRECTOR
COMMITTEE ON INDIAN AFFAIRS
WASHINGTON, DC 20510-6450
January 24, 1995
SENT TO
CRAI
The Honorable Leon Panetta
Chief of Stall
The White House
1600 Pennsylvania Avenue
Washington, D.C. 20500
Dear Leon:
We write to commend to your consideration the reappointment of Ms. Jana McKeag to
serve an additional term as a Republican Commissioner of the National Indian Gaming
Commission. First appointed to the Commission in April 1991 for a one-ycar term, Ms.
McKeag was reappointed for a full three-year term in April of 1992. Her present term expires in
April of 1995.
In our view, the reappointment of Ms. McKeag would lend a continuity and stability to
the work of the Commission at a time when the Chairman of the Commission is still in the first
year of his tenure, and the third Commissioner has been nominated by the President to serve as a
federal district judge. As an enrolled member of the Cherokee Nation of Oklahoma, Ms.
McKeag's reappointment to the Commission would also scrve to fulfill the requirement of the
Indian Gaming Regulatory Act that two of the three Commissioner positions be filled by persons
of Native American ancestry.
We look forward to working with you in the 104th session of the Congress.
Dan
Sincerely,
John mcan
DANIEL K. INOUYE
JOIN McCAIN
Vice-Chairman
Chairman
17:24
INDIAN AFFAIRS U.S. SENATE -> 94562604
NO. 540 001
Hnited States Senate
COMMITTEE ON INDIAN AFFAIRS
WASHINGTON, DC 20510-6450
TELEFAX COVER SHEET
TO:
Eric Sunnnis
FROM: Noelle Kahana
DATE: Feb 27,95
FAX NUMBER: 456.2604
NUMBER OF PAGES INCLUDING COVER SHEET 4
MESSAGE:
you may writ to talk to Majority staff Director
Stive Heeley No nomination Sen. Murkowski
has written to Sen. mecain raising concerns rc
Stetson
TO CONFIRM MESSAGE: (202) 224-2251
FAX NUMBER: (202) 224-2309
FOCUS
LEGAL AFFAIRS
W. JOHN MOORE
FROM SHOO-IN To SHUTOUT?
P
eter B. Edelman, counselor to
even started," said Nan Aron, execu-
the Health and Human Ser-
tive director of the Alliance for Jus-
vices (HHS) Department, has
tice, a liberal public-interest group
the right stuff needed for President
that monitors judicial appointments.
Clinton to nominate him to the U.S.
In some ways. Clinton's quandary
Court of Appeals for the District of
on Edelman highlights the dilemma
Columbia Circuit. His Clinton bona
he faces in governing. If he steers to
fides: He's a certified FOB (Friend
the center, dumping every liberal lia-
of Bill). His wife, Marian Wright
bility along the way, will he be credit-
Edelman, head of the Children's
ed as a crafty pragmatist or damned
Defense Fund, is one of Hillary
as a spineless opportunist?
Rodham Clinton's closest buddies.
Shepard Sherhell/SABA
Edelman's qualifications for an
He once worked for Robert F.
appellate judgeship go beyond his
Kennedy. Before joining HHS, he
long friendship with the Clintons,
was a distinguished professor at
and he has strong support from lead-
Georgetown University Law Center.
ing Democratic activists. "We think
So it's no surprise that the White
he is a nominee with outstanding
House has floated Edelman's name.
credentials," Aron said. "Once his
Until the midterm elections, he looked like a shoo-in for the
record is fully before the U.S. Senate, my belief is that he will be
job on the nation's most important appellate court. But his
confirmed."
prospects have dimmed considerably following the Democrats'
So far, Clinton's judicial appointments have proved a political
electoral debacle. Now each Administration judicial nominee
plus for him. Both of his nominees to the Supreme Court. Ruth
must traverse the minefield of a Republican-dominated Senate
Bader Ginsburg and Stephen G. Breyer, were centrists who
Judiciary Committee. (See NJ, 11/19/94, p. 2715.)
quickly won bipartisan approval in the Senate-avoiding the
Sen. Orrin G. Hatch, R-Utah, the incoming Judiciary Com-
acrimonious battles that occurred over past nominations. After
mittee chairman, has suggested in*recent interviews that nomi-
a sluggish start, the Administration has moved to fill dozens of
nees can expect tougher review from his panel. And Hatch has
judicial vacancies.
signaled the White House that Edelman's nomination would be
Liberal activists such as Aron want more of the same. Clin-
unwelcome.
ton's judicial appointments "have been strong," Aron said. "I
Conservative judicial activists are already prepping them-
would certainly urge the President to put similar judges on the
selves for an Edelman nomination. Thomas L. Jipping, head of
bench over the next two years. This is one area where we think
the Free Congress Research and Education Foundation's Judi-
there is no reason to yield to partisan opposition prematurely,"
cial Monitoring Project, said that he has a two-and-a-half-inch-
Aron added.
thick file on Edelman. "He has a breathtakingly activist view of
So far, the White House appears to be hedging its bets. White
interpreting the Constitution." Jipping said. If Edelman is nomi-
House counsel Abner J. Mikva-whose departure from the
nated, he added, "Clinton cannot claim to be a moderate or a
D.C. Circuit bench created the vacancy that Edelman would be
centrist."
nominated to fill-told Legal Times last month that Edelman is
What inflames conservatives are Edelman's writings. In a
"seriously under consideration." But so are several other promi-
1989 article in Legal Times, Edelman endorsed university codes
nent Washington lawyers.
barring hate speech aimed at racial minorities. Second, and per-
Even Edelman's admirers agree that there are good reasons
haps more troubling to conservatives, Edelman has described
for Clinton to steer clear of him. It would take only 40 votes to
welfare as a constitutional right and has urged the courts to
block his nomination, and because he comes from Washington,
allow higher welfare payments. In the current climate, those
which has no representation in the Senate, he would start off
statements could be deemed politically incorrect, even by a
with no home-state Senator determined to push for him. As a
Democratic White House.
white male, he would make an easier target than would a minor-
A leading conservative pundit, former Reagan Administra-
ity or woman nominee.
tion Treasury Department official Paul Craig Roberts, wrote
Other potential nominees to the D.C. Circuit share Edel-
recently that "it would be folly for any Congress
to confirm
man's progressive agenda without the intellectual baggage.
Edelman. who may have to be impeached for his antidemocratic
Some Democrats worry that a nasty political fight over Edelman
activism."
could slow Senate consideration of other judicial nominees. As
For an Administration already under assault from moderate
a result, they have suggested that maybe the President should
Democrats since the elections, a tough fight over a liberal nomi-
wait and fight another day for another liberal nominee.
nee may be about as welcome as a Christmas party hangover.
Certainly, Stand by Your Man-or woman-isn't the White
The easy call would be to drop Edelman in favor of another
House theme song. Just ask ex-deputy Treasury secretary Roger
nominee with a sterling centrist pedigree. But dumping Edel-
C. Altman, former Surgeon General Joycelyn Elders or erst-
man is not without its risks, especially for a President who's
while Justice Department nominee Lani Guinier. It might be
sometimes criticized even by his own supporters as lacking back-
risky to nominate an old friend such as Edelman when Clinton
bone.
is determined to steer his Administration to the center. But
Some liberals are urging a fight. "I would assume this Admin-
every President at times must decide when a gut check is as
istration does not want to walk off the field before the game has
important as a reality check.
2998 NATIONAL JOURNAL 12/17/94
11/29/94
16:34
INDIAN AFFAIRS U.S. SENATE -> 94562604
NO. 113
001
DANIEL K. INOUYE. HAWAII, CHAIRMAN
JOHN MCUAIN, AIUZONA VICE CHAIRMAN
DENNIS DECONCINI, ARIZONA
THOMAS A. OASCHLE SOUTH OAKOTA
BRANK H. MURKOWSKI ALASKA
MENT CONRAD, NORTH DAKUTA
THAD COCHRAN, MISSISSIPPI
HARRY REID, NEVADA
SLADE GORTON, WASHINGTON
PETE V. DOMENICI. NEW MEXICO
PAUL SIMON, ILLINOIS
DANIEL K. AKAKA. HAWAII
NANCY LANDON KASSEBAUM. KANSAS
DON NICKLES. OKLAHOMA
PAUL WELLSTONE MINNESCITA
MARK 0. HATFIELD. OREGON
DYRON L DORGAN, NORTH DAKOTA
BEN NIGHTHORSE CAMPSELL COLORADO
FATHICIA M. DELL,
STAFF DIRECTOR/CHIEF COUNSEL
DANIEL N. LEWIS, MINORITY STAFF DIRECTOR
United States Senate
COMMITTEE ON INDIAN AFFAIRS
WASHINGTON, DC 20510-6450
TELEFAX COVER SHEET
TO:
EKIC SUNUNDS (a Steve richith)
FROM:
BOB ARNOLD
DATE:
11/29
FAX NUMBER:
456 2604 456 2604
NUMBER OF PAGES INCLUDING COVER SHEET 4
MESSAGE:
The IAIA Goard says two members
mith expired Terms me "deemed reapperated"
under Terms of a 1958 amendment to the
IAIA state. Comment?
2 didn't work a the 1988 and
TO CONFIRM MESSAGE: (202) 224-2251
FAX NUMBER: (202) 224-2309
EXECUTIVE OFFICE OF THE PRESIDENT
13-Oct-1994 02:47pm
TO Eric
TO:
Erin A. O'Connor
TO:
Ann M. Cattalini
FROM:
Eric K. Senunas
Office of Legislative Affairs
SUBJECT: State wants to give Sam Brown personal rank of Ambassador
Pat,
The State Department has asked Personnel to give Sam Brown the
personal rank of Ambassador, which does not require Senate
confirmation.
Brown, if you recall, was the nominee who would have been given
the rank of Ambassador as the head of the delegation to the CSCE
in Geneva if we had been able to reach cloture on his nomination.
The Senate failed in two votes to reach cloture, but he was sent
to Geneva anyway.
Personnel wanted to run this by you to see if you thought there
were any problems with giving him this six-month rank. The only
downside I can think of would be if we wanted to renominate him
for rank, hoping that the Senate would look more favorably on the
job he has done. If we give him this rank without Senate
approval, it might kill a chance to confirm him as rank of
Ambassador.
What do you think? If you think personnel should go ahead with
State's request, just let me know
Thanks,
Eric
WHITE HOUSE
01:30
10/17/94
101
11/29/94
16:34
INDIAN AFFAIRS U.S. SENATE -> 94562604
NO. 113
002
Institute of American Indian Arts
1600 St. Michaels Drive P. O. Box 20007 Santa Fe, New Mexico 87504 505/988-6463
94 OCT 18 AM 27
OFFICE OF THE CHAIRMAN
MR. KENNETH BLANKENSHIP
October 6, 1997
The Honorable Daniel K. Inouye
Senate Committee on Indian Affairs
838 Hart Senate Office Building
Washington, D.C. 20510
Dear Senator Inouye:
On behalf of the Board of Trustees of the Institute of
American Tndian and Alaska Native Culture and Arts Development
(IAIA) we sincerely appreciate your call for a roll call vote to
expedite the confirmation process to fill vacancies existing on our
Board. We welcome the participation of Ms. Barbara Blum, Ms.
LaDonna Harris and Mr. Loren Kieve.
With respect to the remaining vacancies, IAIA's enabling
legislation, "Section 1506(2) (i) of the Higher Education
Amendmonts, states:
"APPOINTMENT EXCEPTION FOR CONTINUITY.--
(1) In order to maintain the stability and continuity of
the Board, the Board shall have the power to recommend
the continuation of members on the Board pursuant to the
provisions of this subsection. When the Board makes such
a recommendation, the Chairman of the Board shall
transmit the recommendation to the President no later
than 75 days prior to the expiration of the term of the
member.
(2) If the President has not transmitted to the senate
a nomination to fill the position of a member covered by
such a recommendation within 60 days from the date that
the member's term expires, the member shall be deemed to
have been reappointed for another full term to the Board,
with all the appropriate rights and responsibilities."
Mr. Chairman, attached is the letter to the White House dated
December 30, 1993 (more than the 75 days prior to expiration of
terms) recommending reappointments for David Lester and James
Santini. The President has not transmitted to the Senate
nominations to fill the vacancies which are created by the
expiration of the terms of Mr. Santini and Mr. Lester, therefore,
Congressionally phartered as the Instituto of Amorican Indian and Alaska Native Culture and Arts Development
11/29/94
16:35
INDIAN AFFAIRS U.S. SENATE -> 94562604
NO. 113
903
-2-
in accordance with IAIA's enabling legislation, the Board maintains
that these members are reappointed and would appreciate
confirmation of the reappointments of Mr. Lester and Mr. Santini as
soon as possible.
Currently there exists two other vacancies for terms ended May
19, 1994 -- although IAIA has received no official notification, it
is our understanding the White House has names in the clearance
process.
In addition, a third seat becomes vacant at the close of this
legislative session (a recess appointment). At the request of the
All Indian Pueblo Council, the consortium for the nineteen Pueblo
Tribes of New Mexico, the Board of Trustees respectfully supports
their request for a Pueblo to be appointed to the Board.
Again, Senator Inouye, thank you for your efforts and concern
on behalf of the Institute, it's students, faculty and staff.
Sincerely,
Fen Kenneth Blahkenship Blankenobip
Chairman, TAIANCAD Board of Trustees
cc: Ms. Veronica Biggins, Director, Office Presidential Personnel
IAIANCAD Board of Trustees
19 Pueblo Governors/All Indian Pueblo Council
New Mexico Congressional Delegation
11/29/94
16:35
INDIAN AFFAIRS U.S. SENATE -> 94562604
NO. 113 904
Institute of American Indian Arts
P.O. Box 1836 Santa Fe, New Mexico 87504 505/988-6289
December 30, 1993
Ms. Jan Piercy
Deputy Associate Director
Office of the Presidential Personnel
THE WHITE HOUSE
Washington, D. C. 20500
Ref: Institute of American Indian and Alaska Native Culture and Arts Development Board of
Trustees - Openings
Dear Ms. Piercy:
The Institute's Board asked that the following be communicated to the Office of
Presidential Personnel. The Board is requesting that the following incumbent Trustees be
reappointed for new terms:
Term Expiration Date
Mr. James D. Santini
May 19, 1994
Mr. A. David Lester
May 19, 1994
Each of the above Trustee's holds an Important position on the Board, is in regular
attendance at Board and Committee meetings, and has provided invaluable service to the College
from the time of its creation in 1988.
Please let me know if there is anything we can do to assist this process. I look forward
to hearing from you.
fased To: sawa Eningh C202/456-24986w4)
Sincerely,
John Blankenship
Ken Blankenship
Chairman, IAIANCAD Board of Trustees
Enclosure (2)
ant-Resumes
2/9/948
Congressionally chartered as the Institute of American Indian and Aleaka Native Culture and Arts Development
FILE COPY
Fedkp8770885465 1/11
THE WHITE HOUSE
WASHINGTON
Office of Legislative Affairs
Fax Cover Sheet
Date 8/8
To: ERIC
Fax Number:
From: ERIN
at (202) 456-2230.
Comments:
mack sent this
to Pat.
Fyl.
Note: The information contained in this facsimile message is
CONFIDENTIAL and intended for the recipient ONLY. If there is
a problem with this transmission, please contact the sender as
soon as possible.
Number of pages w/cover:
TOO
WHITE HOUSE
9:00 16/80/80
08-03-94 01:31PM FROM SENATOR STEVENS
TC 94562883
POC1/007
Lead
PAT
POSSIT ( GYRP. WEST VIRGINIA, CHAIRMAN
DAMIEL X. INDUTE MAYVEL
MARK 0 MATRIELD DROCON
F, HOLLINGS. SOUTH CAROLINA
TED STEVENS. ALASKA
& BENNETT JOHNSTON LOUISIANA
Phil
THAD COCHRAN, MISSISSIPPI
PATRICE d. LEAHY. VERMONT
ALFORGE M. D'AMATO, new FORM
JM CACEER. TENNESSEE
ARI FN SECTER, BENN@YLVANIA
COMMS DISCONCINE AMERICANA
PITE V. DOMENICI, NEW MEXICO
DALE BUMPERS, ARKANSAS
United States Senate
UON NICELES, OKLAHOMA
FRANK # LAUTENBERG. NEW JERSEY
PHIL DRAMM, TEXAS
form MARKIN. IOWA
CHRISTOPHER # SAMO. -
COMMITTEE ON APPROPRIATIONS
BARBARA . MANI SEL MARTIANO
SLADE GONTON. WASHINGTON
Desc
HARRY RED. NEVADA
MITCH MCCONNELL KENTUCKY
WASHINGTON, DC 20510-6025
J HOBERT KEMREY, MEBRASKA
COMME MACE. FLORIDA
HERB KOML WISCONSIN
COMPAO DURNO. MONTANA
PATTY MURRAT. WASHINGTON
massid MINSTEIN. CALIFORNIA
JAMES al. CHGLISM STATE DIRECTOR
1 KEITH KENNEDY. MINORITY STATE DIRECTOR
August 1, 1994
The Honorable Mack McLarty
Counsellor to the President
The White House
Washington, D.C. 20500
Dear Mack:
I wanted to follow-up on our conversation concerning Wayne
Schley's seat on the Postal Rate Commission. As you will recall,
Senator Pryor joined me in recommending Wayne for appointment to
a Republican vacancy on the Commission during the Bush
Administration.
When President Clinton took office, I worked closely with
David to get Ed Gleiman appointed to a Democratic vacancy and
named Chairman. Ed, though he was filling a Democratic slot and
had worked for years for a Democratic Senator and a Democratic
Congressman, was technically registered as an independent. With
Ed's appointment, the Commission is now composed of two
Republicans, one of them being Wayne, two Democrats, and one
independent.
In October, Wayne's term on the Commission expires. David
joined Senator Glenn, the Chairman of the Governmental Affairs
Committee which oversees the Postal Rate Commission, and the
Assistant Majority Leader, Senator Ford, in recommending Wayne
for reappointment. Recently, David was advised that the White
House is now considering appointing a Democrat to fill Wayne's
Republican seat. If Congress confirms the appointment, the
Commission would then include three Democrats, one independent,
and only one Republican.
When we spoke on the phone, you indicated that you had been
advised that Presidents Reagan and Bush had followed that
practice in the past -- that is appointing an independent so they
would only be required to appoint one member of the party not in
control of the White House. I checked the records and found that
is not the case. Enclosed are copies of relevant pages from the
"Plum Book" from 1980, 1984, 1988, and 1990 listing President
Carter's appointees, outlining the appointees from President
Reagan's first term, noting his second term appointments, and
finally, listing President Bush's nominess.
022
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The Honorable Mack McLarty
August 2, 1994
Page Two
You will find that under previous Administrations, the
Postal Rate Commission has always included three members with the
same party affiliation as the President, and two members of the
opposing party.
X
In light of historical precedent, I would very much
appreciate your taking another look at reappointing Wayne Schley
to the current Republican seat on the Postal Rate Commission.
David will tell you that Wayne is one of the most knowledgeable
people in Washington on issues affecting the Postal Service. He
has worked on postal issues since 1971, and served as the Staff
Director of the Postal Service Subcommittee of the Governmental
Affairs Committee from 1980 to 1986. Thanks for your
consideration. If you have questions, please don't hesitate to
contact me directly at 224-1027.
with best wishes,
Cordially,
Jd TED STEVENS
Enclosure
X Both Chairmen (1981-1987) and
Ranling as Member 1 this Democrate 9
always expert Democratic
have + clear amountments Postal Rate for Common
stats and or ill review the other amount & coverpts me meget mac, all that
is what to what aur 86's be am check ' salame
in am system
J
003
WHITE HOUSE
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1980 Plum Book
INDEPENDENT AGENCIES
Carter
PENNSYLVANIA AVENUE DEVELOPMENT CORPORATION
Type of
on
Position
Incumbent
appoint-
Grade or salary
Tenure
Expires
ment
C
Member (Chairman) Board of Direc-
Max N. Berry
PA
$192.72 p.d. (1).
0 years
Oct. 20, 1884.
tora.
Member (Vice Chairman) Board of
Nathaniel A. Owings
PA
$192.73 p.d. (I).
do
Do.
Directors.
Member, Board of Directors
Donald 3. Bruckmann
PA
$102.72 p.d. (I)
do
Oct.. 26, 1979.
do
Leonard A. Haft
PA
3192.72 p.d. ID_
do
Oct. 26, 1082.
do
Thomas F. Murphy
PA
$192.72 D.St. (1)-
de
Do.
do
Orlando W. Darden
PA
8192.72 p.d. (I)
do
Oct. 26. 1980.
do
Mitchell I. Kafarski
PA
$192.72 p.d. (T)
do
130.
do
Vacant
PA
do
Executive Director
W. Anderson Barnes
PL
$50,112
Assistant Director, Legal
Peter T. Messoly
PL
850.112
Assistant Director, Finance
F. David Harris
PL
$48,008
Director of Development
Charles A. Guell
NEA
$G9-16
bills Law 92-578 incumbent continues to serve until successor has been named.
PENSION BENEFIT GUARANTY CORPORATION
C
Executive Director
Robert E. Nagle
Secretary (Stenography)
Geraldine R. Erickson
DO
c
Lovel y
VP
C
GS-10
VP
POSTAL RATE COMMISSION
OFFICE OF THE COMMISSIONERS
:
Chairman
& Lee Fritschler (D)
PAS
Level III
6 years
Oct: 14, 1982.
Commissioner
Simoon M. Bright (T))
PAS
Lovel IV
do
Nov. 22, 1982.
de
James H. Duffy (D)
PAS
do
do
Nov. 22. 1984,
do
Clyde 8. DuPons (R)
PAS
elo
do
Oct. 14, 1980.
do
Janet Steiger (R)
PAS
do
do
Oct. 14, 1986.
OFFICE MEADS
3D
Director, Technical Analysis and Plan-
Robert H. Cohen
PL
$50,112
ning.
R
Deputy Director, Technical Analysis
Harold D. Orenstein
PL
$50,112
and Planning.
Assistant Director, Technical Analysis
Charles McBride
PL
$40,802
and Planning,
General Counsol
David F. Stover
PL
$50,112
Deputy General Counsel
Stephen Gold.
PL
547,889
Assistant General Counsel
Mitchell Knisbacher
PL
$40,832
Officer of the Commission
Stephen Shariman
PI.
$17,839
Special Assistant to Commissioner
Gorald Cerecale
PL
$34,713
Bright.
Special Assistant to Commissioner
Elizabeth Delf
PL
$34,713
DuPont.
Special Assistant to Commissioner
Arpad Kovery
PL
$84,713
Duffy.
Special Assistant to Chairman
Richard Logon
FL
$29,375
Fritschlor.
Special Assistant to Commissioner
Mary Meade
PL
$29,375
O'Doberty.
Secretary to Commissioner Bright
Sandra Crist
PL
$18,760
Secretary to Chuirman Fritschler
Moria T. Duke
PL
$18,700
Sucretary to Commissioner DuPont
Ardine Harrison
PL
$18,700
Secretary to Commissioner Duffy
Elaync Hughes
PL
$18,700
S COMMISSION FOR THE STUDY OF ETHICAL PROBLEMS IN MEDICINE AND BIOMEDICAL AND
BEHAVIORAL RESEARCH
Deputy Director for Management
Mary Ann Orlando
A
$40,832
VP
Dec. 31. 1982.
Deputy Director for Studies
Barbara Mishkin
A
$40,832
S
Do.
Animay Advices
Alan Weisbard
A
$34,718
VP
Do.
100
D
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1984 Plum Book
INDEPENDENT AGENCIES
Reagan
PENSION BENEFIT GUARANTY CORPORATION
Type of
Location
Position
Instimbent
appoint-
Level, grade. or
Tonure
ment
salary
Expires
agton. DC
Executive Director
Charles C. Therp
C
Level V
Deputy Executive Director
David M. Walker
NEA
GS-17
do
Royal S. Dellinger
NEA
GS-16
Associate Executive Director
Roderick J. O'Neil
NEA
GS-16
Special Assistant to the Executive Direc-
Kevin W, Putt
c
GM-14
tor.
Staff Assistant
Graziella A Guerra
C
GS-11
Secretary (Stenography)
Arden c Kendall
C
GS-11
de
Quite J. Dracos
C
GS-9
Secretary (Typing)
Felcia A. Drown
C
GS-9
POSTAL RATE COMMISSION
igton. DC
Chairman
Janet D. Stelger (R)
PAS
Level III
6 years
Oct. 14. 1986.
Commissioner
John W. Crutcher (R)
PAS
Level IV
do
Do.
do
James H. Daffy (I)
PAS
do
Ju
Nov. 22. 1984.
do
Henry R. Folsom (R)
PAS
do
do
Oct. 14. 1988.
do
Simeon M. Bright (D) 1
PAS
do
do
Nov. 22. 1988.
Legal Advisor to the Chairman
Gerald E. Cerasale
PL
$46,567
Special Assistant to the Chairman
Maureen Drammy
PL
$41,892
Special Assistant to Commissioner
Elliott Rock
PL
$41,382
Crutcher.
3R
Special Assistant to Commissioner Duffy
Arpad de Knvacsy
FL
$46,667
Special Assistant to Vice Chairman
Ronald R. Jenson
PL
$16,657
Folsom.
Special Assistant to Commissioner
Vacant
PL
NE
Bright.
Secretary to the Chairman
Carol Choha
PL
$24,024
Secretary to Commissioner Crutcher
Florance Broussard
PL
$24,024
Secretary to Commissioner Duffy
Elayne McHale
PL
$24,024
Secretary to Vice Chairman Folsom
Maria Duke
PL
$24.024
Secretary to Commissioner Bright
Sandy Crist
PL
$24,021
Chief Administrative Officer
Charles L. Clapp
PL
$66,400
General Counsel
David F. Stover
FL
$66.400
Deputy General Counsel
Vacant
PL
$68,500
Assistant General Counsel
Stephen L. Sharfman
PL
$61,615
Director. Office of Technical Analysis
Robert Cohen
PL
$66,400
and Planning.
Deputy Director Office of Technical
Harold Orenstein
PL
$63,500
Analysis and Planning.
Assistant Director, Office of Technical
Charles McBride
PL
$61,515
Analysis and Planning.
Director. Office of the Consumer Adva
Stephen A. Gold
PL
$66,400
cate.
irving under recess appointment.
005
D
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INDEPENDENT AGENCIES
1988 Plum Book
POSTAL RATE COMMISSION
Reugan
ocation
Type of
Position
Incumbent
Level, grade, or
appoint-
Tenure
ment
salary
Expires
n. DC
Chairman
Janet D. Steiger (R)
PAS
Level III
6 years
Oct. 14. 1992.
Commissioner
John W. Crutcher (R)
FAS
Level IV
do
De.
do
Henry R. Folsom (R)
PAS
do
do
Oct. 14, 1004.
do
W. H. "Trey" LeBlane (D)
PAS
do
do
Nov. 22, 1994.
do
Patti Birge Tyson (D)
PAS
do
de
Nov. 22. 1990.
Legal Advisor to the Chairman
Gerald E. Cerasale
PL
$54,907
Special Assistant to the Chairman
Maureen Drummy
PL
$40,079
Special Assistant to Commissioner
Leonard Merewitz
PL
$54,907
Crutcher.
Special Assistant to Commissioner
Vacent
PL
3R
Folsom
Special Assistant to Commissiner Le-
Jennafer Moreland
PL
$32.551
2
D
Blanc.
Special Assistant to Commissioner Tyson
W. Lawrence Graves
PL
$54,907
Secretary to the Chairman
Sandra Crist
PL
$31,066
Secretary to Commissioner Crutcher
Joan Veit
PL
$31,066
Secretary to Commissioner Folsom
Maria Duke
FL
$81,066
Secretary 5 Commissioner LeBlane
Vacant
PL
Sourstary w Commissioner Tyson
Willemens Semunis
M
$81,066
Chief Administrative Officer and Secra-
Charles L. Clapp
PL
$73,400
tary,
General Counsel
David F. Stover
PT.
$73.400
Amistant General Coursel
Susphen L Sharfmnn
PL
$66,952
Director. Technical Analysis and Plan-
Robert Cohen
PL
$73,400
ning.
Assistant Director, Technical Analysis
Charles MeBrido
PL
$68,952
and Planning.
Senior Financial Analyst
Harcld D. Orenstein
PL
$71,910
Director. Office of Consumer Advocate
Stephen A. Gold
PL
$73,400
PRESIDENTS COMMITTEE ON EMPLOYMENT OF THE HANDICAPPED
n. DC
Executive Director
Jay F. Rochlin
SES
NA
RAILROAD RETIREMENT BOARD
L
Chairman
Robert A. Gielow
PAS
Level III
5 years
Member of Board
Aug. 29. 1987.
Charles J, Chamberlain
PAS
Level IV
do
.....do
Aug. 29, 1989.
John D. Crawford
PAS
do
Attorney Advisor
Aug. 29, 1988.
Vacant
PL
GM-15
Assistant to the Board Member
Joseph M. Waechter, Jr
PL
GM-15
Assistant to the Board Member
James C. Boehner
PL
GM-16
OFFICE OF THE INSPECTOR GENERAL
Inspector General
William J. Doyle THE
PAS
Level IV
900
HOUSE 3.LIHA
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1992 Plum
Bush
184
INDEPENDENT AGENCIES
PENSION BENEFIT GUARANTY CORPORATION-Continued
Lemon
Pay
Type
Level.
Position Tide
Name of Incumbent
Plan
of
Grade, or
Tenure
Appt.
Pay
Expire
Washington, DC
Assistant Executive Director for Legislative AF-
Steven Hill
GM
SC "
15
Calza
Do
Assistant Executive
Chemise Bryant
as
SC -
12
Do
Confidential Amistaet
Delores Ulman
CS -
SC-
12
Do
Staff Assistant
Remona Ely
GS -
SC
-
11
Do
Joseph Gram
GS
SC
10
PHYSICIAN PAYMENT REVIEW COMMISSION
Pay
Type
Lovel,
Lenation
Prantine Title
Name of Insumbers
of
Plan
Crade, -
Tenan
Expires
Appt.
Pay
Washington, DC
Chairman
Philip R Lee
FD ⑈
PA "
$310
Do
Commissioner
Linds n Aftern
PD
PA
SG10
Do
1
Drew D. Altman
PD
-
PA
$310
Do
do
Richard Anderson
PD
PA
$710
Do
do
William P. Current
PD
PA
$310
Do
do
Karen Davis
PD ⑉
PA
$310
Do
de
John Mayer Nisenberg
PD
-
PA
5310
Do
do
Jack Guidrey
PD -
PA -
$310
Do
do
Robert B. Keller
FD
-
PA
-
$310
Do
do
W.O. Weasne
PD
-
PA
2010
Do
do
Michael D. McKinney
PD
-
FA -
5310
Do
do
Patricia M Nagemetz
PD
-
PA
-
$310
Do
do
Thomas R. Reardre
PT)
PA -
$310
Do
1
Use E. Reinhardt
PD
-
PA -
1310
Do
Exacutive Director
Paul R Givenburg
OT
-
XS
-
Do
American Director
Marilya J. Field
OT
-
Do
Deputy Director the Management External As
Lauren B. Larry
or
X3
!
fairs.
Do
Senior Economist
Jonathan H. Suppline
or
XS
POSTAL RATE COMMISSION
Location
Parition Title
Pay
Type
Level,
Name of Incurrement
Plan
of
Orade, or
Tesure
Expires
Apps
Pay
OFFICE OF THE COMMISSIONERS
Washington, DC
Chairman
George W. Haley (R)
EX
FAS
15%
e years
10/16/92
Do
Commissioner
William Harden. LeBlane
EX
PAS
IV
- -
10/14/94
III (D)
do
John W. Crutcher (R)
EX
PAS
IV
40
10/14/92
do
Honry R Folsom (R)
EX
PAS
IV
-40 1999
10/14/14
H. Edward Quick, Jr. (D)
EX
PAS
IV
do
11/22/96
Chief Administrative Officer and Secretary
Charles L. Clapp
OT
-
XS
Do Do Do Do Do Do Do Do Do Do Do Do De Do De Do Do Do
Special Assistant to the Chairman
Irving Bramall
OT
XII -
Robert Mitchell
q
XS FOR
Secretary w the Chairman
Augustine Farmer
OT
-
XS
do
Leurned Maramus
$
MR
Special Assistant to a Commissioner
James Arbury
or
XS ***
do
John Bovard
OT
-
XS
Surrenary - 4 Comminsioner
Superve Tudor
or
X3
-
do
Vessal
or
X3
-
do
Anne Corneline
OT
XS
do
toyes Taylor
or
XS
OTHER OFFICIALS
Commi Counsel
David F. Stower
CT
XS
...
Aarlesant to the General Counse)
Stephen L Shartman
9
XS
...
Director, Office of Countrier Advocate
Stephen & Gold
$
X3
-
Director. Technical Analysis and Pleaning
Robert Cobes
or
XS
-
Assistant Director, Technical Analysis and Plan.
William Perguan
OT
XSI
-
ning.
Do
Senior Financial Analyse
Harold D. Commission
OT
YS
200
WHITE HOUSE
04:00
16/80/80
COMM/RESEARCH
ID:2024562239
MAY 18'94 15:23 No.004 P.02
bc-health-moy
MOYNIHAN RAPS WHITE HOUSE
OVER HEALTH CARE CRITICISM
Photo GPN16 and GPN17 available May 17
By JOHN MACHACEK=
and KEITH WHITE=
Gannett News Service=
WASHINGTON Senate Finance Committee Chairman Daniel Patrick Moynihan
Tuesday struck back at White House criticism that he isn't pushing hard enough
for President Clinton's health care reform plan.
"It hasn't sunk in (at the White House) ... that the (Clinton plan) could
be filibustered indefinitely, the New York Democrat said in defending his
strategy of working with Finance Committee Republicans to forge bipartisan
consensus on health care reform.
Some Senate Democrats suggested this week that Moynihan is undercutting
his party by working too closely with committee Republicans on a compromise
measure that would leave out major elements of the Clinton plan, such as price
controls and a requirement that employers provide health coverage.
Moynihan said in an interview with Gannett News Service that the White
House is the source of the criticism.
In fact, Sen. Jay Rockefeller, D-W.Va., one of Clinton's strongest health
care allies on the Finance Committee, told reporters Monday that Moynihan was
''dodging the bullet" on health care while other congressional leaders on the
issue are moving ahead.
Moynihan introduced the Clinton bill in his role as Finance Committee
chairman. But he doubts there are enough votes to pass it in its current form
either in his committee or on the Senate floor. Also, he said he believes that
legislation of such magnitude ought not to be narrowly passed.
Hence, he has initiated bipartisan discussions he hopes will lead to a
broad agreement on a compromise measure that would get Clinton's approval.
Moynihan said he understands that the White House may be thinking of
trying to ram the Clinton plan through the Senate with a bare majority
perhaps with Vice President Al Gore casting a tie-breaking vote as he did on
the Clinton economic plan last year.
But White House strategists seemed to have forgotten there was a fixed
time limit debate on the budget reconciliation bill, Moynihan said. Democrats
would need 60 votes to break a GOP filibuster on an extended health care
reform debate.
Rockefeller said last week after the Finance Committee concluded hearings
on health care reform that it was dangerous to ''play to a bipartisan spirit
... if we keep saying that we need a bill that will get 75 votes'' as Moynihan
has suggested.
"A huge and controversial bill that is comprehensive and has meat in
it probably won't get more than 52, 53 or 54 votes, he said. "If you are
saying you can't get 75 votes then you are saying we'll do a little
insurance reform and call it quits.'
Moynihan forced the issue Tuesday by calling a meeting of Senate Finance
Committee Democrats to see if they wanted to move ahead with a bill "along
the president's lines'' or continue discussions with GOP members. Although no
vote was taken, the Democratic conclave ended with agreement to continue
Moynihan's strategy, according to one participant.
'We've decided that we should continue to talk among ourselves but that
we should also have a lot of emphasis on bipartisan conversations," said Sen.
David Boren, D-Okla., who, along with Sen. Bob Kerrey, D-Neb., recently signed
on to a GOP health care measure sponsored by Sen. John Chafee, R-R.I.
Moynihan has not indicated a preference for any of the alternative health
care plans that have been proposed. But he seems to be leaning toward a
measure that would reform the existing insurance system with or without the
requirement that all employers provide coverage.
During a year of hearings on the health care reform issue, Moynihan said,
COMM/RESEARCH
ID:2024562239
MAY 18'94 15:24 No.004 P.03
"I found myself thinking we are filling out a health care system, not
creating one.''
"I don't have any problem with mandates except the votes aren't there,'
he said.
Moynihan said he believes ''we can get an agreement" on insurance reform
that, among other things, would eliminate pre-existing condition restrictions
on coverage, guarantee continued coverage for workers who change jobs, and
allow everyone to pay the same premium rate regardless of previous medical
condition.
**** filed by:GN-F (--) on 05/17/94 at 17:34EDT ****
**** printed by:WHPR (197) on 05/17/94 at 18:03EDT ****
PAGE
2
2ND STORY of Level 1 printed in FULL format.
Copyright 1993 Information Access Company;
Copyright The New Republic Inc. 1993
The New Republic
October 18, 1993
SECTION: Vol. 209 ; No. 16 ; Pg. 20; ISSN: 0028-6583
LENGTH: 5796 words
HEADLINE: The access capitalists - influence-peddling: the next generation; The
Carlyle Group; Cover Story; Company Profile
BYLINE: Lewis, Michael
BODY:
When you first meet David Rubenstein, you have to force yourself to remember
that as a young staffer in the Carter White House he believed that the best
thing in the world to be was a public servant. In those days he was known mainly
for his unwillingness to go home at night. One of his former White House
colleagues describes him as "the personification of the sheer, boring insistence
that enables people to rise to the top.' He himself says that he was "the first
one to arrive on the first day of the administration and the last one to leave
on the last," though he didn't, as was rumored, actually live in his West Wing
office. He became famous, briefly, when a magazine article described his ascetic
daily regime, which included eating dinner from White House vending machines.
"Machine food is underrated," he said. That did it. A sperm bank called from
California and asked him to contribute a specimen.
But then Carter lost and Rubenstein became just another Washington lawyer,
peddling influence on behalf of clients he didn't care about with causes he
didn't believe in. "I found it demeaning," " he says. "It was legalized bribery.
You'd go up to talk to a senator and the minute you got back to your office the
phone would be ringing and it would be the senator's aide asking when you might
be able to throw a fund-raiser." So in the middle of 1987 he and Stephen Norris,
a Washington lawyer who worked for the Marriott Corporation, opened their own
merchant bank.
"Merchant bank" is a term of art that obscures more than it describes; the
one thing merchant bankers don't do is bank. Rubenstein and Norris planned to
insinuate themselves into the Wall Street fad of buying companies with money
borrowed from real banks: leveraged buyouts. It hardly mattered that neither man
had any experience on Wall Street. By the middle of 1987, just about anyone
could rent space and declare himself a financier, and just about anyone did. "I
thought I had a pretty good i.q. myself," says Rubenstein, "and people were
making a lot more money than me who I thought maybe weren't so smart."
Six years later The Carlyle Group --the name was inspired by the New York
hotel and chosen because, like "merchant bank," it sounded old and
established--holds a majority stake in a dozen or so companies, which employ
about 45,000 people and generate about $ 5 billion in revenues annually,
principally from the United States government. But what Rubenstein has done is
in a way less impressive than whom he's done it with. He employs former
Secretary of Defense Frank Carlucci, former Secretary of State James Baker,
former budget director Richard Darman and many lesser rolodexes: the son of
TM
LEXIS·NEXIS®
LEXIS-NEXIS®
LEXIS·NEXIS®
Services of Mead Data Central, Inc.
PAGE
3
The New Republic, October 18, 1993
Bahrain's ambassador to the United States, a former U.S. ambassador to nato and
so on. Colin Powell is the most recent big shot considering an offer from
Carlyle. Former Treasury Secretary Donald Regan, former Bush Campaign Chairman
Fred Malek, former first son George Bush Jr., former cia Director Robert Gates
and current sec Chairman Arthur Levitt are advisors to, investors in or board
members of Carlyle's companies. Vernon Jordan and Bob Strauss, the Tweedledee
and Tweedledum of Washington Insiderdom, are on the list of references Carlyle
includes in its press kit.
The Carlyle Group, in short, has become a kind of salon des refusees for
the influence-peddling class. It offers a neat solution for people who don't
have a whole lot to sell besides their access, but who don't want to appear to
be selling their access. "Jim Baker wouldn't have joined us if we lobbied," says
Rubenstein. The former Carter operative is right. He is able to attract
political celebrities such as Baker, Carlucci and Darman precisely because he
has found a way to exploit their connections without seeming to be doing so.
Almost unwittingly, he has helped to create the finest specimens of a new social
type: the access capitalist.
The access capitalist enjoys a number of advantages over his progenitor, the
Washington lobbyist. For a start, he stands to become very rich, very quickly.
The lawyer-lobbyist merely rents his influence. The access capitalist
effectively sells the present value of all his influence, in perpetuity, each
time he makes a phone call. What's more, the access capitalist can plausibly
represent himself as a higher social type--a businessperson rather than an
influence- peddler--which gives him an edge if he decides to return to politics.
But per- haps best of all for those who have spent their lives in politics, the
access capitalist doesn't really need to know much about business. Wall Street
has proved brutal to the many beginners, such as David Stockman and Larry
Speakes, who have gone there to work from Washington. That true capitalism
requires something more than connections is the source of Carlyle's appeal: only
a merchant bank that trades more on whom one knows rather than on what one knows
can provide a real home for the access capitalist.
My first meeting with the man who runs what must now be the best game in town
occurred beneath one of the English hunting scenes that decorates his lobby.
Rubenstein has an almost charming disregard for conventional charm. He shakes
hands unhappily, his eyes aimed into his carpet. He doesn't often smile; when he
wants to convey the idea of a smile, he grimaces. This he did as he began his
monologue, which lasted four hours, with a couple of short breaks for questions.
It opened: I've thought more about what I was going to say to you than I do
before I go in to negotiate a deal. Everyone you've talked to has called me. I
figure you will go one of two ways with your story. You could write a story
saying, what are all these former government officials doing making all this
money? Or you could say, who are all these bozos who think they know how to
manage money? I called Jim Baker and asked him what he thought about your story.
He said there was no way that you were going to write anything nice about us
because The New Republic hates him. Now, he grimaces brightly if you were
writing for another publication you could write a story about how all these
smart guys had got together and were making all this money. You ought to think
about that. You could tell it as an adventure story. How a bunch of smart guys
got together, raised $ 5 million and started something
He then went on shallow background to dispute what I thought I had learned
about The Carlyle Group. First he argued that he and his partners, most of
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whom had no previous experience in finance, had made so much money that they
would never be able to spend it all. Then he reversed himself, sensing perhaps
that quick success was implicitly damning: the more successful they were the
more loaded the question of whether Jim, Frank, Dick and the others had been
exploiting their connections. The conversation flipped back and forth. One
moment Rubenstein was rich, the next he was poor. One moment The Carlyle Group
was struggling to make ends meet, the next it had amassed profits of more than $
1 billion in just six years. Four or five times he stopped himself to say,
apropos of nothing, "I don't spend money. I don't enjoy spending money. The car
that I drive is an 11-year-old Honda." On and on this went, while outside, the
rush-hour traffic on Pennsylvania Avenue collected and then dispersed.
The way Rubenstein tells it, the creation of Washington's leading merchant
bank was good old-fashioned American entrepreneurship, similar to, if more
modest than, Bill Gates's founding of Microsoft. But this is one of those
half-truths that contains even less truth than a lie. The Carlyle Group has
passed through several distinctly original phases of money-making, each more
grandiose than the last, none of which would have occurred in a properly
functioning capitalist economy. The first of these was what is known jokingly
around the Carlyle office as The Great Eskimo Tax Scam of 1987. The Great Eskimo
Tax Scam grew out of a brief, curious tax loophole that permitted Alaskan
companies owned by Eskimos to sell their losses for hard cash to other American
corporations. By offsetting the Eskimo losses against their gains, American
corporations were able to avoid income taxes. All of a sudden there was a
business in matching up profitable American corporations with Eskimos.
Rubenstein and Norris spotted the window of opportunity and leapt through.
Since no one likes to pay taxes, finding the corpo- rate buyers was easy. The
trick was to flush out the loss-making Eskimos. Through a friend in Washington,
Rubenstein plugged himself into a group in northern Alaska that had discovered a
dubious technique for showing tax losses on idle property. (The Internal Revenue
Service now challenges the validity of the Eskimos' accounting.) To persuade the
Eskimos to deal with him, Rubenstein flew them to Washington and put them up in
a fancy hotel on the condition that they listen to his pitch. In less than a
year Rubenstein and Norris shuffled between $ 1 billion and $ 2 billion dollars
of dubious Eskimo losses into profitable American companies, for which they took
a 1 percent fee, or between $ 10 million and $ 20 million. "I wouldn't be
surprised if they made more on that than they've made on everything else since,"
says a Carlyle associate. According to Rubenstein, "It gave me and some of the
others here the confidence that we could compete in the investment world."
Still, he only acknowledges his debt to the business of tax avoidance after the
subject has been raised. The official company literature--and his own oral
history of the firm-fails to mention The Great Eskimo Tax Scam.
About the same time he was romancing the Eskimos, Rubenstein was raising $ 5
million from a handful of big investors, mainly friends. ("David really
leveraged his old political connections to raise money," says a friend who
watched him do it and who, like nearly everyone else in this article, spoke only
on the condition of anonymity.) At least part of his appeal was that he would be
able to exploit the false, but common, perception among foreign investors that
they need Washington insiders to facilitate their American business deals.
Explaining to Forbes in 1991 why he had committed funds to such an unusual
operation, Arthur Miltenberger, the chief investment officer for the Mellon
family, Carlyle's most important investor, said, "I was intrigued by a merchant
bank based in Washington, d.c. Foreigners have to come to Washington. (The
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son of the Mellon family's general counsel now works for Carlyle.)
But Rubenstein wanted to do more than just grease the skids in Washington for
credulous Arab sheiks and gullible Japanese real estate tycoons. In 1987 the big
money was being made in leveraged buyouts. As if inhabited by some rogue virus
that transforms people into creatures of the zeitgeist, Rubenstein, former
devoted assistant domestic policy advisor to saintly ex-president Jimmy Carter,
hired a few bright young men to analyze publicly traded companies. When they
found one that seemed undervalued, they staged a raid.
In September 1987 The Carlyle Group, represented by Drexel Burnham, made
their first bid for Chi-Chi's, a chain of Mexican restaurants, but ended up
losing out to a rival bidder, also represented by Drexel. They made bids for
several other companies in various industries, rewarding themselves and their
backers modestly and annoying corporate managements greatly. "What do they add
to the picture?" an executive of one Carlyle target, a defense firm called
Fairchild, asked a reporter for The Washington Post. "These aren't guys who know
the industry." Though their desire to purchase companies (with borrowed money)
was sincere, they seemed relegated to the role of small-time greenmailers.
While it was true that in the 1980s a lot of people without much business
experience made a great deal of money buying undervalued companies with money
borrowed from banks, The Carlyle Group represented an extreme case. Even after
their hiring, in the summer of 1987, of William Conway, a highly respected chief
financial officer from mci Communications (actual business experience!), they
had little credibility with bankers or sellers. One of the biggest investors in
leveraged buyout firms told me that he has refused to finance their ambitions,
"principally because they didn't have enough experience actually doing it." Says
an investor who gave them money for one aborted hostile raid, "Was it a
successful experience? Not really. I wouldn't do it again." Finally, toward the
end of 1988 Carlyle spent $ 90 million to acquire a New Jersey chemical company
called Oakite Products, but only, as the firm now admits, by paying far more
than it was worth.
What transformed The Carlyle Group from a collection of third-stringers in
the leveraged buyout jamboree into a thriving enterprise of a kind that had
never before existed was, oddly enough, a political scandal. Fred Malek was
forced to leave the Bush campaign after The Washington Post revealed that in
1971, as a young aide to Nixon, he had toted up the number of Jews in the
Department of Labor statistics. (Nixon suspected a Zionist conspiracy there.)
Malek was friendly with Norris and Daniel D'Aniello, another Carlyle partner,
from his time at the helm of the Marriott hotel chain, and he sought temporary
asylum in the firm's offices. In early 1989 he persuaded his fellow Republican,
Frank Carlucci, recently retired as Secretary of Defense, to join the firm.
When Carlucci came on board, the defense industry was in turmoil, with as
many as fifty-five different businesses for sale. To profit from the disarray,
Carlyle needed to secure invitations to the sort of private corporate sales in
which the price is kept down by the absence of bidders. "Everyone in our
business is trying to figure out ways to avoid getting into an auction run
by Wall Street," Rubenstein explains. "Get into auctions--that's the way to lose
a lot of money. That's why Baker, Darman and Carlucci are so valuable to us."
Pressed to explain why a ceo looking to sell a division of his company would
entertain the call of a former Cabinet officer over one from a businessman,
Rubenstein says, "Let's suppose you're the ceo of g.m. and you get a call from
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Baker. You think, Hey the former secretary of state wants to come out and have
lunch with me. I'll get the photographer out
have my picture taken.
In other words, Carlyle's chief innovation was to insert the former defense
secretary systematically into leveraged buyouts. Carlucci was ideally suited to
the task. He still had a bit o' the old glitz. He possessed a reservoir of
goodwill with the defense contractors who were the main sellers of businesses.
(The result, no doubt, of his having spent billions of taxpayer dollars on items
for our national defense.) And his presence conferred a self-fulfilling
financial credibility on a deal. "Somehow bank presidents are reassured when
they learn there is someone involved who can place a call," says a leading
defense industry analyst. "An assurance from Carlucci that this business is
sound is more influential than the best financial analysis
There's an awful
lot of atmospherics in this business."
Over the next four years The Carlyle Group was able to exploit Frank
Carlucci's connections within the industry, and within the Pentagon, to turn
itself into one of the twenty-five largest defense contractors in the world. In
September 1990, a year or so after Carlucci joined the firm, The Carlyle Group
paid $ 130 million for a defense consulting subsidiary of Ford Aerospace called
bdm, which Ford had bought two years before for $ 425 million. (The CEO of bdm,
a close friend of Carlucci's named Earle Williams, threatened to walk out with
his top management unless his owner sold him.) In March 1992 Carlyle paid a
still-undisclosed sum for Vinnell Corporation, which trains the Saudi Arabian
Defense Force and allegedly has ties to the cia. (The company was owned by
another friend of Carlucci's.) In August 1992 Carlyle paid $ 215 million for
Vought Aircraft, which makes parts for the b-2 bomber and the c-17 transport
plane. In October 1992 Carlyle paid an undisclosed sum for gde, an electronics
division of General Dynamics. (Carlucci sits on the board of General Dynamics.)
In July 1993 Carlyle paid $ 400 million for Magnavox, a military electronics
division of Phillips. (Carlucci is friends with--and, again, formerly a big
customer of-the ceo of Phillips.)
Rubenstein claims--and others confirm-that The Carlyle Group earns returns
on these companies of between 40 percent and 60 percent a year. This is, of
course, in addition to the several million dollars in fees that it bills the
companies for the privilege of being acquired.
Perhaps a more telling indication of the value of Carlucci's connections is
how much better the firm has done with defense companies than it has with the
businesses it acquired without the same edge in access. After the disastrous
purchase of Oakite, the firm paid $ 300 million to Sears in April 1989 for the
real estate brokerage firm Coldwell Banker. Immediately the real estate market
crashed, Coldwell's revenues plummeted, $ 107 million in equity value vanished
and shares owned by Coldwell's employees (similar to those purchased by Carlyle)
fell from $ 10 to $ 2. For their next trick, Carlyle sunk $ 24 million of equity
into a chain of radio stations called Four Seasons Communications; nearly all of
that money is now gone. Also in 1989, the firm bought Caterair, the world's
largest in-flight catering business, from the Marriott Corporation. They billed
the company $ 8.6 million for the privilege of leveraging it to the hilt; but
then the airline industry fell out of the sky and Caterair lost several big
customers to bankruptcy. (Rubenstein claims to have hidden profits in the
company of $ 250 million. Another investor in the deal, when I related the
number, laughed and asked, "He really said that?" Wall Street's nickname for
Caterair is "Craterair.")
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Probably only Rubenstein and his partners know for sure whether their gains
in defense offset their losses elsewhere. In late 1989 three of the firm's
original four major institutional investors asked for their money back, leaving
the Mellon family as the sole outside partner. In 1991, according to two
well-placed sources, Carlyle almost failed to meet its payroll; the firm was
saved by a $ 2 million fee from a Saudi prince whom they had represented during
the Gulf war in the purchase of shares in Citicorp. (Rubenstein denies the
payroll crisis.)
Though Rubenstein announced several times over the next eighteen months that
Carlyle was raising two investment funds totaling $ 2.3 billion, the firm failed
to raise a dime. The main reason is that it hasn't completed a successful
leveraged buyout by selling a business back to the public for a profit,
presumably because there have been no profits for the taking. Rubenstein puts a
noble face on the situation, saying that he is a long-term investor who does not
want to sell: "If we were in the business of cashing in we'd have sold bdm," the
most successful and most advertised of his acquisitions. This would be more
admirable if it were more true. By prior agreement with the seller, Carlyle is
not permitted to unload bdm until sometime in 1994, and Carlyle partner William
Conway told me that the firm would probably sell bdm as soon as it could.
What Rubenstein freely admits is that there is no money to be made buying
companies at a fair market price and then managing them more efficiently. Money
is to be made buying companies cheaply. Carlucci has enabled Carlyle to buy
cheaply into the defense industry. Baker may be more broadly useful. As
Rubenstein says, "Baker and Carlucci both have the ability to call any ceo in
America. But Baker just puts us in a different league." Baker (like Darman) is
new to the business, however, and so is not fully developed as an example of how
little success in this line of work has to do with ordinary business principles.
Frank Carlucci, on the other hand, may be the closest thing there is to a
pure study of the market value of political contacts. He has spent all but two
years of his career as a government bureaucrat. He has held jobs in every
administration from Kennedy to Bush and rose, without leaving many footprints
(except for his insistence that after a press leak everyone take a lie-detector
test), through the State Department, omb, new, the cia and dod. His first big
career break reads like a literary invention. Riding with fellow foreign service
officers through the Congo in 1960, his car hit and killed a cyclist. A mob
formed around the car and, in the ensuing melee, Carlucci was nicked in the back
with a knife. He was decorated by his government for heroism. His service in the
Congo brought him to the attention of Prime Minister Cyrille Adoula, who,
surveying the photographs of Cabinet officers in the White House state dining
room in early 1963, asked President Kennedy, "Ou est Carlucci?"
Carlucci's rise in government was unimpeded by his tendency to botch things
up the few times he was thrust into anything remotely resembling a business
problem. Presiding over the federal flood relief program that followed Hurricane
Agnes in 1972, for example, he became the subject of a scathing series of
articles in The Washington Post by Jack Anderson, who described in hilarious
detail "the bureaucratic havoc wrought by Frank Carlucci, a human windstorm out
of Washington." Before he became vice chairman of The Carlyle Group, he had
held two jobs in the free market. After graduating from Princeton (he and Baker
were both in the class of '52), he spent a few months as a trainee with the
Jantzen swimsuit company--years ago he told reporters he had quit because he
didn't like business. And before he accepted his final Defense Department
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posting, he spent two years, from 1983 until 1985, as president and chief
executive officer of a subsidiary of Sears called Sears World Trade.
Sears World Trade was the giant retailer's attempt to compete with Japanese
trading companies in shuttling goods around the world. "His job was to ride hard
on 180 people and prevent them from overrunning their budget," says Rod Hills,
who oversaw Carlucci's work at Sears. "He couldn't do it." "I think they're
klutzes," an unnamed analyst at E.F. Hutton told The New York Times at the time,
in a colorful but typical assessment of the venture. By the time Sears World
Trade closed, it had dropped a cool $ 60 million. Carlucci now says that Sears
World Trade was "a good experience" but that "it was hard to have an
entrepreneurial company in a big bureaucracy." A Sears employee who watched his
work closely now says that "Frank's a nice guy, but he's got to be the worst
businessman I've ever met."
Yet by some miracle of corporate politics Carlucci has remade himself into
the darling of the American ceo class. He sits on the boards of thirty-two
companies. A typical day in Carlucci's life-described by Kathleen Day of The
Washington Post-consists of racing back and forth to the board meetings he's
meant to attend at the rate of one per day. Meetings in a doctor's office by
speakerphone! Conference calls from National Airport! Frequent flier miles! (He
says he doesn't have time to use them.) So much for so little. "People think you
make a lot of money out of boards," he says. "You don't, you know." That remark
reveals as much as anything how thoroughly Carlucci's standards have changed
since he left public office. From just nine of his board memberships he receives
annual fees of $ 342,000 plus perks and pension benefits.
I spent an hour with Carlucci at his Carlyle office, which put me in mind,
probably unfairly, of one of those special stage sets they used to design to
make Alan Ladd seem tall. À toy cannon given to him by the officers and soldiers
of the 109th Artillery guards the door; a miniature oriental rug lies on the
floor; a tiny statue of Columbus gesticulates on the sideboard. Between the
statue and the three letters of gratitude from Ronald Reagan, there rests a
framed National Journal cover of the diminutive Carlucci leaning back in an
armchair, hands clasped behind his head in the classic pose of corporate porn.
Beneath him are the words: "In Control"--the one thing he most clearly is not.
Carlucci's success, like that of other professional board members, depends
entirely on going along with the people who actually are in control. Of his
ridiculous number of board memberships he gives this revealing account: "All
these things just happened. For example, Bill Anders from General Dynamics came
in. He sat right there and said, Frank, I need your help because here's the game
plan and I need support on the board for it.' Same thing with Upjohn In any
case, Carlucci hardly has time to be in control. Apart from his board
memberships and his commitment to Carlyle, he has opened his own investment bank
in Bulgaria, and who knows what else. "I'm part of a group that advises Korea
secretly," he said, blowing the secret. "I mean we meet behind closed doors with
prominent Koreans."
Of course, the reason Carlucci--and now Baker-can work on so many fronts at
once is that he doesn't do much more than make a few phone calls for each deal.
One imagines Carlucci saying to a potential seller or lender the sort of things
he said to me: "Les Aspin and Bill Perry have called me several times to ask my
advice about the defense budget." (Perry, the deputy secretary of defense,
oversees procurement. He is now deciding, for example, how much to spend on c-17
transport planes, built partly by Vought Corporation, a Carlyle Group
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company.) Carlucci's advice to the Defense Department is reassuring for owners
of defense-related businesses. "I think the cuts in defense spending--I know
they're too deep," he says. "You are going to destroy the coherence of the
military if you implement these cuts."
It's a bit of a mystery what access capitalists say or do during those
precious seconds when they are fully employed, since no one involved in the
deals has any incentive to expose himself. This gives Rubenstein the confidence
to claim that, no matter how long I looked, I would find no case in which
Carlucci, Baker and the others used their political connections on behalf of The
Carlyle Group. "It's not fair to say that we're lobbying the government," he
said. "That's not what we do." He's right--the use of influence is usually much
more subtle. Still, I didn't have to look far to disprove his claim. One piece
of Carlyle's business fell briefly into the public domain. And it nicely
illustrates the manner in which political people who turn their hands to finance
are able to blend their former public roles with their private interests.
In the early part of last year The Carlyle Group, in partnership with
Thomson csf, the French government-owned electronics company, purchased the
missile manufacturing and aerospace divisions out of the bankruptcy proceedings
of the ltv Corporation. Itv's prized missile technology was what the Pentagon
calls a "black box program," which means no one from outside is meant to know
what's inside. Because the French are notorious both for the theft of industrial
secrets and for the sale of advanced weapons to all takers, the purchase was
challenged in Congress on national security grounds. That Carlyle was paying an
extremely low price for its half of the deal, while Thomson was paying through
the nose for the missiles, heightened suspicion that the French buyers, despite
their promises not to peer into the black boxes at Itv, were, in effect, buying
American military secrets.
Hearings into the deal were to be held by the Senate Commerce Committee.
According to one committee staffer, the first sign of Carlyle's clout came when
Senator Ernest Hollings, the committee's chairman, "received an ominous sounding
phone call from someone who said, I want you to know that Arthur Levitt owns
Roll Call. (Roll Call is an influential Capitol Hill publication and Levitt,
now sec chairman, is a Carlyle investor.) During the hearings similar messages
were delivered to staffers, though never by a Carlyle employee. "They were very
subtle," says the staffer.
Carlyle appointed Frank Carlucci to testify on behalf of the partnership, a
move that was a bit strange because, of the several Carlyle partners involved,
he knew the least about the deal. In response, the Commerce Committee decided it
required someone of equal stature--perhaps another former defense secretary--who
might be more objective. "At first we thought it wasn't going to be a problem,
but then we couldn't find anyone to testify,' says a person involved in the
process. "But it was a problem I had the sense that Carlyle had spoken to all
of our sources."
In addition to the interested parties, the committee heard the testimony of
two independent expert witnesses: Frank Gaffney, a former defense department
official, and Alton Keel, a former ambassador to nato. Gaffney came down
strongly against the deal, and was scathing about Carlucci's role. ("The one
thing that people like Frank Carlucci know how to do is to work the system," he
says now.) Keel came down strongly in favor of it. "Al's testimony was 50
striking," says Gaff- ney, "that afterward I asked him if he had any interest
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in the transaction. He said he did not." Following a hunch, a participant in the
hearings telephoned The Carlyle Group and was immediately put through to the
firm's newest associate--Alton Keel. The hearings occurred on May 14. According
to one Carlyle partner, Keel had joined Carlyle in February. Yet during the
hearings Keel kept this seemingly relevant data to himself.
But it was Carlucci's manner, in both the Senate and the House hearings, that
revealed the most about the mindset of the political bigwig turned business
tycoon. He was at once a businessman representing his own interests, and those
of the French, and a kind of ex officio public official. "I've been working with
this subcommittee since 1977," he explained in his House testimony before a
subcommittee of the Armed Services Committee, "when I first became deputy
director of the cia. I think the members of this subcommittee are well aware of
my commitment to U.S. national security
I
am
absolutely
convinced
that
this
deal will add to the capability of our defense industrial base." During the
hearing, after a Congressman claimed he had seen a secret Defense Department
study recommending the rejection of the sale, Carlucci left the room, called his
friend Donald Atwood, the undersecretary of defense, returned to the room and
reported that his friend did not oppose the acquisition.
Although Carlucci recalls having been grilled mercilessly on both sides of
the Hill, he was for the most part treated with deference. There was one
exception. Hollings: I could not possibly see, and I am sure Mr. Carlucci cannot
see, General Schwartzkopf being employed by Saddam Hussein to train his troops.
Why should we allow you to come in now, as a former secretary of defense, and
take over our defense technology for France? Carlucci: Senator, I resent that
question. Hollings: I do not resent it. That is a very serious question.
Carlucci: I devoted a lifetime of service to my country. Hollings: Yes, sir.
Carlucci: I rose up through the civil service ranks. I have seen a bayonet
jammed in the face of my daughter in service to my country. I have been
arrested. I have been stabbed. I have been brought in to clean up the mess after
Iran-contra. I would not do anything to undermine the security of this country.
Propped up on a coffee table in Carlucci's office is a framed letter from
George Bush. It says how sorry the president was to hear that Congress had
stymied Thomson's purchase of Itv's missile systems (which it did), but how
happy he was to hear that Carlyle had found an American partner for its deal
(which it did). The letter is another one of those inside jokes--like The Great
Eskimo Tax Scam-that the outsider doesn't get. "No one but Carlyle could have
gotten this thing as far along as it went," says Gaffney.
My second session with Rubenstein began much like the first, except that he
kept himself on the record. In the three weeks between our two encounters he and
other Carlyle employees had placed a sensational number of defensive phone calls
to my friends, colleagues and potential sources. "The last time we met," he
began, "I told you that you could go one of two ways with your story 50
which is it?"
But before I could answer, he was off and running: "I'm concerned that the
tone of the article will be that what I've done is illegal, unethical and
immoral. I just think it's unfair. I've been very careful to make sure that
Baker isn't out raising money in the Middle East
I've
leaned
over
backward
so far to avoid using government contacts. I didn't want anyone to be able to
write an article saying we were trading on our connections."
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I have no doubt that Rubenstein's concern for appearances is sincere. The
access game is growing more complicated as the seriously well-connected juke and
jive to adapt to the nation's moral climate. The distinctions they make grow
finer all the time. Of course, the point of all these distinctions is that they
don't require any truly well-connected person to forego his one shot at the main
chance. Rubenstein may not have asked Baker to pass the hat in the Middle East,
but he is passing the hat in the Middle East, and implicit in that pitch is that
James Baker works for him.
Perhaps the best indication of the nature of The Carlyle Group's business
is that each week it receives hundreds of resumes from Washingtonians as free of
financial sense, and as frustrated with conventional influence peddling, as its
founders once were. "I get resumes from some of the biggest names in town," says
Rubenstein, "lawyers who are making $ 800,000 a year. They call and say they'll
come and work for free. It's almost embarrassing."
Finally, I was able to ask Rubenstein a question. I asked if it was true, as
I'd heard, that he told people he wouldn't consider returning to public service
until he had made $ 50 million. "I don't think I said that," he said. "What I
said was that someone in the Bass family said that when you make $ 50 million
you have a different perspective on life."
As the doors were closing behind me at The Carlyle Group, he asked me his
final question: "How do I keep it from being a cover story?"
GRAPHIC: Cartoon
SIC: 6153 Short-term business credit
IAC-NUMBER: IAC 14217067
IAC-CLASS: Magazine
LANGUAGE: ENGLISH
LOAD-DATE-MDC: January 13, 1994
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NOMINATION OF LAURI FITZ-PEGADO
*Senate proceedings*
(CRXPRESS 05/25/94 p.S6299; 167 lines.)
[pS6299]
NOMINATION OF LAURI FITZ-PEGADO
Mr. FAIRCLOTH Mr. President, today the Senate debates the nomination of
Sam Brown to be U.N. Ambassador to the Conference on Security and Cooperation
in Europe. His history of supporting regimes which are hostile to the United
States is shameful. But at least as unfortunate is the fact that he is not
alone. In their own way, other nominees have equally shameful pasts. That is
worth exploring in the context of the Sam Brown nomination.
A good example is the nomination of Lauri Fitz-Pegado to be Assistant
Secretary and Director General of the U.S. Foreign and Commercial Service in
the Department of Commerce.
Mr. President, Lauri Fitz-Pegado has orchestrated lies to Congress. She
has served as a lobbyist for the Communist government in Angola. She worked
for the murderous Duvalier regime in Haiti, a regime which has left us with
the tragic legacy we are dealing with today.
Mr. President, this is just the tip of the iceberg. She has done much
more. She has been a hired gun for disreputable foreign interests. She has
deliberately attempted to mislead Senators about her past. She has taken an
active role in orchestrating perjured testimony before a congressional
committee.
In short, Lauri Fitz-Pegado has disqualified herself from service in the
position to which she has been nominated.
None of these facts and allegations were disclosed either to Chairman DON
RIEGLE, or ranking Republican ALFONSE D'AMATO, or to the other members of the
Banking Committee when her nomination was voted on there.
Mr. President, today I will talk about only one of the reasons why her
nomination should be returned to the Banking Committee for further review.
When the Senate is aware of this and other facts, it will know what many
already know; America can do better than Lauri Fitz-Pegado. In fact, it could
hardly do worse.
A reason-which by itself should be sufficient to reject the nomination of
Lauri Fitz-Pegado-is her role in orchestrating perjury before Congress and
the U.N. Security Council as the representative of "Citizens for a Free
Kuwait."
In 1990, after the Iraqi invasion of their country, the Kuwaiti Government
in exile formed "Citizens for a Free Kuwait". They hired the lobbying firm of
Hill and Knowlton to attempt to influence public opinion in the United States
toward entering the conflict. Lauri Fitz-Pegado was in charge of the effort.
Her strategy was to use alleged witnesses to atrocities to tell stories of
human rights violations in occupied Kuwait. Using their testimony live and on
video news releases, she orchestrated what has come to be known as The Baby
Incubator Fraud.
She first coached a 15-year-old Kuwaiti girl, identified only at the time
as Nayira, to testify before Congress that she had seen Iraqi soldiers remove
Kuwaiti babies from hospital respirators.
Nayira claimed to be a Kuwaiti refugee who had been working as a volunteer
in a Kuwaiti hospital throughout the first few weeks of the Iraqi occupation.
She said that she had seen them take babies out of incubators, take the
incubators, and then leave the babies on the cold floor to die.
Nayira's emotional testimony riveted human rights organizations, the news
media, and the Nation. That incident was cited by six Members of the Senate
as reason to go to war with Iraq. However, it was later discovered that the
girl-who had only been identified as an escapee from occupied Kuwait-was in
fact the daughter of the Kuwaiti Ambassador to the United States. It also
turned out that Lauri Fitz-Pegado had concealed Nayira's real identity.
Since then, every reputable human rights organization and journalist have
concluded that the baby incubator story was an outright fabrication.
Even a study commissioned later by the Kuwaiti Government could not
produce a shred of evidence that the Ambassador's daughter had managed to
sneak back into occupied Kuwait in order to do a few weeks of volunteer work
in a hospital overrun by bloodthirsty Iraqis.
When the perjured testimony was discovered by John MacArthur of Harpers
magazine, and later reported by the television news program "60 Minutes",
Fitz-Pegado first maintained that she had believed the girl's story, and that
she hadn't meant to deceive anyone.
But, Hill and Knowlton later said that they did know about Nayira's family
ties, but that Congress wanted the fact withheld.
They blamed Congress for their lies. What is more, they put on a repeat
performance in front of the U.N. Security Council on November 27, 1990.
In the testimony before Congress, they claimed they could not fully
identify who the witness was because they wanted to protect her family that
was supposedly still trapped in Kuwait which was totally false. In front of
the United Nations, Lauri Fitz-Pegado abandoned that pretense and instead
employed witnesses who testified using false names and occupations.
The most important of these phony witnesses was a man who called himself
Dr. Issah Ibrahim. With Lauri Fitz-Pegado there in New York, he claimed to
have personally buried 40 babies pulled from incubators by the Iraqis.
Dr. Ibrahim told the Security Council that he was a surgeon. But after the
war when the incubator scam was exposed as a total fraud, he admitted to
being a dentist who never buried any babies.
Fitz-Pegado did not inform the Banking Committee of this baby incubator
scam. However, in an on-the-record interview with John MacArthur of "Harpers"
magazine, she was taped admitting that she was involved in the lying to
Congress.
She said she took "total responsibility and much pride in everything that
Hill and Knowlton did." She went on to say that she thought any negative
comments about her were sexist and racist, and said she wanted to make it
clear that "I don't work in the kitchen, I am not a clean-up woman."
But when she was pressed to account for the lies, she said-and I quote-"Oh
come on John. Who gives a ***"-and then she used a word that is so foul that
I will not repeat it on the Senate floor.
I will make an unedited copy of that interview available to any Member of
Congress or the press who would like it.
Mr. President, as a supporter of our country's involvement in the Gulf
war, I am offended that Lauri Fitz-Pegado believes that those kinds of
illegal and unethical activities were necessary to get this country to face
the threat of Saddam Hussein.
I am more offended, however, that she thinks that her orchestrating lies
to Congress is no big deal and that anyone who says it is racist and sexist.
I believe that if the other members of the Banking Committee, Democrat and
Republican alike, had been aware of even this limited set of facts during the
confirmation process, her nomination would have been rejected by that
committee.
Now they will hear even more about Lauri Fitz-Pegado's involvement with
the Marxist Government of Angola. They will hear about her ties to the bloody
Duvalier regime in Haiti. They will hear other facts and allegations about
her past that she has deliberately attempted to hide from Congress.
If confirmed, Lauri Fitz-Pegado would have control over a global network
of 200 trade offices in 70 countries. Mr. President, my opposition is not
based on party or on ideology. It is based on the fact that there are few
people in America who have less business being in charge of our Nation's
trade secrets than Lauri Fitz-Pegado.
Lauri Fitz-Pegado's nomination should be returned to the Banking Committee
for further and full review. If it is not, then facts that are far more
embarrassing to Ms. Fitz-Pegado and to others in government will be revealed
in other speeches and in long and protracted debate on the Senate floor.
Mr. President, the Senate Banking Committee was hoodwinked by a
professional scam artist.
Lauri Fitz-Pegado should be asked to disclose her entire past, and then be
prepared to defend what I believe is an indefensible past.
Mr. President, in the near future I will inform the Senate of other
aspects of Lauri Fitz-Pegado's past.
When the puzzle is completed, Senators will know about Lauri Fitz-Pegado
what others already know about Sam Brown; America can do better than Lauri
Fitz-Pegado, and it would be hard to do worse.
I thank the chair and yield the floor.
[pS6300]
SENT BY :DEPT OF COMMERCE
; 5-16-94 ; 9:14AM
;
OLIA @ OSEC-
94562604;# 2/ 4
13 Or ,
UNITED STATES DEPARTMENT OF COMMERCE
UNITED STATES of /
Office of the General Counsel
Washington, D.C. 20230
MAY 13 I994
MEMORANDUM FOR:
Carol C. Darr
Deputy General Counsel
FROM:
Barbara S. Fredericks
Assistant General Counsel
for Administration
SUBJECT:
Recusal of Lauri Fitz-Pegado Regarding Her
Husband's Business Activities
An editorial in The Wall Street Journal dated May 15, 1994,
questioned whether Lauri Fitz-Pegado, nominee to the position of
Assistant Secretary and Director-General of the U.S. and Foreign
Commercial Service, International Trade Administration, should
have specifically recused herself from matters concerning the
business activities of her husband, Fernando H. Pegado. As
explained below, ethics statutes and regulations specify when a
recusal involving a spouse's activities is appropriate and
Ms. Fitz-Pogado's actions are consistent with Chose rules.
There are two restrictions regarding a spouse's interests or
activities:
O
18 U.S.C. § 208 (a criminal conflict of interest statute)
requires an employee LO recuse herself from any matter
likely to have a direct and predictable effect on her
husband's financial interests; and
5 CFR 2635.502 (part of the Government-wide standards of
conduct) requires that, if an appearance of impropriety is
likely, an employee must recuse herself from working on a
matter if one of the parties is:
-- a member or her household or a close relative
-- an entity for whom the spouse serves as an:
-- officer,
-- director,
-- trustee,
-- general partner,
-- agent,
-- attorney,
-- consultant,
-- contractor, or
-- employee.
Regarding Mr. Pegado, he did not serve in any of the above-named
categories (officer, director, employee, etc.) with a company or
other entity in 1993; therefore, Ms. Fitz-Pegado did not need to,
and could not, recuse herself from matters concerning any
particular entities based on her husband's activities.
SENT BY:DEPT OF COMMERCE
; 5-16-94 ; 9:15AM ;
OLIA @ OSEC-
94562604:# 3/ 4
2
Ms. Fitz-Pegado did issue a comprehensive ethics agreement which
specifically states that she will not participate in matters
affecting entities which were clients of hers during the previous
year, consistent with Government-wide ethics standards.
Ms. Fitz-Pegado will, of course, comply with all ethics
regulations, including recusing herself from matters in which her
husband's employer is a party at any time in which he is serving
as an employee or a consultant and the employer is a party before
the Commerce Department.
However, absent such a relationship, recusal regarding a
potential future employer is not required by the standards of
conduct nor is it even feasible. It is difficult to imagine how
such a recusal would be crafted and, even if one could narrow the
universe of potential employers or clients, a recusal based on
such potontialitics would create an unreasonable and unnecessary
restriction on Ms. Fitz-Pegado's duties and establish a stricter
ethics standard than those set forth in Government-wide
regulations or those which apply to other Government officials.
The question of the scope of the recusal and her husband's
activities was specifically discussed with Ms. Fitz-Pegado by
myself and other ethics attorneys on my staff, who prepared her
disqualification. We advised that her husband's activities would
not be reflected on the recusal because there was no current
employment or other business relationship between her husband and
a specific party which would trigger the recusal provisions of
the ethics regulations or the conflict or interest statute.
Ms. Fitz-Pegado has agreed to seek specific advice from agency
ethics officials before participating in any matter if her
husband should acquire a financial interest or become a
consultant or employee of a specific entity.
We have been advised that Mr. Pegado's field concerns petroleum.
Although not required by ethics rules, to avoid any possible
appearance problem, Ms. Fitz-Pegado has agreed to seek advice
from an ethics official before participating in any petroleum
industry issue. To date, she has not participated in any such
issue.
SENT BY:DEPT OF COMMERCE
P use
count.
operad
mercial
she replied. "He's seif-employed. His
what he does and who his clients are.
business dealings." When we asked
forthcoming about all of my husband's
ject. First she said that whe's "been
don with Ms. Fits Pegado on this sub-
We had a Sairly circular conversa-
tant" with a Washington office.
unclear. except that be is e "commal-
Lauri Fitz in 1988. What be does now is
state on company, before marrying
employed at Sonangeri. the Angolan
the 1980s, Mr. Pegado was in London,
bushand, Fernando H. Fegado. During
much about the financial affairs of her
It's been more difficult to find out
respectable- higger-2nd a the #
Pegade is pretending that she worked
& Knowhen in - so Ms. Fitz-
shady dealings. Gray was acquired by
SEC and the Justice Department for
firm under investigation then by the
worked for Gray & Company. a PR
Between 1882 and 1985, nine actually
ington. from 1983 to 1983. Not quite.
ton, the powerhouse PR time in Wash-
says that she worked at HE & Knows-
a-Pugudo Comprem, year s F
On the official forms submitted last
find a shred of evidence for have me
and that no human-rights group could
daughter of the Kuwaiti ambassador
later turned out that the an was the
off incubators and killing them. It
nesses traqi soldlers tearing bables
Kuwaiti girl who said she had will
testimony before Congress by a
ment before the Gulf War. Ms. Fits-
came on behalf of the Kuwaiti govern-
known activities
Her most well-
also represented).
fwitch Mr. Brown
regime in Halti
and the Duvalier
ernment of Angola
as the Marxist gov.
half of such clients
Gucci Guich on be-
1580s, she inhabited
Brown. During the
owned by Mr.
visory board at WKYS-FM. partially
titumi Convention and serves on an ad-
Brown at the 1988 Democratic Na.
Ms. Fitz-Pegado worked for Mr.
A former Foreign Service officer,
trade offices in 69 countries.
Service,
which
Mr.
general of the U.S. and Foreign Com-
ministration's nominee for director
ter area: Lauri Fitz-Pegado, the ad-
cruise is an even bigger ethles disas-
ing 8 board Mr. Brown's Commerce
information superfighway. Now com-
tions companies eyen as no payes the
ture of his holdings in telecommunica-
operator who hasn't disclosed the na-
ment is Ron Brown. a former Beltway
Heading the Commerce Depart-
Dream on.
runs
meet the Caesar's wife standard.
istration to appoint trade officials who
swamps. we would expect the admin-
top efficials. To traverse these ethical
campaign donors and employers for
companies that may be past or future
pledged to do-and promoting specific
has Administrator C Cunton The
moting U.S. business in the abstract-
MT
There's a fine line between pro-
U.S.
forate.
than any campaign-finance bill.
vailing ethics climate in Washington
non will toll a lot more about the pre-
How the Senate handles this nomina-
of her husband's business affairs).
cuse herseit from policy affecting any
cusals (she hasn't piedged yet to re-
husband's, and the extent of her re-
Pegado's business dealings and Der
some tough questions about Ms. Fits
hope that senators will at least ask
As her consination salts along. we
of who's - which side of the deats.
life. we worry s lot about keeping track
private "partnerskips" as a way of
starts talking about ensterining public-
tion. When the Clinton Administration
enterprise. suiping planes of the ao
side both public budgets and private
along- pliot Beltway Firm rish, ohio of
carned about the growing population
the productive world. We are very con-
crosystems and Southwest Airlines of
however. run toward the Sun MI-
people making money. Our tastes.
We abviously have nothing against
Faircieth will fight M hard.
to the Door. where GOP Sen. Lauch
To preseased THAM If Them week. I
Instion is likely soon, partiags even
that a vote on Ms. Fitz-Pegado's BOBY
Dealarth of Missouri. to n appears
publican on his committee, Sen. Jack
received support from the ranking Re-
pressure to approve her and be basn't
Chairman Hollings has come under
her role in the Kuwaiti hoax.
rats-raised strong reservations about
Hollings and Byron Dorgan-Democ-
nearing on Feb. 10, Senators Ernest
also approve her nomination. At her
the Commerce Committee. which must
tes LBSL year. she ran into opposition at
Don Riegte's Senate Banking Commit-
After winning easy confirmation from
been un the slow DOBITO to China-so far.
it's no wonder her nomination has
problems dogging Ms. Fitz-Pegado,
Considering the outstzed ethics
band's dealings.
to divulge anything about her hus-
to that starviard as long as she refuses
way a judging whether the 3 living up
talk about them." The public has no
potential conflict. I would be happy to
husband has any clients that have a
Fitz-Pegado's airy promise: "If my
vious. And it can't be dealt with by Ms.
potential for a conflict of interest is ob-
Mr. Pegado has no current clients, the
Though Commerce statters assure us
ternational business ventures.
Her husband bas been engaged in in-
salesman for U.S. products abroad.
She is seeking to become chief
prospect looming of a Haltian protec-
more forthcoming. especially with the
spouse, Ma. Fits-Pegudo should be
ings of an officaholder and those of a
distinction between the business deal-
ethics-in-government laws make no
pose a conflict of interest. Since
sure that an official's spouse didn't
gone to extraordinary lengths to make
administrations, ethics officers have
incume must be disclosed). But in past
to disclose a spouse's clients (though
Normally & nominee doesn't have
ness dealings.
don't want to go into any of his busi-
off the conversation. saying, "I really
working on." Then she abruptly cut
clients depend on the projects he's
Who is Lauri Fitz-Pegado?
REVIEW & OUTLOOK
OLTA @ USEC-
H
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
October 22, 1993
PRESIDENT NAMES FERRARO TO UNHRC
President Clinton announced his intention today to appoint
former Congresswoman Geraldine Ferraro to be the U.S.
Representative to the United Nations Human Rights Commission
(UNHRC), with the rank of Ambassador.
"In addition to earning her place in our own country's
political history, Geraldine Ferraro has been a highly effective
voice for the human rights of women around the world, said the
President. "As alternate head of the U.S. delegation to this
year's session of the UNHRC, she spoke eloquently on behalf of
women in the former Yugoslavia, and brought all of the parties
involved to a consensus position. I look forward to her
continuing her strong and much-needed advocacy in this new
position."
Geraldine Ferraro was first elected to Congress from New
York's 9th Congressional District in 1978, and served three terms
in the House before leaving after her 1984 Vice Presidential
campaign, in which she was the first woman ever to be nominated
for national office by a major party. Since leaving public
office, she has remained an active participant in the nation's
foreign policy debate, serving as a board member of the National
Democratic Institute of Foreign Affairs and a member of the
Council on Foreign Relations.
Before entering public life, Ferraro taught elementary
school in the New York City Public Schools, while putting herself
through Fordham Law School at night. After spending thirteen
years at home raising her three children, she joined the Queens
District Attorney's Office.
She is currently managing partner in the New York office of
Keck, Mahin & Cate, a national law firm, and serves on the boards
of the Fordham Law School Board of Visitors, the New York Easter
Seal Society the Planned Parenthood Federation of America, the
National Breast Cancer Research Fund, and the Pension Rights
Center. Ferraro and her husband, John Zaccaro, have three
children. She is 58 years old.
# # #
House. The America for the 1990s
Clintons' business history, compared
year price tag of $100 billion!
a brillian
would break with its unredeemable re-
with their current, large responsibili-
What do we know about SSI-disability
what that
recipients? The typical recipient is in his
cent past.
ties, is SO much "petty financial jug-
comes cle
or her 30s, has a high-school education or
Forget even Whitewater for a mo-
gling." They right. On the evidence
stand and
less, and, in contrast to the familiar image
And the #
ment. Recall early last year when the
so far, it is all very penny-ante. And
of someone who is blind or in a wheelchair,
orably to
President and Mrs. Clinton decided
there seems to be so much of it.
was granted benefits based on a mental
ural and e
disorder. Fully one-third of adults on SSI
omy. At t
disability have mental illnesses and an-
the rest is
Reno's Surrender
other one-fourth have mental retardation.
the fact tl
Young people with mental disorders are
change sy
In "A Man for All Seasons," some-
But the internal review, conducted
the fastest-growing segment of the adult
SSI population.
one asks Sir Thomas More if he would
by four career attorneys, concluded
Thanks to a 1990 court order that loos-
abandon the law to defeat the devil.
that, The suggestions of incompe-
ened eligibility for children, youngsters
He says no, because once the law was
tence, improper motivation and
with disabilities are the fastest-growing
gone there would be nothing to pre-
wrongdoing are baseless. The [Din-
segment of the overall SSI population.
E
vent the devil from going after him.
gell] Subcommittee mistakenly relied
Stretching SSI in ways never contemplated
During
We thought of that famous scene
on dubious sources and incomplete
in 1974, 225,000 children with disabilities
ciety expe
last week after Attorney General Janet
analyses to question the ability and
(mainly mental disorders-including the
social path
integrity of career attorneys who
much-debated attention deficit disorder-
Reno sacrificed one of her top career
there was
and mental retardation) were added to the
prosecutors to appease Representative
made entirely appropriate prosecu-
significant
John Dingell. Neil Cartusciello (kar-
tive decisions."
rolls last year, triple the number in 1989;
nately, the
the total number of children on the rolls
gence of d:
tah-CHEL-o) resigned Friday as chief
Indeed, Mr. Dingell's jihad has re-
now approaches one million.
The prc
of the Justice Department's environ-
lied heavily on the testimony of a wit-
sult of a si
mental crimes section, largely because
ness who appears to have lied about
As some on Capitol Hill and in the press
the late 19
the Democratic House baron was lin-
his credentials. Raleigh Farlow, a sup-
have noted, even alcoholics and drug ad-
use was w
ing him up for a be-
posedly expert witness against the
dicts are finding their way onto SSI in
the young
heading. But in-
PureGro company in a pollution case,
growing numbers. According to the Gen-
self-indulg
stead of standing by
claimed in sworn testimony to have "a
eral Accounting Office, the number of SSI
of the 197
medical degree from Far Eastern Uni-
alcoholics and drug addicts with disabling
her man, Ms. Reno
when the h
complications, such as chronic depression
use was al
all but held the ax
versity" in the Philippines. But maybe
or organ damage, tripled between 1990 and
came incr
as it fell.
not. Mr. Farlow acknowledged to us
mid-1993, rising to 69,000 from 23,000.
rately-see
This
episode
that, "I'm not a licensed physician,"
While SSI does not present the prob-
economic o
matters because it
although "I do have the training."
lems in the forefront of the welfare reform
Parents
demonstrates how
However, the registrar of Far Eastern
debate-teen pregnancy, out-of-wedlock
community
much Ms. Reno
in Manila tells us that Mr. Farlow at-
births, and the cycle of dependency-it
helped to
bends to political
tended that school for only 18 months
nevertheless presents problems that de-
opinion ab
pressure at the Jus-
(not the required four years) and was
mand public attention.
followed, a
tice Department.
John Dingell
never granted a diploma.
While few would deny assistance to
many stat
people with disabilities that is well-tar-
Justice's internal review concluded
tidrug stra
Presidential crony Webb Hubbell first
geted and designed to help those who can
use went d
ran the shop and now Mr. Dingell is
that, "Mr. Farlow would have been a
work do so, SSI falls short of these aims.
early 1990s
showing he has sway even over the
disastrous witness for the govern-
For adults, at the point of entry to the pro-
dropped by
fate of career prosecutors. Mr. Cartu-
ment." In other words, Mr. Cartu-
gram, SSI creates strong disincentives to
and 1992, n
sciello's forced resignation should
sciello and his colleagues did the right
work, disincentives that are no less potent
almost 80%
worry anyone who thinks that deci-
thing in letting PureGro plead on a
than in AFDC. Once on the SSI rolls, peo-
young peop
sions to prosecute shouldn't be subject
misdemeanor charge rather than pur-
ple receive cash assistance, but no reha-
But ear
to Congressional whim.
sue a felony trial that they would have
bilitation, job training or employment ser-
ceived bad
For appearance's sake, of course,
lost. Now savor the irony: Mr. Dingell,
vices, services that are no less critical to
use among
promoting work among people with dis-
the rise. Si
the resignation is being advertised as
oft-time critic of scientific fraud,
abilities than among mothers on AFDC.
sharp inc
a friendly parting. Ms. Reno ex-
claims that based on Mr. Farlow's ex-
And in providing cash support with basi-
eighth-, 10
pressed her "deep gratitude" to Mr.
pertise Mr. Cartusciello should have
cally "no strings attached," SSI tends to
well as an
Cartusciello, who wrote thanking Ms.
thrown the book at PureGro?
perpetuate the very conditions (alco-
lants, LSD
Reno for her "many courtesies." But
The big picture here is whether the
holism, drug addiction, or certain forms of
reported a
our sources say that Ms. Reno told Mr.
Reno Justice Department is going to
mental illness, for example) that preclude
emergency
Cartusciello last week he had no
stand for nonpolitical prosecution. On
work and promote dependency.
that heavy
choice but to step aside. We're also
this point, we'd like to see the Senate
Further, whether in assessing an
These f
told that Lois Schiffer, who has been
adult's ability to engage in "substantial
the federal
Judiciary Committee question Ms.
gainful activity" or a child's ability to en-
the case a
nominated as an assistant attorney
Schiffer at her confirmation hearings
gage in "age-appropriate activities of
law, and to
general for the environment, told him
about just when she learned about the
daily living," the government's decisions
its citizens
the same thing weeks ago.
PureGro case and Mr. Farlow's dubi-
about who is disabled and to what extent
tration has
This capitulation is especially
ous credentials. If she agrees with Mr.
are costly, complex, inherently subjective,
fighting th
strange because it follows an internal
Dingell, she will have shown herself
and frequently disputed.
fundament
Justice review that exonerated Mr.
too much a sycophant for the job.
For these reasons and more, Congress
sider the r
Cartusciello of the allegations Mr.
Rick Filkins, a line prosecutor who
would do well to put SSI on the table when
Days
worked with Mr. Cartusciello, sums up
it takes up welfare reform later this
tration cut
Dingell has been making against him.
The basic Dingell charge, which is
spring. SSI is a critical if neglected aspect
Control Po
the entire sorry episode like this: "In
of the welfare crisis in America.
Soon
largely a political agenda, is that Mr.
the confrontation between Justice and
General Ja
Cartusciello and his fellow prosecu-
John Dingell, Justice first blinked,
Ms. Weaver is resident scholar and di-
wanted to I
tors haven't harassed enough "corpo-
then cowered sheepishly and then laid
rector, Social Security and Pension Studies,
sentences
rate polluters."
prostrate." Whose head will be next?
of the American Enterprise Institute.
federal cri
THE WASHINGTON POST
FRIDAY. APRIL 8. 1994 A2
Mark C. Hansen
ly Children'
Smear at Justice
nariya, 39, executive secretary
al Africa, was honored at the
The reputations of career prosecu-
defend its line prosecutors), the verdict
to the satisfaction of any fair-minde
da, Burundi and Zaire. She
tors in the Department of Justice's Envi-
is rendered in the press: The Environ-
person, that the prosecutorial decision
ronmental Crimes Section have in re-
mental Crimes Section went soft on
in the Environmental Crimes Unit wer
troops, despite threats on her
of Rwanda's and Burundi's
cent months been sullied with a dreadful
corporate criminals. Case closed.
made on the merit (or lack of merit) o
ere reported killing people in
canard. They have been accused of
For all its tabloid appeal, the story
the cases. Not a peppercorn of impropr
idan capital, Kigali. Alison
subverting criminal cases against corpo-
never made any sense. First, let's con-
ety can be found in any of them.
uman Rights Watch, made
rate polluters-in substance, taking a
sider the supposed villain of the piece.
The report stands as a complet
nariya there, and later wrote
dive, for (Republican) political ends.
Neil Cartusciello has logged more than a
vindication of Cartusciello and thos
Now, with the long-awaited release of
decade of government service as an
who made the tough calls with him. I
a comprehensive report prepared by
shows that he did much to make Envi
this morning. She called me
experienced and respected federal pros-
ronmental Crimes a more effective
ecutors from outside the Environmental
t the Rwandan president's
battle-ready unit, that he improver
Crimes Section, the facts can be sepa-
criminal enforcement of environmenta
she was afraid violence
rated from the sound bites. Those facts
her every hour or so after
law and that every decision he made
point to one conclusion: that politically
evacuated from her home,
was based on the lodestar principle
motivated second-guessing of career
whether there was evidence sufficien
gardener. She had already
prosecutors should be left to the stump
J. peace-keeping force) and
to permit a jury to convict, beyond a
speech. It should never have been al-
omeo Dallaire, that he was
reasonable doubt. Where people were
lowed to seep into the halls of the
with Joyce Leader of the
not prosecuted, they were not prose
Department of Justice.
to help but suggested that
cuted for the right reason: because the
Were it not for the reputations and
called HRW [Human Rights
government lacked the evidence. So
serious issues involved, the episode
it you could in Washington. I
ber judgment is what we expect from
ent about 6:30 p.m. and was
might seem almost comical. Unruly
career prosecutors. That is why we
grand jurors go on a rampage, picket the
e.
want people like Cartusciello, not Din-
Denver federal courthouse and break
le more and more frightened.
gell, deciding who gets prosecuted.
into the headlines with the charge that
esidential guard in the neigh-
Neil Cartusciello decided late last
they weren't allowed to indict corporate
calling everyone I could think
week that he had fought the good fight
officials at Rockwell International (after
I diplomats and church people
long enough and announced his resig-
the company pleaded guilty and paid a
ways without success.
BY BORGMAN
nation. The Department of Justice he
substantial fine). Then a junior law pro-
she said that she had seen
has served so well responded (at least in
fessor with a talent for publicity but no
house two removed from
assistant U.S. attorney in Manhattan
public) with two cheers for the depart-
experience in federal or state prosecu-
cluding one who worked as a
and, most recently, as chief of the Envi-
tion-he had never tried a case-sur-
ing chief. He and his colleagues can
coalition of Rwanda, and his
ronmental Crimes Section at Justice.
nevertheless take their vindication and
faces to claim that he would have prose-
the corner of her street.
cuted the individuals and indeed that he
Like any effective career prosecutor,
move on, secure in the knowledge that
id entered the house next
Cartusciello has endured his share of
would have prosecuted lots of people
their performance has withstood the
whom the Environmental Crimes prose-
accusations. Most prominent has been
most searching scrutiny.
rying to figure out alterna-
cutors decided not to charge.
the criticism that he was too tough as a
But the report cannot undo the dam-
with her feet, she could not
Then Rep. John Dingell (D-Mich.), in
prosecutor of alleged corporate wrong-
age this fiasco has done to the revered
ne, to open the door for them
a fine display of modern-day McCarthy-
doers, such as the principals of the
principle of prosecution free from poli-
ouse. I heard gunshots out-
ism, gets into the act in the role of
Princeton/Newport securities firm and
tics. It brings a bittersweet end to an
door. I begged her to stay
Robert Freeman of Goldman Sachs. I
environmental crusader-and manages
episode in which the Justice Department,
ke care of my children. I
to get a lot of network TV face time in
served with him as a federal prosecutor;
for the first time in history, breached the
up.
the bargain.
the thought that he would lie down on a
wall between branches of government
parately within minutes of
case is ridiculous.
Disaffected junior prosecutors, not
and subjected its career employees to a
it Monique, then a man took
second got only a man who
surprisingly, surface to complain about
Now four distinguished career pros-
congressional witch hunt.
their supervisors, under the protection
ecutors from outside Environmental
Those who follow Cartusciello will no
of Rep. Dingell. In an astonishing abdi-
Crimes, with no ax to grind and no
doubt remember the pathetic spectacle
in, but the phone rings for a
cation, the Clinton Justice Department
reason to whitewash decisions made in a
of line prosecutors-and their law-
1.
decides to require its line prosecutors to
prior administration, have rendered a
yers-being paraded up to the Hill to
sidential guard rounded up
answer for their decisions directly to
real verdict. In a thorough (325-page)
answer for their actions. And as career
z Charles Shamukiga, a lead-
Dingell and his people, many of them
and comprehensive report, they have
prosecutors across America step up to
ociation des Volontaires de la
press-hungry tyros with little or no
determined that Neil Cartusciello did
the hard decisions that are their daily
ghborhood were on foot,
experience in the prosecution of federal
the right thing every time. After inter-
task, will the lesson of Environmental
y killed people where they
criminal cases.
views with all of the persons involved
Crimes cause them to hesitate in mak-
ter people who were said to
Hearings are held, and dark allega-
and based on all of the available evi-
ing fair and objective decisions on which
arimana's reputation.
tions of "political" decisions to wink at
dence in the cases in question-and,
cases to prosecute? It's almost too much
ill alive, but will continue to
the activities of environmental criminals
equally important, with the benefit of
to hope it won't.
me, I will try to write a press
are bruited about on the 6 o'clock news.
judgment that can only be forged in the
ill care.
With no evidence (and with a cowed
searing heat of years of federal criminal
The writer is a Washington lawyer
Department of Justice doing nothing to
trials-these lawyers have established,
and a former federal prosecutor.
William Raspberry
vard Singapore
Equality for Haitians
Environmental Crimes Controversy Still Shadowing Reno
By Jim McGee
least two of the six cases reviewed, for example, the re-
Washington Post Staff Writer
INSIDE:
viewers did not question trial prosecutors about the par-
Among the many problem areas that confronted Janet
ticulars of the cases.
Reno when she took over a denigrated and dispirited Jus-
"They didn't talk to the guy who was responsible for
tice Department early last year, the Environmental Crimes
THE JUSTICE DEPARTMENT
the case," said ECS trial lawyer Howard Stewart, who
Section (ECS) was one of the thorniest.
was the lead counsel in the ChemWaste case. Stewart
Officials at its closest federal partner, the Environmental
said he was interviewed about general issues within the
Protection Agency (EPA), had charged that under Republi-
section, but that when he brought up ChemWaste, the in-
can administrations the section had been soft on big busi-
H
ow the controversy over the
prosecutions in Washington, rather
ternal reviewers told him they would get into the specif-
ness polluters. A number of federal prosecutors, including
Environmental Crimes
than in the field." Then-Associate
ics at a later date. They never followed up, he said.
some of the section's own lawyers at Justice's main office in
Section grew:
Attorney General Webster L.
A former ECS attorney, Rebecca Dewees, now an as-
Washington, also were concerned. A powerful congression-
Hubbell defends the ECS staff as
sistant U.S. attorney in Los Angeles, was criticized by
al Democrat, Rep. John D. Dingell (Mich.), chairman of the
House subcommittee charged with oversight of the EPA,
lawyers who are "very dedicated to
name in the report for her work on one of the six cases.
1992
bad already accused the section of less than aggressive pur-
enforcing the laws of this country"
She said she was never questioned about the details of
suit of "significant" cases and of stonewalling congressional
Sept. 10: The investigations
and says "there have been no
the prosecution, told she would be criticized, or given a
inquiries.
subcommittee of the House Energy
disputes brought to my attention
chance to respond. She said she had a single telephone
Reno had arrived at Justice as an agent of change, and
and Commerce Committee says
with the U.S. attorneys offices."
conversation with reviewer Mary Incontro on March 7,
soon staked her personal reputation for probity on the task
ECS failed "to pursue aggressively
three days before the book-length report was printed
Dingell
Reno
a number of significant
and turned over to Reno.
of restoring the public's trust in a department whose repu-
1994
tation for delivering professional, non-partisan law enforce-
environmental cases" and that ECS
The only question Incontro asked her about the case,
1993
ment was under challenge.
supervisors displayed "a lack of
March 14: A report prepared by a
Dewees said, was, "Now that I was a more experienced
Asked about the environmental crimes section at her
Jan. 4: The investigations
Justice Department internal review
environmental law expertise." Also,
lawyer, would I still have indicted the case? And I said
subcommittee of the House
confirmation hearing on March 9, 1993, she had said it was
that ECS had "serious morale
panel concludes that decisions in
yes, I would."
Committee on Science, Space and
the six cases under review were
important. "I want to see that the laws of this country are
problems" and failed to explain to
The report said the tension between the Justice De-
enforced in every way possible to protect the environ-
the Environmental Protection
Technology criticizes plea bargain
"reasonable." It says congressional
partment in Washington and the field began during the
ment," she told the Senate Judiciary Committee.
I
Agency why cases were not
involving actions at the Rocky
criticism questioning the motives
Reagan administration under former ENRD Deputy As-
look forward to building an environmental and lands divi-
Flats, Colo., nuclear weapons
of ECS lawyers has hurt the
prosecuted.
facility. The Justice Department
sistant Attorney General Richard Leon who, it said, was
sion that can pursue these cases vigorously."
program but there is "no basis" for
Yet more than a year after Reno's confirmation, the situ-
Oct. 19: A House Judiciary
says the case is still under review.
that distrust.
perceived as "philosophically opposed to aggressive crim-
inal enforcement."
ation at ECS is far from resolved, and to some of her critics
subcommittee issues a
Nov. 3: In a second House Energy
March 31: At a press briefing,
"It is regrettable that they didn't take the opportunity
it has become a symbol of what they claim is diffused and
consultant's report that says
and Commerce subcommittee
Attorney General Janet Reno says,
to interview me," said Leon, who called the report's
lackluster leadership. Among the critics is Dingell's sub-
Justice preferred to seek the
hearing on ECS, Chairman John D.
"I think the most important thing
characterization of him "clearly false" and described as
committee, now investigating the environmental crimes
indictment of corporations rather
Dingell (D-Mich.) says the
for this nation is that we move
"inaccurate" its account of one case in which he was in-
section itself. It has charged Justice under Reno with block-
than individuals and inhibited
department's current policy on the
ahead now to really pursue
volved.
ing its efforts and has subpoenaed documents it says Justice
wetlands prosecutions. A Justice
supervision of environmental cases
environmental enforcement in a
had refused to turn over.
The report also criticized former Baltimore U.S. At-
official calls the report "an obvious
means ECS "would have a
vigorous, fair, firm manner and
An internal Justice review of the ECS controversy was
torney Breckenridge Wilcox, who said, "I was not inter-
political hatchet job commissioned
stranglehold on the majority of
that's what I'm dead set and
released March 14, six months after the date it was prom-
viewed and what they said about me was not correct."
by a Democratic congressman."
federal environmental crimes
determined to do."
ised. It called for immediate changes in a staff whose work,
The internal reviewers declined to be interviewed on
it said, was being hurt by internal acrimony and external
the record for this article. Reno has not responded to
suspicion. While it concluded that nothing "improper" had
THE WASHINGTON POST
written questions submitted two weeks ago.
occurred in specific environmental cases it reviewed, it de-
Department spokesman Carl Stern said the review
scribed several longstanding management problems, point-
ton-Gore campaign climbed on the ECS-bashing band-
ipants said was "unduly protracted and adversarial," ac-
was not intended to be a thorough investigation of the six
ed to "pervasive [internal] distrust at every level" and said
wagon. "The Bush administration is letting criminals off
cording to the report, and which led to a decision-making
disputed cases, but simply an evaluation of the "reason-
"individuals who should be working cooperatively toward a
the hook after they pollute our air and our water and our
process the report described as "destructive," Cartus-
ableness" of the decisions about prosecution in Washing-
common objective suspect each other's competence or mo-
land," said a campaign press release. "Worse still, the
ciello traveled to Alabama and persuaded the local U.S.
ton based on the information available to supervisors.
tivation."
Bush administration is letting politics get in the way of
attorney not to seek an indictment.
"The four reviewers believe that the report speaks for it-
In comments indicative of the bad blood that the issue
prosecutions."
"Reasonable minds could have disagreed in this case
self," Stem said. "And they believe that they interviewed
has provoked between a Democratic Congress and a Demo-
with respect to the probability of conviction," said the re-
[witnesses] that they deemed necessary and appropriate
cratic executive branch, Dingell told Reno in a January let-
Dingell Continues Oversight Offensive
port. "Mr. Cartusciello's judgment on the prosecutive
to interview." In recent weeks Reno has expressed her
ter that her department "has chosen to defend the policies
of the previous administration, has failed to chart a new
After the election, Dingell pressed ahead.
merit of this case was appropriate and defensible. As sec-
impatience with the persistance of a controversy that be-
course for this program and has apparently tolerated con-
The Bush administration had refused to allow subcom-
tion chief he was entitled to overrule [the prosecutor]."
gan under the Republicans. "What we want to try to do is
tinued harassment against various DOJ employees who
mittee staff to interview most of the trial attorneys in
In a recent letter to Reno, Cartusciello said the report
address any immediate concerns that people have and
have acknowledged problems or suggested improvements
the six disputed cases and resisted disclosure of Justice
"vindicated" his decisions and "refuted accusations of
then move on and try to address what is most important,
in the environmental crimes program."
Department documents about the cases. In one of her
mismanagement" in the section. "The report speaks for
which is the vigorous, fair enforcement," Reno said,
In one of the milder epithets senior Justice officials have
early official acts, Reno allowed the interviews and
itself," he said in an interview.
But the issue promises to hang on. The House sub-
used to describe Dingell, one recently called him a "legisla-
promised cooperation in the disclosure of documents.
The afternoon the report was released, Hubbell re-
committee is now reviewing ECS records that the de-
tive bully."
Meanwhile, Hubbell took over management of the is-
signed in the unrelated controversy with his Little Rock
partment recently turned over under subpoena, and is
Meanwhile, the point man on the ECS controversy, As-
sue. He appointed a committee of four career attorneys
law firm.
pursuing allegations that three of the trial attorneys who
sociate Attorney General Webster L. Hubbell, resigned
to review the environmental crimes program and to ex-
gave statements about the SIX cases were later subjected
three weeks ago in the face of allegations by his former Ar-
amine Dingell's assertions that the six cases "are indica-
Report Perpetuates Dispute
to retaliation inside the department. And last Friday,
kansas law firm of client overbilling and expense irregulari-
tive of serious management and performance problems
Instead of putting to rest congressional criticism of the
ECS Chief Cartusciello announced his resignation.
ties.
plaguing the federal criminal enforcement program."
In an interview last month Reno defended her delibera-
The results were promised by last September.
department, the report's methodology virtually guaran-
Staff researcher Barbara J. Saffir contributed to this
live management style and said she wanted to have the re-
At the time, Dingell applauded the internal review, but
teed that the ECS controversy would continue. In at
report.
warned Reno in a letter that "the Department, under
port before she made any changes. The way you restore
warned Reno in a letter that the Department, under
credibility is to make informed judgments," she said. "You
your predecessors, sought to undermine the indepen-
don't make snap judgments if you are going to do anything
dence of the Department's Inspector General, resisted"
about credibility."
some congressional inquiries and "dragged its feet" on
others. "This sorry record creates a substantial doubt as
LAST THREE DAYS!
Changes in Case Procedure
to the adequacy or credibility of any review conducted by
Department personnel in position prior to Inauguration
During the early 1980s, the nation's 94 U.S. attorneys
Day."
:rfect
handled environmental cases much as they did other
One of the most combative chairmen in Congress,
A SPECIAL EXCLUSIVE!
complex criminal matters. Their procedural Bible, the
with a particular interest in EPA's criminal enforcement
U.S. Attorney's Manual, authorized them to "commence
program, Dingell waited until November for Reno to act.
the prosecution of any" environmental case unless the as-
On Nov. 3, he held a hearing and declared that ECS had
sistant attorney general of the Environmental and Natu-
a "stranglehold" on environmental prosecutions through-
OUR FREE 7-PIECE GIFT
ral Resources Division [ENRD] asked for time to review
out the country.
the matter. Cases traditionally were developed through
Three former U.S. attorneys, all of them Republicans,
close cooperation between regional EPA investigators
testified that leaving ECS in charge of approving prose-
and U.S. attorneys in the field.
cutions was a mistake because it fostered micromanag-
FROM ELIZABETH ARDEN
The environmental division in Washington was free to
ing from the head office. Hubbell followed them to the
pursue cases with litigators from the Justice Depart-
witness table to explain that environmental crime now
ment.
had a "higher priority" at the department, but there were
A 50.00 value, these seven favorites are yours
Two events in 1987 changed all that. The Justice De-
"no plans to change" the current structure or responsibil-
partment in Washington set up its own full-fledged litiga-
ities of ECS. So far, Hubbell said, there had been "no dis-
with any Elizabeth Arden purchase of 17.50 or more.
tion section specifically for environmental crimes-the
putes" with the new U.S. attorneys in the field.
ECS-and then-Attorney General Edwin Meese decided
On March 11, Dingell's subcommittee subpoenaed the
to revise the U.S. Attorney's Manual.
documents he had sought for months, accusing the Jus-
Visible Difference Refining Toner
Lip Spa Lipcolor in Terracoita
One revision that surprised local U.S. attorneys was a
tice Department of stonewalling. He and the subcommit-
change that gave the Justice Department in Washington
tee's ranking Republican, Rep. Dan Schaefer (Colo.),
Red Door Perfumed Body Lotion
Flawless Finish Liquid Makeup
the explicit authority to approve environmental prosecu-
wrote to members of their respective parties on the Sen-
tions. Instead of having broad autonomy to seek indict-
ate Judiciary Committee, asking that the confirmation of
Ceramide Time Complex Moisture Cream
Dewy Finish SPF 4
ments and litigate cases, the prosecutors now had to first
Lois Schiffer as assistant attorney general for the Envi-
get approval from Washington.
ronment and Natural Resources Division be delayed.
Visible Difference Deep Cleansing Lotion
Folding Hair Brush with Muror Handle
Defense attorneys tended to prefer this arrangement.
Such confirmation delays in Congress have hampered
If they could not dissuade the local U.S. attorney from
Reno's efforts to reorient the department after 12 years
One gift to a customer, please Offer good while supply lasts.
seeking indictments, they could ask for redress from
of Republican rule. "With respect to the "expectations","
Washington. But it was hard for local prosecutors and
that she would bring change, Reno said recently, "one of
EPA agents to know what the standards for prosecution
the frustrations I have had" is getting assistant attorneys
were, and a number saw the decisions in Washington as
general confirmed.
ad hoc. Moreover, Justice often refused to supply EPA
with letters explaining why cases were not prosecuted.
Justice Releases Internal Review
Another source of tension was the appointment to the
environmental section of supervisors who had no experi-
On the morning of March 14, the department released
ence in environmental law, including Neil S. Cartusciello,
the long-awaited ECS review, a 325-page report. AI-
who was named ECS chief in 1991.
though the review attacked the Dingell subcommittee's
methods and characterizations, it confirmed that there
Complaints Brought to Congress
were management problems at ECS and suggested that
YORK
some of the past discontent resulted from Republican ap-
PARIS
After years of internal tension, the environmental
pointees who were "philosophically more reluctant" to
crimes controversy finally broke out into the open in
prosecute than their subordinates.
1992, when frustrated EPA officials and others com-
"As general characterizations go," the review said, "we
plained to Congress that supervisors at ECS had under-
think it is fair to say that from 1989 to 1992, Assistant
mined important cases by overruling more experienced
Attorney General [Richard] Stewart and Acting Assis-
trial prosecutors. Six cases were mentioned in particular,
tant Attorney General [Barry] Hartman [in charge of the
and Dingell's subcommittee studied each of them in
division during that period] took a more cautious and
depth.
conservative approach to prosecuting particular cases
Each case involved lengthy EPA investigations that
than others-including some career attorneys
would
resulted in the case agents, often with the support of
have followed."
prosecutors, wanting to proceed with serious criminal
Still, the report noted that while "decision-making" in
charges.
ELIZATE
the six cases could have "been improved," the outcomes
INSURED
Some indictments were, in fact, brought. But in each
reflected a "reasonable exercise of prosecutorial discre-
case ECS supervisors in Washington intervened on legal
tion."
or evidentiary grounds and opted for less significant ac-
For example, the report said, the proposed case
tion than sought from the field-either preventing in-
against, Chemical Waste Management Inc., a subsidiary
dictment entirely, negotiating plea bargains that brought
of WMX Technologies, the nation's largest disposal firm,
lesser penalties, or opting for civil remedies.
"illustrated management problems within the ECS" of
During the same period, another House subcommittee
the sort detected by the reviewers.
issued a consultant's report charging that ECS had dis-
Prosecutors and EPA agents had gathered "sufficient
Make an appointment
played a "pronounced failure to prosecute environmental
credible evidence to prosecute" the company and its offi-
for our Red Door Service
crimes to the same degree as conventional crimes."
cials for "a knowing violation of federal hazardous waste
Justice officials vehemently objected to the criticism
regulations" related to the handling of a herbicide similar
Consultation
and countered that members of Congress were trying to
to Agent Orange, the report concluded. Lawyers for
second-guess their prosecutorial discretion in legally and
ChemWaste argued that its employees made a good faith
and receive an additional bonus
factually complex cases. They were supported by a cho-
effort to follow ECS policy by responding promptly to
rus of defenders, ranging from the editorial page of the
discovery of the herbicide, by reporting the incident to
when you come in!
Wall Street Journal to defense attorneys who repre-
Louisiana authorities and by sending the chemicals to a
sented corporations charged with environmental crimes.
Lord & Taylor, Washington-Chevy Chase 362-9600 White Flint 770-9000 Fair Oaks Mall
legal dump site in Alabama for storage and testing.
Shortly before the 1992 presidential election, the Clin-
Tysons Corner Center 500-1150
After a 1992 prosecution review at Justice that partic-