Conflict of Interest Policy

The Defense Logistics Agency (DLA) regulations prohibit agency employees from participating in any official action in which they or their spouses or other household members have a financial interest. In addition, DLA personnel shall not receive or retain any direct or indirect financial interest that conflicts with their duties or responsibilities. DLA has identified 153 employees with financial conflicts of interest resulting from their spouse's employment. As of June 1991, DLA was reviewing 81 of these cases. In the remaining 72 cases, employees were disqualified from performing specific duties or reassigned to another position or location. In 10 cases, the conflict was resolved because the household member resigned. If a financial conflict of interest cannot be resolved, the employee can ask for a waiver. DLA records identify only two requests for waivers in the 1980s; both requests were denied. However, 62 of the 153 DLA employees with conflicts of interest have requested a waiver. DLA's district offices have denied 13 of these requests and are evaluating 28 others. The remaining 21 waivers have been or will soon be sent to DLA's General Counsel for final decision. GAO concludes that DLA's regulation is consistent with conflict of interest laws and regulations applicable to all government employees. Further, DLA's regulation reflects the government's interest in maintaining high ethical standards while providing for the consideration of DLA employees' individual situations.

GAO found that: (1) the DLA Standards-of-Conduct regulation is based on government-wide conflict-of-interest policies which prohibit a government employee from participating personally and substantially, through decision, approval, disproval, or recommendation, in any matter in which the employee or the employee's spouse has a financial interest; (2) financial conflicts are generally identified and resolved at the local level; (3) DLA does not maintain agencywide statistics concerning the number and resolution of financial conflict of interest cases; and (4) the DLA regulation is consistent with conflict-of-interest laws and regulations applicable to all government employees and it reflects the government's interest in maintaining high ethical standards while considering employees' individual situations.