A House subcommittee has asked the General Accounting Office to investigate whether a former Commerce Department official violated federal ethics laws when he left government to work for a firm that advises foreign governments on trade policy.
The official, Walter C. Lenahan, former deputy assistant secretary of Commerce in charge of textiles policy, was accused in congressional testimony this week of obtaining confidential information on textile quota negotiations before leaving the government in January and joining a consulting firm that works for textile-importing nations.
Rep. Doug Barnard Jr. (D-Ga.), chairman of the commerce, consumer and monetary affairs subcommittee of the House Committee on Government Operations, said in a letter to the GAO that Lenahan's new job raises questions of whether he "violated any law or regulation governing pre- or post-employment activities" by former government officials.
The Commerce Department has launched a separate investigate into Lenahan's activities. Officials there said they are investigating whether Lenahan used classified information he got while he worked for the government in a speech he gave Thursday in Hong Kong.
In that speech, before the Hong Kong Exporters Association, Lenahan was reported to have said that the Reagan administration will be forced to retreat from its tough stance on the renewal of the Multi-Fiber Arrangement (MFA) governing textile quotas if it wants to get Third World nations to agree to a new round of global trade talks. Commerce officials are checking to see if that is part of secret negotiating strategy that may have been available to him before he left the department.
Michael P. Daniels, a lawyer who long has represented textile exporting nations and is the head of the consulting firm that Lenahan joined, strongly denied any illegal activities, but declined to comment on specific allegations raised in congressional testimony.
"We have done nothing illegal, nothing improper and nothing even seemingly improper," Daniels said.
In congressional testimony Wednesday, Rep. Marcy Kaptur (D-Ohio) accused Lenahan of gaining access to confidential negotiating strategies before leaving the government for MFA talks that were held in Switzerland.
"He even showed up at the MFA meeting in Geneva and commented he wasn't attempting to influence U.S. policy, he was just advising Hong Kong. This is a flagrant abuse of the opportunity to serve in the United States government," Kaptur said at a hearing on a bill she is sponsoring to tighten conflict-of-interest laws for former federal employes.
The GAO investigation will be the second one the watchdog agency for Congress has conducted this year into possible conflicts of interests by former government employes. In the first, the GAO referred to the Justice Department for possible prosecution its findings that former White House deputy chief of staff Michael K. Deaver may have violated federal laws by representing Canada on the acid rain issue after dealing with the issue in the White House.
The Justice Department was due to report today on whether to ask for a special prosecutor but has asked Congress for more time to complete its investigation.
Deaver resigned his White House post last May to form Michael K. Deaver & Associates, a public affairs firm that has contracts worth more than $1 million representing foreign governments and companies.
According to documents filed by Deaver with the Justice Department, Mexico has canceled its contract with him.
But top Mexican officials in Mexico City told special correspondent William A. Orme Jr. that the government never signed the two-year, $250,000-a-year contract that Deaver filed in January with the department's Foreign Agents' Registration Office.
Instead, the official said, Deaver had been paid by the Commerce Ministry, the National Foreign Trade Bank and a group of private Mexican exporters for an undisclosed trade project that ended in April.
In a March filing with the Justice Department, Deaver said he "provided advice and representation" to the Mexican Commerce Ministry on a wide range of trade issues between the United States and Mexico, including World Bank lending, "the [Treasury Secretary James A.] Baker plan for sustained economic growth" and the question of Mexico joining the General Agreement on Tariffs and Trade, an international organization that regulates world trade.
Deaver was in Korea yesterday dealing with another of his foreign clients, the Daewoo Corp., that country's major industrial conglomorate.
Mexico is the second country to say Deaver had not been hired on a long-term contract despite documents he filed with the Justice Department. Singapore said last month it had not hired him.