QUESTION OF CONFLICT OF INTEREST WITH RESPECT TO PROPOSED CONTRACT(Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01794R000100040025-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 12, 2016
• Document Release Date: April 8, 2002
• Sequence Number: 25
• Publication Date: September 23, 1963
• Content Type: MFR

Approved For Rele a 2002/05/20 : CIA-RDP80-01794R00D400040025-0
vices of
SUBJECT: Question of Conflict of Interest with Respect to Proposed
Contract with involving Ser-
1. On 19 September 1963, I met at NPIC with Q Assistant
for Plans and Development, NPIC; Chief, Logistics Branch,
Administrative Staff, NPIC; and
of F- is house counsel
activities would and should be such as to avoid the application of this
directive which states that, "The ultimate test should always be: Is
the contractor placed in a position where his judgment may be biased,
or where he has an unfair competitive advantage?"
3. In an effort to resolve this question, I discussed the matter
in detail with Mr. Sol Lindenbaum, an attorney in the Office of Legal
Counsel, Department of Justice, room 5138, code 187, extension 204S.
zational Conflicts of Interest. It was our opinion that
nknow how" be
could be clearly considered to be a Government employee. If not, then
the statute would not apply. If so, then we might have to seek another
solution. We also discussed Department of Defense Directive Number
5500.10 of 1 June 1963 setting forth Rules for the Avoidance of Organi-
We felt that the crux of the problem lay in whether or not
r--j. A contract would be entered into for, D services; he
would remain the employee of he would have no adminis-
trative duties with the Agency and would not be involved in procurement.
He would be a resident scientist who, after a period of orientation,
would work out the problems given him on his own with minimal NPIC super-
vision. In addition to solving problems connected with the organization
and setting up of the 0 he might also be called upon to evaluate
certain scientific instruments or to give an opinion as to whether equip-
ment had met specifications. II said he was concerned with and
would like to have resolved by responsible authority the question of
whether or not the recent conflict of interest statute, P. L. 87-81+9,
which became effective 21 January 1963, would apply to this situation.
in organizing the recently established
used over the period of a year beginning about 1 October 1963 to assist
2. It developed that it is desired that
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SUBJECT: Question of Conflict of Interest with Respect to Proposed
Contract with Involving Ser-
vices of
He said the proposed situation was an unusual one which he felt might
be handled more simply by the Agency hiring II direct for the
required period but that if this could not be done conveniently,L_
would not maiin that is,.,, in fact, a Government employee
or subject to the conflict of interest statute. As a mat er""
he stated that even if 0 were actually a Government employee,
he felt the statute would not apply since the thrust of the prohibi-
tions contained in the statute is toward adversary proceedings and not
toward this kind of a situation. In this connection, he referred to
the legislative history to be found at 2 U. S. Congressional and
Administrative News 1962, page 3852 et seq. which is Senate Report No.
2213. In addition, he furnished a copy of the committee print on
Conflict of Interest dated 1 March 1963 containing Department of
Justice Memorandum analyzing P. L. 87-819, compiled by the Senate
Committee on the Judiciary. In further discussion of the statute,
Mr. Lindenbaum stated that the one hundred and thirty days contained
in the definition of a "special Government employee" refers to work
days, thus twenty six weeks or six months. He further stated that
once the bona fide intention had been established to set up an
individual as a "special Government employee" for employment not to
exceed one hundred and thirty days, the fact that circumstances might
ultimately cause that period to be exceeded would not take the indi-
vidual out of the category of "special Government employee" under the
statute.
4.
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The gist of the foregoing was transmitted by telephone to
he and other people he mew of in the industry were interpreting the
conflict of interest statute much more broadly than that of a mere
"adversary proceeding" concept. I feel that this is not unreasonable.
However, Justice interprets the law and since Mr. Lindenbaum has
stated that he will not quarrel with the Agency's approach to this
problem or argue with our contention that II is not a Government
employee, I feel we had better let well enough alone. Matters of
this kind can be handled better on an individual basis.
5. Contracting Officer, Procurement Division/OL,
assigned to NPIC, who will negotiate the contract, was
advised of the foregoing.
at He stated that 25X1 A
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SUBJECT: Question of Conflict of Interest with Respect to Proposed
Contract with Involving Ser-
6. A sterilized version of this memorandum was approved by
F- I Security Officer of NPIC, for personal transmittal
to r- 1by this week, together with a copy of the
Senate Committee print.
Assistant General Counsel/OL
Distribution : (, r r ~,;" }
1 - OL/PD (Chief)
1 - NPIC
1 - NPIC
2 - OGC
OL/OGC 1(23 Sep 63)
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