White House counsel C. Boyden Gray has been delegated presidential authority to grant waivers to top appointees from conflict-of-interest rules or to allow them to recuse themselves from taking part in decisions because President Bush was spending so much time on the task, according to a government ethics official.
Donald E. Campbell, deputy director of the Office of Government Ethics, said a large increase in the number of such actions was generated by the Bush administration's determination to enforce a 1988 Justice Department decision that broadened potential conflicts.
Under that decision, policy-makers who hold stock or other interests in companies must either recuse themselves from decisions that affect the industries in which the companies operate or obtain waivers from the heads of their agencies. Previously, such officials only had to take that step if their decisions directly affected specific companies in which they held interests.
"There were so many requests for recusal or waivers" from Bush appointees, Campbell said, "that it came to be a problem for the president."
The executive order delegating to Gray the president's authority "to grant exemptions or approvals for individuals" was released Oct. 17.
A recent Associated Press report said Gray had been granted the power to "permit himself to decide issues in which he might have a conflict of interest." Gray said in an interview that he has no intention of ruling on his own potential conflicts. Campbell said it was his understanding that the president would deal with any potential conflicts involving Gray.
Questions have long existed about who supervises the ethics of government officials who are responsible for supervising the ethics of others.
At the White House, for example, John H. Sununu, as chief of staff, reviewed and certified Gray's complex 1989 financial disclosure report as showing it indicated no conflict of interest.
And Gray certified Sununu's 1989 statement.
The Justice Department ruling that triggered last month's changes led to a dispute early in the Bush administration between Gray and Secretary of State James A. Baker III.
In December 1988, during the transition from the Reagan administration, Gray handled conflict-of-interest clearances for Bush appointees. At that time, he told State Department lawyers that because of the 1988 Justice Department ruling, Baker would have to sell his large personal holdings of Chemical Bank of New York stock because, as secretary, he would be with dealing with Third World debt issues that affected U.S. banks.
Baker, who had held the stock during the entire time he was Treasury secretary, was unhappy with Gray's decision because his Chemical stock came from that bank's merging with Texas Commerce Bank, which had been founded by his great-grandfather.
In the maneuvering that followed, it emerged that Gray, during his years as then-Vice President Bush's counsel, had served as an officer of and taken a salary from a business begun by his family -- a practice that would have been barred if he had worked for the president rather than the vice president.
In the end, Baker sold his stock and Gray ended his active participation in his family's business. In addition, Gray set up a qualified blind trust for most of his assets in May 1989 after he became enmeshed in the debate over potential conflicts of interest.