NLPC celebrated Anthony Lake’s March 17 withdrawal from consideration as head of the Central Intelligence Agency. NLPC had been publicly fighting the nomination since February 3.
“It’s a clear victory for ethical and accountable government. Taxpayers deserve officials who they can count on to make unbiased judgments in the best interest of the country and not their own stock portfolio,” said NLPC President Peter Flaherty.
Lake made approximately $26,500 in questionable profits from five energy stocks while he served as National Security Advisor, prompting an investigation by the U.S. Department of Justice. He had been previously warned to sell the stocks by the White House counsel. The investigation went nowhere for over a year until Lake was nominated for the CIA post. Suddenly, the Justice Department and Lake reached a “civil settlement” of $5,000 that ended the investigation.
In several media interviews, Flaherty said, “This is clearly a rush job for the nomination process. At the very least, his fine should match his profits. These were serious ethical violations which threatened America’s national security and violated the law.”
Another problem was Lake’s reported refusal to place any of his assets in a blind trust, if he was confirmed. Lake had asserted that he would recuse himself from all matters that deal with companies in which he holds stock.
“How could Lake be so brazen? Putting his holdings in a blind trust would have been the best way to avoid a conflict of interest problem, yet he refused. Why?” said Flaherty. “Lake is so arrogant he doesn't think ethics rules apply to him.”
To call the Senate’s attention to Lake’s ethical problems, NLPC publicly issued ten questions for Lake to answer on the first day of his confirmation hearings.
1. Why did Lake hold onto four energy stocks -- Duke Power, Exxon, Mobil and Teco Energy -- for more than two years after the White House advised him in March 1993 to sell the four stocks because his work as National Security Advisor would affect energy prices and ownership of these stock presented a real/apparent conflict of interest?
2. Why did Lake continue to hold the four energy stocks after the White House formally requested him to sell the four stocks in October 1993?
3. If Lake thought, as he has claimed, that he sold the four energy stocks in 1993 why did he not notice their absence on his Capital Gains Tax Schedule (Schedule D of the IRS 1040 form) for 1993 and 1994?
4. It has been reported that Lake has claimed that not selling the four
stocks was an oversight because he thought his government-paid secretary
had told Lake’s personal broker to sell the stocks in 1993. If so,
why would Lake entrust a $250,000 to $300,000 personal financial transaction
to his secretary? And, why should a federal employee spend time handling
his personal matters at the taxpayers expense?
5. Does Lake think that the Justice Department’s $5,000 fine for not
selling his stocks is appropriate given that he profited approximately
$24,000 by holding his stocks two years longer than he should have?
Would Lake be opposed to paying a $24,000 fine?
6. Why after selling the four energy stocks would he buy another energy stock -- Williams Company -- in 1996 profiting approximately an additional $2,500?
7. Would Lake be opposed to the Justice Dept. investigating his 1996 energy stock transaction and paying an additional $2,500 fine, equaling the questionable profits?
8. Why has Lake refused to pledge to put some of his stock ownership in a blind trust, if confirmed as CIA Director, so as to avoid conflicts of interest with companies which have dealings with the CIA?
9. Does Lake understand that conflict of interest concerns are serious matters and should not be taken lightly? Does Lake understand that real/apparent conflict of interest, such as his stock situation could or do pose threats to America’s national security? Does Lake understand that American taxpayers expect and deserve someone at the CIA who they can count on to make unbiased judgments in the best interest of the country and not his own personal portfolio?
10. Will Lake pledge, that if he is confirmed, to avoid any and all
conflicts of interest and immediately act on any ethics recommendations
given to him by the CIA General Counsel Office, the Office of Government
Ethics, the U.S. Congress and/or the White House?