THERE WERE EMPTY SEATS at the press tables but the lawyers and lobbyists and Washington "reps" packed the rest of the room, lining the walls and spilling out into the hallway.
The issue before the Senate Banking Committee was a prominent part of what Reagan administration officials like to call their "Watergate overreaction" package. At the moment, only insiders appear to be paying much attention. For this hearing, the Foreign Corrupt Practices Act of 1977, enacted to stem corporate slush funds and overseas bribery, was the target of the day.
Everyone, mind you, is against illicit payments, foreign or domestic. As U.S. Trade Representative William E. Brock felt compelled to protest at the opening session last month, "we do not endorse or condone bribery for any reason".
But American business, he submitted, is "hopelessly confused" over its obligations, and liabilities, under the four-year old laws. He did not mention that there has been only one prosecution since the statute was enacted, of a New York firm that distributes the postage stamps of the Cook Islands.
The administration is also all for openness in government, to hear Attorney General William French Smith tell it. But he has the Freedom of Information Act high on his hit list.
So, too, the Reagan Justice Department has said that it "fully appreciates the circumstances and sentiments" that led to passage of the Ethics in Government Act of 1978. But it has denounced the special prosecutor provisions of the law as "unfair and wasteful" and called for their repeal.
Proposals to undo some of the financial disclosure and conflict of interest provisions of the Ethics in Government Act can also be expected, according to a Justice Department spokesman. White House Counsel Fred Fielding reportedly developed a special antipathy for some of the rules in presiding over conflict-of-interest questions for the Reagan transition effort. In any case, he has been quoted as advocating that financial disclosures by top officials be less detailed and submitted only to congressional committees, not to the public.
The restrictions -- some might call them safeguards -- against excessive government spying that grew out of the Watergate-era investigations of the CIA and the FBI have also been earmarked for major revision. An early draft proposal would have given the CIA wide-ranging authority, at least on paper, to resume domestic intelligence operations.
On Capitol Hill, meanwhile, some Senate Republicans, apparently with President Reagan's blessings, are talking of doing away with the Federal Elections Commission.
The commission, created in 1974 by a reluctant Congress, has a reputation for nitpicking, but it is also the only agency that has ever been devoted to enforcing federal campaign financing laws with any vigor.
There is, in short, barely one memorable Watergate-era reform that is not under assault by the Reagan administration and its Republican cohorts on Capitol Hill. It is a campaign full of Orwellian overtones, with talk about "fine-tuning" laws where emasculation is intended, with allusions to "reforming" the Freedom of Information Act "when greater secrecy is what is in store.
Perhaps the biggest overreaction is the "Watergate overreaction package" itself. The laws and regulations under siege might not have been adopted had not the scandal come along to provide the impetus, but most of them were aimed at abuses of power that had been prevalent for years.
Excessive government secrecy, corporate slush funds, disruptive tactics against political dissidents . . . these have a much longer history than the 1972 break-in at Democratic National Committee headquarters. Violations of the campaign reporting provisions of the Federal Corrupt Practices Act, for instance, had gone largely-ignored since their adoption in 1925.
"It's like they're trying to put the last 10 years behind them," one veteran Justice Department lawyer says of Attorney General William French Smith and his top advisers, particularly in the intelligence field. "They have, in many ways, a pre-1970 mentality. Like Watergate, the Pentagon Papers, things like that never happened."
What is most alarming to those with a better appreciation of recent history is the message underlying the administration's particularized complaints about this and that law. Genuine efforts to improve the rules would be fine, they say. But that's not what the administration seems to have in mind.
"It's the cumulative impact of all these things that worries me," says Archibald Cox, the first Watergate special prosecutor and now the chairman of Common Cause. He is beginning to wonder whether the Reagan administration has any interest in honor, openness and accountability.
"My view is that the measures adopted by Congress and the Executive Branch as a result of Watergate saved us from sinking into a moral abyss in the conduct of government," Cox said in an interview.
"It saved us partly because the measures themselves are constraints against the temptation to use improper methods and they saved us, too, because they expressed a level of concern that government should be open and not only honest, but honorable.
"I think the sum total of the criticisms being leveled today by members of the present administration amounts to saying that we don't care about ethics and honesty in government. It's not just the criticism of particular measures, but what energizes it. It shows a lack of concern."
It also shows, in some quarters at least, that the heat is off. At the CIA, for instance, the concessions to public accountability that it made in 1975 to refurbish its image and respond to questions are being rapidly discarded. Its legislative liaison and public affairs staffs are being cut back and downgraded now that, as CIA Director William J. Casey puts it, "the difficulties of the past decade are behind us."
The administration's campaign for a restoration of what it plainly considers the good old days is just getting started, but it has already produced a striking blend of misleading statistics and questionable history, at least as far as the Freedom of Information Act is concerned.
"What we are trying to do, really, is to cause that act to do what Congress originally intended it to do," Attorney General Smith insisted at a recent press conference. He implied that the only proper purpose of the act was to produce an informed electorate. Too many requests for government records were coming, Smith suggested, "from private interests seeking to obtain information that would serve their own private purposes or causes."
Deputy Attorney General Edward C. Schmults was even more explicit in a speech before the Second Circut Judicial Conference. He asserted that the purpose of FOIA was "to cultivate an informed electorate by providing the public access to government information whenever consistent with the public interest in effective government" (emphasis supplied).
"Some 14 years of experience in administering the act, however, have convincingly demonstrated that it is used for purposes other than those intended by Congress," Schmults continued. "Only a tiny fraction of the requests for disclosure have come from scholars or the news media, the primary groups that could communicate government information to the electorate."
What the administration is really saying here, and none too subtly, is that there should be some sort of credentials test for those seeking access to government records and only those deemed by the government to be sufficiently dedicated to the public weal will pass muster. It smacks of the repudiated principles of federal law before FOIA, when secrecy was the rule rather than the exception and when government agencies had the power to decide whether the persons seeking the information were "legitmately and properly concerned" with it.
The Freedom of Information Act explicitly rejected that approach and, as the House Government Operations Committee pointed out in a 1972 report, replaced it with a rule stating emphatically that "'any person' should have clear access to identifiable agency records without having to state a reason for wanting the information."
In addition, the first seven years of the "14 years of experience" that Schmults cited demonstrated little more than the fact that gomernment agencies had been able to turn the Freedom of Information Act put into effect in 1967 into a "freedom from information act."
In short, it was not until 1974 that Congress, with the Watergate coverup fresh in mind, closed the most glaring loopholes with a series of amendments enacted over President Ford's veto. Since then, the act has worked well enough to provoke an unending litany of complaints from government officials, especially at agencies long accustomed to keeping almost all of their records, and mistakes, from public view.
To some, the threat to the Freedom of Information Act represents the biggest danger. "Of all the reforms, that's the most important," says consumer activist Ralph Nader. "It's the only one the citizen can enforce on his own."
The act, he added, "was intended to be used by everyone, just as free speech is intended to be used by everyone." The administration position, Nader charged, "is like saying that people are using the First Amendment too much, and the wrong people at that."
Like the FOIA, the Foreign Corrupt Practices Act has come under attack on the grounds that it is costing too much, far more than expected, although in this instance American business is footing the bill. Brock said the antibribery act has gained "the reputation of being one of our nation's most serious export disincentives." And the costs of keeping books "in reasonable detail," a new accounting standand that the law imposed on all publicly held companies, have been "highly inflationary," Brock protested.
The chief Senate sponsor of the administration-backed drive to dilute the law, Sen. John H. Chafee (R-R.I.), contends that the rule imposing criminal penalties on corporate executives with "reason to know" of bribes being paid by overseas agents is simply too stiff. Chafee would also change the law so that companies would have to keep detailed accounts only of expenses that have a "material" effect on their business.
For big companies, General Accounting Office experts testified, that could mean even multi-million-dollar items would escape accounting. A former chief accountant for the Securities and Exchange Commission told The Wall Street Journal that even Exxon's payments of more than $50 million to Italian political parties and Cabinet members in the 1960s and early 1970s would not have been "material."
The 1977 law was enacted following Senate and SEC investigations which turned up more than $300 million in questionable or illegal payments by more than 400 corporations to foreign officials, politicians and political parties. More than 117 of the companies ranked in the top Fortune 500 industries. In a number of instances, recalls Sen. William Proxmire (D0Wil.), the main proponent of the 1977 law, "bribes were paid . . . by American companies to beat other American companies out in the competition."
The Chafee bill is also designed to preclude prosecutions of overseas bribery cases under other laws, such as the fraud and conspiracy indictment pending against McDonnell Douglas Corp. in connection with $1.6 million in secret commissions on the sale of DC10 jetliners to Pakistan. That case most recently made headlines when it turned out that Associate Attorney General Rudolph W. Giuliani had met privately with a McDonnell Douglas lawyer to discuss company complaints about the case, without informing the Justice Department who were prosecuting it.
Giuliani said he didn't even know McDonnell Douglas was under indictment until after the meeting had started.
Meanwhile, Congress is being asked to gut the bribery law itself on the grounds that it is "fundamentally unfair" to American business and that it has proved too onerous and costly. Under the circumstances, it is difficult to envision much of a follow-through to the 35 investigations the Justice Department says it is currently conducting under the law.
"Basically, it's an abandonment of law enforcement," Nader charges. "It's much more pronounced than under Nixon or Ford. These guys are very systematic. They're not out to change the system, not just violate it."
There are, to be sure, strong voices contending that there was an "overreaction" in some of the legislative response to Watergate. The last Watergate special prosecutor, Charles Ruff, now U.S. attorney here, is especially keen on what he regards as the defects of the special prosecutor sections of the Ethics in Government Act.
"The Watergate burden is the extraordinary presumption of irregularity in government," Ruff feels. The provisions for a special prosecutor in cases involving high government officials, he adds, were "horribly drafted" and need to be changed considerably, both in terms of the alleged crimes to be covered and the number of government officials to be covered.
Cox and colleagues such as Common Cause president Fred Wertheimer readily agree that no law is perfect, least of all the Ethics in Government Act or the 1974 campaign financing laws that included creation of a Federal Elections Commission.
But, Wertheimer adds, "you have to remember where we came from. It was no accident that we ended up with corporate slush funds and 21 prosecutions of various corporations by the Watergate special presecutor for campaign law violations. The Justice Department had always taken a bipartisan view toward campaign financing laws. They never enforced it."
Cox adds that "if the attorney general's statements on the special prosecutor act, for instance, were to the effect that 'I think fine-tuning is needed, but I understand the need for an institution such as that,' I would say I'd certainly be willing to listen. But that isn't the message I get . . . Men and women being human, unless there are built-in protections such as the Ethics in Government Act, unless there are restraints on campaign spending, unless there is constant emphasis by high officials on the importance of openness, honesty and accountability, then the number of individuals who succumb to the temptations is bound to increase."
Attorney General Smith said through a spokesman that he considers charges that the administration is inviting future scandal as pure "nonsense."
"There were clearly some overreactions to Watergate and related events and we intend to rectify them," Justice Department spokesman Tom DeCair added on the attorney general's behalf. "These were well intended changes, but some of them simply went too far."
Archibald Cox still sees in the drive a "blindness to ethical concerns" that "may recreate the old dangers. Take the Foreign Corrupt Practices Act. If the habit of selling your products and services with payments to foreign officials returns, how long is it going to be before it becomes a habit to pay off officials here?
". . . The temptations of power are always great and the stakes in government and government decisions are higher than ever."