March 21, 1977
Page 8333
OFFICIAL CONDUCT AMENDMENTS OF 1977
The Senate continued with the consideration of the resolution (S. Res. 110) to establish a Code of Official Conduct for the Members, officers, and employees of the U.S. Senate; and for other purposes.
Mr. ZORINSKY. Mr. President, I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. On whose time?
Mr. ZORINSKY. To be charged equally against both sides.
The ACTING PRESIDENT pro tempore. Without objection, it is so ordered. The clerk will call the roll.
The second assistant legislative clerk proceeded to call the roll.
Mr. NELSON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. ANDERSON) . Without objection, it is so ordered.
Mr. NELSON. Mr. President, I ask unanimous consent that the following Senators be added as cosponsors to Senate Resolution 110: Senators ROBERT C. BYRD, ALLEN, BROOKE, CASE, CHAFEE, CHILES, GLENN, HASKELL, METCALF, NUNN, PELL, and SASSER.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE addressed the Chair.
The PRESIDING OFFICER. Who yields time? I am told that the Senator from Maine has used his time on the amendment.
Mr. NELSON. The Senator from Maine has used his time on the amendment?
The PRESIDING OFFICER. His 1 hour, yes.
Mr. NELSON. I yield time from our side on the amendment, whatever is desired by the Senator.
Mr. MUSKIE. I should like 15 minutes to start with, and I think the distinguished Senator from Oregon would like to get involved in the discussion.
Mr. President, I ask unanimous consent that the privilege of the floor be granted to Jim Davidson and Charlie Jacobs of my staff during the consideration of Senate Resolution 110.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I thought it might be helpful at the outset of the discussion today to consider some of the editorial comment that has appeared in the press, with particular reference to the subject of my amendment. First of all, I emphasize the pending Muskie amendment is not designed to raise the limit on earned income. Much of the comment I read in editorials in the Washington Post, the New York Times,and so on, is addressed to my amendment as though that were its thrust.
This amendment accepts the committee test of what is reasonable, that is, that earned income be limited to 15 percent of the basic Senate salary, and applies it across the board to all outside income.
So when the New York Times refers to my amendment in these terms, it is simply serving its own editorial license for the purpose of making its own argument. In the New York Times editorial which appeared in the issue of March 17,1977, entitled "Senate Speechmakers and Coupon Clippers," there is this sentence:
If the Senate eliminates that ceiling, that is, the 15 percent ceiling on earned income, as Senator Muskie proposes, it will, in effect, be proclaiming to the public that the new raise is not enough, not even $66,125 is enough, we want more.
I make the point to the New York Times that is not what my amendment provides at all. My amendment provides that if $66,125 is enough for some Senators; it ought to be enough for all Senators.
But it is not my understanding, Mr. President, that what the committee was considering was putting a cap on Senate income. As a matter of fact, nowhere in its report does the committee say that it is recommending a cap on Senate income.Yet the argument which the New York Times features is just that: That there ought to be a cap on Senate income, except as to Senators who have unearned income sources from outside their Senate salary.
So I suggest the New York Times address itself to that proposition, the proposition that there ought to be a cap on senatorial incomes.
The majority leader makes a similar statement. He says that we are not in the business of trying to equalize Senators' incomes.
In that, he takes a somewhat different line than the New York Times. He says that we are not in the business of trying to equalize senatorial incomes.
The implication of the majority leader is that ED MUSKIE is in the business of trying to equalize senatorial incomes.
Not at all.
I made the point at the very outset of my remarks last Friday that this technique of getting at conflicts of interest was not my choice, but it was the committee's choice and since the committee chose that discipline, the 15 percent on outside earned income, it seemed to me a fair proposition to expand that discipline to cover all outside income.
So it is the committee that triggered this approach, not ED MUSKIE. The 15 percent idea was not mine. I did not invent it. I did not propose it. The committee, the majority leader and others associated with it have proposed it.
I say that if the majority leader does not believe we ought to be in the business of equalizing senatorial incomes, then he is inconsistent with his own proposition. The fact is that with respect to earned incomes, Senators are not all equal. Some Senators can command higher fees and more total income from this source than others.
The majority leader and the committee all say that we are going to equalize them, none of them can earn more than 15 percent above basic Senate salary, none of them, and none of them can earn more than $1,000 per individual lecture fee. The majority leader is in the business of trying to equalize the incomes of some Senators, but he is opposed to equalizing the outside incomes of all Senators.
So it is an interesting philosophical question as to which approach is equitable.
Even if I were to accept the suggestion that I am proposing to equalize the incomes of all Senators, is it fairer to equalize and limit the incomes of some Senators or is it fairer to do it for all Senators?
The majority leader has arrived at his own answer to that question, as has the committee, and I have a different answer.
But I do not think it is an answer to my argument to dismiss it as an attempt to equalize senatorial incomes.
The fact is, of course, that the pending amendment does not take anything away from anybody.
What the pending amendment does is to require Senators who derive outside income from income producing assets to put those assets in trust for their own benefit.
My amendment would not divest them of those assets as the committee proposal divests me of a source of income. There is no divestiture at all.
The amendment requires that income producing assets be put in trust.
Second, my amendment does not even divest Senators of the income from those assets. It merely provides that during their term in office, Senators with access to such income shall not receive more than 15 percent of their basic Senate salary and that trust income in excess of that amount be put back into trust and deferred and available to Senators when their term of office is over.
So my amendment does not divest them of either the asset itself or of the income from that asset.
The most that it does is to defer their enjoyment of the income until they have finished their Senate term, and the majority leader calls that an equalization of income proposal.
May I remind the Senator that the committee proposal divests me totally of earned income above 15 percent of my basic Senate salary.
My amendment divests no one of any income. It simply defers its enjoyment until the end of a Senate term. So there is no income equalization implication to the Muskie amendment.
The New York Times editorial makes another point on which I would like to comment.
Incidentally, Mr. President, I ask unanimous consent that the editorial be printed at this point in the RECORD.
There being no objection, the editorial was ordered to be printed in the RECORD, as follows:
SENATE SPEECH MAKERS AND COUPON CLIPPERS
If their mail is anything like ours; members of the Senate must know that the recent $12,900 Congressional pay raise is still hard for many citizens to swallow. How, then, can the Senate seriously consider — as it will begin doing today — a proposal that must make every member look as though he is trying to cash in even more on his official position?
The question arises in connection with Senate action on a clear, severe code of ethics for Congress. The House has already passed a commendable bill that includes a ceiling on Congressmen's outside earnings, such as fat fees for speeches, and a Senate committee has recommended a similar bill to the Senate. But now, a group of Senators led by Edmund Muskie of Maine have risen to battle. No fair, they say. Senators who make speeches should be treated the same as Senators who clip coupons. Either limit unearned income, too, or — preferably — eliminate any ceiling at all.
One may be personally sympathetic to less affluent members of the Senate, and yet reject this argument for reasons both of political appearances and of logic.
Just imagine the appearances if the ceiling is scrapped. A Senator now earns $57,500 a year. Under the proposed ceiling, he could also earn up to 15 percent of that in outside activity — another $8,625. If the Senate eliminates that ceiling, as Senator Muskie proposes, it will in effect be proclaiming to the public that the new raise is not enough; not even $66,125 is enough — we want more.
As to the matter of unearned income: It seems to us that earned income creates a more troubling ethical problem. While some members may have accumulated large investments since attaining high office, most did so before. But earned income, by definition, can only be achieved while one actually serves in Congress. While some members with unearned income may be influenced by an awareness of which companies are paying them dividends, that influence is usually remote and slight. But earned income often comes from speeches to business, union and other groups with specific legislative interests. While some members may spend time managing their investments, most do not. Earning outside income, however, takes time away from public business.
To say that unearned income is a less urgent problem is not to say it is no problem at all. Once the ethics code is in place, Congress should go on to fashion remedies for it, too. But "unfairness" is no justification now for eliminating the ceiling on earned income from the ethics code. Both the ceiling and the code have now been endorsed by a Presidential commission, two Presidents, the House of Representatives and the Senate leadership. In its own interest as well as the public interest, we trust the Senate will concur.
Mr. MUSKIE. There is another sentence in the editorial:
While some Members may spend time managing their investments, most do not.
On the basis of what evidence does the New York Times reach that conclusion? I would have no judgment on that question at all, because there has been no disclosure in the history of the Senate of these kinds of assets, except as Members individually have done so voluntarily from time to time.
There was no hearing record on this question. How would an editorial writer, in the ivory tower of the New York Times, reach this conclusion?
While some Members may spend time managing their investments, most do not.
If the editorial writer who wrote sentence has the evidence to support it, I should like to see it. I have never had assets of that magnitude. I have no personal way of knowing how much time one should devote to managing one's outside income producing assets. But I will state that if I had outside assets that produced more than $8,600 a year in income, I would spend some time watching those investments, changing them when necessary, forming judgments as to their viability.
Whether it is an oil and gas lease venture, or a speculative real estate venture, or an investment in stock, I cannot imagine myself not spending some time looking over those investments, changing them as my interests dictate or as my judgment suggests. I cannot imagine that does not consume some time.
If, as has been rumored, there are Senators with incomes of $50,000 to $100,000 a year or more from outside investment, is the New York Times telling me they spend no time managing those investments, changing them, examining them, evaluating them, reading the market?,
Even the committee refers to that kind of income as passive income. What, in heaven's name, is passive investment income? Perhaps a blind trust established by an ancestor, as to which you have no control except to receive a monthly check, may be regarded as a passive form of income. But if the assets should perhaps require somebody's management and that somebody is you, how can you do it responsibly, in your own interest, without spending some time at it? Not according
to the New York Times:
While some Members may spend time managing their investments, most do not.
How do you dismiss such a critical test of the equity of this proposal so casually? What God given judgment makes it possible for an editorial writer to make such a statement?
Then, there is the second sentence: Earning outside income, however, takes time away from public business.
Well, does it? Since I am one of those to be judged and sentenced under this bill, perhaps my own case is an appropriate measure of the fairness of that judgment by the New York Times.
Last week, in discussing my amendment, I gave some of the facts bearing upon my own time, and I have more here — just as a for instance.
The PRESIDING OFFICER. The timeof the Senator has expired.
Mr. MUSKIE. May I have an additional 10 minutes?
Mr. NELSON. Mr. President, I yield to the Senator such time as he may desire.
Mr. PACKWOOD. Mr. President, with respect to the time, I ask the Senator from Wisconsin this: Did not the majority leader say that Senator MUSKIE could have as much of the time under control as necessary?
Mr. NELSON. Yes. The Senator just used up the 1 hour that the Senator has on his amendment. I am yielding time from the hour that we have, and I will yield from the bill itself any additional time that anyone wishes.
Mr. PACKWOOD. I thank the Senator.
Mr. MUSKIE. In 1973, Mr. President, the Senate was in session 184 days. I missed 4 of those days on the lecture circuit. That is 2.8 percent of the time.
In 1974, the Senate was in session 168 days. I missed 2 of those days. That represents 2.38 percent.
In 1975, the Senate was in session 178 days. I missed 1 full day and 2 partial days, for 1.59 percent.
In 1976, we were in session 142 days. I missed part of 2 days — five-tenths of 1 percent.
During the last 4 years, we had 2,449 rollcall votes. I missed no more than 40 of those because of lecture fees, and not many of those 40 were decided by a close enough vote to make a difference.
I ask this of the New York Times and others who would judge us: On the basis of what evidence do they conclude that those Members who have income producing assets to which they must devote some time take less time to manage their own affairs than those on the lecture circuit, such as I, who have that kind of commitment to the public interest? Are they saying that we, somehow, should establish a standard requiring that no Senator ever miss a vote for any reason, that he should never miss a vote to tend to his own business, that 2 days out of 170 are too much to miss? What is the standard?
I have heard all this talk about the people expecting their Senators to be full time Senators. What is a full time Senator, or what should he be? The New York Times does not presume to bother with that insignificant detail. The Washington Post does not. Indeed, I cannot find any attention given to it in the Senate report. Nobody tells us what the test of a full time Senator is.
Only one test is suggested, and that is that those who receive earned income unavoidably miss a disproportionate amount of time that they should be spending on the Senate business, and those with unearned income never, on the face of it, miss time managing their own interests to the exclusion of their public duties. That is the judgment of the New York Times. Is that evenhanded? Is that objective? Is that dispassionate?
The New York Times has decided that we have to have a scapegoat in order to establish a code of ethics.
We have one, boys, we have one, and I guess I am one of them.
The Washington Post this morning published an editorial, and I ask unanimous consent that that editorial be printed in the RECORD at this point.
There being no objection, the editorial was ordered to be printed in the RECORD, as follows:
The most controversial issue in the current Senate ethics debate is how much senators should limit their
outside earnings, primarily speaking fees. This focus is encouraging. It suggests that broad financial
disclosure rules, a ban on unregulated "slush funds" and other tough provisions
in the proposed code have become much less controversial. It also shows that nowadays
Senators, compared to House members, are less inclined to practice law part time, collect large fees as
corporate directors or carry on other business activities that raise conflict of interest questions.
The senatorial specialty is speech making. The lecture circuit can be lucrative; in 1973, various groups paid senators more than $1 million in honoraria. In 1974, 22 senators earned more than $15,000 each that way. Because this raised questions of seemliness, Congress then limited honoraria to $15,000 per year and $1,000 per appearance. The ceilings were raised to $25,000 and $2,000 last year. The pending Senate code would bring the earned income limit down to 15 per cent of the official salary, or $8,625 — the figure already adopted by the House.
Sen. Edmund Muskie (D-Maine) and others argue that the lower ceiling would be unfair to senators who lack independent wealth. Either the $25,000 limit should be retained, they say, or unearned income should also be limited. Sen. Muskie's position is especially credible because he has spent 30 scandal free years in public offices, including posts with paltry salaries, and has taken pains to avoid investments that might involve the slightest conflicts.
Nevertheless, this argument has some flaws. Earned and unearned income are not alike. Stock dividends, for instance, flow at the same rate to all investors. Speaking fees do not. Moreover, honoraria are a direct result of one's official power and prestige, and often come from groups with a large interest in fostering senatorial goodwill. Majority leader Robert Byrd (DW. Va.), for example, is a pretty fair fiddle player. Yet as he said the other day, "I don't think any group of citizens would pay me $2,000 to play my fiddle for 15 minutes if I were a meat cutter or working in a shipyard or practicing law."
Of course, unearned income is not always conflict free. A lawmaker's actions can affect or be influenced by his investments, too, though the connections are usually more remote. While disclosure solves many problems, a super strict ethics code would require legislators to put their holdings in blind trusts, as top executive branch officials must do. The purpose of blind trust, however, is not to limit income but to separate personal gain and official activities. Since honoraria cannot be made "blind," a consistent application of the separation principle would include barring senators from getting any fees at all from groups with any interest in legislation.
That is not what Sen. Muskie and his allies have in mind. Their greatest concern seems to be preserving honoraria as an income supplement. But the point of the pay raise to $57,500 was to make official salaries more adequate and reduce the need or justification for getting payments from interest groups. Many people, in fact, consider the pay raise defensible only in exchange for greater congressional self-discipline. Thus, lower limits on outside earnings, while not as vital as full disclosure and other rules, are timely and reasonable.
Mr. MUSKIE. I must say the Post editorial is generous to me when they say this :
Senator Muskie's position is especially credible because he has spent 30 scandal free years in public offices, including posts with paltry salaries, and has taken pains to avoid investments that might involve the slightest conflicts.
I appreciate that. But the Post editorial concludes with this sentence: Thus, lower limits on outside earnings, while not as vital as full disclosure and other rules, are timely and reasonable.
Well, I must say when I read that sentence my impression of the editorial was very clear and simple: "You are guilty of no wrongdoing, Senator, but we are going to impose sentence nevertheless." Let me repeat, "You are guilty of no wrongdoing, Senator; nevertheless we think your income has got to go."
Is that not what it is? The editorial would have been better and more consistent, more logical, if they had left out that tribute to me.
I mean, they admit of no exceptions with respect to unearned income. They are not at all concerned about the possibility of conflicts related to unearned income. They say:
A lawmaker's actions can affect or be influenced by his investments, too, though the connections are usually more remote.
Even that sentence implies that occasionally even in the view of the Washington Post there might be a conflict of interest related to unearned income. But they are not so concerned that they would cut off the income or limit income related to investments. So with respect to a Senator whose tour of the lecture circuit does not raise any alarm with them they would impose the discipline, but with respect to this other form of income they would, No. 1, concede no close possibility of conflict of interest, and even if they could they do not think that to avoid it justifies imposing an income limit.
Mr. PACKWOOD. Mr. President, will the Senator yield?
Mr. MUSKIE. Let me make one other point and then I will yield.
Just the other day on the front page of the Washington Post there was a story with a headline "The Rich Man's Club." The whole implication was there were Members of the Senate with wealth, and so many of them that it was not exactly a healthy thing.
Now, what does the Washington Post say? That the Senators they were talking about were a wealthy few who accumulated their wealth on the lecture circuit. What was that story all about?
Mr. President, I ask unanimous consent to have the article printed at this
point in the RECORD.
There being no objection, the article was ordered to be printed in the RECORD, as follows:
[From the Washington Post, Mar. 14, 1977]
THE RICH MAN'S CLUB: FEW SENATORS LOSE MONEY IN OFFICE
(By T. R. Reid)
Patrick Leahy has used up half his savings. Gary Hart has had to struggle to stay even. But George McGovern has built up a comfortable blanket of financial security. And Daniel Inouye's net worth tripled over a 10 year period.
Those examples reflect the disparate results of a survey by The Washington Post of the personal financial implications of service in the U.S. Senate.
The survey, based on senators' financial disclosures and studies by various groups, shows that some senators have made considerable financial gains while in office, while some others have experienced relatively tight financial straits — particularly during their first years in Congress.
For the most part, the survey shows that Senators — even before receiving their new $12,900 pay raise — are a prosperous group of men who are far better off financially than most of their constituents.
SENATORS ON THE SPEAKING CIRCUIT
The survey seems to disprove the suggestion, raised in recent months by supporters of the pay raise, that serving in Congress can be a costly drain on a member's financial resources.
The U.S. Senate has been known throughout its history as a rich man's club, and the current membership supports that description. At least 18 senators are millionaires. and about 30 others have net worth greater than $250,000.
In contrast, a study last year by Ralph Nader's Citizens' Action Group found only five senators who reported a net worth under $50,000. All were first term members except Bob Packwood (R-Ore.).
Some wealthy senators inherited their money, and some earned it through business interests before entering government. But some have made significant financial progress during their service in Congress.
A few examples:
George McGovern, the South Dakota Democrat who was a history teacher at a small college before entering Congress, told his constituents in 1962 that his successful race for the Senate that year had left him $25,000 in debt.
After 15 years in the Senate, McGovern today reports a net worth of $237,000. He lives in a $135,000 house in northwest Washington, and owns a stately home near Kalorama Circle that he rents out for $3,000 per month. He recently gave his children a $65,000 house in St. Michael's on Maryland's eastern shore.
McGovern's financial growth is due to gains on his Washington real estate and fees for lectures and television appearances. Last year the senator was paid $25,000 by ABC news for a week's work as a political analyst.
When Hubert H. Humphrey (D-Minn.) came to the Senate in 1949, his wealth totaled about $50,000. By 1965, when he left the Senate to become Vice President, he was worth $171,000. Today, after a term as Vice President, two years of teaching and lecturing and another Senate term, he and his wife reported a combined net worth of $637,000.
Humphrey says "the increase in my net worth has resulted from hard work, good investments, frugality, and increased income." He says he earned a "good" income in 1969-70, when he was out of government, and has received income from writing and lecturing since returning to the Senate.
Sen. Daniel Inouye (D-Hawaii) reported a net worth of $72,000 in 1964, his first year in the Senate. At the beginning of 1974 he reported his worth as $224,000. The increase came from successful investments in real estate and corporate stocks. Inouye also earned about $13,000 annually in lecture fees in addition to his Senate salary between 1969 and 1973.
Sen. Edward Brooke (R-Mass.) was elected to the Senate in 1968 after a decade of law practice and five years in state and local government. Since coming to the Senate, he has purchased a vacation retreat, "La Batterie," including a home and 10 acre estate, in the French West Indies, and a cooperative apartment in the Watergate complex. His equity in real estate is estimated at about $200,000; last year he reported stock holdings worth $95,500.
Brooke says he remortgaged his family home in Massachusetts to purchase the real estate he bought while in the Senate.
At the other end of the spectrum is Sen. James Abourezk (D-S.D.), who would appear to qualify for the title of "poorest senator" on the basis of senators' voluntary financial disclosures.
Abourezk last year listed his net worth at $23,433, down from the $24,858 he reported just after his election in 1972. Those figures do not include "a small amount of property" his wife inherited, the senator says.
Other senators who reported a net worth last year under $50,000 were Dick Clark (D-Iowa), Gary Hart (D-Colo.), John Durkin (D-N.H.) and Packwood.
Generally, those who come to the Senate with limited personal assets encounter financial problems in their first years here.
After one year in office, Abourezk had to borrow $6,000 to pay his federal income tax. Leahy spent so much of his savings buying a home in suburban Washington and settling in here, he says, that his net worth dropped from $95,000 to $52,000 in one year.
"The first year here was really hell," Hart recalled in an interview recently. "I knew it was going to be expensive coming to Washington, but I had hoped we could keep our house in Denver. It turned out that we sold that house and still had to worry a lot about money that year."
Hart said he had been paying a $200 monthly mortgage bill on his Denver home. He sold that house and used the gain for the down payment on a house in Bethesda. His new mortgage payment is nearly $800 monthly; in addition, he pays $100 monthly rent on an efficiency apartment in Denver.
Although Hart is reimbursed for transportation costs when he goes home, he does not receive a per diem allowance. Thus, a week's travel through his state can cost him $200 or more for hotel and miscellaneous expenses. (Members of Congress do receive per diem for travel on committee business.)
Although Hart had expected to bear those costs, he was flabbergasted to discover the out of pocket expenses he bore for social obligations to his constituents.
"You're always sending flowers for a funeral, or wedding presents, or bar mitzvah gifts for the kids of somebody who worked on the campaign," the senator said. "It's nickels and dimes here and there, but you end up spending a couple of thousand a year on it."
If he had more money, Hart said, he would like to entertain more constituents when they visit Washington.
"I see my colleagues in the (Senate) restaurant with six, 10 people they're taking to lunch. It would be nice if I could do that, but I haven't been able to afford it."
Like his senior colleagues, Hart gradually found ways to soften his financial predicament. A concert featuring pop singer Linda Ronstadt raised about $5,000 for a "constituents' fund" to defray office costs. University and interest groups were willing to pay $500 or more to hear a Gary Hart lecture, and the senator has added about $12,000 annually to his income through speaking engagements.
Even before the new pay raise, Hart had surmounted the serious financial worries of his freshman year.
"I'm not complaining," Hart said. "I didn't run for the Senate to get rich. But I'm a saver. I want to be saving money for college, for the future, and I can't do it."
Whether they grow rich or poor during their years on Capitol Hill, members of Congress generally sacrifice less and profit more from government service than officials in the executive and judicial branches, according to a study financed by the presidential commission on federal salaries.
The study showed that judges average a salary cut of 33 per cent when entering government, and top executive officials average a 23 per cent drop from their private sector salaries. But new members average a 2 per cent salary increase when they enter Congress.
Upon leaving government, top executive officials can expect a new salary 87 per cent higher than their government pay, the study found. Those few judges who leave federal service average an 84 per cent salary gain. Retired or defeated members of Congress can expect salaries 34 per cent higher than their Congressional pay.
Comparing the last private salary earned before entering government to the first salary earned after leaving, congressmen average a 61 per cent net salary gain. Executive officials have a net gain of 44 per cent, and judges 23 per cent.
Because the financial sacrifice, or "opportunity cost," of federal service was found to be smaller for congressmen than for employees of the other branches, the salary commission recommended larger increases for judges and most top executive officials than for congressmen.
But in the new salary scales just adopted. Congress and the judiciary both received raises of about 29 per cent, while executive positions were given smaller raises.
Like other studies of senators' financial status, The Washington Post survey was hindered by a lack of complete and reliable data.
About 20 senators refuse to disclose their public financial condition.
Some who do make public financial statements employ practices — such as valuing their holdings at cost, or excluding property held in their wives' names — which make it difficult to draw an accurate picture.
Some senators who are most outspoken about the need for disclosure provided incomplete disclosures of their own holdings.
Sen. Howard Cannon (D-Nev.) has sponsored legislation that would require all federal employees making $25,000 per year or more "to make full public disclosure of their personal holdings," as the senator describes it.
Cannon released a detailed statement of his own holdings and net worth in 1970. Last year he released a briefer statement, and declined to reveal his net worth.
Former Sen. Hugh Scott (R-Pa.) was a cosponsor of Cannon's disclosure bill. Scott regularly rebuffed questions about his personal financial holdings, even after allegations that Gulf Oil Corp. had paid him tens of thousands of dollars in cash over a period of years.
In 1964, Sen. Harrison A. Williams (D-N.J.) took the Senate floor for an eloquent speech insisting that senators and most Senate staff aides should make public their financial holdings each year.
Williams annually issues a personal financial statement. But he refused to reveal holdings of his wife, Jeannette Williams, who is one of his chief staff aides.
Mr. MUSKIE. What they suggested in that story for the purpose of alarming the public they now describe as "a lawmaker's actions can affect or be influenced by his investments, too, though the connections are usually more remote." In other words, today, in the editorial column, it is not a bad thing; the Senate is a rich man's club, and I say, Mr. President. I have no personal judgment on that. We have had very little evidence in the public records on which to base such a judgment.
But the Washington Post made such a judgment in its news story, and today it says that does not
alarm the editorial writers of the Washington Post.
I am happy to yield to my good friend.
Mr. PACKWOOD. The Senator has indicated there has been an attempt to differentiate between what is called passive income and earned income. But is it not a matter of fact that in this bill there is even a whole variety of earned income that is exempt from this limitation? They have indicated, looking on page 26. "Proceeds from the sale of creative or artistic work." I take it that means if you want to spend your week end painting instead of speaking you can sell that painting for whatever price it might bring, and if you can be bought by some special interest group that wants to pay you $2,000 for a worthless painting that is all right. I might address that to the chairman of the committee because I was unaware of why that exception was put in.
Mr. NELSON. The Senator is referring to the—
PACKWOOD. To the artistic provision.
Mr. NELSON. You are referring to the remote possibility that sometime an artist might show up in the Senate, and if an artist did show up in the Senate and wanted to do his painting we thought
would let him do his painting in the same way that we permit writing books. The potential for conflict of interest is practically nil. It is not the kind of economic interest involvement that comes into play was honoraria.
Now, we do cover the situation in the remote chance that somebody thought an effective way to influence a Member would be to pay him an excessive price for a painting that he would not dare hang in his house. There is a paragraph which covers that:
A Member, officer or employee of the Senate shall not receive any compensation nor shall he permit any compensation to accrue to his beneficial interest from any source the receipt of which would occur by virtue of influence improperly exerted from his position as a Member, officer or employee.
Mr. PACKWOOD. Would that not apply to anything, not just an artistic work?
Mr. NELSON. It applies to anything. I was responding to the Senator's concern ,:that somebody might sell a bad painting for a big price.
Mr. PACKWOOD. If you were to sell a mediocre piece of land for an inflated price, the same standard would apply, would it not?
Mr. NELSON. Yes.
Mr. PACKWOOD. Or to close stock, not listed, that has no easy, ascertainable market value, sold for an excessive price.
Mr. NELSON. It covers all those.
Mr. PACKWOOD. I am curious, we sort of ended up on Friday afternoon as to what it was — I sat in the committee with the distinguished Senator — the committee was trying to get at with this limitation. Was it a limitation of time? Was it a limitation of actual conflict of interest or was it an attempt to reconcile an apparent conflict of interest that the public had?
Mr. NELSON. I think one would agree that it is a combination of all of them. We are, after all, public officials, and in that respect we differ from all other citizens in this country who are not public officials. We are employees of the public and, as I said last Friday when my good friend from Maine gave his marvelous speech and walked out when I started mine [laughter] and as I said last—
Mr. MUSKIE. The Senator did not tell me he was going to make a speech. He said he was going to make some remarks.
Mr. NELSON. I do not know whether it would qualify as a speech or not. The Senator came by my desk and he said, "I do not have to listen to you, do I?" And I said, "I guess not." But I had to listen to him. [Laughter.]
Mr. MUSKIE. I think that is an accurate quote.
Mr. NELSON. Well, it is.
Mr. MUSKIE. But not with the same emphasis.
Mr. NELSON. Not quite so loudly. The Senator whispered in my ear because he did not want anybody else to hear it, and I do not blame him, but it was a very good speech.
We did discuss some of this after the Senator left. I hated to be left standing here alone, after the only important audience to talk to, the proponent of the amendment, walked out on me. It made me feel very sad.
Mr. PACKWOOD. I might call to the Senator's attention that I stayed and listened to his remarks.
Mr. NELSON. That is right.
I am trying to think of why the Senator did. [Laughter.]
Now, what was the Senator's question?
Mr. PACKWOOD. Why was this limitation put in? If I might say I can only think of three reasons, and I am trying to find out from the Senator who is chairman of the committee. One, it is we ought to be full time Senators and we should not do anything that takes time away from this job. That is the time argument. Two, it is a conflict. If we go out and speak, it is indeed a conflict and that ought to be barred. Or three, even if it is not a conflict, it gives the appearance to the public of a conflict and — as the Senator indicated, appearance is reality — therefore, it should be barred for that reason.
Mr. NELSON. It is for all of those reasons, and I do not think one can ignore them. As public officials, the salary we receive ought to be adequate, but we provide in here that another $8,600 may be earned.
The quarrel is not, I take it, whether there should be no limit. The quarrel is where we should draw the line. Is anyone really going to defend the proposition that a Senator ought to be able to make $250,000 a year, in addition to salary, if he can make it giving speeches for honoraria or practicing law?
Mr. PACKWOOD. No. And conversely, the majority leader in his opening statement about Common Cause — and they are the principal progenitors of this — and as I recall, the chairman of the special Ad Hoc Ethics Committee, indicated if they had their preference there would be no outside earned income. Not 15 percent; none. I do not want to state that if it is not a true fact. I recall what the Senator told me personally — no outside income. The 15 percent is a compromise, but the next time there is a salary increase that comes along that equals the 15 percent we shall cut out the 15 percent.
Mr. NELSON. No; I do not think I said that. I did say it would be my personal preference that there not be any outside earned income, but I understood the kind of problem that even this limitation creates.
Mr. PACKWOOD. Let us take the following situation. We discussed this in committee, and we apparently have made an exception for it on earned income on page 26, line 8. This is the income from the family enterprises, if the services provided by the Senator, officer, or employee of the Senate are not material income producing factors, and we had quite a debate in the committee on the definition of material income producing factors.
I pose the question as to what would be the situation with my predecessor, Senator Wayne Morse, who had owned a farm in Poolesville, Md., and raised cattle. He had a hired hand on the farm, but by and large he spent a fair portion of his time running it; he spent every weekend there and made a very handsome profit selling cattle. Would that still be permissible? Would that be an exception under this? And the answer was this: yes, so long as he—
Mr. NELSON. No; that is not quite a correct answer. Even as to family enterprises, if the income produced is directly as a result of the energies and time spent by the Member producing that income, then it is within the 15 percent limitation.
Mr. PACKWOOD. That was not the specific answer on this question that we had in committee, and I shall be happy to cite the transcript if the Senator wishes as to what the answer was on that situation. So long as all he spent was the weekend, by and large Saturdays and Sundays, on the farm, made the principal decisions as to what cattle to sell and what to buy, that still would not be a material income producing factor. At least, that was the answer in committee. Is the Senator changing now?
Mr. NELSON. No. Obviously, there is a problem involved when the Senator draws a line as to earned income, tries to define earned income, and then tries to respond to specific cases. But if an individual on weekends lived out on his farm that was being run by someone else and he does make decisions on weekends about what to plant, what crops to rotate, and what cattle to buy and sell, we concluded that that was an activity that is acceptable. However, if in fact he were spending a lot of time and we could compute that in fact it was much more than the income limit as a consequence of his personal energies, he would be covered by the limitation provision.
Mr. PACKWOOD. No. I think we clearly outlined the case. It was a weekend retreat. I can often recall Senator Morse saying as far as he was concerned, it was very therapeutic to get back there on weekends, root around in the dirt and get back to nature; he found it very worthwhile from the standpoint of the Senate and very worthwhile financially. I think, honestly, all he spent were weekends on his farm, and we concluded that would be all right.
Now take the situation of my other predecessor, Senator Dick Neuberger, who I believe the Senator knew. Dick Neuberger was a writer, an author, a prolific writer of articles. If one checks the Reader's Guide to Periodic Literature, he probably wrote 300 or 400 articles before he ever got to this Senate. If Dick Neuberger were still in this Senate and spent his Saturdays and Sundays writing articles, that would be prohibited or would be prohibited when we get the honoraria down to zero, even though it takes no more time than it took Senator Morse on weekends to manage his farm.
Mr. NELSON. Writing, as the Senator knows, is covered by overall limitations on earned income and $1,000 per article limit.
Mr. PACKWOOD. Why? Why is it wrong for all of his adult life for former Senator Neuberger to write and be paid by the New York Times, as he was on occasion, and on other occasions by Colliers, Liberty, the Saturday Evening Post, and Commentary, for articles, but when he becomes a Senator the same thing he has done all of his life on his own time is wrong?
Mr. NELSON. I hope the Senator is not using the words "right," "wrong," "good," "bad," in—
Mr. PACKWOOD. I will rephrase it. Why should he be prohibited on Saturdays and Sundays from writing articles when that is what he has done all of his life for money when Senator Morse is not prohibited from running his farm on weekends which is what he did all his life and receiving money for it?
Mr. NELSON. There is a potential in writing articles for which one might be paid by some magazines an excessive price which may be perceived, at least by the public, as a conflict of interest. Magazines have legislation pending all the time. Their postal rates, second class mailing rates, are very important, and it can pose disturbing problems at least from an appearance standpoint.
Mr. PACKWOOD. Why then have we made an exception for books?
Mr. NELSON. Books would have to be published by regular standard publishers. We eliminate those fly-by-night publishers who might have published a book which, because of an arrangement with a corporation or a labor union, they knew would sell whether or not the book could succeed on its own out in the marketplace. But sitting home on one's own time writing a book which may or may not sell — depending on the public's choice — does not pose any conflict of interest question.
Mr. PACKWOOD. But is it a conflict of interest if the Reader's Digest pays you for an article?
Mr. NELSON. Well, without using the name of any magazine, the potential is there, given that all publications do business under the laws that we pass.
Mr. PACKWOOD. I only use that magazine because I notice it has paid the Senator from Wisconsin $2,500 for an article.
Mr. NELSON. Yes, which was contributed to the Nature Conservancy, as I recall it.
Mr. PACKWOOD. No; I think you are wrong on that.
Mr. NELSON. That one was not?
Mr. PACKWOOD. No, it was not. It turns out that the Senator from Wisconsin kept that money.
Mr. NELSON. Yes?
Mr. PACKWOOD. I do have a list, including the ones that were donated in that year, but that one was not.
But the Senator surely is not suggesting that Doubleday Publications is above—
Mr. NELSON. I am suggesting the potential for appearance of conflict is there, and that we ought to at least moderate it by setting limits on the total, which could be received in honoraria and the amount of each honoraria.
Mr. PACKWOOD. Well, now, the Senator says "the potential" for conflict of interest. We have Doubleday and Putnam and all the other book publishers down here from the time the session starts wanting some concession on how to write off expenses for research; they are forever asking for preferential treatment on mailing rates ; they have a whole variety of interests before this Congress, maybe differing or maybe the same as Time magazine or Reader's Digest. But why should Richard Neuberger have been prevented from receiving money from Time or Reader's Digest or the old Saturday Evening Post, but Senator Wayne Morse not have been prevented from receiving money for the sale of his cattle?
Mr. NELSON. Senator Neuberger would not be precluded from writing. He could write 16 articles at $500 each or 8 at $1,000 each. We are arguing the question whether there should be any limit at all, and if there should be a limit, where should the line be drawn? I take that the Senator from Oregon does not agree that the line should be drawn here.
Mr. PACKWOOD. If there should be a limit because the problem is time, then the limit ought to apply equally to all things that take time.
Mr. NELSON. Time is just one of the elements.
Mr. PACKWOOD. Fine. I ask the Senator another question. I visited with a Member of Congress who owns 10 townhouses here. He lives in one and rents out the others. He grossed $38,900 for the rental of those nine last year. He manages them himself. I asked him how much time that took. He said it took from 3 to 5 days a month, because you have to hire the plumbers, painters, and everything else.
Because that income is technically called rent, there is an exception for it. Three to 5 days a month; compare that with the amount of time it takes the Senator from Maine to speak. If the argument is time, he ought to be prohibited. If the argument was time, Senator Morse should have been prohibited.
I do not think the argument really is time. I do not think the argument ever was time, when we started out on this issue.
Mr. NELSON. I might say that I have never rested the argument on time alone.
Mr. GOLDWATER. Mr. President, will the Senator yield?
Mr. PACKWOOD. Yes.
Mr. GOLDWATER. I would like to ask the Senator a question, as long as we are in this general area of conflict of interest.
U.S. News & World Report, probably one of the most influential magazines in the world, often prints interviews, and the Senators and Representatives who give them get nothing for them. Yet they either answer questions or attempt to write the answers out. How are we going to reckon that conflict of interest? I might write favorably on the B-1 bomber, and my friend Mr. PROXMIRE might write in opposite; both influenced by our own personal feelings, which the Senator calls conflict of interest.
How are we going to regulate the requests from our TV and radio stations at home, who ask that we do 10 or 15 minute programs, that we can get paid $5,000 or $10,000 apiece for from national television? Do any of us ever turn down a chance to appear on national talk shows, for which you receive nothing, not even a cold drink?
How do we measure these things in terms of a conflict of interest? I understand what the subcommittee was trying to get at, but I cannot see how we can regulate conflict of interest by merely applying a dollar limit to what we can receive. Does the Senator have an answer for that?
Mr. PACKWOOD. I have no answer and I thought that the Ethics Committee in this case was hypocritical, but we could not get the votes to ban all outside earned income. So they are going to say, in essence, that you can be half ethical. You can speak to all these groups and write for money up to $8,700; after, that, it is unethical. Before that it does not make any difference where it came from, as long as you have not reached the limit.
The majority leader, BOB BYRD, on the opening day, in his first statement indicated that he wanted to ban all outside earned income. That was his ultimate goal. Common Cause — and I say this is a Common Cause code — wanted to ban all outside honoraria and earned income.
I believe we are going down the road to becoming full time elected bureaucrats, and we will spend all of our time, all our waking hours, on the job. We will, probably build an annex here, and sleep down here as well.
Mr. GOLDWATER. If the Senator will permit a comment, when I came here there were 4,000 clerks working on the Hill. There are now 24,000, We do not write the legislation any more, for the most part. I might suggest facetiously that we do away with elections and put Congress under civil service.
Mr. PACKWOOD. Of course, grandfathering in those who are now here, so we will not be subjected to competitive tests.
Mr. GOLDWATER. That includes me?
Mr. PACKWOOD. Yes, of course.
Mr. GOLDWATER. Mr. President, I am much disturbed about this whole approach. I suppose I have done as much, on the so-called lecture circuit as any other Member of this body. I think only one Member of this body missed more meetings than I did, and he became a President. I just missed that myself.
I can understand the concern of the majority leader when he looks around on Friday afternoon, and the check shows there are not many people here, and he assumes they are out making speeches. I can assure the leader that is not universally so. But I am very much concerned about the assumption this body has taken that somehow we can correct our moral image by limiting the income that may come to us from what I will say is an unlimited source of funds, from schools, conventions, and so forth around this country, that I think actually benefit by hearing from the conservative, the liberal, the Republican, the Democrat, and so forth and so on.
But I get back to my original question, and I will not take any more time: When you can speak in the U.S. News & World Report to the end that probably every thinking or influential mind in the United States reads what you have to say, I think that is probably worth more money than any other medium you or I might use to get an idea across, and yet we get nothing for it.
I am not complaining about that. The same goes on the Sunday talk shows that we have all been on, with exposure to from 3 to 7 million people that we could not get otherwise. This, in my opinion, constitutes a conflict of interest, and yet there is no stopping of that.
The Senator was discussing an interesting point a moment ago: artists. I see in the Chamber my good friend HOWARD BAKER. He and I happen to be photographers. I make quite a bit of money every year selling my pictures. But I work on it Saturday and Sunday. I would hate to think that poor little darkroom of mine was suddenly filled with conflicts of interest. Not anything my wife might object to, but I am talking about what you usually find in a darkroom.
Mr. PACKWOOD. I assure the Senator he does not have to worry about that because we made a total exception. Income as proceeds from the sale of creative or artistic work is totally excepted. It does not count as outside earned income. The Senator can sell his pictures for whatever he wants. He can spend all his Saturdays and Sundays in the dark room. He is not limited at all.
Mr. GOLDWATER. I think that is a mistake. In fact, I think this whole approach is rather useless. I do thank my friend.
Mr. PACKWOOD. Let me conclude, because I think I know how we got here very gradually. One, this is not a time argument at all. If it was indeed a time argument, then we would not have made the exception that, as far as above the 15 percent is concerned, a Senator can earn up to $25,000, which is the outside limit now from honoraria, if it is given to charity. A Senator can give as much time as he wants to fly to Detroit to give a speech, the proceeds of which go to the Knights of Columbus or the Presbyterian Church. Time was never intended to be a factor. If it was a factor, we should have adopted the amendment of the Senator from New Hampshire which faced up to that situation and barred that income, too. Nor is it the appearance of conflict of interest.
Mr. DURKIN. Will the Senator yield for a second?
Mr. PACKWOOD. Just a moment.
It is not the appearance. The poll that has been cited most often is a Louis Harris poll taken for the Obey Commission in which the question was asked:
If a Congressman makes a number of speeches to business, trade, environmental, or labor groups which are affected by his work in Congress, and he receives a large fee for such speeches, would that bother you?
It would bother 71 percent, it would not bother 21 percent, and not sure total 8 percent.
But then Louis Harris asked a further question :
Would your concerns about that situation be substantially satisfied if the voters in his district were made fully aware of his situation and could vote for or against him in the next election if he had to file that income publicly?
The answer to that was 57 percent would be satisfied and 39 percent would not be satisfied.
We already have full disclosure on honoraria. Hopefully we will have full disclosure on some other matters before action on this bill is completed.
It is not a time question. It is not an appearance of a conflict of interest question. What it boils down to, and it emanates mostly from the other body, is that there is a jealousy between those who are on the speaking circuit and are in demand and those who are not. There is a jealousy regarding those who have taken by a cause, be it liberal or conservative, environmental or the war, who have gone around this country, stirred up a nation and brought that cause to a successful fruition, and at the same time rode that crest of popularity on the speaking circuit. It is jealousy because others are not asked to make those speeches.
If the argument is made that we are all going to be subject to a conflict of interest, that all of the special interest groups are going to invite us all to make speeches and buy us with honoraria, why are we all not invited?
We only have one vote apiece in this Chamber. Give or take a little on ability, only a few are more significant in terms of persuasion than are others.
I submit the answer is because some people have a message to carry. They have run for President; they are running for President. They have taken a stand long ahead of the rest of the Members of this Chamber on an unpopular issue and turned the Nation around. Then petty, jealous minds in the Congress resent the popularity and are going to attempt to limit it in this fashion, which I think, if we make it a law, is probably unconstitutional. I do not think the Supreme Court, under the equal protection clause, is going to say that we can limit some people's income in this Chamber and not others. However, as a Senate rule, not subject to the normal court scrutiny because the court would give deference to how we conduct our own affairs, it may be constitutional.
It is grossly unfair. It does not stem from any desire to have us conserve our time and give our efforts to the Senate. It does not stem from any desire to curb an apparent conflict of interest which the public is not concerned with if there is full disclosure. It stems from the fact that some people have had the courage to take a cause and go around this country trying to rally people to their side and were paid for it as opposed to others who were never asked.
I yield the floor.
(Mr. JOHNSTON assumed the Chair at this point.)
Mr. CLARK. Mr. President, will the Senator from Oregon yield for a question?
Mr. PACKWOOD. I do not have the floor. I believe the Senator from Maine has the floor.
Mr. CLARK. Will the Senator yield for a question of the Senator from Oregon?
Mr. MUSKIE. I yield for a question.
Mr. CLARK. I just want to point out it does seem to me that the arguments the Senator from Oregon has made would all stand against the pending amendment. As the Senator from Maine has quite correctly pointed out, his amendment does not increase the amount a Member can make. It simply applies a similar standard or a like standard to those people who have unearned income. I guess I am asking the Senator, if we were to adopt the amendment of the Senator from Maine it would not help any situation which he has so far discussed; is that correct?
Mr. PACKWOOD. It would treat everybody equally badly, that is correct. At the moment, the pending bill treats some people badly and unequally.
Mr. CLARK. Does the Senator then intend to support an amendment that would treat everyone unequally and badly? Is that a better solution to this problem than simply moving to strike the15 percent limitation?
Mr. PACKWOOD. I lost the question.
Mr. CLARK. I asked the Senator if he felt that the correct way to deal with this problem, the problem that he has discussed at some length, is to vote for the pending amendment as distinguished from the additional amendment of the Senator from Maine to strike the 15 percent.
Mr. PACKWOOD. The pending amendment would treat everybody equally and badly. If we are going to have equality in this Chamber, then let us have it. If the wisdom of this Chamber is that it is a good idea to limit outside income to 15 percent, let us limit all outside income to 15 percent. I will withhold my judgment on what I do on any other amendment until I see the outcome of that one.
Mr. CLARK. The Senator from Maine has the pending amendment to deal with everyone equally on unearned and earned income. If that amendment passes and becomes law, and we treat everybody equally and badly, as the Senator says, there could be another amendment to say, "Let us increase the amount." Those are two contradictory positions, it seems to me. Obviously, one could subscribe to either of them.
Mr. PACKWOOD. I have no amendment pending. I am supporting the present amendment of the Senator from Maine. I hope it will be agreed to.
Mr. MUSKIE. Mr. President, if I may respond to the question, in which I tried to raise the point I tried to cover in my remarks on Friday and today, the 15 percent limit is a technique adopted by the committee. The committee justifies it on the basis that the public's concern with congressional ethics virtually mandates that. I do not agree with that judgment.
In order to avoid appearing to pursue only my own interests and the interests of others in the same category, my first amendment is based on the assumption that the 15 percent test is right because the Senate says it is right; because the House adopted it as a legitimate discipline. What I am saying is: if it is right for us and if the Senate says that it is right, it is right for everybody so that everybody has to struggle with the same burden and the same inequity that as a Member of the Senate I am willing to try. Wrong as I think that approach is I am willing to try. That is the rationale of the first amendment. It is not that I think the 15 percent is right. I think the 15 percent is wrong.
Believing that I have some obligation to try to respond to what the committee, a committee selected by the Senate and authorized by the Senate, recommended, I am willing to try to make that 15 percent work. What I am saying is that if it is to work it ought to work for everybody. If it does not work for everybody, it is unfair and discriminatory.
The second amendment proceeds from there. If the Senate as a whole says, "No, that 15 percent is not right," whether in terms of their own personal circumstances or of their perception of what is fair, then we try to find another approach to imposing a discipline that is fair.
The disclosure discipline is one that we have applied to lecture fees for a decade, I think, for several years. We were told at the time that it was an adequate solution. Indeed, in this report, the committee goes out of its way to defend disclosure as an adequate discipline. It says that disclosure is the heart and core of this code of ethics. I think those are the precise words of the committee in its report.
Well, if disclosure is the heart and core and is adequate in terms of the committee, then I am willing to try that across the board if the 15 percent across the board is not acceptable to the Senate.
I do not consider those unreasonable approaches to get a Senate consensus at all. I think it is reasonable and I am willing to take the stricter one, the tougher one, first, and let every Senator vote up or down on whether that is reasonable for everybody. If it is not reasonable for everybody, in my judgment, it is not reasonable for anybody. Anyone can argue that 15 percent is a reasonable restriction on some portion of the Senate, but not all. It just escapes my very primitive sense of what is fair.
As long as I am on this subject, I wish to refer to some provisions in the Senate committee report which disclose this pattern of discrimination against earned income. It may be only unwitting and unconscious, but let me refer to it.
On page 3 of the committee report, there is this language:
The Committee has not had the time to conduct an exhaustive empirical study of Members' financial situations, their outside interests, or their handling of their official accounts
The committee has not had the time — consequently, the Rules proposed by the Committee are not specifically designed to remedy practices or abuses found to exist in the Senate at the present time. Instead, the Committee has attempted to fashion rules of conduct.
Now, that language carries the implication, Mr. President, that the committee wanted to avoid overreacting, with possible unwarranted injury to some Members holding income producing assets, until we know the circumstances surrounding them. But, Mr. President, there is no similar concern for earned income. We are to be disciplined whatever the facts. Whatever the facts, we are to be disciplined.
The Washington Post editorial this morning, to which I have already referred, has the same bias. It says:
Senator Muskie, we do not consider you guilty of any wrongdoing, but we think sentence needs to be imposed anyway, and that your earned income ought to be limited anyway.
It is not a question of not knowing the facts. They are willing to pass judgment that I am not guilty of any wrongdoing, but still, I must be disciplined.
On page 3 of the report is this language:
At the heart of the Code of Conduct is full and complete financial disclosure.
No. 1, with respect to unearned income, even the disclosure is not full and complete. All you have to do is examine such things as the categories of value, for example, and the disclosure of spouses income and the protection that was given those, to realize that even full and complete disclosure is not applied to unearned income but, with respect to lecture fees, not only is there full and complete disclosure, but full and complete divestiture above the 15 percent.
On page 4 of the committee report, there is this language:
Throughout this proposed code of conduct, the Committee tried to mandate disclosure and prohibit practices in a way that would restore the public confidence and serve the public's legitimate interests without condoning wholesale, unwarranted invasions of privacy.
No similar concern is in the report, Mr. President, to avoid the wholesale divestiture of sources of earned income in cases where there is no jeopardy to the public, to the public’s legitimate interest either in terms of time consumed or the sponsoring organization. The meticulous concern is that the privacy of recipients of unearned income is not invaded. But meticulous application of discipline is applied to recipients of earned income, whether or not there is a legitimate public interest in the divestiture.
On page 4, again, of the committee report, it states that some thoughtful commentators have pointed out the dangers of overreacting to the public mood. This is in the report. I continue to read from the report:
These observers believe that we are going through, in columnist David Broder's phrase, "a new Puritanism", and fear that Rules designed to expose, prevent, or punish every conceivable deed of wrongdoing will accomplish little except hamstringing the Representative or Senator in performing the function for which he or she was elected.
So, clearly, by the committee's own language, they are leaving open loopholes for conceivable wrongdoing, because to do otherwise would be to accept an unrealistic new puritanism that would represent an overreaction.
So, to read from the report:
Consequently, the committee concluded that financial disclosure of all holdings and possible conflicts was a preferable approach.
That is fine language, and I repeat it:
To avoid overreacting to the public mood the committee concluded that financial disclosure of all holdings and possible conflicts was a preferable approach.
The trouble is when the committee and its report got to the earned income, it added a qualification to that language as to earned income. The committee evidently concluded that disclosure was not enough; that we had to expose, prevent, or punish every conceivable departure from a public interest standard even if the effect is to punish those who have not violated the public interest.
On page 5 of the committee report, we find this:
The guiding principle followed by the Committee was to require only the amount of public financial disclosure necessary to satisfy the legitimate purpose of informing the electorate of private financial interest.
But even that standard is applied only as to unearned income. The disclosure requirement with respect to earned in come is very specific and total. As to unearned income, we have what the committee calls categories of value. Why? Why?
Because of the "expensive and burdensome annual appraisal and evaluation of assets."
Well, I ask the committee, how does that financial burden compare with the burden of the complete divestiture of earned income above 15 percent of basic salary?
Where is that concern for a Senator's economic well being when it comes to earning it?
We cannot ask for detailed exposure of the precise income, the dollar amount received by those who are the recipients of unearned income because of the expenses and the burdensome annual appraisal and evaluation of assets. But boy, we can deprive those on earned income of the income above 15 percent.
With respect to categories of value, the committee report states on page 18:
Categories of value, rather than the exact value, are required when reporting investment or passive income.
Whatever is meant by passive income
A category of value for investment income provides enough information to determine the relative magnitude of any potential conflict of interest without unnecessarily invading the privacy of the reporting individual.
What a nice standard. I could live with that one.
But what are the categories for investment income?
Category A, not more than $1,000. Category B, greater than $1,000 but not more than $2,500.
If that were to apply to earned income, if I had 20 lecture fees of $1,000 each and reported them as showing in category A, the citizen undertaking to evaluate the amount of my earned income would have to guess as to whether or not it was a total of $20,000 or 20 times $1,000.
If that difference is inconsequential for unearned income, why is it not then inconsequential for earned income?
The committee says these categories provide enough information to determine the relative magnitude, any potential conflict of interest. Why then should we not have the benefit of that kind of cloak of secrecy? Why should we not? The committee was not content to deprive us of that kind of blanket.
As to earned income, not only is this test insufficient for disclosure purposes in the view of the committee, but the difference between the present limit in the law of $2,000 and the proposed limit of $1,000 represents such a conflict that it must be prohibited.
Now, ask me, and know what my answer is, as to whether or not this represents a bias aimed at protecting and maybe even overprotecting sources of unearned income which is not given to earned income.
If the justification for reducing the individual lecture fee from $2,000 to $1,000 is so manifestly a greater risk of conflict of interest than $1,000 that the upper limit must be prohibited and the lower one imposed, then how do we conceivably justify the argument that the categories of value put into the resolution to protest unearned income are justified?
In the first place, going to the upper end of the scale, all income or investment income over $100,000 falls in the same category. It can be $200,000. It can be $1 million, $2 million, and it does not matter from what source it comes. We do not get any order of magnitude above $100,000.
What solicitude, Mr. President. And what in heaven's name is passive investment income? Is it real estate ventures? Is it income from partnerships? Is it income from oil and gas leases? Is it income from land development partnerships?
The committee brushes off all such details and contents itself with the bland description of passive income as sufficient description for all investment income from whatever source.
All we have to do is call it passive income and that forgives everything, that excludes all need to examine sources more closely, excludes all need to examine possible conflict. Just call it passive income and that covers the point.
One further point, Mr. President, and then I will be happy to yield for the time being; just another 5 minutes.
There is one other issue that has been raised by the Washington Post editorial that I think one needs to look at. That is the idea that is expressed in these words:
Honoraria are a direct result of one's official power and prestige.
Senator BYRD, the distinguished majority leader, put it in these words:
I don't think any group of citizens would pay me $2,000 to play my fiddle for 15 minutes.
Both the Post and Senator BYRD dismiss the idea that a Senator can have anything to say, or be able to say it in a way that it will attract audiences, audiences that will pay him to do so. They dismiss such things as ability, reputation, the message that a Senator wants to deliver, his effectiveness as a speaker.
None of these have anything to do with whether or not a Senator is invited to address an audience. None of these.
There is also the assumption that if those of us on the circuit who command these fees were not Senators that we could not make a success of anything else, that we could not make a success on the lecture circuit, that we are entirely without a means for earning our own living unless we are Senators.
What kind of standard are we setting? Because this standard says even if there is no conflict of interest, even if there is no time away from the Senate involved, a Senator should not be able to lecture before an audience that poses no conflict and get a fee because he has achieved prominence during his term as a Senator.
The fact is, I say to the committee, when I was just a Senator, I could not command fees on the circuit comparable to those I command now. My fees went up after I was a candidate for Vice President.
So the fees I am able to command now have nothing to do with my Senate career.
When I was elected to the Senate in 1959, I did not find booking agencies swarming into my office offering me $2,000 lecture fees; and I did not, for the next 8 years. If I could get a couple of hundred dollars, I was lucky.
So, obviously, there is something involved by way of ability, reputation, and message.
How about all these other people on the lecture circuit? Does the money they get on the lecture circuit have anything to do with their business professions or businesses or skills? How about Joe Klamath? Football gave him his reputation. He does not command these big lecture fees because he had a reputation or an established reputation as a speaker.
How about Woodward and Bernstein? How did they get to command the fees they command for writing books or for lecturing? The answer to that is self-evident.
How about Ralph Nader? How about John Gardner? I do not suggest they are guilty of any conflicts of interest. How about the astronauts? The astronauts, together, signed book contracts, signed contracts with Life. magazine. Why? Because they achieved prominence while performing. a public duty.
Are Senators to be deprived of that old American freedom that a man who has ability and skill can convert it into income if he is willing to put the time and the energy into it, if there is not conflict of interest, and if it does not take time away from his Senate duties?
On Friday, I made the point that last year I made 19 lecture fees. That is 1 day out of 19. In terms of the days of the Senate session, it meant I missed one-half of 1 percent of the days that the Senate was in session.
Tell me what other overriding public interest mandates that I no longer be able to do that. Tell me. I have read the editorials. I have read the stories quoting the floor manager of this bill, the majority leader, and other members of the committee. None of them has given me a reason that stands up as to why any Senator should be prohibited from making a lecture before an audience as to which there can be no challenge on conflict of interest grounds, on a day when the Senate is not in session — why that Senator should not be able to get a fee, whatever it may be.
This morning's paper informed us the most recent former Secretary of State is going to receive $10,000 per lecture. For a year or 2 years after a Senator or a Secretary of State leaves office, should he be prohibited from going on the lecture circuit? If there is no conflict of interest, why should he not do it?
What kind of double standard is this? I say to Senators they are so panicked by this public drive for ethics in Government that they have picked this handy target and have zeroed in on it.
Mr. BAYH. Mr. President, will the Senator yield?
Mr. MUSKIE. I yield.
Mr. BAYH. Mr. President, I believe the Senator is making a very persuasive defense of the position that he and I and some others espouse about the way in which this particular kind of income has been separated from the others. I think he is in a very good position — perhaps as much as any other Member of this body is — to go on the offensive.
He and I have had a chance to sit around and sort of feel sorry for ourselves and our country, I suppose, because of the almost complete demise of confidence in our political institutions — the fact that many young people particularly do not feel that there is any dialog between them and their elders who govern them and determine their destiny.
Can the Senator tell the Senate his thoughts relative to the experiences he has had with the young people on the campuses? In addition to it being very unfair to separate this particular kind of income, does the Senator feel there is a positive benefit to be derived from people such as we, who have shouldered significant legislative responsibilities, who have run for the highest office in the land — the Senator has come within a whisker of being the Vice President of the United States — opening the kind of dialog that one experiences in pursuing this kind of activity, which would be limited under this bill?
Mr. MUSKIE. I touched on that point extensively on Friday, and I am delighted that the Senator has called my attention back to it. There is no question in my mind about that.
I read into the RECORD last Friday a rather long history of the lecture circuit in American politics. It is as old as the Republic. I could not agree more with the Senator. The demand for our services across the country and the willingness of people to pay these fees indicates the hunger that is out there for this kind of service.
I am not talking about the obvious conflict of interest situations. This code of ethics has to deal with that. What I am talking about is the proper public role — and that is what the Senator is talking about — that a Senator should fill in engaging in a dialog with the American people.
President Carter, for 2 months, has been making much of the need to get back to the people; and he is going back to the people, in Clinton, Mass., in West Virginia, in the telephone call-in show that he had a little while ago.
More and more, we are tied down to our responsibilities in the Senate. In most years since I have come to the Senate, this has been a 12 month job. Therefore, opportunities to travel around the country, as I did when I first came here, holding hearings around the country, are more limited.
But it is still important, and there still are people out there who do not have any special interest ax to grind, who are asking us to go out there. I do not believe we are going to go out there for nothing. I do not believe that, especially if you follow Ralph Nader on a campus — he is getting a maximum fee — or a John Gardner, or any of the others. I put many of those names in the RECORD the other day.
We have a right, if we are responding to a legitimate public need, to receive compensation for it; and with respect to everything else, we say the marketplace is the best test of what that compensation should be. We are not setting these fees by law. We are not mandating them.
Every invitation I receive has its own price tag. It may be $500; it may be $200; it may be $1,000; it may be $1,500. The price finally arrived at is one that is negotiated at arm's length between me and the organization that wants me. This business is not a very direct result of one's official power and prestige, with the implication that I am forcing these people to pay me anything to do this.
The committee says:
No, that role is not of that much interest to the American public. We have to restrict it drastically, even in those situations where the Senator is able to do it on a Sunday or when the Senate is in recess, and even though the sponsoring organization poses no conflict of interest.
The whole idea of getting paid for lecturing is so fraught with the risk of conflict of interest that we have to forbid even the most innocent situation, except to the extent of 15 percent of our income.
One other thing I want to say. I think the Senator from New York (Mr. JAVITS) referred to polls that indicated the public desire for this kind of discipline. There has been a lot of reference to the Lou Harris poll as being the most recent and the foremost one that focuses on the problem to the greatest extent. I do not have the full poll here, but I have enough to indicate that the public is concerned by proposed conflicts other than those related to lecture fees.
For instance, there was this question:
With respect to a Member of Congress who owns a large amount of stock in a major corporation which has Government contracts.
Sixty-seven percent of those interviewed would be bothered by that, 79 percent of those seriously, and 64 percent of those interviewed would be satisfied by disclosure as a discipline to prevent that sort of thing.
At the other end, and a leading question if I ever saw one:
With respect to a Senator who makes a number of speeches to groups affected by legislation for a large fee.
Seventy-one percent, or 4 percent more than the other, would be bothered; 80 percent of them seriously bothered, and 57 percent would be satisfied by disclosure.
I picked out eight of the questions, and with respect to all of them disclosure would satisfy those interviewed.
With respect to those Senators who make an occasional speech to business, labor, or other groups affected by legislation for a small fee, 39 percent would be bothered, 67 percent satisfied with disclosure.
With respect to occasional speeches to colleges for a small fee, 29 percent would be bothered, 67 percent would be satisfied by disclosure.
So up and down the list between 57 and 70 percent would be satisfied by disclosure. So that is the public perception as revealed by the Harris poll.
But the committee goes along with disclosure for all but those at the bottom of the list in the poll, those who get earned income for making speeches, so they go farther, the committee goes farther, than the poll suggests that people need to be satisfied. That part of the poll we very seldom hear about, but it is there, and I think it ought to be part of the RECORD at this point.
At this point, Mr. President, I think I have covered most of the major points I had in mind covering when I started this afternoon. I suspect the distinguished floor manager, my good friend from Wisconsin, may like to get a crack at some of the points I have made, and I am prepared to yield the floor at this point so he may get his views into the RECORD, if he is ready at this time, and I promise to sit around and listen.
The PRESIDING OFFICER. Who yields time?
Mr. NELSON. Mr. President, I ask unanimous consent that the time that has been used thus far on the bill be equally divided from the 25 hours on each side. I mentioned it to Senator
THURMOND and he did not have any objection.
Mr. PACKWOOD. Reserving the right to object—
Mr. NELSON. From both sides on the bill.
The PRESIDING OFFICER. On this amendment?
Mr. PACKWOOD. Reserving the right to object.
Mr. NELSON. The amendment time has been used up, but I did yield to Senator MUSKIE, who is on the other side, I was negligent in yielding and the Parliamentarian advises me it is all coming from the time on my side.
The PRESIDING OFFICER. Is there objection?
Mr. PACKWOOD. I object.
The PRESIDING OFFICER. Objection is heard. Who yields time?
Mr. EAGLETON. Mr. President, will the Senator from Wisconsin yield to me when he concludes his remarks at this juncture?
Mr. NELSON. I will yield to the Senator.
Mr. BAYH. Mr. President, will the Senator yield to me for 30 seconds in order to make a unanimous consent request?
Mr. NELSON. I will yield 30 seconds without losing my right to the floor:
Mr. BAYH. Mr. President, I ask unanimous consent that Barbara Dixon and Tom Connaughton of my staff be granted the privileges of the floor during the debate on Senate Resolution 110.
I thank my colleague.
The PRESIDING OFFICER. Without objection, it is so ordered. Who yields time?
Mr. EAGLETON. Mr. President, I ask unanimous consent that Mr. Mark Abels a member of my staff, have the privileges of the floor during the pendency of the ethics resolution.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. NELSON. Mr. President, I renew my request that the time that has been yielded from the bill thus far be equally divided between the proponents and the opponents.
The PRESIDING OFFICER. Is that on the Muskie amendment?
Mr. NELSON. Yes.
Mr. PACKWOOD addressed the Chair
Mr. THURMOND. Mr. President; I have no objection to that providing we can stop it whenever we want to. I do not know how far this is going.
Mr. PACKWOOD. Mr. President, reserving the right to object, I want to pose a question to the Senator from South Carolina, if I might, because in this case my side is not my side's position.
Will the Senator from South Carolina yield to me such time as I might need in this debate if, by chance, it is impossible to get time from the Senator from Wisconsin or we run out of time on our side?
Mr. THURMOND. Mr. President, I will certainly yield to the Senator from Oregon. I just do not know how the time is going to run. We may have to give some others time, too, and we will divide it around. I will certainly yield all we can
Mr. PACKWOOD. I have no objection.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. NELSON. Mr. President, I yield myself whatever time may be needed.
Mr. President, as I have listened to the all-out assault upon this resolution, one would think somehow that some cabal of Senators met some place secretly in a dark room, and drafted an evil code and brought it here onto the floor to impose unfairly upon the Members of the Senate.
How strange. Everything in the code was authorized by the resolution, and not one single word was uttered by the Senator from Maine or the Senator from Oregon. The resolution whizzed through. This Senator did not ask for the job. The resolution passed, and I was appointed to it. What did the resolution say that seems to now come as such a surprise to the Senator from Maine and the Senator from Oregon and others who are up here now shedding tears, because somehow or another we are cutting their income?
I pointed out Friday night that I had great difficulty shedding tears for the Senator from Maine who voted against the salary increase, and then stands on he floor and says, "You are taking my income away. I cannot live on it."
Why did he not fail to vote for the salary increase then?
What does the resolution provide? It states:
It shall be the function and the duty of the special committee to conduct a complete study of all matters relating to standards of conduct of members, officers, and employees of the Senate. Such study and recommended code of official conduct shall include but not be limited to standards (1) annual public disclosure of income, assets, debts, gifts, and other financial items.
That is in the code, as we were directed by the Senator from Maine and the Senator from Oregon, and the rest of the Senate to put it in the code.
They wanted it in the code. The whole Senate wanted it in the code. Not a word was said against. No Senator demanded a roll call. No Senator amended the resolution creating the committee.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. NELSON. At this moment I shall not yield to the Senator from Maine but I will be happy to yield later.
No. 2, the resolution provides that the code of official conduct shall include restrictions on — and I wish the Senator from Maine would listen to this.
Mr. MUSKIE. I could listen better if I had a chance to ask questions.
Mr. NELSON. The Senator has had more time thus far than this Senator has had. I simply wish to have the Senator listen — and I know that it is quite an imposition — because the Senator walked out on me Friday night. At least if he sits here he should have to suffer the burden of listening to what I have to say as I suffered the burden of listening to what the Senator from Maine had to say.
So, the resolution which passed the Senate, with not one word spoken at that time by the Senator from Maine, provided that the code shall include restrictions on or the elimination of outside income from honoraria, legal fees, gifts, and other sources, financial or in-kind remuneration. That is in the code.
Mr. MUSKIE. May I ask the Senator a question?
Mr. NELSON. I will yield for a question if we could have it without a lecture.
Mr. MUSKIE. Is the Senator telling me this whole question was prejudged at the time the resolution was submitted?
Mr. NELSON. I am telling the Senator that as a Member of 100 in the Senate a resolution was submitted directing the creation of a committee and directing that the committee make such study and recommend a code of conduct which "shall include but not be limited to" standards covering outside earned income. I did not draft the resolution. The entire Senate adopted it.
Mr. MUSKIE. The Senator is not answering my question. This is the first time I have ever had it suggested that the introduction of a piece of legislation is binding thereafter on every Senator with respect to the contents of the introduced bill.
Mr. NELSON. This Senator did not suggest it was binding. What the Senator was suggesting is that indignation and outrage is being expressed all over the Chamber as though this comes as a great surprise. I am simply saying that it was in the resolution.
Mr. MUSKIE. Did I say it was a surprise?
Mr. NELSON. The resolution asked us to study it, and we came out with what the resolution directed us to do.
Mr. MUSKIE. Will the Senator yield for another question?
Mr. NELSON. I yield.
Mr. MUSKIE. Have I said in the few days of debate that I was surprised by what the committee did?
Mr. NELSON. The Senator sounded surprised and sometimes even astonished to my hearing.
Mr. MUSKIE. Astonished, yes, astonished as to the lack of judgment that went into it. But surprised that the committee yielded to the panic and the pressure of public opinion of what the House of Representatives had done and of the majority leader's leadership, no, I am not surprised by that.
Mr. NELSON. At least the Senator should not complain about a resolution that directed us to study and report on these six items listed here after not once raising his voice at any time against the resolution.
Mr. MUSKIE addressed the Chair.
Mr. NELSON. Let me continue.
Mr. MUSKIE. I think I am entitled to a comment on that, and it shall not be more than two sentences.
Mr. NELSON. Go ahead.
Mr. MUSKIE. Really.
Mr. NELSON. All right. I yield.
Mr. MUSKIE. The suggestion that a piece of paper introduced up at the desk must on that day be thoroughly analyzed and digested by a Senator, lest he should be held bound by what it says, I find incredible. I assumed that when a resolution directing the committee to undertake this study is introduced that committee will inquire with open mind the full dimensions of the problem and bring back some recommendations that relate to what it inquired about and Senators not be bound by a piece of paper that was first introduced. If that is what that resolution does, I tell the Senator this: I will leave a standing request at the desk that everything that is introduced which bears upon conduct of the Senate or inquiry into its activities be held until it has been debated and sent to committee. That is a most ridiculous kind of argument to make in a so-called deliberative body.
Mr. NELSON. Mr. President, I am simply responding to the suggestion that seems implicit in much of what has been said in the Chamber in criticism of the Code of Conduct. This committee was directed by the Senate to address itself to the issues listed in the resolution. We did address ourselves to the issue in the resolution.
Obviously, the Senator is not bound in advance by anything a committee may do. But we did do what we were directed to do, whether the Senator likes the result or not. Obviously, a committee of people, with differing viewpoints, directed to report to the Chamber recommendations covering the six items listed here, is not going to be in unanimous agreement. All legislation, as the Senator well knows, comes out as a consequence of compromise. I am simply pointing out, however, that we were directed to address ourselves to these items, the third of which is conflict of interest arising out of investments, securities, commodities, real estate, or other sources; fourth, office accounts and excess campaign contributions; fifth, Senate travel; and sixth, engaging in business or professional activities or employment, or other activities so as to avoid any conflict with the conscientious performance of official duties.
Not only did this resolution, which was introduced on January 18, direct us to address ourselves to these issues but it also directed us to report back by March 1, which we were unable to do; though the committee staff worked days and nights and on weekends, and members of the committee worked as fast and as conscientiously as we could, we were not quite able to meet that deadline. But we did what the Senate directed us to do, and not everyone is expected to agree with it 100 percent.
The question is continually raised: Why should there be any limitation?
If it is the argument of the Senator from Maine, that there should be no limit at all on outside earned income, whether it is $100,000, or $200,000, or whatever it may be, it is an argument that he will have to live with. I cannot defend it. I cannot personally accept it and I do not think the public does either.
This Senate has agreed twice previously to set limits on earned income from honoraria. We have set it at $25,000, we have set it at $15,000, and this committee is suggesting a figure that would amount to about $8,600.
I do not know where the perfect place may be to draw the line. As to the whole spectrum of amounts of money, if presented to 100 Senators each would draw a line some place different on that spectrum, with some saying zero and some saying no limit at all. We came down on a limit of $8,600.
I do not say there is any magic in it, but I would suggest that that 15 percent amounting to $8,600 a year, represents more than 50 percent of the mean annual salary, on the average, earned by our constituents — more than 50 percent of the average annual salary of those who sent us here — and that is why I believe that the figure is fair.
There is a question of time involved. It is not the whole question, but there is a question. There is also a question of seemliness.