President Bush has exempted 13 top officials from federal conflict-of-interest laws so they may advise him on how Libya can be "punished and isolated" for the bombing of Pan Am Flight 103.
Three of the officials -- Secretary of State James A. Baker III, then-Commerce Secretary Robert A. Mosbacher and national security adviser Brent Scowcroft -- have large oil investments. One tactic proposed by foreign policy experts has been an oil embargo against the North African nation.
The unusual group waiver was granted by Bush less than a week after two Libyan intelligence officers were indicted by the Justice Department and Britain last November in the 1988 airliner bombing over Lockerbie, Scotland, that killed 270 people.
A president is known to have granted a similar group exemption only once before: In August 1990, Bush similarly waived the law for 11 top officials so he could get their advice on "policies and military measures" to counter the week-old Iraqi invasion of Kuwait.
Although both waivers are public documents, neither was publicly disclosed until requested by the Associated Press.
It is a felony for federal officials to take or recommend government actions that directly affect their finances, but a boss can waive the law if the financial interest is too small to influence them. In both waivers, Bush wrote that although some officials would not need the waiver, others have "substantial financial interests in industries that may be affected."
In the Libyan waiver, Bush concluded, "In my judgment, the nature of the current situation and the gravity of the measures under consideration by the United States are such that even the substantial financial interests held by some of you could not be deemed likely to affect the integrity" of their actions. His Iraq waiver was almost identical.
"We now face a series of decisions on steps the international community should take to ensure that a major perpetrator of state-sponsored terrorism -- Libya -- is both punished and isolated," Bush wrote.
Gary Davis, general counsel of the Office of Government Ethics, could not recall another group waiver since waivers were authorized in 1962. But the ethics office was only set up in 1978 and, while agencies frequently consulted it on waivers, they were not required to until 1989.
Mosbacher, who left government Jan. 14 to chair Bush's reelection campaign, controlled more than $9.5 million in oil and natural gas exploration, production and transportation assets.
Baker has a blind trust that does not shield him from the conflict statute, because it is not diversified. In 1981, he put in oil company stock and other oil investments worth at least $500,000 and perhaps more than $1 million. Public records show the trust still holds most of those assets, but the records do not disclose current value.
Scowcroft holds oil and oil-services stock worth between $51,000 and $115,000.
Treasury Secretary Nicholas F. Brady, Office of Management and Budget Director Richard G. Darman and White House counsel C. Boyden Gray have blind trusts diversified enough to shield them from the conflict law. Few if any holdings of the others posed obvious problems. They were: Attorney General William P. Barr; Defense Secretary Richard B. Cheney; White House Press Secretary Marlin Fitzwater; CIA Director Robert M. Gates; then-Transportation Secretary, now White House Chief of Staff Samuel K. Skinner; then-Chief of Staff, now counselor John H. Sununu; and Energy Secretary James D. Watkins.