oversight

Actions Recommended to Make the Foreign Gifts and Decorations Act More Effective

Published by the Government Accountability Office on 1977-06-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                           DOCUMENT RESUME

02526 - [A1812847]
Actions Recommended to Make the ?oreign Gifts and Decorations
Act More Effective. ID-77-31; B-159008. June 23, 1977. 8 pp. + 2
appendices (13 pp.).

Report to the Congress; by Elmer B. Staats, Comptroller General.
Issue Area: International Economic and Military Programs (600).
Contact: International Div.
Budget Function: International Affairs: Conduct of Foreign
    AfiTaJrs (152).
Organization Concerned: Department cf State.
Congressional Relevance: House Committee on International
    Relations; Senate Committee on Foreign Relations; Congress.
Authority: Foreign Gifts and Decorations Act of 1966 (P.L.
    89-673, as amended; P.L. 90-83). 5 U.S.C. 7342. 18 U.S.C.
    641. 22 C.F.R. 3.
          A followup review was made of the Secretary of State's
implementation of recommendations made in 1975, which were
designed to strengthen the administration of the Foreign Gift-
and Decorati.ons Act of 1966. The act prohibits U.S. Got.rnment
employees from soliciting gifts and decorations from foreigr
governments and discourages the acceptance of unsolicited gifts
and decorations. Where ref-sal night embarrass the donor or
adversely affect U.S. foreign relatirns, the item(s) may be
accepted. They may be retained by the individual if less than
$50 in value; if their value is more than $50, they Bust be
tfrned over to the Government. Findings/Conclusions: The status
of the DepartmeLt of State's actions on the recommendations was:
(1) definitive procedures for ,andling foreign gifts received by
the President and members of his family had been developed; (2)
the Department of State does not plan to implement the
recommendation that Federal Agencies nd U.S. Missions report
gifts or decorations received in excess of minimal value by
Federal employees; (3) no additional steps are being taken by
the Off.ce of Protocol to publicly disclose gifts reported; (4)
no action has been taken in terms of providing comprehensive and
overall guidance concerning the act; (5) no action has been
taken to note and document gifts received but not reported or
deposited; (6) new criteria were developed, but not formalized
in writing, as to followup on gifts retained for official use;
and (7) no new blanket concurrences to the Armed Forces for
badges and *mdals have been granted.   Recommendations:
Legislative action is still needed to strengthen provisions to
the act to: establish points of responsibility in each of the
three branches of the Government to assure compliance with the
act; report and deposit gifts within a specified period of time
from their revceipt;   provide coverage for temporary or
intermittent experts and consultants; establish effective
penalties for noncompliance with the act; give the General
Services Administration responsibility for defining sin'l-al
valve subject to evaluation every 3 years; and provide for
approval of the Secretary of State or his delegate before
foreign gifts may be sold, and give the General Services
Adainistration explicit authority to conduct negotiated sales.
 (DJN)
                     REPORT TO THE CONGRESS

0:       -           BY THE COMPTROLLER GEN1ERAL
     i       S -OF          THE UNITED STATES




                 Actions Recommended To
                 Make The Foreign Gifts And
                 Decorations Act More Effective
                 Department of State

                 In 1975 GAO recommended legislative chanc-
                 es to the Congress and made several recornm-
                 mendations to ,he Secretary of Sta3te to
                 strengthen the admniriistration of the r-oreign
                 Gifts and Decorations Act whic prohibits
                 U.S. Government employees from soliciting
                 gifts and decorations frcm other governments
                 and discourages the acceptance of unsolicited
                 gifts and decorations.
                 However, no n:i. legislation has been passed
                 on the recomme-,atiolis; other GAO recom
                 mendations to -,., Secretary of £,ate gen
                 erally have not been put into action. this
                 report stresses the continuing need 1(ir action
                 so that the letter and spirit of this awvw is car-
                 riecl out.




                 ID-77-31                                             JUNE 23, )977
              COMPTROLLER GENERAL OF THE UtI1TO rrATLS
                         WASHINMTrON. D.C


B-159008



To the President of the Senate and the
Speaker of the House of Representatives

     This is our followup report on the statue of
recommendations made in our March 26, 1975, resort
to the Senate Committee on Foreign Relations, "Propo-
sals To Strengthen The Foreign Gifts and Decorations
Act of 1956" (ID-75-51).  (See app. I.)
     The Foreign Gifts and Decorations Act of 1966 (Public
Law 89-673) of October 15, 1966, as amended in 1967
(Public Law 90-83), prohibits U.S. Government employees
from soliciting gifts and decorations from foreign
governments and discourages the acceptance of unsolicited
gifts and decorations. Gifts of minimal val. :--less than
$50--may be accepted. Gifts of more than minimal value
may be accepted if refusal would cause offense or ewtar-
rassment or otherwise adversely affect U.S. foreign relations,
but they cannot be retained by the recipient. Such gifts
are accepted on behalf of the U.S. Government and must be
forwarde6 to the Chief of Protocol, Department of State.

     Our 1975 report noted that 542 foreign gifts had been
reported to the Chief of Protocol from the passage of the
act on October 15, 1966, through September 1, 1974. This
figure did not include a large number of foreign gifts
received by U.S. Presidents. From September 1, 1974, through
February 11, 1977, 959 foreign gifts were reported to the
Chief of Protocol. These gifts were reported as follows.

              President Ford and his family              216
              Vice President Rockefeller
                and his family                             6
              Secretary of State Kissinger
                and his family                           311
B-159008


               Members of Congress              59
               Others                          367

                                             a/959
a/ 101 gifts were approved by the Office of Protocol to
   be retained for official use by various Government
   agencies.

     Our 1975 eport made a series of recommendations
to the Secretary of State designed to strengthen the
administration of the act. We found that the Secretary
generally has not implemented our recommendations and
no new legislation has been passed t^ strengthen the
Foreign Gifts and Decorations Act. However, in this
followup review, we found that the Office of Protocol
had impro-,ed its procedures for recording and account-
ing for for gn gifts reported. In addition, :he House
of Representa:ives rnd the Senate have passed resolutions
outlining a code o. ethicr that affects the tireatment
of gifts through reporting in financial dicclosure
statements.

     The £tatus of State's actions on our recommendations
is discussed below.

     Recommendation 1--Develop definitive procedures
     for the recording, control, and custody of gifts
     received by the Vice President, Secretary of State,
     and members of their families.

     The Office of Protorol developed definitive pro-
cedures for handling the foreign gifts received by the
President and members of the First Family.  Procedures
for handling Vice President Rockefeller's gifts had
been discussed at the staff level.  On April 7, 1976,
a copy of the procedures for handling the President's
gifts was forwarded to the Counsel to the Vice President
for consideration in arriving at a procedure for han-
dling foreign gifts received by the Vice President. As
of January 12, 1977, no response had been received
from the Office of the Vice President by the Office of
Protocol.




                             2
 E-159008



      A senior staff representative of Vice
 Mcndale's staff has been fully briefed       President
 ments of the law and regulations, and   on  the require-
                                        the Office of
 Protocol has already given the requested
 for display at the Vice President's        authorization
                                     official residence
 of a number  of gifts presenteC to him in
 of his recent working visits to Western the course
 Japan.                                 Europe and

      The Office of Protocol's position is
                                             that no special
procedures are necessary for handling
                                        the foreign gifts
received by the Secretary of State.
bound by The same Federal Regulations The   Secretary is
                                        (22 CFR part 3)
as are all other persons who fre subject
the Department feels that these regulations to the act, and
for this purpose. The Secretary of             are adequate
                                     State,
turned in gifts to the Office of Protocol however, has
groups rather than individually as           in lots or
                                    received and five
wedding gifts have been returned to
                                     the donors.
     Recommendation 2--Request Federal
     Missiofns to report to the Chief of agencies and U.S.
                                          Protocol any
     Federal employees who receive decorations
                                                  or
     gifts in excess of minimal value.

      State does not plan to implement this
 tion. It maintains that neither               recomLmenda-
                                    Federal agencies nor
 U.S. Missions have the obligation,
 have under statute or regulationqs, nor should they
                                      to report gifts
 received by their employees.   On
 the Chief of Protocol reiterated .ecember    20, 1976,
                                    employee responsibfl-
 ities under the act in a memorandum
                                       to the beads of
all Federal agencies.   This memorandum, similar to one
issued in July 1974, included
value was defined as $50 retailtwo   additions--minimal
                                   in the United States
and a statement was included in the
                                       regulatLns placing
the burden of proof on the recipient
establish that the gift from a foreignof the gift to
minimal 7alue. Copies of this memorandum  government is of
sent to all American diplomatic and          ,;ere also
                                       consular posts, the
Speaker of the House of Representatives,
of the Senate. The State Department         and the President
                                        has further pub-
licized this information ir its January
                                           i977 Newsletter.


                              3
B-159008


     Reco,?mnendation 3--Direct the Chief of Protocol
     to perio-ically disclose to the public all gifts
     reported to him and to request an accounting of
     gifts received by the Vice President, the White
     House staff, and the Secretary of State.
     State believes that the Chief of Protocol should
not be burdened with the obligation of publicly dis-
closing gi2ts reported to the Office of Protocol or with
requesting a formal accounting by the officials cited--
requirements which Protocol contends are satisfied by
existing procedures. State also continues to believe
that the Foreign Gifts and Decorations Act confers no
investigative powers on the Chief of Protocol and that
therefore the Office of Protocol is not authorized
to require such an accounting.
     Office of Protocol officials told us in January
1977 that they were taking no additional steps to
publicly disclose gifts reported, because these records
are already open to the public under the Freedom of
Information Act. The State Department disagreed with
our suggestion that gift records be periodically reported
in the Federal Register, stating th6t such disclosures
are likely to cause embarrassment to the donors.
     Recommendation 4--Provide mnr' detailed guidance
    *to Federal agencies concerning those provisions
     of the act which are confusing or subject to
     misinterpretation.
     Two points have been clarified in the December 20,
1976, memorandum to the heads of all Federal agencies
on employee responsibilities under the Foreign Gifts and
Decorations Act of 1966. These are (1) minimal value
is defined as being $50 retail in the United States and
(2) the burden of proof to establish that a gift from
a foreign government ".s of minimal value rests with
the recipient of the gift. The other items below which
were considered confusing or subject to misinterpre-
tation as stated in our March 1975 report were not
addressed.

                            4
 B-159008




      -- Definitions of gift and foreign government.

      -- Status of gifts received from quasi-governmental
         or multinational organizations.

      ---Confusion on types of gifts required
                                              to be reported.
      -- Whether a trip or travel could be accepted
         the expense of a foreign government.       at

      -- Whether the President or his delegate
                                               could
         authorize disposal of foreign gifts and
         tions without regard to restrictions of decora-
                                                 other
         statutes governing disposal of U.S. property.

     No action has been taken on this recommendation
in terms of providing comprehensive  and overall guidance
to Federal agencies. Protocol officials
                                          informed us
in January 1977 that they clarify confusing
of the act on an ad hoc basis as needs       provisions
                                        arise (i.e., when
contacted by agencies with questions).

     Recommendation 5--Direct the Chief of Protocol
     note and document gifts known to have been       to
                                                  received
     but not reported or deposited.  After notifying
     the gift recipient of his responsibilities,
     sideration should be given to notifying       con-
     and other appropriate officials and to   the  Congress
                                             documenting
     action taken.
     Again, State's position remains unchanged
actions have been taken. The Department         and no
                                         maintains
actions which we noted the Office of Protocol       that
                                               could have
taken to effect compliance are not being
the absence of enforcement authority.    taken due to

     Office of Protocol officials expressed
that this recommendation lies in the realm the opinion
                                            of employee
conduct and ethics and therefore, the employees'
should be monitored by the appropriate            actions
                                       employing Federal
agencies.



                            5
B-159008



     Recommendation 6--Direct the Chief of Protocol to
     periodically follow up on gifts retained for official
     use.
     State believes that responsibility for property
control and an inventory system for gifts retained for
official use must rest with the user who possesses
physical control of an item. In i,.s January 1975 com-
ments on a draft of our report, the Department informed
us that new criteria had been developed for passing
upon such agency requests and that subsequent corres-
pondence with agencies would state agency razsponsibili-
ties concerning the safeguarding of this property.

     Office of Protocol officials advised us in January
1977 that the new criteria has not been formalized in
writing. However, the criteria is that an item will be
approved for official use if a similar item is normally
used in the course of an agency's official business and
is furnished as part of the agency'r inventory. Language
in the letters approving items for retention for official
use states that the gifts are Federal property and *;hould
be accounted for and safeguarded at all times in accordance
with v,:andard Federal property management procedures.  If
at any time the gift is not desired, it should be forwarded
to the )ffice of Protocol for disposition as provided for
under %ne act.

     Recommendation 7--Direct the Chief of Protocol to
     review recurring requests for authority to retain
     various classes of medals and badges and consider
     providing blanket concurrence to the Armed Forces
     for those badges and medals that are of nominal
     stature.

     The Department of State, when commenting on a draft
of our prior report in January 1975, told us that a review
of recurring requests would be undertaken, with a pos-
sible provision of blanket concurrence where appropriate.
In January 1977, State irformed us that no further blanket
concurrences have been granted beyond those previously
approved allowing the Arm,, and Air Force to review their
department's requests to retain qualifications and skill
badges. However, in the event that requests for retention


                            6
 B-159008




of other nominal awards should reach such a
                                            level as
to cause administrative problems, consideration
also be given to providing blanket concurrence will
                                                on these
awards.



     We discussed the status of the recommendations
to the Secretary of State with Department            made
                                          officials and
believe that the substance of the recommendations
                                                  made
in our March 1975 report is still valid. Bowever,
State's position is that it does not have the
                                              authority
to require compliance with the 1966 act nor
                                            believes
it appropriate to have this authority and does
the resources
                                               not have
               to monitor compliance.
      Our review of financial disclosure systems
regulations concerning standards for conduct      and
                                               of executive
branch departments and agencies also affects
                                               the subject
of gifts.   During the past 3 years, we have issued some
20 reports on this subject, and in February
                                              1977 we
issued a summary report recommending that the
establish an Office of Ethics in the executive President,
adequate resources to ensure enforcement and     branch with
                                               compliance.
Should such an office be established, we believe
                                                   it should
have responsibility for issuing rules and regulations
esteolisbling the criteria for minimum value.           and

     To date, no new legislation has been passed
                                                  to strengthen
the provisions of the Foreign Gifts and Decorations
In our opinion, regardless of congressional          Act.
                                            action.s being
taken to establish a financial disclosure
                                          system for top-
level Governme.t officers and employees, legislative
action is still needed to strengthen the provisions
of the Foreign Gifts and Decorations Act to

     -- establish points of responsibility in each
                                                   of the
        three branches of tie Government to assure
                                                   com-
        pliance with the act,

    -- report and deposit gifts within a specific
                                                  period
       of time from their receipt,



                            7
 B-159008




     -- provide coverage for temporary or intermittent
        experts and consultants,
     -- establish effective penalties for noncompliance
        with the act;
     -- give the General Services Administration
                                                 respon-
        sibility for defining minimal value subject
        evaluation every 3 years, and               to

     -- provide for appro-val of the Secretary
                                               c: State
        or his delegate before foreign gifts may
                                                  be sold
        and give the General Services Administration
        explicit authority to conduct negotiated
                                                  sales.
A proposed revised statute draft wh.~ch
                                        incorporates these
changes is included as appendix II.

     Copies of this report are being sent
Office of Managenent and Budget; Secretary to the Director,
                                            of State;
Administrator, General Services Administration;
Chairman, Civil Service Commission.              and




                             Comptroller General
                             of the United States
APPENDIX I                                                APPENDIX I


 COMPTROLLER GENERAL'S REPORT TO     PROPOSALS TO STRENGTHEN THE
 THE COMMITTEE ON FOREIGN            FORFIGN GIFTS AND DECORATIONS
 RELATIONS                           ACT OF 1966
 UNITED STATES SENATE                Multiagency

 DIGEST

 WHY THE REVIEW WAS MADE             Acceptance of unsolicited gifts
                                     and decorations is permissible
 The Senate Committee on Foreign     if their refusal might offend
 Relations asked GAO to review       or embarrass the donor or ad-
 administration and operation of     versely affect the foreign re-
 the Foreign Gifts and Decora-       lations of the United States.
 tions Act of 1966 and subse-        (See p. 1.)
 quent legislation, Executive
 orders, and regulations. (See       The act permits acceptance and
 P. 37.)                             retention of gifts of minimal
                                     value and decorations for out-
 The Chief of Protocol, Depart-      standing or meritorious serv-
 ment of State is responsible        ice. All other gifts and deco-
 for administering the act.          rations may not be retained and
 (See p. 2.)                         are the property of the United
                                     States.- (See p. 1.)
 FINDINGS AND CONCLUSIONS            Reporting of gifts
 Deficiencies in the act and its     The act applies to Presidents,
 implementing regulations limit      Vice Presidents, Members of the
 the effectiveness of the law.       Congress' and employees in all
                                     three branches of Federal
 Gifts and decorations               Government, including civilian
 legislation                         and military. It does not ap-
                                     ply to some experts and con-
 Implementing provisions of the      sultants hired by the Govern-
 Constitution (see p. 1), the        ment. (See p. 4.)
 1°66 Act
                                     The President, Vice President,
 -- prohibits Government employ-     and Secretary of State and
    eef; from soliciting gifts and   members of their families are
    decorations, and                 the principal recipients of
                                     gifts from foreign governments.
 -- discourages acceptance of un-    (See p. 4.)
    solicited gifts from other
    governments by limiting con-     As of September 1, 1974, 542
    ditions under which gifts may    foreign gifts were reported by
    be accepted. (See p. 1.)         141 employees of the executive
APPENDIX I                                                  APPENDIX I

and legislative branches to the         ascertain whether these were
Office of Protocol.  (See               isolated instances or represen-
p. 4.)                                  tative of a more general prob-
                                        lem of a lack of reporting.
This total does not include a           (See pp. 4, 8, and 10.)
large number of gifts received
by Presidents Johnson or Nixon.         Administration of the act
Neither had reported to Pro-
tocol the gifts recorded by             The reporting system under the
their Gift Units. (See                  act relies heavily on voluntary
p. 4.)                                  compliance by the recipient.
                                        Neither the act nor its regula-
 Pr-sident Johnson's gifts are          tions require that gifts be re-
 in the LBJ Library in Austin,          ported within a specific time,
 Texas. Most of President               nor is there an effective
 Nixon's gifts are in storage at        penalty for noncompliance.
 the National .rchives. (See
 pp. 7 and 8.)                          These deficiencies limit the
                                        effectiveness of the law.
 Gifts received by the Presi-           (See p. 15.)
 dents are handled exclusively
 by a White House Gift Unit.            However, the Chief of Protocol
 The White House Gift Unit did          could have
 not identify all gifts received
 by former President Nixon and          -- alerted the Congress to dif-
 members of his family. (See               ficulties encountered,
 pp. 5 to 70)
                                        --requested the White House and
 President Ford has approved new          other Federal agencies or
 procedures relating to the ac-           units to report gifts re-
 ceptance of foreign gifts re-            ceived by their employees,
 ceived by him and his family.
 GAO believes the new procedures        --advised gift recipi'.nts of
 will improve reporting and con-          the provisions of the act,
 trolling these gifts under the           and
 act. (See p. 7.)
                                        -- retained   or prepared records
 As of March 1975, Vice Presi-             of gifts   known to have been
 dent Rockefeller's staff and              received   but not reported.
 the Department of State'c                 (See pp.   17 and 18.)
 staff were developing new
 procedures for handling gifts.         Individuals receiving gifts
 (See p. 13.)                           often are in the higher civil
                                        service grades or hold elective
 Records GAO h3as examined indi-        or high appointee positions.
 cate that some Government of-          GAO noted a reluctance on the
 ficials may have received gifts        part of the Office of Protocol
 which, up to the present, have         to approach such individuals
 not been reported to the Chief         concerning requirements of the
 of Protocol. GAO was unable to         act. (See p. 18.)




                                   10
 APPENDIX I
                                                           APPENDIX I
  Here are other arpects of the
  act and its regulations re-           to the General Services Admin-
  quiring clarification o:              istration for disposition.
  change:                               The Chief of Protocol was un-
                                        able to locate all gifts, in-
 -- Regulations do not explain          dicative of inadequate control.
    that the act applies to gilts       (See pp. 29 and 31.)
    given by officials of any
    foreign governmental subdivi-       Generally, the General Services
    sion, not solely national           Administration advises suitable
                                        Government units, such as
   governments. (See p. 20.)
                                        museums, that items are avail-
 -- Regulations fail to explain
                                        able. If there are no
                                        quests,                re-
   that all gifts whether given                 the items may be sold.
   as a personal or state gift,
   are under the provisions of          As of September i, 1974, 433
   the law. (See p. 20.)                gifts had been turned over to
                                        the General Services Adminis-
 --Neither the regulations nor          tration. Of these, 283 were
   the act state whether or not         on hand and 143 were trano-
   gifts from foreign quasi-            ferred, with the remaining 7
   government organizations or          being sold by the Administra-
                                        tion.
   multinational organizations
   need to be reported. (See
                                       One museum, to which gifts had
        p. 16.)                        been transferred, had.exchanged
Neither the act nor its requla-        or sold 26 items. Better
                                                                 con-
                                       trcl over disposition of gifts
tions require an independent
appraisal of the gifts. The             is needed. (See pp. 29 to 31.)
burden of determining a gift's
worth--"minimal value' defined         Decorations
as $50 or less--rests with the
recipient. (See p. 17.)                ?'ne provisions of the act re-
                                       garding decorations are gener-
The act also applies to intan-         ally being followed. (See
                                       pp. 33 and 34.)
gible gifts such as travel.
However, as a general rule,
intangible gifts of more than          RECOMMENDATIONS
minimal value may not be ac-
cepted.                                The Secretary of State should
         (See p. 21.)                  develop clear procedures for
Questionable disposition and            he recording, control,
use of gifts                           custody of gifts subject and
                                                                 to
                                       reporting under the 1966 act.
Once a gift is reported to             These procedures should in-
                           the
Chief of Protocol, he may per-         clude:
mit its use for official pur-
poses or declare it excess per-        --Requesting that Federal agen-
sonal property and transfer it           cies and U.S. missions report
                                         to the Chief of Protocol




                                  11
APPENDIX 1                                                 APPENDIX I

  Federal employees who re-              recipients. (See pp. 12,
  ceived decorations or gifts            13, 23, and 24.)
  beyond minimal value.
                                       The act and its regulations
-- Directing the Chief of Pro-         limit the State Department's
   tocol to periodically dis-          administrative effectiveness.
   close to the public, gifts          However, actions GAO indicated
   reported to him; request an         the Department could have taken
   accounting of gifts received        were prudent administrative
   by the Vice President, the          steps readily available.
   White House staff, and Sec-
   retary of State; and note           In addition comments were re-
   and document gifts retained         ceived from the Department of
   for official use, and gifts         Defense, Executive Office of
   not deposited but known to          the President, General Services
   have been received.   (See          Administration, and Smithsonian
   pp. 12 and 23.)                     Institution and are discussed,
                                       where appropriate, in the re-
                                       port.
AGENCY ACTIONS AND UNRESOLVED
 ISSUESD     -        --               MATTERS FOR CONSIDERATION
                                       BY THE   CONGRESS
In disagreeing with GAO recom-
mendations, the Department of          GAO believes a need exists to
State                                  amend the Foreign Gifts and
                                       Decorations Act to provide the
-- was of the opinion that it          basis for adequately implement-
   could not have taken any ac-        ing the constitutional intent
   tion which would have led to        to control the impact of gifts
   broader compliance with the         given by foreign governments.
   act,                                Further, a need exists for each
                                       branch of the Goveca;ment to es-
 --said that actions which GAO         tablish separate arrangements
   feels the Office of Protocol        to see that the statute is
   could have taken, were not          followed. GAO believes it is
   taken due to the absence of         unreasonable to expect the Ot-
   enforcement and compliance          fice of Protocol to be in a
   authority, and                      position to effectively admin-
                                        ister the act with respect to
 --indicated that the Office of        the legislative and judicial
   Protocol's reticence to ad-         branches. GAO believes the act
   vise the Congress of diffi-         should be amended to require
   culties encountered in ad-          that
   ministering the act stemmed
   from Protocol's inability to        --separate entities be respon-
   effect compliance in a gen-           sible for administering the
   eral way, rather than from            act in each branch of the
   sensitivity toward gift               Government,




                                  12
APPENDIX I                                                APPENDIX I



-- gifts be reported and depos-         clearly accrue to the U.S.
   ited within a specific period        Government as opposed to the
   of time from receipt,                individual, and when approved
                                        by an appropriate official of
--there be an effective penalty         the executive, legislative,
  for noncompliance with the            and judicial branche3.
  act,
                                      --clarify whether the President
-- appropriate coverage for             or his delegate is authorized
   temporary or intermittent            to dispose of foreign gifts
   experts and consultants be           and decorations without con-
   provided,                            sidering restrictions of
                                        other statutes governing dis-
-- permission be required from          posal of U.S. property, and
   the Secretary of StaLe before
   selling or trading a foreign       -- clarify if a gift from a
   gift, and                             member of a foreign Head of
                                         State's family is to be con-
--responsibility for defining            sidered a gift from a for-
  minimal value be given to the          eign government. (See
  President and be d2fined as a          p. 25.)
  specific dollar value not
  subject to interpretation           When considering the amendment
  (possibly $100 U.S. retail          and administration of the act,
  price at the time of pur-           Congress may wish to consider
  chase) with consideration be-       alternative policy options in
  ing given by him from time to       the interest of perspective.
  time to making the value re-        Four approaches are listed
  flect inflation factors.            below.
  (See pp. 24 and 25.)
                                      --Consenting to the acceptance
The act should furtner be               of gifts, where their refusal
amended to                              would likely cause offense or
                                         lembarrassment or adversely
--require public disclosure and         affect the foreign relations
   independent appraisal of             of the United States, with
  .gifts,                               the recipient permitted to
                                        retain those of minimal value
--clarify whether gifts from            (current approach).
  quasi-governmental and multi-
  national organizations are          --Consenting to the recipient's
  included under the provisions         retention of gifts of minimal
  of the act,                           value, where their refusal
                                        would likely caus?: offense or
--distinguish and prcvide for           embarrassment or adversely
  the acceptance of intangible          affect the foreign reations
  gifts and emoluments of more          of the United States, aIrd
  than minimal value, such as           prohibiting the acceptance
  travel, where the benefits            of gifts above such value.




                                 13
.APPENDIX I                                              APPENDIX T

 -- Co'.senting to the recipi-         --Prohibiting the acceptance of
    elit's acceptance and re-            any gifts by Federal employ-
    tention of all gifts, where          ees. (See pp. 25 to 28.)
    their refusal would likely
    cause offense or embarrass-        GAO has drafted a revised stat-
    ment or adversely affect           ute, based on the current ap-
    the foreign relations of           proach and the problems identi-
    the United States.                 fied during this review. (See
                                       app. V.)




                                  14
*APPENDIX II                                    APPENDIX II

                            REVISED STATUTE

                               A BILL
      To amend and improve 5 U.S.C. S7342.

      Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled,

That 5 U.S.C. §7342 is hereby repealed and the follow-
ing new section is substituted therefor:
57342.  Receipt and disposition of foreign gifts and
decorations.
     "(a)   For the purpose of this section--
            "(1) 'employee' means--
                 "(A)  an employee as defined by section
            2105 of this title;
                 "(B) an expert or consultant while under
            contract with the United States or any agency,
            department, or establishment, thereof pursuant
            to section 3109 of this title;
                   " iC)   an individual employed by, or
            occupying an office or position in, the
            government of a ter:itory or possession of
            the United States or the District of Columbia;
                   "(D)    a member of a uniformed service;
                   "(E)    the President;
                   "(F)    a Member of Congress as defined
            by section 2106 of this title or any Delegate
            to the Congress; and
                 "(G. a member of the family and household
            of an individual described in subparagraphs
            (A)-IF) of this paragraph; 1/
1/ This provision would reenact subsection (a)(l)(F)
   of the existing act. For discussion of problems
   created by this provision and the countervailing
   considerations, see p. 16 of our report, ID-75-51,
   March 26, 1975.

                               15
APPENDIX II                                  APPENDIX II


              "(2)   'foreign government' means--

                    "(A) all units of foreign governmental
              authority, including foreign national, state,
              local, and municipal governments;

                    "(B)  international and multinational
              organizations whose membership is composed,
              in whole or in part, of foreign governments
              as defined in subparagraph (A) of this
              paragraph; 2/ and
                     "(C)   an agent or representative of
              a .oreign government as defined in subpara-
              graph (A) and (B) of this paragraph, whether
              acting in an official or private capacity;
              "(3)   'gift' means a present or thing, other
              than a decoration, tendered by or received
              from a foreign government, but does not include
              assistance for which the Congress consents to
              the acceptance pursuant to section 108A of
              the r:utual Educational and Cultural Exchange
              Act of 1961, as amended ;
              "(4) 'decoration' means an order, device,
              medal, badge, insignia, or emblem tendered
              by or received from a foreign government;
              "(5)   'minimal value' means a retail value at
              time of acceptance not in excess of $100
              in the United States; provided that every
              three years from the date of enactment of this
              section, 'minimal value' shall be redefined
              in regulations prescribed by the Administrator
              of the General Services Administration
              in consultation with the Secretary of State
              to reflect changes in the consumer price
              index for the prior three-year period;
              provided further that regulations of the
              employing agencies of the Government may
              define 'minimal value' for their employees
              to be less than the value prescribed under
              this paragraph;
2/ It is unclear under the existing act whether gifts
   from such organizations are subject to the act.


                                  16
APPENDIX II                                            APPENDIX II

              "(6)    'employing agency of the Government'
              means the Committee on Standards of Official
              Conduct for Members and employees of the
              House of Representatives; the Select Committee
              on Standards and Conduct for Senators and
              employees of the Senate; the department,
              agency, office, or other entity in which an
              employee is employed for all other legislative
              branch employees and all executive branch
              employees; and the Administrative Office
              of the U.S. Courts for judicial branch employees.
                     "(b)   An employee may not--
                            "(1)   request or otherwise encourage
                                   the tender of a gift or decora-
                                   tion; or
                            "(2)   accept a gift or decoration except
                                   in accordance with the provisions
                                   of subsection (c) and (d).
                     "(c)    (1) Congress consents to--
                                "(A) the accepting and retaining
                            by an employee of a gift of minimal
                            value tendered or received as a
                            souvenir or mark of courtesy; and
                                "(B)   the accepting by an
                            employee of a gift of more than
                            minimal value when it appears
                            that to refuse the gift would
                            likely cause offense or embar-
                            rassment or otherwise adversely
                            affect the foreign relations of
                            the United States; provided,
                            however, that a gift of more
                            than minimal value is deemed
                            to have been accepted on behalf
                            of the United States and, upon
                            acceptance, shall become the
                            property of the United States;
                            provided further, that an employee
                            may accept gifts of travel expenses
                            such as transportation, food, and
                            lodging of more than minimal value
                            from a foreign government only
                            when the employing agency of the
                            Government determines that (1) the

                                     17
APPENDIX Ii                             APPENDIX II



              employee is on official business,
              (2) the expenses would otherwise
              be reimbursable by the United
              States, and (3) the circumstances
              and conditions make acceptance of
              such expenses necessary. The Secre-
              tary of State shall promulgate
              uniform guidelines for the use of
              the Government to implement this
              proviso.
                   "(2) Within 60 days of acceptance
              of a gift of more than minimal value,
              the donee shall--
                      "(A) deposit the gift for
                   disposal with the Secretary of
                   State or his delegate; or
                      "(B) subject to the approval
                   of the employing agency of the Gov-
                   ernment and the concurrence of the
                   Secretary of State, deposit the
                   gift for official use with the
                   employing agency of the Govern-
                   ment. Within 30 days of termin-
                   ation of the official user the
                   employing agency of the Govern-
                   ment shall deposit the gift for
                   disposal with the Secretary of
                   State.
                   "(3)  when a donee deposits
              a gift of more than minimal value
              for disposal or for official use
              under subsection (c)(2), or within
              30 days of acceptance of travel
              expenses as provided in subsection
              (c)(l)(B); the donee shall file
              a statement with the Secretary of
              State containing the information
              prescribed in subsection (f) of
              this section for that gift.

                    18
APPENDIX II                                     APPENDIX II



                       "(d)  Congress consents to the
                  accepting, retaining, and wearing by an
                  employee of a decoration tendered in
                  recognition of active field service in
                  time of combat operations or awarded
                  for other outstanding or unusually
                  meritorious performance, subject to the
                  approval of the employing agency of the
                  Government and the concurrence of the
                  Secretary of State. Without this approval
                  and concurrence, the decoration is deemed
                  to have been accepted on behalf of the
                  United States, shall become the property
                  of the United States, and shall be
                  deposited by the donee, within 60 days of
                  acceptance, with the Secretary of State
                  or his delegate for official use or
                  disposal.

                        "(e) Gifts and decorations that have
                  been deposited with the Secretary of State
                  or his delegate for disposal shall be (1)
                  returned to the donor, or (2) forwarded to
                  the General Services Administration for trans-
                  fer, donation, or other disposal in accor-
                  dance with the provisions of the Federal
                  Property and Administrative Services Act
                  of 1949 (63 Stat. 377).  However, no gift
                  or decoration that has been deposited for
                  disposal shall be sold except with the
                  approval of the Secretary of State or his
                  delegate after determining that the sale
                  will not adversely affect the foreign rela-
                  tions of the United States. Gifts and
                  decorations may be sold by negotiated
                  sales. 3,/

                       "(f)  As soon as practicable after
                  December 31 of a calendar year but no later
                  than January 31 of the succeeding year, the

3/   It is the view of the State Department and General Services
     Administration that the present Foreign Gifts and Decor-
     ations Act contains an independent grant of authority to
     dispose of U.S. property.   If this proposed subsection (e)
     is not enacted, the Congress should place some restrictions
     on the types of disposition that may be authorized.

                               19
APPENDIX II                             APPENDIX II



              Secretary of State shall compile a listing
              of all statements filed in accordance with
              subvsection (c)(3) and shall cause the
              listing to be published in the Federal
              Register. The listing shall include
              the following information for each gift
              reported:

                        "(1)  the name and position of
                   the employee;

                        "(2)  a brief description of each
                   gift accepted;

                        "(3)  the foreign government that
                   presented each gift; and

                        "(4)  the date of acceptance
                   of each gift.

              "(g)  (1) The Secretary of State shall
              prescribe regulations to carry out the
              purpose of this section. These regulations
              shall be implemented by ,ilch of the employ-
              ing agencies of the Government for their
              employees.

                   "(2)  The employing agency of the
              Government shall document cases in which
              there is reason to believe that an
              employee has violated this section and
              refer such cases to the Department of
              Justice; obtain an independent appraisal
              of gifts when necessary; and take other
              similar actions necessary to carry out
              the purpose of this section.

              "(h)  (1) Any employee who fails to
              deposit a gift cf more than minimal value
              as required under subsections (c)(2)(A)
              or (B) of this section shall, upon
              conviction, be punished by a fine of not
              more than $1,000 or by imprisonment for
              not more than twelve months, or by both
              such fine and imprisonment.


                           20
APPENDIX II                                      APPENDIX II




                    "(2)  The penalty authorized in
              18 U.S.C. §641 for unlawfully converting
              property of the United States shall apply
              to the !-.lawful retention of gifts
              of more than minimal value."




                          21