FINANCIAL DISCLOSURE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81-00314R000600010012-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 9, 2016
• Document Release Date: August 11, 2000
• Sequence Number: 12
• Publication Date: July 8, 1977
• Content Type: MF

OGC HAS REVIEWED.
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OLC: 77-2596
8 July 1977
MEMORANDUM FOR: John F. Blake
Deputy Director for Administration
FROM: George L. Cary
Legislative Counsel
SUBJECT: Financial Disclosure
f' _,S'1 l.~i3
1. As passed by the Senate, S. 555 would require all Federal
employees in the grades GS-16-18 or paid according to the Executive
Schedule to file financial disclosure statements which would be
reviewed by a new Office of Government Ethics and made available
to the public upon request. The bill exempts employees of the CIA,
when the President determines that public disclosure of the report
would reveal the identify of an undercover agent of the Federal
Government. In this case, the financial report would be filed with
the Director of Central Intelligence and not be made public.
2. The Administration's position on financial disclosure is that
each employee should file a report with the head of his agency, and
that the head of the agency and the Director of the Office of Government
Ethics shall make provisions to assure that each report is reviewed
to assure compliance with the law. The Administration would exempt
from public disclosure reports filed by employees of the CIA, if the
President finds that public disclosure would compromise the national
interest of the Federal Government.
3. This office will seek to broaden the exemption contained in
S. 555 as passed by the Senate, when the bill is considered in the
House of Representatives. There are three arguments in support of
our position: (a) Agency personnel rosters and organization charts are
classified, and making the reports available to the public would, in
effect, disclose classified information; (b) availability of financial
records eases the task of identifying possible targets by those who
wish to infiltrate the Agency; and (c) the CIA Act of 1949 exempts
the Agency from any law which requires disclosure of organization
or numbers of personnel
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4. A possible compromise may be to require reports to be filed
with the Director and be received by someone outside the Agency.
Any such person(s) would be required to possess an Agency clearance.
A major question in this regard is whether the receiver(s) would be
employees of the Office of Government Ethics or come from some other
organization (such as the 101s).
5. Also to be considered is the position the Agency should take
concerning Executive Schedule employees. Staffers of the Senate
Governmental Affairs Committee seemed to feel these reports should
be made public.
6. This bill will likely be given early consideration in the House.
Therefore, it is important: that I receive your comments as soon as
possible.
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SUBJECT: Meeting with Senate Governmental Affairs
Committee Staffers Concerning S. 555
1. On 21 June 1977, 0 and I met with Dav:i.d Schaefer and STATINTL
John Childers, on the staff of the Senate Governmental Affairs Committee,
to discuss S. 555. The bill-would require non-undercover personnel in
grades GS-16-18 to file financial disclosure statements which would be
made available to the' public.
2. 1 indicated that this portion of the bill would create problems
for several reasons. They are:
a.. Lists of Agency personnel, such as the phone book,: and
outlines of the Agency structure are classified information.
Releasing the financial disclosure reports to the public, in
effect, discloses classified information.
b. Availability of financial records cases the task of
identifying possible targets by those who wish to infiltrate
the Agency. We indicated that we have no knowledge of an
Agency employee being recruited, and this is partially a result
of the precautions which are taken. It would be dangerous
practice to case the task of those trying to recruit Agency
personnel.
c. The CIA Act of 1949 exempts the Agency from any
law which requires disclosure of organization or numbers of
personnel..
3. Schaefer expressed the view that the boundaries of the financial
disclosure provisions are a matter of balancing. We responded that these
are concerns that should be part of the balancing which they may not have
considered. Scha.efcr also stated that as a matter of interpretat=ion he
felt this law would take precedence over the 1949 Act. Schaefer then
asked if the same arguments about subverting employees could apply to any
Government agency. We responded that intelligence agencies are in a unique
position because of the data they handle and because we are certain they
are the target of foreign intelligence organizations.
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4. Childers asked what other intelligence agencies may have the same
problem. We mentioned DIA and NSA, which are singled out i n the bill. IIc
then raised the question of persons paid at the Executive Schedule Level,
who are required to file public reports by other section-)s. He also asked
for The nummmbe:r of these posit.-i_ons. We _i_n(licated th~rt Our obi .ct__ion_, ;_,1:-
not be as strong in this case, and that there are probably no more than ten
such positions.
S. The bill is currently scheduled to come to the floor immed.iatel.y
following the July 4th recess, and we indicated we would be in touch with
them next week. Childers raised the following questions which should be
answered before we meet:
a. Would the Agency object to a review of the disclosure
statements by members of the Office of Government Ethics (which
the bill establishes) who would have Agency clearances but no
public disclosure of the statements?
b. What would be the status of CIA deta_i.lees to other
Government organizations, including the Congress? For example,
Schaefer indicated that persons detailed to Congress are subject
to congressional disclosure rules.
c. What is the Administration's position? We told him
that OMB had cleared our taking the initi_a.tiveu Childers said,
however, that Lipshutz had sent the Committee a Letter outlining
the Administration's problems, and that this was not included.
d. What is the Agency's position on disclosure by
Executive Schedule employees? The staffers indicated that
the Committee would not be receptive to suggestions of an
exemption for them.
Office of Legislative Counsel.
Distribution:
I - OLC Subject
1. - OLC Chrono
OLC:JEC:sm (22 Jun 77)
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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
FROM:
Legislative Counsel
EXTENSION
NO.
6C19 HQ
6121
DATE --- -
g JUL "i977
TO: (Officer designation, room number, and
building)
ATE
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MMENTS (Number each comment to show from whom
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to whom. Draw a line across column after each comment.)
1.
} )DDA
7D18 HQ
1
L 1977
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Attached is a memorandum out-
lining problems the Agency has with
2
. 555, a bill requiring financial
isclosure, as it passed the Senate.
In the event we are unable to get a
3,
complete exemption in the House,
allback options might include
clearance of certain people in the
4,
Office of Government Ethics (in
much the same way that I believe we
clear people in the Civil Service
57
omission and elsewhere) or the
ubmission of reports on our
mployees to the Intelligence
6.
versight Board. Please include
our thoughts on these alternatives
in your comments.
7.
Also attached is a Memorandum
or the Record of a meeting members
8.
f my staff had with Senate
ommittee staffers. The staffers ha
greed to support our position in
9.
onference Committee.
10.
11.
`~//~~G ~ GC Lam{
12.
~z7 v" 6- 5
6J ~
13.
14.
15.
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