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In Wake of Scully Fiasco, Public Citizen Calls on the Office of Governmental Ethics to Improve Procedures for Granting Ethics Waivers

Jan. 14, 2004

In Wake of Scully Fiasco, Public Citizen Calls on the Office of Governmental Ethics to Improve Procedures for Granting Ethics Waivers


White House Memo Acknowledges Problems With Conflict-of-Interest Regulations


WASHINGTON, D.C. – Public Citizen sent a letter this week to Marilyn Glynn, acting director of the U.S. Office of Governmental Ethics, the agency responsible for administering ethics laws and regulations within the executive branch, requesting that the agency review the basis for an inappropriate waiver from conflict-of-interest rules given to former Medicare chief Thomas Scully and upgrade the guidelines for issuing waivers.

On May 12, 2003, U.S. Department of Health and Human Services (HHS) Secretary Tommy Thompson granted a waiver from conflict-of-interest rules for Scully, then Medicare administrator. While negotiating the critical Medicare prescription drug legislation, Scully simultaneously negotiated future employment with three lobbying firms and two investment firms that had major stakes in the legislation. He ultimately accepted job offers from two of the firms after concluding legislative negotiations and resigning from his government post.

Following ethics complaints filed by Public Citizen and others, White House Chief of Staff Andrew Card issued a Jan. 6 memorandum establishing a new procedure for granting waivers – a tacit admission that the Scully waiver had been mishandled, Public Citizen said. Now, the Office of Counsel to the president must review all waiver requests made by presidential appointees who are seeking private employment to determine if they are in violation of conflict-of-interest regulations. But the White House policy is vague and incomplete. In its letter, Public Citizen seeks an investigation into the Scully waiver and a clearer policy on the grounds for granting waivers.

“This is a constructive first step in protecting the integrity of our national government,” said Frank Clemente, director of Public Citizen’s Congress Watch. “However, it is imperative that the agency most responsible for administering ethics rules within the executive branch – the Office of Governmental Ethics – review the administration’s failure in the Scully incident and work with the White House to ensure fair and uniform implementation of ethics procedures.”

Added Craig Holman, legislative representative for Public Citizen, “Thompson and other ethics officials in the department showed a blatant disregard for the ethics rules. The justification for the Scully waiver suggests that Thompson either did not know or did not care about the conflicts of interest.”