EXEMPTION FROM PUBLIC AVAILABILITY ASPECTS OF FINANCIAL REPORTS REQUIRED BY THE ETHICS IN GOVERNMENT ACT OF 1978

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00156R000300020019-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 15, 2016
• Document Release Date: October 7, 2003
• Sequence Number: 19
• Publication Date: April 2, 1979
• Content Type: MF

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CIA-RDP83-00150030
1979
MEMORANDUM FOR: Director of Central Intelligence
THRU: Deputy Director of Central Intelligence
FROM: Don I. Wortman
Deputy Director for Administration
OEc 79-03o9g
Y-3-79
J Stocutivo Regist y
SUBJECT: Exemption From Public Availability Aspects of
Financial Reports Required by the Ethics in
Government Act of.1978
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1. Action Requested: That you sign the attached letter to President
Carter (Tab B) requesting that he make the appropriate findings necessary
to exempt financial reports of CIA officials from public availability and
to permit the filing of additional reports where necessary to preserve
cover. II
2. Background: The Ethics in Government Act of 1978 .requires that
all senior Government officials file annual detailed financial statements
with a designated official of their agency. The Act also provides that
unless exempted by the President, copies of such statements must be given
to any person on request together with a copy of the official position
descriptions of the positions held by the persons filing such reports.
Such requests must be honored any time within 6 years from the date of
filing. In addition to the provision for Presidential exemption from the
public availability aspects of the Act, the President can also authorize
the filing of more than one such report if necessary to preserve opera-
tional e
uiti
q
es such as official cover.
3. Staff Position:
a. Attached hereto (Tab A) is a paper which discusses the possi-
ble effects the public release of detailed financial statements of
CIA employees would have on the Agency's mission. I strongly urge
that you petition President Carter to make the necessary findings
which would exempt the financial statements of all Agency officials
from public ava' ability except those of Presidential appointees
(DCI, DDCI).
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b. I do not make this recommendation lightly. It is based
not only on the attachment but also on extensive discussions by
my staff with key senior officials Agency wide. It is their over-
whelming opinion that such a course of action must be taken to
preserve the Agency as a viable foreign operational arm of the
U.S. Government. It is their judgment that, in terms of security,
counterintelligence and cover, the public availability require-
ments of the Act contain the potential for the most dangerous and
debilitating exposure in Agency history. As pointed out above,
unless exempted by the President, copies of reports containing
in-depth details of the financial condition and personal status
of the top fficials of the Agency, together with the
official d of title) of the positions they hold must
be given to any person on request received up to 6 years from the
date the report is filed. Beyond doubt, the Agency will receive
such requests, perhaps within hours of the time such reports must
be filed. Those reports will then be available to the media,
foreign embassies, international terrorist groups, and assorted
nuts. This must not b llowed to happen. The list of potential
problems is endless.
c. There are other options to this course of action, but
anything less than total exemption would have to be based on an
arbitrary dividing line related to the amount of public exposure
officials, such as the Legislative and General Counsels, receive
as a result of their responsibilities. But, as the attachment
points up, some of the major effects that may occur due to public
disclosure will apply to all officials of the Agency. Therefore,
I believe that notoriety by itself is an insufficient basis for
drawing the line.
4. Recommendation: I recommend that you sign the letter to President
Carter (Tab B requesting that he make the necessary findings which will
exempt the financial statements of Agency officials from public disclosure
and will authorize the filing of additional reports by officials with
other Government agenci where necessary to protect cover or other
operational equities.
Attachments:
As stated
Don I. Wortman
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SUBJECT: Exemption From Public Availability Aspects of Financial
Reports Required by the Ethics in Government Act of 1978
Distribution:
Original - Addressee w/atts
1 - DCI Watts
1 - DDCI w/atts
1 - ER w/atts
1 - D/NFAC w/atts
1 - DDO w/atts
1 - DDS&T w/atts
1 - Comptroller w/atts
1 - General Counsel w/atts
1 - Inspector General w/atts
1 - Legislative Counsel w/atts
,1/ DDA Subject w/atts
1 - DDA Chrono
1 - Al Subject w/atts
1 - AI Chrono
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EFFECT OF PUBLIC DISCLOSURE
OF FINANCIAL STATEMENTS OF CIA EMPLOYEES
(Ethics in Government Act of 1978)
Prologue
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This paper discusses the possible consequences of the public
availability of financial reports provisions set forth in the Ethics
in Government Act of 1978 (hereinafter "the Act") in the event the
President does not make the necessary finding which would exempt such
financial reports from public disclosure. In reviewing this matter,
it is extremely important to keep in mind that CIA abroad must operate
under cover and that senior personnel are routinely rotating between
domestic and foreign assignments. Official and overt U.S. Government
acknowledgement of certain employees' CIA affiliation would create
political, security, and foreign government difficulties to the assign-
ment of such personnel abroad. The destruction of the Agency or pub-
lication of its activities with the intent of rendering it useless are
objectives not only of the KGB but also the avowed purpose of Philip
Agee and others of his persuasion, including Morton Halperin and John
Marks of the Center for National Security Studies. More than any other
agency, CIA excites the curiosity of the press and public because of
the mistique and the James Bond aura which inevitably encompasses secret
F
Because of the above, coupled with the revelations and investiga-
tions of the past 5 years, the Agency is not only more vulnerable to
media mischief than are other Government agencies but because of cover
and foreign operational aspects such mi f can undermine and destroy
the effectiveness of the Agency abroad. t~i
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I. The Requirement
A. Who Must File
1. The Act requires that every employee file with a designated
Agency official a detailed financial report if:
a. the employee occupies a position graded GS-16 or above;
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b. the employee occupies a position the rate of basic pay
for which is fixed at or above the minimum GS-16 level. ^ 25
2. Office of Government Ethics (OGE) Interpretation. OGE, the
office charged with implementing the Act, has interpreted
the law in a way that would make the law applicable to any-
one in CIA whose salary is equal to the minimum GS-16 level,
i.e., the top levels of GS-15.F]
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B. Agency Positions or Persons Covered
If the applies to positions rather than salary, then approxi-
mate) of the Agency's top officials will fall under the Act.
Howeve , the OGE interpretation prevails, i.e., that the
salary of the person rather than the grade of the position is
controlling, then an additional 200 more Agency officials
would be required to file reports. II 25
C. Public Availabilit of Reports
The Act requires that all reports, as well as the official
position description of the position occupied by the official
filing the report be available to the public unless the President
acts to exempt any such reports. The Agency must, at the request
of any person, make any such report available for inspection and/or
provide a copy of such report and position description. Further-
more, such reports/position descriptions must be available to the
public for a period of 6 years from date of filing. 0 25
D. Exemption of Reports from Public Availability
1. Congress recognized that while the public interest would be
well served if most senior Government officials filed finan-
cial reports, the public interest would not necessarily be
served if the financial reports of certain persons involved
in intelligence activities were to be made available to the
world. The law therefore provided a mechanism whereby such
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financial reports could be exempted from the public avail-
ability provisions of the Act discussed above. In order
for the financial reports of intelligence officials to be
so exempt, the President must find that
"due to the nature of the office or posi-
tion occupied by such individual, public
disclosure of such report would, by
revealing the identity of the individual
or other sensitive information, compro-
mise the national interest of the United
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States" (emphasis added).
2. Legislative History. The legislative history of the Act
justifies a broad interpretation of the President's author-
ity to provide exemptions from the public availability
aspects of the Act for individuals engaged in intelligence
activities. II
a. The House Bill. The House version of the Act provided
for Presidential authority to exempt reports from public
disclosure where
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"due to the nature of the office
or position occupied by such
individual, public disclosure of
such report would compromise the
national interest of the United
States." ^
b. The Senate Bill. The Senate version of the Act provided
narrower exemption limited to cases where
"public disclosure of such report
would reveal the identity of an
undercover agent of the Federal
Government."
In conference on the Act, the Senate accepted the House
version with the modification that the reports could be
exempted if they would
"by revealing the identity of the
individual or other sensitive in-
formation, compromise the national
interest of the United States."
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II. Effect of Public Disclosure of Financial Reports of CIA Employees
From a security standpoint, the public availability requirements
of the Act contain the potential for the most dangerous and
debilitating exposure in Agency history. As pointed out above,
unless exempted by the President, copies of reports containing
in-depth details of the financial condition and personal status
of the top fficials of the Agency, together with the
official descrip ion not title) of the positions they hold must
be given to any person on request received up to 6 years from the
date the report is filed. Beyond doubt, the Agency will receive
such requests, perhaps within hours of the time such reports must
be filed. Those reports will then be available to the media,
foreign embassies, international terrorist groups, and assorted
nuts. The list of potential problems is endless. I I
For purposes of discussion, the effects of public disclosure are
considered in the general areas of security, counterintelligence,
and cover. Not all of these factors will apply to every person
or position covered under the Act but some of them will apply to
every such person or position.II
A. Penetration by Foreign Intelligence Services
1. It is known that one of the primary objectives of the KGB
is to penetrate CIA. Counterintelligence staff records
document numerous attempts by the KGB to develop and recruit
CIA personnel. The KGB believes that the best way to
recruit U.S. citizens is through financial reward. Similar
efforts are mounted by other foreign intelligence services.
These efforts include the use of clandestine tradecraft
(surveillance, access agents, etc.) as well as the exhaus-
tive use of open source material (telephone directories,
State Biographic Registers, Foreign Service lists, news
papers, etc.) coupled with data processing techniques to
identify and assess American intelligence personnel. What
more could the KGB and others ask for than a blueprint of
the senior jobs in the Agency, who fills them, and. what
those persons' financial weaknesses might be. What would
CIA do if presented with a similar list of KGB personnel? ^
2. It can be argued that the Agency has already disclosed the
names of many of its senior officials. But in such cases
names are generally revealed one or two at a time, and care
is taken to withhold the identities of those under cover.
Under the Act, we would be serving up not only an extensive
listing of names but also an immense amount of data, thus
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facilitating the effort of the adversaries of the Agency
to obtain such information or identities. In addition,
the information would be guaranteed accurate and official.
C. Agency Projects, Programs, and Functions
The public release of the financial reports and position descrip-
tions mentioned above, if placed in the hands of even a semi-
sophisticated investigator, would lead to the revelation of
considerable additional data concerning Agency programs, projects,
covert installations, and firms with which the Agency has covert
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1. Official Position Descriptions. Through public disclosure
of official position descriptions, an adversary could develop
an extensive amount of data on Agency personnel strengths in
given areas, classified functions and programs of various
components, and the existence of and general location of
covert Agency installations. Such position descriptions,
just to cite a few from various Directorates, include:
information on the existence of various stations and the
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2. Security of Senior Officials. The same officials who will
be required to file reports will also be the officials who
travel most extensively on Agency business.. Many such
officials are required to meet with officials of firms with
which we have covert contracts or other sensitive relations
or with officials of foreign governments who themselves may
be under some form of cover. The implications of their meet-
ing with overtly identified CIA personnel may lead to
embarrassment through undesirable publicity, political
difficulties in certain foreign countries, as well as
physical threats to personal or family safety. 0
D. Effect on Agents and Foreign Liaison Services
The publication of the names and financial statements of senior
Agency officials would have a detrimental effect on our agents,
foreign liaison, and domestic contacts. It would be another
signal, one of a series in recent history (investigations, leaks,
FOIA, etc.), that the U.S. Government and CIA have lost both the
will and the ability to maintain the confidentiality of relation-
ships which depend for the most part on that very confidentialit
The implications for our collection capabilities are obvious. f?
E. Effect on Foreign Governments
Public official revelation of the names of officials as well as
the existence of a CIA presence in a particular country could
cause extensive foreign relations problems and even prompt a
foreign government to withhold visas and perhaps expel some CIA
officials. ^
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F. Opportunities for Media Mischief
While the opportunities for media mischief based on the public
revelation of financial reports of senior officials of any U.S.
Government agency are extensive, one need only remember the
press coverage of they matters, and the
natural curiosity of the pu ic, to realize that such reports
of CIA officials will probably engender a number of exposes by
irresponsible journalists or media representatives.
G. Personnel Flexibility
There are at least two aspects to this problem. The first
involves the future use under cover of officials who would be
subject to the public availability aspects of the Act at this
time. The publicity they would receive would severely limit
their future use. In addition, if an official is not currently
exempted but is later assigned to a position mandating an
exemption, then a petition for a Presidential finding will have-
to be submitted at that time. This could lead to a series of
such petitions. Just how the whole process would work is un-
known at this time, but it is fair to say it would be extremely
time consuming.
III. Summary
In sum, public disclosure of the CIA affiliation and job description
of senior officials -- and particularly those who are now or may in
the future be involved in the management of field activities -- would
be so detrimental to the operating equities of the Agency that such
disclosures must be avoided. There is no practical alternative. The
very existence of the Agency as a viable foreign operational arm of
the Government is at stake. El
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S ECR., LE T