Eight years ago, the Defense Department issued a directive that required top officers, policy makers and procurement officials to disclose their financial interests every year.
In the post-Watergate climate of 1977, the Pentagon billed the directive, entitled "Standards of Conduct," as a way to eliminate conflicts of interest by officials who manage billions of defense dollars.
But a recently released audit by the department's inspector general concluded that the order was "inconsistently implemented and did not ensure that all conflicts of interest were identified." It blamed the Pentagon and its "ethics counselors" for failing to administer, review and enforce the financial disclosure requirements properly.
Focusing on DOD divisions involved in technical work at 22 outposts, the auditors found that in 1983:
* Eight employes at the Redstone Arsenal's Army Missile Command whose jobs involved contract awards bought stock in 1983 in an engineering firm that was included on a list of contractors doing business with the missile command.
The command's ethics counselor knew of the potential conflict and tried in vain to persuade Army criminal investigators to look into the matter, according to the report. After their discovery, auditors referred the case to the Defense Criminal Investigative Service. It is unclear from the report how the case was resolved.
* Eighty-nine employes in agencies ranging from the Office of the Undersecretary of Defense, Research and Engineering to the Army's Tank Automotive Command failed to file required disclosure statements in 1983.
* Eighty-six workers were advised they didn't have to file statements, even though they were involved in choosing contractors and negotiating their contracts.
* Seventy-nine contract and procurement employes of the Defense Logistics Agency, which buys spare parts and administers some weapons contracts, were given exemptions from the financial disclosure rules without documentation.
Although supervisors are permitted to exempt certain employes, the auditors said a formal approval process should be established, with superiors required to explain exceptions.
The auditors recommended that disclosure statements be required not only from decision-makers but by those who can influence decisions. They called on ethics counselors to make sure that the statements are filed in a timely manner and are complete.
Asked by the auditors to respond, the general counsel's office agreed that the 1977 directive was "obsolete in several significant respects" and told them it would be revised.
TALENT HUNT . . . Pentagon talent scouts are still looking for a successor to Richard D. DeLauer, the former undersecretary for research and engineering who resigned in December to become a defense industry consultant.
Pentagon spokesman Michael I. Burch said last week that while candidates were under consideration, DeLauer's principal deputy, James P. Wade Jr., is "running the office and doing an outstanding job and things are going along just fine."
Another DOD official said the job of replacing DeLauer had been complicated by the intense scrutiny under which defense contractors have come in recent weeks.
"You have to hire some from private industry," he said, "but nobody's coming forth because of the pressure on public servants."