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Reform Groups Urge Congress Not to Use 9/11 Intelligence Reform Bill to Gut Financial Disclosure Laws

Nov. 12, 2004

Reform Groups Urge Congress Not to Use 9/11 Intelligence Reform Bill to Gut Financial Disclosure Laws

Senate-House Conferees Debate Weakening Requirements for National Security Officials

WASHINGTON, D.C. – Public Citizen, the Campaign Legal Center and Democracy 21 today jointly sent a letter to a House-Senate conference committee condemning efforts by House Republicans to insert an extraneous anti-ethics provision into the “9/11 Recommendations Implementation Act.” The provision would dramatically reduce the personal financial disclosure requirements for senior-level national security officials and appointees.

After more than a year of studying the problems that left the United States unprepared for the attacks on Sept. 11, 2001, the 9/11 Commission recommended a series of reforms to enhance the operations and performance of the intelligence community. Congress has since proceeded to implement those recommendations. The commission didn’t recommend any cutback on ethics rules.

H.R. 10, the House-passed response to those recommendations, which is now being conferenced with the Senate bill (S. 2845), would, among other things, repeal the requirement that senior-level national security officials and appointees report the amount of their personal financial assets in excess of $2.5 million. Currently, senior-level government officials must report the value of their personal assets over $5 million, $25 million and $50 million. This disclosure can help flag when officials have personal financial stakes that could compromise their decisions on such matters as awarding government contracts.

“Why would Republican House leaders want so badly to insert an attack on our nation’s ethics laws into a national security bill?” said Public Citizen President Joan Claybrook. “It belies the recommendations of the 9/11 Commission, it sets the stage for corruption and it has nothing to do with enhancing the performance of the intelligence community.”

In negotiations with the Senate, House conferees also have proposed weakening the personal financial disclosure requirements for all executive branch officials, rather than just national security officials. By presenting the package for undercutting the nation’s ethics laws as a homeland security issue, those who oppose personal financial disclosure requirements could make significant legislative strides toward that goal.

H.R. 10 also proposes to end the requirement that senior-level officials report the dates of major stock transactions, another provision unrelated to national security. When an official has “inside” information of pending business deals, such as a major homeland security government contract, that official can personally benefit by trading stocks before the deal becomes public.

“Public disclosure of major stock transfers provides the greatest single safeguard against insider trading by government officials. The timing of such transfers can serve as a red flag for potential fraud, and disclosure of these transactions is therefore a first-line defense against corruption,” noted the coalition’s letter to the conference committee.

To read the letter to the House-Senate conference committee by Public Citizen, the Campaign Legal Centerand Democracy 21, click here.