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(00:20:23) Senator KERRY. Now, ethically, my other colleagues have talked about some of that, and I point, as they have, to a very, very clear statement in your own standard that you have read to this Con,. mittee tonight, and this morning. The standard you gave us is it will result in an appearance of conflict. Now you cite to us these other groups that have made a finding. I've read every one of their statements. I found them wanting. Because they, like you, stuck with-just stuck to the legalese and this is not a business just about legalese. You know, some Senators refuse PAC money. Some Senators don't take gifts. Some Senators never took honoraria. The law didn't require it, but people perceived what you have cited as a higher standard. I respectfully say to you that not to have been sensitive, ethically, to both the friendship, and no one has mentioned this, but also to the fact that everybody in this town talked about Mr. Altman as potential future Secretary of the Treasury. For him to walk into the White House after everyone he talked to had helped him make up his mind to recuse himself and it was their opinion and his that he should recuse himself, you should have said Roger, fine, it's your decision. But no, you're sitting here saying I kept telling him the bottom line was it was his decision, but a whole bunch of stuff comes in between from his boss, from his White House. So any sensitive employee to the future is going to be saying well, gee, they don't really want me to do this. Now, Senator Shelby said to you it was a mauling. I'm not going to characterize it as a mauling. I don't know what it was. All I know is this public employee had made up his mind to recuse himself. The people who worked for him thought he was going there to do it, He went in there to do it and he told you he was doing it and he came out of there not doing it. That's the bottom line. That's the bottom line. I agree with the Chairman, you should not have done anything. Instead, there was a different opinion. Then, ultimately, this man, after all of this notion of accepting sworn duty, recused himself for The New York Times editorial boy, Howell Rains. Mr. NUSSBAUM. That's right. That's right. Senator KERRY. So this is a serious issue here for this Committee to think about what happened in the context of politics, the ethics, and sort of the legal reasoning that you've given us. Mr. NUSSBAUM. Doesn't that show, Senator, why he recused himself? Senator KERRY. Beg your pardon? Mr. NUSSBAUM. When he recused himself in a conversation with Howell Rains of The New York Times, doesn't that really show Senator KERRY. It shows a lot of things. Mr. NUSSBAUM. It shows that he didn't want the public relations heat that would come from acting in this matter and, Senator Senator KERRY. Mr. Nussbaum, that is where you are ethically failing here because we live with public relations heat every day. It's the bread and butter of our life. 501 Mr. NUSSBAUM. Right, and you should take it. Senator KERRY. And it is a reflection of the public which is what this country is all about. What happened, in this case, is you were dealing with legalese and not a sensitivity to how the public would perceive this, which is ultimately what motivated him to react, which is ultimately what keeps this country straight and true as a democracy. Mr. NUSSBAUM. Senator, you and I have a profound philosophical difference here. Senator KERRY. If you think you could ram down the throats of Americans the notion that there was not somehow an appearance of a problem in his being there given the fact that he had this close relationship, then I think you are just missing the standard by which we're living in this community today. Mr. NUSSBAUM. I'm missing it, the OGE is missing it, his ethics advisors are missing it Senator KERRY. No, because I'll tell you what, if you read the OGE report, the OGE report specifically said they could not rule as to Mr. Altman's behavior with respect to the September 29th transfer and they only ruled, if you'll read page 2, as to the Treasury employees, not the White House employees. Don't throw that report at me again. Mr. NUSSBAUM. Senator Senator KERRY. That's what it says. Mr. NUSSBAUM. It says what it says, Senator, Senator KERRY. I'll read it to you. Could I have the report, please? I mean, let's-you know, you want to say it says what it says. Let me read it to you. Page 2, second paragraph: Because your authority as Secretary of the Treasury relates to employees of the Department, the report of the Inspectors General is necessarily focused upon the activities of officials of the Treasury Department. For that reason our analysis is not intended to cover, nor should it in any way reflect upon, the actions of individuals who are employed by the White House. We could put that in the record at this point.
(00:25:34) Mr. NUSSBAUM. 1. don't object to that, Senator, but the report also indicates that Mr. Altman had no legal or ethical obligation to recuse himself. That's what Senator KERRY. I agree, it does reflect that. Mr. NUSSBAUM. And that's what Mr. Altman told me. Senator KERRY. But I also read that they took out each of the sort of legal, codified concepts of recusal and frankly, they had to do with a public employee affecting the private sector or a public employee affecting private gain, private decision, but it didn't reflect any applicable notion of ethics with respect to a public employee's impact on another public institution, particularly one that was involved with an investigation. And you yourself were sensitive enough about the investigation to state in your own policy that you shouldn't meet except rarely. Mr. NUSSBAUM. Senator, he came into our off-ices on Yebruary 2nd and he said I'm inclined to recuse myself, but I am not legally or ethically required to do so. I've been told that and I don't believe it. And I respectfully, Senator, disagree with you. Senator KERRY. You're entitled to and I'm not going to lambast you. Mr. NUSSBAUM. When somebody says that to me, I think then you have to do your duty. And if there's political heat, if Howell Rains is going to write editorials against you, if Republicans are going to criticize you, so be it. Senator KERRY. So do you still believe he should not have recused himself? Mr. NUSSBAUM. Yes, sir. Senator KERRY. Well, then, I'm very happy you're not serving as President's Counsel today. The CHAIRMAN. Senator Domenici. Senator DOMENICI. First, let me state for the record, Mr. Chairman, that I agree with you and I might also state that, all things considered, your statement tonight is very courageous and these whole hearings have been a testimony of your fairness. Now we have a testimonial beyond your fairness in conducting matters here, your straightforwardness and integrity, and I thank you very much for it. Mr. Nussbaum, I trust your integrity as much as anyone else's, and I had a lot of difficulty, as I heard you talk about the duty to sit rule. Frankly, you almost remind me of the law professors we have who taught a different kind of law than today, and you might be that kind of lawyer. I'm not at all sure you'd be out there seeking cases like some of them are, which you and I learned was champerty when we went to law school. But, frankly, it bothered me that you carried an analogy of a duty to sit rule to this situation. Now, frankly, there is no longer a duty to sit rule; that rule has been changed by statute. Title 48, section 455 no longer includes the duty to sit rule, but rather says, it obliges judges to recuse where their impartiality, and now I will, quote, "might be reasonably questioned." Now, frankly, I believe" that is exactly-that is exactly carried over to the last sentence of the so-called ethics rule that you read to us in our statement. Mr. NUSSBAUM. I agree with that. I agree it's carried over there--I and I also believe Senator DOMENICI. I'm going to let you answer but I want to fin- ish my thoughts. I'm not at all sure even now, having heard you, my self. But about the total reason for Roger Altman not recusing him I am convinced more than ever, that he shouldn't have asked you,'; if he did, and you should not have told him, if you did. My own conviction is he went there convinced that he was going to recuse himself.
(01:10:27) It's the standard. Is it right or is it wrong? There have been countless decisions made in the body in which we serve which were terribly unpopular in the hour in which they were made and played a significant and positive role in this country's history. I would hope that as we consider these decisions, it's been said here over and over that too much of what has guided this Administration has been its preoccupation with what the morning headline was going to look like rather than what history might write. And so, Mr. Nussbaum, I feel far closer to your philosophy, if you will, on this regard, than I do with those who would suggest that public perception is important. My God, we all live with it here, as one of my colleagues said. But we have to be far more diligent in following the rule of what's right if we're going to succeed. Mr. NUSSBAUM. Thank you, Senator. The CHAIRMAN. Senator Kerry. Senator KERRY. Mr. Chairman, I will be very, very brief. I want to make it clear. I had a note to myself and in the course of 7 minutes we get distracted and in our exchange I got distracted, but in no way in my comment when I said I thought you were legally wrong, did I mean to imply, and I say this to my colleagues, that the question you raise is not a legally valid one. I was saying I thought it was legally invalid here. The two reasons I said, because of the "de facto recusal" and because the standard didn't fit to Mr. Altman. Mr. NUSSBAUM. I understand, Senator. Senator KERRY. But I do believe the question is, in generic form, absolutely legitimate, and I agree with my colleagues when we have to think out. And the second thing I want to say to you is I 514 have enormous respect for the gumption and tenacity with which you've sat here and expressed your opinion. It is very refreshing indeed, wonderful to have somebody who believes something and who sticks with it and doesn't simply sweep away. The final comment is, in no way am I suggesting that we should become-put our finger up and measure where it goes-but there is that other standard above it which you have to measure, which you're going to be tested by. Sometimes we're going to fall on our faces and sometimes we're going to meet it. And I just think it's not an easy one because it's shifting pretty constantly. I have enormous respect for your opinion. We just disagree on that, but thank you. Mr. NUSSBAUM. And I respect you, Senator, and I thank you very much. The CHAIRMAN. Mr. Nussbaum, I think it's my sense and the feeling that's been expressed, in part, by each of the three Senators who just spoke and shared by, I suspect, virtually every Senator here, certainly shared by me in terms of respect for you individually. We have a difference of opinion on this and on these facts, but I would not want that to be misunderstood as something personal, other than a disagreement on case facts and on a circumstance. As I said at the outset, you've given very important service to this country on more than one occasion. You deserve great respect for your ability and for your beliefs, and I would not want my earlier comments, which I hold very strongly, to be interpreted in any other way as it relates to the points I've just made. Mr. NUSSBAUM. Thank you very much, Senator. Senator DAMATO. Mr. Chairman, let me say that in the final analysis, everybody is responsible for his or her actions. We're not talking about just one act, an attempt to lay off everything on Bernie. Bernie did it. You know, that would be an easy thing. And so, while there may be a disagreement as it related to your advice, you didn't start the ball rolling. Let's understand. You didn't go out and solicit and say come in. I think the record is quite clear on that. I think no matter how you look at it, the fact is you stated your opinion. Most of us have a disagreement With your opinion on that.
(00:30:05) Now, there's a lot of testimony to that, and I know you don't agree with it but there's a lot of testimony that he went there al- ready committed in his mind to recuse himself, The Legal Counsel for that agency, Ms. Kulka, she even said, "I can't understand why he isn't resigning." The Legal Counsel for the Department of the, Treasury, which has more of a relationship to him and a relation-, ship more unburdened by other things, she told him that he should recuse himself. Secretary Bentsen indicates he should recuse him- self so the one person that changes this, as I see it, is You, al- though I would think that perhaps Harold Ickes was agreeing With you. I would assume that some of the other people in that room might have been agreeing with you, if not verbally, clearly they weren't 503 taking his side of this. But let me tell you, you've got to understand what bothers us, and it's not just your duty to serve notion. I mean, this man was working with the First Lady on Health Care. He knew that she was very burdened by this Whitewater matter. He was close to the President, although perhaps not as close as some people may have been saying. But now he is going to be impressed because you speak for the White House and everything that it stands for. And essentially, I'm not prepared to conclude tonight that you are the sole reason for his changing his mind and thus putting us in this predicament where for days we're trying to find out what happened, what's behind all this. Maybe we might conclude tonight that it was your advice to him that's behind this and he never even bothered to be as simple as that, that you convinced him as a representative of the President. Frankly, from everything I can glean here, you are a significant part of why he didn't do what in hindsight it seems very, very much the case that he really should have done. It would have been in the interest of the President and the Presidency, which you are so concerned about protecting. I don't have any quibble with your deep concern about duty; I think that's an admirable quality. We don't hear it enough in the United States anymore. But I don't think that's the sole reason why he should recuse himself. Legal duty isn't the only reason. Ethical duty might not be the only reason. But, frankly, I think it was not ethical for you to tell him that, in fact, he should stay on when there are many other concepts that should have been considered. Now you can respond and use as much time as I have left. Mr. NUSSBAUM. Senator, obviously I respect your view. I don't agree with you. I profoundly disagree with your view. It seems I disagree with views on both sides of the aisle. There's an evenhandedness about this. Senator, he told me he was not legally or ethically required to recuse himself He told me he had an opinion to that effect from an ethics advisor. That opinion was then confirmed later in February with two other opinions. Senator, when that happens, when that comes into play, once you make that assumption-maybe you don't want to make that assumption-you don't really want to make the assumption that he wasn't legally or ethically required to recuse himself, but just make it with me for a moment because that's what he told me and that's what his ethics advisor told him. Once you've made that assumption, then your duty to do your duty comes into play and now, the OGE, the Office of Government Ethics, a nonpartisan group headed by a person-respected person appointed by President Bush agrees with me and doesn't agree, with all due respect, with a number of the Senators here tonight. What it says, and what I quote on page 13, in effect, is that if a person-it says this: That if a person has no legal or ethical obligation to recuse himself, then that person has to act, has to do their duty. That is how I look at it. That's how the OGE looks at it. That's how the ethics advisors, I think, to Deputy Secretary Altman looked at it. It's not how you look at it. It's not how Mr, Cutler looks at it. It's not how Secretary Bentsen looks at it. Maybe I 504 think I'm right. You think you're right. History will determine who is right.
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(00:35:15) The CHAIRMAN. Senator Bryan. Senator BRYAN. Thank you very much, Mr. Chairman. Mr. Nuss- baum, I was struck by your comment on page 3 of your statement when you go on to say "I sought to conduct myself in the hightest traditions of public service and of my profession." I believe that. Mr. NUSSBAUM. Thank you, Senator. Senator BRYAN. I watched a part of your testimony before the House where you spoke, I thought, with some eloquence and, great deal of emotion about how honored you had been to serve as White House Counsel. I think that was real, not staged. I think a central feature of this, in what I see running through thought process and your analysis, is what I would characterize as an overlegalistic, mechanistic approach with these issues you had to deal with. Let me talk first about the nature of the RTC." Both you and Mrs. Hanson make the point that it was not an inde- pendent agency, and then you go on to cite as authority for that proposition that indeed, unlike the SEC, it did not have a fixed term for its appointees and others. Now it's been a long time since I've practiced law, and I will no quarrel with your legal scholarship. You may very well be right in a court of law. But let me suggest to you that I think that that reasoning was fatally flawed in the court of public opinion. I believe it is the perception of the public, I believe it was the intent of Con; gress, although it may have not been carefully executed, that we did contemplate and intend that the RTC would function separately from the Treasury and that agency ought not to have been considered as if it were some division or bureau within the Department. So I think that that was a fatal mistake in the reasoning process as you viewed your relationship with Mr. Altman as he approached you in the context of his dual responsibility as Acting Head of the RTC. Let me make a comment, if I may, about the doctrine of legal recusal. Again, as a persuasive advocate, you may very well be right in a strictly legalistic sense. And I would think that it would be a real delight for a graduate student in a school of public administration to hear you expound upon your views and discuss it because I believe that you sincerely believe that. I don't question your judgment. I must say that, with all due respect, I think that's a very ivory tower approach. I don't think that meets the test of what the public expectation is and Senator Shelby and others have pointed out, that last paragraph, and I shall not burden my colleagues with it this evening, where the perception of fairness by the public, that is a reasonable standard. As an institution of Government, in order to enjoy public confidence, the public must perceive and believe that all who are executing functions on behalf of the Government are acting fairly, even though their conduct would not be prohibited or, prescribed by some purely legal standard. That is my sense. And finally, let me just offer a comment and if I have the chance, I'm going to ask one question and not prolong this discussion. With respect to your relationship with Mr. Altman and how he perceived You, I don't think that you beat him up, As I was hearing your 505 powerful-and I must say I admire you greatly in terms of your integrity and your courage in expressing your views here, discussing the duty to stay in there and to, in effect, perform what you believe was his responsibility, I thought of the book that I read on the life of MacArthur and Gregory Peck going up to West Point for what MacArthur talked about was his final rollcall where he gave that great emotional speech, duty, honor and country. Let me suggest that anybody in your presence who is treated to the kind of discussion that you've given us tonight, I think, would have left that meeting with the belief, duty, honor and country compel me to do so. I've just heard Mr. Nussbaum give that point of view. That's my perception. May I ask you a question? Mr. NUSSBAUM. I'm complimented to be compared to General MacArthur's speech at West Point. [Laughter.]
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