Smithsonian Institution officials told a House subcommittee yesterday that the museum has taken numerous steps to protect and tighten controls on the museum's world-famous gem and mineral collection, whose management and exchange practices have been the subject of critical internal audits and press reports.
Rep. Sidney R. Yates (D-Ill.), chairman of the House Appropriations subcommittee that allocates the Smithsonian's funds, directed museum officials to conduct a prompt and thorough examination to ensure that all the gems and minerals the museum has received over the years are accounted for.
At the hearing yesterday, he questioned the institution's administrators, the chief auditor, the curator of gems and minerals, the general counsel and a member of the governing Board of Regents.
The hearing focused on potential conflicts of interest by a former curator, violations of express and implied restrictions in donors' gifts and bequests, income tax deductions taken by donors far in excess of purchase prices, incomplete gem inventory records that accounted for only 6,000 of the museum's estimated 10,000 gems and potentially undesirable exchanges with and sales to private dealers.
Yates said he was concerned that Smithsonian officials had assured the subcommittee for more than a decade that all was well with the priceless collection.
Internal museum guidelines, which museum officials say they began to work on after a 1982 internal audit and which have continued to evolve in recent months and weeks, now govern the gem and mineral collection. They show that museum officials have been directed:
* To refuse gem and mineral donations "when the appraisal supplied by the donor appears to exceed reasonable limits." Previously the museum accepted gifts considered desirable for the collection. As a matter of policy, the museum left the question of appraisal up to the donor and the Internal Revenue Service.
Officials are to file reports evaluating the reasonableness of any appraisal for items worth more than $1,000. Donations valued in excess of $7,500 must be approved by the museum director, and independent appraisals may be required.
* To decline a gem or mineral donation "unless there is a good faith intention to place it in the collections for the foreseeable future." The practice had been to accept some donations as barter material for more desirable specimens from private dealers and collectors.
* To decline gifts or bequests "if they are encumbered with conditions set by the donor" unless "the object is of such extraordinary value to the collections that acceptance of the conditions is deemed in the public interest."
Sales and exchanges from the collection are now permissible only after a written report verifies that the items are not subject to a gift restriction by the donor. In the past, some objects were traded and sold from the collection without consulting the terms of the gift or bequest. In other instances, restrictions were simply ignored.
* To get approval from senior Smithsonian officials for all sales or exchanges of gems and minerals of significant value. For material worth more than $7,500, approval must come from the museum director; for anything worth more than $10,000, the general counsel and the Smithsonian secretary must approve; and for specimens worth more than $50,000, the Board of Regents must grant approval.
In recent years exchanges and sales of items worth hundreds of thousands of dollars have required only the approval of the curator and the department head.
Yates asked Smithsonian general counsel Peter Powers why the institution had not taken action sooner after reviewing the financial dislosure statements of former gem and mineral curator Paul Desautels showing that he had received outside payments from private collectors totaling more than $30,000.
Powers said that Desautels had declined to respond to questions about his 1980 and 1981 financial disclosure statements, and that neither he nor the reviewing Smithsonian attorney had been aware of the nature of the outside payments until an internal audit last year.
"I am not the FBI. I don't have an investigative staff," Powers told the subcommittee. In an earlier interview, Desautels said he was perfectly willing to discuss his outside employment with Smithsonian lawyers but had never been asked.
Yates also said the income tax deductions some donors were taking for their gifts to the Smithsonian "troubles the committee very, very much" and that it was a matter he would explore further.
After the hearing he said he was concerned that if the deductions (some of them five times to 1,000 times the purchase price) were not justified, then the American taxpayers were paying the bill indirectly.