WASHINGTON — A top U.S. trade official said Chief Textile Negotiator Jennifer Hillman will not be disciplined for flying first class to attend an apparel convention without obtaining special approval — an apparent violation of federal ethics rules.

Thomas Nides, chief of staff to U.S. Trade Representative Mickey Kantor, acknowledged that Hillman failed to notify the agency’s ethics officer that she accepted a first-class airplane ticket valued at $1,045 to speak to the American Apparel Manufacturers Association in Boca Raton, Fla., Feb. 12.

Nides, in an interview with WWD, said, “I don’t think she realized it was a problem. If it was an oversight, it was an oversight.”

Under General Services Administration (GSA) regulations, Hillman would have to pay $1,045 to the Treasury if it were determined she violated the law.

The issue has prompted retail and import industry officials to claim there is “a cozy relationship between USTR and the domestic textile and apparel industries, which drives U.S. policy.”

Hillman vehemently denied she committed any ethics or policy improprieties. The AAMA convention was one of seven meetings she attended between May 1993 and March 1994, where industry paid a total of $4,431.86 in transportation and lodging costs, according to disclosure forms filed by USTR with the Office of Government Ethics (OGE).

The following expenses were paid to USTR to enable Hillman to attend meetings in 1993: $698, round-trip airfare, American Yarn Spinners Association, Charlotte, N.C., May 26. $344.26, round-trip airfare, Kurt Salmon Associates, New York, June 15.

$133, “round-trip transportation,” Knitted Textile Association, New York, June 22.

$419, round-trip airfare, Northern Textile Association, Saratoga Springs, N.Y., Sept. 19.

Expenses paid in 1994 include:

$600, lodging, World Economic Forum, Davos, Switzerland, Jan. 31-Feb. 1.

$1,000, reported on OGE form, round-trip airfare.

$300 lodging for one night at the Boca Raton Resort and Club, AAMA annual meeting, Feb. 11-12.

$292.60 round-trip airfare and $600 lodging, KTA annual meeting, Turnberry Isle Resort, Aventura, Fla., March 11-12.

No other negotiators in USTR’s textile office reported accepting industry funds to attend meetings during the year ending March 31. Disclosure forms indicate Rita Hayes, the deputy assistant secretary of Commerce for textiles and apparel, and chairman of the interagency Committee for the Implementation of Textile Agreements, accepted $341 for round-trip airfare and $94 for other transportation, to speak to an AAMA export seminar in Atlanta on Feb. 23.

Hayes told WWD: “On all other business trips, I paid my own way. I like to go commercial fare. If someone else does the reservations for you, sometimes you don’t get it that way.”

Three members of Commerce’s Office of Textiles and Apparel accepted airfare and lodging worth $1,401.50 from industry to participate in business meetings between August 1993 and January 1994.

Under GSA regulations, it is legal to accept such funds and each year thousands of federal employees do so, although no dollar total is available.

Various ethical “tests” must be met and policies followed, however.

An agency ethics officer must decide whether the group offering to pay is a “conflicting source” with a stake in an individual’s decisions. The USTR’s Nides acknowledged AAMA “obviously is a conflicting source.” He noted, however, that agency ethics officer and assistant general counsel Laura Sherman determined that the benefit of Hillman’s AAMA keynote speech outweighed potential ethical conflicts.

Federal regulations stipulate that the value of the payment from a conflicting source must be considered, and that employees should fly coach class. First-class airline travel can be authorized only for reasons of national or personal security, or to accommodate an employee’s disability. When coach seats are not available, first-class travel may be authorized, but GSA requires that strict tests be met. These determinations must be made as part of the prior approval process to guard against abuse.

Employees must certify the circumstances on their travel vouchers. When advance approval is not possible due to “extenuating circumstances or emergency situations,” the GSA stipulates employees “shall obtain written approval from the agency head, or designee, at the earliest possible time.”

Federal employees who accept first-class travel must report this annually to the GSA by Nov. 30.

USTR policy, distributed in writing to employees along with federal ethics forms, states: “First-class travel is normally reserved for the head of the agency and permitted for other employees only for security or medical reasons. The use of first class must be approved by the Assistant USTR for Administration prior to travel.”

Hillman, in an interview with WWD last week, said she received the necessary ethics clearances to make the Feb. 12 AAMA speech. She said the AAMA sent an airline ticket to her office on Thursday, Feb. 10, but she didn’t realize it was for first class. That flight was slated to leave Friday, Feb. 11, from Washington’s National Airport at 1:45 p.m., according to AAMA records.

Hillman said she was “in negotiations [in Washington] with Sri Lanka late Thursday night and on Friday, well into the day.”

She said that on Friday U.S. government offices were closed due to a major snow storm and when she arrived at the airport, her flight and most others had been canceled. Hillman said she called AAMA officials in Florida to tell them “I was not able to come as planned,” but was persuaded by an AAMA official to contact its travel agent.

Only then, Hillman said, did she realize the ticket was for first-class travel, but she could not contact USTR since government offices were closed. She said the travel agent booked her on a flight to Miami, first class, saying this was the only seat available.

Hillman said she arrived in Miami early on the morning of Saturday, Feb. 12, and was met by a hotel car, which took her to Boca Raton. She flew back to Washington Saturday afternoon.

A USTR spokeswoman said Sherman issued the clearance, assuming that AAMA was providing a coach class ticket and, contrary to Nides’s perception of AAMA, determined that the association “was not a conflicting source.” The spokeswoman added that John Hopkins, the assistant USTR for administration, “signed off [on Hillman’s trip] based on Laura [Sherman’s] determination.”

As to Hillman’s failure to apprise the agency of the first-class ticket, Nides conceded, “She should have come into my office on Monday and said this and that happened; that’s the oversight.” Nides, a former Democratic National Committee official and one-time aide to former Rep. Tony Coehlo, now a Clinton adviser, said Hillman “offered to pay the $209 difference between business and coach class, but I said she shouldn’t do it,” adding, “I talked this over with the USTR general counsel and they concur.”

A round-trip coach airline ticket between Washington and West Palm Beach that required a two-week advance purchase and a Saturday night stay cost $242.

Nides said Hillman “is one of the hardest-working people in this building, who got to her [AAMA] hotel room at 1:30 a.m. and left that day at 1:30 p.m. If anything, she should be charged with stupidity for not staying longer.” Hillman, a Harvard University Law School graduate, worked on international trade matters for Patton, Boggs & Blow, a prestigious Washington law firm, before serving as counsel and legislative director to former Sen. Terry Sanford (D, N.C.).

Prior to joining USTR in spring 1993, she worked on President-elect Clinton’s transition team, where she was responsible for conducting budget, personnel and policy reviews of 17 financial services agencies, including the Resolution Trust Corp. and Federal Reserve system.

Hillman, asked by a reporter last week whether she had filed an amended ethics statement, said only that disclosure of the first-class ticket would be filed with the GSA after Sept. 30.

Meanwhile, Hillman’s and Nides’s stance on the ticket brouhaha has raised the hackles of importer and retailer groups. “Ethics laws exist to insure there will be no appearance of impropriety, and Hillman should not be above the law,” said Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel.

“Really,” added Robin Lanier, an International Mass Retail Association vice president, “this is like the person who gets caught with a hand in the cookie jar saying she wasn’t reaching for the cookies. It shows they [USTR] feel they can selectively enforce the law when it suits them.”

Jones and Lanier argued that the ticket incident demonstrates a USTR bias towards domestic interests.

“Hillman was to address USAITA’s October 1993 annual meeting in New York, but canceled at the last minute, saying she had other business” and later declined to attend its Washington meeting, citing work demands, Jones said.

“Yet, when a domestic group asks, she braves a snowstorm and accepts a first-class ticket to fly there,” Jones said, adding, “This typifies USTR’s attitude. It puts quotas on Chinese silk imports that harm our multibillion dollar industry, and Hillman is unwilling to discuss this with us beforehand.”

Lanier added, “There is something rotten in Denmark with the way USTR works and the Florida trip is not an isolated incident,” she said. “Hillman and Kantor say they have no position on the assembly origin rule in the GATT. But in private meetings with members of Congress and their staffs, they are clearly working with domestic industry to write the origin rule amendments.”

Hillman responded that she did speak to the USAITA in New York in June 1993, traveling there on agency funds, and added that negotiations precluded her attendance at the group’s October 1993 meeting.

“We have tried to reach out to all groups that have a stake in trade issues, including retailers and importers,” Hillman said, noting she has spoken to the National Apparel and Textile Association, with National Retail Federation officials and with “the entire gamut of those involved with textiles and clothing.”

Some U.S. textile executives might be surprised to hear charges that Hillman’s in their camp, as they have been particularly critical of the administration’s support of GATT. At two recent conventions, for example, several executives vigorously confronted Hillman on such issues as market access, intellectual property rights and transshipping.

Meanwhile, officials with U.S. textile and apparel groups that paid for Hillman to attend their meetings staunchly defended the practice and Hillman’s ethics.

“Right after Jennifer spoke at our Saratoga Springs session she flew off to Geneva for GATT talks, and it was crucial that we hear about wool tariffs,” said Carl Spilhaus, president of the Northern Textile Association. “Paying for government officials’ airfare is not routine for us, since we’re on a tight budget,” Spilhaus said.

“But part of our business is to educate members,” Spilhaus added, “and when it’s important to get top government people to address them, we’ll pay if we have to.”

— Fairchild News Service

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