Congressional Accountability Project
1611 Connecticut Ave. NW, Suite 3A
Washington, DC 20009
(202) 296-2787
fax (202) 833-2406
 

February 23, 1998
 

The Honorable John McCain, Chairman
The Honorable Ernest Hollings, Ranking Minority Member
Committee on Commerce, Science, and Transportation
United States Senate
508 Dirksen Senate Office Building
Washington, DC 20510

RE: Renomination of Gus A. Owen to the Surface Transportation Board

Dear Senators McCain and Hollings:

I am writing to raise questions about the renomination of Gus A. Owen to be a Member of the Surface Transportation Board (STB).

As you know, the STB regulates the railroad industry, as well as aspects of the trucking, bus, ocean shipping, pipeline, and moving van industries. The STB has a staff of approximately 135, and a budget of nearly $16 million.(1)

On February 2, 1998 the U.S. Senate received notice that President Bill Clinton re-nominated Gus Owen to be a Member of the STB, for a term expiring on December 31, 2002.(2) Surface Transportation Board Members are appointed by the President with the advice and consent of the Senate.(3) The Senate Commerce Committee has jurisdiction over these appointments. As a part of your advice and consent responsibilities, I urge you to investigate whether Gus Owen has violated federal ethics and financial disclosure rules, and whether Owen has improperly engaged in business and lobbying activities which are incompatible with his government service.

In an October, 1997 Senate Commerce Committee hearing, Chairman John McCain said that "The U.S. Constitution grants the Senate with advice and consent authority over Presidential nominations - authority which this Committee takes very seriously. There are few higher callings than public service and those individuals who enter it should recognize the great level of trust placed in them by the American people. This Committee, and indeed the entire Senate, expects the highest level of integrity, competence, and devotion to duty from all Presidential appointees."(4)

The Senate Commerce Committee must determine whether Gus Owen meets this standard, in light of his business and lobbying activities, and apparent failure to fully disclose the extent and nature of his non-governmental activities.

A: The Senate Commerce Committee Should Determine Whether Gus Owen's Business Activities are Compatible with his Responsibilities at the Surface Transportation Board.

News reports and Gus Owen's public financial disclosure reports, when read together, suggest that Owen was engaged in substantial business activities while acting as STB Vice Chairman. The Senate Commerce Committee should determine whether these business activities constitute a violation of federal ethics rules, which prohibit full-time noncareer Presidential appointees from receiving many types of outside earned income. In general, federal ethics rules permit government employees to garner income from passive investments, but disallow income from business endeavors that may consume a substantial portion of a government employee's time and attention.

Regardless of federal ethics rules, news reports and Owen's public financial disclosure reports, when read together, suggest that Owen's real estate business activities may be time-consuming, and therefore potentially incompatible with his duties and responsibilities at the STB. Owen denies taking an "active management role" in these businesses during his tenure in government service.(5) Taxpayers deserve diligence and dedication from their top appointed officials. The Senate Commerce Committee should find out whether Owen has provided, and can provide in the future, due diligence in performing his governmental tasks, given his business responsibilities.

Following is a description of some of Owen's business activities, derived from public financial disclosure reports.(6)

Brook Park West, Buena Park, CA.
In his 1995-97, public financial disclosure reports, Owen lists himself as a partner of Brook Park West apartments, which he describes as a limited partnership.
 

CMOW Corp., Santa Ana, CA.
We urge the Senate Commerce Committee to determine whether Owen should have assumed the role of Vice President of CMOW Corp. -- a real estate and property management business reported to be growing and active -- while serving on the ICC and, subsequently, the STB.

According to his 1995 public financial disclosure report, Owen became Vice President of CMOW Corp. in December, 1994 - while serving as an ICC Member. In his 1995-96 public financial disclosure reports, Owen lists himself as Vice President of CMOW Corp. In 1997, he describes himself as an "Investor/Partner"of CMOW Corp.

In 1996, the Orange County Business Journal wrote that:

CMOW's chairman is John Cronin, founder and chairman of the for-profit Professional Association of Diving Instructors (PADI), a scuba diving retailing and certification organization. The CMOW president is investment banker Ron Meer. The EVPs are apartment developers and Lincoln Club activists Gus Owen and Robert Waller. Owen is married to OC developer Kathryn Thompson and serves as one of three board members of the federal Surface Transportation Board, the scaled-down successor to the U.S. Interstate Commerce Commission.

CMOW has been quietly building a 1,500-unit, $67 million apartment portfolio for its investors over the last 18 months. Lately, the group has been putting more time and money into its efforts. In the last 30 days the company has spent $9 million on new purchases....

"We're probably looking at about 100 deals a month," said [CMOW President Ron] Meer. These are primarily Class B, C, or D properties of over 100 units in good locations. CMOW renovates them and puts in tougher management to boost occupancies and therefore rental income....

But some of the properties take a little bit more than new paint to turn. Last year, CMOW picked up the 184-unit Villa del Mar apartments in Oceanside....It had an effective vacancy rate of 60% including uncollected rents and the highest incidence of police calls in the city. Now the property is cleaned up and occupancy is holding at 91%.

"It's only through tough hands-on management that you can do this," said Owen. "You can't do it with absentee ownership and management or a drive-by supervisor."(7)

In an attachment to his pre-confirmation 1997 public financial disclosure report, Owen states that CMOW, Inc. was "involved in the acquisition of apartment projects in Southern California. This was an investment. I had no active management role. Furthermore, as of January 1998, CMOW will cease to be in business."(8) Elsewhere, Owen notes on his pre-confirmation 1997 public financial disclosure report that CMOW Corp. will be "Closing 1-1-98".

However, according to California business records obtained on February 20, 1998 from the California Secretary of State, CMOW Corp. is still an active corporation.(9)

The Senate Commerce Committee should investigate whether Owen himself was personally responsible for the "tough hands-on management" Owen describes in the Orange County Business Journal article. If so, the Committee should determine whether Owen's management activities are compatible with the demanding and time-consuming position of STB Vice Chairman.

Colonial Maple, Oceanside, CA.
In his 1995-97, public financial disclosure reports, Owen lists himself as a partner of Colonial Maple Apartments, which he describes as a limited partnership.
 

Grove Industrial Park, Ontario, CA.
In his 1995-97, public financial disclosure reports, Owen lists himself as a partner of Grove Industrial Park, which he describes as a limited partnership.
 

Hollybrook Apartments, Westminster, CA.
In his 1995-97, public financial disclosure reports, Owen declares $15,001-$50,000 in income from "Rent and Royalties" at Hollybrook Apartments.
 

Owen Properties, Inc., Aliso Viejo, CA.
In his 1993-94 pre-confirmation public financial disclosure report, Owen describes himself as President of Owen Properties, and notes that he "will resign upon confirm[ation]." Apparently, Owen did not resign. Owen describes himself as "President" of Owen Properties in his 1995-96 public financial disclosure reports, and "Owner" in his 1997 report. In an attachment to his pre-confirmation 1997 public financial disclosure report, Owen states that he has "had no active management role since 1994" in Owen Properties. "In reference to my currently being the President of Owen Properties, effective November 12, 1997, I have resigned. I will continue to own the company, but, as before, I will have no active management role."(10) However, according to California business records obtained on February 20, 1998 from the California Secretary of State, Owen is still the Chief Executive Officer of Owen Properties.(11)
 

Pacific Argonaut II; Bonnie Benton, Ltd.; Weslin, Ltd.
A search of California state business records indicates that Owen has an active business partnership with his wife, Kathryn G. Thompson, in Pacific Argonaut II, L.P.(12) Owen disclosed his position in Pacific Argonaut in his 1994 pre-confirmation public financial disclosure report, but not in public financial disclosure reports since then. Owen is also listed as the only general partner and registered agent of Bonnie Benton, Ltd. and one of three general partners and registered agent of Weslin, Ltd.(13) Neither of these business positions are listed in Owen's public financial disclosure reports during his tenure in government service.
 

* * *

In 1995, when he was a Commissioner of the ICC, Gus Owen told The Orange County Register:

I have a property-management company dealing with apartments, offices and industrial buildings in Aliso Viejo. I have a staff that runs the company, and I keep in touch by telephone and fax and Federal Express. When I'm on the West Coast, my staff in Washington keeps me updated the same way.(14)

The Senate Commerce Committee ought to inquire whether Owen is so occupied with time-consuming private business activities that he cannot devote the time and attention needed to carry out his duties and responsibilities at the STB. Certainly, taxpayers deserve STB Members who devote their full attention and efforts to the STB's railroad and other transportation regulatory matters. If Owen cannot, or does not, shoulder the full burden of an STB Member's workload, then he should not be re-confirmed.

B: The Senate Commerce Committee Should Determine Whether Gus Owen Has Violated Federal Ethics Rules Regarding Outside Earned Income, or Other Ethics Rules.

The Senate Commerce Committee should scrutinize Owen's executive branch public financial disclosure reports to ensure that he has not violated federal ethics rules regarding the receipt of outside earned income. Federal ethics rules state that "A covered noncareer employee who is a Presidential appointee to a full-time noncareer position is prohibited by section 102 of Executive Order 12674, as amended, from receiving any outside earned income for outside employment or any other activity performed during that Presidential appointment."(15) The Senate Commerce Committee should determine whether any of Owen's business activities have generated income in violation of this rule.

Property management and income derived from property management.

In general, federal outside earned income rules distinguish between income derived from passive investments, and income derived from active engagement in private business endeavors. The purpose of these rules is, in general, to shelter governmental processes from the appearance or actuality of conflicts of interest, and to ensure that government employees are making an honest effort to carry out their governmental duties. Outside earned income rules explicitly allow government officials to keep "Income from investment activities where the individual's services are not a material factor in the production of income."(16)

Owen disclosed in his 1995 and 1996 public financial disclosure reports that he received compensation exceeding $5,000 in each year from duties including property management from Brook Park West and Grove Industrial Park. However, in an attachment to his pre-confirmation 1997 public financial disclosure report, Owen states that "As to properties where I am listed as a general partner, I am a partner by virtue of my investment and I have no active management role."(17) If any of Owen's outside earned income derives from property management duties carried out during his government service, then the Senate Commerce Committee should determine whether it violates federal ethics rules.

Income generated from property management is not exempt investment income for the purposes of the outside earned income prohibition. Federal rules posit the example of "A covered noncareer employee is a limited partner in a partnership that invests in commercial real estate. Because he does not take an active role in the management of the partnership, his share of the partnership income is neither 'outside earned income' nor 'compensation.'"(18) This example suggests that if Owen has derived income from property management activities, rather than passive investments, he may have run afoul of federal ethics rules.

Corporate management and limited partnerships.

It is very difficult to determine the exact nature of a government official's involvement in a business entity, based only on public financial disclosure reports and a corporation's public filings. We understand, based on such disclosure reports and corporate filings, that Gus Owen holds positions with several business entities. The Commerce Committee should not draw any conclusions from the titles of these positions, in and of themselves. Nor do I claim that, in and of themselves, the titles of Owen's corporate positions suggest endeavors that are incompatible with government service, or are violations of federal ethics rules. But these corporate titles and positions, contained in disclosure reports and corporate filings, should be investigated by the Senate Commerce Committee to see if they give rise to violations of federal ethics laws and rules.

Owen's public financial disclosure reports and other corporate records indicate that he has served as President, or "Owner," or Chief Executive Officer of Owen Properties, and Vice President of CMOW Corp, while in government service. Owen indicates that he earned $0-201 in income from each of these corporate positions. These activities may not violate federal outside earned income rules because they appear to be uncompensated.

However, Owen's self-professed "tough hands-on management" of CMOW Corp. and other business activities may leave him afoul of the federal ethics rules "honest effort" standard regarding the use of official time for official work.

Unless authorized in accordance with law or regulations to use such time for other purposes, an employee shall use official time in an honest effort to perform official duties. An employee not under a leave system, including a Presidential appointee exempted under 5 U.S.C. 6301(2), has an obligation to expend an honest effort and a reasonable proportion of his time in the performance of official duties."(19)

Owen's public financial disclosure reports and other corporate records indicate that he has served as a general partner in five limited partnerships: Brook Park West, Colonial Maple, Ltd., Grove Industrial Park, Bonnie Benton, Ltd., and Weslin, Ltd. Owen has disclosed compensation in excess of $5,000 per year each from Brook Park West and Colonial Maple, according to his 1995 and 1996 public financial disclosure reports. California business records indicate that Owen is just one of two general partners of Brook Park West and Colonial Maple.(20)

California business records indicate that Owen is the sole general partner of Grove Industrial Park, Ltd.(21) Owen discloses between $0-201 in income for Grove Industrial Park in his 1995-97 disclosure reports, but did disclose compensation in excess of $5,000 in his 1995-96 disclosure reports for duties of "Property Management" in connection with Grove Industrial Park. The Senate Commerce Committee should determine whether this compensation is consistent with federal outside earned income rules. Also, if management of Grove Industrial Park consumes substantial amounts of Owen's time, then this may trigger a violation of the "honest effort" standard regarding a public official's use of official time to perform official duties.

In sum, Gus Owen maintains corporate positions which may require substantial expenditure of time and effort. The Senate Commerce Committee should determine the extent of these corporate activities to ascertain whether they are so demanding as to interfere with Owen's ability to perform government service.

C: The Senate Commerce Committee Should Determine Whether Gus Owen's Lobbying and Advocacy Activities are Compatible with his Position as Vice Chairman of the Surface Transportation Board.

Presidential appointees do not surrender entirely their First Amendment rights, or the ability to lobby, upon assumption of appointed office. However, appointed officials must be extremely careful to exercise their rights in a manner which is consonant with their governmental duties, and which does not lead to conflicts of interest, or the appearance of prejudgement.

While Gus Owen was STB Vice Chairman, news reports indicate that he directed a California lobbying and advocacy effort on behalf of Fairness for Small Business, which is "a coalition of businesses organized to ensure that small business will benefit from the deregulation of the electric utility industry."(22) Owen served as "President" and "Chairman" of Fairness for Small Business, which was described in one article as "an organization of 1,000 small business owners." Fairness for Small Business appears to have been principally interested in supporting the California Public Utilities Commission (CPUC) proposal for electric restructuring.

These activities are of particular concern because the CPUC occasionally comes before the STB regarding regulatory matters. For example, the CPUC was a party to the Union Pacific-Southern Pacific merger proceeding.(23)

The Senate Commerce Committee should evaluate whether there were any conflicts of interest, either real or apparent or potential, between Owen's official duties at the STB and his lobbying and advocacy activities on behalf of the businesses comprising Fairness for Small Business. The Committee should also determine whether any of Owen's official actions violated federal ethics rules regarding impartiality in performing official duties.(24)

The Senate Commerce Committee should determine whether Owen should have directed, or even been publicly affiliated with, Fairness for Small Business while acting as an STB Member, and to what extent Owen's lobbying and advocacy activities raise questions about whether he has the capacity for judgment necessary to carry out his responsibilities as STB Vice Chairman.
 

D: The Senate Commerce Committee Should Determine Whether Gus Owen's Public Financial Disclosure Reports Have Significant Gaps, Omissions, or False Statements.

After having carefully reviewed Gus Owen's executive branch public financial disclosure reports, as well as news reports and corporate filings, I am concerned that Gus Owen's public financial disclosure reports appear to lack important information about his business and advocacy activities, and may contain false or misleading statements. Since not all interactions between an executive branch official and their Designated Agency Ethics Official are public, it is not clear whether any apparent omissions may reflect the judgment or approval of either the ICC's or STB's Designated Agency Ethics Official. In light of this, the Senate Commerce Committee should determine whether any of these apparent omissions or possible false statements place Owen in violation of federal law governing financial disclosure.(25)

Fairness for Small Business.
News reports indicate that Owen served as "President" and "Chairman" of Fairness for Small Business, but this position is not disclosed in any of Owen's public financial disclosure reports. Federal law requires public financial disclosure report filers to disclose "all positions held...in any nonprofit organization...or any other educational or other institution other than the United States."(26) The Senate Commerce Committee should establish whether this omission constitutes a violation of federal law.
 

Pacific Argonaut II.
In his pre-confirmation, 1994 public financial disclosure report, Owen states that he was a partner of "Pacific Argonaut" until 1993, and had received in excess of $5,000 in compensation from "Pacific Argonaut II" "till 6-93." This statement apparently conflicts with California business records, which list Owen's Pacific Argonaut II limited partnership with his wife, Kathryn G. Thompson, as active.(27)

In a 1994 pre-confirmation letter to the ICC's Designated Agency Ethics Official, Owen wrote that:

I declare that the assets of my wife represent her sole financial interest and responsibility, of which I have no knowledge, that they are not in any way, past or present, derived from my income, assets, or activities; and that I neither derive, nor expect to derive any financial benefit therefrom.(28)

Similarly, in an attachment to his pre-confirmation 1997 public financial disclosure report, Owen states that "My wife Kathryn Gore Thompson and I have an Agreement Regarding Property Rights dated September 5, 1989. At that time, I had cursory knowledge of her holdings. Since that time, I have had no knowledge of her financial interests other than the one property we jointly own, which has been reported."(29) Owen is apparently referring to their joint ownership of the Queens House Bed & Breakfast in Muskogee, Oklahoma.

Owen's statement to the ICC's Designated Agency Ethics Official, and his 1997 statement attached to his pre-confirmation public financial disclosure report, may conflict with California business records, which state that Owen's maintains an active partnership with his wife in Pacific Argonaut II.

CMOW Corp.
In his 1995-96 public financial disclosure reports, Owen lists himself as Vice-President of CMOW Corp, and in 1997, as an "investor/partner"of CMOW Corp. CMOW's statement of officers form filed with the California Secretary of State does not indicate vice presidents, but does record that Owen is a director of CMOW.(30) That position was not disclosed in Owen's public financial disclosure report, until his 1997 pre-confirmation public financial disclosure report.

In an attachment to his pre-confirmation 1997 public financial disclosure report, Owen states that CMOW, Inc. was "involved in the acquisition of apartment projects in Southern California. This was an investment. I had no active management role. Furthermore, as of January 1998, CMOW will cease to be in business."(31) Elsewhere, Owen notes on his pre-confirmation 1997 public financial disclosure report that CMOW Corp. will be "Closing 1-1-98".

However, according to California business records obtained on February 20, 1998 from the California Secretary of State, CMOW Corp. is still an active corporation.(32)
 

Owen Properties, Inc.
In an attachment to his pre-confirmation 1997 public financial disclosure report, Owen states that he has "had no active management role since 1994" in Owen Properties. "In reference to my currently being the President of Owen Properties, effective November 12, 1997, I have resigned. I will continue to own the company, but, as before, I will have no active management role."(33) However, according to California business records obtained on February 20, 1998 from the California Secretary of State, Owen is still the Chief Executive Officer of Owen Properties.(34)
 

Grove Industrial Park
In an attachment to his pre-confirmation 1997 public financial disclosure report, Owen states that "As to properties where I am listed as a general partner, I am a partner by virtue of my investment and I have no active management role."(35) The Senate Commerce Committee should determine if this statement conflicts with previous public financial disclosure reports, and California business records which indicate that Owen is the sole general partner for Grove Industrial Park.
 

Bonnie Benton, Ltd., and Weslin, Ltd.
According to California business records, Owen is the only general partner of Bonnie Benton, Ltd. and one of three general partners of Weslin, Ltd. Neither of these positions are listed in Owen's public financial disclosure reports.
 
 
E: Conclusion

The Senate Commerce Committee is charged with advice and consent authority over the President's nominees to the Surface Transportation Board. The Senate Commerce Committee should carry out this responsibility by closely scrutinizing whether Gus Owen's business or lobbying activities constitute violations of federal ethics rules, or call into question his integrity, judgment, or fitness to regulate America's railroads, pipelines, trucks, buses, ocean shipping, and moving vans. I hope that the Senate Commerce Committee will discharge its authority with diligence and care.
 

Sincerely,
 
 

Gary Ruskin
Director


Endnotes

1. Testimony of Linda J. Morgan, Chairman, Surface Transportation Board, on Rail Service Problems in the West, before the House Agriculture Committee Subcommittee on General Farm Commodities, 6 November 1997.

2. Congressional Record, February 2, 1998, at S280.

3. 49 U.S.C. § 701(b)(1).

4. Prepared Statement of Senator John McCain, Chairman, Before the Senate Commerce Science, and Transportation Committee, 30 October 1997.

5. Statement of Gus A. Owen, November 7, 1997. See Attachment #1.

6. Gus Owen's public financial disclosure reports, 1994-97. See Attachment #2.

7. Melinda Fulmer, "Prominent OCers Hunt For Deals, Investors." Orange County Business Journal, 25 March 1996. See Attachment #3.

8. Statement of Gus A. Owen, November 7, 1997.

9. California Secretary of State, Business Programs Division, Information Retrieval/Certification Unit, status inquiry for CMOW Corp., 20 February 1998. See Attachment #4.

10. Statement of Gus A. Owen, November 7, 1997.

11. California Secretary of State, Business Programs Division, Information Retrieval/Certification Unit, status inquiry for Owen Properties, Inc., 20 February 1998. See Attachment #5.

12. California Secretary of State, California Limited Partnership, Certificate of Limited Partnership for Pacific Argonaut II, L.P., filed 17 November 1988. See Attachment #6.

13. California Secretary of State, California Limited Partnership, Certificate of Limited Partnership for Bonnie Benton, Ltd., filed 1 July 1984; and Weslin, Ltd., filed 1 July 1984. See Attachment #7.

14. Dina Elboghdady, "Owen Sees ICC Post as Capital Opportunity." The Orange County Register, 5 February 1995. See Attachment #8.

15. 5 CFR § 2636.302(a). See also 5 CFR § 2635.804(a).

16. 5 CFR § 2636.303(b)(4).

17. Statement of Gus A. Owen, November 7, 1997.

18. 5 CFR § 2636.303(b).

19. 5 CFR § 2635.705(a).

20. California Secretary of State, California Limited Partnership, Certificate of Limited Partnership for Brook Park West and Colonial Maple, Ltd. See Attachment #9.

21. California Secretary of State, California Limited Partnership, Certificate of Limited Partnership for Grove Industrial Park, Ltd. See Attachment #10.

22. "Small Business Supports CPUC Restructuring Plan." PR Newswire, 7 June 1995. Attachment #11 also includes Lynn Graebner, "Electricity 'Stock Exchange' Gets Cool Reception." Sacramento Business Journal, 19 June 1995. Gus Owen, "The Orange Grove: Consumers to Get a Charge from a PUC Plan." The Orange County Register, 20 July 1995. Gus Owen, "Deregulating Electricity." Letters to the editor, Los Angeles Times, 26 October 1995. Howard Fine, "Dereg: Lower Costs, Shifting Alliances." Orange County Business Journal, 19 February 1996. WEPEX news release, "Utilities Seek Approval of Nation's First Comprehensive Electric Restructuring Proposals to Bring Benefits of Competition to California Consumers." PR Newswire, 29 April 1996.

23. Union Pacific Corporation, Union Pacific Railroad Company, and Missouri Pacific Railroad Company-Control and Merger-Southern Pacific Rail Corporation, Southern Pacific Transportation Company, St. Louis Southwestern Railway Company, SPCSL Corp., and the Denver and Rio Grande Western Railroad Company, Finance Docket No. 32760, Decision No. 44, 1996 STB Lexis 220, August 6, 1996, at 214-217.

24. 5 CFR § 2635.502(a) states that "Where an employee knows that...a person with whom he has a covered relationship is or represents a party to such matter, and where the employee determines that the circumstances would cause a reasonable person with knowledge of the relevant facts to question his impartiality in the matter, the employee should not participate in the matter unless he has informed the agency designee of the appearance problem and received authorization from the agency designee in accordance with paragraph (d) of this section."

25. See generally 5 U.S.C. App. 6, §§ 101-111, 5 U.S.C. App. 6 § 104(a), 18 U.S.C. § 1001, 18 U.S.C. § 3571.

26. 5 U.S.C. App. 6 § 102(a)(6)(A).

27. California Secretary of State, California Limited Partnership, Certificate of Limited Partnership for Pacific Argonaut II, L.P., filed 17 November 1988.

28. Correspondence from Gus A. Owen, Owen Properties, to Mr. John M. Atkisson, Designated Agency Ethics Official, Interstate Commerce Commission, 19 May 1994. See Attachment #12.

29. Statement of Gus A. Owen, November 7, 1997.

30. State of California, Secretary of State, Statement by a Domestic Stock Corporation, Statement for CMOW Corp., filed 22 October 1993. See Attachment #13.

31. Statement of Gus A. Owen, November 7, 1997.

32. California Secretary of State, Business Programs Division, Information Retrieval/Certification Unit, status inquiry for CMOW Corp., 20 February 1998..

33. Statement of Gus A. Owen, November 7, 1997.

34. California Secretary of State, Business Programs Division, Information Retrieval/Certification Unit, status inquiry for Owen Properties, Inc., 20 February 1998.

35. Statement of Gus A. Owen, November 7, 1997.