B-247038, August 7, 1992

B-247038, August 7, 1992

MISCELLANEOUS TOPICS Environment/Energy/Natural Resources Environmental protection Air quality Operating permit program Rulemaking Because Clean Air Act operating program permit regulations are not specifically required to be developed under section 307(d)(1), there exists a presumption that the rulemaking provisions do not apply. That presumption was not overcome since the Administrator made neither an express nor an implied determination, as he was authorized to do, that the rulemaking provisions of section 307(d) applied.

The Honorable John D. Dingell Chairman, Subcommittee on Oversight and Investigations Committee on Energy and Commerce House of Representatives

Dear Mr. Chairman:

Your letter of December 5, 1991 asked for our opinion whether Allan Hubbard while Executive Director of the Council on Competitiveness violated federal conflict of interest rules (18 U.S.C. Sec. 208). At your request, we restricted our review to Mr. Hubbard's involvement in the Council's review of Clean Air Act regulations. On April 3, we briefed the Subcommittee staff on the results of our efforts and were asked to furnish a brief report on the status of our work. This letter responds to that request.

Mr. Hubbard became Executive Director of the Competitiveness Council in June 1990. In late November 1990, the Vice President's Deputy Counsel sent the draft of a proposed conflict of interest waiver and also a draft recusal for Mr. Hubbard to the Office of Government Ethics. The Office of Government Ethics provided its comments to the Deputy Counsel on January 4, 1991.

On May 23, 1991, Mr. Hubbard, to avoid potential conflicts of interest, recused himself from dealing in particular matters involving certain companies. With respect to any remaining potential conflicts, Mr. Hubbard sought a waiver from the requirements of 18 U.S.C. Sec. 208. On June 12, 1991, the Vice President found that Mr. Hubbard's financial interests were not substantial enough to affect the integrity of service expected from him and granted the waiver. Thus, between June 1990 and June 1991, Mr. Hubbard did not have a waiver from the application of the requirements of 18 U.S.C. Sec. 208. On January 22, 1992, Mr. Hubbard left his position as Executive Director of the Council on Competitiveness to assume other responsibilities in the Vice President's office.

Section 208 of Title 18, United States Code, prohibits officers and employees of the United States from personally and substantially participating in any particular matter in which that person knows he has a financial interest. To determine compliance with this section, we examined Mr. Hubbard's public financial disclosure reports for 1990 and 1991. We sought to compare his holdings with his activities as Executive Director of the Council on Competitiveness. To discover whether Mr. Hubbard participated in particular matters affecting his financial interests, we asked the Office of the Vice President to provide all records:

(1) relating to discussions between EPA employees or officers and Council on Competitiveness employees or officers that took place between June 1990 and June 12, 1991 regarding EPA regulations;

(2) relating to any meeting Allan Hubbard attended between June 1990 and June 12, 1991, with other employees or officers of the United States regarding any a) federal government contracts, or b) agency rulemaking or portion of a rulemaking process; or

(3) relating to any discussion Allan Hubbard had between June 1990 and June 12, 1991, with employees or officers of the United States regarding any a) federal government contracts, or b) agency rulemaking or portion of a rulemaking process;

in which Mr. Hubbard participated through the rendering of advice, investigation, or otherwise.

We first requested the records in early January and frequently renewed our request. To date, we have not been provided access to those records. The Office of the Vice President has produced a list of publicly announced Competitiveness Council meetings attended by Allan Hubbard (see enclosure) and other documents already in the public domain. This information does not reveal the nature or extent of Mr. Hubbard's Council activities. From this information, we cannot assess Mr. Hubbard's compliance with federal conflict of interest requirements.

On March 13, 1992, we met with EPA's acting General Counsel and requested records in EPA's possession meeting the above criteria. EPA officials told us that, in order to respond to requests from congressional committees, they have gathered the documents and sent them to the White House for review and to the Department of Justice for information. We have not yet received any documents from EPA.

We also asked the Acting Chief of the Public Integrity Section of the Department of Justice whether his office had undertaken an examination of Mr. Hubbard's activities. He stated that no investigation was pending and that based on media reports, there is apparently no basis to begin a criminal investigation.

In light of the above, we believe that further efforts to obtain White House cooperation in our review of Mr. Hubbard's compliance with 18 U.S.C. Sec. 208 would not be productive.

On a related matter, you have requested that we examine whether an EPA rulemaking begun under section 307 of the Clean Air Act could be completed under the informal rulemaking procedures of the Administrative Procedure Act (5 U.S.C. Sec. 553). We will respond to that request shortly.

We are sending a similar letter to the Chairman of the Committee on Government Operations.