Bishop, Floyd, on behalf of National League of District Postmasters, 83 Franklin, N. Mathew, actuary, the Surety Association of America, Hallbeck, E. C., legislative representative, National Federation of Horton, J. V., National Association of Postal Supervisors Johnson, Edward T., Accounting Systems Division, General Account- Leahey, John J., Director, Division of Post Office Personnel, and Peter J. Connolly, Assistant Solicitor, Post Office Department. - Lewis, Martin W., general manager, the Surety Association of America, McCart, John A., legislative representative, American Federation of Smith, J. C., secretary in charge of surety department, Travelers' Snow, Ralph D., Assistant Director, Office of Accounting Policy, Office of the Assistant Secretary of Defense. Steward, Luther C., president, National Federation of Federal Letters, statements, etc., submitted for the record by— Bennem, William H., vice president, American Surety Co. of New Association of_Casualty and Surety Companies suggested plan for bonding Federal officials and employees- Exhibit A-Post office employees blanket position bond.. Exhibit B-Post office employees position schedule bond_ Exhibit E-Postmaster General's blanket position bond.. Exhibit F-Government employees position schedule bond. Exhibit G-Internal revenue employees blanket position bond__ Exhibit H-Report from Martin W. Lewis, general manager, the Letters, statements, etc., submitted for the record by-Continued Bennem, William H., vice president, American Surety Co. of New Exhibit 1. Federal rate schedule-official bonds, general rates Exhibit 2. Rating plan-Federal official and post office employee Exhibit 3. Rating plan-Federal official and postal transportation service employees blanket position bonds.. Exhibit 4. Rating plan-Federal official and postal inspectors Report-Federal Bonding Program, from J. Dewey Dorsett, Horton, J. V., National Association of Postal Supervisors: Suggested initial assesments on each class of employee.... Summary of expected operation for first 2 years_ Johnson, E. T., Chief, Office of Investigations, General Accounting Office, statement in re bonding of Federal employees_- Johnson, Louis, Secretary of Defense, letter to Hon. Frank M. Karsten, Karsten, Hon. Frank M., a Representative in Congress from the State of Missouri and chairman of the Public Accounts Subcommittee, Recommendation No. 12 of the Hoover Commission Report. Lewis, Martin W., general manager, the Surety Association of America, 26 Rich, Hon. Robert F., a Representative in Congress from the State of Pennsylvania, excerpt of letter from Office of the Comptroller of Riley, George D., member, Legislative Committee, American Federa- Smith, J. C., chairman, subcommittee, surety advisory committee, Smith, J. C., secretary in charge of surety department, Travelers' Snow, Ralph D., Assistant Director, Office of Accounting Policy, 169 15 99 105 BONDING OF FEDERAL EMPLOYEES THURSDAY, MARCH 2, 1950 HOUSE OF REPRESENTATIVES, PUBLIC ACCOUNTS SUBCOMMITTEE OF THE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS, Washington, D. C. The subcommittee met at 10 a. m., pursuant to call, in room 1501, New House Office Building, Hon. Frank M. Karsten (chairman of the subcommittee), presiding. Mr. KARSTEN. The subcommittee will please come to order. Gentlemen, we have met this morning for the considering of the matter of bonding Federal employees. (The bills are as follows:) H. R. 2830, 81st Cong., 1st sess.] A BILL To provide for the payment by the United States of premiums on bonds of Government officers or employees Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, notwithstanding the provisions of the Act of August 5, 1909 (36 Stat. 125; U. S. C. 14), and section 3709 of the Revised Statutes (41 U. S. C. 5), the head of each department or agency of the Government shall pay from appropriations for the administrative expense of such department or agency the premiums on any bond or bonds of personnel of such department or agency as are required to be bonded by law or otherwise, under such rules and regulations as the head of each department or agency may, with the concurrence of the Secretary of the Treasury, prescribe: Provided, That the provisions contained in the last sentence of section 1 of the Act of August 13, 1894 (28 Stat. 279; 6 U. S. C. 6), shall not be applicable to bonds, the premiums of which are paid pursuant to this Act. SEC. 2. This Act shall take effect on July 1, 1949. [H. R. 2871, 81st Cong., 1st sess.] A BILL To provide for the payment by the United States of premiums on bonds of Government officers or employees Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, notwithstanding the provisions of the Act of August 5, 1909 (36 Stat. 125; U. S. C. 14), and section 3709 of the Revised Statutes (41 U. S. C. 5), the head of each department or agency of the Government shall pay from appropriations for the administrative expense of such department or agency the premiums on any bond or bonds of personnel of such department or agency as are required to be bonded by law or otherwise, under such rules and regulations as the head of each department or agency may, with the concurrence of the Secretary of the Treasury, prescribe: Provided, That the provisions contained in the last sentence of section 1 of the Act of August 13, 1894 (28 Stat. 279; 6 U. S. C. 6), shall not be applicable to bonds, the premiums of which are paid pursuant to this Act. SEC. 2. This Act shall take effect on July 1, 1949. 1 [H. R. 4084, 81st Cong., 1st sess.] A BILL To provide for the payment by the United States of premiums on bonds of Government officers of employees Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, notwithstanding the provisions of Sixth United States Code, 14, and section 3709 of the Revised Statutes (41 U. S. C. 5), the head of each department or agency of the Government shall pay from appropriations for the administrative expense of such department or agency the premiums on any bond or bonds of personnel of such department or agency as are required to be bonded by law or otherwise, under such rules and regulations as the head of each department or agency may, with the concurrence of the Secretary of the Treasury, prescribe. SEC. 2. This Act shall take effect July 1, 1949. [H. R. 4642, 81st Cong., 1st sess.] A BILL To amend title 6 of the United States Code to provide for the issuance by the United States of official bonds covering Government officers and employees without charge to such officers and employees, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the index following the heading "Title 6— Official and Penal Bonds" of title 6 of the United States Code is amended to read as follows: "Chap. "1. Official bonds of Government employees. "2. Other bonds... Sec. 1 6" SEC. 2. Sections 1-5, inclusive, of title 6 of the United States Code, entitled "Official and Penal Bonds", are amended to read as follows: “CHAPTER I—Official Bonds of Government EmployeES "Sec. "1. Application and administration. "2. Federal Bonding Board. "3. Federal Fidelity Trust Fund. "4. Official bonds. "5. Liability of employees. "'§ 1. Application and Administration "(a) This chapter shall be applicable to all official bonds required by law, regulation, or administrative requirement to be furnished by any officer or employee of the Executive, Legislative, and Judicial branches of the Government (referred to hereinafter in this chapter as 'employee'). As used in this section "(1) the term 'official bond' shall include each fidelity, subsistence, and other bond required to be furnished by any employee to secure to the Government any of the objects specified in section 4 (a) of this chapter; and "(2) the term 'Government' shall include each department, establishment, office, and agency of the United States, and each corporation the stock of which is wholly owned by the United States. "(b) Except as otherwise expressly provided herein, this chapter shall be administered by the Secretary of the Treasury, who— "(1) may require that any official bond issued or scheduled under this chapter or under any other provision of law be filed in the Treasury Department; "(2) shall make, and from time to time revise and change, such rules and regulations not inconsistent with the provisions of this chapter as he may deem necessary to carry out his functions hereunder; "(3) shall utilize as far as practicable existing facilities and personnel of the Treasury Department; "(4) may, subject to the civil-service laws and the Classification Act of 1923, as amended, appoint such additional personnel as may be required for the efficient administration of this chapter; "(5) shall prepare estimates for appropriations necessary to defray the expenses of administering this chapter, and disburse from the fund established by section 3, such sums as may be necessary for the payment of (A) such expenses and (B) losses which the Board established by section 2 shall have certified to be liabilities properly chargeable to such fund; and "(6) shall include in his annual report to the Congress an account of the operation of such fund for the preceding fiscal year. "(c) There are hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, to the Secretary of the Treasury (1) the sum of $500,000 for the initial establishment of the fund created by section 3 (a) of this chapter; and "(2) such sums as may be necessary thereafter for the administration of this chapter, and for the maintenance of the solvency of such fund. "§ 2. Federal Bonding Board "(a) There is hereby established a Federal Bonding Board (hereinafter referred to as the 'Board'), composed of the Secretary of the Treasury, who shall be Chairman, the Director of the Bureau of the Budget, and the Comptroller General of the United States. Each member of the Board may designate a representative from his department or agency to act in his place, but no final action of the Board shall be taken without the approval of a majority of the members of the Board unless the Board shall by regulation provide otherwise. Whenever a determination or order of the Board shall involve an alleged default of an employee in the department or agency of any one of the Board members, such Board member shall be disqualified from participating in consideration or decision of such case, and the other two Board members shall elect, to serve in place of such disqualified Board member, the head of some agency or department other than the Bureau of the Budget, the General Accounting Office, or the Treasury Department. The department or agency head so selected shall for the purpose of such case be a member of the Board, and shall have the same power granted other Board members to designate a representative from his department or agency to act in his place. "(b) The Board shall have power "(1) with the concurrence of the head of the department, establishment, agency, office, or corporation concerned, to require fidelity bonds in any office or position, in addition to those with respect to which a bond is now or hereafter otherwise required by law, whenever the Board deems such requirement necessary to the protection of the United States; but no bond shall be required for any office or position expressly exempted by law from such requirement; '(2) subject to the provisions of section 4 of this chapter, to prescribe the terms of all classes of bonds issued or scheduled under the provisions of this chapter; "(3) to issue, or in its discretion to provide for the scheduling, of a suitable bond to secure to the Government any or all of the objects specified in section 4 (a) of this chapter with respect to the office or position of any employee, which bond shall be in lieu of any bond otherwise required by law, regulation, or administrative requirement with respect to such office or position; "(4) to determine when a loss for which the fund is liable has occurred, and the amount of the loss for which the fund is liable. In any case in which the Board shall determine that a loss for which the fund is liable has occurred, it shall certify its determinations to the Secretary of the Treasury who, upon receipt of such certificate, shall pay from the fund to the department, establishment, agency, office, or corporation in which such loss was sustained, or to any other person lawfully entitled thereto, the amount so certified; and "(5) to make such rules and regulations not inconsistent with the provisions of this chapter which it shall deem necessary to carry out its functions as herein provided. "(c) All decisions and determinations of the Board respecting the liability of the fund for losses shall be final and conclusive except in any suit brought by or against an employee or his legal representative involving the question of his legal liability for a loss certified by the Board as payable from the fund: Provided, That in any case where the Board shall decline to certify an alleged loss for payment, a suit for the amount involved may nevertheless be prosecuted against the employee or his legal representative pursuant to section 5 (b) of this chapter, without regard to the action of the Board, and if in any such case a judgment shall be recovered against the employee the Board shall reconsider its previous action in the matter and shall make a new determination as to whether the fund is liable for the loss. "§ 3. Federal Fidelity Trust Fund "(a) There is hereby established a Federal fidelity trust fund (hereinafter referred to as the 'fund'), which shall be deposited in a special account with the Treasurer of the United States under the supervision of the Secretary of the Treasury. |