-Caveat Lector-

US Ambassador's Japan Deals Curbed

By LARRY MARGASAK
.c The Associated Press

WASHINGTON (AP) -- Thomas Foley, the U.S. ambassador to Japan, will have to
withdraw from matters involving the think tank where his wife is a researcher
and the major Japanese bank closely tied to it.

Heather Foley was often controversial as the unpaid chief of staff to her
husband when he was House speaker. The State Department, billing itself as
``family friendly,'' has ruled that Mrs. Foley's new job conforms with ethics
rules but that her husband must not be involved in decisions on matters
involving the think tank, the Japan Research Institute, or its affiliate,
Sumitomo Bank, which, in turn, is part of a huge Japanese conglomerate.

``Mrs. Foley has authorized us to say that she is happy to be working,'' the
State Department said in a statement.

State officials said a department review before Mrs. Foley began her job in
October found ``her employment conforms with all relevant State Department
regulations regarding employment overseas.''

Sensitive to even the appearance of a conflict of interest, the department
said Foley ``should recuse himself from official activities involving the
institute and Sumitomo Bank, unless properly authorized'' by the agency.

Foley became ambassador to Japan in October 1997 after 30 years in the House,
where he served as speaker from 1989 until his defeat in the 1994 elections.
During most of Foley's tenure as a Democrat from Washington state, Mrs. Foley
was his unpaid chief of staff. She gained considerable behind-the-scenes
influence among then-controlling Democrats when her husband became a party
leader.

She tried to stay out of the limelight, but made headlines when she was
forced to testify before a federal grand jury in 1992 during an investigation
of scandals at the House Post Office. She was neither a subject nor a target
of that investigation, according to the U.S. attorney at the time.

But out of the limelight, Mrs. Foley had much to do with hiring and firing of
staff, and remodeling much of the House side of the Capitol -- a task that
brought criticism for perceived excesses, including marble floors in
elevators.

After Democrats took considerable heat when it became known that the old
House bank was covering overdrafts for lawmakers, Mrs. Foley quietly
presented a list of members who were overdrawing their accounts to Republican
leaders -- a warning that both parties could be hurt by the scandal.

The State Department official said the agency ``reviewed carefully'' her new
job, pointing out she was a private citizen.

``As a family-friendly employer, the department sympathetically reviews
requests for employment by family members of its employees ... in their areas
of professional experience,'' the department said.

``Under department regulations ... the spouse of a ... department employee
may accept outside employment in a foreign country unless such employment
would violate any law of such country, could require a waiver of diplomatic
immunity deemed unacceptably broad by the chief of mission, or could
otherwise damage the interests of the United States as determined by the
chief of mission.''

The chief of mission normally is the ambassador, but in this case, department
officials in Washington made the determination that her employment ``merited
approval.''

Several conditions were established: Mrs. Foley's name cannot appear on any
institute materials or reports that are distributed outside of the institute;
the institute should not use her name to publicize its work, to raise funds
or to attract new clients; and Mrs. Foley should not use her access to the
embassy or to other State Department resources to further the interests of
the institute, Sumitomo Bank or the bank's clients.

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