The Financial Disclosure Process of the Legislative Branch Can Be Improved

Gao ID: FPCD-81-20 March 4, 1981

The Ethics in Government Act of 1978 was enacted to require public financial disclosure of Members of Congress and other high-level officials in all three branches of government. The House Committee on Standards of Official Conduct and the Senate Select Committee on Ethics are responsible for implementing and administering the requirements of the Act. Under the Act, GAO is required to review and comment on whether disclosure requirements have been effectively implemented and whether audits for completeness and accuracy of disclosure reports should be performed. Accordingly, GAO reviewed the House and Senate financial disclosure activities for the 1979 and 1980 calendar year filing requirements.

The Ethics Committees have no formal written procedures prescribing how the systems should operate and no clear delineation of responsibilities to guide them in effectively implementing and administering the Act. Neither Committee periodically checks to ensure that legislative branch agencies are properly identifying all individuals required to file. Although compliance is a problem for candidates, neither Committee has created an effective system to obtain reports from nonfilers in a timely manner, nor are they effectively reviewing the disclosure reports to see that they are in proper form and comply with the disclosure provisions of the Act. While the Act authorizes the Attorney General to bring a civil action against any nonfiler, the Committees have not taken action to refer nonfilers for prosecution. The Act provides that a reporting individual need not report the holdings of or the source of income from the holdings of a qualified blind trust. Both Committees have approved trust arrangements where some of the trust instruments and trustees did not appear to meet the trust standards of the Act. Neither Committee monitors the administration of a qualified blind trust after it has been approved. The Act also requires that a copy of each disclosure report filed by congressional Members and candidates be sent to their states so that the report can be inspected by their constituents. Few requests are made for these reports, and states' practices vary widely as to maintenance, use restrictions, and disposition of reports.


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